Willis Lease Finance Reports Record 2008 Net Income of $26.6 Million

• Press Release
• Source: Willis Lease Finance Corp.
• On 6:17 pm EDT, Wednesday March 25, 2009

NOVATO, Calif., March 25, 2009 (GLOBE NEWSWIRE) -- Willis Lease Finance Corporation (NasdaqGM:WLFC - News), a leading lessor of commercial jet engines, today reported record revenues, net income and earnings per share in 2008, reflecting continued growth in the lease portfolio, high utilization of lease assets and historically low interest rates. Willis Lease's net income available to common stockholders increased 61% to $23.5 million, or $2.68 per diluted share in 2008, compared to $14.5 million or $1.66 per diluted share a year ago.

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Symbol	Price	Change
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{"s" : "wlfc","k" : "c10,l10,p20,t10","o" : "","j" : ""}

2008 Highlights (at or for the year ended December 31, 2008 compared to December 31, 2007)

 * The lease portfolio increased 11% from a year ago to $829.7 million.
 * Average utilization was 93%, in line with a year ago.
 * Lease rent revenues rose 19% to $102.4 million, contributing to a
   25% increase in total revenue of $152.3 million.
 * Maintenance reserve revenues contributed $33.7 million to revenue
   compared to $28.2 million a year ago.
 * Earnings per diluted share grew 61% to $2.68 compared to $1.66 in
   2007.
 * Book value per common share was $17.66 at year end versus $16.93 at
   the end of 2007.
 * Purchased 43 engines and sold or consigned 27 engines, ending the
   year with 160 engines in the portfolio.
 * Liquidity available from warehouse and revolving credit facilities
   decreased to $242 million at year end, down slightly from $300
   million a year ago.

``We had a great year,'' said Charles F. Willis, President and CEO. ``I'm very proud of our outstanding performance in 2008. We set new records for total revenue, net income, earnings per share and capital expenditures. We have a great team that worked hard to make this happen. A large part of our success in 2008 was the business volumes created from our lease pools in North America and China, developed several years ago. As a result of our in-roads in these markets, we generated more revenue in North America and China in 2008 than ever before. Having the engines that customers want has also contributed greatly to our success. Our long-term engine purchase agreement with CFM International has provided us with access to the most popular engine types available today, which has opened doors for us all over the world with customers that otherwise we may not have been able to attract.

``We can be successful in good times and bad,'' continued Willis. ``In good times, demand for our leased engines rises along with the growth of the worldwide fleet of aircraft. In bad times, demand is fueled by our customers desire to conserve cash. That's what I see happening now. Many of our customers are deferring shop visits on their engines, choosing to lease our engines instead. I expect that the desire to conserve cash will continue to generate healthy demand for our engines during these difficult economic times.''

``The fourth quarter of 2008 was our busiest ever,'' said Donald A. Nunemaker, Executive Vice President & General Manager-Leasing. ``During the quarter, we purchased 11 engines totaling $89 million, entered into 23 new leases and raised the utilization rate from 88% at the end of September 2008 to 92% at year-end. Most of our 2008 new engine deliveries were back-end loaded to the second half of the year. This accelerated pace of engine deliveries provided a significant challenge to our marketing, contracts and technical teams. Everyone worked together and did an exceptional job of quickly placing the engines into service and on lease at favorable terms.''

``Although it is still early to predict what will happen to the credit markets, we believe that we have the debt facilities in place to weather the current economic cycle due to our strong financial liquidity and the existence of our asset-backed securitization, WEST,'' said Brad Forsyth, Chief Financial Officer. ``Since its initial issuance in 2005, WEST cash flows have been strong, resulting in performance well ahead of original projections. WEST provides the majority of our debt and we benefit from the long term nature of this financing, with the notes payable over 13 to 15 years.''

``All of our debt is tied to one-month LIBOR which has recently dropped sharply in response to the economic downturn. With 60% of our interest costs fixed through hedging, our financing costs were relatively flat for the year and down 10% in the fourth quarter from a year ago. Despite the overall increase in debt levels, we benefited from the interest savings on the un-hedged portion of our debt,'' Forsyth added. ``In 2009, we expect to increase our hedging activities to protect against the risk of rising interest rates and take advantage of historically low long term swap rates. As always, our policy is to engage in hedging with only the highest rated counter parties.''

Balance Sheet

At December 31, 2008, the company had 160 commercial aircraft engines, 3 aircraft parts packages and 4 aircraft and other engine-related equipment in its lease portfolio, with a net book value of $829.7 million, compared to 144 commercial aircraft engines, 3 aircraft parts packages, 6 aircraft and other engine-related equipment in its lease portfolio with a net book value of $744.8 million at December 31, 2007. Capital expenditures on equipment (including capitalized costs) totaled $229 million in 2008 of which $92 million was deployed in the fourth quarter.

With the establishment of the new WEST $200 million warehouse facility in December 2007 and the placement of $212 million of WEST long term notes in March 2008, the company had $242 million of availability under its revolving credit and warehouse facilities at December 31, 2008, compared to $300 million a year earlier. The company's funded debt-to-equity ratio was 3.34 to 1 at December 31, 2008, compared to 3.25 to 1 at December 31, 2007.

About Willis Lease Finance

Willis Lease Finance Corporation leases spare commercial aircraft engines, rotable parts and aircraft to commercial airlines, aircraft engine manufacturers and overhaul/repair facilities worldwide. These leasing activities are integrated with the purchase and resale of used and refurbished commercial aircraft engines.

Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made; and we undertake no obligation to update them. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to, the effects on the airline industry and the global economy of events such as terrorist activity, changes in oil prices and other disruptions to the world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet the changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company's Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.

 Consolidated Statements of Income
 (In thousands, except per share data, audited)

                    Three Months              Twelve Months
                       Ended                      Ended
                    December 31,      %        December 31,       %
                   2008      2007   Change    2008      2007    Change
                  -------  ------- -------  --------  -------- -------
 REVENUE
 Lease rent
  revenue         $25,380  $23,404    8.4%  $102,421  $ 86,084   19.0%
 Maintenance
  reserve revenue   9,633    4,793  101.0%    33,716    28,169   19.7%
 Gain/(Loss) on
  sale of leased
  equipment          (485)   5,613 (108.6)%   12,333     6,876   79.4%
 Other income       2,388      190 1156.8%     3,823       768  397.8%
                  -------  -------          --------  --------
 Total revenue     36,916   34,000    8.6%   152,293   121,897   24.9%
                  -------  -------          --------  --------

 EXPENSES
 Depreciation
  expense           9,631    8,480   13.6%    37,438    31,136   20.2%
 Write-down of
  equipment         3,469    1,680  106.5%     6,142     3,822   60.7%
 General and
  administrative    7,995    6,047   32.2%    30,758    23,094   33.2%
 Net finance costs:
  Interest expense  9,651   10,012   (3.6)%   38,640    37,940    1.8%
  Interest income    (411)    (999) (58.9)%   (1,887)   (3,795) (50.3)%
  Net loss on
   extinguishment
   of debt             --    1,208 (100.0)%       --     2,667 (100.0)%
                  -------  -------          --------  --------
 Total net finance
  costs             9,240   10,221   (9.6)%   36,753    36,812   (0.2)%
                  -------  -------          --------  --------
 Total expenses    30,335   26,428   14.8%   111,091    94,864   17.1%
                  -------  -------          --------  --------

 Earnings from
  operations        6,581    7,572  (13.1)%   41,202    27,033   52.4%

 Earnings from
  joint venture       232      245   (5.3)%      797       700   13.9%

 Income before
  income taxes      6,813    7,817  (12.8)%   41,999    27,733   51.4%
 Income tax
  expense           2,464    2,703   (8.8)%   15,398    10,069   52.9%
                  -------  -------          --------  --------
 Net income       $ 4,349    5,114  (15.0)% $ 26,601  $ 17,664   50.6%

 Preferred stock
  dividends paid
  and declared-
  Series A            782      782    0.0%     3,128     3,128    0.0%
                  -------  -------          --------  --------
 Net income
  attributable to
  common
  shareholders    $ 3,567  $ 4,332  (17.7)% $ 23,473  $ 14,536   61.5%
                  =======  =======          ========  ========

 Basic earnings
  per common
  share           $  0.43  $  0.53          $   2.85  $   1.79
                  =======  =======          ========  ========

 Diluted earnings
  per common
  share           $  0.41  $  0.48          $   2.68  $   1.66
                  =======  =======          ========  ========

 Average common
  shares
  outstanding       8,300    8,176             8,242     8,115
 Diluted average
  common shares
  outstanding       8,787    9,007             8,760     8,742


 Consolidated Balance Sheets
 (In thousands, except share data, audited)

                                            December 31,  December 31,
                                                2008         2007
                                            ------------  ------------
 ASSETS
 Cash and cash equivalents                  $      8,618  $      7,234
 Restricted cash                                  69,194        64,960
 Equipment held for operating lease, less
  accumulated depreciation                       829,739       744,827
 Equipment held for sale                          21,191         5,006
 Operating lease related receivable, net of
  allowances                                       8,607         5,550
 Investments                                      10,434        10,327
 Assets under derivative instruments                 276            12
 Property, equipment & furnishings, less
  accumulated depreciation                         7,751         6,771
 Equipment purchase deposits                      13,530        12,180
 Other assets                                     13,969        11,723
                                            ------------  ------------
 Total assets                               $    983,309  $    868,590
                                            ============  ============

 LIABILITIES AND SHAREHOLDERS' EQUITY
 Liabilities:
 Accounts payable and accrued expenses      $     12,732  $     11,825
 Liabilities under derivative instruments         20,810         7,709
 Deferred income taxes                            56,118        46,632
 Notes payable                                   641,125       567,108
 Maintenance reserves                             49,158        49,481
 Security deposits                                 5,179         5,890
 Unearned lease revenue                            5,980         5,293
                                            ------------  ------------
 Total liabilities                               791,102       693,938
                                            ------------  ------------

 Shareholders' equity:
 Preferred stock                            $     31,915  $     31,915
 Common stock ($0.01 par value)                       91            84
 Paid-in capital in excess of par                 57,939        55,712
 Retained earnings                               117,163        93,690
 Accumulated other comprehensive loss, net
  of tax benefit                                 (14,901)       (6,749)
                                            ------------  ------------
 Total shareholders' equity                      192,207       174,652

 Total liabilities and shareholders'        ------------  ------------
  equity                                    $    983,309  $    868,590
                                            ============  ============


 Consolidated Statements of Income
 (In thousands, except per share data)

                                      Twelve Months Ended
                                         December 31,

                          2008      2007      2006      2005     2004
                        --------  --------  --------  -------  -------
 REVENUE
 Lease rent revenue     $102,421  $ 86,084  $ 69,230  $63,119  $58,177
 Maintenance reserve
  revenue                 33,716    28,169    32,744   15,983   13,045
 Gain/(Loss) on sale of
  leased equipment        12,333     6,876     3,781   (1,844)     360
 Other income              3,823       768       300      366      677
                        --------  --------  --------  -------  -------
 Total revenue           152,293   121,897   106,055   77,624   72,259
                        --------  --------  --------  -------  -------

 EXPENSES
 Depreciation expense     37,438    31,136    26,255   25,786   23,336
 Write-down of equipment   6,142     3,822     3,389    6,781   12,755
 General and
  administrative          30,758    23,094    21,539   17,604   16,176
 Net finance costs:
  Interest expense        38,640    37,940    31,610   24,514   16,350
  Interest income         (1,887)   (3,795)   (3,082)  (1,541)    (434)
  Realized and
   unrealized (gains)/
   losses on derivative
   instruments                --        --      (153)  (1,589)    (465)
  Net Loss on
   extinguishment of
   debt                       --     2,667        --    1,375       --
                        --------  --------  --------  -------  -------
 Total net finance costs  36,753    36,812    28,375   22,759   15,451
                        --------  --------  --------  -------  -------
 Total expenses          111,091    94,864    79,558   72,930   67,718
                        --------  --------  --------  -------  -------

 Earnings from
  operations              41,202    27,033    26,497    4,694    4,541

 Earnings from joint
  venture                    797       700       466       --       --

 Income before income
  taxes                   41,999    27,733    26,963    4,694    4,541
 Income tax expense       15,398    10,069     9,077    1,053    1,213
                        --------  --------  --------  -------  -------
 Net income             $ 26,601  $ 17,664  $ 17,886  $ 3,641  $ 3,328

 Preferred stock
  dividends paid and
  declared-Series A        3,128     3,128     2,945       --       --
                        --------  --------  --------  -------  -------
 Net income attributable
  to common
  shareholders          $ 23,473  $ 14,536  $ 14,941  $ 3,641  $ 3,328
                        ========  ========  ========  =======  =======

 Basic earnings per
  common share          $   2.85  $   1.79  $   1.63  $  0.40  $  0.37
                        ========  ========  ========  =======  =======

 Diluted earnings per
  common share          $   2.68  $   1.66  $   1.56  $  0.38  $  0.36
                        ========  ========  ========  =======  =======

 Average common shares
  outstanding              8,242     8,115     9,169    9,075    8,925
 Diluted average common
  shares outstanding       8,760     8,742     9,606    9,515    9,276

          Willis Lease Finance Corporation
          Brad Forsyth, Chief Financial Officer
          (415) 408-4700