1018164--4/2/2007--WILLIS_LEASE_FINANCE

related topics

{investment, property, distribution}

{debt, indebtedness, cash}

{operation, natural, condition}

{competitive, industry, competition}

{regulation, government, change}

{stock, price, operating}

{regulation, change, law}

{operation, international, foreign}

{customer, product, revenue}

{personnel, key, retain}

{cost, regulation, environmental}

{cost, contract, operation}

{capital, credit, financial}

{provision, law, control}

{condition, economic, financial}

{acquisition, growth, future}

{loss, insurance, financial}

We are affected by the risks faced by commercial aircraft operators and MROs because they are our customers. Continuing failures by lessees to meet their maintenance and recordkeeping obligations under our leases could adversely affect the value of our leased engines and our ability to lease the engines in a timely manner following termination of the lease. Our operating results vary and comparisons to results for preceding periods may not be meaningful. Our customers face intense competition and some carriers are in troubled financial condition. We and our customers operate in a highly regulated industry and changes in laws or regulations may adversely affect our ability to lease or sell our engines. Any change to current tax laws or accounting principles making operating lease financing less attractive could adversely affect our business, financial condition and results of operations. Allegations that our aircraft, engines or parts have caused bodily injury or property damage expose us to liability claims. We may not be adequately covered by insurance. Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues. Our financing facilities impose restrictions on our operations. We are exposed to interest rate risk on our engine leases, which could have a negative impact on our margins. Our maintenance reserves may be inadequate or lessees may default on their obligations to perform maintenance, which could increase our expenses. Our engine values and lease rates, which are dependent on the status of the types of aircraft on which engines are installed, and other factors, could decline. We have risks in managing our portfolio of engines to meet customer needs. Upon termination of a lease, we may be unable to enter into new leases or sell the engine on acceptable terms. We may not be able to repossess an engine when the lessee defaults, and even if we are able to repossess the engine, we may have to expend significant funds in the repossession and leasing of the engine. We are subject to the risks and costs of aircraft maintenance and obsolescence on the aircraft that we own. Our inability to maintain sufficient liquidity could limit our operational flexibility and also impact our ability to make payments on our obligations as they come due. A substantial portion of our lease revenue comes from foreign customers, subjecting us to divergent regulatory requirements. Our leases require payments in U.S. dollars but many of our customers operate in other currencies; if foreign currencies devalue against the U.S. dollar, our lessees may be unable to make their payments to us. We operate globally and are affected by our customers local and regional economic and other risks. We may not be able to enforce our rights as a creditor if a lessee files for bankruptcy outside of the United States. Liens on our engines could exceed the value of the engines, which could negatively affect our ability to repossess, lease or sell a particular engine. In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine. Intense competition in our industry, particularly with major companies with substantially greater financial, personnel, marketing and other resources, could cause our revenues and business to suffer. Substantially all of our assets are pledged to our creditors. We may be unable to manage the expansion of our operations. Compliance with the regulatory requirements imposed on us as a public company results in significant costs that will likely have an adverse effect on our results. We are effectively controlled by one principal stockholder, who has the power to contest the outcome of most matters submitted to the stockholders for approval and to affect our stock prices adversely if he were to sell substantial amounts of his common stock. Our business might suffer if we were to lose the services of certain key employees. We are the servicer and administrative agent for the WEST facility and our cash flows would be materially and adversely affected if we were removed from these positions. Provisions in Delaware law and our charter and bylaws might prevent or delay a change of control.

Full 10-K form ▸

1018164--4/2/2007--WILLIS_LEASE_FINANCE_CORP