☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of each class
|
Name of each exchange on which registered
|
|||
American Depositary Shares
|
New York Stock Exchange
|
|||
Common Shares, par value of $0.001 per share
|
New York Stock Exchange*
|
* |
Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission.
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
Non-accelerated filer ☐
|
Emerging growth company ☐
|
U.S. GAAP ☒
|
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐
|
Other ☐
|
Page
|
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PART I
|
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3
|
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3
|
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3
|
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26
|
|
33
|
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33
|
|
51
|
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54
|
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64
|
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65
|
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66
|
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75
|
|
76
|
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PART II
|
|
77
|
|
77
|
|
77
|
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79
|
|
79
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79
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79
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80
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80
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80
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|
80
|
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PART III
|
|
F-1
|
|
F-2
|
|
81
|
(Dollars in thousands, except per share data)
Years ended
|
||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||
Statement of income data:
|
||||||||||||||||||||
Operating lease revenue
|
$
|
346,894
|
$
|
313,582
|
$
|
429,691
|
$
|
406,563
|
$
|
351,792
|
||||||||||
Gain on sale of aircraft
|
3,926
|
27,195
|
28,959
|
14,761
|
5,421
|
|||||||||||||||
Total revenues
|
353,251
|
345,039
|
462,397
|
425,548
|
360,634
|
|||||||||||||||
Total expenses
|
339,321
|
381,428
|
434,200
|
356,673
|
303,560
|
|||||||||||||||
Net income (loss)
|
2,598
|
(29,112
|
)
|
22,798
|
60,184
|
53,940
|
||||||||||||||
Earnings (loss) per share:
|
||||||||||||||||||||
Basic
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
$
|
1.42
|
$
|
1.55
|
|||||||||
Diluted
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
$
|
1.42
|
$
|
1.55
|
|||||||||
Dividends declared and paid per share
|
$
|
—
|
$
|
—
|
$
|
1.00
|
$
|
1.00
|
$
|
0.88
|
(Dollars in thousands, except per share data)
As of December 31,
|
||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||
Balance sheet data:
|
||||||||||||||||||||
Total assets
|
$
|
3,595,615
|
$
|
3,447,009
|
$
|
3,424,480
|
$
|
4,218,408
|
$
|
3,660,679
|
||||||||||
Total liabilities
|
3,051,906
|
2,853,774
|
2,767,516
|
3,462,154
|
2,918,583
|
|||||||||||||||
Total shareholders’ equity
|
543,709
|
593,235
|
656,964
|
756,254
|
742,096
|
|||||||||||||||
Number of shares outstanding
|
27,983,352
|
32,256,440
|
35,671,400
|
41,432,998
|
41,306,338
|
· |
the particular maintenance, damage and operating history of the airframes and engines;
|
· |
the number of operators using a type of aircraft or engine;
|
· |
whether an aircraft is subject to a lease and, if so, whether the lease terms are favorable to the lessor;
|
· |
the age of our aircraft;
|
· |
airworthiness directives and service bulletins;
|
· |
aircraft noise and emission standards;
|
· |
any tax, customs, regulatory and other legal requirements that must be satisfied when an aircraft is purchased, sold or re-leased;
|
· |
compatibility of our aircraft configurations or specifications with other aircraft owned by operators of that type; and
|
· |
decreases in the creditworthiness of our lessees.
|
· |
passenger air travel and air cargo demand;
|
· |
geopolitical and other events, including war, acts of terrorism, civil unrest, outbreaks of epidemic diseases and natural disasters;
|
· |
airline operating costs, including fuel costs;
|
· |
general economic conditions affecting our lessees’ operations;
|
· |
governmental regulation, including new airworthiness directives, statutory limits on age of aircraft, and restrictions in certain jurisdictions on the age of aircraft for import, climate change initiatives and environmental regulation, and other factors leading to obsolescence of aircraft models;
|
· |
interest and foreign exchange rates;
|
· |
airline restructurings and bankruptcies;
|
· |
increased supply due to the sale of aircraft portfolios;
|
· |
availability and cost of credit;
|
· |
manufacturer production levels and technological innovation;
|
· |
retirement and obsolescence of aircraft models;
|
· |
manufacturers merging or exiting the industry or ceasing to produce aircraft or engine types;
|
· |
accuracy of estimates relating to future supply and demand made by manufacturers and lessees;
|
· |
reintroduction into service of aircraft or engines previously in storage; and
|
· |
airport and air traffic control infrastructure constraints.
|
· |
impair our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions and investments;
|
· |
significantly increase our interest expense and financial leverage to the extent we incur additional debt to finance acquisitions and investments;
|
· |
incur or assume unanticipated liabilities, losses or costs associated with the aircraft that we acquire, or investments we may make; or
|
· |
incur other significant charges, including asset impairment or restructuring charges.
|
· |
airlines;
|
· |
aircraft manufacturers;
|
· |
financial institutions (including those seeking to dispose of repossessed aircraft at distressed prices);
|
· |
aircraft brokers;
|
· |
special purpose vehicles formed for the purpose of acquiring, leasing and selling aircraft; and
|
· |
public and private partnerships, investors and funds, including private equity and hedge funds.
|
· |
competition;
|
· |
fare levels;
|
· |
air cargo rates;
|
· |
passenger air travel and air cargo demand;
|
· |
geopolitical and other events, including war, acts of terrorism, civil unrest, outbreaks of epidemic diseases and natural disasters;
|
· |
increases in operating costs, including the availability and cost of jet fuel and labor costs;
|
· |
labor difficulties;
|
· |
economic and financial conditions and currency fluctuations in the countries and regions in which the lessee operates; and
|
· |
governmental regulation of, or affecting, the air transportation business, including noise and emissions regulations, climate change initiatives and age limitations.
|
· |
result in a grounding of the aircraft;
|
· |
cause us to incur costs in restoring the aircraft to an acceptable maintenance condition to re-lease the aircraft;
|
· |
adversely affect lease terms in the re-lease of the aircraft; and
|
· |
adversely affect the value of the aircraft.
|
· |
at least 75% of our independent directors and holders of 75% or more of all of our outstanding common shares (measured by vote) determine by resolution that there has been unsatisfactory performance by our Manager that is materially detrimental to us;
|
· |
our Manager materially breaches the management agreement and fails to remedy such breach within 90 days of receiving written notice from us requiring it to do so, or such breach results in liability to us and is attributable to our Manager’s gross negligence, fraud or dishonesty, or willful misconduct in respect of the obligation to apply the standard of care;
|
· |
any license, permit or authorization held by the Manager which is necessary for it to perform the services and duties under the management agreement is materially breached, suspended or revoked, or otherwise made subject to conditions which, in the reasonable opinion of our board of directors, would prevent the Manager from performing the services and the situation is not remedied within 90 days;
|
· |
BBAM Aviation Services Limited or one of its affiliates ceases to hold (directly or indirectly) more than 50% of the voting equity of, and economic interest in, the Manager;
|
· |
our Manager becomes subject to bankruptcy or insolvency proceedings that are not discharged within 75 days, unless our Manager is withdrawn and replaced within 90 days of the initiation of such bankruptcy or insolvency proceedings with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the management agreement;
|
· |
our Manager voluntarily commences any proceeding or files any petition seeking bankruptcy, insolvency, receivership or similar law, or makes a general assignment for the benefit of its creditors, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the management agreement; or
|
· |
an order is made for the winding up of our Manager, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the management agreement.
|
· |
Bankruptcy or insolvency of BBAM LP;
|
· |
BBAM LP ceases to own, directly or indirectly, at least 50% of the Servicer;
|
· |
Summit ceases to own, directly or indirectly, at least 33.33% of the partnership interests in BBAM LP; provided that a sale that results in such ownership being at a level below 33.33% shall not constitute a servicer termination event if the sale is to a publicly listed entity or other person with a net worth of at least $100.0 million; and
|
· |
50% or more of the Servicer’s key finance and legal team or technical and marketing team cease to be employed by BBAM LP and are not replaced with employees with reasonably comparable experience within 90 days.
|
· |
most of the aircraft and related leases in our portfolio secure debt obligations, the terms of which restrict our ability to sell aircraft and require us to use proceeds from sales of aircraft, in part, to repay outstanding debt;
|
· |
we are required to dedicate a significant portion of our cash flows from operations to debt service payments, thereby reducing the amount of our cash flows available to fund working capital, make capital expenditures and satisfy other needs;
|
· |
restrictions on our subsidiaries’ ability to distribute excess cash flows to us under certain circumstances;
|
· |
lessee, geographical and other concentration requirements limit our flexibility in leasing our aircraft;
|
· |
requirements to obtain the consent of third parties including lenders, the insurance policy provider and rating agency confirmations for certain actions; and
|
· |
restrictions on our subsidiaries’ ability to incur additional debt, pay dividends or make other restricted payments, create liens on assets, sell assets, enter into transactions with our affiliates, make freighter conversions and make certain investments or capital expenditures.
|
· |
making it more difficult for us to satisfy our debt obligations with respect to the notes and our other debt;
|
· |
limiting our ability to obtain additional financing to fund the acquisition of aircraft or for other general corporate requirements;
|
· |
requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for aircraft acquisitions and other general corporate purposes;
|
· |
increasing our vulnerability to general adverse economic and industry conditions;
|
· |
exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our various credit facilities, are at variable rates of interest;
|
· |
limiting our flexibility in planning for and reacting to changes in the aircraft industry;
|
· |
placing us at a disadvantage compared to other competitors; and
|
· |
increasing our cost of borrowing.
|
Facility
(1)
|
Amount Outstanding
at December 31, 2017
(2)
|
Number of
Aircraft Financed
|
Maturity Date
|
|||||
Securitization Notes
|
$ |
101.6 million
|
9
|
November 2033
|
||||
Nord LB Facility
|
$ |
153.2 million
|
6
|
November 2018
|
(1) |
Excludes $431.9 million outstanding for seven aircraft financed by individual non-recourse loans.
|
(2) |
Excludes unamortized debt discounts and loan costs.
|
· |
announcements concerning our competitors, the airline industry or the economy in general;
|
· |
announcements concerning the availability of the type of aircraft we own;
|
· |
general and industry-specific economic conditions;
|
· |
changes in the price of aircraft fuel;
|
· |
changes in financial estimates or recommendations by securities analysts or failure to meet analysts’ performance expectations;
|
· |
any increased indebtedness we may incur in the future;
|
· |
speculation or reports by the press or investment community with respect to us or our industry in general;
|
· |
announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments;
|
· |
changes or proposed changes in laws or regulations affecting the airline industry or enforcement of these laws and regulations, or announcements relating to these matters; and
|
· |
general market, political and economic conditions, including any such conditions and local conditions in the markets in which our lessees are located.
|
· |
provisions that permit us to require any competitor of BBAM LP that acquires beneficial ownership of more than 15% of our common shares either to tender for all of our remaining common shares for no less than their fair market value, or sell such number of common shares to us or to third parties as to reduce its beneficial ownership to less than 15%, in either case within 90 days of our request to so tender or sell;
|
· |
provisions that reduce the vote of each common share held by a competitor of BBAM LP that beneficially owns 15% or more, but less than 50%, of our common shares to three-tenths of one vote per share on all matters upon which shareholders may vote;
|
· |
provisions that permit our board of directors to determine the powers, preferences and rights of any preference shares we may issue and to issue any such preference shares without shareholder approval;
|
· |
advance notice requirements by shareholders for director nominations and actions to be taken at annual meetings; and
|
· |
no provision for cumulative voting in the election of directors, such that all the directors standing for election may be elected by our shareholders by a plurality of votes cast at a duly convened annual general meeting, the quorum for which is two or more persons present in person or by proxy at the start of the meeting and representing in excess of 25% of all votes attaching to all shares in issue entitling the holder to vote at the meeting.
|
Lessee
|
Aircraft Type
|
Airframe Type
|
Date of
Manufacture
|
|
1.
|
Aeromexico
|
B737-700
|
Narrow-body
|
2006
|
2.
|
Aeromexico
|
B737-700
|
Narrow-body
|
2005
|
3.
|
Aeromexico
|
B737-700
|
Narrow-body
|
2005
|
4.
|
Air China
|
B737-800
|
Narrow-body
|
2007
|
5.
|
Air Europa
|
B787-8
|
Wide-body
|
2017
|
6.
|
Air India
|
B787-8
|
Wide-body
|
2015
|
7.
|
Air India
|
B787-8
|
Wide-body
|
2014
|
8.
|
Air India
|
B787-8
|
Wide-body
|
2014
|
9.
|
Air Moldova
|
A319-100
|
Narrow-body
|
2006
|
10.
|
American Airlines
|
B737-800
|
Narrow-body
|
2013
|
11.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
12.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
13.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
14.
|
American Airlines
|
A319-100
|
Narrow-body
|
2000
|
15.
|
Chang’An Airlines
|
B737-800
|
Narrow-body
|
2006
|
16.
|
easyJet
|
A319-100
|
Narrow-body
|
2007
|
17.
|
easyJet
|
A319-100
|
Narrow-body
|
2004
|
18.
|
easyJet
|
A319-100
|
Narrow-body
|
2004
|
19.
|
Ethiopian Airlines
|
B777-200LRF
(1)
|
Wide-body
|
2015
|
20.
|
Ethiopian Airlines
|
B777-200LRF
(1)
|
Wide-body
|
2015
|
21.
|
Finnair
|
A320-200
(2)
|
Narrow-body
|
2003
|
22.
|
flydubai
|
B737-800
|
Narrow-body
|
2010
|
23.
|
Frontier
|
A319-100
|
Narrow-body
|
2001
|
24.
|
Garuda Indonesia
|
B737-800
|
Narrow-body
|
2010
|
25.
|
Garuda Indonesia
|
B737-800
|
Narrow-body
|
2010
|
26.
|
Go2Sky
|
B737-800
|
Narrow-body
|
1998
|
27.
|
Icelandair
|
B757-200SF
(1)
|
Narrow-body
|
1990
|
28.
|
Israir Airlines
|
A320-200
|
Narrow-body
|
2016
|
29.
|
IZair
|
B737-800
|
Narrow-body
|
2007
|
30.
|
IZair
|
B737-800
|
Narrow-body
|
2006
|
31.
|
Jet Airways
|
B737-800
|
Narrow-body
|
2014
|
32.
|
Jet Airways
|
B737-800
|
Narrow-body
|
2014
|
33.
|
Jet Airways
|
B737-800
|
Narrow-body
|
2014
|
34.
|
Jet Lite
|
B737-700
|
Narrow-body
|
2002
|
35.
|
Jetstar Pacific Airlines
|
A320-200
|
Narrow-body
|
2005
|
36.
|
LATAM
|
B787-8
|
Wide-body
|
2013
|
37.
|
Lucky Air Airlines
|
B737-800
|
Narrow-body
|
2007
|
38.
|
Lucky Air Airlines
|
B737-800
|
Narrow-body
|
2007
|
39.
|
Malaysian Airlines
|
B737-800
|
Narrow-body
|
2012
|
40.
|
Malaysian Airlines
|
B737-800
|
Narrow-body
|
2011
|
41.
|
Malaysian Airlines
|
B737-800
|
Narrow-body
|
2011
|
42.
|
Nok Airlines
|
B737-800
|
Narrow-body
|
2015
|
43.
|
Oman Air S.A.O.C.
|
B737-800
|
Narrow-body
|
2009
|
44.
|
Oman Air S.A.O.C.
|
B737-800
|
Narrow-body
|
2009
|
45.
|
Philippine Airlines
|
A321-200
|
Narrow-body
|
2014
|
46.
|
Philippine Airlines
|
A321-200
|
Narrow-body
|
2014
|
47.
|
Philippine Airlines
|
A330-300
|
Wide-body
|
2013
|
48.
|
Philippine Airlines
|
A330-300
|
Wide-body
|
2013
|
49.
|
PT Lion Mentari
|
B737-MAX 8
|
Narrow-body
|
2017
|
50.
|
PT Lion Mentari
|
B737-MAX 8
|
Narrow-body
|
2017
|
51.
|
PT. Batik Air Indonesia
|
A320-200
|
Narrow-body
|
2017
|
52.
|
Shandong Airlines
|
B737-800
|
Narrow-body
|
2013
|
53.
|
Shandong Airlines
|
B737-800
|
Narrow-body
|
2013
|
54.
|
Silk Air
|
A320-200
|
Narrow-body
|
2004
|
55.
|
Spicejet
|
B737-800
|
Narrow-body
|
2010
|
56.
|
Spicejet
|
B737-800
|
Narrow-body
|
2010
|
Lessee
|
Aircraft Type
|
Airframe Type
|
Date of
Manufacture
|
|
57.
|
Spicejet
|
B737-800
|
Narrow-body
|
2007
|
58.
|
Spicejet
|
B737-800
|
Narrow-body
|
2007
|
59.
|
Spicejet
|
B737-900ER
|
Narrow-body
|
2007
|
60.
|
Sun Express (Turkey)
|
B737-800
|
Narrow-body
|
2007
|
61.
|
Sunwing Airlines
|
B737-800
|
Narrow-body
|
2006
|
62.
|
Sunwing Airlines
|
B737-800
|
Narrow-body
|
2006
|
63.
|
Swift Air
|
B737-800
|
Narrow-body
|
2006
|
64.
|
TAM
|
A320-200
|
Narrow-body
|
2006
|
65.
|
TAROM S.A.
|
B737-800
|
Narrow-body
|
2017
|
66.
|
THY
|
A320-200
|
Narrow-body
|
2005
|
67.
|
THY
|
A320-200
|
Narrow-body
|
2005
|
68.
|
THY
|
A320-200
|
Narrow-body
|
2005
|
69.
|
Transavia France
|
B737-800
|
Narrow-body
|
2008
|
70.
|
Transavia France
|
B737-800
|
Narrow-body
|
2008
|
71.
|
Transavia France
|
B737-800
|
Narrow-body
|
2007
|
72.
|
Transavia France
|
B737-800
|
Narrow-body
|
2007
|
73.
|
Travel Service
|
B737-800
|
Narrow-body
|
2010
|
74.
|
Travel Service
|
B737-800
|
Narrow-body
|
2010
|
75.
|
TUI Travel Aviation Finance
|
B737-800
|
Narrow-body
|
2010
|
76.
|
TUI Travel Aviation Finance
|
B757-200
|
Narrow-body
|
1999
|
77.
|
TUI Travel Aviation Finance
|
B757-200
|
Narrow-body
|
1999
|
78.
|
Virgin America
|
A320-200
|
Narrow-body
|
2007
|
79.
|
Virgin Atlantic
|
A340-600
|
Wide-body
|
2006
|
80.
|
Virgin Atlantic
|
A340-600
|
Wide-body
|
2006
|
81.
|
Vueling Airlines
|
A320-200
|
Narrow-body
|
2007
|
82.
|
Vueling Airlines
|
A320-200
|
Narrow-body
|
2007
|
83.
|
Yakutia
|
B737-800
|
Narrow-body
|
2002
|
84.
|
Off lease
|
A321-200
|
Narrow-body
|
2015
|
85.
|
Off lease
(3)
|
A330-200
|
Wide-body
|
2001
|
(1) |
Freighter.
|
(2) |
Investment in finance lease.
|
(3) |
In January 2018, the aircraft was delivered to Virgin Atlantic.
|
Aircraft Manufacturer
|
Aircraft
Type
|
Number of
Aircraft
|
||
Airbus
|
A319-100
|
9
|
||
A320-200
(1)
|
12
|
|||
A321-200
|
3
|
|||
A330-200
|
1
|
|||
A330-300
|
2
|
|||
A340-600
|
2
|
|||
Total
|
29
|
|||
Boeing
|
B737-700
|
4
|
||
B737-MAX 8
|
2
|
|||
B737-800
|
39
|
|||
B737-900ER
|
1
|
|||
B757-200
|
2
|
|||
B757-200SF
|
1
|
|||
B777-200LRF
|
2
|
|||
B787-8
|
5
|
|||
Total
|
56
|
|||
Total
|
85
|
(1) |
Includes an investment in finance lease.
|
Airframe Type
|
Number of
Aircraft
|
|
Narrow-body
(1) (2)
|
73
|
|
Wide-body
(3)
|
12
|
|
Total
|
85
|
(1) |
Includes an investment in finance lease.
|
(2) |
Includes one freighter.
|
(3) |
Includes two freighters.
|
Years ended
|
||||||||||||||||||||||||
2017
|
2016
|
2015
|
||||||||||||||||||||||
Europe:
|
||||||||||||||||||||||||
Spain
|
$
|
11,199
|
3
|
%
|
$
|
5,361
|
2
|
%
|
$
|
9,191
|
2
|
%
|
||||||||||||
Turkey
|
17,103
|
5
|
%
|
24,593
|
8
|
%
|
29,847
|
7
|
%
|
|||||||||||||||
United Kingdom
|
29,182
|
8
|
%
|
34,498
|
11
|
%
|
50,742
|
12
|
%
|
|||||||||||||||
Germany
|
26,457
|
8
|
%
|
13,836
|
4
|
%
|
18,201
|
4
|
%
|
|||||||||||||||
Russia
|
1,927
|
1
|
%
|
3,141
|
1
|
%
|
24,095
|
6
|
%
|
|||||||||||||||
Other
(1)
|
27,984
|
8
|
%
|
27,319
|
8
|
%
|
46,779
|
11
|
%
|
|||||||||||||||
Europe — Total
|
113,852
|
33
|
%
|
108,748
|
34
|
%
|
178,855
|
42
|
%
|
|||||||||||||||
Asia and South Pacific:
|
||||||||||||||||||||||||
India
|
64,381
|
18
|
%
|
39,640
|
13
|
%
|
19,572
|
4
|
%
|
|||||||||||||||
Philippines
|
29,825
|
9
|
%
|
29,129
|
9
|
%
|
38,677
|
9
|
%
|
|||||||||||||||
Indonesia
|
16,308
|
5
|
%
|
8,320
|
3
|
%
|
7,915
|
2
|
%
|
|||||||||||||||
China
|
22,611
|
6
|
%
|
23,882
|
8
|
%
|
37,943
|
9
|
%
|
|||||||||||||||
Other
|
19,263
|
6
|
%
|
18,967
|
5
|
%
|
31,141
|
7
|
%
|
|||||||||||||||
Asia and South Pacific — Total
|
152,388
|
44
|
%
|
119,938
|
38
|
%
|
135,248
|
31
|
%
|
|||||||||||||||
Mexico, South and Central America:
|
||||||||||||||||||||||||
Chile
|
8,939
|
3
|
%
|
8,939
|
3
|
%
|
24,336
|
6
|
%
|
|||||||||||||||
Other
|
8,626
|
2
|
%
|
8,768
|
3
|
%
|
16,732
|
4
|
%
|
|||||||||||||||
Mexico, South and Central America — Total
|
17,565
|
5
|
%
|
17,707
|
6
|
%
|
41,068
|
10
|
%
|
|||||||||||||||
North America:
|
||||||||||||||||||||||||
United States
|
17,647
|
5
|
%
|
24,591
|
8
|
%
|
37,316
|
9
|
%
|
|||||||||||||||
Other
|
6,237
|
2
|
%
|
6,223
|
2
|
%
|
6,380
|
1
|
%
|
|||||||||||||||
North America — Total
|
23,884
|
7
|
%
|
30,814
|
10
|
%
|
43,696
|
10
|
%
|
|||||||||||||||
Middle East and Africa:
|
||||||||||||||||||||||||
Ethiopia
|
30,018
|
9
|
%
|
30,084
|
10
|
%
|
22,808
|
5
|
%
|
|||||||||||||||
Other
|
9,918
|
2
|
%
|
8,357
|
2
|
%
|
8,315
|
2
|
%
|
|||||||||||||||
Middle East and Africa — Total
|
39,936
|
11
|
%
|
38,441
|
12
|
%
|
31,123
|
7
|
%
|
|||||||||||||||
Total Lease Revenue
|
$
|
347,625
|
100
|
%
|
$
|
315,648
|
100
|
%
|
$
|
429,990
|
100
|
%
|
(1) |
Includes $0.7 million, $2.1 million and $0.3 million of finance lease revenue in 2017, 2016 and 2015, respectively.
|
Airframe Type
|
|||||
Year of Scheduled Lease Expiration
|
Narrow
|
Wide
|
Total
|
||
Off-lease
|
1
|
1
|
2
|
||
2018
|
7
|
—
|
7
|
||
2019
|
15
|
2
|
17
|
||
2020
|
11
|
(1)
|
—
|
11
|
|
2021
|
8
|
—
|
8
|
||
2022
|
10
|
—
|
10
|
||
2023
|
6
|
—
|
6
|
||
2024
|
4
|
—
|
4
|
||
2025
|
3
|
(2)
|
3
|
6
|
|
2026
|
2
|
—
|
2
|
||
2027
|
2
|
(3)
|
2
|
4
|
|
2028
|
1
|
3
|
4
|
||
2029
|
3
|
1
|
4
|
||
Total
|
73
|
12
|
85
|
(1) |
Includes one freighter.
|
(2) |
Includes an investment in finance lease.
|
(3) |
Includes two freighters.
|
Lessee
|
Sublessee
|
|
Transavia France S.A.S.
|
Air Transat A.T. Inc.
|
|
Travel Service, a.s.
|
Sunwing Airlines Inc.
|
● |
Flight equipment where original manufacturer’s prices are not relevant due to plane modifications and conversions.
|
● |
Flight equipment that is out of production and may have a shorter useful life or lower residual value due to obsolescence.
|
● |
The remaining life of a converted freighter is determined based on the date of conversion, in which case, the total useful life may extend beyond 25 years from the date of manufacture.
|
● |
Flight equipment which management believes will be disposed of prior to the end of its estimated useful life.
|
● |
Operating lease revenue.
We receive lease revenue from flight equipment under operating leases. Rental income from aircraft is recognized on a straight-line basis over the initial term of the respective lease. The operating lease agreements generally do not provide for purchase options, however, the leases may allow the lessee to exercise an option to extend the lease for an additional term. Contingent rents are recognized as revenue when the contingency is resolved. Revenue is not recognized when collection is not reasonably assured.
|
● |
End of lease income.
The amount of end of lease income we recognize in any reporting period is inherently volatile and depends upon a number of factors, including the timing of both scheduled and unscheduled lease expiries, and the timing of maintenance performed on the aircraft by the lessee, among others.
|
● |
Lease incentives.
Our leases may contain provisions which require us to contribute a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. We account for these expected payments as lease incentives, which are amortized as a reduction of lease revenue over the life of the lease.
|
● |
Finance lease income.
Revenue from finance leases is recognized using the interest method to produce a level yield over the life of the finance lease.
|
Years ended
|
Increase/
(Decrease)
|
|||||||||||
2017
|
2016
|
|||||||||||
(Dollars in thousands)
|
||||||||||||
Revenues
|
||||||||||||
Operating lease revenue
|
$
|
346,894
|
$
|
313,582
|
$
|
33,312
|
||||||
Finance lease revenue
|
731
|
2,066
|
(1,335
|
)
|
||||||||
Equity earnings from unconsolidated subsidiary
|
496
|
530
|
(34
|
)
|
||||||||
Gain on sale of aircraft
|
3,926
|
27,195
|
(23,269
|
)
|
||||||||
Interest and other income
|
1,204
|
1,666
|
(462
|
)
|
||||||||
Total revenues
|
353,251
|
345,039
|
8,212
|
|||||||||
Expenses
|
||||||||||||
Depreciation
|
133,227
|
120,452
|
12,775
|
|||||||||
Aircraft impairment
|
22,000
|
96,122
|
(74,122
|
)
|
||||||||
Interest expense
|
127,782
|
123,161
|
4,621
|
|||||||||
Selling, general and administrative
|
30,671
|
30,077
|
594
|
|||||||||
Ineffective, dedesignated and terminated derivatives
|
(192
|
)
|
91
|
(283
|
)
|
|||||||
Loss on modification and extinguishment of debt
|
23,309
|
9,246
|
14,063
|
|||||||||
Maintenance and other costs
|
2,524
|
2,279
|
245
|
|||||||||
Total expenses
|
339,321
|
381,428
|
(42,107
|
)
|
||||||||
Net income (loss) before provision (benefit) for income taxes
|
13,930
|
(36,389
|
)
|
50,319
|
||||||||
Provision (benefit) for income taxes
|
11,332
|
(7,277
|
)
|
18,609
|
||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
31,710
|
Years ended
|
|
Increase/
(Decrease)
|
||||||||||
2017
|
2016
|
|||||||||||
(Dollars in thousands)
|
||||||||||||
Operating lease revenue:
|
||||||||||||
Operating lease rental revenue
|
$
|
337,137
|
$
|
313,976
|
$
|
23,161
|
||||||
End of lease income
|
17,837
|
8,918
|
8,919
|
|||||||||
Amortization of lease incentives
|
(7,668
|
)
|
(8,898
|
)
|
1,230
|
|||||||
Amortization of lease premiums, discounts & other
|
(412
|
)
|
(414
|
)
|
2
|
|||||||
Total operating lease revenue
|
$
|
346,894
|
$
|
313,582
|
$
|
33,312
|
Years ended
|
Increase/
(Decrease)
|
|||||||||||
2016
|
2015
|
|||||||||||
(Dollars in thousands)
|
||||||||||||
Revenues
|
||||||||||||
Operating lease revenue
|
$
|
313,582
|
$
|
429,691
|
$
|
(116,109
|
)
|
|||||
Finance lease revenue
|
2,066
|
299
|
1,767
|
|||||||||
Equity earnings from unconsolidated subsidiary
|
530
|
1,159
|
(629
|
)
|
||||||||
Gain on sale of aircraft
|
27,195
|
28,959
|
(1,764
|
)
|
||||||||
Interest and other income
|
1,666
|
2,289
|
(623
|
)
|
||||||||
Total revenues
|
345,039
|
462,397
|
(117,358
|
)
|
||||||||
Expenses
|
||||||||||||
Depreciation
|
120,452
|
159,732
|
(39,280
|
)
|
||||||||
Aircraft impairment
|
96,122
|
66,093
|
30,029
|
|||||||||
Interest expense
|
123,161
|
145,448
|
(22,287
|
)
|
||||||||
Selling, general and administrative
|
30,077
|
33,674
|
(3,597
|
)
|
||||||||
Ineffective, dedesignated and terminated derivatives
|
91
|
4,134
|
(4,043
|
)
|
||||||||
Loss on modification and extinguishment of debt
|
9,246
|
17,491
|
(8,245
|
)
|
||||||||
Maintenance and other costs
|
2,279
|
7,628
|
(5,349
|
)
|
||||||||
Total expenses
|
381,428
|
434,200
|
(52,772
|
)
|
||||||||
Net income (loss) before provision (benefit) for income taxes
|
(36,389
|
)
|
28,197
|
(64,586
|
)
|
|||||||
Provision (benefit) for income taxes
|
(7,277
|
)
|
5,399
|
(12,676
|
)
|
|||||||
Net income (loss)
|
$
|
(29,112
|
)
|
$
|
22,798
|
$
|
(51,910
|
)
|
Years ended
|
|
Increase/
(Decrease)
|
||||||||||
2016
|
2015
|
|||||||||||
(Dollars in thousands)
|
||||||||||||
Operating lease revenue:
|
||||||||||||
Operating lease rental revenue
|
$
|
313,976
|
$
|
398,741
|
$
|
(84,765
|
)
|
|||||
End of lease income
|
8,918
|
53,760
|
(44,842
|
)
|
||||||||
Amortization of lease incentives
|
(8,898
|
)
|
(20,527
|
)
|
11,629
|
|||||||
Amortization of lease premiums, discounts & other
|
(414
|
)
|
(2,283
|
)
|
1,869
|
|||||||
Total operating lease revenue
|
$
|
313,582
|
$
|
429,691
|
$
|
(116,109
|
)
|
If redeemed during the 12-month period commencing on October 15 of the years set forth below:
|
Redemption Price
|
|||
2017
|
104.781
|
%
|
||
2018
|
103.188
|
%
|
||
2019
|
101.594
|
%
|
||
2020 and thereafter
|
100.000
|
%
|
If redeemed during the 12-month period commencing on October 15 of the years set forth below
:
|
Redemption Price
|
|||
2020
|
102.625
|
%
|
||
2021
|
101.313
|
%
|
||
2022 and thereafter
|
100.000
|
%
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
||||||||||||||||||||||
Principal payments:
|
||||||||||||||||||||||||||||
Principal payment under the 2021 Notes
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
325,000
|
$
|
—
|
$
|
—
|
$
|
325,000
|
||||||||||||||
Principal payment under the 2024 Notes
|
—
|
—
|
—
|
—
|
—
|
300,000
|
300,000
|
|||||||||||||||||||||
Principal payments under the Securitization Notes
(1)
|
10,497
|
16,208
|
3,447
|
12,047
|
12,337
|
47,015
|
101,551
|
|||||||||||||||||||||
Principal payments under the Nord LB Facility
(2)
|
153,176
|
—
|
—
|
—
|
—
|
—
|
153,176
|
|||||||||||||||||||||
Principal payments under the CBA Facility
|
7,816
|
8,172
|
33,092
|
—
|
—
|
—
|
49,080
|
|||||||||||||||||||||
Principal payments under the Term Loan
(3)
|
23,504
|
22,404
|
22,404
|
22,404
|
22,404
|
318,151
|
431,271
|
|||||||||||||||||||||
Principal payments under the Magellan Acquisition Limited Facility
|
26,542
|
26,542
|
26,542
|
26,542
|
26,542
|
199,058
|
331,768
|
|||||||||||||||||||||
Principal payments under the Fly Acquisition III Facility
|
7,182
|
7,182
|
7,182
|
7,182
|
7,182
|
50,610
|
86,520
|
|||||||||||||||||||||
Principal payments under Other Aircraft Secured Borrowings
|
81,197
|
88,722
|
94,517
|
84,322
|
105,971
|
450,796
|
905,525
|
|||||||||||||||||||||
Total principal payments
|
309,914
|
169,230
|
187,184
|
477,497
|
174,436
|
1,365,630
|
2,683,891
|
|||||||||||||||||||||
Interest payments:
|
||||||||||||||||||||||||||||
Interest payments under the 2021 Notes and 2024 Notes
|
36,469
|
36,469
|
36,469
|
32,152
|
15,750
|
28,219
|
185,528
|
|||||||||||||||||||||
Interest payments under secured borrowings
(4)
|
66,750
|
54,524
|
49,311
|
42,350
|
38,015
|
59,244
|
310,194
|
|||||||||||||||||||||
Total interest payments
|
103,219
|
90,993
|
85,780
|
74,502
|
53,765
|
87,463
|
495,722
|
|||||||||||||||||||||
Payments to BBAM and its affiliates under our management agreement
(5)
|
7,307
|
7,307
|
7,307
|
7,307
|
7,307
|
54,799
|
91,334
|
|||||||||||||||||||||
Payments to BBAM and its affiliates under our administrative services and servicing agreements
(6)
|
13,256
|
12,734
|
11,155
|
9,722
|
8,292
|
28,491
|
83,650
|
|||||||||||||||||||||
Total
|
$
|
433,696
|
$
|
280,264
|
$
|
291,426
|
$
|
569,028
|
$
|
243,800
|
$
|
1,536,383
|
$
|
3,354,597
|
(1) |
Principal payments under the Securitization Notes are determined monthly based on revenues collected and costs and other liabilities incurred prior to the relevant payment date. Future principal payment amounts are estimated based upon existing leases and current re-leasing assumptions. The final maturity of the Securitization Notes is November 14, 2033.
|
(2) |
Amounts reflect estimated principal payments through maturity date of November 14, 2018.
|
(3) |
In February 2018, we made an additional principal payment of $1.1 million.
|
(4) |
For variable rate borrowings based on LIBOR plus the applicable margin, LIBOR is assumed to remain at the current rate in effect at year end through the term of the loan.
|
(5) |
Assumes an automatic extension for one additional term of five years to July 1, 2030. Also assumes the net book value of aircraft at December 31, 2017 and Consumer Price Index rates in effect as of December 31, 2017 remain constant in future periods.
|
(6) |
Amounts in the table reflect the application of these servicing fees to our aircraft at December 31, 2017.
|
Name
|
Age
|
Position
|
||
Colm Barrington
|
72
|
Chief Executive Officer and Director
|
||
Julie Ruehl
|
52
|
Chief Financial Officer
|
||
Joseph M. Donovan
|
63
|
Director and Chairman
|
||
Erik G. Braathen
|
62
|
Director
|
||
Eugene McCague
|
59
|
Director
|
||
Robert S. Tomczak
|
56
|
Director
|
||
Susan M. Walton
|
57
|
Director
|
||
Steven Zissis
|
58
|
Director
|
● |
selecting independent auditors for approval by our shareholders;
|
● |
reviewing the scope of the audit to be conducted by our independent auditors, as well as the results of their audit;
|
● |
approving audit and non-audit services provided to us by the independent auditors;
|
● |
reviewing the organization and scope of our internal system of audit, financial and disclosure controls;
|
● |
overseeing internal controls and risk management;
|
● |
overseeing our financial reporting activities, including our annual report, and the accounting standards and principles followed;
|
● |
reviewing and approving related-party transactions and preparing reports for the board of directors on such related-party transactions;
|
● |
conducting other reviews relating to compliance with applicable laws and our policies, including reviewing at least annually our decision to enter into swaps, and our hedging policy; and
|
● |
overseeing our internal audit function.
|
Shares Beneficially Owned
|
||||||||
Name
|
Number
|
Percent
|
||||||
Donald Smith & Co., Inc.
(1)
|
2,814,483
|
10.1
|
%
|
|||||
Onex Corporation
(2)
|
2,443,476
|
8.7
|
%
|
|||||
Summit Aviation Partners LLC
(3)
|
1,708,156
|
6.1
|
%
|
(1) |
The information above and in this footnote is based on information taken from the Schedule 13G filed by Donald Smith & Co., Inc., Donald Smith Long/Short Equities Fund, L.P. and Jon Hartsel with the SEC on February 12, 2018. Donald Smith & Co., Inc. has sole voting power over 2,629,749 ADSs and sole dispositive power over 2,814,483 ADSs. Donald Smith Long/Short Equities Fund, L.P. has sole voting power over 8,086 ADSs and sole dispositive power over 2,814,483 ADSs. Jon Hartsel has sole voting power over 3,500 ADSs and sole dispositive power over 2,814,483 ADSs.
|
(2) |
The information above and in this footnote is based on information taken from the Schedule 13G/A filed by Onex Corporation, Onex Partners III GP LP, Onex Partners GP Inc., Onex US Principals LP, Onex American Holdings GP LLC, Onex American Holdings II LLC, Onex Partners III PV LP, Onex Partners III Select LP, Onex Partners III LP, New PCo II Investments Ltd., and Gerald W. Schwartz (collectively, the “Onex Reporting Persons”) with the SEC on April 3, 2017. Onex Corporation has shared voting and dispositive power over 2,427,732 ADSs. Gerald W. Schwartz has shared voting and dispositive power over 2,443,476 ADSs.
|
(3) |
The information above and in this footnote is based on information taken from the Schedule 13D/A filed by Steven Zissis, the Zissis Family Trust and Summit Aviation Partners LLC with the SEC on March 14, 2016, and from information independently provided to us by Mr. Zissis. Steven Zissis and the Zissis Family Trust have shared voting and dispositive power over 1,708,156 ADSs. Summit Aviation Partners LLC has shared voting and dispositive power over 1,610,717 ADSs.
|
● |
managing our portfolio of aircraft and other aviation assets and the administration of our cash balances;
|
● |
if requested by our board, making available a member of the core management team of our Manager as our nominee on the board of directors of any of our subsidiaries (provided that each such member must be agreed between us and our Manager);
|
● |
assisting with the implementation of our board’s decisions;
|
● |
providing us suitably qualified and experienced persons to perform the management and administrative services for us and our subsidiaries, including persons to be appointed by our board to serve as our dedicated chief executive and chief financial officers (who shall remain employees of, and be remunerated by, our Manager or an affiliate of our Manager while serving in such capacities);
|
● |
performing or procuring the performance of all reasonable accounting, tax, corporate secretarial, information technology, reporting and compliance services for us and our subsidiaries, including the preparation and maintenance of our accounts and such financial statements and other reports and filings as we are required to make with any governmental agency (including the SEC) or stock exchange;
|
● |
supervising financial audits of us by an external auditor as required;
|
● |
managing our relations with our investors and the public, including:
|
● |
preparing our annual reports and any notices of meeting, papers, reports and agendas relating to meetings of our shareholders; and
|
● |
assisting in the resolution of any complaints by or disputes with our investors and any litigation involving us (other than litigation in which our interests are adverse to those of our Manager or BBAM); and
|
● |
using commercially reasonable efforts to cause us to comply with all applicable laws.
|
● |
sourcing opportunities relating to aircraft and other aviation assets, including using its commercially reasonable efforts to notify us of potential aviation asset investment opportunities that come to the attention of our Manager and which our Manager acting reasonably believes may be of interest to us as investments;
|
● |
in relation to identified potential opportunities to purchase or sell aircraft and other aviation assets, investigating, researching, evaluating, advising and making recommendations on or facilitating such opportunities;
|
● |
with respect to prospective purchases and sales of aircraft and other aviation assets, conducting negotiations with sellers and purchasers and their agents, representatives and financial advisors; and
|
● |
otherwise providing advice and assistance to us in relation to the evaluation or pursuit of aviation asset investment or disposition opportunities as we may reasonably request from time to time.
|
● |
the expansion of our Manager’s core management team with additional personnel as may be required by developments or changes in the commercial aircraft leasing industry (whether regulatory, economic or otherwise) or the compliance or reporting environment for publicly listed companies in the United States (whether as a result of changes to securities laws or regulations, listing requirements or accounting principles or otherwise); and
|
● |
making available individuals (other than members of our Manager’s core management team) as our nominees on the boards of directors of any of our subsidiaries.
|
● |
that matter has been the subject of a recommendation by our Manager; or
|
● |
the failure to make that decision, take that action or omit to take that action would breach the fiduciary duties of our directors or any law.
|
● |
that matter has been the subject of a recommendation by our Manager; or
|
● |
the failure to make that decision, take that action or omit to take that action would breach the fiduciary duties of our directors or any law.
|
(1) |
carry out any transaction with an affiliate of our Manager on our behalf, it being understood that BBAM has been appointed as the exclusive Servicer for our portfolio of aircraft, and that our Manager may delegate the provision of all or any part of the services under the Management Agreement to any person affiliated or associated with BBAM;
|
(2) |
carry out any aviation asset investment or disposition transaction, or sequence of related aviation asset investment or disposition transactions with the same person or group of persons under common control, for us if the aggregate purchase price to be paid or the gross proceeds to be received by us in connection therewith would exceed $200 million;
|
(3) |
carry out any aviation asset investment or disposition transaction if the sum of all the purchase prices to be paid or of all the gross proceeds to be received by us in connection with all such transactions during any quarter would exceed $500 million;
|
(4) |
appoint or retain any third-party service provider to assist our Manager in providing management and administrative services if:
|
● |
the amount to be paid by our Manager and reimbursed by us or paid by us to the third party with respect to any particular matter, or series of related matters, is reasonably likely to exceed $1 million; or
|
● |
as a result of the appointment or retention, the amount to be paid by our Manager and reimbursed by us or paid by us to all such third-party service providers appointed or retained in any rolling 12-month period is reasonably likely to exceed $5 million;
|
(5) |
appoint or retain any third-party service provider to assist our Manager in providing ancillary management and administrative or the origination and disposition services if:
|
● |
the amount to be paid by our Manager and reimbursed by us or paid by us to the third party with respect to any particular matter, or series of related matters, is reasonably likely to exceed $1 million; or
|
● |
as a result of the appointment or retention, the amount to be paid by our Manager and reimbursed by us or paid by us to all such third-party service providers appointed or retained in any rolling 12-month period is reasonably likely to exceed $7.5 million; or
|
(6) |
hold any cash or other assets of ours, provided that our Manager may cause our cash and other assets to be held in our name or any custodian for us nominated or approved by us.
|
● |
for all our costs paid for us by our Manager (other than remuneration and certain expenses in relation to our Manager’s core management team and our Manager’s corporate overhead), including the following items which are not covered by the management expense amount:
|
● |
directors’ fees for the independent directors on our board of directors and our subsidiaries,
|
● |
directors’ and officers’ insurance for our and our subsidiaries’ directors and officers,
|
● |
travel expenses of the directors (including flights, accommodation, taxis, entertainment and meals while traveling) to attend any meeting of the board of our Company,
|
● |
registration and listing fees in connection with the listing of our shares on the NYSE and registering the shares under the Securities Act,
|
● |
fees and expenses relating to any equity or debt financings we enter into in the future,
|
● |
fees and expenses of the depositary for our ADSs,
|
● |
costs and expenses related to insuring our aircraft and other aviation assets, including all fees and expenses of insurance advisors and brokers,
|
● |
costs incurred in connection with organizing and hosting our annual meetings or other general meetings of our Company,
|
● |
costs of production and distribution of any of our security holder communications, including notices of meetings, annual and other reports, press releases, and any prospectus, disclosure statement, offering memorandum or other form of offering document,
|
● |
website development and maintenance,
|
● |
travel expenses of the core management team and other personnel of BBAM and its affiliates (including flights, accommodation, taxis, entertainment and meals while traveling) related to sourcing, negotiating and conducting transactions on our behalf and attending any meeting of the board or our Company,
|
● |
external legal counsel,
|
● |
fees of third party consultants, accounting firms and other professionals,
|
● |
external auditor’s fees, and
|
● |
internal auditor’s fees.
|
● |
for all taxes, costs, charges and expenses properly incurred by our Manager in connection with:
|
● |
the provision of ancillary management and administrative services, and
|
● |
the engagement of professional advisors, attorneys, appraisers, specialist consultants and other experts as requested by us from time to time; or which our Manager considers reasonably necessary in providing the services and discharging its duties and other functions under the Management Agreement, including, without limitation, the fees and expenses of professional advisors relating to the purchase and sale of aircraft and other aviation assets.
|
● |
BBAM LP ceases to hold (directly or indirectly) more than 50% of the voting equity of, and economic interest in our Manager
;
|
● |
our Manager becomes subject to bankruptcy or insolvency proceedings that are not discharged within 75 days, unless our Manager is withdrawn and replaced within 90 days of the initiation of such bankruptcy or insolvency proceedings with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the Management Agreement
;
|
● |
at least 75% of our independent directors and holders of 75% or more of all of our outstanding common shares (measured by vote) determine by resolution that there has been unsatisfactory performance by our Manager that is materially detrimental to us
;
|
● |
our Manager materially breaches the Management Agreement and fails to remedy such breach within 90 days of receiving written notice from us requiring it to do so, or such breach results in liability to us and is attributable to our Manager’s gross negligence, fraud or dishonesty, or willful misconduct in respect of the obligation to apply the standard of care;
|
● |
any license, permit or authorization held by our Manager which is necessary for it to perform the services and duties under the Management Agreement is materially breached, suspended or revoked, or otherwise made subject to conditions which, in the reasonable opinion of our board of directors, would prevent our Manager from performing the services and the situation is not remedied within 90 days;
|
● |
our Manager voluntarily commences or files any petition seeking bankruptcy, insolvency or receivership relief; consents to the institution of, or fails to contest the filing of any bankruptcy or insolvency filing; files an answer admitting the material allegations filed against it in any such proceeding; or makes a general assignment for the benefit of its creditors, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the Management Agreement; or
|
● |
an order is made for the winding up of our Manager, unless our Manager is withdrawn and replaced within 15 days with an affiliate or associate of BBAM that is able to make correctly the representations and warranties set out in the Management Agreement.
|
● |
we fail to make any payment due under the Management Agreement to our Manager within 15 days after the same becomes due;
|
● |
we otherwise materially breach the Management Agreement and fail to remedy the breach within 90 days of receiving written notice from our Manager requiring us to do so; or
|
● |
if the directors in office on December 28, 2012 and any successor to any such director who was nominated or selected by a majority of the current directors and our Manager appointed directors, cease to constitute at least a majority of the board (excluding directors appointed by our Manager). (See “Board Appointees”.)
|
● |
dealing or conducting business with us, our Manager, any affiliate or associate of BBAM or any shareholder of ours;
|
● |
being interested in any contract or transaction with us, our Manager, any affiliate or associate of BBAM or any shareholder of ours;
|
● |
acting in the same or similar capacity in relation to any other corporation or enterprise;
|
● |
holding or dealing in any of our shares or other securities or interests therein; or
|
● |
co-investing with us.
|
● |
lease marketing and remarketing, including lease negotiation;
|
● |
collecting rental payments and other amounts due under leases, collecting maintenance payments where applicable, lease compliance and enforcement and delivery and accepting redelivery of aircraft under lease;
|
● |
implementing aircraft dispositions;
|
● |
monitoring the performance of maintenance obligations of lessees under the leases;
|
● |
procuring legal and other professional services with respect to the lease, sale or financing of the aircraft, any amendment or modification of any lease, the enforcement of our rights under any lease, disputes that arise as to any aircraft or for any other purpose that BBAM reasonably determines is necessary in connection with the performance of its services;
|
● |
periodic reporting of operational information relating to the aircraft, including providing certain reports to lenders and other third parties; and
|
● |
certain aviation insurance related services.
|
● |
Bankruptcy or insolvency of BBAM LP
;
|
● |
BBAM LP ceasing to own, directly or indirectly, at least 50% of the Servicer
;
|
● |
Summit ceasing to own, directly or indirectly, at least 33.33% of the partnership interests in BBAM LP; provided that a sale that results in such ownership being at a level below 33.33% shall not constitute a servicer termination event if the sale is to a publicly listed entity or other person with a net worth of at least $100 million; and
|
● |
during any one year period commencing each April 29, 50% or more of the Servicer’s key finance and legal team or technical and marketing team ceasing to be employed by BBAM LP and are not replaced with employees with reasonably comparable experience within 90 days
.
|
Dividend payment date
|
Dividends paid
per share
|
Total cash outlay
|
|||||||
November 20, 2015
|
$
|
0.25
|
$
|
10.3 million
|
|||||
August 20, 2015
|
$
|
0.25
|
$
|
10.4 million
|
|||||
May 20, 2015
|
$
|
0.25
|
$
|
10.4 million
|
|||||
February 20, 2015
|
$
|
0.25
|
$
|
10.4 million
|
High
|
Low
|
|||||||
2013
|
$
|
17.37
|
$
|
12.51
|
||||
2014
|
16.59
|
10.86
|
||||||
2015
|
16.29
|
11.77
|
||||||
2016
|
14.45
|
9.54
|
||||||
2017
|
14.65
|
11.91
|
High
|
Low
|
|||||||
2016
|
||||||||
Quarter ending March 31, 2016
|
$
|
13.85
|
$
|
10.63
|
||||
Quarter ending June 30, 2016
|
12.65
|
9.71
|
||||||
Quarter ending September 30, 2016
|
12.47
|
9.54
|
||||||
Quarter ending December 31, 2016
|
14.45
|
11.53
|
||||||
2017
|
||||||||
Quarter ending March 31, 2017
|
14.40
|
12.50
|
||||||
Quarter ending June 30, 2017
|
13.82
|
11.91
|
||||||
Quarter ending September 30, 2017
|
14.65
|
13.01
|
||||||
Quarter ending December 31, 2017
|
14.58
|
12.91
|
High
|
Low
|
|||||||
2017
|
||||||||
September 2017
|
$
|
14.65
|
$
|
13.32
|
||||
October 2017
|
14.58
|
13.62
|
||||||
November 2017
|
14.35
|
13.20
|
||||||
December 2017
|
14.05
|
12.91
|
||||||
2018
|
||||||||
January 2018
|
13.50
|
12.81
|
||||||
February 2018
|
13.13
|
11.54
|
1) |
Deposit Agreement between Deutsche Bank Trust Company Americas and Babcock & Brown Air Limited. See Item 5 “Liquidity and Capital Resources—Financing— Term Loan.”
|
2) |
Servicing Agreement, dated as of October 2, 2007, among Babcock & Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
3) |
Administrative Services Agreement, dated as of October 2, 2007, among Deutsche Bank Trust Company Americas, AMBAC Assurance Corporation, Babcock & Brown Air Management Co. Limited and Babcock & Brown Air Funding I Limited. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
4) |
Trust Indenture, dated as of October 2, 2007, among Deutsche Bank Trust Company Americas, BNP Paribas, AMBAC Assurance Corporation and Babcock & Brown Air Funding I Limited. See Item 5 “Liquidity and Capital Resources — Financing — Securitization.”
|
5) |
Security Trust Agreement, dated as of October 2, 2007, between Deutsche Bank Trust Company Americas, and Babcock & Brown Air Funding I Limited. See Item 5 “Liquidity and Capital Resources—Financing— Securitization Notes.”
|
6) |
Cash Management Agreement between Deutsche Bank Trust Company Americas and Babcock & Brown Air Funding I Limited. See Item 5 “Liquidity and Capital Resources—Financing— Securitization Notes.”
|
7) |
Form of Director Service Agreement between Babcock & Brown Air Limited and each director thereof. See Item 6. “Directors, Senior Management and Employees.”
|
8) |
Amendment No. 1 to Servicing Agreement, dated as of April 29, 2010, among Babcock & Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
9) |
Fly Leasing Limited Omnibus Incentive Plan.
|
10) |
Form of Stock Appreciation Right Award Agreement.
|
11) |
Form of Restricted Stock Unit Award Agreement.
|
12) |
Form of Loan Agreement among Hobart Aviation Holdings Limited, Norddeutsche Landesbank Girozentrale and each borrower thereof. See Item 5 “Liquidity and Capital Resources – Financing – Nord LB Facility.”
|
13) |
Form of Servicing Agreement among BBAM US LP, BBAM Aviation Services Limited and each company thereof. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
14) |
Securities Purchase Agreement dated November 30, 2012, by and among Fly Leasing Limited, Summit Aviation Partners LLC and such persons identified therein. See Item 7, “Major Shareholders and Related Party Transactions.”
|
15) |
Purchase Agreement dated November 30, 2012 by and among BBAM Limited Partnership, Summit Aviation Partners LLC, Fly-BBAM Holdings Ltd., Summit Aviation Management Co., Ltd. and such persons identified therein. See Item 7, “Major Shareholders and Related Party Transactions.”
|
16) |
First Amendment to Purchase Amendment dated December 28, 2012 by and among Fly Leasing Limited, Summit Aviation Partners LLC and such persons identified therein. See Item 7, “Major Shareholders and Related Party Transactions.”
|
17) |
Amended and Restated Fly Leasing Limited Management Agreement dated as of December 28, 2012, between Fly Leasing Limited and Fly Leasing Management Co. Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
18) |
Registration Rights Agreement dated as of December 28, 2012, by and among Fly Leasing Limited and each shareholder identified therein. See Item 7, “Major Shareholders and Related Party Transactions.”
|
19) |
Amended and Restated Servicing Agreement, dated as of January 24, 2013, by and among BBAM US LP, BBAM Aviation Services Limited and Fly Leasing Limited. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
20) |
Amended and Restated Term Loan Credit Agreement, dated as of November 21, 2013, among Fly Funding II S.à r.l., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock & Brown Air Acquisition I Limited, each other Guarantor Party referred to therein, the Lenders identified therein, Citibank, N.A., and Wells Fargo Bank Northwest, National Association. See Item 5 “Liquidity and Capital Resources – Financing – Term Loan.”
|
21) |
Indenture dated December 11, 2013, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital Resources—Financing—Unsecured Borrowing.”
|
22) |
First Supplemental Indenture, dated December 11, 2013, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital Resources—Financing—Unsecured Borrowing.”
|
23) |
Second Supplemental Indenture, dated as of October 3, 2014, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital Resources—Financing—Unsecured Borrowing.”
|
24) |
Amendment No. 1 to Trust Indenture, dated as of October 24, 2014, by and among Babcock & Brown Air Funding I Limited, Deutsche Bank Trust Company Americas, BNP Paribas and AMBAC Assurance Corporation. See Item 5 “Liquidity and Capital Resources—Financing— Securitization Notes.”
|
25) |
Amendment No. 2 to Servicing Agreement, dated as of October 24, 2014, by and among BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
26) |
Amendment to Credit Agreement, dated as of April 22, 2015, among Fly Fundin
g II S.
à
r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent. See Item
5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
27) |
First Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated June 19, 2015, between Fly Leasing Limited and Fly Leasing Management Co. Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
28) |
Servicing Agreement dated as of February 26, 2016, among BBAM US LP, BBAM Aviation Services Limited and Fly Acquisition III Limited. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
29) |
Facility Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
30) |
Note Purchase Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Purchasers party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
31) |
Credit Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Banks party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
32) |
Guaranty [Fly 2016A Warehouse] dated February 26, 2016 by Fly Leasing Limited. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
33) |
Security Agreement [Fly 2016A Warehouse] dated February 26, 2016 among Fly Acquisition III Limited, the Grantors party thereto, and Well Fargo Bank, National Association as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.
|
34) |
Aircraft Mortgage and Security Agreement dated as of August 9, 2012, among Fly Funding II S.a.r.l.., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock & Brown Air Acquisition I Limited, The Initial Intermediate Lessees, The Initial Lessor Subsidiaries, The Additional Grantors Referred to Therein and Wells Fargo Bank Northwest, National Association. See Item 5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
35) |
Second Amendment to Credit Agreement, dated as of October 19, 2016, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent. See Item 5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
36) |
Second Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated July 27, 2016, between Fly Leasing Limited and Fly Leasing Management Co. Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
37) |
Amendment No. 3 to Servicing Agreement, dated as of February 1, 2017, by and among BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Servicing Agreement.”
|
38) |
Third Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated as of February 1, 2017, between Fly Leasing Limited and Fly Leasing Management Co. Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
39) |
Fee Rebate Side Letter, dated as of February 1, 2017, by and among Babcock & Brown Air Funding I Limited, Fly Leasing Management Co. Limited, and AMBAC Assurance Corporation. See Item 7 “Related Party Transactions — Management Agreement.”
|
40) |
Third Supplemental Indenture dated as of October 16, 2017, between Fly Leasing Limited and Wells Fargo Bank, National Association. See Item 5 “Liquidity and Capital Resources—Financing—Unsecured Borrowing.”
|
41) |
Servicing Agreement dated as of December 8, 2017, among BBAM US LP, BBAM Aviation Services Limited and Magellan Acquisition Limited. See Item 7 “Related Party Transactions — Management Agreement.”
|
42) |
Third Amendment to Credit Agreement, dated as of April 28, 2017, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent.
See Item
5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
43) |
Fourth Amendment to Credit Agreement, dated as of November 1, 2017, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent.
See Item
5 “Liquidity and Capital Resources—Financing—Term Loan.”
|
44) |
Facility Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
45) |
Note Purchase Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Purchasers party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
46) |
Credit Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Banks party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
47) |
Security Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Grantors party thereto, and Wells Fargo Bank, National Association, as Security Trustee. See Item 5 “Liquidity and Capital Resources—Financing—Magellan Acquisition Limited.”
|
48) |
Guaranty [Fly 2017A Term Loan] dated December 8, 2017 by Fly Leasing Limited. See Item 5 “Liquidity and Capital Resources—Financing—Fly Acquisition III.”
|
● |
An “Irish Holder” is a holder of our shares that (1) beneficially owns our shares by virtue of holding the related ADSs evidenced by the relevant American Depositary Receipt or ADR; (2) in the case of individual holders, is resident or ordinarily resident in Ireland under Irish taxation laws; and (3) in the case of a holder that is a company, is resident in Ireland under Irish taxation laws and is not also a resident of any other country under any double taxation agreement entered into by Ireland.
|
● |
A “Non-Irish Holder” is a holder of our shares that is not an Irish Holder and has never been an Irish Holder.
|
● |
A “US Holder” is a holder of our shares that (1) beneficially owns our shares by virtue of holding the related ADSs evidenced by the relevant ADR; (2) is a resident of the United States for the purposes of the Ireland/United States Double Taxation Convention; (3) in the case of an individual holder, is not also resident or ordinarily resident in Ireland for Irish tax purposes; (4) in the case of a corporate holder, is not resident in Ireland for Irish tax purposes and is not ultimately controlled by persons resident in Ireland; and (5) is not engaged in any trade or business and does not perform independent personal services through a permanent establishment or fixed base in Ireland.
|
● |
“Relevant Territory” is defined as a country with which Ireland has a double tax treaty (which includes the United States), a country with which Ireland has signed a double taxation treaty which will come into force once all ratification procedures have been completed, or a member state of the European Union other than Ireland.
|
● |
who are ultimately controlled, whether directly or indirectly, by persons resident in a Relevant Territory and who are not ultimately controlled, whether directly or indirectly, by persons not resident in a Relevant Territory; or
|
● |
who are resident in a Relevant Territory and not controlled directly or indirectly by Irish residents; or
|
● |
whose principal class of shares or the principal class of shares of whose 75% or greater parents are substantially and regularly traded on a recognized stock exchange in a Relevant Territory; or which are wholly owned by two or more companies, each of whose principal class of shares are substantially and regularly traded on a recognized stock exchange in a Relevant Territory or on such other stock exchange as may be approved by the Minister for Finance.
|
· |
0.5% on the first €12,012;
|
· |
2.5% on the next €6,760;
|
· |
5% on the next €51,272 and
|
· |
8% on the aggregate income in excess of €70,044.
|
● |
an individual resident in a Relevant Territory and who are not resident or ordinarily resident in Ireland; or
|
● |
a corporation that is resident in a Relevant Territory and not controlled directly or indirectly by Irish residents; or
|
● |
a corporation that is ultimately controlled, whether directly or indirectly, by persons resident in a Relevant Territory and who are not ultimately controlled, whether directly or indirectly, by persons not resident in a Relevant Territory; or
|
● |
a corporation whose principal class of shares (or whose 75% or greater parent’s principal class of shares) are substantially and regularly traded on a recognized stock exchange in a Relevant Territory or on such other stock exchange as may be approved by the Minister for Finance; or
|
● |
a corporation that is wholly owned by two or more corporations each of whose principal class of shares are substantially and regularly traded on a recognized stock exchange in a Relevant Territory or on such other stock exchange as may be approved by the Minister for Finance; or
|
● |
otherwise entitled to an exemption from DWT.
|
● |
Excess distributions by us to a U.S. Holder would be taxed in a special way. “Excess distributions” are amounts received by a U.S. Holder with respect to our shares in any taxable year that exceed 125% of the average distributions received by such U.S. Holder from us in the shorter of either the three previous years or such U.S. Holder’s holding period for shares before the present taxable year. Excess distributions must be allocated ratably to each day that a U.S. Holder has held our shares. A U.S. Holder must include amounts allocated to the current taxable year in its gross income as ordinary income for that year. A U.S. Holder must pay tax on amounts allocated to each prior taxable year in which we were a PFIC at the highest rate in effect for that year on ordinary income and the tax is subject to an interest charge at the rate applicable to deficiencies for income tax. The preferential U.S. federal income tax rates for dividends and long-term capital gain of individual U.S. Holders (as well as certain trusts and estates) would not apply, and special rates would apply for calculating the amount of the foreign tax credit with respect to excess distributions.
|
● |
The entire amount of gain realized by a U.S. Holder upon the sale or other disposition of shares will also be treated as an excess distribution and will be subject to tax as described above.
|
● |
The tax basis in shares that were acquired from a decedent who was a U.S. Holder would not receive a step-up to fair market value as of the date of the decedent’s death but would instead be equal to the decedent’s basis, if lower than fair market value.
|
Years ended
|
||||||||||||||||
2017
|
2016
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Audit fees
|
$
|
1,803
|
73
|
%
|
$
|
1,798
|
90
|
%
|
||||||||
Tax fees
|
304
|
11
|
%
|
175
|
9
|
%
|
||||||||||
All other fees
|
269
|
16
|
%
|
20
|
1
|
%
|
||||||||||
Total
|
$
|
2,376
|
100
|
%
|
$
|
1,993
|
100
|
%
|
Period
|
Total
Number of
Shares
Purchased
|
Average Price
Paid Per
Share
|
Total Number
of Shares
Purchased as
Part of a
Publicly
Announced
Repurchased
Plan
|
Approximate Dollar Value
of Shares that may yet be
Purchased Under the
Plans or Programs
|
||||||||||||
January 1-31, 2017
|
—
|
$
|
—
|
—
|
$
|
66.7 million
|
||||||||||
February 2-28, 2017
|
—
|
$
|
—
|
—
|
$
|
66.7 million
|
||||||||||
March 1-31, 2017
|
99,524
|
$
|
12.95
|
99,524
|
$
|
65.4 million
|
||||||||||
April 1-30, 2017
|
371,316
|
$
|
12.88
|
371,316
|
$
|
60.6 million
|
||||||||||
May 1-31, 2017
|
651,819
|
$
|
12.84
|
651,819
|
$
|
52.2 million
|
||||||||||
June 1-30, 2017
|
958,812
|
$
|
13.30
|
958,812
|
$
|
39.4 million
|
||||||||||
July 1-31, 2017
|
649,714
|
$
|
13.75
|
649,714
|
$
|
30.5 million
|
||||||||||
August 1-31, 2017
|
572,866
|
$
|
13.40
|
572,866
|
$
|
22.8 million
|
||||||||||
September 1-30, 2017
|
254,584
|
$
|
13.75
|
254,584
|
$
|
19.3 million
|
||||||||||
October 1-31, 2017
|
114,284
|
$
|
13.88
|
114,284
|
$
|
17.7 million
|
||||||||||
November 1-30, 2017
|
366,591
|
$
|
13.66
|
366,591
|
$
|
12.7 million
|
||||||||||
December 1-31, 2017
|
235,059
|
$
|
13.53
|
235,059
|
$—
|
(1)
|
(1) |
In November 2017, our board of directors approved a $50.0 million share repurchase program expiring in December 2018, to replace our program which expired in December 2017. Under this program, we may make share repurchases from time to time in the open market or in privately negotiated transactions.
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
Consolidated Balance Sheets of Fly Leasing Limited as of December 31, 2017 and 2016
|
F-4
|
Consolidated Statements of Income (Loss) of Fly Leasing Limited for the years ended December 31, 2017, 2016 and 2015
|
F-5
|
Consolidated Statements of Comprehensive Income (Loss) of Fly Leasing Limited for the years ended December 31, 2017, 2016 and 2015
|
F-6
|
Consolidated Statements of Shareholders’ Equity of Fly Leasing Limited for the years ended December 31, 2015, 2016 and 2017
|
F-7
|
Consolidated Statements of Cash Flows of Fly Leasing Limited for the years ended December 31, 2017, 2016 and 2015
|
F-8
|
Notes to Consolidated Financial Statements
|
F-10
|
Schedule I — Condensed Financial Information of Parent
|
F-38
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
329,105
|
$
|
517,964
|
||||
Restricted cash and cash equivalents
|
127,710
|
94,123
|
||||||
Rent receivables
|
2,059
|
419
|
||||||
Investment in unconsolidated subsidiary
|
8,196
|
7,700
|
||||||
Investment in finance lease, net
|
13,946
|
15,095
|
||||||
Flight equipment held for operating lease, net
|
2,961,744
|
2,693,821
|
||||||
Maintenance rights, net
|
131,299
|
101,969
|
||||||
Deferred tax asset, net
|
9,943
|
7,445
|
||||||
Fair value of derivative assets
|
2,643
|
1,905
|
||||||
Other assets, net
|
8,970
|
6,568
|
||||||
Total assets
|
$
|
3,595,615
|
$
|
3,447,009
|
||||
Liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
18,305
|
$
|
13,786
|
||||
Rentals received in advance
|
14,968
|
13,123
|
||||||
Payable to related parties
|
2,084
|
5,042
|
||||||
Security deposits
|
49,689
|
42,495
|
||||||
Maintenance payment liability
|
244,151
|
182,571
|
||||||
Unsecured borrowings, net
|
615,922
|
691,390
|
||||||
Secured borrowings, net
|
2,029,675
|
1,831,985
|
||||||
Deferred tax liability, net
|
30,112
|
19,847
|
||||||
Fair value of derivative liabilities
|
7,344
|
13,281
|
||||||
Other liabilities
|
39,656
|
40,254
|
||||||
Total liabilities
|
3,051,906
|
2,853,774
|
||||||
Shareholders’ equity
|
||||||||
Common shares, $0.001 par value; 499,999,900 shares authorized; 27,983,352 and 32,256,440 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
28
|
32
|
||||||
Manager shares, $0.001 par value; 100 shares authorized, issued and outstanding
|
—
|
—
|
||||||
Additional paid-in capital
|
479,637
|
536,922
|
||||||
Retained earnings
|
68,624
|
66,026
|
||||||
Accumulated other comprehensive loss, net
|
(4,580
|
)
|
(9,745
|
)
|
||||
Total shareholders’ equity
|
543,709
|
593,235
|
||||||
Total liabilities and shareholders’ equity
|
$
|
3,595,615
|
$
|
3,447,009
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Revenues
|
||||||||||||
Operating lease revenue
|
$
|
346,894
|
$
|
313,582
|
$
|
429,691
|
||||||
Finance lease revenue
|
731
|
2,066
|
299
|
|||||||||
Equity earnings from unconsolidated subsidiary
|
496
|
530
|
1,159
|
|||||||||
Gain on sale of aircraft
|
3,926
|
27,195
|
28,959
|
|||||||||
Interest and other income
|
1,204
|
1,666
|
2,289
|
|||||||||
Total revenues
|
353,251
|
345,039
|
462,397
|
|||||||||
Expenses
|
||||||||||||
Depreciation
|
133,227
|
120,452
|
159,732
|
|||||||||
Aircraft impairment
|
22,000
|
96,122
|
66,093
|
|||||||||
Interest expense
|
127,782
|
123,161
|
145,448
|
|||||||||
Selling, general and administrative
|
30,671
|
30,077
|
33,674
|
|||||||||
Ineffective, dedesignated and terminated derivatives
|
(192
|
)
|
91
|
4,134
|
||||||||
Loss on modification and extinguishment of debt
|
23,309
|
9,246
|
17,491
|
|||||||||
Maintenance and other costs
|
2,524
|
2,279
|
7,628
|
|||||||||
Total expenses
|
339,321
|
381,428
|
434,200
|
|||||||||
Net income (loss) before provision (benefit) for income taxes
|
13,930
|
(36,389
|
)
|
28,197
|
||||||||
Provision (benefit) for income taxes
|
11,332
|
(7,277
|
)
|
5,399
|
||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
22,798
|
|||||
Weighted average number of shares:
|
||||||||||||
Basic
|
30,307,357
|
33,239,001
|
41,222,690
|
|||||||||
Diluted
|
30,353,425
|
33,239,001
|
41,315,149
|
|||||||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
|||||
Diluted
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
|||||
Dividends declared and paid per share
|
$
|
—
|
$
|
—
|
$
|
1.00
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
22,798
|
|||||
Other components of comprehensive income (loss), net of tax:
|
||||||||||||
Change in fair value of derivatives, net of deferred tax
(1)
|
3,926
|
5,036
|
158
|
|||||||||
Reclassification from other comprehensive loss into earnings due to termination of derivative liabilities, net of deferred tax
(2)
|
—
|
(10
|
)
|
(130
|
)
|
|||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment, net of deferred tax
(3)
|
1,239
|
729
|
1,563
|
|||||||||
Comprehensive income (loss)
|
$
|
7,763
|
$
|
(23,357
|
)
|
$
|
24,389
|
(1) |
The associated deferred tax expense
was $
0.6
million,
$0.7 million and $0.3 million
for the
years ended December 31, 2017, 2016 and 2015, respectively.
|
(2) |
The associated deferred tax benefit was $1,000 and $19,000 for the years ended December 31, 2016 and 2015, respectively.
|
(3) |
The associated deferred tax expense was $0.2 million, $0.1 million and $0.2 million for the years ended December 31, 2017, 2016 and 2015, respectively.
|
Manager
Shares
|
Common Shares
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss, net
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||
Balance December 31, 2014
|
100
|
$
|
—
|
41,432,998
|
$
|
41
|
$
|
658,522
|
$
|
114,782
|
$
|
(17,091
|
)
|
$
|
756,254
|
|||||||||||||||||
Dividends to shareholders
|
—
|
—
|
—
|
—
|
—
|
(41,388
|
)
|
—
|
(41,388
|
)
|
||||||||||||||||||||||
Dividend equivalents
|
—
|
—
|
—
|
—
|
—
|
(1,054
|
)
|
—
|
(1,054
|
)
|
||||||||||||||||||||||
Shares issued in connection with vested share grants
|
—
|
—
|
36,075
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Shares repurchased pursuant to share repurchase program
|
—
|
—
|
(421,329
|
)
|
—
|
(5,529
|
)
|
—
|
—
|
(5,529
|
)
|
|||||||||||||||||||||
Shares repurchased pursuant to tender offer
|
—
|
—
|
(5,376,344
|
)
|
(5
|
)
|
(75,898
|
)
|
—
|
—
|
(75,903
|
)
|
||||||||||||||||||||
Share-based compensation
|
—
|
—
|
—
|
—
|
195
|
—
|
—
|
195
|
||||||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
22,798
|
—
|
22,798
|
||||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $0.3 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
158
|
158
|
||||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to termination of derivative liabilities, net of deferred tax of $19,000
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(130
|
)
|
(130
|
)
|
||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment, net of deferred tax of $0.2 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
1,563
|
1,563
|
||||||||||||||||||||||||
Balance December 31, 2015
|
100
|
$
|
—
|
35,671,400
|
$
|
36
|
$
|
577,290
|
$
|
95,138
|
$
|
(15,500
|
)
|
$
|
656,964
|
|||||||||||||||||
Shares repurchased
|
—
|
—
|
(3,414,960
|
)
|
(4
|
)
|
(40,368
|
)
|
—
|
—
|
(40,372
|
)
|
||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
—
|
(29,112
|
)
|
—
|
(29,112
|
)
|
||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $
0.7
million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
5,036
|
5,036
|
||||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to termination of derivative liabilities, net of deferred tax of $1,000
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
(10
|
)
|
(10
|
)
|
||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment, net of deferred tax of $0.1 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
729
|
729
|
||||||||||||||||||||||||
Balance December 31, 2016
|
100
|
$
|
—
|
32,256,440
|
$
|
32
|
$
|
536,922
|
$
|
66,026
|
$
|
(9,745
|
)
|
$
|
593,235
|
|||||||||||||||||
Shares issued in connection with SARs exercised
|
—
|
—
|
1,481
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Shares repurchased
|
—
|
—
|
(4,274,569
|
)
|
(4
|
)
|
(57,285
|
)
|
—
|
—
|
(57,289
|
)
|
||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
2,598
|
—
|
2,598
|
||||||||||||||||||||||||
Net change in the fair value of derivatives, net of deferred tax of $0.6 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
3,926
|
3,926
|
||||||||||||||||||||||||
Reclassification from other comprehensive loss into earnings due to derivatives that no longer qualified for hedge accounting treatment, net of deferred tax of $0.2 million
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
1,239
|
1,239
|
||||||||||||||||||||||||
Balance December 31, 2017
|
100
|
$
|
—
|
27,983,352
|
$
|
28
|
$
|
479,637
|
$
|
68,624
|
$
|
(4,580
|
)
|
$
|
543,709
|
(1) |
See Note 12 to Notes to Consolidated Financial Statements
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
22,798
|
|||||
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
|
||||||||||||
Equity earnings from unconsolidated subsidiary
|
(496
|
)
|
(530
|
)
|
(1,159
|
)
|
||||||
Finance lease revenue
|
(731
|
)
|
(2,066
|
)
|
(299
|
)
|
||||||
Gain on sale of aircraft
|
(3,926
|
)
|
(27,195
|
)
|
(28,959
|
)
|
||||||
Depreciation
|
133,227
|
120,452
|
159,732
|
|||||||||
Aircraft impairment
|
22,000
|
96,122
|
66,093
|
|||||||||
Amortization of debt discounts and debt issuance costs
|
7,955
|
9,375
|
11,922
|
|||||||||
Amortization of lease incentives
|
7,668
|
8,898
|
20,527
|
|||||||||
Amortization of lease premiums, discounts and other
|
412
|
388
|
2,046
|
|||||||||
Amortization of GAAM acquisition fair value adjustments
|
1,223
|
1,621
|
3,650
|
|||||||||
Loss on modification and extinguishment of debt
|
23,309
|
9,246
|
17,491
|
|||||||||
Share-based compensation
|
—
|
—
|
195
|
|||||||||
Unrealized foreign exchange (gain) loss
|
2,305
|
(437
|
)
|
(1,247
|
)
|
|||||||
Provision (benefit) for deferred income taxes
|
5,178
|
(9,158
|
)
|
4,919
|
||||||||
(Gain) loss on derivative instruments
|
(478
|
)
|
76
|
4,134
|
||||||||
Security deposits and maintenance payment liability recognized into earnings
|
(16,268
|
)
|
(3,450
|
)
|
(48,658
|
)
|
||||||
Security deposits and maintenance payment claims applied towards operating lease revenue
|
—
|
(684
|
)
|
—
|
||||||||
Cash receipts from maintenance rights
|
—
|
9,513
|
—
|
|||||||||
Maintenance rights recognized into earnings
|
465
|
—
|
—
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Rent receivables
|
(4,251
|
)
|
(1,034
|
)
|
6,814
|
|||||||
Other assets
|
(2,599
|
)
|
(1,134
|
)
|
137
|
|||||||
Payable to related parties
|
(10,126
|
)
|
(17,163
|
)
|
(19,407
|
)
|
||||||
Accounts payable, accrued liabilities and other liabilities
|
11,588
|
(10,964
|
)
|
(2,183
|
)
|
|||||||
Net cash flows provided by operating activities
|
179,053
|
152,764
|
218,546
|
|||||||||
Cash Flows from Investing Activities
|
||||||||||||
Investment in unconsolidated subsidiary
|
—
|
—
|
(2,009
|
)
|
||||||||
Rent received from finance lease
|
1,880
|
2,970
|
424
|
|||||||||
Investment in finance lease
|
—
|
—
|
(33,596
|
)
|
||||||||
Purchase of flight equipment
|
(434,122
|
)
|
(552,166
|
)
|
(567,523
|
)
|
||||||
Proceeds from sale of aircraft, net
|
21,750
|
430,867
|
1,110,046
|
|||||||||
Payments for aircraft improvement
|
(7,357
|
)
|
(2,230
|
)
|
(8,196
|
)
|
||||||
Payments for lessor maintenance obligations
|
(12,564
|
)
|
(2,712
|
)
|
(18,609
|
)
|
||||||
Net cash flows (used in) provided by investing activities
|
(430,413
|
)
|
(123,271
|
)
|
480,537
|
Cash Flows from Financing Activities
|
||||||||||||
Security deposits received
|
7,196
|
920
|
13,914
|
|||||||||
Security deposits returned
|
(3,554
|
)
|
(7,438
|
)
|
(7,788
|
)
|
||||||
Maintenance payment liability receipts
|
75,765
|
71,514
|
84,491
|
|||||||||
Maintenance payment liability disbursements
|
(14,303
|
)
|
(10,951
|
)
|
(38,768
|
)
|
||||||
Net swap termination payments
|
—
|
(709
|
)
|
(3,737
|
)
|
|||||||
Debt modification and extinguishment costs
|
(17,396
|
)
|
(3,153
|
)
|
(3,623
|
)
|
||||||
Debt issuance costs
|
(1,464
|
)
|
(2,552
|
)
|
(933
|
)
|
||||||
Proceeds from unsecured borrowings
|
295,150
|
—
|
—
|
|||||||||
Repayment of unsecured borrowings
|
(375,000
|
)
|
—
|
—
|
||||||||
Proceeds from secured borrowings
|
513,459
|
572,719
|
147,276
|
|||||||||
Repayment of secured borrowings
|
(326,909
|
)
|
(448,346
|
)
|
(791,385
|
)
|
||||||
Shares repurchased
|
(57,286
|
)
|
(40,257
|
)
|
(81,432
|
)
|
||||||
Dividends paid
|
—
|
—
|
(41,388
|
)
|
||||||||
Dividend equivalents
|
—
|
—
|
(1,054
|
)
|
||||||||
Net cash flows provided by (used in) financing activities
|
95,658
|
131,747
|
(724,427
|
)
|
||||||||
Effect of exchange rate changes on unrestricted and restricted cash and cash equivalents
|
430
|
(84
|
)
|
(424
|
)
|
|||||||
Net increase (decrease) in unrestricted and restricted cash and cash equivalents
|
(155,272
|
)
|
161,156
|
(25,768
|
)
|
|||||||
Unrestricted and restricted cash and cash equivalents at beginning of period
|
612,087
|
450,931
|
476,699
|
|||||||||
Unrestricted and restricted cash and cash equivalents at end of period
|
$
|
456,815
|
$
|
612,087
|
$
|
450,931
|
||||||
Reconciliation to Consolidated Balance Sheets:
|
||||||||||||
Cash and cash equivalents
|
$
|
329,105
|
$
|
517,964
|
$
|
275,998
|
||||||
Restricted cash and cash equivalents
|
127,710
|
94,123
|
174,933
|
|||||||||
Unrestricted and restricted cash and cash equivalents
|
$
|
456,815
|
$
|
612,087
|
$
|
450,931
|
1. |
ORGANIZATION
|
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
● |
Flight equipment where original manufacturer’s prices are not relevant due to plane modifications and conversions.
|
● |
Flight equipment that is out of production and may have a shorter useful life or lower residual value due to obsolescence.
|
● |
The remaining life of a converted freighter is determined based on the date of conversion, in which case, the total useful life may extend beyond 25 years from the date of manufacture.
|
● |
Flight equipment that management believes will be disposed of prior to the end of its estimated useful life.
|
● |
Operating lease revenue.
The Company receives lease revenue from flight equipment under operating leases. Rental income from aircraft is recognized on a straight-line basis over the initial term of the respective lease. The operating lease agreements generally do not provide for purchase options, however, the leases may allow the lessee to exercise an option to extend the lease for an additional term. Contingent rents are recognized as revenue when the contingency is resolved. Revenue is not recognized when collection is not reasonably assured.
|
● |
End of lease income.
The amount of end of lease income the Company recognizes in any reporting period is inherently volatile and depends upon a number of factors, including the timing of both scheduled and unscheduled lease expiries and the timing of maintenance performed on the aircraft by the lessee, among others.
|
● |
Lease incentives.
The Company’s leases may contain provisions which require it to contribute a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. The Company accounts for these expected payments as lease incentives, which are amortized as a reduction of lease revenue over the life of the lease.
|
● |
Finance lease income.
Revenue from finance lease is recognized using the interest method to produce a level yield over the life of the finance lease.
|
3.
|
SUPPLEMENTAL DISCLOSURE TO CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
113,710
|
$
|
110,351
|
$
|
132,780
|
||||||
Taxes
|
2,155
|
460
|
384
|
|||||||||
Noncash Activities:
|
||||||||||||
Security deposits applied to maintenance payment liability, rent receivables, other assets and rentals received in advance
|
2,045
|
—
|
3,292
|
|||||||||
Maintenance payment liability applied to rent receivables and rentals received in advance
|
68
|
—
|
2,523
|
|||||||||
Other liabilities applied to maintenance payment liability and rent receivables
|
676
|
2,550
|
240
|
|||||||||
Noncash investing activities:
|
||||||||||||
Aircraft improvement
|
192
|
5,245
|
1,587
|
|||||||||
Noncash activities in connection with purchase of aircraft
|
3,979
|
6,388
|
19,382
|
|||||||||
Noncash activities in connection with sale of aircraft
|
—
|
78,722
|
93,819
|
4. |
INVESTMENT IN FINANCE LEASE
|
December 31, 2017
|
December 31, 2016
|
|||||||
Total minimum lease payments receivable
|
$
|
13,200
|
$
|
15,080
|
||||
Estimated unguaranteed residual value of leased asset
|
4,227
|
4,227
|
||||||
Unearned finance income
|
(3,481
|
)
|
(4,212
|
)
|
||||
Net Investment in Finance Lease
|
$
|
13,946
|
$
|
15,095
|
Year ending December 31,
|
(Dollars in thousands)
|
|||
2018
|
$
|
1,800
|
||
2019
|
1,800
|
|||
2020
|
1,800
|
|||
2021
|
1,800
|
|||
2022
|
1,800
|
|||
Thereafter
|
4,200
|
|||
Future minimum rental payments under finance lease
|
$
|
13,200
|
5. |
FLIGHT EQUIPMENT HELD FOR SALE
|
6. |
FLIGHT EQUIPMENT HELD FOR OPERATING LEASE
|
December 31, 2017
|
December 31, 2016
|
|||||||
Cost
|
$
|
3,574,202
|
$
|
3,180,160
|
||||
Accumulated depreciation
|
(612,458
|
)
|
(486,339
|
)
|
||||
Flight equipment held for operating lease, net
|
$
|
2,961,744
|
$
|
2,693,821
|
December 31, 2017
|
December 31, 2016
|
|||||||||||||||
Europe:
|
||||||||||||||||
Spain
|
$
|
175,593
|
6
|
%
|
$
|
57,845
|
2
|
%
|
||||||||
Turkey
|
135,764
|
5
|
%
|
142,787
|
5
|
%
|
||||||||||
United Kingdom
|
128,116
|
4
|
%
|
143,560
|
5
|
%
|
||||||||||
Germany
|
—
|
—
|
98,483
|
4
|
%
|
|||||||||||
Russia
|
16,332
|
—
|
17,582
|
1
|
%
|
|||||||||||
Other
|
235,013
|
8
|
%
|
179,155
|
7
|
%
|
||||||||||
Europe — Total
|
690,818
|
23
|
%
|
639,412
|
24
|
%
|
||||||||||
Asia and South Pacific:
|
||||||||||||||||
India
|
601,072
|
20
|
%
|
574,853
|
21
|
%
|
||||||||||
Philippines
|
268,504
|
9
|
%
|
279,031
|
10
|
%
|
||||||||||
Indonesia
|
204,840
|
7
|
%
|
62,921
|
2
|
%
|
||||||||||
China
|
186,083
|
6
|
%
|
194,774
|
7
|
%
|
||||||||||
Other
|
152,371
|
5
|
%
|
153,323
|
7
|
%
|
||||||||||
Asia and South Pacific — Total
|
1,412,870
|
47
|
%
|
1,264,902
|
47
|
%
|
||||||||||
Mexico, South and Central America:
|
||||||||||||||||
Chile
|
83,097
|
3
|
%
|
86,251
|
3
|
%
|
||||||||||
Other
|
79,177
|
3
|
%
|
83,368
|
3
|
%
|
||||||||||
Mexico, South and Central America — Total
|
162,274
|
6
|
%
|
169,619
|
6
|
%
|
||||||||||
North America:
|
||||||||||||||||
United States
|
147,580
|
5
|
%
|
156,472
|
6
|
%
|
||||||||||
Other
|
52,182
|
2
|
%
|
55,044
|
2
|
%
|
||||||||||
North America — Total
|
199,762
|
7
|
%
|
211,516
|
8
|
%
|
||||||||||
Middle East and Africa:
|
||||||||||||||||
Ethiopia
|
322,896
|
11
|
%
|
332,817
|
12
|
%
|
||||||||||
Other
|
116,273
|
4
|
%
|
75,555
|
3
|
%
|
||||||||||
Middle East and Africa — Total
|
439,169
|
15
|
%
|
408,372
|
15
|
%
|
||||||||||
Off-Lease — Total
|
56,851
|
2
|
%
|
—
|
—
|
|||||||||||
Total flight equipment held for operating lease, net
|
$
|
2,961,744
|
100
|
%
|
$
|
2,693,821
|
100
|
%
|
Years ended
|
||||||||||||||||||||||||
2017
|
2016
|
2015
|
||||||||||||||||||||||
Europe:
|
||||||||||||||||||||||||
Spain
|
$
|
11,199
|
3
|
%
|
$
|
5,361
|
2
|
%
|
$
|
9,191
|
2
|
%
|
||||||||||||
Turkey
|
17,103
|
5
|
%
|
24,593
|
8
|
%
|
29,847
|
7
|
%
|
|||||||||||||||
United Kingdom
|
29,182
|
8
|
%
|
34,498
|
11
|
%
|
50,742
|
12
|
%
|
|||||||||||||||
Germany
|
26,457
|
8
|
%
|
13,836
|
4
|
%
|
18,201
|
4
|
%
|
|||||||||||||||
Russia
|
1,927
|
1
|
%
|
3,141
|
1
|
%
|
24,095
|
6
|
%
|
|||||||||||||||
Other
|
27,253
|
8
|
%
|
25,253
|
8
|
%
|
46,480
|
11
|
%
|
|||||||||||||||
Europe — Total
|
113,121
|
33
|
%
|
106,682
|
34
|
%
|
178,556
|
42
|
%
|
|||||||||||||||
Asia and South Pacific:
|
||||||||||||||||||||||||
India
|
64,381
|
18
|
%
|
39,640
|
13
|
%
|
19,572
|
4
|
%
|
|||||||||||||||
Philippines
|
29,825
|
9
|
%
|
29,129
|
9
|
%
|
38,677
|
9
|
%
|
|||||||||||||||
Indonesia
|
16,308
|
5
|
%
|
8,320
|
3
|
%
|
7,915
|
2
|
%
|
|||||||||||||||
China
|
22,611
|
6
|
%
|
23,882
|
8
|
%
|
37,943
|
9
|
%
|
|||||||||||||||
Other
|
19,263
|
6
|
%
|
18,967
|
5
|
%
|
31,141
|
7
|
%
|
|||||||||||||||
Asia and South Pacific — Total
|
152,388
|
44
|
%
|
119,938
|
38
|
%
|
135,248
|
31
|
%
|
|||||||||||||||
Mexico, South and Central America:
|
||||||||||||||||||||||||
Chile
|
8,939
|
3
|
%
|
8,939
|
3
|
%
|
24,336
|
6
|
%
|
|||||||||||||||
Other
|
8,626
|
2
|
%
|
8,768
|
3
|
%
|
16,732
|
4
|
%
|
|||||||||||||||
Mexico, South and Central America — Total
|
17,565
|
5
|
%
|
17,707
|
6
|
%
|
41,068
|
10
|
%
|
|||||||||||||||
North America:
|
||||||||||||||||||||||||
United States
|
17,647
|
5
|
%
|
24,591
|
8
|
%
|
37,316
|
9
|
%
|
|||||||||||||||
Other
|
6,237
|
2
|
%
|
6,223
|
2
|
%
|
6,380
|
1
|
%
|
|||||||||||||||
North America — Total
|
23,884
|
7
|
%
|
30,814
|
10
|
%
|
43,696
|
10
|
%
|
|||||||||||||||
Middle East and Africa:
|
||||||||||||||||||||||||
Ethiopia
|
30,018
|
9
|
%
|
30,084
|
10
|
%
|
22,808
|
5
|
%
|
|||||||||||||||
Other
|
9,918
|
2
|
%
|
8,357
|
2
|
%
|
8,315
|
2
|
%
|
|||||||||||||||
Middle East and Africa — Total
|
39,936
|
11
|
%
|
38,441
|
12
|
%
|
31,123
|
7
|
%
|
|||||||||||||||
Total Operating Lease Revenue
|
$
|
346,894
|
100
|
%
|
$
|
313,582
|
100
|
%
|
$
|
429,691
|
100
|
%
|
Year ending December 31,
|
(Dollars in thousands)
|
|||
2018
|
$
|
355,172
|
||
2019
|
320,670
|
|||
2020
|
280,506
|
|||
2021
|
245,208
|
|||
2022
|
209,542
|
|||
Thereafter
|
734,445
|
|||
Future minimum rental payments under operating leases
|
$
|
2,145,543
|
Year ending December 31,
|
||||
2018
|
$
|
9,137
|
||
2019
|
8,449
|
|||
2020
|
5,849
|
|||
2021
|
3,594
|
|||
2022
|
2,218
|
|||
Thereafter
|
1,044
|
|||
Future amortization of lease incentives
|
$
|
30,291
|
7. |
MAINTENANCE RIGHTS
|
December 31, 2017
|
December 31, 2016
|
|||||||
Maintenance rights, net beginning balance
|
$
|
101,969
|
$
|
94,493
|
||||
Acquisitions
|
25,033
|
28,412
|
||||||
Capitalized to aircraft improvements
|
(192
|
)
|
(5,245
|
)
|
||||
Maintenance rights recognized into earnings
|
(465
|
)
|
—
|
|||||
Cash receipts from maintenance rights
|
—
|
(9,513
|
)
|
|||||
Maintenance rights associated with aircraft sold
|
4,954
|
(6,178
|
)
|
|||||
Maintenance rights, net at end of year
|
$
|
131,299
|
$
|
101,969
|
8.
|
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY
|
9.
|
OTHER ASSETS
|
December 31, 2017
|
December 31, 2016
|
|||||||
Lease costs, net
|
$
|
2,045
|
$
|
1,730
|
||||
Value added tax and general sales tax receivables, net
|
2,915
|
2,994
|
||||||
Other assets
|
4,010
|
1,844
|
||||||
Total other assets
|
$
|
8,970
|
$
|
6,568
|
10. |
UNSECURED BORROWINGS
|
Balance as of
|
||||||||
December 31, 2017
|
December 31, 2016
|
|||||||
(Dollars in thousands)
|
||||||||
Outstanding principal balance:
|
||||||||
2020 Notes
|
$
|
—
|
$
|
375,000
|
||||
2021 Notes
|
325,000
|
325,000
|
||||||
2024 Notes
|
300,000
|
—
|
||||||
Total outstanding principal balance
|
625,000
|
700,000
|
||||||
Unamortized debt discounts and loan costs
|
(9,078
|
)
|
(8,610
|
)
|
||||
Unsecured borrowings, net
|
$
|
615,922
|
$
|
691,390
|
If redeemed during the 12-month period commencing on October 15 of the years set forth below
:
|
Redemption Price
|
|||
2017
|
104.781
|
%
|
||
2018
|
103.188
|
%
|
||
2019
|
101.594
|
%
|
||
2020 and thereafter
|
100.000
|
%
|
If redeemed during the 12-month period commencing on October 15 of the years set forth below
:
|
Redemption Price
|
|||
2020
|
102.625
|
%
|
||
2021
|
101.313
|
%
|
||
2022 and thereafter
|
100.000
|
%
|
11.
|
SECURED BORROWINGS
|
Outstanding principal
balance as of
December 31,
|
Weighted average
interest rate
(1)
as of
December 31,
|
||||||||||||||||
2017
|
2016
|
2017
|
2016
|
Maturity date
|
|||||||||||||
Securitization Notes
|
$
|
101,551
|
$
|
139,741
|
3.06
|
%
|
3.36
|
%
|
November 2033
|
||||||||
Nord LB Facility
|
153,176
|
171,509
|
4.47
|
%
|
4.14
|
%
|
November 2018
|
||||||||||
CBA Facility
|
49,080
|
56,146
|
5.53
|
%
|
5.45
|
%
|
October 2020
|
||||||||||
Term Loan
|
431,271
|
404,016
|
4.25
|
%
|
4.41
|
%
|
February 2023
|
||||||||||
Magellan Acquisition Limited Facility
|
331,768
|
—
|
3.15
|
%
|
—
|
December 2025
|
|||||||||||
Fly Acquisition III Facility
|
86,520
|
113,045
|
3.41
|
%
|
2.88
|
%
|
February 2022
|
||||||||||
Other Aircraft Secured Borrowings
|
905,525
|
980,967
|
3.83
|
%
|
3.50
|
%
|
September 2019 – June 2028
|
||||||||||
Unamortized debt discounts and loan costs
|
(29,216
|
)
|
(33,439
|
)
|
|||||||||||||
Total
|
$
|
2,029,675
|
$
|
1,831,985
|
(1) |
Represents the contractual interest rates and effect of derivative instruments and excludes the amortization of debt discounts and debt issuance costs.
|
Year ending December 31,
|
||||
2018
|
$
|
309,914
|
||
2019
|
169,230
|
|||
2020
|
187,184
|
|||
2021
|
152,497
|
|||
2022
|
174,436
|
|||
Thereafter
|
1,065,630
|
|||
Future minimum principal payments due
|
$
|
2,058,891
|
12.
|
DERIVATIVES
|
Type
|
Quantity
|
Maturity
Dates
|
Hedge
Interest
Rates
|
Swap
Contract
Notional
Amount
|
Credit
Risk
Adjusted
Fair
Market
Value
|
Gain
Recognized in
Accumulated
Comprehensive
Loss
|
Loss
Recognized
into
Earnings
|
||||||||||||||||||
Interest rate swap contracts
|
9
|
11/14/2018-1/11/23
|
0.90% - 4.30
|
%
|
$
|
175,552
|
$
|
2,625
|
$
|
2,090
|
$
|
(16
|
)
|
||||||||||||
Accrued interest
|
—
|
18
|
—
|
—
|
|||||||||||||||||||||
Total – designated derivative assets
|
9
|
$
|
175,552
|
$
|
2,643
|
$
|
2,090
|
$
|
(16
|
)
|
Type
|
Quantity
|
Maturity
Dates
|
Hedge
Interest
Rates
|
Swap
Contract
Notional
Amount
|
Credit
Risk
Adjusted
Fair
Market
Value
|
Loss
Recognized in
Accumulated
Comprehensive
Loss
|
Gain
Recognized
into
Earnings
|
||||||||||||||||||
Interest rate swap contracts
|
7
|
3/14/18-9/27/25
|
1.98% - 6.22
|
%
|
$
|
206,447
|
$
|
(2,735
|
)
|
$
|
(2,393
|
)
|
$
|
4
|
|||||||||||
Accrued interest
|
—
|
(113
|
)
|
—
|
—
|
||||||||||||||||||||
Total – designated derivative liabilities
|
7
|
$
|
206,447
|
$
|
(2,848
|
)
|
$
|
(2,393
|
)
|
$
|
4
|
Type
|
Quantity
|
Maturity
Dates
|
Hedge
Interest
Rates
|
Swap
Contract
Notional
Amount
|
Credit
Risk
Adjusted
Fair
Market
Value
|
Gain
Recognized
into
Earnings
|
|||||||||||||||
Interest rate swap contracts
|
4
|
2/9/2018-2/9/2019
|
1.69% - 3.47
|
%
|
$
|
318,747
|
$
|
(4,312
|
)
|
$
|
204
|
||||||||||
Accrued interest
|
—
|
(184
|
)
|
—
|
|||||||||||||||||
Total – dedesignated derivative liabilities
|
4
|
$
|
318,747
|
$
|
(4,496
|
)
|
$
|
204
|
13. |
INCOME TAXES
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Current tax expense:
|
||||||||||||
Ireland
|
$
|
—
|
$
|
—
|
$
|
33
|
||||||
Luxembourg
|
195
|
145
|
252
|
|||||||||
Australia
|
4,062
|
1,742
|
138
|
|||||||||
Other
|
43
|
33
|
57
|
|||||||||
Current tax expense — total
|
4,300
|
1,920
|
480
|
|||||||||
Deferred tax (benefit) expense:
|
||||||||||||
Ireland
|
8,710
|
(10,812
|
)
|
4,558
|
||||||||
Australia
|
(1,743
|
)
|
1,615
|
334
|
||||||||
Other
|
65
|
—
|
27
|
|||||||||
Deferred tax (benefit) expense — total
|
7,032
|
(9,197
|
)
|
4,919
|
||||||||
Total income tax (benefit) expense
|
$
|
11,332
|
$
|
(7,277
|
)
|
$
|
5,399
|
December 31,
2017
|
December 31,
2016
|
|||||||
Deferred tax asset:
|
||||||||
Net operating loss carry forwards
|
$
|
170,960
|
$
|
151,575
|
||||
Net unrealized losses on derivative instruments
|
390
|
1,181
|
||||||
Basis difference on acquisition of GAAM Australian assets
|
7,314
|
6,786
|
||||||
Other
|
55
|
224
|
||||||
Valuation allowance
|
(39,484
|
)
|
(30,524
|
)
|
||||
Total deferred tax asset
|
139,235
|
129,242
|
||||||
Deferred tax liability:
|
||||||||
Excess of tax depreciation over book depreciation
|
(153,447
|
)
|
(137,249
|
)
|
||||
Book/tax differences identified in connection with GAAM Portfolio acquisition
|
(412
|
)
|
(438
|
)
|
||||
Net earnings of non-European Union member subsidiaries
|
(3,745
|
)
|
(3,957
|
)
|
||||
Withholding tax on Australian unrepatriated earnings
|
(1,800
|
)
|
—
|
|||||
Total deferred tax liability
|
(159,404
|
)
|
(141,644
|
)
|
||||
Deferred tax liability, net
|
$
|
(20,169
|
)
|
$
|
(12,402
|
)
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Irish statutory corporate tax rate on trading income
|
12.5
|
%
|
12.5
|
%
|
12.5
|
%
|
||||||
Valuation allowances
|
59.9
|
%
|
(19.8
|
)%
|
12.0
|
%
|
||||||
Equity earnings from Fly-Z/C LP
|
(0.4
|
)%
|
0.2
|
%
|
(0.5
|
)%
|
||||||
Tax impact of repurchased and resold Notes
|
(0.8
|
)%
|
1.3
|
%
|
(3.2
|
)%
|
||||||
Foreign tax rate differentials
|
(18.4
|
)%
|
7.8
|
%
|
(9.7
|
)%
|
||||||
True-up of prior year tax provision
|
2.2
|
%
|
—
|
1.4
|
%
|
|||||||
Non-taxable gain on debt extinguishment
|
—
|
0.3
|
%
|
—
|
||||||||
Non-deductible interest expense, transaction fees and expenses
|
12.2
|
%
|
(4.8
|
)%
|
6.1
|
%
|
||||||
Deductible intra-group interest
|
—
|
30.9
|
%
|
—
|
||||||||
Unrealized foreign exchange loss on re-valuation of deferred tax balances
|
0.5
|
%
|
(8.6
|
)%
|
—
|
|||||||
Withholding tax
|
13.3
|
%
|
0.0
|
%
|
0.0
|
%
|
||||||
Other
|
0.3
|
%
|
0.2
|
%
|
0.5
|
%
|
||||||
Effective tax rate
|
81.3
|
%
|
20.0
|
%
|
19.1
|
%
|
14. |
OTHER LIABILITIES
|
December 31,
2017
|
December 31,
2016
|
|||||||
Current tax payable
|
$
|
4,226
|
$
|
2,036
|
||||
Lease incentive obligation
|
20,306
|
24,757
|
||||||
Deferred rent
|
8,444
|
3,792
|
||||||
Refundable deposits
|
805
|
350
|
||||||
Other
|
5,875
|
9,319
|
||||||
Total other liabilities
|
$
|
39,656
|
$
|
40,254
|
15. |
SHAREHOLDERS’ EQUITY
|
16. |
SHARE-BASED COMPENSATION
|
17.
|
EARNINGS PER SHARE
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Numerator
|
||||||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
22,798
|
|||||
Less:
|
||||||||||||
Dividends declared and paid to shareholders
|
—
|
—
|
(41,388
|
)
|
||||||||
Dividend equivalents paid to vested RSUs and SARs
|
—
|
—
|
(1,054
|
)
|
||||||||
Net income (loss) attributable to common shareholders
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
(19,644
|
)
|
||||
Denominator
|
||||||||||||
Weighted average shares outstanding-Basic
|
30,307,357
|
33,239,001
|
41,222,690
|
|||||||||
Dilutive common equivalent shares:
|
||||||||||||
RSUs
|
—
|
—
|
7,950
|
|||||||||
SARs
|
46,068
|
—
|
84,509
|
|||||||||
Weighted average shares outstanding-Diluted
|
30,353,425
|
33,239,001
|
41,315,149
|
|||||||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
||||||||||||
Distributed earnings
|
$
|
—
|
$
|
—
|
$
|
1.00
|
||||||
Undistributed income (excess distribution)
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
(0.48
|
)
|
||||
Basic earnings (loss) per share
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
|||||
Diluted
|
||||||||||||
Distributed earnings
|
$
|
—
|
$
|
—
|
$
|
1.00
|
||||||
Undistributed income (excess distribution)
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
(0.48
|
)
|
||||
Diluted earnings (loss) per share
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
18. |
COMMITMENTS AND CONTINGENCIES
|
19. |
RELATED PARTY TRANSACTIONS
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
||||||||||||||||||||||
Fixed base fee payments
(1)
|
$
|
245
|
$
|
245
|
$
|
245
|
$
|
245
|
$
|
245
|
$
|
1,470
|
$
|
2,695
|
||||||||||||||
Fixed administrative agency fee payments due by B&B Air Funding
(1)
|
108
|
69
|
31
|
12
|
12
|
13
|
245
|
|||||||||||||||||||||
Fixed administrative services fee due under the Term Loan
(2)
|
472
|
452
|
373
|
288
|
200
|
134
|
1,919
|
|||||||||||||||||||||
Fixed administrative services fee due under the Magellan Acquisition Limited Facility
(2)
|
204
|
204
|
204
|
202
|
192
|
758
|
1,764
|
|||||||||||||||||||||
Fixed administrative services fee due under Fly Acquisition III
(2)
|
168
|
153
|
144
|
144
|
31
|
7
|
647
|
|||||||||||||||||||||
Fixed administrative agency fee payments due by other subsidiaries
(2)
|
401
|
362
|
325
|
271
|
262
|
622
|
2,243
|
|||||||||||||||||||||
Fixed payments for Management Expenses
(1) (3)
|
7,307
|
7,307
|
7,307
|
7,307
|
7,307
|
54,799
|
91,334
|
|||||||||||||||||||||
Total
|
$
|
8,905
|
$
|
8,792
|
$
|
8,629
|
$
|
8,469
|
$
|
8,249
|
$
|
57,803
|
$
|
100,847
|
(1) |
Assumes Consumer Price Index (“CPI”) rates in effect as of December 31, 2017 remain constant in future periods.
|
(2) |
Assumes number of aircraft at December 31, 2017 remains constant in future periods.
|
(3) |
Assumes an automatic extension for one additional term of five years to July 1, 2030. Also assumes net book value of aircraft at December 31, 2017 and Consumer Price Index rates in effect as of December 31, 2017 remain constant in future periods.
|
20. |
FAIR VALUE MEASUREMENTS
|
As of December 31, 2017
|
As of December 31, 2016
|
|||||||||||||||
Principal
Amount
Outstanding
|
Fair Value
|
Principal
Amount
Outstanding
|
Fair Value
|
|||||||||||||
Securitization Notes
|
$
|
101,551
|
$
|
95,839
|
$
|
139,741
|
$
|
134,850
|
||||||||
Nord LB Facility
|
153,176
|
153,176
|
171,509
|
171,509
|
||||||||||||
CBA Facility
|
49,080
|
49,080
|
56,146
|
56,146
|
||||||||||||
Term Loan
|
431,271
|
431,271
|
404,016
|
406,804
|
||||||||||||
Magellan Acquisition Limited Facility
|
331,768
|
331,768
|
—
|
—
|
||||||||||||
Fly Acquisition III Facility
|
86,520
|
86,520
|
113,045
|
113,045
|
||||||||||||
Other Aircraft Secured Borrowings
|
905,525
|
905,525
|
980,967
|
980,967
|
||||||||||||
2020 Notes
|
—
|
—
|
375,000
|
394,219
|
||||||||||||
2021 Notes
|
325,000
|
339,235
|
325,000
|
340,438
|
||||||||||||
2024 Notes
|
300,000
|
301,500
|
—
|
—
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
December 31, 2017:
|
||||||||||||||||
Derivative assets
|
—
|
$
|
2,643
|
—
|
$
|
2,643
|
||||||||||
Derivative liabilities
|
—
|
7,344
|
—
|
7,344
|
||||||||||||
December 31, 2016:
|
||||||||||||||||
Derivative assets
|
—
|
$
|
1,905
|
—
|
$
|
1,905
|
||||||||||
Derivative liabilities
|
—
|
13,281
|
—
|
13,281
|
21. |
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED FINANCIAL INFORMATION
|
March 31,
2017
|
June 30,
2017
|
September 30,
2017
|
December 31,
2017
|
|||||||||||||
Total revenues
|
$
|
79,266
|
$
|
79,832
|
$
|
86,219
|
$
|
107,934
|
||||||||
Net income (loss)
|
$
|
5,052
|
$
|
2,880
|
$
|
(12,504
|
)
|
$
|
7,170
|
|||||||
Earnings (loss) per share — Basic
|
$
|
0.16
|
$
|
0.09
|
$
|
(0.43
|
)
|
$
|
0.25
|
|||||||
Earnings (loss) per share — Diluted
|
$
|
0.16
|
$
|
0.09
|
$
|
(0.43
|
)
|
$
|
0.25
|
March 31,
2016
|
June 30,
2016
|
September 30,
2016
|
December 31,
2016
|
|||||||||||||
Total revenues
|
$
|
81,208
|
$
|
77,934
|
$
|
85,297
|
$
|
100,600
|
||||||||
Net income (loss)
|
$
|
7,100
|
$
|
4,677
|
$
|
22,942
|
$
|
(63,831
|
)
|
|||||||
Earnings (loss) per share — Basic
|
$
|
0.21
|
$
|
0.14
|
$
|
0.70
|
$
|
(1.98
|
)
|
|||||||
Earnings (loss) per share — Diluted
|
$
|
0.21
|
$
|
0.14
|
$
|
0.70
|
$
|
(1.98
|
)
|
22. |
SUBSEQUENT EVENTS
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
157,014
|
$
|
229,777
|
||||
Notes receivable from subsidiaries
|
375,477
|
441,451
|
||||||
Investments in subsidiaries
|
985,476
|
912,163
|
||||||
Investment in unconsolidated subsidiary
|
8,196
|
7,700
|
||||||
Other assets, net
|
1,655
|
534
|
||||||
Total assets
|
$
|
1,527,818
|
$
|
1,591,625
|
||||
Liabilities
|
||||||||
Payable to related parties
|
$
|
223
|
$
|
906
|
||||
Payable to subsidiaries
|
349,585
|
280,034
|
||||||
Unsecured borrowings, net
|
615,922
|
691,390
|
||||||
Deferred tax liability, net
|
3,739
|
1,946
|
||||||
Accrued and other liabilities
|
14,640
|
24,114
|
||||||
Total liabilities
|
984,109
|
998,390
|
||||||
Shareholders’ equity
|
543,709
|
593,235
|
||||||
Total liabilities and shareholders’ equity
|
$
|
1,527,818
|
$
|
1,591,625
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Revenues
|
||||||||||||
Equity earnings (loss) from subsidiaries
|
$
|
35,208
|
$
|
(24,385
|
)
|
$
|
17,065
|
|||||
Equity earnings from unconsolidated subsidiary
|
496
|
530
|
1,159
|
|||||||||
Intercompany management fee income
|
12,124
|
8,866
|
15,053
|
|||||||||
Intercompany interest income
|
34,068
|
44,394
|
48,077
|
|||||||||
Interest and other income
|
809
|
410
|
224
|
|||||||||
Total revenues
|
82,705
|
29,815
|
81,578
|
|||||||||
Expense
|
||||||||||||
Interest expense
|
45,970
|
48,013
|
48,013
|
|||||||||
Selling, general and administrative
|
12,630
|
11,803
|
12,987
|
|||||||||
Loss on modification and extinguishment of debt
|
19,655
|
—
|
—
|
|||||||||
Total expenses
|
78,255
|
59,816
|
61,000
|
|||||||||
Net income (loss) before provision (benefit) for income taxes
|
4,450
|
(30,001
|
)
|
20,578
|
||||||||
Provision (benefit) for income taxes
|
1,852
|
(889
|
)
|
(2,220
|
)
|
|||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
22,798
|
|||||
Weighted average number of shares:
|
||||||||||||
Basic
|
30,307,357
|
33,239,001
|
41,222,690
|
|||||||||
Diluted
|
30,353,425
|
33,239,001
|
41,315,149
|
|||||||||
Earnings (loss) per share:
|
||||||||||||
Basic
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
|||||
Diluted
|
$
|
0.09
|
$
|
(0.88
|
)
|
$
|
0.52
|
Years ended
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income (loss)
|
$
|
2,598
|
$
|
(29,112
|
)
|
$
|
22,798
|
|||||
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
|
||||||||||||
Equity earnings (loss) from subsidiaries
|
(35,208
|
)
|
24,385
|
(17,065
|
)
|
|||||||
Equity earnings from unconsolidated subsidiary
|
(496
|
)
|
(530
|
)
|
(1,159
|
)
|
||||||
Deferred income taxes
|
1,852
|
(12,139
|
)
|
(2,276
|
)
|
|||||||
Share-based compensation
|
—
|
—
|
195
|
|||||||||
Amortization of debt discount and other
|
1,931
|
1,982
|
1,982
|
|||||||||
Loss on modification and extinguishment of debt
|
19,655
|
—
|
—
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Payable to subsidiaries
|
6,144
|
(162,229
|
)
|
132,843
|
||||||||
Other assets
|
(1,121
|
)
|
476
|
1,060
|
||||||||
Payable to related parties
|
(683
|
)
|
856
|
(867
|
)
|
|||||||
Accrued and other liabilities
|
(9,478
|
)
|
12,622
|
483
|
||||||||
Net cash flows provided by (used in) operating activities
|
(14,806
|
)
|
(163,689
|
)
|
137,994
|
|||||||
Cash Flows from Investing Activities
|
||||||||||||
Distributions received from subsidiaries
|
—
|
—
|
53,500
|
|||||||||
Capital contributions to unconsolidated subsidiary
|
—
|
—
|
(2,009
|
)
|
||||||||
Notes receivable from subsidiaries
|
(48,335
|
)
|
(40,172
|
)
|
(650,083
|
)
|
||||||
Notes payable to subsidiaries
|
144,718
|
334,556
|
505,273
|
|||||||||
Net cash flows provided by (used in) investing activities
|
96,383
|
294,384
|
(93,319
|
)
|
||||||||
Cash Flows from Financing Activities
|
||||||||||||
Proceeds from issuance of unsecured borrowings
|
295,150
|
—
|
—
|
|||||||||
Repayment of unsecured borrowings
|
(375,000
|
)
|
—
|
—
|
||||||||
Debt modification and extinguishment costs
|
(16,287
|
)
|
—
|
—
|
||||||||
Debt issuance costs
|
(917
|
)
|
—
|
—
|
||||||||
Shares repurchased
|
(57,286
|
)
|
(40,257
|
)
|
(81,432
|
)
|
||||||
Dividends paid
|
—
|
—
|
(41,388
|
)
|
||||||||
Dividend equivalents
|
—
|
—
|
(1,054
|
)
|
||||||||
Net cash flows used in financing activities
|
(154,340
|
)
|
(40,257
|
)
|
(123,874
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(72,763
|
)
|
90,438
|
(79,199
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
229,777
|
139,339
|
218,538
|
|||||||||
Cash and cash equivalents at end of period
|
$
|
157,014
|
$
|
229,777
|
$
|
139,339
|
||||||
Supplemental Disclosure:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
41,883
|
$
|
46,032
|
$
|
46,723
|
||||||
Taxes
|
—
|
—
|
—
|
|||||||||
Noncash Activities
:
|
||||||||||||
Noncash investing activities:
|
||||||||||||
Capital contribution to subsidiaries
|
109,391
|
207,340
|
17,246
|
|||||||||
Distributions from subsidiaries
|
76,451
|
55,039
|
711
|
Exhibit
Number
|
Description of Exhibit
|
|
Memorandum of Association
(1)
|
||
Amended and Restated Bye-Laws of Fly Leasing Ltd
.
(2)
|
||
Deposit Agreement between Deutsche Bank Trust Company Americas and Babcock & Brown Air Limited.
(1)
|
||
Servicing Agreement, dated as of October 2, 2007, among Babcock & Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(1)
|
||
Administrative Services Agreement, dated as of October 2, 2007, among Deutsche Bank Trust Company Americas, AMBAC Assurance Corporation, Babcock & Brown Air Management Co. Limited and Babcock & Brown Air Funding I Limited.
(1)
|
||
Trust Indenture, dated as of October 2, 2007, among Deutsche Bank Trust Company Americas, BNP Paribas, AMBAC Assurance Corporation and Babcock & Brown Air Funding I Limited.
(1)
|
||
Security Trust Agreement, dated as of October 2, 2007, between Deutsche Bank Trust Company Americas, and Babcock & Brown Air Funding I Limited.
(1)
|
||
Cash Management Agreement between Deutsche Bank Trust Company Americas and Babcock & Brown Air Funding I Limited.
(1)
|
||
Form of Director Service Agreement between Babcock & Brown Air Limited and each director thereof.
(1)
|
||
Amendment No. 1 to Servicing Agreement, dated as of April 29, 2010, among Babcock & Brown Aircraft Management LLC, Babcock & Brown Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(3)
|
||
Fly Leasing Limited Omnibus Incentive Plan
.
(3)
|
||
Form of Stock Appreciation Right Award Agreement
.
(3)
|
||
Form of Restricted Stock Unit Award Agreement
.
(3)
|
||
Loan Agreement dated as of November 14, 2007, among Global Aviation Holdings Fund Limited, GAHF (Ireland) Limited, Caledonian Aviation Holdings Limited and Norddeutsche Landesbank Girozentrale.
(4)
|
||
Form of Loan Agreement among Hobart Aviation Holdings Limited, Norddeutsche Landesbank Girozentrale and each borrower thereof.
(4)
|
||
Form of Servicing Agreement among BBAM US LP, BBAM Aviation Services Limited and each company thereof.
(17)
|
||
Securities Purchase Agreement dated November 30, 2012, by and among Fly Leasing Limited, Summit Aviation Partners LLC and such persons identified therein.
(8)
|
||
4.15
|
Purchase Agreement dated November 30, 2012 by and among BBAM Limited Partnership, Summit Aviation Partners LLC, Fly-BBAM Holdings Ltd., Summit Aviation Management Co., Ltd. and such persons identified therein.
(6)
|
|
First Amendment to Purchase Amendment dated December 28, 2012 by and among Fly Leasing Limited, Summit Aviation Partners LLC and such persons identified therein
.
(8)
|
Exhibit
Number
|
Description of Exhibit
|
|
Amended and Restated Fly Leasing Limited Management Agreement dated as of December 28, 2012, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(8)
|
||
Registration Rights Agreement dated as of December 28, 2012, by and among Fly Leasing Limited and each shareholder identified therein.
(8)
|
||
Amended and Restated Servicing Agreement dated as of January 24, 2013, by and among BBAM US LP, BBAM Aviation Services Limited and Fly Leasing Limited.
(8)
|
||
Indenture dated December 11, 2013 between Fly Leasing Limited and Wells Fargo Bank, National Association.
(7)
|
||
First Supplemental Indenture dated December 11, 2013 between Fly Leasing Limited and Wells Fargo Bank, Nation Association.
(7)
|
||
Second Supplemental Indenture dated as of October 3, 2014, between Fly Leasing Limited and Wells Fargo Bank, National Association.
(10)
|
||
Amendment No. 1 to Trust Indenture, dated as of October 24, 2014, by and among Babcock & Brown Air Funding I Limited, Deutsche Bank Trust Company Americas, BNP Paribas and AMBAC Assurance Corporation.
(12)
|
||
Amendment No. 2 to Servicing Agreement, dated as of October 24, 2014, by and among BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(12)
|
||
First Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated June 19, 2015, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(13)
|
||
Sale Agreement dated June 19, 2015, among certain sellers and ECAF I Ltd.
(13)
|
||
Servicing Agreement dated as of February 26, 2016, among BBAM US LP, BBAM Aviation Services Limited and Fly Acquisition III Limited.
(14)
|
||
Second Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated July 27, 2016, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(16)
|
||
Amendment No. 3 to Servicing Agreement, dated as of February 1, 2017, by and among BBAM Aircraft Management LP, BBAM Aircraft Management (Europe) Limited, Babcock & Brown Air Funding I Limited and AMBAC Assurance Corporation.
(17)
|
||
Third Amendment to Amended and Restated Fly Leasing Limited Management Agreement, dated as of February 1, 2017, between Fly Leasing Limited and Fly Leasing Management Co. Limited.
(17)
|
||
Fee Rebate Side Letter, dated as of February 1, 2017, by and among Babcock & Brown Air Funding I Limited, Fly Leasing Management Co. Limited, and AMBAC Assurance Corporation.
(17)
|
||
Guaranty [Fly 2016A Warehouse] dated February 26, 2016 by Fly Leasing Limited.
(17)
|
||
Third Supplemental Indenture dated as of October 16, 2017, between Fly Leasing Limited and Wells Fargo Bank, National Association.
(19)
|
Exhibit
Number
|
Description of Exhibit
|
|
Servicing Agreement dated as of December 8, 2017, among BBAM US LP, BBAM Aviation Services Limited and Magellan Acquisition Limited.
|
||
Guaranty [Fly 2017A Term Loan] dated December 8, 2017 by Fly Leasing Limited.
|
||
List of the Company’s subsidiaries.
|
||
Aircraft Mortgage and Security Agreement dated as of August 9, 2012, among Fly Funding II S.A.R.L., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock & Brown Air Acquisition I Limited, The Initial Intermediate Lessees, The Initial Lessor Subsidiaries, The Additional Grantors Referred to Therein and Wells Fargo Bank Northwest, National Association.
(5)
|
||
Amended and Restated Senior Secured Credit Agreement dated July 3, 2013 among Fly Acquisition II Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, and Deutsche Bank Trust Company Americas, as Security Trustee and as Administrative Agent.
(9)
|
||
Amended and Restated Term Loan Credit Agreement dated as of November 21, 2013 among Fly Funding II S.A.R.L., Fly Leasing Limited, Fly Peridot Holdings Limited, Babcock & Brown Air Acquisition I Limited, each other Guarantor Party referred to therein, the Lenders identified therein, Citibank, N.A., and Well Fargo Bank Northwest, National Association.
(11)
|
||
Amendment to Credit Agreement, dated as of April 22, 2015, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent.
(13)
|
||
Facility Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(14)
|
||
Note Purchase Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Purchasers party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(14)
|
||
Credit Agreement [Fly 2016A Warehouse] dated as of February 26, 2016 among Fly Acquisition III Limited, the Banks party thereto, Commonwealth Bank of Australia, New York Branch, as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
(14)
|
||
Second Amendment to Credit Agreement, dated as of October 19, 2016, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent.
(15)
|
||
Third Amendment to Credit Agreement, dated as of April 28, 2017, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent.
(18)
|
||
Fourth Amendment to Credit Agreement, dated as of November 1, 2017, among Fly Funding II S.à r.l., each Borrower Party named therein, the Consenting Lenders and the Replacement Lenders named therein, Wells Fargo Bank Northwest, National Association, as Collateral Agent, and Citibank N.A., in its capacity as Administrative Agent.
(20)
|
Exhibit
Number
|
Description of Exhibit
|
|
Facility Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Subsidiary Guarantors party thereto, the Lenders party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
|
||
Note Purchase Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Purchasers party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
|
||
Credit Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Banks party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Administrative Agent and Wells Fargo Bank, National Association, as Security Trustee.
|
||
Security Agreement [FLY 2017A Term Loan], dated as of December 8, 2017 among Magellan Acquisition Limited, the Grantors thereto, and Wells Fargo Bank, National Association, as Security Trustee
|
||
10.15 |
Security Agreement [Fly 2016A Warehouse] dated February 26, 2016 among Fly Acquisition III Limited, the Grantors party thereto, and Well Fargo Bank, National Association as Security Trustee.
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
||
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
||
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
|
||
Consent of Deloitte & Touche LLP.
|
||
101
|
The following materials from the Company’s Annual Report on Form 20-F for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2017 and 2016, (ii) Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015, (iv) Consolidated Statement of Shareholders’ Equity for the years ended December 31, 2015, 2016 and 2017, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015, and (vi) Notes to Consolidated Financial Statements for the year ended December 31, 2017.
|
(1) |
Previously filed with the Registration Statement on Form F-1, File No. 333-145994.
|
(2) |
Previously filed as an exhibit on Form 6-K dated June 30, 2010.
|
(3) |
Previously filed as an exhibit on Form 6-K dated May 7, 2010.
|
(4) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2011.
|
(5) |
Previously filed as an exhibit on Form 6-K dated November 13, 2012.
|
(6) |
Confidential treatment has been requested with certain portions of this exhibit. This exhibit omits the information subject to this confidential treatment request. The omitted information has been filed separately with the Securities and Exchange Commission.
|
(7) |
Previously filed as an exhibit on Form 6-K dated December 11, 2013.
|
(8) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2012.
|
(9) |
Previously filed as an exhibit on Form 6-K dated August 6, 2013.
|
(10) |
Previously filed as an exhibit on Form 6-K dated October 3, 2014.
|
(11) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2013.
|
(12) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2014.
|
(13) |
Previously filed as an exhibit on Form 6-K dated August 5, 2015.
|
(14) |
Previously filed as an exhibit on Form 6-K dated May 19, 2016.
|
(15) |
Previously filed as an exhibit on Form 6-K dated October 20, 2016.
|
(16) |
Previously filed as an exhibit on Form 6-K dated November 17, 2016.
|
(17) |
Previously filed with the Annual Report on Form 20-F for the year ended December 31, 2016.
|
(18) |
Previously filed as an exhibit on Form 6-K dated May 1, 2017.
|
(19) |
Previously filed as an exhibit on Form 6-K dated October 16, 2017.
|
(20)
|
Previously filed as an exhibit on Form 6-K dated November 1, 2017.
|
Fly Leasing Limited
|
||
By:
|
/s/ Colm Barrington
|
|
Colm Barrington
|
||
Chief Executive Officer and Director
|
||
Dated: March 13, 2018
|
BBAM US LP, as Servicer
|
||
By:
|
||
Name:
|
||
Title:
|
||
BBAM AVIATION SERVICES LIMITED, as Servicer
|
||
By:
|
||
Name:
|
||
Title:
|
||
MAGELLAN ACQUISITION LIMITED, as Borrower
|
||
By:
|
||
Name:
|
||
Title:
|
Lessee Communications & Reporting
|
-
|
Receive, review, and respond to all communications with each Lessee and advise/invoice each Serviced Group Member as necessary
|
-
|
Monitor each Lessee’s periodic reporting obligations (utilization and maintenance status, financial statements, etc)
|
|
Lease Options
|
-
|
Advise each Serviced Group Member with respect to necessary action in connection with purchase, Lease extension and other Lease options
|
-
|
In the event of an insolvency of a Lessee or other Lease Event of Default, engage such Lessee in connection with negotiations, restructuring or other workout and advise the relevant Serviced Group Member with respect to any recommended action
|
|
Invoicing & Routine Administration of Receivables
|
-
|
Invoice each Lessee for amounts due, including Basic Rent, Security Deposits, Maintenance Payments or other payments, under the Lease
|
-
|
Monitor and maintain appropriate payment records
|
|
Maintenance Reserve Administration
|
-
|
Monitor the performance of maintenance obligations by each Lessee under the Leases
|
-
|
Monitor periodic payments and verify relevant calculations
|
|
-
|
Review and recommend payment with respect to approval of Maintenance Payment reimbursement claims
|
|
-
|
Upon redelivery of Aircraft, arrange for inspection of Aircraft, review and maintain records, determine whether the applicable Lessee has complied with the terms of the Lease, including all redelivery requirements, airworthiness directives and maintenance obligations
|
|
Insurance
|
-
|
Monitor performance of each Lessee’s insurance obligations under the Leases
|
-
|
Review agreed values and advise each Serviced Group Member if increases or additional coverages should be effected, and, to the extent commercially available, request brokers to arrange such increases or additional coverages as directed by each Serviced Group Member
|
|
-
|
Notify each Serviced Group Member promptly in writing of incidents known to the Servicers resulting in damage with cost potentially exceeding Damage Notification Threshold (as defined in the relevant Lease)
|
|
-
|
Request brokers to arrange insurance for Aircraft off-lease (at the relevant Serviced Group Member's expense) in accordance with standard BBAM practices
|
|
Enforcement
|
-
|
Take necessary steps to enforce the obligations of each Lessee under the Leases and, following a default, all steps necessary or appropriate to preserve and enforce the rights of the relevant Serviced Group Member under the Leases
|
Technical Services
|
-
|
Monitor performance of each Lessee’s Maintenance Payment obligations under the Leases by reference to the monthly reports provided by each Lessee under the Leases |
-
|
Arrange, when requested by a Serviced Group Member, and at such Serviced Group Member's cost, physical inspections by the Servicers or any other person nominated by such Serviced Group Member and provide written reports (including assistance relating to any valuation or appraisal services) | |
-
|
Monitor each Lessee’s compliance with respect to service bulletins and airworthiness directives required by the Leases, which may be subject to cost sharing arrangements as between the relevant Serviced Group Member and each Lessee pursuant to the Leases, including a review of the calculation of such cost sharing | |
-
|
Review and make recommendations in respect of Lessee proposals for modifications to the Aircraft | |
-
|
Review proposed changes to the maintenance program for the Aircraft of which the Servicers have knowledge
|
|
-
|
Redelivery management (compliance with redelivery requirements (including, without limitation, service bulletins and airworthiness directives compliance required by threlevant Lease), documentation and acceptance)
|
Operational Reports/Notices
|
-
|
Provide notice to the relevant Serviced Group Member of any material Lessee payment defaults
|
-
|
Provide to the relevant Serviced Group Member technical status updates (utilisation and timing of major Maintenance Payments) as requested by such Serviced Group Member
|
|
-
|
Information and reports provided by each Lessee under the Leases and received by the Servicers
|
|
-
|
Provide to the relevant Serviced Group Member notice of Events of Default of which the Servicers have knowledge
|
|
-
|
Provide to the relevant Serviced Group Member notice of any claim made by a Lessee against such Serviced Group Member of which the Servicers have knowledge | |
Other
|
-
|
Prepare, draft and negotiate each lease agreement for each new lease each Serviced Group Member enters into with respect to the Aircraft
|
-
|
Receive and review any estimate of cost, invoice or other request for reimbursement or expenditure pursuant to the Leases
|
|
-
|
Evaluate and advise each Serviced Group Member regarding any proposal or request to approve pooling arrangements made by a Lessee in accordance with the Lease
|
|
-
|
Consult with the relevant Serviced Group Member to discuss any matters relating to the Lease, the Aircraft or the Lessee (i) whenever such Serviced Group Member shall reasonably request and/or (ii) whenever the Servicers shall deem it advisable.
|
|
-
|
Set up and manage corporate bank accounts in the name of and on behalf of each Serviced Group Member in connection with the performance of the Services
|
|
-
|
Procure legal, tax and accounting services on behalf of each Serviced Group Member as is necessary or desirable in connection with the performance of the Services
|
|
-
|
Forward promptly a copy of any material communication received from any person in relation to the Lease, Aircraft or engine
|
|
-
|
Hold all original Lease and Lease related documents (or copies thereof) of each Serviced Group Member in safe custody, by application of measures comparable to those each Servicer uses in the retention of its own original documents of a similar nature
|
|
-
|
If a Lease terminates or expires for any reason, the Servicers shall use commercially reasonable efforts to lease, sell or otherwise remarket the Aircraft taking into account the then current market conditions
|
Dated: _________________, 2017
|
||
FLY LEASING LIMITED
|
||
By:
|
||
Name:
|
||
Title:
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
|
Amber Aircraft Leasing Limited
|
Ireland
|
|
Amethyst Aircraft Leasing Limited
|
Ireland
|
|
Aphrodite Aviation Limited
|
Ireland
|
|
Aquamarine Aircraft Leasing Limited
|
Ireland
|
|
Artemis Aviation Limited
|
Ireland
|
|
B&B Air Acquisition 3151 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 3237 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 34953 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 34956 Leasing Limited
|
Ireland
|
|
B&B Air Acquisition 403 Leasing Limited
|
Ireland
|
|
B&B Air Funding 27974 Leasing Limited
|
Ireland
|
|
B&B Air Funding 28595 Leasing Limited
|
Ireland
|
|
B&B Air Funding 29052 Leasing Limited
|
Ireland
|
|
B&B Air Funding 29330 Leasing Limited
|
Ireland
|
|
B&B Air Funding 30785 Leasing Limited
|
Ireland
|
|
B&B Air Funding 888 Leasing Limited
|
Ireland
|
|
Babcock & Brown Air Acquisition I Limited
|
Bermuda
|
|
Babcock & Brown Air Finance (Cayman) Limited
|
Cayman Islands
|
|
Babcock & Brown Air Finance II (Cayman) Limited
|
Cayman Islands
|
|
Babcock & Brown Air Funding I Limited
|
Bermuda
|
|
Baker & Spice Aviation Limited
|
Ireland
|
|
Balfour Aviation Limited
|
Ireland
|
|
Brookdell Limited
|
Ireland
|
|
Caledonian Aviation Holdings Limited
|
Ireland
|
|
Callista Aviation Limited
|
Ireland
|
|
Caraway Aircraft Leasing SARL
|
France
|
|
Cardamom Aircraft Leasing Pte. Ltd.
|
Singapore
|
|
Carnelian Aircraft Leasing Limited
|
Ireland
|
|
Cassia Aircraft Leasing (Labuan) Ltd.
|
Malaysia
|
|
Churchill Aviation Limited
|
Ireland
|
|
Citrine Aircraft Leasing Limited
|
Ireland
|
|
Clementine Aviation Limited
|
Ireland
|
|
Coral Aircraft Holdings Limited
|
Cayman Islands
|
|
Coral Aircraft One Limited
|
Ireland
|
|
Coral Aircraft Three Limited
|
Ireland
|
|
Coral Aircraft Two Limited
|
Ireland
|
|
Drake Aviation Limited
|
Ireland
|
|
Eternity Aviation Limited
|
Ireland
|
|
Fairydell Limited
|
Ireland
|
|
Fly 30144 Leasing SARL
|
France
|
|
Fly 30145 Leasing SARL
|
France
|
|
Fly Acquisition 37774 Owner Limited
|
Ireland
|
|
Fly Acquisition 39330 Leasing Limited
|
Ireland
|
|
Fly Acquisition II Limited
|
Bermuda
|
|
Fly Acquisition III Limited
|
Bermuda
|
|
Fly Aircraft Holdings Eight Limited
|
Ireland
|
|
Fly Aircraft Holdings Eighteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Eleven Limited
|
Ireland
|
|
Fly Aircraft Holdings Fifteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Five Limited
|
Ireland
|
|
Fly Aircraft Holdings Forty Limited
|
Ireland
|
|
Fly Aircraft Holdings Forty-One Limited
|
Ireland
|
|
Fly Aircraft Holdings Four Limited
|
Ireland
|
|
Fly Aircraft Holdings Fourteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Nine Limited
|
Ireland
|
|
Fly Aircraft Holdings Nineteen Limited
|
Ireland
|
|
Fly Aircraft Holdings One Limited
|
Ireland
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
|
Fly Aircraft Holdings Seven Limited
|
Ireland
|
|
Fly Aircraft Holdings Seventeen Limited
|
Ireland
|
|
Fly Aircraft Holdings Six Limited
|
Ireland
|
|
Fly Aircraft Holdings Sixteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Ten Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirteen Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Eight Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Five Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Four Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Nine Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-One Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Seven Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Six Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Three Limited
|
Ireland
|
|
Fly Aircraft Holdings Thirty-Two Limited
|
Ireland
|
|
Fly Aircraft Holdings Three Limited
|
Ireland
|
|
Fly Aircraft Holdings Twelve Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Eight Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Five Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Four Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Nine Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-One Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Seven Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Six Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Three Limited
|
Ireland
|
|
Fly Aircraft Holdings Twenty-Two Limited
|
Ireland
|
|
Fly Aircraft Holdings Two Limited
|
Ireland
|
|
Fly Funding II S.à.r.l.
|
Luxembourg
|
|
Fly Peridot Holdings Limited
|
Cayman Islands
|
|
Fly-BBAM Holdings, Ltd.
|
Cayman Islands
|
|
GAAM China No. 1 Limited
|
Ireland
|
|
GAHF (Ireland) Limited
|
Ireland
|
|
Garnet Aircraft Leasing Limited
|
Ireland
|
|
Global Aviation Holdings Fund Limited
|
Cayman Islands
|
|
Goa Aviation Limited
|
Ireland
|
|
Grace Aviation Limited
|
Ireland
|
|
Great Wall Aviation Limited
|
Ireland
|
|
Hermes Aviation Limited
|
Ireland
|
|
Hobart Aviation Holdings Limited
|
Ireland
|
|
JET-i 2522 Leasing Limited
|
Ireland
|
|
JET-i 2670 Leasing Limited
|
Ireland
|
|
JET-i 2728 Holdings Limited
|
Ireland
|
|
JET-i 28042 Leasing Limited
|
Ireland
|
|
JET-i 2849 Leasing Limited
|
Ireland
|
|
JET-i 34293 Leasing Limited
|
Ireland
|
|
JET-i 34295 Leasing Limited
|
Ireland
|
|
JET-i 34898 Leasing Limited
|
Ireland
|
|
JET-i 34899 Leasing Limited
|
Ireland
|
|
JET-i 35089 Leasing Limited
|
Ireland
|
|
Kimolos Limited
|
Ireland
|
|
Lapis Aircraft Leasing Limited
|
Ireland
|
|
Lemongrass Aircraft Leasing Pte. Ltd.
|
Singapore
|
|
Magellan Acquisition Limited
|
Bermuda
|
|
Malachite Aircraft Leasing Limited
|
Ireland
|
|
Marlborough Aviation Limited
|
Ireland
|
|
Montgomery Aviation Limited
|
Ireland
|
|
Mumbai Aviation Limited
|
Ireland
|
|
Nelson Aviation Limited
|
Ireland
|
|
Opal Holdings Australia Pty Limited
|
Australia
|
Name of Subsidiary
|
Jurisdiction of Incorporation
|
|
Opal Holdings Lux S.à.r.l.
|
Luxembourg
|
|
Padoukios Limited
|
Ireland
|
|
Palma Aviation Limited
|
Ireland
|
|
Panda Aviation Limited
|
Ireland
|
|
Pandan Aircraft Leasing SARL
|
France
|
|
Pyrite Aircraft Leasing Limited
|
Ireland
|
|
Quilldell Limited
|
Ireland
|
|
Richoux Aviation Limited
|
Ireland
|
|
Roosevelt Holdings Limited
|
Ireland
|
|
Sage Aircraft Leasing Pte. Ltd.
|
Singapore
|
|
Sapphire Leasing Pty Limited
|
Australia
|
|
Somerset Aviation Limited
|
Ireland
|
|
Suffolk Aviation Limited
|
Ireland
|
|
Surrey Aviation Limited
|
Ireland
|
|
Sussex Aviation Limited
|
Ireland
|
|
Temple Aviation Holdings Limited
|
Ireland
|
|
Topaz Aircraft Leasing Limited
|
Ireland
|
|
Tourmaline Aircraft Leasing Limited
|
Ireland
|
|
Victoria Peak Aviation Limited
|
Ireland
|
|
Wingate Aviation Limited
|
Ireland
|
|
Zircon Aircraft Leasing Limited
|
Ireland
|
Page
|
|||
ARTICLE I FRAMEWORK AND DEFINITIONS
|
1
|
||
Section 1.01.
|
Framework
|
1
|
|
Section 1.02.
|
Defined Terms
|
2
|
|
Section 1.03.
|
Interpretation
|
37
|
|
Section 1.04.
|
Accounting Terms; IFRS
|
37
|
|
ARTICLE II THE CREDIT
|
38
|
||
Section 2.01.
|
The Commitments
|
38
|
|
Section 2.02.
|
Termination of the Commitments
|
38
|
|
Section 2.03.
|
Prepayment of Drawings
|
39
|
|
Section 2.04.
|
Fees
|
40
|
|
Section 2.05.
|
Withholding of Taxes; Gross-Up
|
40
|
|
Section 2.06.
|
Payments Generally; Pro Rata Treatment; Sharing of Set offs
|
44
|
|
Section 2.07.
|
Mitigation Obligations; Replacement of Lenders
|
46
|
|
Section 2.08.
|
Application of Collections; Proceeds of Collateral
|
47
|
|
Section 2.09.
|
Defaulting Lenders
|
51
|
|
ARTICLE III REPRESENTATIONS AND WARRANTIES
|
51
|
||
Section 3.01.
|
Organization; Powers
|
51
|
|
Section 3.02.
|
Authorization; Enforceability
|
51
|
|
Section 3.03.
|
Governmental Approvals; No Conflicts
|
51
|
|
Section 3.04.
|
Properties
|
52
|
|
Section 3.05.
|
Litigation and Environmental Matters
|
52
|
|
Section 3.06.
|
Compliance with Laws and Agreements
|
52
|
|
Section 3.07.
|
Taxes
|
52
|
|
Section 3.08.
|
Disclosure; Absence of Material Adverse Effect
|
53
|
|
Section 3.09.
|
Use of Credit
|
53
|
|
Section 3.10.
|
Capitalization and Subsidiaries; Aircraft Assets
|
53
|
|
Section 3.11.
|
Legal Form
|
54
|
|
Section 3.12.
|
Ranking and Validity of Security Interests
|
54
|
Section 3.13.
|
Commercial Activity; Absence of Immunity
|
55
|
|
Section 3.14.
|
Special Purpose Status, Etc
|
55
|
|
Section 3.15.
|
Investment Company Status
|
55
|
|
Section 3.16.
|
ERISA
|
55
|
|
Section 3.17.
|
Solvency
|
55
|
|
Section 3.18.
|
Employees
|
55
|
|
Section 3.19.
|
OFAC
|
55
|
|
ARTICLE IV CONDITIONS
|
56
|
||
Section 4.01.
|
Conditions to Effective Date
|
56
|
|
Section 4.02.
|
Conditions to each Release Date
|
58
|
|
ARTICLE V AFFIRMATIVE COVENANTS
|
63
|
||
Section 5.01.
|
Certain Information
|
63
|
|
Section 5.02.
|
Notices of Material Events
|
63
|
|
Section 5.03.
|
Existence; Conduct of Business
|
63
|
|
Section 5.04.
|
Payment of Obligations
|
63
|
|
Section 5.05.
|
Maintenance of Properties; Insurance
|
64
|
|
Section 5.06.
|
Books and Records; Inspection Rights
|
65
|
|
Section 5.07.
|
Compliance with Laws; Maintenance of Permits
|
65
|
|
Section 5.08.
|
Use of Proceeds
|
66
|
|
Section 5.09.
|
Monthly Report
|
66
|
|
Section 5.10.
|
Further Assurances; Certain Obligations Respecting Subsidiaries; Drawdown of Subordinated Indebtedness
|
67
|
|
Section 5.11.
|
Governmental Approvals
|
68
|
|
Section 5.12.
|
Appraisal Updates; LTV Certificates
|
68
|
|
Section 5.13.
|
Payment of Collections Into Collections Account
|
69
|
|
Section 5.14.
|
Security Reserve Account
|
69
|
|
Section 5.15.
|
Maintenance Reserve Account
|
69
|
|
Section 5.16.
|
Leases
|
70
|
|
Section 5.17.
|
Opinions
|
70
|
|
Section 5.18.
|
Registration of Portfolio Aircraft
|
70
|
|
Section 5.19.
|
Sanctions
|
71
|
|
Section 5.20.
|
Special Purpose Entity Requirements
|
71
|
|
Section 5.21.
|
Hedging Requirements
|
71
|
ARTICLE VI NEGATIVE COVENANTS
|
72
|
||
Section 6.01.
|
Indebtedness
|
72
|
|
Section 6.02.
|
Liens
|
73
|
|
Section 6.03.
|
Fundamental Changes
|
73
|
|
Section 6.04.
|
Investments
|
74
|
|
Section 6.05.
|
Restricted Payments
|
74
|
|
Section 6.06.
|
Restrictive Agreements
|
74
|
|
Section 6.07.
|
Operating Covenants
|
75
|
|
Section 6.08.
|
Changes to the Portfolio
|
75
|
|
Section 6.09.
|
Modifications of Certain Documents
|
77
|
|
Section 6.10.
|
Limitation on Business Activities
|
77
|
|
Section 6.11.
|
Limitations on Sales and Leasebacks
|
78
|
|
Section 6.12.
|
Non-Petition, Material Actions
|
78
|
|
Section 6.13.
|
ERISA
|
78
|
|
ARTICLE VII GUARANTEE
|
78
|
||
Section 7.01.
|
The Guarantee
|
78
|
|
Section 7.02.
|
Obligations Unconditional
|
79
|
|
Section 7.03.
|
Reinstatement
|
80
|
|
Section 7.04.
|
Subrogation
|
80
|
|
Section 7.05.
|
Remedies
|
80
|
|
Section 7.06.
|
Instrument for the Payment of Money
|
80
|
|
Section 7.07.
|
Continuing Guarantee
|
81
|
|
Section 7.08.
|
Rights of Contribution
|
81
|
|
Section 7.09.
|
General Limitation on Guarantee Obligations
|
81
|
|
ARTICLE VIII EVENTS OF DEFAULT
|
82
|
||
Section 8.01.
|
Events of Default
|
82
|
|
ARTICLE IX THE ADMINISTRATIVE AGENT AND THE SECURITY TRUSTEE
|
85
|
||
Section 9.01.
|
Appointment
|
85
|
|
Section 9.02.
|
Exculpatory Provisions
|
86
|
|
Section 9.03.
|
Reliance
|
86
|
Section 9.04.
|
Delegation
|
87
|
|
Section 9.05.
|
Withholding Tax
|
87
|
|
Section 9.06.
|
Successor Secured Party Representative
|
88
|
|
Section 9.07.
|
Security Trustee
|
89
|
|
ARTICLE X MISCELLANEOUS
|
93
|
||
Section 10.01.
|
Notices
|
93
|
|
Section 10.02.
|
Waivers; Amendments
|
94
|
|
Section 10.03.
|
Expenses; Indemnity; Damage Waiver
|
96
|
|
Section 10.04.
|
Assignments Generally
|
98
|
|
Section 10.05.
|
Survival
|
99
|
|
Section 10.06.
|
Counterparts; Integration; Effectiveness
|
99
|
|
Section 10.07.
|
Severability
|
99
|
|
Section 10.08.
|
Right of Setoff
|
100
|
|
Section 10.09.
|
Governing Law; Jurisdiction; Service of Process; Etc
|
100
|
|
Section 10.10.
|
WAIVER OF JURY TRIAL
|
101
|
|
Section 10.11.
|
No Immunity
|
101
|
|
Section 10.12.
|
Judgment Currency
|
102
|
|
Section 10.13.
|
Use of English Language
|
102
|
|
Section 10.14.
|
Headings
|
102
|
|
Section 10.15.
|
Treatment of Certain Information; Confidentiality
|
102
|
|
Section 10.16.
|
USA PATRIOT Act
|
104
|
|
Section 10.17.
|
Owner Trusts
|
104
|
|
Section 10.18.
|
Conflict of Interest
|
104
|
|
Section 10.19.
|
Posting of Approved Electronic Communications
|
105
|
|
Section 10.20.
|
No Fiduciary Duty
|
106
|
|
Section 10.21.
|
Consent and Direction
|
106
|
SCHEDULES
|
|
Schedule I
|
Commitments/Lenders
|
Schedule II
|
Capitalization and Subsidiaries
|
Schedule III
|
PS Portfolio Aircraft
|
Schedule IV
|
Initial Leases
|
Schedule V
|
Lender Notice Details
|
EXHIBITS
|
|
Exhibit A-1
|
Form of Credit Agreement
|
Exhibit A-2
|
Form of Note Purchase Agreement
|
Exhibit A-3
|
Form of Guaranty
|
Exhibit A-4
|
Form of Security Agreement
|
Exhibit B
|
Form of Notice of Drawdown/Release Request
|
Exhibit C
|
Form of Lessee Notice and Acknowledgment
|
Exhibit D
|
Minimum Lease Provisions
|
Exhibit E
|
Form of Monthly Report
|
Exhibit F
|
Eligibility Criteria
|
Exhibit G-1
|
Terms of Subordinated Indebtedness
|
Exhibit G-2
|
Form of Subordination and Security Agreement
|
Exhibit H
|
Form of Process Agent Acceptance
|
Exhibit I
|
Form of Bermuda Share Charge
|
Exhibit J
|
Form of Servicing Agreement
|
Exhibit K
|
Form of Qualifying Person Confirmation
|
Exhibit L
|
Form of LTV Certificate
|
ANNEXES:
|
|
Annex 1
|
Competitor List
|
WAY
|
=
|
Y1 +
(Y2-Y1)(X-X1)
(X2-X1)
|
WAY
|
=
|
weighted average yield.
|
X
|
=
|
Remaining Weighted Average Life in years of such Note.
|
X1
|
=
|
whole integer closest to and less than X that is closest in maturity to Swap Rate and available on the Screen.
|
X2
|
=
|
whole integer closest to and greater than X that is closest in maturity in years to Swap Rate and available on the Screen.
|
Y1
|
=
|
Swap Rate with maturities equal to X1.
|
Y2
|
=
|
Swap Rate with maturities equal to X2.
|
(i)
|
if to any Borrower Group Company, to it at
|
Magellan Acquisition Limited
|
|
West Pier Business Campus
|
|
Dun Laoghaire
|
|
Co. Dublin A96 N6T7, Ireland
|
|
Attention: General Counsel
|
|
Fax: +353-1-231-1901
|
|
with a copy to:
|
|
BBAM US LP
|
|
50 California Street
|
|
14th Floor
|
|
San Francisco, CA 94111
|
|
Attention: General Counsel
|
|
Fax: +1 415 618-3337
|
(ii)
|
if to the Administrative Agent, to:
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
|
|
1221 Avenue of the Americas
|
|
New York, NY 10020
|
|
Email: AgencyDesk@us.sc.mufg.jp
|
|
Attention: Lawrence Blat
|
|
(iii)
|
if to the Security Trustee, to:
|
Wells Fargo Bank, National Association
|
|
MAC 8 U1228-051
|
|
299 South Main Street, 5th Floor
|
|
Salt Lake City, Utah 84111
|
|
Attn: Corporate Trust Administration
|
|
Fax: 801-246-7142
|
|
Email: CTSLeaseGroup@wellsfargo.com
|
MAGELLAN ACQUISITION LIMITED, as Borrower
|
||
By:
|
||
Name:
|
||
Title:
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Administrative Agent
|
||
By:
|
||
Name:
|
||
Title:
|
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Security Trustee
|
||
By:
|
||
Name:
|
||
Title:
|
Lenders:
|
||
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
||
COLUMBIA STATE BANK, as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
||
FIFTH THIRD BANK, as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
||
NTT LEASING SINGAPORE PTE. LTD., as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
||
APPLE BANK FOR SAVINGS, as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
DEKABANK DEUTSCHE GIROZENTRALE, as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
||
By:
|
||
Name:
|
||
Title:
|
||
BNP PARIBAS, as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
||
By:
|
||
Name:
|
||
Title:
|
||
FIRST ABU DHABI BANK P.J.S.C. SINGAPORE BRANCH, as a Lender
|
||
By:
|
||
Name:
|
||
Title:
|
THE BANK OF NEW YORK MELLON, A BANKING CORPORATION ORGANIZED UNDER THE LAWS OF NEW YORK, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED AS OF JULY 1ST, 2015 BETWEEN NEW YORK LIFE INSURANCE COMPANY, AS GRANTOR, JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.), AS BENEFICIARY, JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK, AS BENEFICIARY, AND THE BANK OF NEW YORK MELLON, AS TRUSTEE, as a Lender
|
||
By:
|
NYL Investors LLC, its Investment Manager
|
|
By:
|
||
Name:
|
||
Title:
|
||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION, as a Lender
|
||
By:
|
NYL Investors LLC, its Investment Manager
|
|
By:
|
||
Name:
|
||
Title:
|
||
NEW YORK LIFE INSURANCE COMPANY
|
||
By:
|
||
Name:
|
||
Title:
|
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT (BOLI 30C), as a Lender
|
||
By:
|
NYL Investors LLC, its Investment Manager
|
|
By:
|
||
Name:
|
||
Title:
|
||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT (BOLI 3), as a Lender
|
||
By:
|
NYL Investors LLC, its Investment Manager
|
|
By:
|
||
Name:
|
||
Title:
|
Page
|
|||
Article I DEFINITIONS
|
1
|
||
Section 1.01.
|
Defined Terms
|
1
|
|
Article II THE CREDIT
|
1
|
||
Section 2.01.
|
The Commitments; Global Notes and Advances
|
1
|
|
Section 2.02.
|
Advances and Drawdowns
|
1
|
|
Section 2.03.
|
Notices of Drawdown
|
1
|
|
Section 2.04.
|
Funding of Advances
|
2
|
|
Section 2.05.
|
[Reserved]
|
2
|
|
Section 2.06.
|
Repayment of Notes; Evidence of Debt
|
2
|
|
Section 2.07.
|
Interest
|
3
|
|
Article III REPRESENTATIONS AND WARRANTIES OF THE BORROWER GROUP COMPANIES
|
4
|
||
Section 3.01.
|
Co-operation with Ratings Agencies
|
4
|
|
Section 3.02.
|
Securities Act
|
4
|
|
Article IV REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE PURCHASERS
|
4
|
||
Article V MISCELLANEOUS
|
7
|
||
Section 5.01.
|
Incorporated Provisions
|
7
|
|
Section 5.02.
|
Successors and Assigns
|
7
|
|
Section 5.03.
|
Consent and Direction
|
12
|
|
EXHIBITS
|
|||
Exhibit A
|
Form of Assignment and Acceptance
|
||
Exhibit B
|
Form of Global Note
|
MAGELLAN ACQUISITION LIMITED,
|
||
as Borrower
|
||
By:
|
|
|
Name:
|
||
Title:
|
THE BANK OF TOKYO-MITSUBISHI UFJ,
LTD., as Administrative Agent
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
By:
|
|
|
Name:
|
||
Title:
|
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Security Trustee
|
||
By:
|
|
|
Name:
|
||
Title:
|
NEW YORK LIFE INSURANCE COMPANY,
|
||
as a Purchaser
|
||
By:
|
|
|
Name:
|
||
Title:
|
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION,
|
||
as a Purchaser
|
||
By:
|
NYL Investors LLC, its Investment Manager | |
By:
|
|
|
Name:
|
||
Title:
|
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
INSTITUTIONALLY OWNED LIFE
INSURANCE SEPARATE ACCOUNT (BOLI
30C),
|
||
as a Purchaser
|
||
By:
|
NYL Investors LLC, its Investment Manager | |
By:
|
|
|
Name:
|
||
Title:
|
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
INSTITUTIONALLY OWNED LIFE
INSURANCE SEPARATE ACCOUNT (BOLI
3),
|
||
as a Purchaser
|
||
By:
|
NYL Investors LLC, its Investment Manager | |
By:
|
|
|
Name:
|
||
Title:
|
THE BANK OF NEW YORK MELLON, A
BANKING CORPORATION ORGANIZED
UNDER THE LAWS OF NEW YORK, NOT
IN ITS INDIVIDUAL CAPACITY BUT
SOLELY AS TRUSTEE UNDER THAT
CERTAIN TRUST AGREEMENT DATED AS
OF JULY 1ST, 2015 BETWEEN NEW YORK
LIFE INSURANCE COMPANY, AS
GRANTOR, JOHN HANCOCK LIFE
INSURANCE COMPANY (U.S.A.), AS
BENEFICIARY, JOHN HANCOCK LIFE
INSURANCE COMPANY OF NEW YORK,
AS BENEFICIARY AND THE BANK OF
NEW YORK MELLON, AS TRUSTEE,
|
||
as a Purchaser
|
||
By:
|
New York Life Insurance Company, its attorney-in-fact | |
By:
|
|
|
Name:
|
||
Title:
|
Page | |||
ARTICLE I DEFINITIONS
|
1
|
||
Section 1.01.
|
Defined Terms
|
1
|
|
ARTICLE II THE CREDIT
|
1
|
||
Section 2.01.
|
The Commitments and the Loans
|
1
|
|
Section 2.02.
|
Loans and Drawdowns
|
1
|
|
Section 2.03.
|
Notices of Drawdown
|
2
|
|
Section 2.04.
|
Funding of Loans
|
2
|
|
Section 2.05.
|
[Reserved]
|
2
|
|
Section 2.06.
|
Repayment of Loans; Evidence of Debt
|
2
|
|
Section 2.07.
|
Interest
|
3
|
|
Section 2.08.
|
Substitute Basis
|
4
|
|
Section 2.09.
|
Illegality
|
5
|
|
Section 2.10.
|
Increased Costs
|
5
|
|
Section 2.11.
|
Break Funding Payments
|
6
|
|
Section 2.12.
|
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
|
7
|
|
Section 2.13.
|
Representations and Warranties of the Banks
|
8
|
|
Section 2.14.
|
German Foreign Trade and Payments Act
|
9
|
|
Section 2.15.
|
German Money Laundering Act
|
9
|
|
ARTICLE III MISCELLANEOUS
|
9
|
||
Section 3.01.
|
Incorporated Provisions
|
9
|
|
Section 3.02.
|
Successors and Assigns
|
9
|
|
Section 3.03.
|
Consent and Direction
|
13
|
|
EXHIBITS
|
|||
Exhibit A
|
Form of Assignment and Acceptance
|
MAGELLAN ACQUISITION LIMITED,
|
||
as Borrower
|
||
By:
|
|
|
Name:
|
||
Title:
|
THE BANK OF TOKYO-MITSUBISHI
|
||
UFJ, LTD., as Administrative Agent
|
||
By:
|
|
|
Name:
|
||
Title:
|
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Security Trustee
|
||
By:
|
|
|
Name:
|
||
Title:
|
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as a Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
COLUMBIA STATE BANK, as a Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
FIFTH THIRD BANK, as a Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
NTT LEASING SINGAPORE PTE. LTD., as a
Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
APPLE BANK FOR SAVINGS, as a Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
DEKABANK DEUTSCHE GIROZENTRALE, as a
Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
BNP PARIBAS, as a Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
FIRST ABU DHABI BANK P.J.S.C. SINGAPORE
BRANCH, as a Bank
|
||
By:
|
|
|
Name:
|
||
Title:
|
Page
|
|||
ARTICLE I DEFINED TERMS
|
2
|
||
Section 1.01.
|
Definitions
|
2
|
|
Section 1.02.
|
Other Definitional Provisions
|
8
|
|
ARTICLE II APPOINTMENT OF SECURITY TRUSTEE
|
8
|
||
ARTICLE III GRANT OF SECURITY INTEREST
|
8
|
||
Section 3.01.
|
Grant of Security Interest
|
8
|
|
Section 3.02.
|
Excluded Assets
|
10
|
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES
|
11
|
||
Section 4.01.
|
Representations in Facility Agreement; Borrower Representations
|
11
|
|
Section 4.02.
|
Title; No Other Liens
|
12
|
|
Section 4.03.
|
Perfected Liens
|
12
|
|
Section 4.04.
|
Jurisdiction of Organization; Chief Executive Office; Cape Town Leases
|
13
|
|
Section 4.05.
|
Contracts and Leases
|
13
|
|
Section 4.06.
|
Choice of Law and Enforcement
|
14
|
|
Section 4.07.
|
No Immunity
|
15
|
|
Section 4.08.
|
Pledged Shares
|
15
|
|
Section 4.09.
|
Owner Trustees
|
15
|
|
ARTICLE V COVENANTS
|
15
|
||
Section 5.01.
|
Covenants in Facility Agreement
|
15
|
|
Section 5.02.
|
Delivery of Instruments and Chattel Paper; Pledged Shares
|
16
|
|
Section 5.03.
|
Payment of Obligations
|
17
|
|
Section 5.04.
|
Maintenance of Perfected Security Interests; Further Documentation
|
17
|
|
Section 5.05.
|
Changes in Name, Etc
|
18
|
|
Section 5.06.
|
Notices of Liens
|
18
|
|
Section 5.07.
|
Leases and Contracts
|
18
|
|
Section 5.08.
|
Special Provisions Relating to Pledged Shares
|
19
|
|
Section 5.09.
|
Special Provisions Relating to Group Contingency Insurances
|
19
|
|
Section 5.10.
|
Registrations
|
20
|
|
Section 5.11.
|
FAA Registrations
|
21
|
|
ARTICLE VI ACCOUNTS AND REMEDIAL PROVISIONS
|
21
|
||
Section 6.01.
|
Accounts
|
21
|
Section 6.02.
|
Communications with Parties to Contracts and Leases; Grantors Remain Liable
|
25
|
|
Section 6.03.
|
Proceeds to be Turned Over to Security Trustee
|
26
|
|
Section 6.04.
|
Application of Proceeds
|
26
|
|
Section 6.05.
|
Code and Other Remedies
|
26
|
|
Section 6.06.
|
Certain Securities Act Limitations; Private Sale
|
28
|
|
Section 6.07.
|
Deficiency
|
28
|
|
ARTICLE VII THE SECURITY TRUSTEE
|
28
|
||
Section 7.01.
|
Security Trustee's Appointment as Attorney-in-Fact, etc
|
28
|
|
Section 7.02.
|
Duties of Security Trustee
|
30
|
|
Section 7.03.
|
Further Assurances
|
30
|
|
Section 7.04.
|
Authority of Security Trustee
|
31
|
|
ARTICLE VIII MISCELLANEOUS
|
31
|
||
Section 8.01.
|
Amendments in Writing
|
31
|
|
Section 8.02.
|
Notices
|
32
|
|
Section 8.03.
|
No Waiver by Course of Conduct; Cumulative Remedies
|
32
|
|
Section 8.04.
|
Enforcement Expenses; Indemnification
|
32
|
|
Section 8.05.
|
Successors and Assigns
|
33
|
|
Section 8.06.
|
Set-Off
|
33
|
|
Section 8.07.
|
Counterparts
|
33
|
|
Section 8.08.
|
Severability
|
33
|
|
Section 8.09.
|
Section Headings
|
34
|
|
Section 8.10.
|
Integration
|
34
|
|
Section 8.11.
|
Governing Law; Jurisdiction; Service of Process; Etc
|
34
|
|
Section 8.12.
|
Waiver of Jury Trial
|
35
|
|
Section 8.13.
|
Acknowledgements
|
35
|
|
Section 8.14.
|
Additional Grantors
|
36
|
|
Section 8.15.
|
Releases, Etc
|
36
|
|
Section 8.16.
|
No Immunity
|
36
|
|
Section 8.17.
|
Judgment Currency
|
37
|
|
Section 8.18.
|
Use of English Language
|
37
|
|
Section 8.19.
|
Owner Trusts
|
37
|
|
Section 8.20.
|
Servicer as Borrower's Agent
|
37
|
|
ARTICLE IX SPECIAL PROVISIONS
|
38
|
||
Section 9.01.
|
Amendments; Reinstatement
|
38
|
Schedules
|
||
Schedule 1
|
–
|
Notice Addresses of Grantors
|
Schedule 2
|
–
|
Jurisdiction of Organization, Identification Number and Location of Principal Place of Business
|
Schedule 3
|
–
|
Description of Accounts
|
Schedule 4(a)
|
–
|
Description of Contracts
|
Schedule 4(b)
|
–
|
Description of Leases and Related Documents
|
Schedule 5
|
–
|
Description of Owner Trusts and Trust Agreements
|
Schedule 6
|
–
|
Pledged Shares
|
Schedule 7
|
–
|
Aircraft, Airframes and Engines
|
Annex I
|
–
|
Assumption Agreement
|
Exhibits
|
||
Exhibit A
|
–
|
Form of FAA Aircraft Mortgage
|
Exhibit B
|
–
|
Form of FAA Aircraft Mortgage and Lease Security Assignment
|
Exhibit C
|
–
|
Form of FAA Lease Security Assignment
|
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Security Trustee
|
||
By:
|
||
Name:
|
||
Title:
|
||
MAGELLAN ACQUISITION LIMITED, as
Borrower
|
||
By:
|
||
Name:
|
||
Title:
|
Page
|
|||
SECTION 1
|
DEFINED TERMS
|
2
|
|
1.01
|
Definitions
|
2
|
|
1.02
|
Other Definitional Provisions
|
8
|
|
SECTION 2
|
APPOINTMENT OF SECURITY TRUSTEE
|
8
|
|
SECTION 3
|
GRANT OF SECURITY INTEREST
|
8
|
|
3.01
|
Grant of Security Interest
|
8
|
|
3.02
|
Excluded Assets
|
10
|
|
SECTION 4
|
REPRESENTATIONS AND WARRANTIES
|
11
|
|
4.01
|
Representations in Facility Agreement; Borrower Representations
|
11
|
|
4.02
|
Title; No Other Liens
|
12
|
|
4.03
|
Perfected Liens
|
12
|
|
4.04
|
Jurisdiction of Organization; Chief Executive Office; Cape Town Leases
|
13
|
|
4.05
|
Contracts and Leases
|
13
|
|
4.06
|
Choice of Law and Enforcement
|
14
|
|
4.07
|
No Immunity
|
14
|
|
4.08
|
Pledged Shares
|
14
|
|
4.09
|
Owner Trustees
|
15
|
|
SECTION 5
|
COVENANTS
|
15
|
|
5.01
|
Covenants in Facility Agreement
|
15
|
|
5.02
|
Delivery of Instruments and Chattel Paper; Pledged Shares
|
15
|
|
5.03
|
Payment of Obligations
|
16
|
|
5.04
|
Maintenance of Perfected Security Interests; Further Documentation
|
17
|
|
5.05
|
Changes in Name, Etc
|
17
|
|
5.06
|
Notices of Liens
|
18
|
|
5.07
|
Leases and Contracts
|
18
|
|
5.08
|
Special Provisions Relating to Pledged Shares
|
19
|
|
5.09
|
Special Provisions Relating to Group Contingency Insurances
|
19
|
|
5.10
|
Registrations
|
19
|
|
5.11
|
FAA Registrations
|
20
|
|
5.12
|
Local Filings
|
21
|
|
SECTION 6
|
ACCOUNTS AND REMEDIAL PROVISIONS
|
21
|
|
6.01
|
Accounts
|
21
|
|
6.02
|
Communications with Parties to Contracts and Leases; Grantors Remain Liable
|
25
|
|
6.03
|
Proceeds to be Turned Over To Security Trustee
|
26
|
|
6.04
|
Application of Proceeds
|
26
|
|
6.05
|
Code and Other Remedies
|
26
|
|
6.06
|
Certain Securities Act Limitations; Private Sale
|
27
|
|
6.07
|
Deficiency
|
28
|
Page | |||
SECTION 7
|
THE SECURITY TRUSTEE
|
28
|
|
7.01
|
Security Trustee’s Appointment as Attorney-in-Fact, etc
|
28
|
|
7.02
|
Duties of Security Trustee
|
30
|
|
7.03
|
Further Assurances
|
30
|
|
7.04
|
Authority of Security Trustee
|
31
|
|
SECTION 8
|
MISCELLANEOUS
|
31
|
|
8.01
|
Amendments in Writing
|
31
|
|
8.02
|
Notices
|
32
|
|
8.03
|
No Waiver by Course of Conduct; Cumulative Remedies
|
32
|
|
8.04
|
Enforcement Expenses; Indemnification
|
32
|
|
8.05
|
Successors and Assigns
|
33
|
|
8.06
|
Set-Off
|
33
|
|
8.07
|
Counterparts
|
33
|
|
8.08
|
Severability
|
33
|
|
8.09
|
Section Headings
|
33
|
|
8.10
|
Integration;
|
33
|
|
8.11
|
Governing Law; Jurisdiction; Service of Process; Etc
|
34
|
|
8.12
|
WAIVER OF JURY TRIAL
|
35
|
|
8.13
|
Acknowledgements
|
35
|
|
8.14
|
Additional Grantors
|
35
|
|
8.15
|
Releases, Etc
|
36
|
|
8.16
|
No Immunity
|
36
|
|
8.17
|
Judgment Currency
|
36
|
|
8.18
|
Use of English Language
|
37
|
|
8.19
|
Owner Trusts
|
37
|
|
8.20
|
Servicer as Borrower’s Agent
|
37
|
|
SECTION 9
|
SPECIAL PROVISIONS
|
37
|
|
9.01
|
Amendments; Reinstatement
|
37
|
Schedules
|
||
Schedule 1
|
–
|
Notice Addresses of Grantors
|
Schedule 2
|
–
|
Jurisdiction of Organization, Identification Number and Location of Principal Place of Business
|
Schedule 3
|
–
|
Description of Accounts
|
Schedule 4(a)
|
–
|
Description of Contracts
|
Schedule 4(b)
|
–
|
Description of Leases and Related Documents
|
Schedule 5
|
–
|
Description of Owner Trusts and Trust Agreements
|
Schedule 6
|
–
|
Pledged Shares
|
Schedule 7
|
–
|
Aircraft, Airframes and Engines
|
Annex I
|
–
|
Assumption Agreement
|
Exhibits
|
||
Exhibit A
|
–
|
Form of FAA Aircraft Mortgage
|
Exhibit B
|
–
|
Form of FAA Aircraft Mortgage and Lease Security Assignment
|
Exhibit C
|
–
|
Form of FAA Lease Security Assignment
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
, as Security Trustee
|
||
By:
|
||
Name:
|
||
Title:
|
||
FLY ACQUISITION III LIMITED
, as Borrower
|
||
By:
|
||
Name:
|
||
Title:
|
1. |
I have reviewed this annual report on Form 20-F of Fly Leasing Limited;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
4. |
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
|
5. |
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
Date: March 13, 2018
|
|
/s/ Colm Barrington
|
|
Colm Barrington
|
|
Chief Executive Officer
|
|
Fly Leasing Limited
|
1. |
I have reviewed this annual report on Form 20-F of Fly Leasing Limited;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
4. |
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
|
5. |
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
Date: March 13, 2018
|
|
/s/ Julie Ruehl
|
|
Julie Ruehl
|
|
Chief Financial Officer
|
|
Fly Leasing Limited
|
1. |
the accompanying annual report on Form 20-F of the Company for the year ended December 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: March 13, 2018
|
|
/s/ Colm Barrington
|
|
Colm Barrington
|
|
Chief Executive Officer
|
|
Fly Leasing Limited
|
|
Date: March 13, 2018
|
|
/s/ Julie Ruehl
|
|
Julie Ruehl
|
|
Chief Financial Officer
|
|
Fly Leasing Limited
|