Willis Lease Finance Corporation (WLFC) has reported second-quarter 2023 total revenues of US$109.0 million and pre-tax earnings of US$19.0 million. For the three months ended June 30, 2023, aggregate lease rent and maintenance reserve revenues were US$89.8 million and spare parts and equipment sales were US$4.6 million. The WLFC reported increased total revenues in the second quarter when compared to the prior-year period, primarily due to an increase in the company’s core lease rent and short-term maintenance revenues driven by continued global recovery in travel.
Lease rent revenue increased by US$17.7 million, or 48.3%, to US$54.4 million in the second quarter of 2023, compared to US$36.7 million in the second quarter of 2022. The increase is due to an increase in the number of engines acquired and placed on lease, including an increase in utilisation compared to that of the prior period.
Maintenance reserve revenue was US$35.4 million, an increase of 46.1%, compared to US$24.2 million in the same quarter of 2022. There was US$6.8 million long-term maintenance revenue recognised for the three months ended June 30, 2023, compared to US$15.1 million in the comparable prior period. “Non-reimbursable” maintenance reserve revenue is directly influenced by on-lease engine flight hours and cycles. Engines out on lease with “non-reimbursable” usage fees generated US$28.6 million of short-term maintenance revenues, compared to US$9.2 million in the comparable prior period.
As of June 30, 2023 and December 31, 2022, there was US$19.8 million and US$6.3 million, respectively, of cumulative deferred in-substance fixed payment use fees included in “Unearned revenue.”
Spare parts and equipment sales decreased to US$4.6 million in the second quarter, compared to US$6.8 million in the second quarter of 2022.
Gain on sale of leased equipment was US$4.5 million, reflecting the sale of two engines and other parts and equipment from the lease portfolio. Gain on sale of leased equipment was US$0.5 million in the second quarter of 2022, reflecting the sale of eight engines.
There was no gain on sale of financial assets during the second quarter of 2023 as we did not sell any notes receivable. Gain on sale of financial assets was US$3.1 million in the second quarter of 2022, reflecting the sale of four notes receivable.
WLFC generated US$19.0 million of pre-tax income in the second quarter of 2023, a 73.2% increase as compared to pre-tax income of US$11.0 million in the second quarter of 2022.
The book value of lease assets we own directly or through our joint ventures, inclusive of our notes receivable, maintenance rights, and investments in sales-type leases, was US$2,551.3 million at June 30, 2023. As of June 30, 2023, WLFC also managed 339 engines, aircraft and related equipment on behalf of other parties. £1.00 = US$1.27 at time of publication).