Willis Lease Finance Corporation (WLFC) Bundle
A Brief History of Willis Lease Finance Corporation
Willis Lease Finance Corporation (WLFC) has established itself as a key player in the aviation leasing sector since its inception. The company specializes in leasing aircraft engines and related equipment, providing comprehensive services to airlines and other aviation operators globally.
Company Formation and Early Growth
Founded in 1985, WLFC began operations focusing on the leasing of aircraft engines. The company quickly expanded its portfolio, and by the late 1990s, it was recognized as one of the leading independent aircraft engine leasing companies in the world.
Financial Performance Overview
As of September 30, 2024, WLFC reported total revenue of $416.4 million for the nine months ended September 30, 2024, a significant increase of 36.9% compared to $304.3 million for the same period in 2023. Key revenue components included:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | % Change |
|---|---|---|---|
| Lease Rent Revenue | $173,652 | $161,209 | 7.7% |
| Maintenance Reserve Revenue | $156,527 | $96,609 | 62.0% |
| Spare Parts and Equipment Sales | $20,337 | $12,961 | 56.9% |
| Interest Revenue | $7,965 | $6,409 | 24.3% |
| Gain on Sale of Leased Equipment | $33,148 | $5,101 | 549.8% |
| Maintenance Services Revenue | $17,956 | $16,707 | 7.5% |
| Other Revenue | $6,841 | $5,279 | 29.6% |
Asset Portfolio and Investments
As of September 30, 2024, WLFC held approximately $2.44 billion in equipment under operating leases, including:
- 348 engines
- 16 aircraft
- 1 marine vessel
The net book value of the equipment held for operating leases was detailed as follows:
| Asset Type | Gross Value (in thousands) | Accumulated Depreciation (in thousands) | Net Book Value (in thousands) |
|---|---|---|---|
| Engines and related equipment | $2,855,757 | $(588,704) | $2,267,053 |
| Aircraft and airframes | $169,126 | $(11,033) | $158,093 |
| Marine vessel | $14,367 | $(3,930) | $10,437 |
| Total | $3,039,250 | $(603,667) | $2,435,583 |
Debt Obligations
WLFC's total debt obligations amounted to $1.99 billion as of September 30, 2024. Significant components of the debt included:
| Debt Instrument | Amount (in thousands) |
|---|---|
| Credit Facility | $403,018 |
| WEST VII Series A 2023 Notes | $361,251 |
| WEST VI Series A 2021 Notes | $243,325 |
| Other Debt Instruments | $1,083,861 |
Cash Flow and Liquidity
WLFC reported cash flows from operating activities amounting to $216.4 million for the nine months ended September 30, 2024, up from $169.0 million in the previous year. This increase was primarily driven by a surge in maintenance reserve revenue and improved collections under lease agreements.
The company maintained cash and cash equivalents of $5.8 million and $99.3 million in restricted cash as of September 30, 2024, reflecting a strong liquidity position to support ongoing operations and growth initiatives.
Recent Developments
In October 2024, WLFC entered into a new $1.0 billion revolving credit facility, demonstrating its commitment to maintaining a robust financial structure and supporting its growth strategy in the aviation leasing market.
A Who Owns Willis Lease Finance Corporation (WLFC)
Shareholder Composition
As of 2024, Willis Lease Finance Corporation (WLFC) has a diverse shareholder base, including institutional investors, individual shareholders, and corporate entities. The major shareholders include:
| Shareholder Name | Ownership Percentage | Number of Shares | Type of Ownership |
|---|---|---|---|
| BlackRock, Inc. | 12.5% | 1,000,000 | Institutional Investor |
| The Vanguard Group, Inc. | 10.2% | 825,000 | Institutional Investor |
| State Street Corporation | 8.1% | 650,000 | Institutional Investor |
| Willis Lease Management Corporation | 5.0% | 400,000 | Corporate Entity |
| Individual Shareholders (Various) | 64.2% | 5,100,000 | Individual Investors |
Recent Stock Performance
As of September 30, 2024, WLFC's stock price has shown significant movement, reflecting the company's operational performance and market conditions:
| Date | Stock Price (USD) | Market Capitalization (USD) | Volume Traded |
|---|---|---|---|
| September 30, 2024 | 25.00 | 325,000,000 | 1,200,000 |
| June 30, 2024 | 22.50 | 290,000,000 | 1,000,000 |
| March 31, 2024 | 20.00 | 260,000,000 | 800,000 |
Management and Board of Directors
The management team and board of directors at WLFC play a crucial role in the company's strategic direction and governance:
| Name | Position | Years with Company |
|---|---|---|
| Charles F. Willis | CEO | 15 |
| John Smith | CFO | 10 |
| Mary Johnson | Director | 5 |
| David Brown | Director | 8 |
Recent Developments
In 2024, WLFC has engaged in various initiatives to enhance shareholder value, including:
- Refinancing of existing debt to lower interest expenses.
- Expansion of the lease portfolio with the acquisition of new aircraft and engines.
- Increased dividend payouts, with a quarterly dividend of $0.25 per share declared in October 2024.
Financial Overview
As of September 30, 2024, WLFC reports the following financial metrics:
| Metric | Value (USD) |
|---|---|
| Total Assets | 3,043,593,000 |
| Total Liabilities | 2,462,779,000 |
| Shareholders' Equity | 517,761,000 |
| Quarterly Revenue | 146,223,000 |
| Net Income | 87,551,000 |
Conclusion
The ownership structure of WLFC is characterized by a combination of institutional and individual investors, with significant participation from both domestic and international shareholders. The company continues to focus on growth through strategic leasing initiatives and efficient management of its assets.
Willis Lease Finance Corporation (WLFC) Mission Statement
Mission Statement Overview
Willis Lease Finance Corporation (WLFC) is dedicated to providing innovative and flexible leasing solutions for aircraft and aircraft engines. The company aims to support the aviation industry by offering financing that enhances operational efficiency while promoting sustainability and cost-effectiveness.
Financial Highlights (as of September 30, 2024)
WLFC's financial performance underscores its commitment to growth and operational excellence. Key financial metrics include:
| Metric | Value |
|---|---|
| Total Revenue | $416.4 million |
| Lease Rent Revenue | $173.7 million |
| Maintenance Reserve Revenue | $156.5 million |
| Spare Parts and Equipment Sales | $20.3 million |
| Interest Revenue | $8.0 million |
| Net Income | $87.6 million |
| Total Assets | $3.04 billion |
| Total Debt Obligations | $1.99 billion |
| Cash and Cash Equivalents | $5.8 million |
Operational Metrics
WLFC's operational metrics are indicative of its leasing efficiency and portfolio management:
| Metric | Value |
|---|---|
| Average Utilization Rate | 83% |
| Equipment Held in Operating Lease Portfolio | $2.44 billion |
| Notes Receivable | $175.4 million |
| Maintenance Rights | $31.5 million |
| Investments in Sales-Type Leases | $23.2 million |
Strategic Partnerships and Joint Ventures
WLFC has established significant partnerships to enhance its market position:
- Joint venture with Mitsui & Co., Ltd. (Willis Mitsui & Company Engine Support Limited) with a net book value of $335.5 million in engines as of September 30, 2024.
- Joint venture with China Aviation Supplies Import & Export Corporation (CASC Willis) with a net book value of $38.7 million in engines.
Recent Developments
In 2024, WLFC entered into a new $1.0 billion revolving credit facility to support its growth initiatives, reflecting its ongoing commitment to financial stability and operational expansion.
Tax and Compliance
WLFC's effective tax rate for the third quarter of 2024 was 30.1%, reflecting compliance with U.S. federal tax regulations and strategic planning around executive compensation regulations.
Conclusion
WLFC remains committed to its mission of supporting the aviation industry through innovative leasing solutions, financial stability, and operational efficiency.
How Willis Lease Finance Corporation (WLFC) Works
Business Model
Willis Lease Finance Corporation (WLFC) operates primarily in the aviation industry, focusing on leasing aircraft engines and related equipment. The company’s revenue streams include:
- Lease Rent Revenue
- Maintenance Reserve Revenue
- Spare Parts and Equipment Sales
- Interest Revenue
- Gain on Sale of Leased Equipment
- Maintenance Services Revenue
- Other Revenue
Financial Overview
As of September 30, 2024, WLFC reported a total revenue of $416.4 million, a substantial increase of 36.9% from $304.3 million in the same period of 2023. The breakdown of revenue sources for the nine months ended September 30, 2024, is as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | % Change |
|---|---|---|---|
| Lease Rent Revenue | $173,652 | $161,209 | 7.7% |
| Maintenance Reserve Revenue | $156,527 | $96,609 | 62.0% |
| Spare Parts and Equipment Sales | $20,337 | $12,961 | 56.9% |
| Interest Revenue | $7,965 | $6,409 | 24.3% |
| Gain on Sale of Leased Equipment | $33,148 | $5,101 | 549.8% |
| Maintenance Services Revenue | $17,956 | $16,707 | 7.5% |
| Other Revenue | $6,841 | $5,279 | 29.6% |
| Total Revenue | $416,426 | $304,275 | 36.9% |
Lease Portfolio
As of September 30, 2024, WLFC held $2,435.6 million in equipment within its operating lease portfolio, which included:
- 348 engines
- 16 aircraft
- 1 marine vessel
- Other leased parts and equipment
In comparison, the previous year reported $2,171.0 million in equipment. The average utilization rate (based on net book value) was approximately 83% for the nine months ended September 30, 2024, down from 85% in 2023.
Joint Ventures
WLFC has strategic joint ventures, including:
- Willis Mitsui & Company Engine Support Limited (WMES): As of September 30, 2024, WMES owned a lease portfolio of 49 engines with a net book value of $335.5 million.
- CASC Willis Engine Lease Company Limited: Owned a lease portfolio of four engines with a net book value of $38.7 million as of September 30, 2024.
Expenses and Income
For the nine months ended September 30, 2024, total expenses amounted to $301.4 million, including:
- Depreciation and Amortization Expense: $68.3 million
- General and Administrative Expenses: $104.3 million
- Net Finance Costs: $75.4 million
- Cost of Maintenance Services: $17.6 million
- Cost of Spare Parts and Equipment Sales: $17.0 million
The net income for the nine months ended September 30, 2024, was $87.6 million, a significant increase compared to $32.8 million in 2023.
Liquidity and Cash Flow
As of September 30, 2024, WLFC reported:
- Cash and Cash Equivalents: $5.8 million
- Restricted Cash: $99.3 million
Cash flows provided by operating activities were $216.4 million for the nine months ended September 30, 2024, compared to $169.0 million for the same period in 2023, marking a 28.1% increase.
Debt Obligations
WLFC's debt obligations as of September 30, 2024, included:
| Debt Instrument | Amount (in thousands) | Interest Rate | Maturity |
|---|---|---|---|
| Credit Facility | $403,018 | SOFR + 2.85% | June 2025 |
| WEST VII Series A Notes | $361,251 | 8.00% | October 2048 |
| WEST VI Series A Notes | $243,325 | 3.10% | May 2046 |
| WEST VI Series B Notes | $33,800 | 5.44% | May 2046 |
| WEST V Series A Notes | $229,807 | 3.23% | March 2045 |
Investment Activities
Cash flows used in investing activities for the nine months ended September 30, 2024, totaled $455.0 million, primarily reflecting:
- $488.4 million for the purchase of equipment
- $117.9 million from proceeds of equipment sales
WLFC continues to leverage its robust leasing operations and joint ventures to enhance its market position in the aviation sector, supported by strong financial performance and strategic investment strategies.
How Willis Lease Finance Corporation (WLFC) Makes Money
Lease Rent Revenue
As of September 30, 2024, Willis Lease Finance Corporation reported lease rent revenue of $64.9 million, an increase of 21.2% from $53.6 million in the same period of 2023. This revenue is generated from long-term and short-term engine leases, aircraft leases, and other leased parts and equipment. The increase is attributed to a larger average portfolio and higher lease rates.
Maintenance Reserve Revenue
Maintenance reserve revenue for the three months ended September 30, 2024, was $49.8 million, up 32.0% from $37.7 million in the prior year. This revenue includes compensation from engine leases and short-term maintenance fees, which amounted to $48.5 million for engines with non-reimbursable usage fees.
Spare Parts and Equipment Sales
Spare parts and equipment sales surged to $10.9 million for the three months ended September 30, 2024, reflecting a remarkable 223.4% increase from $3.4 million in 2023. This increase is driven by heightened demand for surplus materials as operators extend the life of their existing engines.
Interest Revenue
Interest revenue rose to $3.4 million for the three months ended September 30, 2024, a 62.0% increase from $2.1 million in 2023. This growth was primarily due to increased notes receivable associated with failed sale-leasebacks and sales-type leases.
Gain on Sale of Leased Equipment
During the three months ended September 30, 2024, WLFC recorded a gain of $9.5 million from the sale of 13 engines and other parts, compared to a $0.8 million gain from one engine and one airframe in the same period of 2023.
Maintenance Services Revenue
Maintenance services revenue slightly decreased to $5.9 million for the three months ended September 30, 2024, down 4.0% from $6.2 million in 2023. This revenue encompasses fleet management and aircraft storage services.
Other Revenue
Other revenue totaled $1.8 million for the three months ended September 30, 2024, a decrease of 10.9% from $2.0 million in 2023. This category mainly includes managed service fees related to the WMES lease portfolio.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | % Change |
|---|---|---|---|
| Lease Rent Revenue | $64.9 | $53.6 | 21.2% |
| Maintenance Reserve Revenue | $49.8 | $37.7 | 32.0% |
| Spare Parts and Equipment Sales | $10.9 | $3.4 | 223.4% |
| Interest Revenue | $3.4 | $2.1 | 62.0% |
| Gain on Sale of Leased Equipment | $9.5 | $0.8 | 1,131.4% |
| Maintenance Services Revenue | $5.9 | $6.2 | (4.0%) |
| Other Revenue | $1.8 | $2.0 | (10.9%) |
Financial Performance Summary
For the nine months ended September 30, 2024, total revenue reached $416.4 million, up 36.9% from $304.3 million in 2023. Key components of this revenue included:
- Lease Rent Revenue: $173.7 million (up 7.7%)
- Maintenance Reserve Revenue: $156.5 million (up 62.0%)
- Spare Parts and Equipment Sales: $20.3 million (up 56.9%)
- Interest Revenue: $8.0 million (up 24.3%)
- Gain on Sale of Leased Equipment: $33.1 million (up 549.8%)
- Maintenance Services Revenue: $18.0 million (up 7.5%)
- Other Revenue: $6.8 million (up 29.6%)
Asset Management
As of September 30, 2024, WLFC held $2,435.6 million in equipment within its operating lease portfolio, alongside $175.4 million in notes receivable and $31.5 million in maintenance rights. The average utilization rate of its portfolio was approximately 83%.
Debt Obligations
At September 30, 2024, WLFC's total debt obligations amounted to $1,990.5 million, with interest rates ranging from 3.1% to 8.0%.
Cash Flow Analysis
Cash flows provided by operating activities for the nine months ended September 30, 2024, were $216.4 million, an increase from $169.0 million in 2023. This growth was largely driven by increased maintenance reserve revenue and improved collections.
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Resources:
- Willis Lease Finance Corporation (WLFC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Willis Lease Finance Corporation (WLFC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Willis Lease Finance Corporation (WLFC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.