WILLIS LEASE FINANCE CORP

Previous wording

Our core business is acquiring and leasing commercial aircraft and aircraft engines and related aircraft equipment pursuant to operating leases, all of which we sometimes collectively refer to as “equipment.” As of June 30, 2025, the majority of our leases were operating leases, with the exception of certain failed sale-leaseback transactions classified as notes receivable under the guidance provided by Accounting Standards Codification (“ASC”) 842 and investments in sales-type leases. As of June 30, 2025, we had 69 lessees in 36 countries. Our portfolio is continually changing due to equipment acquisitions and sales. As of June 30, 2025, we had $2,606.6 million of equipment held in our operating lease portfolio, $171.8 million of notes receivable, $34.7 million of maintenance rights, and $16.8 million of investments in sales-type leases, which represented 348 engines, 15 aircraft, one marine vessel, and other leased parts and equipment. As of June 30, 2025, we also managed 284 engines, aircraft and related equipment on behalf of other parties.

Current wording

Our core business is acquiring and leasing commercial aircraft and aircraft engines and related aircraft equipment pursuant to operating leases, all of which we sometimes collectively refer to as “equipment.” As of September 30, 2025, the majority of our leases were operating leases, with the exception of certain failed sale-leaseback transactions classified as notes receivable under the guidance provided by Accounting Standards Codification (“ASC”) 842 and investments in sales-type leases. As of September 30, 2025, we had 69 lessees in 37 countries. Our portfolio is continually changing due to equipment acquisitions and sales. As of September 30, 2025, we had $2,700.4 million of equipment held in our operating lease portfolio, $144.8 million of notes receivable, $27.0 million of maintenance rights, and $16.3 million of investments in sales-type leases, which represented 354 engines, 20 aircraft, one marine vessel, and other leased parts and equipment. As of September 30, 2025, we also managed 86 engines, aircraft and related equipment on behalf of other parties.

Previous wording

Lease Rent Revenue. Lease rent revenue consists of rental income from long-term and short-term engine leases, aircraft leases, and other leased parts and equipment. Lease rent revenue increased by $16.4 million, or 29.4%, to $72.3 million in the three months ended June 30, 2025 from $55.9 million for the three months ended June 30, 2024. The increase is due to an increase in the average size of the portfolio as compared to that of the prior year period as well as an increase in average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowance) of equipment held in our operating lease portfolio.

Current wording

Lease Rent Revenue. Lease rent revenue consists of rental income from long-term and short-term engine leases, aircraft leases, and other leased parts and equipment. Lease rent revenue increased by $11.6 million, or 17.9%, to $76.6 million in the three months ended September 30, 2025 from $64.9 million for the three months ended September 30, 2024. The increase is due to an increase in the average size of the portfolio as compared to that of the prior year period as well as an increase in average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) of equipment held in our operating lease portfolio.

Previous wording

At June 30, 2025, the Company had $2,606.6 million of equipment held in our operating lease portfolio, $171.8 million of notes receivable, $34.7 million of maintenance rights, and $16.8 million of investments in sales-type leases. At June 30, 2024, the Company had $2,317.9 million of equipment held in our operating lease portfolio, $115.5 million of notes receivable, $25.5 million of maintenance rights, and $6.2 million of investments in sales-type leases. Average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) was approximately 87.2% and 83.0% for the three months ended June 30, 2025 and 2024, respectively. Utilization at June 30, 2025 was 88.3%.

Current wording

At September 30, 2025, the Company had $2,700.4 million of equipment held in our operating lease portfolio, $144.8 million of notes receivable, $27.0 million of maintenance rights, and $16.3 million of investments in sales-type leases. At September 30, 2024, the Company had $2,435.6 million of equipment held in our operating lease portfolio, $175.4 million of notes receivable, $31.5 million of maintenance rights, and $23.2 million of investments in sales-type leases. Average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) was approximately 86.0% and 82.9% for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Two customers accounted for approximately 13% and 10% of the total lease rent revenue of the Company during the six months ended June 30, 2025, and two customers accounted for approximately 11%, each, of the Company’s total lease rent revenue during the six months ended June 30, 2024.

Current wording

Two customers accounted for approximately 12% and 10% of the Company’s total lease rent revenue during the three months ended September 30, 2025, and two customers each accounted for approximately 11% of the Company’s total lease rent revenue during the three months ended September 30, 2024.

Previous wording

Maintenance Reserve Revenue. Maintenance reserve revenue decreased $12.2 million, or 19.3%, to $50.7 million for the three months ended June 30, 2025 from $62.9 million for the three months ended June 30, 2024. Long-term maintenance revenue is influenced by end of lease compensation and the realization of long-term maintenance reserves associated with engines coming off lease. We recognized $0.5 million in long-term maintenance revenue for the three months ended June 30, 2025, compared to $17.0 million in long-term maintenance revenue recognized in the comparable prior period as significantly fewer engines came off leases with long-term maintenance conditions during the second quarter of 2025 as compared to the second quarter of 2024. Engines on lease with “non-reimbursable” usage fees generated $50.2 million of short-term maintenance revenues, compared to $45.9 million in the comparable prior period, an increase of $4.4 million or 9.5%. The increase in short-term maintenance reserve revenue was influenced by an increase in the number of engines on short-term lease conditions, and the systematic, contractual increase in the hourly and cyclical usage rates on our engines.

Current wording

Maintenance Reserve Revenue. Maintenance reserve revenue increased $26.3 million, or 52.8%, to $76.1 million for the three months ended September 30, 2025 from $49.8 million for the three months ended September 30, 2024. We recognized $29.5 million in long-term maintenance revenue for the three months ended September 30, 2025, compared to $1.2 million in long-term maintenance revenue recognized in the comparable prior period as more engines came off leases with long-term maintenance conditions. Long-term maintenance revenue is influenced by end of lease compensation and the realization of long-term maintenance reserves associated with engines coming off lease. Engines on lease with “non-reimbursable” usage fees generated $46.6 million of short-term maintenance revenues, compared to $48.5 million in the comparable prior period. Short-term maintenance revenues are a proxy for flight time of our portfolio of engines.

Previous wording

Gain on Sale of Leased Equipment. During the six months ended June 30, 2025, we sold 21 engines, three airframes, and other parts and equipment from the lease portfolio for $138.8 million less economic closing adjustments, resulting in a net gain of $32.0 million. During the six months ended June 30, 2024, we sold 15 engines, eight airframes, and other parts and equipment from the lease portfolio for $104.7 million less economic closing adjustments, resulting in a net gain of $23.6 million.

Current wording

Gain on Sale of Leased Equipment. During the three months ended September 30, 2025, we sold 10 engines, one airframe, and other parts and equipment from the lease portfolio for $73.7 million less economic closing adjustments, resulting in a net gain of $16.1 million. During the three months ended September 30, 2024, we sold 13 engines and other parts and equipment from the lease portfolio, resulting in a net gain of $9.5 million.

Previous wording

Maintenance Services Revenue. Maintenance services revenues predominately represent fleet management, engine and aircraft storage and repair services, and revenue related to fixed base operator services provided to third parties, such as refueling, maintenance, and hangar services. Maintenance services revenue increased by $1.3 million, or 18.4%, to $8.0 million for the three months ended June 30, 2025, from $6.8 million for the three months ended June 30, 2024. The increase primarily reflects an increase in service fee revenue.

Current wording

Maintenance Services Revenue. Maintenance services revenues predominately represent fleet management, engine and aircraft storage and repair services, and revenue related to fixed base operator services provided to third parties, such as refueling, maintenance, and hangar services. Maintenance services revenue decreased by $2.3 million, or 38.9%, to $3.6 million for the three months ended September 30, 2025, from $5.9 million for the three months ended September 30, 2024. The decrease primarily reflects a decrease in fleet management revenue resulting from the sale of that line of business on June 30, 2025 to our joint venture Willis Mitsui & Company Engine Support Limited (“WMES”).

Previous wording

Other Revenue. Other revenue increased by $0.4 million, or 8.1%, to $5.4 million for the six months ended June 30, 2025 from $5.0 million for the six months ended June 30, 2024. Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the WMES lease portfolio. These services include management of the WMES lease portfolio, which occurs on an ongoing basis, as well as marketing, which occurs on a transactional basis.

Current wording

Other Revenue. Other revenue increased by $0.4 million, or 24.4%, to $2.3 million for the three months ended September 30, 2025 from $1.8 million for the three months ended September 30, 2024. Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the WMES lease portfolio. These services include management of the WMES lease portfolio, which occurs on an ongoing basis, as well as marketing, which occurs on a transactional basis.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased by $5.4 million, or 24.3%, to $27.6 million for the three months ended June 30, 2025, compared to $22.2 million for the three months ended June 30, 2024. The increase is primarily due to an increase in the size of our lease portfolio, as well as the timing of placing acquired engines on lease.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased by $5.0 million, or 21.2%, to $28.7 million for the three months ended September 30, 2025, compared to $23.7 million for the three months ended September 30, 2024. The increase is primarily due to an increase in the size of our lease portfolio, the timing of placing acquired engines on lease, and to a lesser extent, an increase in accelerated depreciation on older engine models.

Previous wording

Cost of Spare Parts and Equipment Sales. Cost of spare parts and equipment sales increased by $22.7 million, or 416.9%, to $28.1 million for the three months ended June 30, 2025, compared to $5.4 million for the three months ended June 30, 2024. Cost of spare parts sales were $8.3 million and $6.2 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $2.1 million, or 34.7%, reflecting the increase in spare parts sales. Cost of equipment sales were $19.8 million for the three months ended June 30, 2025. There were no equipment or cost of equipment sales for the three months ended June 30, 2024.

Current wording

Cost of Spare Parts and Equipment Sales. Cost of spare parts and equipment sales decreased by $2.2 million, or 24.6%, to $6.7 million for the three months ended September 30, 2025, compared to $8.9 million for the three months ended September 30, 2024. Cost of spare parts sales were $6.7 million and $8.8 million for the three months ended September 30, 2025 and 2024, respectively, a decrease of $2.1 million, or 23.7%, reflecting the decrease in spare parts sales. Cost of equipment sales were $0.1 million for the three months ended September 30, 2024.

Previous wording

Cost of Maintenance Services. Cost of maintenance services predominately represent the costs of fleet management, engine and aircraft storage and repair services, and the management of fixed base operator services provided to third parties. Cost of maintenance services increased by $3.0 million, or 52.0%, to $8.6 million for the three months ended June 30, 2025, compared to $5.7 million for the three months ended June 30, 2024. The increase is primarily related to an increase in personnel as well as project-related costs, as a result of expansion of our aircraft tear down and repair services business.

Current wording

Cost of Maintenance Services. Cost of maintenance services predominately represent the costs of fleet management, engine and aircraft storage and repair services, and the management of fixed base operator services provided to third parties. Cost of maintenance services decreased by $1.3 million, or 19.8%, to $5.1 million for the three months ended September 30, 2025, compared to $6.4 million for the three months ended September 30, 2024, reflecting the decrease in maintenance services revenue.

Previous wording

Write-down of Equipment. There was $11.5 million in write-downs of equipment for the three months ended June 30, 2025, reflecting the write-down of six engines. Write-downs were predominantly related to engines moved from Equipment held for operating lease to Equipment held for sale. There was no write-down of equipment for the three months ended June 30, 2024.

Current wording

Write-down of Equipment. There was $10.2 million in write-downs of equipment for the three months ended September 30, 2025, reflecting the write-down of eight engines. Write-downs were predominantly related to engines moved from Equipment held for operating lease to Equipment held for sale. There was $0.6 million in write-downs of equipment for the three months ended September 30, 2024, reflecting the write-down of three engines.

Previous wording

Technical Expense. Technical expense consists of the non-capitalized cost of engine repairs, engine thrust rental fees, outsourced technical support services, sublease engine rental expense, engine storage and freight costs. Technical expense increased by $3.0 million to $7.5 million for the three months ended June 30, 2025, compared to $4.5 million for the three months ended June 30, 2024, primarily due to an increased level of engine repair activity as compared to that of the prior period.

Current wording

Technical Expense. Technical expense consists of the non-capitalized cost of engine repairs, engine thrust rental fees, outsourced technical support services, sublease engine rental expense, engine storage and freight costs. Technical expense increased by $3.2 million to $8.4 million for the three months ended September 30, 2025, compared to $5.2 million for the three months ended September 30, 2024, primarily due to an increased level of engine repair activity as compared to that of the prior period.

Previous wording

Income Tax Expense. Income tax expense was $13.9 million for the three months ended June 30, 2025, compared to income tax expense of $15.3 million for the three months ended June 30, 2024. The effective tax rate for the second quarter of 2025 was 18.7%, compared to 26.5% in the prior year period. The Company’s effective tax rate differed from the U.S. federal statutory rate of 21.0% primarily due to executive compensation exceeding $1.0 million as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), as well as the sale of the Company’s entire issued share capital of BAML, for which no statutory tax was due on the gain recognized.

Current wording

Income Tax Expense. Income tax expense was $18.9 million for the three months ended September 30, 2025, compared to income tax expense of $10.4 million for the three months ended September 30, 2024. The effective tax rate for the third quarter of 2025 was 43.7%, compared to 30.1% in the prior year period. The Company’s effective tax rate differed from the U.S. federal statutory rate of 21.0% primarily due to executive compensation exceeding $1.0 million as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). H.R. 1., also known as the One Big Beautiful Bill Act (“OBBBA”), was enacted on July 4, 2025. The provisions of the OBBBA impacted certain tax deductions, including bonus depreciation, limiting the Company’s ability to benefit from the Section 250 deduction. This disallowance caused the Company’s third quarter effective tax rate to be higher than that of the previous quarter.

Previous wording

Lease Rent Revenue. Lease rent revenue increased by $31.3 million, or 28.7%, to $140.0 million for the six months ended June 30, 2025, compared to $108.7 million for the six months ended June 30, 2024. The increase is due to an increase in the average size of the portfolio as compared to that of the prior year period and an increase in the average lease rate factor.

Current wording

Lease Rent Revenue. Lease rent revenue increased by $42.9 million, or 24.7%, to $216.6 million for the nine months ended September 30, 2025, compared to $173.7 million for the nine months ended September 30, 2024. The increase is due to an increase in the average size of the portfolio as compared to that of the prior year period as well as an increase in average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) of equipment held in our operating lease portfolio.

Previous wording

At June 30, 2025, the Company had $2,606.6 million of equipment held in our operating lease portfolio, $171.8 million of notes receivable, $34.7 million of maintenance rights, and $16.8 million of investments in sales-type leases. At June 30, 2024, the Company had $2,317.9 million of equipment held in our operating lease portfolio, $115.5 million of notes receivable, $25.5 million of maintenance rights, and $6.2 million of investments in sales-type leases. Average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) was approximately 83.6% and 83.5% for the six months ended June 30, 2025 and 2024, respectively. Utilization at June 30, 2025 was 88.3%.

Current wording

At September 30, 2025, the Company had $2,700.4 million of equipment held in our operating lease portfolio, $144.8 million of notes receivable, $27.0 million of maintenance rights, and $16.3 million of investments in sales-type leases. At September 30, 2024, the Company had $2,435.6 million of equipment held in our operating lease portfolio, $175.4 million of notes receivable, $31.5 million of maintenance rights, and $23.2 million of investments in sales-type leases. Average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) was approximately 84.4% and 83.3% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Two customers accounted for approximately 13% and 10% of total lease rent revenue of the Company during the three months ended June 30, 2025, and one customer accounted for approximately 10% of total lease rent revenue during the three months ended June 30, 2024.

Current wording

Two customers accounted for approximately 13% and 10% of the Company’s total lease rent revenue during the nine months ended September 30, 2025, and two customers accounted for approximately 11% and 10% of the Company’s total lease rent revenue during the nine months ended September 30, 2024.

Previous wording

Maintenance Reserve Revenue. Maintenance reserve revenue decreased $1.2 million, or 1.1%, to $105.6 million for the six months ended June 30, 2025 from $106.8 million for the six months ended June 30, 2024. Long-term maintenance revenue was $10.1 million for the six months ended June 30, 2025 compared to $23.3 million in the prior year period. Long-term maintenance revenue is influenced by end of lease compensation and the realization of long-term maintenance reserves associated with engines coming off lease. Engines on lease with “non-reimbursable” usage fees generated $95.5 million of short-term maintenance revenues compared to $83.4 million in the comparable prior period, an increase of $12.1 million or 14.5%. The increase in short-term maintenance reserve revenue was influenced by an increase in the number of engines on short-term lease conditions, and the systematic, contractual increase in the hourly and cyclical usage rates on our engines.

Current wording

Maintenance Reserve Revenue. Maintenance reserve revenue increased $25.1 million, or 16.1%, to $181.7 million for the nine months ended September 30, 2025 from $156.5 million for the nine months ended September 30, 2024. Long-term maintenance revenue was $39.5 million for the nine months ended September 30, 2025 compared to $24.6 million in the prior year period, an increase of $15.0 million or 61.0%. Long-term maintenance revenue is influenced by end of lease compensation and the realization of long-term maintenance reserves associated with engines coming off lease. Engines on lease with “non-reimbursable” usage fees generated $142.1 million of short-term maintenance revenues compared to $132.0 million in the comparable prior period, an increase of $10.1 million or 7.7%. The increase in short-term maintenance reserve revenue was influenced by an increase in the number of engines on short-term lease conditions, and the systematic, contractual increase in the hourly and cyclical usage rates on our engines.

Previous wording

Spare Parts and Equipment Sales. Spare parts and equipment sales increased by $39.1 million, or 412.9%, to $48.6 million for the six months ended June 30, 2025 compared to $9.5 million in the prior year period. Spare parts sales were $25.3 million and $9.5 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $15.8 million, or 166.8%, compared to the same period in 2024. The increase in spare parts sales for the six months ended June 30, 2025 reflects the demand for surplus material as operators extend the lives of their current generation engine portfolios. In addition, the increase includes a discrete $7.0 million sale. Equipment sales for the six months ended were $23.3 million for the sale of two engines. There were no equipment sales for the six months ended June 30, 2024.

Current wording

Spare Parts and Equipment Sales. Spare parts and equipment sales increased by $33.7 million, or 165.5%, to $54.0 million for the nine months ended September 30, 2025 compared to $20.3 million in the prior year period. Spare parts sales were $30.7 million and $19.4 million for the nine months ended September 30, 2025 and 2024, respectively, an increase of $11.3 million, or 58.4%, compared to the same period in 2024. The increase in spare parts sales for the nine months ended September 30, 2025 reflects the demand for surplus material as operators extend the lives of their current generation engine portfolios. Equipment sales for the nine months ended were $23.3 million for the sale of two engines. Equipment sales for the nine months ended September 30, 2024 were $1.0 million for the sale of one engine.

Previous wording

Interest Revenue. Interest revenue increased by $1.4 million, or 59.8%, to $3.6 million for the three months ended June 30, 2025, from $2.3 million for the three months ended June 30, 2024. The increase primarily reflects an increase in notes receivable related to failed sale-leasebacks in which the Company was the buyer-lessor.

Current wording

Interest Revenue. Interest revenue increased by $3.0 million, or 37.4%, to $10.9 million for the nine months ended September 30, 2025 compared to $8.0 million for the nine months ended September 30, 2024. The increase primarily reflects an overall higher amount of interest revenue recognized on new notes receivable that were entered into during the latter half of 2024. Notes receivable result from failed sale-leasebacks in which the Company was the buyer-lessor.

Previous wording

Gain on Sale of Leased Equipment. During the three months ended June 30, 2025, we sold 14 engines, two airframes, and other parts and equipment from the lease portfolio for $91.1 million less economic closing adjustments, resulting in a net gain of $27.6 million. During the three months ended June 30, 2024, we sold seven engines, eight airframes, and other parts and equipment from the lease portfolio for $68.5 million less economic closing adjustments, resulting in a net gain of $14.4 million.

Current wording

Gain on Sale of Leased Equipment. During the nine months ended September 30, 2025, we sold 31 engines, four airframes, and other parts and equipment from the lease portfolio for $212.5 million less economic closing adjustments, resulting in a net gain of $48.2 million. During the nine months ended September 30, 2024, we sold 28 engines, eight airframes, and other parts and equipment from the lease portfolio, resulting in a net gain of $33.1 million.

Previous wording

Gain on Sale of Financial Assets. During the six months ended June 30, 2025, we sold two investments in sales-type lease assets for a net gain of $0.4 million. There was no gain on sale of financial assets during the six months ended June 30, 2024.

Current wording

Gain on Sale of Financial Assets. During the nine months ended September 30, 2025, we sold two investments in sales-type lease assets for a net gain of $0.4 million. There was no gain on sale of financial assets during the nine months ended September 30, 2024.

Previous wording

Other Revenue. Other revenue increased by $0.2 million, or 7.4%, to $2.9 million for the three months ended June 30, 2025 from $2.7 million for the three months ended June 30, 2024. Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the Willis Mitsui & Company Engine Support Limited (“WMES”) lease portfolio. These services include management of the WMES lease portfolio, which occurs on an ongoing basis, as well as marketing, which occurs on a transactional basis.

Current wording

Other Revenue. Other revenue increased by $0.9 million, or 12.5%, to $7.7 million for the nine months ended September 30, 2025 from $6.8 million for the nine months ended September 30, 2024. Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the WMES lease portfolio. These services include management of the WMES lease portfolio, which occurs on an ongoing basis, as well as marketing, which occurs on a transactional basis.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased by $7.9 million, or 17.7%, to $52.6 million for the six months ended June 30, 2025 compared to $44.7 million for the six months ended June 30, 2024. The increase is primarily due to an increase in the size of our lease portfolio, as well as the timing of placing acquired engines on lease.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased by $12.9 million, or 18.9%, to $81.2 million for the nine months ended September 30, 2025 compared to $68.3 million for the nine months ended September 30, 2024. The increase is primarily due to an increase in the size of our lease portfolio, the timing of placing acquired engines on lease, and to a lesser extent, an increase in accelerated depreciation on older engine models.

Previous wording

Cost of Spare Parts and Equipment Sales. Cost of spare parts and equipment sales increased by $35.3 million, or 433.3%, to $43.4 million for the six months ended June 30, 2025 compared to $8.1 million for the six months ended June 30, 2024. Cost of spare parts sales were $22.2 million and $8.1 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $14.0 million, or 172.1%, reflecting the increase in spare parts sales. Cost of equipment sales were $21.3 million for the six months ended June 30, 2025. There were no equipment or cost of equipment sales for the six months ended June 30, 2024.

Current wording

Cost of Spare Parts and Equipment Sales. Cost of spare parts and equipment sales increased by $33.1 million, or 194.7%, to $50.1 million for the nine months ended September 30, 2025 compared to $17.0 million for the nine months ended September 30, 2024. Cost of spare parts sales were $28.8 million and $16.9 million for the nine months ended September 30, 2025 and 2024, respectively, an increase of $11.9 million, or 70.6%, reflecting the increase in spare parts sales. Cost of equipment sales were $21.3 million and $0.1 million for the nine months ended September 30, 2025 and September 30, 2024, respectively, reflecting the increase in equipment sales.

Previous wording

Cost of Maintenance Services. Cost of maintenance services increased by $2.7 million, or 24.1%, to $14.0 million for the six months ended June 30, 2025, compared to $11.2 million for the six months ended June 30, 2024. The increase is primarily related to an increase in personnel costs, as a result of expansion of our aircraft tear down and repair services business.

Current wording

Cost of Maintenance Services. Cost of maintenance services increased by $1.4 million, or 8.1%, to $19.1 million for the nine months ended September 30, 2025, compared to $17.6 million for the nine months ended September 30, 2024. The increase is primarily related to an increase in personnel costs, as a result of expansion of our aircraft tear down and repair services business.

Previous wording

Write-down of Equipment. Write-down of equipment was $13.6 million for the six months ended June 30, 2025, primarily reflecting the write-down of 11 engines. Write-downs were predominantly related to engines moved from Equipment held for operating lease to Equipment held for sale. Write-down of equipment was $0.3 million for the six months ended June 30, 2024, primarily reflecting the write-down of one airframe.

Current wording

Write-down of Equipment. Write-down of equipment was $23.8 million for the nine months ended September 30, 2025, primarily reflecting the write-down of 19 engines. Write-downs were predominantly related to engines moved from Equipment held for operating lease to Equipment held for sale. Write-down of equipment was $0.9 million for the nine months ended September 30, 2024, primarily reflecting the write-down of one airframe and three engines.

Previous wording

General and Administrative Expenses. General and administrative expenses increased by $33.9 million, or 52.7%, to $98.1 million for the six months ended June 30, 2025 compared to $64.3 million for the six months ended June 30, 2024. The increase primarily reflects a $19.3 million increase in personnel costs. Increased personnel costs included approximately $15.6 million of increased share-based compensation. Of the $15.6 million increase in share-based compensation, $5.3 million related to the acceleration of the vesting of shares upon the resignation of our prior General Counsel, and the remainder primarily related to the rapid appreciation of the market value of the Company’s equity. Further, there was a $6.3 million increase in consultant-related fees, primarily related to the Company’s sustainable aviation fuel project, as well as a $3.4 million increase in legal fees.

Current wording

General and Administrative Expenses. General and administrative expenses increased by $43.0 million, or 41.3%, to $147.3 million for the nine months ended September 30, 2025 compared to $104.3 million for the nine months ended September 30, 2024. The increase primarily reflects a $22.1 million increase in personnel costs, which included an increase of $16.5 million in share-based compensation and an increase of $3.3 million in wages. Of the $16.5 million increase in share-based compensation, $5.3 million related to the acceleration of the vesting of shares upon the resignation of our prior General Counsel, and the remainder primarily related to the appreciation of the market value of the Company’s equity as well as share awards to new personnel to support the continued growth of the Company. Further, there was a $9.8 million increase in consultant fees, which was influenced by costs associated with the Company’s sustainable aviation fuel project, as well as a $4.9 million increase in legal fees primarily associated with finance and strategic initiatives.

Previous wording

Technical Expense. Technical expense increased by $1.0 million, or 7.6%, to $13.7 million for the six months ended June 30, 2025 compared to $12.8 million for the six months ended June 30, 2024, primarily due to an increased level of engine repair activity as compared to that of the prior period.

Current wording

Technical Expense. Technical expense increased by $4.2 million, or 23.2%, to $22.1 million for the nine months ended September 30, 2025 compared to $17.9 million for the nine months ended September 30, 2024, primarily due to an increased level of engine repair activity as compared to that of the prior period.

Previous wording

Net Finance Costs. Net finance costs increased by $18.1 million, or 38.0%, to $65.7 million for the six months ended June 30, 2025 compared to $47.6 million for the six months ended June 30, 2024, primarily due to an overall increased level of debt obligations and an increased weighted average borrowing cost. Interest expense associated with the Company’s credit facility increased by $9.5 million for the six months ended June 30, 2025, due to an increase in the average outstanding balance of the credit facility for the six months ended June 30, 2025, as compared to that of the prior year period. Further, there was additional interest expense of $7.6 million for the six months ended June 30, 2025 associated with WWFL, as the senior secured warehouse facility was not entered into until May 2024, and $1.2 million of additional interest expense associated with the WEST VIII notes offering which closed in June 2025. Further, both the Company’s credit facility and WWFL have a floating rate of interest of one-month term SOFR plus a certain spread, so fluctuations in SOFR impact interest expense as well. Additionally, derivative-related receipts were $4.9 million for the six months ended June 30, 2025, as compared to $6.2 million for the six months ended June 30, 2024 as certain interest rate swap positions ran off.

Current wording

Net Finance Costs. Net finance costs increased by $27.4 million, or 36.4%, to $102.8 million for the nine months ended September 30, 2025 compared to $75.4 million for the nine months ended September 30, 2024, primarily due to an overall increased level of debt obligations. Interest expense associated with the Company’s credit facility increased by $9.4 million for the nine months ended September 30, 2025, due to an increase in the average outstanding balance of the credit facility for the nine months ended September 30, 2025, as compared to that of the prior year period. Further, there was additional interest expense of $7.2 million for the nine months ended September 30, 2025 associated with Willis Warehouse Facility LLC (“WWFL”), as the senior secured warehouse facility did not close until May 2024, and $9.6 million of additional interest expense associated with WEST VIII notes payable, which did not close until June 2025, and loss on debt extinguishment of $3.0 million. These increases in interest expense were partially offset by a decrease of $3.8 million in interest expense associated with WEST VII notes payable due to a reduction in these notes outstanding and $1.9 million of increased interest income associated with larger restricted cash balances as we refinanced the balance sheet. Additionally, derivative-related receipts were $4.4 million for the nine months ended September 30, 2025, as compared to $9.2 million for the nine months ended September 30, 2024 as certain interest rate swap positions were terminated and certain interest rate metrics fluctuated.

Previous wording

Gain on Sale of Business. During the three months ended June 30, 2025, Willis Asset Management Limited (“WAML”), a wholly-owned subsidiary of the Company entered into a Share Purchase Agreement (the “SPA”), by and between WAML and WMES. Pursuant to the SPA, WAML sold the entire issued share capital of Bridgend Asset Management Limited (“BAML”), a United Kingdom-based aviation consultancy business, to WMES for a total purchase price of $45.0 million subject to certain working capital adjustments. The transaction closed on June 30, 2025, resulting in a gain on sale of business of approximately $43.0 million for the Company.

Current wording

Gain on Sale of Business. During the nine months ended September 30, 2025, a wholly-owned subsidiary of the Company, entered into a Share Purchase Agreement (the “SPA”), by and between Willis Asset Management Limited (“WAML”) and WMES. Pursuant to the SPA, WAML sold the entire issued share capital of Bridgend Asset Management Limited (“BAML”), a United Kingdom-based aviation consultancy business, to WMES for a total purchase price of $45.0 million subject to certain working capital adjustments. The transaction closed on June 30, 2025, resulting in a gain on sale of business of approximately $43.0 million for the Company.

Previous wording

Income Tax Expense. Income tax expense was $22.3 million for the six months ended June 30, 2025 compared to $24.3 million for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 was 22.4% compared to 27.7% in the prior year period. The Company’s effective tax rate differed from the U.S. federal statutory rate of 21.0% primarily due to executive compensation exceeding $1.0 million as defined in Section 162(m) of the Code, as well as the sale of the Company’s entire issued share capital of BAML, for which no statutory tax was due on the gain recognized.

Current wording

Income Tax Expense. Income tax expense was $41.2 million for the nine months ended September 30, 2025 compared to $34.7 million for the nine months ended September 30, 2024. The effective tax rate for the nine months ended September 30, 2025 was 28.9% compared to 28.4% in the prior year period. The Company’s effective tax rate differed from the U.S. federal statutory rate of 21.0% primarily due to executive compensation exceeding $1.0 million as defined in Section 162(m) of the Code, as well as the sale of the Company’s entire issued share capital of BAML, a discrete item per ASC 270, “Interim Reporting,” due to the unusual and infrequent nature of the sale. The provisions of the OBBBA impacted certain tax deductions, including bonus depreciation, limiting the Company’s ability to benefit from the Section 250 deduction.

Previous wording

At June 30, 2025, the Company had $37.3 million of cash and cash equivalents and $745.3 million of restricted cash. We fund our operations primarily from cash provided by our leasing activities. We finance our growth through borrowings secured primarily by our equipment lease portfolio. Cash of approximately $851.1 million and $357.2 million for the six months ended June 30, 2025 and 2024, respectively, was derived from our borrowing activities, which included our $596.0 million WEST VIII capital raise in June 2025. In these same time periods, $309.6 million and $211.3 million, respectively, was used to pay down related debt.

Current wording

At September 30, 2025, the Company had $12.9 million of cash and cash equivalents and $158.1 million of restricted cash. We fund our operations primarily from cash provided by our leasing activities. We finance our growth through borrowings secured primarily by our equipment lease portfolio. Cash of approximately $1,005.1 million and $518.9 million for the nine months ended September 30, 2025 and 2024, respectively, was derived from our borrowing activities, which included our $596.0 WEST VIII capital raise in June 2025. In these same time periods, $1,029.8 million and $331.2 million, respectively, was used to pay down related debt.

Previous wording

Cash flows provided by operating activities were $145.2 million and $129.7 million for the six months ended June 30, 2025 and 2024, respectively. The $15.5 million, or 12.0%, increase in operating cash flows was primarily driven by a period over period $49.6 million increase in cash flows from changes in inventory, partially offset by a $22.2 million decrease in payments on sales-type leases and a period over period $10.9 million decrease in cash flows from changes in accounts payable and accrued expenses. These changes reflect significant inventory purchases made in the prior comparable period to meet the high demand for spare parts. Spare parts sales were $25.3 million and $9.5 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $15.8 million, or 166.8%, compared to the same period in 2024. Cash flows from operations are driven significantly by payments made under our lease agreements, which comprise lease revenue, security deposits and maintenance reserves, and are offset by interest expense and general and administrative costs. Cash received as maintenance reserve payments for some of our engines on lease are partially restricted by our debt arrangements. The lease revenue stream, in the short term, is at fixed rates while a portion of our debt is at variable rates. If interest rates increase, it is unlikely we could increase lease rates in the short term, and this would cause a reduction in our earnings and operating cash flows. Revenue and maintenance reserves are also affected by the amount of equipment off lease. The average utilization rate (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) for the six months ended June 30, 2025 and 2024 was approximately 83.6% and 83.5%, respectively. If there is an increase in off-lease rates or deterioration in lease rates that are not offset by reductions in interest rates, there will be a negative impact on earnings and cash flows from operations.

Current wording

Cash flows provided by operating activities were $209.1 million and $216.4 million for the nine months ended September 30, 2025 and 2024, respectively. The $7.4 million, or 3.4%, decrease in operating cash flows was primarily driven by a $23.2 million decrease in payments on sales-type leases, a period over period $28.1 million decrease in cash flows from changes in accounts receivable, and a period over period $24.0 million decrease in cash flows from changes in accounts payable and accrued expenses. Partially offsetting the decreases was a period over period $52.1 million increase in cash flows from changes in inventory. These changes reflect significant inventory purchases made in the prior comparable period to meet the high demand for spare parts. Spare parts sales were $30.7 million and $19.4 million for the nine months ended September 30, 2025 and 2024, respectively, an increase of $11.3 million, or 58.4%, compared to the same period in 2024. Cash flows from operations are driven significantly by payments made under our lease agreements, which comprise lease revenue, security deposits and maintenance reserves, and are offset by interest expense and general and administrative costs. Cash received as maintenance reserve payments for some of our engines on lease are partially restricted by our debt arrangements. The lease revenue stream, in the short term, is at fixed rates while a portion of our debt is at variable rates. If interest rates increase, it is unlikely we could increase lease rates in the short term, and this would cause a reduction in our earnings and operating cash flows. Revenue and maintenance reserves are also affected by the amount of equipment off lease. The average utilization rate (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) for the nine months ended September 30, 2025 and 2024 was approximately 84.4% and 83.3%, respectively. If there is an increase in off-lease rates or deterioration in lease rates that are not offset by reductions in interest rates, there will be a negative impact on earnings and cash flows from operations.

Previous wording

Cash flows used in investing activities were $2.2 million for the six months ended June 30, 2025 and primarily reflected $154.9 million for the purchase of equipment held for operating lease and for sale (including capitalized costs and prepaid deposits made in the period) and $17.1 million for the purchase of property, equipment and furnishings, which was primarily related to leasehold improvements, partially offset by proceeds from sale of equipment (net of selling expenses) of $141.9 million and proceeds from sale of business of $23.1 million. Cash flows used in investing activities were $275.0 million for the six months ended June 30, 2024 and primarily reflected $321.6 million for the purchase of equipment held for operating lease (including capitalized costs and prepaid deposits made in the period) and $26.7 million related to leases entered into which were classified as notes receivable under ASC 842, partly offset by proceeds from sale of equipment (net of selling expenses) of $70.0 million.

Current wording

Cash flows used in investing activities were $108.2 million for the nine months ended September 30, 2025 and primarily reflected $310.6 million for the purchase of equipment held for operating lease and for sale (including capitalized costs and prepaid deposits made in the period) and $23.2 million for the purchase of property, equipment and furnishings, which was primarily related to leasehold improvements, partially offset by proceeds from sale of equipment (net of selling expenses) of $194.3 million and proceeds from sale of business of $21.9 million. Cash flows used in investing activities were $455.0 million for the nine months ended September 30, 2024 and primarily reflected $488.4 million for the purchase of equipment held for operating lease (including capitalized costs and prepaid deposits made in the period) and $89.6 million related to leases entered into which were classified as notes receivable under ASC 842, partly offset by proceeds from sale of equipment (net of selling expenses) of $117.9 million.

Previous wording

Cash flows provided by financing activities were $507.1 million for the six months ended June 30, 2025 and primarily reflected $851.1 million in proceeds from debt obligations, partially offset by $309.6 million in principal payments and $18.7 million in cancellation of restricted stock in satisfaction of withholding tax. Cash flows provided by financing activities were $125.2 million for the six months ended June 30, 2024 and primarily reflected $357.2 million in proceeds from debt obligations, partially offset by $211.3 million in principal payments and $7.1 million in cash dividends paid to common shareholders.

Current wording

Cash flows used in financing activities were $62.4 million for the nine months ended September 30, 2025 and primarily reflected $1,029.8 million in principal payments and $18.7 million in cancellation of restricted stock in satisfaction of withholding tax, partially offset by $1,005.1 million in proceeds from debt obligations. Cash flows provided by financing activities were $175.6 million for the nine months ended September 30, 2024 and primarily reflected $518.9 million in proceeds from debt obligations and $13.1 million in proceeds from issuance of preferred stock, partially offset by $331.2 million in principal payments, $8.9 million in cash dividends paid to shareholders of common stock, and $7.2 million in cancellation of restricted stock in satisfaction of withholding tax.

Previous wording

During the six months ended June 30, 2025, the Company paid cash dividends of $3.7 million to shareholders of common stock. During the six months ended June 30, 2024, the Company paid cash dividends of $7.1 million to shareholders of common stock.

Current wording

During the nine months ended September 30, 2025 and September 30, 2024, the Company paid cash dividends of $5.7 million and $8.9 million, respectively, to shareholders of common stock.

Previous wording

Prior to the Stock Purchase Agreement, the Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 8.5% per share, and the Series A-2 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share. During each of the six months ended June 30, 2025 and 2024, the Company paid total preferred stock dividends of $3.0 million and $1.8 million, respectively.

Current wording

Prior to the Stock Purchase Agreement, the Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 8.5% per share, and the Series A-2 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share. During each of the nine months ended September 30, 2025 and 2024, the Company paid total preferred stock dividends of $4.3 million and $3.4 million, respectively.

Previous wording

At June 30, 2025, debt obligations consisted of loans totaling $2,800.6 million, net of unamortized issuance costs and note discounts, payable with interest rates varying between approximately 3.1% and 8.0%. Substantially all of our assets are pledged to secure our obligations to creditors. For further information on our debt instruments, see Note 4 “Debt Obligations” in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

At September 30, 2025, debt obligations consisted of loans totaling $2,239.5 million, net of unamortized issuance costs and note discounts, payable with interest rates varying between approximately 3.1% and 8.0%. Substantially all of our assets are pledged to secure our obligations to creditors. For further information on our debt instruments, see Note 4 “Debt Obligations” in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

At June 30, 2025, we were in compliance with the covenants specified in our revolving credit facility, including the Interest Coverage Ratio requirement of at least 2.25 to 1.00, and the Total Leverage Ratio requirement of not greater than 4.25 to 1.00. The Interest Coverage Ratio, as defined in the credit facility, is the ratio of earnings before interest, taxes, depreciation and amortization and other one-time charges to consolidated interest expense. The Total Leverage Ratio, as defined in the credit facility, is the ratio of total indebtedness to tangible net worth. At June 30, 2025, we were in compliance with the covenants specified in the WEST III, WEST IV, WEST V, WEST VI, WEST VII, WEST VIII, and WWFL indentures and servicing and other debt related agreements.

Current wording

At September 30, 2025, we were in compliance with the covenants specified in our revolving credit facility, including the Interest Coverage Ratio requirement of at least 2.25 to 1.00, and the Total Leverage Ratio requirement of not greater than 4.00 to 1.00. The Interest Coverage Ratio, as defined in the credit facility, is the ratio of earnings before interest, taxes, depreciation and amortization and other one-time charges to consolidated interest expense. The Total Leverage Ratio, as defined in the credit facility, is the ratio of total indebtedness to tangible net worth. At September 30, 2025, we were in compliance with the covenants specified in the WEST III, WEST IV, WEST V, WEST VI, WEST VII, WEST VIII, and WWFL indentures and servicing and other debt related agreements.