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: May 8, 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 May 8, 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:
May 8, 2020
  
By:
/s/ Colm Barrington
     
Colm Barrington
Chief Executive Officer and
Director

3
EXHIBIT INDEX

Exhibit
Title
   
Press release of Fly Leasing Limited, dated May 8, 2020.


4

Exhibit 99.1

Fly Leasing Reports First Quarter 2020 Financial Results
 
Dublin, Ireland, May 8, 2020 – Fly Leasing Limited (NYSE: FLY) (“FLY”), a global leader in aircraft leasing, today announced its financial results for the first quarter of 2020.
 
Highlights
 

 •
Net income of $38.1 million, $1.24 per share

•
Adjusted Net Income of $43.6 million, $1.42 per share

•
Return on equity of 17.2%, Adjusted return on equity of 19.7%

•
Sold six aircraft and two engines for a gain of $31.7 million, a 20% premium to book value

•
$29.21 book value per share, a 28% increase since March 31, 2019

•
Unrestricted cash and cash equivalents of $361.2 million

•
$560 million net book value of unencumbered assets

•
2.1x net debt to equity

“The COVID-19 pandemic has caused tremendous distress in the global aviation industry, and FLY remains highly focused on successfully managing through the crisis. FLY is well positioned to face what is certain to be a difficult year,” said Colm Barrington, Chief Executive Officer of FLY. “Our high cash balance and low leverage puts us in a strong position to meet our operating and financial commitments in 2020. FLY does not have any orders with the aircraft manufacturers and the company has no near-term refinancing requirements.”

“FLY is reporting strong financial results for the first quarter of 2020 and had an unrestricted cash balance of $361 million, and record low leverage of 2.1x at quarter end,” said Barrington. “We have grown our book value per share to $29.21, which is a 28% increase from a year ago.”

“We sold six aircraft with an average age of over 10 years, as well as two engines from a parted-out aircraft, generating a pre-tax gain of nearly $32 million, which was a 20% premium to book value,” added Barrington. “Our aircraft sales again monetized value from our balance sheet, reduced our lessee concentration, generated cash, and further reduced leverage.”
 
Financial Results

FLY is reporting net income of $38.1 million, or $1.24 per share, for the first quarter of 2020. This compares to net income of $45.0 million, or $1.38 per share, for the same period in 2019. The first quarter 2020 results include a $9.4 million unrealized fair value loss related to investments in ABS equity certificates.

Adjusted Net Income
 
Adjusted Net Income was $43.6 million for the first quarter of 2020, compared to $47.2 million for the same period in the previous year. On a per share basis, Adjusted Net Income was $1.42 in the first quarter of 2020, compared to $1.44 for the first quarter of 2019.

A reconciliation of Adjusted Net Income to net income determined in accordance with GAAP is shown below.
 
Financial Position
 
At March 31, 2020, FLY’s total assets were $3.6 billion, including investment in flight equipment totaling $3.0 billion. Total cash at March 31, 2020 was $391.7 million, of which $361.2 million was unrestricted. The book value per share at March 31, 2020 was $29.21, a 28% increase since March 31, 2019. At March 31, 2020, FLY’s net debt to equity ratio was 2.1x, reduced from 3.4x as of March 31, 2019.
 
Aircraft Portfolio
 
At March 31, 2020, FLY had 84 aircraft and seven engines in its portfolio. FLY’s aircraft and engines are on lease to 40 airlines in 24 countries. The table below does not include the engines.
 
Portfolio at
  
Mar. 31, 2020
    
Dec. 31, 2019
  
   
Number
    
% of Net
Book Value
    
Number
    
% of Net
Book Value
  
Airbus A320ceo Family
    
33
      
28
%
    
34
      
28
%
Airbus A320neo Family
    
1
      
2
%
    
1
      
2
%
Airbus A330
    
3
      
6
%
    
3
      
6
%
Boeing 737NG
    
38
      
36
%
    
42
      
37
%
Boeing 737 MAX
    
2
      
3
%
    
2
      
3
%
Boeing 757-SF
    
1
    
<1
 %
    
1
    
<1
 %
Boeing 777-LRF
    
2
      
10
%
    
2
      
10
%
Boeing 787
    
4
      
15
%
    
4
      
14
%
Total(1)
    
84
      
100
%
    
89
      
100
%

(1)
Includes six aircraft classified as flight equipment held for sale as of December 31, 2019. No aircraft was held for sale as of March 31, 2020.

At March 31, 2020, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 7.8 years. The average remaining lease term was 5.2 years, also weighted by net book value.

2
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 Friday, May 8, 2020. Participants should call +1 (409) 220-9381 (International) or (866) 438-0730 (North America) and enter confirmation code 5452704. 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.
 
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. Additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks. 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

3
Fly Leasing Limited
Consolidated Statements of Income
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three months ended Mar. 31,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
  
Revenues
            
Operating lease rental revenue
  
$
85,535
    
$
105,328
  
End of lease income
    
2,427
      
1,564
  
Amortization of lease incentives
    
(614
)
    
(1,632
)
Amortization of lease discounts and other
    
92
      
(8
)
Operating lease revenue
    
87,440
      
105,252
  
Finance lease revenue
    
145
      
160
  
Gain on sale of aircraft
    
31,717
      
27,620
  
Interest and other income
    
2,253
      
1,671
  
Total revenues
    
121,555
      
134,703
  
Expenses
                
Depreciation
    
31,631
      
37,585
  
Interest expense
    
27,155
      
38,179
  
Selling, general and administrative
    
7,664
      
8,722
  
Loss on derivatives
    
507
      
17
  
Fair value loss on marketable securities
    
9,412
      
—
  
Loss on extinguishment of debt
    
850
      
2,169
  
Maintenance and other costs
    
1,184
      
598
  
Total expenses
    
78,403
      
87,270
  
Net income before provision for income taxes
    
43,152
      
47,433
  
Provision for income taxes
    
5,080
      
2,468
  
Net income
  
$
38,072
    
$
44,965
  
Weighted average number of shares
                
-  Basic
    
30,765,840
      
32,632,715
  
-  Diluted
    
30,768,029
      
32,632,715
  
Earnings per share
                
-  Basic
  
$
1.24
    
$
1.38
  
-  Diluted
  
$
1.24
    
$
1.38
  

4
Fly Leasing Limited
Consolidated Balance Sheets
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

   
Mar. 31,
2020
(Unaudited)
    
Dec. 31,
2019
(Audited)
  
Assets
            
Cash and cash equivalents
  
$
361,151
    
$
285,565
  
Restricted cash and cash equivalents
    
30,593
      
52,738
  
Rent receivables
    
19,688
      
14,264
  
Investment in finance lease, net
    
11,334
      
11,639
  
Flight equipment held for sale, net
    
—
      
144,119
  
Flight equipment held for operating lease, net
    
2,716,757
      
2,720,000
  
Maintenance rights
    
280,152
      
290,958
  
Deferred tax asset, net
    
15,166
      
11,675
  
Fair value of derivative assets
    
7,152
      
4,824
  
Other assets, net
    
120,123
      
129,377
  
Total assets
  
$
3,562,116
    
$
3,665,159
  
Liabilities
                
Accounts payable and accrued liabilities
  
$
31,706
    
$
22,746
  
Rentals received in advance
    
13,910
      
16,391
  
Payable to related parties
    
4,270
      
10,077
  
Security deposits
    
40,140
      
40,726
  
Maintenance payment liability, net
    
195,665
      
219,371
  
Unsecured borrowings, net
    
619,842
      
619,407
  
Secured borrowings, net
    
1,579,273
      
1,695,525
  
Deferred tax liability, net
    
63,030
      
57,935
  
Fair value of derivative liabilities
    
54,102
      
27,943
  
Other liabilities
    
69,942
      
76,761
  
Total liabilities
    
2,671,880
      
2,786,882
  
Shareholders’ equity
                
Common shares, $0.001 par value, 499,999,900 shares authorized; 30,481,069 and 30,898,410 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
    
31
      
31
  
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding
    
—
      
—
  
Additional paid-in capital
    
509,738
      
516,254
  
Retained earnings
    
418,464
      
380,392
  
Accumulated other comprehensive loss, net
    
(37,997
)
    
(18,400
)
Total shareholders’ equity
    
890,236
      
878,277
  
Total liabilities and shareholders’ equity
  
$
3,562,116
    
$
3,665,159
  

5
Fly Leasing Limited
Consolidated Statements of Cash Flows
(DOLLARS IN THOUSANDS)

   
Three months ended Mar. 31,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
  
Cash Flows from Operating Activities
            
Net income
  
$
38,072
    
$
44,965
  
Adjustments to reconcile net income to net cash flows provided by operating activities:
                
Gain on sale of aircraft
    
(31,717
)
    
(27,620
)
Depreciation
    
31,631
      
37,585
  
Amortization of debt discounts and debt issuance costs
    
1,875
      
2,796
  
Amortization of lease incentives and other items
    
604
      
1,839
  
Fair value loss on marketable securities
    
9,412
      
—
  
Loss on extinguishment of debt
    
850
      
2,169
  
Provision for deferred income taxes
    
5,181
      
2,472
  
Maintenance payment liability recognized into earnings
    
(2,487
)
    
—
  
Other
    
268
      
(333
)
Changes in operating assets and liabilities:
                
Rent receivables
    
(7,036
)
    
2,505
  
Other assets
    
230
      
(742
)
Payable to related parties
    
(5,807
)
    
(393
)
Accounts payable, accrued liabilities and other liabilities
    
9,957
      
7,348
  
Net cash flows provided by operating activities
    
51,033
      
72,591
  
Cash Flows from Investing Activities
                
Purchase of flight equipment
    
(27,282
)
    
—
  
Proceeds from sale of aircraft, net
    
160,271
      
235,770
  
Payments for aircraft improvement
    
(6,294
)
    
(1,365
)
Payments for lessor maintenance obligations
    
(347
)
    
(584
)
Other
    
(231
)
    
(335
)
Net cash flows provided by investing activities
    
126,117
      
233,486
  

6
   
Three months ended Mar. 31,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
  
Cash Flows from Financing Activities
                
Security deposits received
    
3,305
      
—
  
Security deposits returned
    
—
      
(1,546
)
Maintenance payment liability receipts
    
7,848
      
17,016
  
Maintenance payment liability disbursements
    
(10,109
)
    
(8,604
)
Debt extinguishment costs
    
(20
)
    
(54
)
Debt issuance costs
    
—
      
(342
)
Repayment of secured borrowings
    
(118,211
)
    
(155,184
)
Shares repurchased
    
(6,504
)
    
(2,117
)
Net cash flows used in financing activities
    
(123,691
)
    
(150,831
)
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
    
(18
)
    
(59
)
Net increase in unrestricted and restricted cash and cash equivalents
    
53,441
      
155,187
  
Unrestricted and restricted cash and cash equivalents at beginning of period
    
338,303
      
281,080
  
Unrestricted and restricted cash and cash equivalents at end of period
  
$
391,744
    
$
436,267
  
                 
Reconciliation to Consolidated Balance Sheets:
                
Cash and cash equivalents
  
$
361,151
    
$
363,930
  
Restricted cash and cash equivalents
    
30,593
      
72,337
  
Unrestricted and restricted cash and cash equivalents
  
$
391,744
    
$
436,267
  

7
Fly Leasing Limited
Reconciliation of Non-GAAP Measures
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

   
Three months ended Mar. 31,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
  
Net income
  
$
38,072
    
$
44,965
  
Adjustments:
                
Unrealized foreign exchange gain
    
(95
)
    
(172
)
Deferred income taxes
    
5,181
      
2,472
  
Fair value changes on undesignated derivatives
    
481
      
(112
)
Adjusted Net Income
  
$
43,639
    
$
47,153
  
Average Shareholders’ Equity
  
$
884,257
    
$
720,007
  
Adjusted Return on Equity
    
19.7
%
    
26.2
%
                 
Weighted average diluted shares outstanding
    
30,768,029
      
32,632,715
  
Adjusted Net Income per diluted share
  
$
1.42
    
$
1.44
  
 
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.
 

8