UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the Securities
Exchange Act of 1934

Date of Report: February 27, 2020

Commission File Number: 001-33701

Fly Leasing Limited
(Exact Name of registrant as specified in its charter)

West Pier Business Campus
Dun Laoghaire
County Dublin, A96 N6T7
Ireland
(Address of principal executive office)

Indicate by check mark whether registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F
   ☒
Form 40-F
   ☐  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
 
The following document, which is attached as an exhibit hereto, is incorporated by reference herein.
 
Exhibit
Title
   
99.1
Press release of Fly Leasing Limited, dated February 27, 2020.

2
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Fly Leasing Limited
 
(Registrant)
   
Date:
February 27, 2020
  
By:
/s/ Colm Barrington
   
Colm Barrington
   
Chief Executive Officer and Director

3
EXHIBIT INDEX

Exhibit
Title
   
Press release of Fly Leasing Limited, dated February 27, 2020.


4

 
Fly Leasing Reports Fourth Quarter and Full Year 2019 Financial Results
 
Dublin, Ireland, February 27, 2020 – Fly Leasing Limited (NYSE: FLY) (“FLY”), a global leader in aircraft leasing, today announced its financial results for the fourth quarter and full year of 2019.
 
Fourth Quarter 2019 Highlights
 
•
Net income of $75.2 million, $2.43 per share
•
Adjusted Net Income of $77.0 million, $2.49 per share
•
Return on equity of 35.9%, Adjusted return on equity of 36.7%
•
Sold ten aircraft for an economic gain of $62.7 million, a 31% premium to book value
•
Purchased seven aircraft for $217.0 million
 
2019 Full Year Highlights
 
•
Net income of $225.9 million, $7.12 per share
•
Adjusted Net Income of $245.9 million, $7.75 per share
•
Return on equity of 29.2%, Adjusted return on equity of 31.8%
•
Sold 35 aircraft for an economic gain of $149.1 million, an 18% premium to book value
•
$28.42 book value per share at year end, a 32% increase since December 31, 2018
•
Net debt to equity ratio of 2.3x

“FLY is reporting record financial outcomes for the fourth quarter and full year 2019 along with adjusted returns on equity of more than 30% in both the quarter and full year,” said Colm Barrington, FLY’s Chief Executive Officer. “At year end, our book value per share was $28.42, which was a 32% increase in the year. Our leverage was reduced to 2.3x at year end, down from 4.0x at the beginning of the year.”

“Our aircraft sales in 2019 demonstrated the value in our balance sheet, reduced lessee concentration, generated cash and reduced our leverage,” added Barrington. “In the year we sold 35 aircraft with an average age of over 10 years, generating an economic gain of nearly $150 million, which was an 18% premium to book value.”

“FLY remains well positioned for a period of fleet enhancement as we continue to take delivery of our committed pipeline of new, fuel-efficient and low polluting Airbus A320neo family aircraft and pursue other opportunities to acquire attractive aircraft,” said Barrington. “FLY has a strong balance sheet and ample financial capacity to support the acquisition of both our committed deliveries and additional aircraft that we expect to acquire this year.”

Financial Results

FLY is reporting net income of $75.2 million, or $2.43 per share, for the fourth quarter of 2019. This compares to net income of $31.0 million, or $0.95 per share, for the same period in 2018.

Net income for the year ended December 31, 2019 was $225.9 million, or $7.12 per share, compared to net income of $85.7 million, or $2.88 per share, for the year ended December 31, 2018.

Adjusted Net Income

Adjusted Net Income was $77.0 million for the fourth quarter of 2019, compared to $30.8 million for the same period in the previous year. On a per share basis, Adjusted Net Income was $2.49 in the fourth quarter of 2019, compared to $0.94 for the fourth quarter of 2018.

For the year ended December 31, 2019, Adjusted Net Income was $245.9 million, or $7.75 per share, compared to $91.2 million, or $3.06 per share, for the same period last year.

A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.
 
Share Repurchases
 
During the year ended December 31, 2019, FLY repurchased 2.0 million shares at an average price of $16.29 per share, for a total cost of $32.8 million. As of December 31, 2019, FLY had 30.9 million shares outstanding and had $50.0 million remaining under its share repurchase authorization.
 
Financial Position
 
At December 31, 2019, FLY’s total assets were $3.7 billion, including investment in flight equipment totaling $3.2 billion. Total cash at December 31, 2019 was $338.3 million, of which $285.6 million was unrestricted. The book value per share at December 31, 2019 was $28.42, a 32% increase since December 31, 2018. At December 31, 2019, FLY’s net debt to equity ratio was 2.3x, reduced from 4.0x at December 31, 2018.
 
Aircraft Portfolio
 
At December 31, 2019, FLY’s portfolio consisted of 89 aircraft, six of which were classified as flight equipment held for sale, and seven engines. FLY’s aircraft and engines were on lease to 41 airlines in 24 countries. The table below does not include engines.
 
2

 
Portfolio at
  
Dec. 31, 2019
    
Dec. 31, 2018
  
   
Number
    
% of Net
Book Value
    
Number
    
% of Net
Book Value
  
Airbus A320ceo Family
    
34
      
28
%
    
55
      
38
%
Airbus A320neo Family
    
1
      
2
%
    
—
      
—
  
Airbus A330
    
3
      
6
%
    
3
      
5
%
Airbus A340
    
—
      
—
      
2
      
1
%
Boeing 737NG
    
42
      
37
%
    
42
      
32
%
Boeing 737 MAX
    
2
      
3
%
    
2
      
3
%
Boeing 757-SF
    
1
    
<1
 %    
3
      
1
%
Boeing 777-LRF
    
2
      
10
%
    
2
      
8
%
Boeing 787
    
4
      
14
%
    
4
      
12
%
Total(1)
    
89
      
100
%
    
113
      
100
%
 
(1) Includes six aircraft and twelve aircraft classified as flight equipment held for sale at December 31, 2019 and December 31, 2018, respectively.

At December 31, 2019, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 7.6 years. The average remaining lease term was 5.3 years, also weighted by net book value. At December 31, 2019, FLY’s portfolio, excluding aircraft held for sale, was generating annualized rental revenue of approximately $332 million.
 
Conference Call and Webcast

FLY’s senior management will host a conference call and webcast to discuss these results at 9:00 a.m. U.S. Eastern Time on Thursday, February 27, 2020. Participants should call +1 (409) 220-9381 (International) or (866) 438-0730 (North America) and enter confirmation code 8991734. A live webcast with slide presentation will be available on the Events and Presentations page in the Investor Relations section of FLY’s website at www.flyleasing.com. A webcast replay will be available on the company’s website for one year.
 
About FLY
 
FLY is a global aircraft leasing company with a fleet of modern, high-demand, and fuel efficient commercial jet aircraft. FLY leases its aircraft under multi-year lease contracts to a diverse group of airlines throughout the world. FLY is managed and serviced by BBAM LP, a worldwide leader in aircraft lease management and financing. For more information about FLY, please visit our website at www.flyleasing.com.
 
Non-GAAP Financial Measures
 
FLY provides all financial information in accordance with Generally Accepted Accounting Principles in the United States (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release, and on our conference call, certain non-GAAP financial measures, including Adjusted Net Income and Adjusted Return on Equity.  In calculating these non-GAAP financial measures, we have excluded certain amounts, as detailed in the reconciliation below.
 
3
Cautionary Statement Regarding Forward-Looking Statements
 
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for FLY’s future business, operations and financial performance. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially due to global political, economic, business, competitive, market, regulatory and other factors and risks, and the risk that FLY may be unable to achieve its portfolio growth expectations, or to reap the benefits of such growth. Further information on the factors and risks that may affect FLY’s business is included in filings FLY makes with the Securities and Exchange Commission from time to time, including its Annual Report on Form 20-F and its reports on Form 6-K. FLY expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, or otherwise.

# # #
Contact:
 
Matt Dallas
Fly Leasing Limited
+1 203-769-5916
 
ir@flyleasing.com
 
4
Fly Leasing Limited
 
Consolidated Statements of Income
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three months ended Dec. 31,
    
Year ended Dec. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
    
2019
(Audited)
    
2018
(Audited)
  
Revenues
                        
Operating lease rental revenue
  
$
88,622
    
$
112,159
    
$
391,142
    
$
389,350
  
End of lease income
    
48,394
      
4,264
      
78,781
      
20,333
  
Amortization of lease incentives
    
(1,237
)
    
(2,614
)
    
(5,590
)
    
(9,738
)
Amortization of lease discounts and other
    
39
      
(42
)
    
66
      
(431
)
Operating lease revenue
    
135,818
      
113,767
      
464,399
      
399,514
  
Finance lease revenue
    
149
      
163
      
618
      
675
  
Equity earnings (loss) from unconsolidated subsidiary
    
(10
)
    
56
      
2,717
      
(54
)
Gain on sale of aircraft
    
14,691
      
7,874
      
97,323
      
13,398
  
Interest and other income
    
3,606
      
445
      
9,967
      
4,766
  
Total revenues
    
154,254
      
122,305
      
575,024
      
418,299
  
Expenses
                                
Depreciation
    
32,029
      
39,887
      
140,798
      
144,084
  
Interest expense
    
29,935
      
40,703
      
137,133
      
144,742
  
Selling, general and administrative
    
9,131
      
8,487
      
35,304
      
31,185
  
Loss (gain) on derivatives
    
(89
)
    
233
      
2,720
      
(2,382
)
Loss on modification and extinguishment of debt
    
4,260
      
1,016
      
9,590
      
2,474
  
Maintenance and other costs
    
229
      
510
      
3,075
      
2,547
  
Total expenses
    
75,495
      
90,836
      
328,620
      
322,650
  
Net income before provision for income taxes
    
78,759
      
31,469
      
246,404
      
95,649
  
Provision for income taxes
    
3,601
      
460
      
20,527
      
9,926
  
Net income
  
$
75,158
    
$
31,009
    
$
225,877
    
$
85,723
  
Weighted average number of shares
                                
-  Basic
    
30,898,410
      
32,650,019
      
31,607,781
      
29,744,083
  
-  Diluted
    
30,903,313
      
32,661,240
      
31,715,469
      
29,783,904
  
Earnings per share
                                
-  Basic
  
$
2.43
    
$
0.95
    
$
7.15
    
$
2.88
  
-  Diluted
  
$
2.43
    
$
0.95
    
$
7.12
    
$
2.88
  

5
Fly Leasing Limited
 
Consolidated Balance Sheets
(DOLLARS IN THOUSANDS, EXCEPT PAR VALUE DATA)

   
Dec. 31,
2019
(Audited)
    
Dec. 31,
2018
(Audited)
  
Assets
            
Cash and cash equivalents
  
$
285,565
    
$
180,211
  
Restricted cash and cash equivalents
    
52,738
      
100,869
  
Rent receivables
    
14,264
      
9,307
  
Investment in finance lease, net
    
11,639
      
12,822
  
Flight equipment held for sale, net
    
144,119
      
259,644
  
Flight equipment held for operating lease, net
    
2,720,000
      
3,228,018
  
Maintenance rights
    
290,958
      
298,207
  
Deferred tax asset, net
    
11,675
      
6,505
  
Fair value of derivative assets
    
4,824
      
5,929
  
Other assets, net
    
129,377
      
124,960
  
Total assets
  
$
3,665,159
    
$
4,226,472
  
Liabilities
                
Accounts payable and accrued liabilities
  
$
22,746
    
$
23,146
  
Rentals received in advance
    
16,391
      
21,322
  
Payable to related parties
    
10,077
      
4,462
  
Security deposits
    
40,726
      
60,097
  
Maintenance payment liability, net
    
219,371
      
292,586
  
Unsecured borrowings, net
    
619,407
      
617,664
  
Secured borrowings, net
    
1,695,525
      
2,379,869
  
Deferred tax liability, net
    
57,935
      
36,256
  
Fair value of derivative liabilities
    
27,943
      
8,558
  
Other liabilities
    
76,761
      
80,402
  
Total liabilities
    
2,786,882
      
3,524,362
  
Shareholders’ equity
                
Common shares, $0.001 par value, 499,999,900 shares authorized; 30,898,410 and 32,650,019 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively
    
31
      
33
  
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding
    
—
      
—
  
Additional paid-in capital
    
516,254
      
549,123
  
Retained earnings
    
380,392
      
154,347
  
Accumulated other comprehensive loss, net
    
(18,400
)
    
(1,393
)
Total shareholders’ equity
    
878,277
      
702,110
  
Total liabilities and shareholders’ equity
  
$
3,665,159
    
$
4,226,472
  

6
Fly Leasing Limited

Consolidated Statements of Cash Flows
(DOLLARS IN THOUSANDS)

   
Year ended Dec. 31,
  
   
2019
(Audited)
    
2018
(Audited)
  
Cash Flows from Operating Activities
            
Net income
  
$
225,877
    
$
85,723
  
Adjustments to reconcile net income to net cash flows provided by operating activities:
                
Finance lease revenue
    
(618
)
    
(675
)
Equity in (earnings) loss from unconsolidated subsidiary
    
(2,717
)
    
54
  
Gain on sale of aircraft
    
(97,323
)
    
(13,398
)
Depreciation
    
140,798
      
144,084
  
Amortization of debt discounts and debt issuance costs
    
9,906
      
9,455
  
Amortization of lease incentives and other items
    
6,152
      
11,409
  
Loss on modification and extinguishment of debt
    
9,590
      
2,474
  
Unrealized foreign exchange gain
    
(271
)
    
(563
)
Provision for deferred income taxes
    
20,449
      
9,864
  
Loss (gain) on derivative instruments
    
3,224
      
(1,269
)
Security deposits and maintenance payment liability recognized into earnings
    
(47,890
)
    
(15,597
)
Distributions from unconsolidated subsidiary
    
2,727
      
2,131
  
Cash receipts from maintenance rights
    
4,637
      
3,013
  
Changes in operating assets and liabilities:
                
Rent receivables
    
(10,668
)
    
(12,866
)
Other assets
    
(2,160
)
    
(4,119
)
Payable to related parties
    
5,615
      
2,378
  
Accounts payable, accrued liabilities and other liabilities
    
4,842
      
18,982
  
Net cash flows provided by operating activities
    
272,170
      
241,080
  
Cash Flows from Investing Activities
                
Distributions from unconsolidated subsidiary
    
2,639
      
3,103
  
Rent received from finance lease
    
1,800
      
1,800
  
Net payments for derivative settlements
    
(3,208
)
    
—
  
Investment income from equity certificates
    
1,603
      
—
  
Purchase of equity certificates
    
(10,481
)
    
(5,747
)
Purchase of flight equipment
    
(319,995
)
    
(934,481
)
Proceeds from sale of aircraft, net
    
824,116
      
177,702
  
Capitalized interest on Portfolio B order book
    
(4,893
)
    
—
  
Purchase price allocated to Portfolio B order book value
    
—
      
(80,450
)
Payments for aircraft improvement
    
(8,085
)
    
(6,779
)
Payments for lessor maintenance obligations
    
(2,110
)
    
(8,601
)
Net cash flows provided by (used in) investing activities
    
481,386
      
(853,453
)

7
   
Year ended Dec. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
  
Cash Flows from Financing Activities
            
Security deposits received
    
4,369
      
15,042
  
Security deposits returned
    
(4,617
)
    
(8,716
)
Maintenance payment liability receipts
    
60,744
      
84,102
  
Maintenance payment liability disbursements
    
(22,567
)
    
(15,495
)
Net swap termination payments
    
—
      
1,801
  
Debt modification and extinguishment costs
    
(2,052
)
    
301
  
Debt issuance costs
    
(342
)
    
(3,619
)
Proceeds from secured borrowings
    
—
      
826,396
  
Repayment of secured borrowings
    
(698,989
)
    
(482,703
)
Net proceeds from shares issued
    
—
      
19,624
  
Shares repurchased
    
(32,871
)
    
—
  
Net cash flows (used in) provided by financing activities
    
(696,325
)
    
436,733
  
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
    
(8
)
    
(95
)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents
    
57,223
      
(175,735
)
Unrestricted and restricted cash and cash equivalents at beginning of year
    
281,080
      
456,815
  
Unrestricted and restricted cash and cash equivalents at end of year
  
$
338,303
    
$
281,080
  
                 
Reconciliation to Consolidated Balance Sheets:
                
Cash and cash equivalents
  
$
285,565
    
$
180,211
  
Restricted cash and cash equivalents
    
52,738
      
100,869
  
Unrestricted and restricted cash and cash equivalents
  
$
338,303
    
$
281,080
  

8
Fly Leasing Limited

Reconciliation of Non-GAAP Measures
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three months ended Dec. 31,
    
Year ended Dec. 31,
  
   
2019
(Unaudited)
    
2018
(Unaudited)
    
2019
(Unaudited)
    
2018
(Unaudited)
  
Net income
  
$
75,158
    
$
31,009
    
$
225,877
    
$
85,723
  
Adjustments:
                                
Unrealized foreign exchange loss (gain)
    
178
      
(187
)
    
(271
)
    
(668
)
Deferred income taxes
    
4,486
      
227
      
20,449
      
9,864
  
Fair value changes on undesignated derivatives
    
(2,794
)
    
(286
)
    
(176
)
    
(3,732
)
Adjusted Net Income
  
$
77,028
    
$
30,763
    
$
245,879
    
$
91,187
  
Average Shareholders’ Equity
  
$
838,525
    
$
692,124
      
774,145
      
614,344
  
Adjusted Return on Equity
    
36.7
%
    
17.8
%
    
31.8
%
    
14.8
%
                                 
Weighted average diluted shares outstanding
    
30,903,313
      
32,661,240
      
31,715,469
      
29,783,904
  
Adjusted Net Income per diluted share
  
$
2.49
    
$
0.94
    
$
7.75
    
$
3.06
  

FLY defines Adjusted Net Income as net income plus or minus (i) unrealized foreign exchange gains and losses; (ii) deferred income taxes; (iii) the fair value changes associated with interest rate derivative contracts that are not accounted for as cash flow hedges; and (iv) non-recurring expenses. The adjustments included within Adjusted Net Income are primarily non-cash or non-recurring items that we consider unrelated to the ongoing performance of our operations. Adjusted Return on Equity is calculated by dividing Adjusted Net Income by average shareholders’ equity for each period presented. For periods of less than one year, the resulting return is annualized.

FLY uses Adjusted Net Income and Adjusted Return on Equity, in addition to GAAP net income and earnings per share, to assess our core operating performance on a consistent basis from period to period. Management believes these measures are helpful in evaluating the operating performance of our ongoing operations and identifying trends in our performance, because they remove the effects of certain non-cash or non-recurring items and certain other items that are not indicative of our overall operating trends. In addition, Adjusted Net Income and Adjusted Return on Equity help us compare our performance to our competitors. These measures should be considered in addition to, and not as substitutes for, net income or other financial measures determined in accordance with GAAP. FLY’s definitions may be different than those used by other companies.


9