Willis Lease Finance Corporation has reported second quarter total revenues of $78.1 million. For the three months ended June 30, 2022, aggregate lease rent and maintenance reserve revenues were $60.9 million and spare parts and equipment sales were $6.8 million. Willis Lease reported increased total revenues in the second quarter when compared to the prior year period, primarily due to an increase in lease rent revenue and short-term maintenance revenue.
“Second quarter pre-tax profit of $11.0 million speaks to the strength of the underlying business and represents the beginnings of a recovery post a first quarter, heavily influenced by the Russian crisis,” said Austin C. Willis, the Company’s Chief Executive Officer.
“We are pleased with our second quarter results and our team’s efforts to recover the Company from the impacts of the pandemic, Russia’s decision to confiscate our engines and rising interest rates,” said Brian R. Hole, President. “We continue to believe that our programmatic offerings will be the difference for customers working to optimize capacity at a time when both new equipment production and maintenance are facing historic difficulties and delay.”
Lease rent revenue increased by $4.3 million, or 13.2%, to $36.7 million in the second quarter of 2022, compared to $32.4 million in the same quarter of 2021, primarily reflecting an increase in the number of engines placed on lease as supported by an increase in utilization compared to the prior year period.
Maintenance reserve revenue was $24.2 million in the second quarter of 2022, an increase of 40.3% compared to $17.3 million in the same quarter of 2021. Long-term maintenance revenue, which is influenced by end of lease compensation and the realization of long-term maintenance reserves associated with engines coming off lease, increased to $15.1 million for the second quarter of 2022, compared to $14.8 million in the comparable prior period. Short-term maintenance reserve revenue, which is directly influenced by on lease engine flight hours and cycles, increased to $9.2 million for the second quarter of 2022, compared to $2.5 million in the comparable prior period.
Spare parts and equipment sales increased to $6.8 million in the second quarter of 2022, compared to $3.6 million in the second quarter of 2021. The increase in spare parts sales was driven by improved industry wide demand compared to the prior year period.
Gain on sale of leased equipment was $0.5 million in the second quarter of 2022 reflecting the sale of eight engines. Gain on sale of financial assets, effectively the sale of leased equipment, was $3.1 million in the second quarter of 2022 reflecting the sale of four notes receivable. There were no sales of leased equipment or notes receivable in the second quarter of 2021.
Willis Lease generated $11.0 million of pre-tax income in the second quarter of 2022 compared to $(1.9) million in the comparable quarter of 2021.
The book value of lease assets owned directly or through joint ventures, inclusive of notes receivable and investment in sales-type leases, was $2,352.4 million at June 30, 2022. As of June 30, 2022, Willis Lease also managed 351 engines, aircraft and related equipment on behalf of other parties.
Willis Lease maintained $431.0 million of undrawn revolver capacity at June 30, 2022.
During the second quarter of 2022, Willis Lease repurchased a total of 101,435 shares of common stock for approximately $3.4 million at a weighted average price of $33.55 per share.
As of June 30, 2022, Willis Lease held $1,957.6 million of equipment in its operating lease portfolio, $83.3 million notes receivable, and $7.0 million investment in sales-type leases, represented 293 engines, twelve aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2021, Willis Lease had $1,991.4 million equipment held for operating lease portfolio and $115.5 million notes receivable, which represented 304 engines, twelve aircraft, one marine vessel and other leased parts and equipment.