Group 1 - Supply chain disruptions have positively impacted leasing companies in the aviation sector, leading to a global shortage of aircraft and engine parts [1] - Engine lessors, such as Willis Lease Finance, have benefited significantly from these disruptions [1] Group 2 - The article does not provide any specific financial data or performance metrics related to the companies mentioned [2][3] - There are no investment recommendations or advice given in the article [2][3]

Core Insights - Shares of Willis Lease Finance Corporation (WLFC) increased by 8.1% post-earnings report for Q2 2025, outperforming the S&P 500's 1% growth during the same period [1] - The company reported Q2 2025 EPS of $8.43, a significant increase from $6.21 in Q2 2024 [1] Revenue and Earnings Performance - WLFC's total revenues reached $195.5 million, marking a 29.4% increase from $151.1 million in the previous year, driven by strong lease rent growth and increased spare parts and equipment sales [2] - Lease rent revenue rose 29.4% year over year to $72.3 million, while net income attributable to common shareholders surged 41.5% to $59 million [2] Key Business Metrics - Maintenance reserve revenues decreased by 19.3% year over year to $50.7 million due to timing differences and fewer engines coming off long-term leases [3] - Recurring short-term maintenance reserve revenue increased by 9.5%, reflecting higher engine utilization and contractual rate increases [4] - Spare parts and equipment sales skyrocketed nearly 391% to $30.4 million, driven by a large engine sale and strong demand as airlines extended fleet life [4] - The company's portfolio utilization rate improved to 88.3% at quarter end, up from 76.7% at year-end 2024 [4] Management Commentary - CEO Austin C. Willis attributed the record performance to a durable business model, rising lease rates, and strong demand for integrated maintenance and parts services [5] - CFO Scott B. Flaherty highlighted higher equipment sales, stronger lease revenues, and a $43 million gain from the consultancy business sale as key profitability drivers [5] Factors Influencing Financial Results - Revenue growth was bolstered by higher gross equipment sales, increased utilization, and strong demand for fixed asset trading, resulting in a $27.6 million gain on the sale of leased equipment, up 91.2% from the prior year [6] - Expenses rose significantly, with general and administrative costs up 45.4% and technical expenses up 66.2%, partly due to increased engine repair activity and legal costs [6] - Interest expense increased by 36.7% due to higher debt levels associated with expanded portfolio investments [6] Other Developments - WLFC sold its U.K.-based aviation consultancy business, generating a $43 million gain, which was part of a strategic reallocation towards core leasing and maintenance operations [8] - In July, Willis Aviation Services secured a commitment from Jet2.com for two base maintenance lines in the U.K., indicating ongoing expansion in maintenance capabilities [8]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________________________________ FORM 10-Q For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-15369 ______________________________________________________________________ WILLIS LEASE FINANCE CORPORATION (Exact name of registrant as specified in its charter) | Delawar ...

Financial Data and Key Metrics Changes - The company achieved record quarterly total revenue of $195.5 million, an increase of 29.4% year-over-year [3][16] - Earnings before taxes (EBT) for the quarter were $74.3 million, up 28.3% from the same period in 2024 [16][27] - Net income attributable to common shareholders was $59 million, reflecting a 41.5% increase from the prior year [16][28] - Average portfolio utilization increased to 87.2% for the quarter, compared to 83% in the same period last year, ending the quarter at 88.3% [18][32] Business Line Data and Key Metrics Changes - Core lease rent revenue was $72.3 million, up 29.4% from the prior year [17] - Interest revenue increased by 59.8% to $3.6 million, driven by growth in long-term loan-like financings [17] - Maintenance reserve revenues were $50.7 million, down from $62.9 million in the prior year, with short-term maintenance reserve revenues increasing by 9.5% [19][24] - Fair parts and equipment sales surged by 391% to $30.4 million, attributed to the sale of one engine [20] Market Data and Key Metrics Changes - The company noted a positive trend in the aviation marketplace, with airlines increasingly relying on leasing and maintenance solutions to avoid costly engine shop visits [4][9] - The leasing rates have increased by approximately 9% year-over-year, indicating stability in the market [35] Company Strategy and Development Direction - The company aims to leverage its differentiated asset portfolio and integrated maintenance capabilities to drive growth [5][14] - The launch of the SOAR lean business system is intended to improve operational efficiency and service quality [9] - The company is focused on maintaining a strong cash flow while returning capital to shareholders through dividends [4][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational excellence and innovation driving future growth [14] - The company anticipates no negative pressure on lease rates in the near term, supported by a significant portion of its portfolio in next-generation equipment [36] - Management highlighted the positive impact of recent agreements between the US and EU regarding zero tariffs on aircraft and parts [13][14] Other Important Information - The company completed its largest engine ABS transaction to date, reflecting strong market confidence [14] - The sale of the consulting business to a joint venture is expected to enhance capital for core leasing growth while maintaining access to consulting capabilities [12][27] - The company received over $6 million in grant proceeds from the UK government for staff initiatives [8][62] Q&A Session Summary Question: Impact of OEM production on lease rates - Management noted lease rates have increased about 9% year-over-year and expect stability in rates despite improvements in OEM production [35][36] Question: Parting out of young aircraft - Management acknowledged the trend of airlines parting out younger aircraft for engines, indicating strong demand for engines in the market [39][40] Question: Average utilization rate for the quarter - The average utilization rate for the quarter was reported at 87.2%, with an end-of-quarter rate of 88.3% [44][46] Question: Employee count and impact of consulting business sale - The employee count was approximately 420, and the sale of the consulting business is expected to positively impact operating income through additional equity [49][50] Question: Maintenance service revenues and costs - Management clarified that the maintenance service revenues were impacted by increased labor costs associated with new contracts, affecting margins [51][53] Question: Timing of grant revenue recognition - Management confirmed that grant proceeds received in the second quarter would be recognized in the P&L, with additional grants expected to be recognized upon receipt [62][63]

Second Quarter 2025 Financial Results [Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Willis Lease Finance Corporation achieved record Q2 2025 results with significant revenue growth, record pre-tax income, and improved portfolio utilization | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $195.5 million | +29.4% | | Pre-Tax Income | $74.3 million | Record High | | Lease Rent Revenue | $72.3 million | +29.4% | | Maintenance Reserve Revenue | $50.7 million | -19.3% (YoY) | | Spare Parts & Equipment Sales | $30.4 million | +390.7% | - A significant one-time event was the sale of the company's aviation consultancy business to the Willis Mitsui & Company Engine Support Limited (WMES) joint venture, resulting in a **$43.0 million** gain[5](index=5&type=chunk)[7](index=7&type=chunk) - Portfolio utilization increased significantly to **88.3%** at the end of Q2 2025, compared to **76.7%** at the end of 2024, indicating stronger demand for the company's leased assets[5](index=5&type=chunk) [Operating Results Analysis](index=1&type=section&id=Operating%20Results%20Analysis) Q2 2025 operating results show robust growth in core revenues, spare parts sales, and significant gains from asset and business divestitures [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Total revenue surged by **29.4%** to **$195.5 million** in Q2 2025, driven by growth in core lease, maintenance, and spare parts sales | Revenue Stream | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $195.5M | $151.1M | +29.4% | | Core Lease & Maintenance Revenue | $123.0M | $118.8M | +4.0% | | Short-term Maintenance Revenue | $50.2M | $45.9M | +9.5% | | Spare Parts & Equipment Sales | $30.4M | $6.2M | +390.7% | - The growth in core lease and maintenance revenues was attributed to the continued strength of the aviation market, leading airlines to increasingly use the company's leasing and maintenance services[2](index=2&type=chunk) - The significant increase in spare parts and equipment sales was primarily due to the sale of one engine for **$21.1 million** and heightened demand for surplus materials as operators extend the life of their engine portfolios[4](index=4&type=chunk) [Asset Sales and Portfolio](index=3&type=section&id=Asset%20Sales%20and%20Portfolio) Q2 2025 saw significant gains from asset sales, including **$27.6 million** from equipment and **$43.0 million** from the UK consultancy business divestiture - The company sold 14 engines, two airframes, and other equipment from its lease portfolio, resulting in a gain on sale of **$27.6 million**, a significant increase from the **$14.4 million** gain in Q2 2024[6](index=6&type=chunk) - The sale of Bridgend Asset Management Limited (BAML), the UK aviation consultancy business, to the WMES joint venture generated a gain of approximately **$43.0 million**[7](index=7&type=chunk) | Lease Portfolio Value | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Lease Portfolio | $2,830.0M | $2,872.3M | | Engines | 348 | 354 | | Aircraft | 15 | 16 | [Financial Statements](index=5&type=section&id=Financial%20Statements) Unaudited Q2 2025 financial statements show substantial growth in net income, diluted EPS, and total assets, primarily funded by increased debt [Unaudited Condensed Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 income statements show total revenue of **$195.5 million** (+**29.4%**), record pre-tax income, and **41.5%** growth in net income to **$59.0 million** | Income Statement (Q2) | 2025 (in thousands) | 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $195,502 | $151,120 | 29.4% | | Total Expenses | $167,237 | $97,042 | 72.3% | | Gain on sale of business | $42,950 | $0 | nm | | Income before income taxes | $74,297 | $57,903 | 28.3% | | Net income attributable to common shareholders | $58,955 | $41,664 | 41.5% | | Diluted EPS | $8.43 | $6.21 | 35.8% | [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$3.95 billion** as of June 30, 2025, driven by increased debt and restricted cash, with shareholders' equity growing to **$617.9 million** | Balance Sheet (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $37,267 | $9,110 | | Restricted cash | $745,268 | $123,392 | | Equipment held for operating lease | $2,606,593 | $2,635,910 | | **Total Assets** | **$3,946,445** | **$3,297,196** | | **Liabilities & Equity** | | | | Debt obligations | $2,800,643 | $2,264,552 | | **Total Liabilities** | **$3,265,247** | **$2,684,736** | | **Total Shareholders' Equity** | **$617,937** | **$549,338** | [Corporate Information](index=3&type=section&id=Corporate%20Information) Willis Lease Finance Corporation specializes in aircraft engine leasing and services, with a conference call scheduled to discuss Q2 2025 results and forward-looking statements - The company's core business involves leasing large and regional spare commercial aircraft engines, APUs, and aircraft to a global client base of airlines, manufacturers, and MRO providers[11](index=11&type=chunk) - A conference call with executive management to discuss the Q2 2025 results was scheduled for 10:00 a.m. Eastern Time on August 5, 2025[9](index=9&type=chunk)[10](index=10&type=chunk) - The press release contains forward-looking statements and advises readers not to place undue reliance on them, highlighting various risks and uncertainties that could affect actual results, such as industry trends, economic events, and regulatory changes[12](index=12&type=chunk)

Core Insights - The company reported record pre-tax income of $74.3 million and record quarterly revenue of $195.5 million for Q2 2025, marking a 29.4% increase from $151.1 million in Q2 2024 [1][3][8] Financial Performance - Total revenue for Q2 2025 was $195.5 million, up 29.4% from $151.1 million in Q2 2024 [3][8] - Core lease rent and maintenance reserve revenues totaled $123.0 million, a 4% increase from $118.8 million in the same period last year [3] - Lease rent revenue reached $72.3 million, reflecting a 29.4% increase [8] - Maintenance reserve revenue was strong at $50.7 million, with short-term recurring maintenance reserve revenue up 9.5% [8] - Spare parts and equipment sales surged to $30.4 million, a significant increase from $6.2 million in Q2 2024, representing a 390.7% growth [5][8] Operational Highlights - The company generated $50.2 million in short-term maintenance revenues from engines on lease with "non-reimbursable" usage fees, up 9.5% from $45.9 million in Q2 2024 [4] - The gain on sale of leased equipment was $27.6 million, compared to $14.4 million in Q2 2024, marking a 91.2% increase [6][8] - The company sold its UK aviation consultancy business, Bridgend Asset Management Limited, to its WMES joint venture, resulting in a gain of approximately $43.0 million [7][8] Balance Sheet Overview - As of June 30, 2025, the company's lease portfolio was valued at $2,830.0 million, with total assets amounting to $3,946.4 million [8][16][17] - The company reported total liabilities of $3,265.2 million, with debt obligations at $2,800.6 million [17] - Shareholders' equity stood at $617.9 million, an increase from $549.3 million at the end of 2024 [17]

Core Points - Willis Lease Finance Corporation will release its financial results for Q2 2025 on August 5, 2025, before market opens [1] - A conference call will be hosted by the executive management team on the same day at 10:00 a.m. Eastern Time [1] Company Overview - Willis Lease Finance Corporation is a leading lessor of commercial aircraft engines and provides global aviation services [3] - The company leases large and regional spare commercial aircraft engines, auxiliary power units, and aircraft to various clients including airlines and maintenance providers [3] - Its services include engine maintenance, aircraft disassembly, parking, storage, and ground handling services [3] - Willis Sustainable Fuels aims to develop projects to decarbonize aviation [3]

Core Insights - Willis Lease Finance Corporation (WLFC) announced a commitment from Jet2.com for two base maintenance lines at its subsidiary Willis Aviation Services Limited (WASL) for the upcoming season [1][2] - The expansion follows the successful completion of a single maintenance line for Jet2 earlier this year, showcasing WASL's strong performance [2] - The new maintenance lines will be conducted at WASL's state-of-the-art facility at Teesside International Airport, enhancing capacity in the UK MRO sector [3] Company Overview - WLFC is a leading lessor of commercial aircraft engines and provides aviation services globally, including leasing large and regional spare commercial aircraft engines and auxiliary power units [5] - The company integrates its leasing activities with engine and aircraft trading, asset management services, and various end-of-life solutions for engines and aviation materials [5] - WLFC's service offerings include Part 145 engine maintenance, aircraft line and base maintenance, and ground handling services [5] Industry Context - The demand for aircraft maintenance services remains high across the UK and Europe, prompting WASL's expansion to meet the needs of airlines and lessors globally [3] - The new facility is expected to create a significant number of highly skilled jobs, contributing to local economic growth and talent development in the aerospace industry [3][4]

Core Insights - Willis Lease Finance Corporation has successfully closed the sale of Bridgend Asset Management Limited to Willis Mitsui & Co. Engine Support Limited, leading to the renaming of BAML to Willis Mitsui & Co. Asset Management Limited [1][2] - The transaction aims to enhance the capabilities and efficiency of the WMES platform by integrating technical consultancy and records management services [3] - The joint venture WMES, established in 2011, currently manages assets worth approximately $380 million, with expectations for growth due to expanded service offerings [3] Company Developments - The sale marks a significant milestone for WLFC and its partnership with Mitsui, indicating a step towards closer collaboration and growth within the joint venture [4] - WLFC retains a 50% ownership stake in WMES and plans to leverage its services to support leasing operations while focusing on strategic initiatives to expand its aviation portfolio [4] Industry Context - The integration of consultancy and advisory services into WMES is positioned to better meet the growing demands of the global aviation market, solidifying the joint venture's role in delivering comprehensive engine-related services [4]

Core Points - Willis Lease Finance Corporation (WLFC) announced the completion of an offering of $524 million in Series A Fixed Rate Notes and $72 million in Series B Fixed Rate Notes [1] - The Notes are secured by a portfolio of 62 aircraft engines and two airframes, which will be acquired from WLFC or its subsidiaries [2] - The Series A Notes have a fixed coupon of 5.582% and the Series B Notes have a fixed coupon of 6.070%, with an expected maturity of approximately six years [3] Summary by Category Financial Offering - WLFC's wholly-owned subsidiary, Willis Engine Structured Trust VIII (WEST), completed an offering totaling $596 million in aggregate principal amount [1] - The final subscription for the Series A Notes was 3.60x (gross) and 5.10x (available), while the Series B Notes had a final subscription of 7.15x (gross) and 13.00x (available) [2] Notes Details - Series A Notes and Series B Notes have an expected weighted average life of 5.1 years and a final maturity of 25 years [3] - The Series A Notes were issued at a price of 99.99721% of par, and the Series B Notes at 99.99711% of par [3] Company Overview - WLFC specializes in leasing commercial aircraft engines and provides various aviation services, including engine maintenance and asset management [6] - The company also focuses on sustainable aviation initiatives through its Willis Sustainable Fuels division [6]