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: August 13, 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 August 13, 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:
August 13, 2020
  
By:
/s/ Colm Barrington
     
Colm Barrington
Chief Executive Officer and
Director

3
EXHIBIT INDEX

Exhibit
Title
   
Press release of Fly Leasing Limited, dated August 13, 2020.


4
Exhibit 99.1
 
 
Fly Leasing Reports Second Quarter 2020 Financial Results
 
Dublin, Ireland, August 13, 2020 – Fly Leasing Limited (NYSE: FLY) (“FLY”), a global leader in aircraft leasing, today announced its financial results for the second quarter of 2020.
 
Highlights
 

 •
Net income of $9.6 million, $0.32 per share

•
Adjusted Net Income of $11.3 million, $0.37 per share

•
$29.46 book value per share at quarter end, a 21% increase since June 30, 2019

•
$289.0 million of unrestricted cash and cash equivalents

•
$597.9 million net book value of unencumbered assets

•
2.1x net debt to equity

“Our second quarter results reflect the challenges of the COVID-19 pandemic but FLY remains in a strong position to meet its financial and operating commitments with unrestricted cash of $289 million and nearly $600 million of unencumbered aircraft,” said Colm Barrington, Chief Executive Officer of FLY. “FLY is reporting a record low net debt to equity ratio of 2.1x at quarter end and 21% growth in book value per share from a year ago to $29.46. FLY does not have any orders for aircraft or other capital commitments and has no significant near-term refinancing requirements.”

“We are working closely with our airline customers and now expect to agree to defer rents representing approximately 20% of contracted rental revenue for the second half of the year,” said Barrington. “Meanwhile, several of our lessees have received support from their governments, which is helping them to meet their payment obligations. FLY also has the benefit of BBAM’s decades of experience and expertise in navigating industry cycles, which is truly an invaluable resource during this time.”
 
Financial Results
 
FLY is reporting net income of $9.6 million, or $0.32 per share, for the second quarter of 2020. This compares to net income of $54.1 million, or $1.68 per share, for the same period in 2019.

Net income for the six months ended June 30, 2020 was $47.7 million, or $1.56 per share, compared to net income of $99.0 million, or $3.06 per share, for the six months ended June 30, 2019.
 
Adjusted Net Income
 
Adjusted Net Income was $11.3 million for the second quarter of 2020, compared to $61.9 million for the same period in the previous year. On a per share basis, Adjusted Net Income was $0.37 in the second quarter of 2020, compared to $1.92 for the second quarter of 2019.

For the six months ended June 30, 2020, Adjusted Net Income was $54.9 million, or $1.79 per share, compared to $109.0 million, or $3.37 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.
 
Financial Position
 
At June 30, 2020, FLY’s total assets were $3.5 billion, including investment in flight equipment totaling $3.0 billion. Total cash at June 30, 2020 was $309.3 million, of which $289.0 million was unrestricted. The book value per share at June 30, 2020 was $29.46, a 21% increase since June 30, 2019. At June 30, 2020, FLY's net debt to equity ratio was 2.1x, a decrease from 2.3x at December 31, 2019.
 
Aircraft Portfolio
 
At June 30, 2020, FLY had 86 aircraft and seven engines in its portfolio. FLY's aircraft and engines are on lease to 41 airlines in 25 countries. The table below does not include the engines.
 
Portfolio at
  
Jun. 30, 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
    
40
      
37
%
    
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
      
14
%
    
4
      
14
%
Total(1)
    
86
      
100
%
    
89
      
100
%

 
(1)
Includes six aircraft classified as held for sale as of December 31, 2019. No aircraft were held for sale as of June 30, 2020.

At June 30, 2020, the average age of the portfolio, weighted by net book value of each aircraft and engine, was 8.0 years. The average remaining lease term was 4.9 years, also weighted by net book value. At June 30, 2020, FLY's portfolio was generating annualized rental revenue of approximately $318 million.
 
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 Thursday, August 13, 2020. Participants should call +1 (409) 220-9381 (International) or (866) 438-0730 (North America) and enter confirmation code 7868869. 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 Jun. 30,
    
Six months ended Jun. 30,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
    
2020
(Unaudited)
    
2019
(Unaudited)
  
Revenues
                        
Operating lease rental revenue
  
$
79,843
    
$
101,108
    
$
165,378
    
$
206,436
  
End of lease income
    
227
      
28,823
      
2,654
      
30,387
  
Amortization of lease incentives
    
(703
)
    
(1,319
)
    
(1,317
)
    
(2,951
)
Amortization of lease discounts and other
    
(250
)
    
11
      
(158
)
    
3
  
Operating lease revenue
    
79,117
      
128,623
      
166,557
      
233,875
  
Finance lease revenue
    
141
      
156
      
286
      
316
  
Gain on sale of aircraft
    
—
      
16,078
      
31,717
      
43,698
  
Interest and other income
    
704
      
2,176
      
2,957
      
3,847
  
Total revenues
    
79,962
      
147,033
      
201,517
      
281,736
  
Expenses
                                
Depreciation
    
31,977
      
37,303
      
63,608
      
74,888
  
Interest expense
    
25,284
      
35,439
      
52,439
      
73,618
  
Selling, general and administrative
    
7,093
      
9,438
      
14,757
      
18,160
  
Provision for uncollectible operating lease receivables
    
2,000
      
—
      
2,000
      
—
  
Loss on derivatives
    
65
      
255
      
572
      
272
  
Fair value loss on marketable securities
    
1,083
      
—
      
10,495
      
—
  
Loss on extinguishment of debt
    
—
      
1,541
      
850
      
3,710
  
Maintenance and other costs
    
1,032
      
1,625
      
2,216
      
2,223
  
Total expenses
    
68,534
      
85,601
      
146,937
      
172,871
  
Net income before provision for income taxes
    
11,428
      
61,432
      
54,580
      
108,865
  
Provision for income taxes
    
1,822
      
7,382
      
6,902
      
9,850
  
Net income
  
$
9,606
    
$
54,050
    
$
47,678
    
$
99,015
  
Weighted average number of shares
                                
-  Basic
    
30,481,069
      
32,053,830
      
30,623,455
      
32,341,674
  
-  Diluted
    
30,481,069
      
32,187,115
      
30,623,455
      
32,396,717
  
Earnings per share
                                
-  Basic
  
$
0.32
    
$
1.69
    
$
1.56
    
$
3.06
  
-  Diluted
  
$
0.32
    
$
1.68
    
$
1.56
    
$
3.06
  

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

   
Jun. 30,
2020
(Unaudited)
    
Dec. 31,
2019
(Audited)
  
Assets
            
Cash and cash equivalents
  
$
288,980
    
$
285,565
  
Restricted cash and cash equivalents
    
20,367
      
52,738
  
Rent receivables, net
    
58,052
      
14,264
  
Investment in finance lease, net
    
11,026
      
11,639
  
Flight equipment held for sale, net
    
—
      
144,119
  
Flight equipment held for operating lease, net
    
2,730,949
      
2,720,000
  
Maintenance rights
    
285,869
      
290,958
  
Deferred tax asset, net
    
15,204
      
11,675
  
Fair value of derivative assets
    
6,285
      
4,824
  
Other assets, net
    
118,194
      
129,377
  
Total assets
  
$
3,534,926
    
$
3,665,159
  
Liabilities
                
Accounts payable and accrued liabilities
  
$
21,681
    
$
22,746
  
Rentals received in advance
    
13,356
      
16,391
  
Payable to related parties
    
3,619
      
10,077
  
Security deposits
    
39,720
      
40,726
  
Maintenance payment liability, net
    
200,354
      
219,371
  
Unsecured borrowings, net
    
620,278
      
619,407
  
Secured borrowings, net
    
1,544,546
      
1,695,525
  
Deferred tax liability, net
    
64,578
      
57,935
  
Fair value of derivative liabilities
    
55,845
      
27,943
  
Other liabilities
    
72,841
      
76,761
  
Total liabilities
    
2,636,818
      
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 June 30, 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
    
428,070
      
380,392
  
Accumulated other comprehensive loss, net
    
(39,731
)
    
(18,400
)
Total shareholders’ equity
    
898,108
      
878,277
  
Total liabilities and shareholders’ equity
  
$
3,534,926
    
$
3,665,159
  

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

   
Six months ended Jun. 30,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
  
Cash Flows from Operating Activities
            
Net income
  
$
47,678
    
$
99,015
  
Adjustments to reconcile net income to net cash flows provided by operating activities:
                
Gain on sale of aircraft
    
(31,717
)
    
(43,698
)
Depreciation
    
63,608
      
74,888
  
Amortization of debt discounts and debt issuance costs
    
3,696
      
5,369
  
Amortization of lease incentives and other items
    
1,635
      
3,324
  
Provision for uncollectible operating lease receivables
    
2,000
      
—
  
Fair value loss on marketable securities
    
10,495
      
—
  
Loss on extinguishment of debt
    
850
      
3,710
  
Provision for deferred income taxes
    
6,763
      
9,991
  
Security deposits and maintenance payment liability recognized into earnings
    
(2,487
)
    
(26,145
)
Cash receipts from maintenance rights
    
2,725
      
1,741
  
Other
    
252
      
(113
)
Changes in operating assets and liabilities:
                
Rent receivables
    
(47,549
)
    
(2,011
)
Other assets
    
3,490
      
(3,360
)
Payable to related parties
    
(6,458
)
    
2,131
  
Accounts payable, accrued liabilities and other liabilities
    
(72
)
    
(2,054
)
Net cash flows provided by operating activities
    
54,909
      
122,788
  
Cash Flows from Investing Activities
                
Purchase of flight equipment
    
(74,128
)
    
(61,381
)
Proceeds from sale of aircraft, net
    
160,271
      
410,939
  
Payments for aircraft improvement
    
(12,888
)
    
(2,832
)
Payments for lessor maintenance obligations
    
(357
)
    
(1,461
)
Other
    
(890
)
    
(643
)
Net cash flows provided by investing activities
    
72,008
      
344,622
  

6
             
   
Six months ended Jun. 30,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
  
Cash Flows from Financing Activities
            
Security deposits received
    
3,305
      
—
  
Security deposits returned
    
—
      
(1,546
)
Maintenance payment liability receipts
    
12,039
      
33,633
  
Maintenance payment liability disbursements
    
(10,109
)
    
(12,738
)
Debt extinguishment costs
    
(20
)
    
(74
)
Debt issuance costs
    
—
      
(342
)
Repayment of secured borrowings
    
(154,625
)
    
(325,317
)
Shares repurchased
    
(6,504
)
    
(27,025
)
Net cash flows used in financing activities
    
(155,914
)
    
(333,409
)
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
    
41
      
(28
)
Net (decrease) increase in unrestricted and restricted cash and cash equivalents
    
(28,956
)
    
133,973
  
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
  
$
309,347
    
$
415,053
  
                 
Reconciliation to Consolidated Balance Sheets:
                
Cash and cash equivalents
  
$
288,980
    
$
351,892
  
Restricted cash and cash equivalents
    
20,367
      
63,161
  
Unrestricted and restricted cash and cash equivalents
  
$
309,347
    
$
415,053
  

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

   
Three months ended Jun. 30,
    
Six months ended Jun. 30,
  
   
2020
(Unaudited)
    
2019
(Unaudited)
    
2020
(Unaudited)
    
2019
(Unaudited)
  
Net income
  
$
9,606
    
$
54,050
    
$
47,678
    
$
99,015
  
Adjustments:
                                
Unrealized foreign exchange (gain) loss
    
56
      
68
      
(39
)
    
(104
)
Deferred income taxes
    
1,582
      
7,519
      
6,763
      
9,991
  
Fair value changes on undesignated derivatives
    
13
      
255
      
494
      
143
  
Adjusted Net Income
  
$
11,257
    
$
61,892
    
$
54,896
    
$
109,045
  
Average Shareholders’ Equity
  
$
894,172
    
$
745,783
      
888,874
      
731,225
  
Adjusted Return on Equity
    
5.0
%
    
33.2
%
    
12.4
%
    
29.8
%
                                 
Weighted average diluted shares outstanding
    
30,481,069
      
32,187,115
      
30,623,455
      
32,396,717
  
Adjusted Net Income per diluted share
  
$
0.37
    
$
1.92
    
$
1.79
    
$
3.37
  

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