DUBLIN, May 2, 2016 /PRNewswire/ -- FLY Leasing
Limited (NYSE: FLY) (the "Company") today announced that it has
addressed the issues raised by the Securities and Exchange
Commission ("SEC") in relation to its accounting for maintenance
rights associated with its acquisition of on-lease aircraft and has
restated its previously issued financial statements for fiscal
years 2014 and 2013 to reflect the resolution of these issues.
Investors should now rely on the Company's restated financial
statements for fiscal years 2014 and 2013 included in its Annual
Report on Form 20-F for fiscal year 2015, which was filed
today.
In prior years, when purchasing aircraft already on lease, the
Company, in line with industry practice, did not separately
identify, measure and account for maintenance rights provisions in
the leases. Following discussions with the staff (the "Staff") of
the SEC, the Company has been advised that it should separately
identify, measure and account for maintenance rights. In addition,
the Company has included certain other immaterial adjustments in
its restated financial statements. None of the adjustments
implicates misconduct with respect to the Company or its
management. The Company's restatement will not impact its ability
to run its business or to borrow under its existing credit
facilities.
The adjustments to the Company's financial statements for fiscal
years 2014 and 2013 have had no material effect on reported cash
flow from operations or on the Company's balance sheet. In the
Company's three most recent fiscal years, the net impact of these
items on its statements of income was to increase net income and
earnings per share:
- Fiscal year 2015: increase in net income of $16.2 million, or $0.39 per diluted share
- Fiscal year 2014: increase in net income of $4.1 million, or $0.10 per diluted share
- Fiscal year 2013: increase in net income of $1.5 million, or $0.05 per diluted share
For fiscal year 2015, the Company's audited results are compared
to the results reported in its earnings release issued on
March 8, 2016. For fiscal years 2014
and 2013, the Company's restated results are compared to its
previously issued financial statements.
Impact of the Adjustments
The adjustments to the Company's consolidated statements of
income for fiscal years ended December 31,
2015, 2014 and 2013 are summarized in the tables below.
|
Year Ended
December 31, 2015
|
|
(Dollars in
thousands, except per share data)
|
|
As previously
reported
|
|
Maintenance
rights
adjustments
|
|
Other
adjustments
|
|
As
adjusted
|
|
Operating lease
revenue
|
$
|
440,725
|
|
$
|
(11,034)
|
$
|
—
|
|
$
|
429,691
|
|
Gain on sale of
aircraft
|
|
26,090
|
|
|
1,284
|
|
1,585
|
|
|
28,959
|
|
Depreciation
|
|
168,867
|
|
|
(8,770)
|
|
(365)
|
|
|
159,732
|
|
Aircraft
impairment
|
|
84,255
|
|
|
(17,328)
|
|
(834)
|
|
|
66,093
|
|
Provision for income
taxes
|
|
2,439
|
|
|
1,984
|
|
976
|
|
|
5,399
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
|
|
|
|
$
|
0.52
|
|
Diluted
|
$
|
0.13
|
|
|
|
|
|
|
$
|
0.52
|
|
Year Ended
December 31, 2014
|
|
(Dollars in
thousands, except per share data)
|
|
As previously
reported
|
|
Maintenance
rights
adjustments
|
|
|
Other
adjustments
|
|
As
restated
|
|
Operating lease
revenue
|
$
|
404,668
|
|
$
|
1,895
|
|
$
|
—
|
|
$
|
406,563
|
|
Equity earnings from
unconsolidated subsidiary
|
|
2,456
|
|
|
—
|
|
|
1,106
|
|
|
3,562
|
|
Gain on sale of
aircraft
|
|
18,878
|
|
|
(4,564)
|
|
|
447
|
|
|
14,761
|
|
Depreciation
|
|
175,547
|
|
|
(8,290)
|
|
|
(274)
|
|
|
166,983
|
|
Aircraft
impairment
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|
1,200
|
|
Selling, general and
administrative
|
|
41,148
|
|
|
—
|
|
|
(115)
|
|
|
41,033
|
|
Net (gain) loss on
extinguishment of debt
|
|
(3,922)
|
|
|
1,713
|
|
|
15
|
|
|
(2,194)
|
|
Maintenance and other
costs
|
|
6,960
|
|
|
—
|
|
|
100
|
|
|
7,060
|
|
Provision for income
taxes
|
|
8,263
|
|
|
751
|
|
|
(323)
|
|
|
8,691
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.32
|
|
|
|
|
|
|
|
$
|
1.42
|
|
Diluted
|
$
|
1.32
|
|
|
|
|
|
|
|
$
|
1.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2013
|
|
(Dollars in
thousands, except per share data)
|
|
As previously
reported
|
|
Maintenance
rights
adjustments
|
|
Other
adjustments
|
|
As
restated
|
|
Operating lease
revenue
|
$
|
359,409
|
|
$
|
(8,062)
|
$
|
445
|
|
$
|
351,792
|
|
Equity earnings from
unconsolidated subsidiary
|
|
1,871
|
|
|
—
|
|
(380)
|
|
|
1,491
|
|
Gain on sale of
aircraft
|
|
6,277
|
|
|
(856)
|
|
—
|
|
|
5,421
|
|
Depreciation
|
|
146,400
|
|
|
(7,854)
|
|
(210)
|
|
|
138,336
|
|
Aircraft
impairment
|
|
8,825
|
|
|
(2,659)
|
|
—
|
|
|
6,166
|
|
Selling, general and
administrative
|
|
37,418
|
|
|
—
|
|
2,175
|
|
|
39,593
|
|
Net (gain) loss on
extinguishment of debt
|
|
(15,881)
|
|
|
—
|
|
734
|
|
|
(15,147)
|
|
Maintenance and other
costs
|
|
15,454
|
|
|
—
|
|
22
|
|
|
15,476
|
|
Provision for income
taxes
|
|
5,659
|
|
|
118
|
|
(2,643)
|
|
|
3,134
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.51
|
|
|
|
|
|
|
$
|
1.55
|
|
Diluted
|
$
|
1.50
|
|
|
|
|
|
|
$
|
1.55
|
For further details, please refer to the Company's Annual Report
on Form 20-F for fiscal year 2015.
The Company's management expects to report its first quarter
earnings on Wednesday, May 18, 2016,
and will address any investor questions on these matters at that
time.
About FLY
FLY is a global aircraft leasing company
with a fleet of modern, high-demand and fuel-efficient commercial
jet aircraft. FLY acquires and leases its aircraft under multi-year
operating lease contracts to a diverse group of airlines throughout
the world. FLY is managed and serviced by BBAM LP, a worldwide
leader in aircraft lease management and financing. For more
information visit www.flyleasing.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain "forward -
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be
identified by words such as "expects," "intends," "anticipates,"
"plans," "believes," "seeks," "estimates," "will," or words of
similar meaning and include, but are not limited to, statements
regarding the outlook for FLY's future business and financial
performance. Forward-looking statements are based on management's
current expectations and assumptions, which are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. Actual outcomes and results may differ
materially due to global political, economic, business,
competitive, market, regulatory and other factors and risks.
Further information on the factors and risks that may affect FLY's
business is included in filings FLY makes with the Securities and
Exchange Commission from time to time, including its Annual Report
on Form 20-F and its reports on Form 6-K. FLY expressly
disclaims any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in its views or expectations, or
otherwise.
Contact:
Matt Dallas
FLY Leasing Limited
+1 203-769-5916
ir@flyleasing.com
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SOURCE FLY Leasing Limited