SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
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For the Quarterly Period Ended June 30, 2004 |
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OR |
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
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Commission File Number: 0-28774 |
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WILLIS LEASE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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68-0070656 |
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(State or other jurisdiction of incorporation or |
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(IRS Employer Identification No.) |
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2320 Marinship Way, Suite 300 |
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94965 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code (415) 331-5281 |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b.2 of the Exchange Act).
Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
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Title of Each Class |
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Outstanding at August 10, 2004 |
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Common Stock, $0.01 Par Value |
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8,952,919 |
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
INDEX
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PART I |
FINANCIAL INFORMATION |
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Item 1. |
Consolidated Financial Statements (Unaudited) |
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Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003 |
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Consolidated Statements of Income for the Three and Six months ended June 30, 2004 and 2003 |
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Consolidated Statements of Cash Flows for the Six months ended June 30, 2004 and 2003 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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2
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
(In thousands, except share data, unaudited)
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June 30, |
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December 31, |
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ASSETS |
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Cash and cash equivalents including restricted cash of $37,160 and $33,784 at June 30, 2004 and December 31, 2003, respectively |
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$ |
46,355 |
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$ |
42,986 |
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Equipment held for operating lease, less accumulated depreciation of $76,094 and $67,873 at June 30, 2004 and December 31, 2003, respectively |
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496,255 |
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499,454 |
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Net investment in direct finance lease |
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1,807 |
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5,551 |
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Operating lease related receivable, net of allowances of $400 and $440 at June 30, 2004 and December 31, 2003, respectively |
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2,681 |
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2,095 |
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Notes receivable |
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6,505 |
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— |
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Investments |
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1,480 |
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1,480 |
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Assets under derivative instruments |
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2,090 |
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7 |
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Other assets |
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6,516 |
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8,449 |
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Total assets |
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$ |
563,689 |
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$ |
560,022 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Liabilities: |
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Accounts payable and accrued expenses |
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$ |
8,597 |
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$ |
5,753 |
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Liabilities under derivative instruments |
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— |
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696 |
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Deferred income taxes |
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27,092 |
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25,283 |
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Notes payable |
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351,567 |
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362,395 |
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Maintenance reserves |
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54,154 |
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46,408 |
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Security deposits |
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2,246 |
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2,314 |
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Unearned lease revenue |
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5,605 |
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7,111 |
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Total liabilities |
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449,261 |
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449,960 |
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Shareholders’ equity: |
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Preferred stock ($0.01 par value, 5,000,000 shares authorized; none outstanding) |
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— |
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— |
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Common stock, ($0.01 par value, 20,000,000 shares authorized; 8,952,919 and 8,846,805 shares issued and outstanding at June 30, 2004 and December 31, 2003, respectively) |
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90 |
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88 |
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Paid-in capital in excess of par |
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62,245 |
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61,710 |
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Accumulated other comprehensive gain/(loss), net of tax expense of $457 and tax benefit of $584 at June 30, 2004 and December 31, 2003, respectively |
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1,285 |
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(660 |
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Retained earnings |
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50,808 |
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48,924 |
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Total shareholders’ equity |
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114,428 |
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110,062 |
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Total liabilities and shareholders’ equity |
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$ |
563,689 |
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$ |
560,022 |
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See accompanying notes to the consolidated financial statements.
3
WILLIS LEASE FINANCE CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data, unaudited)
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Three Months Ended |
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Six Months Ended |
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2004 |
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2003 |
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2004 |
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2003 |
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REVENUE |
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Lease revenue |
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$ |
14,360 |
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$ |
14,599 |
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$ |
29,124 |
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$ |
28,603 |
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Gain on sale of leased equipment |
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542 |
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1,013 |
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690 |
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1,051 |
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Other income |
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155 |
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— |
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329 |
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— |
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Total revenue |
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15,057 |
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15,612 |
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30,143 |
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29,654 |
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EXPENSES |
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Depreciation expense |
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5,603 |
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5,312 |
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11,325 |
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10,566 |
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Write-down of equipment |
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577 |
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645 |
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577 |
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645 |
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General and administrative |
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3,434 |
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3,547 |
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7,125 |
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6,933 |
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Total expenses |
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9,614 |
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9,504 |
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19,027 |
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18,144 |
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Earnings from operations |
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5,443 |
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6,108 |
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