Q1 2025 Willis Lease Finance Corp Earnings Call
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Please stand by. Your conference is about to begin.
Speaker Change: today and welcome to the Willis Lease Financial Corporation first quarter 2025 earnings call. Today's conference is being recorded.
Speaker Change: We would like to remind you that during this conference call management will be making forward-looking statements, including statements regarding our expectations related to financial guidance, outlook for the company, and our expected investment and growth initiatives.
Speaker Change: Please note that these forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties.
Speaker Change: to these forward-looking statements in light of new information or future events.
Speaker Change: These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations
Speaker Change: WLFC's financial results, please refer to its filings with the FCC, including without limitation WLFC's most recent quarterly report on form 10Q, annual report on form 10K and other periodic reports.
Speaker Change: Which are available on the Investor Relations section of WLFC's website at https colon slash slash www.wlfc.global-investor-relations
Speaker Change: At this time, I'd like to turn the conference over to Austin Willis, Chief Financial Officer. Please go ahead.
Speaker Change: Thank you, operator, and thank you all for joining us. On our call today, I am joined by Scott Flaherty, our chief financial officer, and Brian Hull, our president.
Speaker Change: In our first quarter, WLFC continued to deliver strong financial performance underpinned by the growth of our core leasing business.
Speaker Change: While average utilization for the quarter was 79.9%, we ended the quarter at over 86%. Evidenceing our ability to produce revenue from off-lease engine purchases in a timely manner.
Speaker Change: For the first quarter, our total revenue was 157.7 million, and pre-tax income was 25.2 million.
Speaker Change: Our performance has enabled us to return capital to our shareholders while meaningfully expanding our business. And in April , we paid our fourth consecutive quarterly dividend of 25 cents per share. In a moment, Scott will provide more detail on our results.
Speaker Change: Following a transformative 2024, we were off to a strong start to beer, particularly as our differentiated flywheel business model enables us to generate premium returns.
Speaker Change: The macroeconomic concerns over tariffs have created market volatility, but the drivers of our business over the long-term remain unchanged.
Speaker Change: The cost of new engines continues to drive operators towards Leasing, and our maintenance capabilities and programs aid cost-conscious airlines who would prefer to focus on flying passengers rather than engine maintenance planning.
Speaker Change: We remain confident in our business model and ability to continue to lead the sector in value creation.
Speaker Change: To that end, I want to highlight three notable transactions announced during the quarter that advance our strategy to provide efficient solutions to airlines.
Speaker Change: For those of you on the webcast, we have some accompanying slides.
Speaker Change: First, in February , we announced that we would exercise purchase rights to buy 30 additional lead engines from CSM International, a joint venture between GE Aerospace and Safran Aircraft
Speaker Change: The purchase includes Leap 1A engines for the Airbus A320 Neo-Family Bearcraft and Leap 1B engines for the Boeing 737 MAX.
Speaker Change: These engines represent an important investment that will enable us to provide additional support to operators of these popular engines and aircraft.
Speaker Change: This purchase aligns with our vision to pioneer services and solutions that drive more sustainable operations.
Speaker Change: and is consistent with our historical strategy of always having the most end-demand assets for our customers.
Speaker Change: Second, in March, we announced a new constant thrust deal with Air India Express for CFM 56-7B engines.
Speaker Change: expected to close in the second quarter, which further builds on our existing partnership with Air India that began with our first transaction back in 2022.
Speaker Change: To reiterate, constant thrust is a product we created over a decade ago, in which we do a sale and leaseback on an airline's fleet of aircraft or engines.
Speaker Change: and when an engine becomes unserviceable, we replace it with another from our fleet, managing the unserviceable engine through our maintenance and services businesses.
Speaker Change: The downtime for an airline is as little as one day, which delivers a level of efficiency and cost savings, unobtainable, through traditional maintenance or leasing arrangements.
Speaker Change: We value our partnership with Air India and believe that their decision to engage in another constant thrust deal with us is indicative of the value that it provides operators compared
Speaker Change: As discussed on our fourth quarter, 2024 earnings scold, we believe constant thrust will attract heightened demand as airlines look to transition from legacy fleets into Neo and Max Aircraft.
Speaker Change: We look forward to continuing to support the growth of the Indian Aviation Industry and providing innovative solutions to our global customers.
Speaker Change: The shortage of adequate testing capacity is causing the log jam into industry, constraining throughput and slowing engine repair turn times.
Speaker Change: This collaboration with Global Engine Maintenance and Engine MRO will allow us to test our engines, our customers engines, James customers engines as well as third parties who want us to test engines for them.
Speaker Change: By combining our engine testing needs with that of another MRO, we can offset much of the cost with the base load provided by the shareholders and seek additional income by offering the service to third parties.
Speaker Change: The test cell will initially focus on CSN 56-5V and 7D engines.
Speaker Change: but will have the capability to test more modern variants in the future with slight modification.
Speaker Change: Finally, I want to reiterate the strength and expertise of our team as the aviation industry with ongoing macroeconomic uncertainty.
Speaker Change: Demand for a product and services remains robust, both domestically and abroad. However, as always, we are prepared for the changes that could come as a result of the volatility experience over the previous few months.
The tariffs present challenges as well as opportunities.
Speaker Change: We have operated through multiple economic cycles and industry disrupting events in our 45 plus years of operation and we stand prepared to respond as necessary.
Speaker Change: Our deep understanding of our customers' needs and the assets we manage will put us in the best position to prosper in any environment we face going forward. And with that, I'll hand it over to Scott Flaherty, our CFO , to discuss our financial performance in greater depth.
Thank you, Austin, and good morning all.
Scott Flaherty: As you can see from our PNL, we are off to a good start in 2025.
Q1 produced record quarterly revenues of 157.7 million.
driving 25.3 million of earnings before taxes or EVT.
Scott Flaherty: A consolidated revenues of 157.7 million were up 33% from the comparable quarter in 2024 and were driven by our core lease rent revenue and maintenance reserve revenues which were further enhanced by our vertically integrated services business.
Scott Flaherty: Walking through the P&L, as it relates to revenue, core lease rent revenue for the quarter was $67.7 million, and interest revenue was $3.9 million, which reflects interest income on long-term loan-like financing.
Scott Flaherty: Growth in these line items primarily reflects our increased total portfolio size of $2.82 billion as of March 31st.
Scott Flaherty: Our total own portfolio is reflected on our balance sheet as equipment health for operating lease maintenance rights, nose receivable and investment in sales type leases.
Scott Flaherty: We have seen portfolio utilization grow from 76.7% at year end 2024.
Scott Flaherty: A solid average lease rate factor across the portfolio of 1.0%
Scott Flaherty: Maintenance Reserve revenues for the quarter were 54.9 million, up 11 million or 25% from the comparable quarter in 2024.
Scott Flaherty: As you peel back the numbers, you can see that 9.6 million of these maintenance reserve revenues were long-term maintenance reserve revenue associated with engines coming off lease and the associated elimination of any maintenance reserve liabilities.
Scott Flaherty: 7.7 million of the 9.6 million related to an end of lease payment for which the company has subsequently been paid.
by a Chinese-based Leasey customer.
Scott Flaherty: 45.3 million of our maintenance reserve revenues were short-term maintenance reserves compared to 37.6 million in the prior comparable period.
Scott Flaherty: This 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 engine.
Scott Flaherty: and to a lesser extent, in this quarter, the timing of revenue recognition of in-substance fixed payments.
Scott Flaherty: Fair parts and equipment sales to third parties increased by 15.0 million or 455% to 18.2 million in Q1 2025 compared to 3.3 million in the comparable quarter.
Scott Flaherty: This increase was driven by the demand for surplus material that we are seeing as operators extend the lives of their current generation engine portfolios. In addition, there was a discrete 7.0 million sale in the quarter as well as 2.2 million of equipment sales for which there were none in the comparable period.
Scott Flaherty: Wasey, our spare parts business, provides a valuable outlet for the company to recognize residual values on our engine portfolio while also providing feed stock for our and our customers fleets in a tight parts market.
Scott Flaherty: The recycling of these spare parts often occurs at one of our two engine MRO facilities, which are locating coconut creek Florida and Ridge and Wales.
Genome sale of Lease Equipment [inaudible]
Together with our game...
on sale of financial assets.
Annette Revenue Matrix, Aggregated [inaudible]
Scott Flaherty: to 4.8 million in the first quarter, down slightly from 9.2 in the comparable period.
Scott Flaherty: This game was associated with gross equipment sales of $49.8 million, representing an effective 10% margin on such sales.
Scott Flaherty: A trading activity tends to be lumpy and varies from quarter to quarter due to the nature of the business. Trading is an important part of the business and keeps our portfolio relevant.
Scott Flaherty: Maintenance Service Revenue, which represents fleet management, engine and aircraft storage and repair services.
Scott Flaherty: and revenues related to management of fixed-based operator services was $5.6 million in the first quarter, up slightly from the comparable period in 2024.
Scott Flaherty: Gross margins came in at 5% as we are still in the build-out stages of our fixed-based operator services business which influences our aggregate margins.
Scott Flaherty: We believe that our maintenance service offerings both enhance and create lease opportunities for the business and provide further vertical integration supporting the full life cycle of the company's assets.
Scott Flaherty: On the expense side of the equation, depreciation in the first quarter was up 11.3% to 25 million for the quarter, as we increase the portfolio size, as well as put new engines on lease, which starts their depreciation through our P&L.
Scott Flaherty: Right down to the equipment was 2.1 million for the quarter, which represented an impairment on five engines which were all moved to health for sale.
Scott Flaherty: GNA was $47.7 million in the first quarter compared to $29.6 million in the comparable period in 2024.
Scott Flaherty: Increases in the overall G&A spend were mainly related to $11.4 million in consulted related fees which are predominantly related to the company's sustainable aviation fuel project.
Scott Flaherty: Given the stage of this project's development, gap, dictates that these costs are expense rather than capitalized. The company has been awarded a UK Government grant which will ultimately offset a portion of these charges but such grant will not be recognized until cash is received.
Scott Flaherty: We anticipate that first quarter spend, which represents licensing and engineering fees, represents the bulk of our net anticipated spend, inclusive of grant in 2025.
Scott Flaherty: In addition, there was 6.9 million of share-based compensation which was influenced by the rise in the company's share price relative to Q1 2024 and represented a 3.1 million increase from the comparable period.
Scott Flaherty: and approximately 1.2 million of wage increases due to additional headcount and general salary escalation as we grow the footprint of the overall business.
Scott Flaherty: Technical expense was $6.2 million in the first quarter, slightly down from $8.3 million in the comparable period in 2024.
Scott Flaherty: Technical expense generally relates to unplanned maintenance, whereas engine performance restorations tend to be planned, capitalized events.
Net Finance Costs
Scott Flaherty: We're 32.1 million in the first quarter compared to 23.0 million in the comparable period in 2024. The increase in cost was related to an increase in indebtedness, as total debt obligations increased from 1.7 billion at March 2024 to 2.2 billion at March 2025.
Scott Flaherty: As well an increase in the quarterly weighted average cost of debt, inclusive our interest rate hedge positions
Scott Flaherty: which rose from 4.56 in Q1 2024 to 6.16 in Q1 2025.
Scott Flaherty: The company also picked up 1.4 million in radical earnings from our 50% ownership interest in our Willis Mitsui and Casix, Willis joint ventures.
Scott Flaherty: The company produced 15.5 million of net income attributable to common shareholders, which factors in gap taxes and the costs of our preferred equity.
Scott Flaherty: Deluted weighted average income per share was $2.21 in Q1 2025.
Scott Flaherty: Metcash provided by operating activities was 41.0 million in the first quarter of 2025 as compared to 59.8 million in the first quarter of 2024.
Scott Flaherty: The decrease was predominantly related to working capital, where relative changes in accounts payable had a significant influence on the net cash provided by operating activities.
Scott Flaherty: Adjusting for working capital, where changes in assets and liabilities, NetTash provided by operating activities was 13 million higher in the first quarter of 2025 than in the comparable period in 2024.
Scott Flaherty: On the financing and capital structure side of the business, the company completed its fourth and fifth Joe Co. Financings in the first quarter, bringing total Joe Co. Financings at quarter end to approximately 105 million.
Scott Flaherty: Subsequent to quarter-end, the company completed sixth gelco, bringing a total gelco of financing to a hundred and twenty-five million.
Scott Flaherty: We regularly access the capital markets as we endeavor to source competitively priced capital to continue to grow our balance sheet and P&L.
Scott Flaherty: In February of the first quarter, we paid our third regular quarterly dividend of 25 cents per share.
Scott Flaherty: Subsequent to quarter end, we declared our fourth consecutive regular quarterly dividend, which is expected to be paid on May 22, 2025, to stockholders of record at the close of business on May 12, 2025.
Scott Flaherty: We believe that our ability to pay a recurring given in speaks to the health of the business and provides our shareholders with a moderate current cash yield on their investment while not degrading the strong cash flow characteristics and equity growth of the business which supports our overall growth.
Scott Flaherty: With respect to leverage, as defined as total debt obligations, net of cash and restricted cash, to equity, inclusive of preferred stock, our leverage tick lower to 3.31 times as compared to 3.48 times at year end, 2024.
Scott Flaherty: We mentioned with our annual results that our leverage had climbed in the fourth quarter as we took advantage of some year-end asset purchase opportunities and we have now been able to start to work that leverage back down in the first quarter. With that, I will now open the call to questions.
Speaker Change: Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone,
Scott Flaherty: Once again, that is star 1 to signal for a question and will pass just briefly to a symbol
Scott Flaherty: And we'll take our first question from Hillary Kakanondo with Deutsche Bank. Please go ahead.
Hillary Cacanondo: Yes, hi. Thanks for taking my questions. I just wanted to find out if you're impacted any way by direct impact.
Directly impacted by Carrot, you know, I-
Hillary Cacanondo: I guess I wasn't sure if you import any parts or any material from overseas for your maintenance services or anything like that if you will be impacted directly. Thank you.
[inaudible]
Thanks, Hillary.
Hillary Cacanondo: So thus Flaher are our impacts of really been de minimis, both on the import side of parts as well as on the leasing side. You got to remember a lot of our business, at least with our MROs, the parts come from our own parts capability. So we really haven't seen too much of an impact there yet.
Hillary Cacanondo: By and large, we really haven't seen very much of an impact. There was a little bit of noise around China early on with respect to the implication of tariffs on Lease Rent Revenue, but it looks like that has largely gone away, so things are pretty much business as usual.
Speaker Change: Okay, so that's not too much. I mean, so pretty much, I guess, minimal impact. Okay, great. And then I just wanted to get your thoughts on what happens to the value of your distinct portfolio, your terms of multi-values and these traits is...
Speaker Change: If Tara Flette escalates with you about the 90 days.
Um...
Speaker Change: I would think that you were aircraft gets expensive, so maybe older-ass values and these rates go up, but then I don't know what would happen to the demand side [inaudible]
Speaker Change: and then what's the demand for travel, let's say, or for aircraft, so what's the impact will be on the existing asset? So just kind of wanted to get your thoughts on what you think the market value is on this way to be over, maybe you're interested in portfolio.
Speaker Change: Sure. So, you know, it's hard to tell. I mean, the reality is...
Speaker Change: That being said, I don't think it's unreasonable to expect some degree of asset inflation with our existing portfolio. I think when engines coming out of the OEMs are likely to be a bit more expensive because of the tariffs that they incur, I think that will drive up values elsewhere and exactly to your point.
Speaker Change: I think there is a reasonable case to be said that incumbent assets in particular jurisdictions are likely to see some level of appreciation as well because obviously they won't be subject to cross-border tariffs, you know, should reciprocals be put in place. And then finally, I think there's a scenario where less expensive assets could be more attractive even if they do cross-borders just by the nature of the tariff being a percentage on value.
Thank you. Thank you very much. Thank you.
No problem.
Speaker Change: If you find that your question has been answered, you may remove yourself from the queue by pressing star 2. We move next to Louis Raffetto with Wolf Research. Please go ahead.
May good morning.
Good morning, Louis
Speaker Change: There's a nice step up in the spare part sales. I guess, you know, maybe you can say, what are you seeing in the USM market? It's been tight for the right assets for a long time, I guess. And you know, many engines.
Speaker Change: Yeah, we're being repaired, as opposed to being torn down, are you seeing a shift there and how are you bouncing the decision to either repair an engine or tear it down?
Speaker Change: Yeah, so a lot of the step up in part sales from our parts business was due to a large transaction that we had where we purchased a portfolio of parts and then subsequently sold them back to back, but even taking that into account, we still did have a pretty good step up in part sales, and I think that is...
Speaker Change: We run a process. Whenever one of our engines becomes unserviceable, we look at, do we part it out? And what is that net revenue generate? Do we fix that engine? And what's the present value based upon that? And then we'll also solicit bids from third party market to determine what that would get in cash for us right now. And ultimately, we look at the three scenarios and just do a present value analysis. And then finally, we look at the three scenarios. And then we look at the three scenarios and just do a present value analysis.
We also look at...
Speaker Change: Does it make sense to repair engines versus what we can purchase engines for out on the market? And historically, we've been pretty darn good at spot market trading, so in many cases we can actually procure engines on a better value on a cost for cycle basis than one can overhauling them.
Speaker Change: All right, great. Appreciate that. Maybe just two quick clarification questions. The one engine that was sold out of the sort of spare parts and equipment I'll call it portfolio versus that the least engine portfolio, just how it lifts the differentiation between this.
Speaker Change: I think, are you referring to the spare parts? Yeah, the $7 million of spare parts?
Thank you. We appreciate it.
Speaker Change: Oh, I'm sorry. Paragraph instead. What you probably saw is if you look at the line item of our financials, it's spare parts and equipment sales.
Right, so...
Or...
Speaker Change: is really effectively like a trading, so it's not a lease asset, not an asset that was on lease. It's an engine or piece of equipment that we bought and ultimately sold and without having it in a lease portfolio. Thank you very much.
Speaker Change: So really what you saw in the quarter was a $2 million step up in that one line item, specifically related to that.
Okay, great. Appreciate that.
Yep.
Speaker Change: Our next question or comment comes from the line of Will Waller with M3. Please go ahead.
Will Waller: of 2024. You mentioned the average, if I heard it right, was 79.9% for the quarter, and then the quarter ended at 86.4%. Is it safe to assume that the GTF engines that affected that at the end of the year weren't leased out until pretty close to the end of the first quarter based on sort of what the average utilization rate was?
Speaker Change: Yeah, no, hey, well, how are you doing? That is a good assumption, right? So I think that if you kind of go back and look like you said or we talk about quite often average utilization and then if you also look at the actual at period ends at the end of the year.
Speaker Change: We're at 76.67% utilization at the end of Q4 and now we're at 86.4 and a lot of that was related.
to some of the GTS that we've picked up. [inaudible]
Speaker Change: Late in the fourth quarter and then over time we've got that portfolio on to Lease and you're right, you know They all didn't go on Lease at one point in time and you know some some of those went on Lease even you know late into the month of March
Speaker Change: And what is the going rate for, say, a GTF or a leap in today's market, and how does that compare with say six months ago?
Speaker Change: So I appreciate the question, but I hope you appreciate for competitive reasons we're not going to get into specific lease rates on assets.
Speaker Change: Okay. And then as it relates to the long-term maintenance revenues, you kind of walk through a number of numbers, and I might have heard something wrong, but there was seven million related to a Chinese airline where some engines came back off a lease. Was that during the quarter, or after the quarter? And...
Sure, so so so
That was a, so...
What that was was in end of Lease.
Speaker Change: So long-term, long-term related and that was recognized in the quarter and cash, cash was received, received subsequent to quarter end.
Speaker Change: Okay, sounds good to that, but it was counted in the long-term maintenance revenue for the first quarter at that $7 million.
Sure, it's a revenue recognition.
Speaker Change: Correct. Okay. Perfect. And then when I look at the liability, the maintenance reserve liability, it grew from year end 97.8 million to about 104.5 million at the end of the first quarter. So that's sort of the additional buildup that's occurring where you're having
Speaker Change: You know, there's some probably leaf extensions that are going on and so on but that's where the buildup is and then eventually that's what will become revenue once the engine's a return correct.
Correct.
Okay, so in a sense, that 104 point.
Speaker Change: 4.5 million. That's in that maintenance reserve liability. Basically, that is the revenue associated with the long-term leases that just haven't been recognized as income yet. Correct? And then it will be recognized once the engines are returned, some more to the seven that the Chinese airline returned.
Speaker Change: So, think about it like this, well, like the short-term component.
are the monthly payments that we are getting.
from the operators for their usage.
Speaker Change: We would never have to give those back, right? So those are the monthly payments.
for long-term
Scott Flaherty, CFO Alphabet and Google
Speaker Change: where the operator chooses not to shop, visit that engine and return it in the condition in which it was provided to them. They give us the engine back in its current state and then we release those maintenance reserves and recognize them as revenues.
Speaker Change: Okay, great. So, those are sort of buildings going away when we're looking at things.
Speaker Change: If there are least extensions going on, which it sounds like in the industry, there's-
There's a...
Speaker Change: a lot higher than normal lease extensions going on. Then you're just going to always kind of have a much higher number that's being deferred and not being recognized as revenue. Whereas if it was a short term lease, you'd be recognizing that all the way along the life of the lease. It wouldn't be one month at the end. [inaudible]
That's correct.
Speaker Change: Okay, and what, you know, the utilization rate changed a decent amount. I think historically, dating back.
Speaker Change: 3 or 6 months ago the last time that you disclosed it about 53% of your leases were long term leases, 47% were short term leases. What is that next at the end of the first quarter? [inaudible]
Speaker Change: Yes, so the mix is pretty similar. We usually keep it in the neighborhood of 50-50 and that short-term lease capability is really one of the drivers that differentiates us and enables us to do what we do both on the programmatic side.
as well as the trading side because...
Speaker Change: That gives us the real-time information on what assets are worth so we can go out and speckled up with the item and put them out on lease. A good example of that is with some of the assets we purchased off lease at the end of the year without having that real-time information, you're not going to be as certain about your ability to get those assets to produce revenue. That's why we're able to get those assets on lease quickly.
Great. Thanks a lot. I appreciate it.
Thanks, Will. Thanks, Will.
Speaker Change: That's Fort Trial and Advisory, but thank you. Great job on the Elise Front Revenue and Maintenance Reserve Revenue Growth this quarter.
Speaker Change: Gentlemen, a few questions first for Scott, and then one to finish up with you, Austin.
Speaker Change: In such a strong environment, just curious why the quarter was so much lower than what you've been averaging the last four quarters and how you're thinking about likely gains on sale flight equipment in the coming quarters for 2025.
Sure.
Speaker Change: Eric, it's always hard to predict and it's hard to time exactly the trading component, but we continue to see significant value in the portfolio and as we've talked about in the past the problem beyond the book value, so it really depends on how we package.
in any period.
Speaker Change: Assets that we are selling. So I think that we would really look to a consistent type margin over the longer term and I wouldn't judge any one specific period to dictate a longer term margin. [inaudible]
Okay.
Speaker Change: All right, moving on to the consultant-related fees, the way the press really reads it says the increasing consultant-related fees predominantly related to the company's sustainable aviation fuel project.
Speaker Change: If this was an increase, is that an 11% increase of what baseline in the prior year? Is it off of zero or is it off of some kind of normal kind of consultancies that are going out the door every quarter? I didn't find much in historical notes and the financials to be able to determine that.
Speaker Change: A lot less material than the aggregate that you're seeing there, and that's why we specifically highlighted that kind of given the fact that it does jump out in that one period.
And if I can add to what Scott's saying,
Speaker Change: Sorry, just to jump in yet, the amounts that we've experienced historically are pretty immaterial. The amounts that we're spending right now, or that we've spent in this first quarter, really represent the line share of what we expect the expense to be for this year.
Speaker Change: And you're saying the line share based on the credits you expect to get back from the UK government or whatever body that is on a net basis, correct?
Speaker Change: Well, we do expect to get a fair amount back from the UK government when they pay us over the next two quarters.
Austin Willis: Yep, okay, great. And then, finally, the last questions for you, Austin. This is a high-level question, but if you look back to year-end 2022 and go out to year-end 2024 where all this data is available
Speaker Change: The owned number of engines that Willis has is up about 4%. The managed engine count is actually down over 14%. But the number of employees is actually up about 60%.
Speaker Change: The question is this, with an asset base in terms of number of assets that hasn't grown much over the last few years, why is it necessary to have 60% more employees?
Speaker Change: Thanks. So, yeah, I mean, if you look at our portfolio by and large, it's considerably larger than it was in 2022, but I get your point on the quantity of assets being owned and managed. A lot of the growth that you're seeing on the GNA side in headcount is really a function of the people that we have in our services businesses. So, you know, leasing has grown somewhat commensurate, but to a lesser extent than the growth in our balance sheet. So, yeah. So, yeah.
Speaker Change: but we have grown as we have built out our engine MRO work US in Florida, our engine MRO in the UK and our aircraft MRO in T-side in the UK as well. So that's the predominant factor.
Speaker Change: And at this time, we have no further signals. I'll turn the floor back to our speakers for any additional or closing remarks.
Speaker Change: of a bifurcated system where assets tend to live their lives more in particular regions. So I just wanted to quickly mention that and thank everybody for taking the time to be with us today.
[inaudible]
Speaker Change: This concludes today's conference. We thank you for your participation. You may disconnect at this time.