Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 12, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-15369 | ||
Entity Registrant Name | WILLIS LEASE FINANCE CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 68-0070656 | ||
Entity Address, Address Line One | 4700 Lyons Technology Parkway | ||
Entity Address, City or Town | Coconut Creek | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33073 | ||
City Area Code | 561 | ||
Local Phone Number | 349-9989 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | WLFC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 124.4 | ||
Entity Common Stock, Shares Outstanding | 6,393,323 | ||
Documents Incorporated by Reference | The Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001018164 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Grant Thornton LLP |
Auditor Location | Cincinnati, Ohio |
Auditor Firm ID | 248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
ASSETS | |||
Cash and cash equivalents | $ 7,071 | $ 12,146 | |
Restricted cash | 160,958 | 76,870 | |
Equipment held for operating lease, less accumulated depreciation of $594,293 and $543,183 at December 31, 2023 and 2022, respectively | 2,112,837 | 2,111,935 | |
Maintenance rights | 9,180 | 17,708 | |
Equipment held for sale | 805 | 3,275 | |
Receivables, net of allowances of $2,311 and $1,511 at December 31, 2023 and 2022, respectively | 58,485 | 46,954 | |
Spare parts inventory | 40,954 | 38,577 | |
Investments | 58,044 | 56,189 | |
Intangible assets, net | 1,040 | 1,129 | |
Notes receivable, net of allowances of $69 and $0 at December 31, 2023 and 2022, respectively | 92,621 | 81,439 | |
Investments in sales-type leases, net of allowances of $9 and $0 at December 31, 2023 and 2022, respectively | 8,759 | 6,440 | |
Other assets | 64,430 | 87,205 | |
Total assets | 2,652,344 | [1] | 2,575,217 |
Liabilities: | |||
Accounts payable and accrued expenses | 52,937 | 43,040 | |
Deferred income taxes | 147,779 | 132,516 | |
Debt obligations | 1,802,881 | 1,847,278 | |
Maintenance reserves | 92,497 | 59,453 | |
Security deposits | 23,790 | 20,490 | |
Unearned revenue | 43,533 | 17,863 | |
Total liabilities | 2,163,417 | [2] | 2,120,640 |
Redeemable preferred stock ($0.01 par value, 2,500 shares authorized; 2,500 shares issued and outstanding at December 31, 2023 and 2022) | 49,964 | 49,889 | |
Shareholders’ equity: | |||
Common stock ($0.01 par value, 20,000 shares authorized; 6,849 and 6,615 shares issued at December 31, 2023 and 2022, respectively) | 68 | 66 | |
Paid-in capital in excess of par | 29,667 | 20,386 | |
Retained earnings | 397,781 | 357,493 | |
Accumulated other comprehensive income, net of income tax expense of $3,215 and $7,587 at December 31, 2023 and 2022, respectively | 11,447 | 26,743 | |
Total shareholders’ equity | 438,963 | 404,688 | |
Total liabilities, redeemable preferred stock and shareholders’ equity | 2,652,344 | 2,575,217 | |
Property, Equipment, and Furnishings | |||
ASSETS | |||
Property, equipment & furnishings, less accumulated depreciation of $19,374 and $16,060 at December 31, 2023 and 2022, respectively | $ 37,160 | $ 35,350 | |
[1] Total assets at December 31, 2023 and 2022 include the following assets of variable interest entities (“VIEs”) that can only be used to settle the liabilities of the VIEs: Restricted cash $160,958 and $76,870; Equipment $1,518,050 and $1,167,970; Maintenance rights $7,806 and $5,433; Notes receivable $91,960 and $80,220; Investments in sales-type leases $3,564 and $0; and Other assets $13,339 and $6,470, respectively. Total liabilities at December 31, 2023 and 2022 include the following liabilities of VIEs for which the VIEs’ creditors do not have recourse to Willis Lease Finance Corporation: Debt obligations $1,411,680 and $1,118,721, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accumulated depreciation for equipment held for operating lease | $ 594,293 | $ 543,183 |
Receivables, allowances | 2,311 | 1,511 |
Notes receivable, allowance | 69 | 0 |
Investments in sales-type leases, allowance | $ 9 | $ 0 |
Redeemable preferred stock - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Redeemable preferred stock - shares authorized (in shares) | 2,500,000 | 2,500,000 |
Redeemable preferred stock - shares outstanding (in shares) | 2,500,000 | 2,500,000 |
Redeemable preferred stock - shares issued (in shares) | 2,500,000 | 2,500,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 6,849,000 | 6,615,000 |
Accumulated other comprehensive income, income tax expense | $ 3,215 | $ 7,587 |
Restricted cash | 160,958 | 76,870 |
Equipment | 2,112,837 | 2,111,935 |
Maintenance rights | 9,180 | 17,708 |
Notes receivable, net of allowances of $69 and $0 at December 31, 2023 and 2022, respectively | 92,621 | 81,439 |
Investments in sales-type leases, net of allowances of $9 and $0 at December 31, 2023 and 2022, respectively | 8,759 | 6,440 |
Other assets | 64,430 | 87,205 |
Debt obligations | 1,802,881 | 1,847,278 |
Variable Interest Entity | ||
Restricted cash | 160,958 | 76,870 |
Equipment | 1,518,050 | 1,167,970 |
Maintenance rights | 7,806 | 5,433 |
Notes receivable, net of allowances of $69 and $0 at December 31, 2023 and 2022, respectively | 91,960 | 80,220 |
Investments in sales-type leases, net of allowances of $9 and $0 at December 31, 2023 and 2022, respectively | 3,564 | 0 |
Other assets | 13,339 | 6,470 |
Debt obligations | 1,411,680 | 1,118,721 |
Property, Equipment, and Furnishings | ||
Accumulated depreciation | $ 19,374 | $ 16,060 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
REVENUE | ||
Interest income | $ 8,721 | $ 7,579 |
Gain on sale of leased equipment | 10,581 | 3,133 |
Gain on sale of financial assets | 0 | 3,116 |
Total revenue | 418,555 | 311,927 |
EXPENSES | ||
Depreciation and amortization expense | 90,925 | 88,260 |
Cost of spare parts and equipment sales | 15,207 | 20,833 |
Write-down of equipment | 4,398 | 21,849 |
General and administrative | 144,788 | 92,530 |
Technical expense | 20,220 | 14,415 |
Net finance costs: | ||
Interest expense | 78,795 | 66,743 |
Gain on debt extinguishment | 0 | (2,558) |
Total net finance costs | 78,795 | 64,185 |
Total expenses | 354,333 | 302,072 |
Income from operations | 64,222 | 9,855 |
Income (loss) from joint ventures | 2,908 | (62) |
Income before income taxes | 67,130 | 9,793 |
Income tax expense | 23,349 | 4,354 |
Net income | 43,781 | 5,439 |
Preferred stock dividends | 3,334 | 3,250 |
Accretion of preferred stock issuance costs | 75 | 84 |
Net income attributable to common shareholders | $ 40,372 | $ 2,105 |
Basic weighted average earnings per common share (in dollars per share) | $ 6.40 | $ 0.35 |
Diluted weighted average earnings per common share (in dollars per share) | $ 6.23 | $ 0.33 |
Basic weighted average common shares outstanding (in shares) | 6,305 | 6,071 |
Diluted weighted average common shares outstanding (in shares) | 6,481 | 6,297 |
Lease rent revenue | ||
REVENUE | ||
Lease rent and maintenance reserve revenue | $ 213,138 | $ 162,571 |
Maintenance reserve revenue | ||
REVENUE | ||
Lease rent and maintenance reserve revenue | 133,668 | 83,424 |
Spare parts and equipment sales | ||
REVENUE | ||
Other sales and revenues | 20,359 | 27,009 |
Other revenue | ||
REVENUE | ||
Other sales and revenues | $ 32,088 | $ 25,095 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 43,781 | $ 5,439 |
Other comprehensive income: | ||
Currency translation adjustment | (523) | (1,373) |
Unrealized (loss) gain on derivative instruments | (18,309) | 27,508 |
Reclassification of gain on derivative instruments to interest expense | (247) | 0 |
Unrealized (loss) gain on derivative instruments at joint venture | (530) | 1,697 |
Net (loss) gain recognized in other comprehensive income | (19,609) | 27,832 |
Tax (benefit) expense related to items of other comprehensive income | (4,313) | 6,120 |
Other comprehensive (loss) income | (15,296) | 21,712 |
Total comprehensive income | $ 28,485 | $ 27,151 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Preferred Stock and Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Paid-in Capital in Excess of Par | Retained Earnings | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive (Loss) Income | Redeemable Preferred Stock |
Balances, beginning of period, redeemable preferred stock (in shares) at Dec. 31, 2021 | 2,500,000 | |||||||
Balances, beginning of period, redeemable preferred stock at Dec. 31, 2021 | $ 49,805 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Accretion of preferred shares issuance costs | $ (84) | $ (84) | $ 84 | |||||
Balances, end of period, redeemable preferred stock (in shares) at Dec. 31, 2022 | 2,500,000 | 2,500,000 | ||||||
Balances, end of period, redeemable preferred stock at Dec. 31, 2022 | $ 49,889 | $ 49,889 | ||||||
Balances, beginning of period, common stock (in shares) at Dec. 31, 2021 | 6,531,000 | |||||||
Balances, beginning of period at Dec. 31, 2021 | 375,885 | $ 65 | $ 15,401 | 355,388 | $ 5,031 | |||
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 5,439 | 5,439 | ||||||
Net unrealized gain (loss) from currency translation adjustment, net of tax (benefit) expense | (1,071) | (1,071) | ||||||
Net unrealized gain (loss) from derivative instruments, net of tax (benefit) expense | 22,783 | 22,783 | ||||||
Shares repurchased (in shares) | (154,215) | |||||||
Shares repurchased | (5,245) | $ (1) | (5,244) | |||||
Shares issued under stock compensation plans (in shares) | 350,000 | |||||||
Shares issued under stock compensation plans | 335 | $ 2 | 333 | |||||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (112,000) | |||||||
Cancellation of restricted stock units in satisfaction of withholding tax | (3,655) | $ 0 | (3,655) | |||||
Stock-based compensation, net of forfeitures | 13,551 | 13,551 | ||||||
Accretion of preferred shares issuance costs | (84) | (84) | 84 | |||||
Preferred stock dividends | $ (3,250) | (3,250) | ||||||
Balances, ending of period, common stock (in shares) at Dec. 31, 2022 | 6,615,000 | 6,615,000 | ||||||
Balances, end of period at Dec. 31, 2022 | $ 404,688 | $ (84) | $ 66 | 20,386 | 357,493 | $ (84) | 26,743 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Accretion of preferred shares issuance costs | $ (75) | (75) | $ 75 | |||||
Balances, end of period, redeemable preferred stock (in shares) at Dec. 31, 2023 | 2,500,000 | 2,500,000 | ||||||
Balances, end of period, redeemable preferred stock at Dec. 31, 2023 | $ 49,964 | $ 49,964 | ||||||
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 43,781 | 43,781 | ||||||
Net unrealized gain (loss) from currency translation adjustment, net of tax (benefit) expense | (408) | (408) | ||||||
Net unrealized gain (loss) from derivative instruments, net of tax (benefit) expense | (14,696) | (14,696) | ||||||
Net realized gain from derivative instruments, net of tax expense of $55 | (192) | (192) | ||||||
Shares issued under stock compensation plans (in shares) | 345,000 | |||||||
Shares issued under stock compensation plans | 274 | $ 3 | 271 | |||||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (111,000) | |||||||
Cancellation of restricted stock units in satisfaction of withholding tax | (5,793) | $ (1) | (5,792) | |||||
Stock-based compensation, net of forfeitures | 14,802 | 14,802 | ||||||
Accretion of preferred shares issuance costs | (75) | (75) | $ 75 | |||||
Preferred stock dividends | $ (3,334) | (3,334) | ||||||
Balances, ending of period, common stock (in shares) at Dec. 31, 2023 | 6,849,000 | 6,849,000 | ||||||
Balances, end of period at Dec. 31, 2023 | $ 438,963 | $ 68 | $ 29,667 | $ 397,781 | $ 11,447 |
Consolidated Statements of Re_2
Consolidated Statements of Redeemable Preferred Stock and Shareholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Net unrealized loss from currency translation adjustments, tax benefit | $ 115,000 | $ 302,000 |
Net unrealized gain from derivative instruments, tax expense | 4,143,000 | $ 6,421,000 |
Net realized gain from derivative instruments, tax expense | $ 55,000 | |
Preferred stock, dividends (in dollars per share) | $ 1.33 | $ 1.30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 43,781 | $ 5,439 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 90,925 | 88,260 |
Write-down of equipment | 4,398 | 21,849 |
Stock-based compensation expense | 14,802 | 13,551 |
Accretion of deferred costs and note discounts | 6,150 | 5,319 |
Allowances and provisions | 838 | 837 |
Payments received on sales-type leases | 4,570 | 584 |
Gain on sale of leased equipment | (10,581) | (3,133) |
Gain on insurance proceeds | (761) | 0 |
Gain on derivative instruments | (247) | 0 |
Gain on sale of financial assets | 0 | (3,116) |
Gain on debt extinguishment | 0 | (2,558) |
Income from joint ventures | (2,908) | 62 |
Loss (gain) on disposal of property, equipment and furnishings | 9 | (71) |
Deferred income taxes | 19,652 | 2,065 |
Changes in assets and liabilities: | ||
Receivables | (17,375) | (3,168) |
Inventory | (1,710) | 14,288 |
Other assets | 3,247 | (5,617) |
Accounts payable and accrued expenses | 17,154 | 942 |
Maintenance reserves | 32,159 | 2,372 |
Security deposits | 3,300 | 2,372 |
Unearned revenue | 22,334 | 4,147 |
Net cash provided by operating activities | 229,737 | 144,424 |
Cash flows from investing activities: | ||
Purchase of equipment held for operating lease and for sale | (163,640) | (286,393) |
Proceeds from sale of equipment (net of selling expenses) | 85,061 | 69,238 |
Proceeds from sale of note receivable (net of selling expenses) | 0 | 40,705 |
Issuance of notes receivable | (15,397) | (15,270) |
Purchase of property, equipment and furnishings | (5,140) | (6,630) |
Payments received on notes receivable | 4,147 | 3,974 |
Insurance proceeds received on equipment | 2,189 | 0 |
Net cash used in investing activities | (92,780) | (194,376) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt obligations | 625,727 | 284,000 |
Principal payments on debt obligations | (665,480) | (228,840) |
Repurchase of common stock | 0 | (5,245) |
Cancellation of restricted stock units in satisfaction of withholding tax | (5,793) | (3,655) |
Preferred stock dividends | (3,241) | (3,268) |
Proceeds from shares issued under stock compensation plans | 274 | 335 |
Debt issuance costs | (9,431) | 0 |
Net cash (used in) provided by financing activities | (57,944) | 43,327 |
Increase (decrease) in cash, cash equivalents and restricted cash | 79,013 | (6,625) |
Cash, cash equivalents and restricted cash at beginning of period | 89,016 | 95,641 |
Cash, cash equivalents and restricted cash at end of period | 168,029 | 89,016 |
Net cash paid for: | ||
Interest | 76,913 | 63,544 |
Income Taxes | 505 | 2,242 |
Supplemental disclosures of non-cash activities: | ||
Transfers from Equipment held for operating lease to Investments in sales-type leases | 6,898 | 0 |
Transfers from Equipment held for operating lease to Equipment held for sale | 1,901 | 7,183 |
Transfers from Equipment held for operating lease to Spare parts inventory | 667 | 1,906 |
Transfers from Equipment held for sale to Equipment held for operating lease | 0 | 542 |
Non-cash additions to Equipment held for operating lease | 2,817 | 1,148 |
Accretion of preferred stock issuance costs | $ 75 | $ 84 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Unless the context requires otherwise, references to the “Company,” “WLFC,” “we,” “us” or “our” in these consolidated financial statements on Form 10-K refer to Willis Lease Finance Corporation and its subsidiaries. (a) Organization Willis Lease Finance Corporation with its subsidiaries is a provider of aviation services whose primary focus is providing operating leases of commercial aircraft, aircraft engines and other aircraft-related equipment to air carriers, manufacturers and overhaul/repair facilities worldwide. The Company also engages in the selective purchase and resale of commercial aircraft engines. Willis Aeronautical Services, Inc. (“Willis Aero”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft engines. Willis Asset Management Limited (“Willis Asset Management”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the engine management and consulting business. Willis Engine Securitization Trust III (“WEST III” or the “WEST III Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an asset-backed securitization (“ABS”), of which the Company is the sole beneficiary. WEST III is a variable interest entity (“VIE”) which the Company owns 100% of the interest and consolidates in its financial statements. Willis Engine Securitization Trust IV (“WEST IV” or the “WEST IV Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST IV is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. Willis Engine Structured Trust V (“WEST V” or the “WEST V Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST V is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. Willis Engine Securitization Trust VI (“WEST VI” or the “WEST VI Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST VI is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. In October 2023, the Company and its direct, wholly-owned subsidiary, Willis Engine Structured Trust VII (“WEST VII”), closed its offering of $410.0 million aggregate principal amount of fixed rate notes (the “WEST VII Notes”). WEST VII is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST VII is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. Principal and interest on the WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes are payable monthly to the extent of available cash in accordance with a priority of payments included in the respective indenture agreements. The WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes are secured by, among other things, the respective ABS’s direct and indirect interests in a portfolio of assets. The WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes have scheduled amortizations and are payable solely from revenue received from the lease portfolios, after payment of certain expenses of the respective ABS. The assets of WEST III, WEST IV, WEST V, WEST VI, and WEST VII are not available to satisfy the Company’s obligations other than the obligations specific to the respective ABS. WEST III, WEST IV, WEST V, WEST VI, and WEST VII are consolidated for financial statement presentation purposes, with the respective assets and liabilities on the Company’s Consolidated Balance Sheets. Each ABS’s ability to make distributions and pay dividends to the Company is subject to the prior payments of its debt and other obligations and maintenance of adequate reserves and capital. Under each ABS, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of the maintenance reserve payments and lease security deposits are formulaically accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Additionally, in connection with WEST III, WEST IV, WEST V, WEST VI, and WEST VII, the Company entered into servicing agreements and administrative agency agreements to provide certain engine, lease management and reporting functions in return for fees based on a percentage of collected lease revenues and asset sales. Because WEST III, WEST IV, WEST V, WEST VI, and WEST VII are consolidated for financial statement reporting purposes, all fees eliminate upon consolidation. (b) Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of WLFC and its wholly-owned subsidiaries, including VIEs in which the Company is the primary beneficiary, in accordance with consolidation guidance. The Company first evaluates all entities in which it has an economic interest to determine whether for accounting purposes the entity is either a VIE or voting interest entity. If the entity is a VIE, the Company consolidates the financial statements of that entity if it is the primary beneficiary of such entities’ activities. If the entity is a voting interest entity, the Company consolidates the entity when it has a majority of voting interests in such entity. Intercompany transactions and balances have been eliminated in consolidation. (c) Revenue Recognition Leasing revenue Revenue from leasing of engines, aircraft and related parts and equipment is recognized as operating lease revenue on a straight-line basis over the terms of the applicable lease agreements. Revenue is not recognized when cash collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status, and revenue is recognized when cash payments are received. Under the terms of some of the Company’s leases, the lessees pay use fees (also known as maintenance reserves) to the Company based on usage of the leased asset, which are designed to cover expected future maintenance costs. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures. Use fees received are recognized in revenue as maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are recorded as a maintenance reserve liability until they are reimbursed to the lessee, the lease terminates, or the obligation to reimburse the lessee for such reserves ceases to exist, at which time they are recognized in revenue as maintenance reserve revenue. Unearned Revenue includes deferred nonrefundable use fees which qualify as in-substance fixed lease payments due to the lessee’s requirement to make certain minimum payments. These in-substance fixed lease payments are recognized ratably over the expected lease term rather than when the variable use fees are invoiced. As of December 31, 2023 and 2022, there were $28.4 million and $6.3 million, respectively, of deferred in-substance fixed payment use fees included in Unearned Revenue. Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2023, the Company had an aggregate of approximately $10.5 million in lease rent and $8.9 million in maintenance reserve receivables more than 30 days past due. Inability to collect receivables or to repossess engines or other leased equipment in the event of a default by a lessee could have a material adverse effect on the Company. The Company estimates an allowance for doubtful accounts for receivables it does not consider fully collectible. The allowance for doubtful accounts includes the following: (1) specific reserves for receivables which are impaired for which management believes full collection is doubtful, and (2) a general reserve for estimated losses based on historical experience. The Company also estimates an allowance for credit losses. Receivables, net of allowances, include amounts billed to customers in which the right to payment is unconditional. The Company maintains an allowance for trade receivables to provide for the estimated amount that will not be collected, even when the risk of loss is remote. The allowance is measured on a collective pool basis when similar risk characteristics exist and is established as a percentage of accounts receivable. The percentage is based on all available and relevant information including age of outstanding receivables, historical payment experience and loss history, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions. A write-off is recorded when all or part of the receivable is deemed uncollectible. Write-offs are charged against the previously established allowance for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowance for credit losses. Notes receivable and investments in sales-type leases, net of allowances, represent the current remaining balances that the Company expects to collect for failed sale-leaseback transactions and sales-type leases. The Company establishes allowances for credit losses to cover probable but specifically unknown losses existing in the portfolio. In doing so, the Company categorizes financial assets by pools with similar risk characteristics, including whether the financial asset is collateral-backed and whether the customer is placed on non-accrual status. A write-off is recorded when all or part of the financial asset is deemed uncollectible. Write-offs are charged against previously established allowances for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowances for credit losses. One customer accounted for more than 10% of total lease rent revenue during the years ended December 31, 2023 and 2022. One customer accounted for more than 10% of total receivables during the year ended December 31, 2023. Spare parts sales The Spare Parts Sales reportable segment primarily engages in the sale of aircraft engine parts and materials through the acquisition or consignment of engines from third parties or the Company’s leasing operations. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, the buyer is responsible for any loss in transit, and the Company has a legal right to payment for the spare parts. Management has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) 606-10-5-86. The spare parts transaction price is a fixed dollar amount and is stated on each purchase order for a fixed amount by total number of parts. Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and, as a result, all of the transaction price is allocated to that performance obligation. Management has determined that it is appropriate for the Company to recognize spare parts sales at a point in time ( i.e. , the date the parts are shipped) under ASC 606. Equipment sales Equipment sales represent the selective purchase and resale of commercial aircraft engines and other aircraft equipment. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, payment terms, condition of the asset, bill of sale, and the assignment of rights and warranties from the Company to the customer. Management has identified the promise in the equipment sale contract to be the transfer of ownership of the asset. Management believes that the asset holds stand-alone value to the customer as it is not dependent on any other services for functionality purposes, and therefore is distinct within the context of the contract and as described in ASC 606-10. As such, management has identified the transfer of the asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of assets) and is explicitly stated in each contract. Equipment sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer to be the date that the customer obtains control and title over the asset and the date which revenue is to be recognized and payment is due. Managed services Managed services revenue predominantly represents fleet management and engine storage services which may be combined on a single contract with a customer. Fleet management services are performed for a stated fixed fee as agreed upon in the services agreement. Engine storage services are for a fixed monthly fee. For a contract containing more than one performance obligation, the allocation of the transaction price is generally performed on the basis of the relative stand-alone selling price of each distinct good or service in the contract. As each of the services provided within the contract have separate prices, the Company allocates the price to its related performance obligation described above. Management has determined that each of the revenue elements contain performance obligations that are satisfied over time and therefore recognizes revenue over time in accordance with ASC 606-10-25-27. The Company utilizes the percentage-of-completion method (input method) for recognizing fleet management services and will calculate revenues based on labor hours incurred. Additionally, as is required by ASC 606-10-25-35, as circumstances change over time, the Company will update its measure of progress to reflect any changes in the outcome of the performance obligation. Engine storage services are recognized on a monthly basis, utilizing the input method of days passed. Amounts owed for managed services are typically billed upon contract completion. At December 31, 2023, unbilled revenue was $1.7 million, and the Company expects the remaining revenue to be fully recognized by June 30, 2024. Additionally, managed services are presented within the Other revenue line in the Consolidated Statements of Income. Interest income Interest income represents interest earned on notes receivable related to failed sale-leasebacks in which the Company was the buyer-lessor and on sales-type leases. Gain on sale of leased equipment The Company regularly sells equipment from its lease portfolio. This equipment may or may not be subject to a lease at the time of sale. The net gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the equipment are not included in the sale, any such amount is included in the calculation of gain or loss. Gain on sale of financial assets Some of the Company’s leases are recorded as financial assets and classified as notes receivable under ASC 842 as they are failed sale-leaseback transactions. The Company may sell its engines that are classified as notes receivable, and the net gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the equipment are not included in the sale, any such amount is included in the calculation of gain or loss. Other revenue Other revenue consists primarily of management fee income, lease administration fees, third-party consignment commissions earned, service and maintenance fee revenue, revenue related to the management of fixed base operator services, and other discrete revenue items. (d) Equipment Held for Operating Lease Aircraft assets held for operating lease are stated at cost, less accumulated depreciation. Certain costs incurred in connection with the acquisition of aircraft assets are capitalized as part of the cost of such assets. Major overhauls paid for by the Company, which improve functionality or extend the original useful life, are capitalized and depreciated over the shorter of the estimated period to the next overhaul (“deferral method”) or the remaining useful life of the equipment. The Company does not accrue for planned major maintenance. The cost of overhauls of aircraft assets under long-term leases, for which the lessee is responsible for maintenance during the period of the lease, are paid for by the lessee or from reimbursable maintenance reserves paid to the Company in accordance with the lease and are not capitalized. Based on specific aspects of the equipment, the Company generally depreciates engines on a straight-line basis over a 15-year period from the acquisition date to a 55% residual value. This methodology is believed to accurately reflect the Company’s typical holding period for the engine assets and that the residual value assumption reasonably approximates the selling price of the assets 15 years from the date of acquisition. The typical 15-year holding period is the estimated useful life of the Company’s engines based on its business model and plans and represents how long the Company anticipates holding a newly acquired engine. The technical useful life of a new engine can be in excess of 25 years. The Company reviews the useful lives and residual values of all engines periodically as demand changes to accurately depreciate the cost of equipment over the useful lives of the engines. The aircraft and airframes owned by the Company are generally depreciated on a straight-line basis over an estimated useful life of 13 to 20 years to a 17% residual value. The marine vessel owned by the Company is depreciated on a straight-line basis over an estimated useful life of 18 years to a 15% residual value. The other leased parts and related equipment owned by the Company are generally depreciated on a straight-line basis over an estimated useful life of 14 to 15 years to a 25% residual value. The useful lives of older generation engines and aircraft may be significantly less based upon the technical status of the engine, as well as supply and demand factors. For these older generation engines and aircraft, the remaining useful lives and the remaining expected holding periods are typically the same. For older generation engines or aircraft that are unlikely to be repaired at the end of the current expected useful lives, the Company depreciates the engines or aircraft over their estimated lives to a residual value based on an estimate of the wholesale value of the parts after disassembly. As of December 31, 2023, 24 engines having a net book value of $17.2 million were depreciated under this policy with estimated remaining useful lives ranging from 1 to 83 months. The Company adjusts its estimates annually for these older generation assets, including updating estimates of an engine’s or aircraft’s remaining operating life as well as future residual value expected from part-out based on the current technical status of the engine or aircraft. The Company reviews its long-lived assets, including certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under ASC 842, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets to be disposed are reported at the lower of carrying amount or fair value less cost to sell. Impairment is identified by review of appraisals or by comparison of undiscounted forecasted cash flows, including estimated sales proceeds, over the life of the asset with the assets’ book value. If the undiscounted forecasted cash flows are less than the book value, the asset is written down to its fair value. Fair value is determined per individual asset by reference to independent appraisals, quoted market prices ( e.g. , an offer to purchase) and other factors considered relevant by the Company. The Company evaluates assets during the year if a triggering event is identified indicating impairment is possible and also conducts a formal annual review of the carrying values of long-lived assets. The formal annual review resulted in $2.0 million in impairment charge in 2023 and no impairment charge in 2022. Additionally, the Company recorded impairment charges of $2.4 million and $21.8 million in 2023 and 2022, respectively, as a result of triggering events occurring during the year. These write-downs are included in “Write-down of equipment” in the Consolidated Statements of Income. (e) Equipment Held for Sale Equipment held for sale includes assets being marketed for sale as well as third-party consigned assets. The assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell. (f) Debt Issuance Costs and Related Fees Fees paid in order to secure debt are capitalized, included in Debt obligations on the Consolidated Balance Sheets, and amortized over the life of the related loan using the effective interest method. Interest expense related to the accretion of debt issuance costs and note discounts was $4.8 million and $4.4 million in 2023 and 2022, respectively. (g) Interest Rate Hedging The Company enters into various derivative instruments periodically to mitigate the exposure on variable rate borrowings. The derivative instruments are fixed-rate interest swaps that are recorded at fair value as either an asset or liability. While substantially all of the Company’s derivative transactions are entered into for the purposes described above, hedge accounting is only applied when specific criteria have been met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and it must be highly effective. The hedging instrument’s effectiveness is assessed utilizing both a dollar offset and regression testing approach at the inception of the hedge and either a dollar offset and regression testing approach or qualitative analysis on at least a quarterly basis throughout its life. All of the transactions that the Company has designated as hedges are cash flow hedges. The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings. The ineffective portion of the hedges is recorded in earnings in the current period. (h) Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date. The Company recognizes in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 8). The Company files income tax returns in various states and countries which may have different statutes of limitations. The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Such adjustments have historically been minimal and immaterial to our financial results. (i) Property, Equipment and Furnishings Property, equipment and furnishings are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three (j) Cash and Cash Equivalents The Company considers highly liquid investments readily convertible into known amounts of cash, with original maturities of 90 days or less, as cash equivalents. (k) Restricted Cash The Company has certain bank accounts that are subject to restrictions in connection with its WEST III, WEST IV, WEST V, WEST VI, and WEST VII notes payable. Under these borrowings, cash is collected in restricted accounts, which are used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of projected maintenance obligations and some or all of the lease security deposits are accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Under WEST III, cash equal to a portion of the projected maintenance obligations for the subsequent nine months is held in a restricted account and is subject to a minimum balance of $9.4 million. Under WEST IV, cash equal to a portion of the projected maintenance obligations for the subsequent ten months is held in a restricted account and is subject to a minimum balance of $4.5 million. Under WEST V, cash equal to a portion of the projected maintenance obligations for the subsequent twelve months is held in a restricted account and is subject to a minimum balance of $5.0 million. Under WEST VI and WEST VII, cash equal to a portion of the projected maintenance obligations for the subsequent twelve months is held in a restricted account and is subject to a minimum balance of $1.0 million. Under WEST III, WEST IV, WEST V, and WEST VII, security deposits are held in restricted accounts equal to a portion of the security deposits for leases scheduled to terminate over the subsequent four months, in each case, subject to a minimum balance of $1.0 million. Under WEST VI, all security deposits for leases scheduled to terminate before the expected maturity date of the notes are held in a restricted account, subject to a minimum balance of $1.0 million. Provided lease return conditions have been met, these deposits will be returned to the lessee. To the extent return conditions are not met, these deposits may be retained by the Company. The Company had total cash and cash equivalents and restricted cash, as presented in the Consolidated Statements of Cash Flows, as follows: December 31, 2023 2022 (in thousands) Cash and cash equivalents $ 7,071 $ 12,146 Restricted cash 160,958 76,870 Total as presented in the consolidated statements of cash flows $ 168,029 $ 89,016 (l) Spare Parts Inventory Spare parts inventory consists of spare aircraft and engine parts purchased either directly by Willis Aero and also engines removed from the lease portfolio to be parted out. Spare parts inventory is stated at lower of cost or net realizable value. An impairment charge for excess or inactive inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns, future sales expectations, and salvage value. (m) Intangible Assets Intangible assets include customer relationships and goodwill at Willis Asset Management. Intangible assets are accounted for in accordance with ASC 350, “Intangibles — Goodwill and Other.” Customer relationships are amortized on a straight-line basis over their estimated useful life of eight years. Aside from goodwill, the Company has no intangible assets with indefinite useful lives. Goodwill is assessed for impairment annually, at each year end. (n) Other Assets Other assets typically include prepaid purchase deposits and other prepaid expenses. As of December 31, 2023 and 2022, other assets included prepaid deposits of $5.8 million and $7.0 million, respectively, relating to commitments to purchase equipment. (o) Management Estimates These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S.”). The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management evaluates estimates on an ongoing basis, including those related to residual values, estimated asset lives, impairments, bad debts and credit losses. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the accounting policies on revenue recognition, useful life of equipment, asset residual values, asset impairment, allowance for doubtful accounts, and allowance for credit losses are critical to the results of operations. If the useful lives or residual values are lower than those estimated, upon sale of the asset a loss may be realized. Significant management judgment is required in the forecasting of future operating results, which are used in the preparation of projected undiscounted cash flows and should different conditions prevail, material impairment write-downs may occur. (p) Earnings Per Share Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of shares outstanding, adjusted for the dilutive effect of unvested restricted stock awards (“RSAs”). See Note 10 for more information on the computation of earnings per share. (q) Investments The Company’s investments are joint ventures, in which it owns 50% of the equity of the ventures and are accounted for using the equity method of accounting. The investments are recorded at the amount invested plus or minus our 50% share of net income or loss, less any distributions or return of capital received from the entities. (r) Stock-Based Compensation The Company recognizes stock-based compensation expense in the financial statements for share-based awards based on the grant-date fair value of those awards. Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. Forfeitures are accounted for as they occur. (s) Initial Direct Costs Associated with Leases The Company accounts for the initial direct costs, including sales commissions, incurred in obtaining a new lease by deferring and amortizing those costs over the term of the lease. The amortization of these costs is recorded under general and administrative expenses in the Consolidated Statements of Income. The amounts amortized were $1.4 million and $0.9 million for the years ended December 31, 2023 and 2022, respectively. (t) Maintenance Rights The Company identifies, measures and accounts for maintenance right assets and liabilities associated with acquisitions of equipment with in-place leases. A maintenance right asset represents the fair value of the contractual right under a lease to receive equipment in an improved maintenance condition as compared to the maintenance condition on the acquisition date. A maintenance right liability represents the Company’s obligation to pay the lessee for the difference between the lease-end contractual maintenance condition of the equipment and the actual main |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases As lessor, and as of December 31, 2023, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under the guidance provided by ASC 842. As lessee, the significant majority of leases the Company enters are for real estate (office and warehouse space for our operations) as well as automobiles. These lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, in 2022, the Company subleased a Willis Mitsui & Company Engine Support Limited (“WMES”) engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a right-of-use (“ROU”) asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022. Leases with terms of 12 months or less are not recorded on the Consolidated Balance Sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include variable non-lease components ( e.g. , taxes) which are not separated from associated lease components ( e.g. , fixed rent, common-area maintenance costs, vehicle protection plans and other service fees) as elected under the practical expedient package provided by ASC 842. The Company’s leases have remaining lease terms of approximately one one Supplemental information to the Consolidated Balance Sheets related to leases was as follows: Leases Classification December 31, 2023 December 31, 2022 (in thousands, except lease term and discount rate) Assets Operating lease right-of-use assets Other assets $ 8,652 $ 11,382 Liabilities Lease liabilities Accounts payable and accrued expenses $ 7,941 $ 10,365 Weighted average remaining lease term (years) Operating leases 2.90 3.45 Weighted average discount rate Operating leases 4.6 % 4.9 % The weighted average discount rate is based on the incremental borrowing rate for each lease and the remaining balance of the lease payments for each lease at the reporting date. Future maturities of the Company’s lease liabilities at December 31, 2023 are as follows: Year (in thousands) 2024 $ 3,341 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 Total lease payments 8,599 Less: interest (658) Total lease liabilities $ 7,941 The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2023: Year (in thousands) 2024 $ 3,363 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 $ 8,621 The components of lease expense were as follows: Years Ended December 31, Lease expense Classification 2023 2022 (in thousands) Operating lease cost General and administrative $ 3,709 $ 1,692 Net lease cost $ 3,709 $ 1,692 Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,327 $ 1,388 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 307 $ 6,478 |
Leases | Leases As lessor, and as of December 31, 2023, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under the guidance provided by ASC 842. As lessee, the significant majority of leases the Company enters are for real estate (office and warehouse space for our operations) as well as automobiles. These lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, in 2022, the Company subleased a Willis Mitsui & Company Engine Support Limited (“WMES”) engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a right-of-use (“ROU”) asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022. Leases with terms of 12 months or less are not recorded on the Consolidated Balance Sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include variable non-lease components ( e.g. , taxes) which are not separated from associated lease components ( e.g. , fixed rent, common-area maintenance costs, vehicle protection plans and other service fees) as elected under the practical expedient package provided by ASC 842. The Company’s leases have remaining lease terms of approximately one one Supplemental information to the Consolidated Balance Sheets related to leases was as follows: Leases Classification December 31, 2023 December 31, 2022 (in thousands, except lease term and discount rate) Assets Operating lease right-of-use assets Other assets $ 8,652 $ 11,382 Liabilities Lease liabilities Accounts payable and accrued expenses $ 7,941 $ 10,365 Weighted average remaining lease term (years) Operating leases 2.90 3.45 Weighted average discount rate Operating leases 4.6 % 4.9 % The weighted average discount rate is based on the incremental borrowing rate for each lease and the remaining balance of the lease payments for each lease at the reporting date. Future maturities of the Company’s lease liabilities at December 31, 2023 are as follows: Year (in thousands) 2024 $ 3,341 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 Total lease payments 8,599 Less: interest (658) Total lease liabilities $ 7,941 The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2023: Year (in thousands) 2024 $ 3,363 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 $ 8,621 The components of lease expense were as follows: Years Ended December 31, Lease expense Classification 2023 2022 (in thousands) Operating lease cost General and administrative $ 3,709 $ 1,692 Net lease cost $ 3,709 $ 1,692 Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,327 $ 1,388 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 307 $ 6,478 As of December 31, 2023, the Company had $2,112.8 million of equipment held in our operating lease portfolio, $92.6 million of notes receivable, $9.2 million of maintenance rights, and $8.8 million of investments in sales-type leases, which represented 337 engines, 12 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2022, the Company had $2,111.9 million of equipment held in our operating lease portfolio, $81.4 million of notes receivable, $17.7 million of maintenance rights, and $6.4 million of investments in sales-type leases, which represented 339 engines, 13 aircraft, one marine vessel and other leased parts and equipment. The following table disaggregates equipment held for operating lease by asset class (in thousands): As of December 31, 2023 2022 Gross value Accumulated depreciation Net book value Gross value Accumulated depreciation Net book value (in thousands) Engines and related equipment $ 2,535,148 $ (569,596) $ 1,965,552 $ 2,491,448 $ (525,172) $ 1,966,276 Aircraft and airframes 157,616 (21,409) 136,207 150,089 (15,543) 134,546 Marine vessel 14,366 (3,288) 11,078 13,581 (2,468) 11,113 $ 2,707,130 $ (594,293) $ 2,112,837 $ 2,655,118 $ (543,183) $ 2,111,935 Notes Receivable and Investments in Sales-Type Leases During the years ended December 31, 2023 and 2022, the Company recorded interest income related to the notes receivable and investments in sales-type leases of $8.7 million and $7.6 million, respectively. The effective interest rates on our notes receivable and investments in sales-type leases ranged from 7.1% to 12.2% as of December 31, 2023 and 7.1% to 12.2% as of December 31, 2022. A majority of the equipment is leased and operated internationally. Substantially all leases relating to this equipment are denominated and payable in U.S. dollars. The Company leases equipment to lessees domiciled in seven geographic regions. The tables below set forth geographic information about the leased equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location): Years Ended December 31, Lease rent revenue 2023 2022 Region (in thousands) United States $ 71,436 $ 64,767 Asia-Pacific 69,692 40,270 Europe 43,790 35,621 South America 17,375 12,246 Canada 8,293 5,083 Central America 1,921 3,391 Middle East 631 1,193 Totals $ 213,138 $ 162,571 As of December 31, Net book value of equipment held for operating lease 2023 2022 Region (in thousands) Asia-Pacific $ 530,309 $ 485,737 United States 464,088 471,184 Europe 443,901 353,661 South America 136,917 141,145 Canada 109,056 69,030 Central America 43,192 130,187 Middle East 42,965 42,853 Off-lease 342,409 418,138 Totals $ 2,112,837 $ 2,111,935 As of December 31, 2023, the lease status of the equipment held for operating lease (in thousands) was as follows: Lease Term Net Book Value Off-lease and other $ 342,409 Month-to-month leases 360,550 Leases expiring 2024 613,557 Leases expiring 2025 230,389 Leases expiring 2026 180,004 Leases expiring 2027 105,166 Leases expiring 2028 118,635 Leases expiring thereafter 162,127 $ 2,112,837 As of December 31, 2023, minimum future payments under non-cancelable leases were as follows: Year (in thousands) 2024 $ 158,408 2025 78,803 2026 50,926 2027 36,122 2028 6,431 Thereafter 45,031 $ 375,721 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following tables disaggregate revenue by major source for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 Leasing and Spare Parts Sales Eliminations Total Lease rent revenue $ 213,138 $ — $ — $ 213,138 Maintenance reserve revenue 133,668 — — 133,668 Spare parts and equipment sales 476 19,883 — 20,359 Interest income 8,721 — — 8,721 Gain on sale of leased equipment 10,581 — — 10,581 Gain on sale of financial assets — — — — Managed services 29,246 — — 29,246 Other revenue 2,364 689 (211) 2,842 Total revenue $ 398,194 $ 20,572 $ (211) $ 418,555 Year ended December 31, 2022 Leasing and Spare Parts Sales Eliminations Total Lease rent revenue $ 162,571 $ — $ — $ 162,571 Maintenance reserve revenue 83,424 — — 83,424 Spare parts and equipment sales 1,595 25,414 — 27,009 Interest income 7,579 — — 7,579 Gain on sale of leased equipment 3,133 — — 3,133 Gain on sale of financial assets 3,116 — — 3,116 Managed services 23,613 — — 23,613 Other revenue 994 673 (185) 1,482 Total revenue $ 286,025 $ 26,087 $ (185) $ 311,927 |
Equipment Held for Operating Le
Equipment Held for Operating Lease | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Equipment Held for Operating Lease | Leases As lessor, and as of December 31, 2023, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under the guidance provided by ASC 842. As lessee, the significant majority of leases the Company enters are for real estate (office and warehouse space for our operations) as well as automobiles. These lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, in 2022, the Company subleased a Willis Mitsui & Company Engine Support Limited (“WMES”) engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a right-of-use (“ROU”) asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022. Leases with terms of 12 months or less are not recorded on the Consolidated Balance Sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include variable non-lease components ( e.g. , taxes) which are not separated from associated lease components ( e.g. , fixed rent, common-area maintenance costs, vehicle protection plans and other service fees) as elected under the practical expedient package provided by ASC 842. The Company’s leases have remaining lease terms of approximately one one Supplemental information to the Consolidated Balance Sheets related to leases was as follows: Leases Classification December 31, 2023 December 31, 2022 (in thousands, except lease term and discount rate) Assets Operating lease right-of-use assets Other assets $ 8,652 $ 11,382 Liabilities Lease liabilities Accounts payable and accrued expenses $ 7,941 $ 10,365 Weighted average remaining lease term (years) Operating leases 2.90 3.45 Weighted average discount rate Operating leases 4.6 % 4.9 % The weighted average discount rate is based on the incremental borrowing rate for each lease and the remaining balance of the lease payments for each lease at the reporting date. Future maturities of the Company’s lease liabilities at December 31, 2023 are as follows: Year (in thousands) 2024 $ 3,341 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 Total lease payments 8,599 Less: interest (658) Total lease liabilities $ 7,941 The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2023: Year (in thousands) 2024 $ 3,363 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 $ 8,621 The components of lease expense were as follows: Years Ended December 31, Lease expense Classification 2023 2022 (in thousands) Operating lease cost General and administrative $ 3,709 $ 1,692 Net lease cost $ 3,709 $ 1,692 Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,327 $ 1,388 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 307 $ 6,478 As of December 31, 2023, the Company had $2,112.8 million of equipment held in our operating lease portfolio, $92.6 million of notes receivable, $9.2 million of maintenance rights, and $8.8 million of investments in sales-type leases, which represented 337 engines, 12 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2022, the Company had $2,111.9 million of equipment held in our operating lease portfolio, $81.4 million of notes receivable, $17.7 million of maintenance rights, and $6.4 million of investments in sales-type leases, which represented 339 engines, 13 aircraft, one marine vessel and other leased parts and equipment. The following table disaggregates equipment held for operating lease by asset class (in thousands): As of December 31, 2023 2022 Gross value Accumulated depreciation Net book value Gross value Accumulated depreciation Net book value (in thousands) Engines and related equipment $ 2,535,148 $ (569,596) $ 1,965,552 $ 2,491,448 $ (525,172) $ 1,966,276 Aircraft and airframes 157,616 (21,409) 136,207 150,089 (15,543) 134,546 Marine vessel 14,366 (3,288) 11,078 13,581 (2,468) 11,113 $ 2,707,130 $ (594,293) $ 2,112,837 $ 2,655,118 $ (543,183) $ 2,111,935 Notes Receivable and Investments in Sales-Type Leases During the years ended December 31, 2023 and 2022, the Company recorded interest income related to the notes receivable and investments in sales-type leases of $8.7 million and $7.6 million, respectively. The effective interest rates on our notes receivable and investments in sales-type leases ranged from 7.1% to 12.2% as of December 31, 2023 and 7.1% to 12.2% as of December 31, 2022. A majority of the equipment is leased and operated internationally. Substantially all leases relating to this equipment are denominated and payable in U.S. dollars. The Company leases equipment to lessees domiciled in seven geographic regions. The tables below set forth geographic information about the leased equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location): Years Ended December 31, Lease rent revenue 2023 2022 Region (in thousands) United States $ 71,436 $ 64,767 Asia-Pacific 69,692 40,270 Europe 43,790 35,621 South America 17,375 12,246 Canada 8,293 5,083 Central America 1,921 3,391 Middle East 631 1,193 Totals $ 213,138 $ 162,571 As of December 31, Net book value of equipment held for operating lease 2023 2022 Region (in thousands) Asia-Pacific $ 530,309 $ 485,737 United States 464,088 471,184 Europe 443,901 353,661 South America 136,917 141,145 Canada 109,056 69,030 Central America 43,192 130,187 Middle East 42,965 42,853 Off-lease 342,409 418,138 Totals $ 2,112,837 $ 2,111,935 As of December 31, 2023, the lease status of the equipment held for operating lease (in thousands) was as follows: Lease Term Net Book Value Off-lease and other $ 342,409 Month-to-month leases 360,550 Leases expiring 2024 613,557 Leases expiring 2025 230,389 Leases expiring 2026 180,004 Leases expiring 2027 105,166 Leases expiring 2028 118,635 Leases expiring thereafter 162,127 $ 2,112,837 As of December 31, 2023, minimum future payments under non-cancelable leases were as follows: Year (in thousands) 2024 $ 158,408 2025 78,803 2026 50,926 2027 36,122 2028 6,431 Thereafter 45,031 $ 375,721 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Investments [Abstract] | |
Investments | Investments In 2011, the Company entered into an agreement with Mitsui & Co., Ltd. to participate in a joint venture formed as a Dublin-based Irish limited company, WMES, for the purpose of acquiring and leasing jet engines. Each partner holds a 50% interest in the joint venture, and the Company uses the equity method in recording investment activity. As of December 31, 2023, WMES owned a lease portfolio of 35 engines and four aircraft with a net book value of $232.2 million. In 2014, the Company entered into an agreement with China Aviation Supplies Import & Export Corporation (“CASC”) to participate in a joint venture named CASC Willis Lease Finance Company Limited (“CASC Willis”), a joint venture based in Shanghai, China. Each partner holds a 50% interest in the joint venture and the Company uses the equity method in recording investment activity. CASC Willis acquires and leases jet engines to Chinese airlines and concentrates on the demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. As of December 31, 2023, CASC Willis owned a lease portfolio of four engines with a net book value of $39.8 million. As of December 31, 2023 WMES CASC Willis Total (in thousands) Investment in joint ventures as of December 31, 2021 $ 39,069 $ 16,858 $ 55,927 Income (loss) from joint ventures 248 (310) (62) Foreign currency translation adjustment — (1,373) (1,373) Other comprehensive gain from joint ventures 1,697 — 1,697 Investment in joint ventures as of December 31, 2022 41,014 15,175 56,189 Income (loss) from joint ventures (437) 3,345 2,908 Foreign currency translation adjustment — (523) (523) Other comprehensive loss from joint ventures (530) — (530) Investment in joint ventures as of December 31, 2023 $ 40,047 $ 17,997 $ 58,044 “Other revenue” on the Consolidated Statements of Income includes management fees earned of $2.4 million and $2.0 million during the years ended December 31, 2023 and 2022, respectively, related to the servicing of engines for the WMES lease portfolio. During 2023, WMES sold an engine to the Company for $22.3 million, and the Company sold two engines to WMES for $28.8 million. During 2022, the Company sold two engines to WMES for $12.6 million. During 2022, the Company subleased a WMES engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a ROU asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022. Unaudited summarized financial information for 100% of WMES is presented in the following table: Years Ended December 31, 2023 2022 (in thousands) Revenue $ 47,617 $ 52,106 Expenses 46,317 51,953 WMES net income $ 1,300 $ 153 As of December 31, 2023 2022 (in thousands) Total assets $ 236,732 $ 267,580 Total liabilities 150,604 183,083 Total WMES net equity $ 86,128 $ 84,497 The difference between the Company’s investment in WMES and 50% of total WMES net equity, as well as the difference between the Company’s income or loss from WMES and 50% of total WMES net income, is primarily attributable to the recognition of deferred gains, which are related to engines sold by WMES to the Company, and prior to the adoption of ASU 2017-05, related to engines sold by the Company to WMES. |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Debt obligations consisted of the following: As of December 31, 2023 2022 (in thousands) Credit facility at a floating rate of interest of one-month term Secured Overnight Financing Rate (“SOFR”) plus 1.75% at December 31, 2023, secured by engines. The facility has a committed amount of $708.0 million at December 31, 2023. $49.8 million revolves until the earlier of the final WEST VII novated asset or the maturity date of March 31, 2024, $158.2 million revolves until the maturity date of June 2024, and $500.0 million revolves until the maturity date of June 2025. $ 353,000 $ 727,000 WEST VII Series A 2023 term notes payable at a fixed rate of interest of 8.00%, maturing in October 2048, secured by engines 406,894 — WEST VI Series A 2021 term notes payable at a fixed rate of interest of 3.10%, maturing in May 2046, secured by engines 252,986 262,779 WEST VI Series B 2021 term notes payable at a fixed rate of interest of 5.44%, maturing in May 2046, secured by engines 35,142 36,502 WEST VI Series C 2021 term notes payable at a fixed rate of interest of 7.39%, maturing in May 2046, secured by engines 12,361 14,738 WEST V Series A 2020 term notes payable at a fixed rate of interest of 3.23%, maturing in March 2045, secured by engines 240,371 255,136 WEST V Series B 2020 term notes payable at a fixed rate of interest of 4.21%, maturing in March 2045, secured by engines 33,485 35,542 WEST V Series C 2020 term notes payable at a fixed rate of interest of 6.66%, maturing in March 2045, secured by engines 10,695 13,314 WEST IV Series A 2018 term notes payable at a fixed rate of interest of 4.75%, maturing in September 2043, secured by engines 212,157 238,072 WEST IV Series B 2018 term notes payable at a fixed rate of interest of 5.44%, maturing in September 2043, secured by engines 29,024 36,386 WEST III Series A 2017 term notes payable at a fixed rate of interest of 4.69%, maturing in August 2042, secured by engines 175,705 209,061 WEST III Series B 2017 term notes payable at a fixed rate of interest of 6.36%, maturing in August 2042, secured by engines 23,592 30,255 Note payable at a fixed rate of interest of 4.59%, maturing in January 2032, secured by an engine 22,610 — Note payable at a fixed rate of interest of 4.23%, maturing in July 2031, secured by an engine 17,802 — Note payable at a fixed rate of interest of 3.18%, maturing in July 2024, secured by an aircraft 1,235 3,304 1,827,059 1,862,089 Less: unamortized debt issuance costs and note discounts (24,178) (14,811) Total debt obligations $ 1,802,881 $ 1,847,278 In October 2023, the Company entered into Amendment No. 4 to the Fourth Amended and Restated Credit Agreement (“Amendment No. 4”), which extended the maturity date for $500.0 million of its credit facility to June 2025. In December 2023, under the terms of Amendment No. 4, the Company terminated $292.0 million of its credit facility. This termination resulted in the credit facility having a reduced total committed amount of $708.0 million as of December 31, 2023. $49.8 million revolves until the earlier of the final WEST VII novated asset or the maturity date of March 31, 2024, and $158.2 million revolves until the maturity date of June 2024. One-month term SOFR was 5.38%, and the one-month London Inter-Bank Offered Rate (“LIBOR”) was 4.39% as of December 31, 2023 and December 31, 2022, respectively. As it relates to the $22.6 million and $17.8 million notes payable resulting from failed sale-leaseback transactions that are secured by engines, the Company has options to repurchase the engines in January 2032 for $17.7 million and July 2031 for $17.0 million, respectively. Principal outstanding at December 31, 2023, is expected to be repayable as follows: Year (in thousands) 2024 $ 73,206 2025 424,958 2026 271,175 2027 193,761 2028 239,778 Thereafter 624,181 Total $ 1,827,059 At December 31, 2023, the Company had a revolving credit facility to finance the acquisition of equipment for lease as well as for general working capital purposes, with the amounts drawn under the facility not to exceed that which is allowed under the borrowing base as defined by the credit agreement. As of December 31, 2023 and 2022, $355.0 million and $273.0 million were available under this facility, respectively. On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the revolving credit facility. Under the revolving credit facility, all subsidiaries except WEST III, WEST IV, WEST V, WEST VI, and WEST VII jointly and severally guarantee payment and performance of the terms of the loan agreement. The guarantee would be triggered by a default under the agreement. In October 2023, the Company and its direct, wholly-owned subsidiary WEST VII, closed its offering of $410.0 million aggregate principal amount of fixed rate notes. The notes are secured by, among other things, WEST VII’s direct and indirect interests in a portfolio of aircraft engines and airframes. The notes have a fixed coupon of 8.00%, an expected maturity in October 2029, and a final maturity date in October 2048. The notes were issued at a price of 98.84814% of par. Principal on the notes is payable monthly to the extent of available cash in accordance with a priority of payments included in the indenture. In December 2022, the Company recognized a $2.6 million gain on debt extinguishment associated with the repurchase of six tranches of ABS notes with a balance of $12.2 million. The assets of WEST III, WEST IV, WEST V, WEST VI, and WEST VII are not available to satisfy the Company’s obligations other than the obligations specific to that WEST entity. WEST III, WEST IV, WEST V, WEST VI, and WEST VII are consolidated for financial statement presentation purposes. WEST III’s, WEST IV’s, WEST V’s, WEST VI’s, and WEST VII’s abilities to make distributions and pay dividends to the Company is subject to the prior payments of their debt and other obligations and their maintenance of adequate reserves and capital. Under WEST III, WEST IV, WEST V, WEST VI, and WEST VII, cash is collected in restricted accounts, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of maintenance reserve payments and lease security deposits are formulaically accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. The WEST III, WEST IV, WEST V, WEST VI, and WEST VII indentures require that a minimum threshold of maintenance reserve and security deposit balances be held in restricted cash accounts. Virtually all of the Company’s debt requires ongoing compliance with the covenants of each financing, including debt/equity ratios, minimum tangible net worth and minimum interest coverage ratios, and other eligibility criteria including customer and geographic concentration restrictions. The Company also has certain negative financial covenants such as liens, advances, change in business, sales of assets, dividends, and stock repurchases. Compliance with these covenants is tested either monthly, quarterly, or annually, as required, and the Company was in full compliance with all financial covenant requirements at December 31, 2023. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company periodically holds interest rate derivative instruments to mitigate exposure to changes in interest rates, predominantly one-month SOFR, with $353.0 million and $727.0 million of variable rate borrowings at December 31, 2023 and 2022, respectively. As a matter of policy, management does not use derivatives for speculative purposes. As of December 31, 2023, the Company had five interest rate swap agreements. During 2021, the Company entered into four fixed-rate interest swap agreements, each having notional amounts of $100.0 million, two with remaining terms of one month and two with remaining terms of 25 months as of December 31, 2023. One interest rate swap agreement was entered into during 2019 which has a notional outstanding amount of $100.0 million with a remaining term of six months as of December 31, 2023. The derivative instruments were designated as cash flow hedges at inception and recorded at fair value. As it relates to the two fixed-rate interest swap agreements with remaining terms of one month as of December 31, 2023, the Company evaluated the probability of the forecasted transactions occurring. The Company determined that it is not probable that the forecasted transactions will occur upon the maturities of these two fixed-rate interest rate swap agreements and as such, reclassified into earnings the associated amount in accumulated other comprehensive income. The impact was an addition to interest income, or reduction to interest expense, in the Company’s Consolidated Statements of Income of approximately $0.2 million for the year ended December 31, 2023. The Company evaluated the effectiveness of the swaps to hedge the interest rate risk associated with its variable rate debt and concluded at the swap inception date that the swaps were highly effective in hedging that risk. The Company evaluates the effectiveness of the hedging relationship on an ongoing basis and concluded there was no ineffectiveness in the hedges for the year ended December 31, 2023. The Company estimates the fair value of derivative instruments using a discounted cash flow technique. Valuation of the derivative instruments requires certain assumptions for underlying variables and the use of different assumptions would result in a different valuation. Management believes it has applied assumptions consistently during the period. The Company applies hedge accounting and accounts for the change in fair value of its cash flow hedges through other comprehensive income for derivative instruments that are effective and for which the related forecasted transaction is probable of occurring. The net fair value of the interest rate swaps as of December 31, 2023 and December 31, 2022 was $16.5 million and $34.8 million, respectively, each representing an asset and reflected within other assets on the Consolidated Balance Sheets. The Company recorded an adjustment to interest expense of $(23.4) million and $(7.8) million during the years ended December 31, 2023 and 2022, respectively, from derivative investments. As of December 31, 2023, the accumulative derivative gain was $16.5 million, and as of December 31, 2022, the accumulative derivative gain was $34.8 million. Effect of Derivative Instruments on Earnings in the Consolidated Statements of Income and of Comprehensive Income The following table provides additional information about the financial statement effects related to the cash flow hedges for the years ended December 31, 2023 and 2022: Derivatives in Cash Flow Hedging Relationships Amount of Unrealized (Loss) Gain Recognized in OCI on Derivatives Years Ended December 31, 2023 2022 (in thousands) Interest rate contracts $ (18,309) $ 27,508 Total $ (18,309) $ 27,508 The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings or it is probable that the forecasted transaction will not occur. The ineffective portion of the hedges, if any, is recorded in earnings in the current period. There was no ineffectiveness in the hedges for the years ended December 31, 2023 and 2022. Counterparty Credit Risk The Company evaluates the creditworthiness of the counterparties under its hedging agreements. The counterparties for the interest rate swaps are large financial institutions that possess investment grade credit ratings. Based on these ratings, the Company believes that the counterparties were credit-worthy and that their continuing performance under the hedging agreement is probable and does not require the counterparties to provide collateral or other security to the Company. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income before income taxes are as follows: Years ended December 31, 2023 2022 (in thousands) United States $ 73,853 $ 11,864 Foreign (6,723) (2,071) Income before income taxes $ 67,130 $ 9,793 The components of income tax expense for the years ended December 31, 2023 and 2022 were as follows: Federal State Foreign Total (in thousands) 2023 Current $ 2,449 $ 1,387 $ (139) $ 3,697 Deferred 16,338 3,314 — 19,652 Total $ 18,787 $ 4,701 $ (139) $ 23,349 2022 Current $ — $ 128 $ 2,161 $ 2,289 Deferred 3,758 (1,693) — 2,065 Total $ 3,758 $ (1,565) $ 2,161 $ 4,354 The following is a reconciliation of the federal income tax expense at the statutory rate of 21% for the years ended December 31, 2023 and 2022 to the effective income tax expense: Years Ended December 31, 2023 2022 (in thousands) Statutory federal income tax expense $ 14,097 $ 2,057 State taxes, net of federal benefit 4,410 (1,593) Foreign tax paid (169) 1,509 Foreign jurisdiction rate differential 545 666 Permanent differences-nondeductible executive compensation 2,929 2,180 Permanent differences and other 1,537 (465) Effective income tax expense $ 23,349 $ 4,354 Permanent differences and other includes Subpart F income of $1.3 million from foreign operations for the year ended December 31, 2023. The Company records tax expense or benefit for unusual or infrequent items discretely in the period in which they occur. The following table summarizes the activity related to the Company’s unrecognized tax benefits: (in thousands) Balance as of December 31, 2021 $ 13 Increases related to current year tax positions 11 Decreases due to tax positions expired (5) Balance as of December 31, 2022 19 Increases related to current year tax positions 435 Decreases due to tax positions expired (5) Balance as of December 31, 2023 $ 449 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: As of December 31, 2023 2022 (in thousands) Deferred tax assets: Unearned lease revenue $ 9,614 $ 3,867 State taxes 167 2 Inventory 2,426 2,123 Reserves and allowances 5,471 4,425 Other accruals 29,231 15,973 Lease liability 934 1,366 Net operating loss carry forward 51,240 67,595 California alternative minimum tax credit — 33 Charitable contributions 2 2 Total deferred tax assets 99,085 95,386 Less: valuation allowance (978) (536) Net deferred tax assets 98,107 94,850 Deferred tax liabilities: Depreciation and impairment on aircraft engines and equipment (231,694) (208,389) Notes receivable (5,405) (5,479) Lease liability (930) (1,360) Other deferred tax liabilities (4,622) (4,590) Net deferred tax liabilities (242,651) (219,818) Other comprehensive income deferred tax liability (3,235) (7,548) Net deferred tax liabilities $ (147,779) $ (132,516) As of December 31, 2023, the Company had net operating loss carry forwards of approximately $235.4 million for federal tax purposes and $1.0 million (tax effected) for state tax purposes. The majority of the federal net operating loss carry forwards were generated in 2020 and can be carried forward indefinitely, and the state net operating loss carry forwards will expire at various times from 2026 to 2043. There is a $0.5 million valuation allowance for net operating losses in California that expire between 2034 and 2042 and a $0.1 million valuation allowance for net operating losses in Georgia that expire between 2032 and 2040. The Company’s ability to utilize the net operating loss and tax credit carry forwards in the future may be subject to restriction in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code and similar state tax law. Management believes that no valuation allowance is required on deferred tax assets related to federal net operating loss carry forwards, as it is more likely than not that all amounts are recoverable through future taxable income. The open tax years for federal and state tax purposes are from 2006 to 2023. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision. Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: • Cash and cash equivalents, restricted cash, receivables, and accounts payable : The amounts reported in the accompanying Consolidated Balance Sheets approximate fair value due to their short-term nature. • Notes receivable : The carrying amount of the Company’s outstanding balance on its Notes receivable as of December 31, 2023 and 2022 was estimated to have a fair value of approximately $90.3 million and $83.5 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each period end (Level 2 inputs). • Investments in sales-type leases: The carrying amount of the Company's outstanding balance on its Investments in sales-type leases as of December 31, 2023 and 2022 was estimated to have a fair value of approximately $8.7 million and $6.4 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each period end (Level 2 inputs). • Debt obligations : The carrying amount of the Company’s outstanding balance on its Debt obligations as of December 31, 2023 and 2022 was estimated to have a fair value of approximately $1,598.5 million and $1,540.2 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each year end (Level 2 inputs). Assets Measured and Recorded at Fair Value on a Recurring Basis and a Nonrecurring Basis As of December 31, 2023 and 2022, the Company measured the fair value of its interest rate swaps based on Level 2 inputs, due to the usage of inputs that can be corroborated by observable market data. The Company estimates the fair value of derivative instruments using a discounted cash flow technique. The net fair value of the interest rate swaps as of December 31, 2023 and December 31, 2022 was $16.5 million and $34.8 million, respectively, each representing an asset and reflected within other assets on the Consolidated Balance Sheets. The Company recorded an adjustment to interest expense of $(23.4) million and $(7.8) million during the years ended December 31, 2023 and 2022, respectively, from derivative investments. Goodwill is assessed for impairment annually, at each year end by comparing the fair values of the reporting units to their carrying amounts. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. The Company determines fair value of long-lived assets held and used, such as Equipment held for operating lease and Equipment held for sale, by reference to independent appraisals, quoted market prices ( e.g. , an offer to purchase) and other factors. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. The Company used Level 2 inputs to measure write-downs of equipment held for lease and equipment held for sale. Total Losses Years Ended December 31, 2023 2022 (in thousands) Equipment held for lease $ 4,083 $ 21,771 Equipment held for sale 315 78 Total $ 4,398 $ 21,849 Write-downs of equipment to their estimated fair values totaled $4.4 million for the year ended December 31, 2023, primarily reflecting an adjustment of the carrying value of five engines and two airframes. As of December 31, 2023, included within equipment held for lease and equipment held for sale was $31.9 million in remaining book value of 15 assets which were previously written down. Write-downs of equipment to their estimated fair values totaled $21.8 million for the year ended December 31, 2022, primarily reflecting an adjustment of the carrying value of four impaired engines. Of these write-downs, $20.4 million reflects the impairment of two engines located in Russia which were determined, due to the Russia and Ukraine conflict, to be unrecoverable. The remaining write-downs were in the ordinary course of business. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net income, less preferred stock dividends and accretion of preferred stock issuance costs, by the weighted average number of common shares outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the vesting of restricted stock using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is anti-dilutive. Additionally, redeemable preferred stock is not convertible and does not affect dilutive shares. There were no anti-dilutive shares excluded in the computations of diluted weighted average earnings per common share for the years ended December 31, 2023 and 2022. The following table presents the calculation of basic and diluted EPS: Year Ended December 31, 2023 2022 (in thousands) Net income attributable to common shareholders $ 40,372 $ 2,105 Basic weighted average common shares outstanding 6,305 6,071 Potentially dilutive common shares 176 226 Diluted weighted average common shares outstanding 6,481 6,297 Basic weighted average earnings per common share $ 6.40 $ 0.35 Diluted weighted average earnings per common share $ 6.23 $ 0.33 |
Commitments, Contingencies, Gua
Commitments, Contingencies, Guarantees and Indemnities | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies, Guarantees and Indemnities | Commitments, Contingencies, Guarantees and Indemnities Other obligations Other obligations, such as certain purchase obligations are not recognized as liabilities in the consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require the Company’s performance in the event of demands by third parties or contingent events. As of December 31, 2023, the Company had $459.7 million in purchase commitments of equipment that will be satisfied within three fiscal years. The purchase obligations are subject to escalation based on the closing date of each transaction. In December 2020, the Company entered into definitive agreements for the purchase of 21 modern technology aircraft engines. As part of the purchase, the Company has committed to certain future overhaul and maintenance services which are anticipated to range between $74.5 million and $102.3 million by 2030. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Common Stock Repurchase In October 2022, the Board of Directors approved the renewal of the existing common stock repurchase plan which allows for repurchases of up to $60.0 million of the Company’s common stock, extending the plan through December 31, 2024. Repurchased shares are immediately retired. During 2023, no shares were repurchased. During 2022, the Company repurchased 154,215 shares of common stock for approximately $5.2 million under the plan, at a weighted average price of $33.98 per share. At December 31, 2023, approximately $39.6 million was available to purchase shares under the plan. Redeemable Preferred Stock In October 2016, the Company sold and issued to Development Bank of Japan Inc. (“DBJ”) an aggregate of 1,000,000 shares of the Company’s Series A Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”) at a purchase price of $20.00 per share. The net proceeds to the Company after deducting investor fees were $19.8 million. In September 2017, the Company sold and issued to DBJ an aggregate of 1,500,000 shares of the Company’s Series A-2 Preferred Stock, $0.01 par value per share (the “Series A-2 Preferred Stock”) at a purchase price of $20.00 per share. The net proceeds to the Company after deducting issuance costs were $29.7 million. The rights and privileges of the Preferred Stock are described below: Voting Rights: Holders of the Preferred Stock do not have general voting rights. Dividends: The Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share through October 15, 2023 and accrue quarterly dividends at the rate per annum of 8.5% per share thereafter. The Company’s Series A-2 Preferred Stock accrue quarterly dividends at the rate per annum of 6.5% per share. During the years ended December 31, 2023 and 2022, the Company paid total dividends of $3.2 million and $3.3 million on the Series A-1 and Series A-2 Preferred Stock, respectively. Liquidation Preference: The holders of the Preferred Stock have preference in the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the corporation, including a merger or consolidation. Upon such liquidation event, the Preferred Stockholders are entitled to be paid out of the assets of the Company available for distribution to its stockholders after payment of all the Company’s indebtedness and other obligations and before any payment shall be made to the holders of common stock or any other class or series of stock ranking on liquidation junior to the Preferred Stock an amount equal to $20.00 per share, plus any declared but unpaid dividends. Redemption: The Preferred Stock has no stated maturity date, however the holders of the Preferred Stock have the option to require the Company to redeem all or any portion of the Preferred Stock for cash upon occurrence of any significant changes in operating results, ownership structure, or liquidity events as defined in the Preferred Stock purchase agreements. The redemption price is $20.00 per share plus dividends accrued but not paid. The Company is accreting the Preferred Stock to redemption value over the period from the date of issuance to the date first callable by the Preferred Stockholders (September 2024 for both of the Series A Preferred Stock and Series A-2 Preferred Stock, as a result of the First Amendment to Second Amended and Restated Certificate of Designations, Preferences, and Relative Rights and Limitations of Series A Cumulative Redeemable Preferred Stock dated as of September 26, 2023), such that the carrying amounts of the securities will equal the redemption amounts at the earliest redemption dates. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation Plans | Stock-Based Compensation Plans The components of stock compensation expense were as follows: Year Ended December 31, 2023 2022 (in thousands) 2023 Stock Incentive Plan $ 14,667 $ 13,401 Employee Stock Purchase Plan 135 150 Total Stock Compensation Expense $ 14,802 $ 13,551 The significant stock compensation plans are described below. The 2023 Incentive Stock Plan (the “2023 Plan”) amended and restated the prior 2021 Incentive Stock Plan. The 2023 Plan authorized 1,750,000 shares for issuance, plus the number of shares remaining for issuance under the prior stock plan and any future forfeited awards under the prior plan. Stock-based compensation is in the form of restricted stock awards (“RSAs”). The RSAs are subject to either service-based vesting, which is typically between one four one two As of December 31, 2023, the Company has granted 1,591,800 RSAs under the 2023 Plan and has 2,052,796 shares available for future issuance. The fair value of the restricted stock awards equaled the stock price at the grant date. The following table summarizes restricted stock activity under the 2023 Plan for the years ended December 31, 2023 and 2022: Number Outstanding Weighted Average Balance as of December 31, 2021 560,608 $ 36.30 Shares granted 330,400 32.44 Shares forfeited — — Shares vested (395,060) 38.09 Balance as of December 31, 2022 495,948 $ 32.30 Shares granted 335,100 56.06 Shares forfeited (7,665) 42.99 Shares vested (357,527) 31.34 Balance as of December 31, 2023 465,856 $ 49.95 At December 31, 2023, the stock compensation expense related to the RSAs that will be recognized over the average remaining vesting period of approximately one year totaled $18.5 million. At December 31, 2023, the intrinsic value of unvested RSAs was $22.8 million. Under the Employee Stock Purchase Plan (“ESPP”), as amended and restated effective November 10, 2021, 425,000 shares of common stock have been reserved for issuance. Full-time employees may designate no more than 10% of their base cash compensation to be deducted each pay period for the purchase of common stock under the Purchase Plan. Participants may purchase no more than 1,000 shares or $25,000 of common stock in any one calendar year. Each January 31 and July 31, shares of common stock are purchased with the employees’ payroll deductions from the immediately preceding six months at a price per share of 85% of the lesser of the market price of the common stock on the purchase date or the market price of the common stock on the date of entry into an offering period. In 2023 and 2022, 9,832 and 19,789 shares of common stock, respectively, were issued under the ESPP. The Company issues new shares through its transfer agent upon employee stock purchase. |
Employee 401(k) Plan
Employee 401(k) Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee 401(k) Plan | Employee 401(k) Plan The Company adopted The Willis 401(k) Plan (the “401(k) Plan”) effective as of January 1997. The 401(k) Plan provides for deferred compensation as described in Section 401(k) of the Internal Revenue Code. The 401(k) Plan is a contributory plan available to all full-time and part-time employees in the U.S. In 2023, employees who participated in the 401(k) Plan could elect to defer and contribute to the 401(k) Plan up to 75% of pretax salary or wages up to $22,500 (or $30,000 for employees at least 50 years of age). The Company matches 50% of employee contributions and was capped at $11,250 per employee (or $15,000 for employees at least 50 years of age) in 2023. The Company match totaled $0.9 million and $0.7 million during the years ended December 31, 2023 and 2022, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Joint Ventures “Other revenue” on the Consolidated Statements of Income includes management fees earned of $2.4 million and $2.0 million during the years ended December 31, 2023 and 2022, respectively, related to the servicing of engines for the WMES lease portfolio. During 2023, WMES sold an engine to the Company for $22.3 million, and the Company sold two engines to WMES for $28.8 million. During 2022, the Company sold two engines to WMES for $12.6 million. During 2022, the Company subleased a WMES engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a ROU asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022. Other Between January 2023 and July 2023, Willis Asset Management Limited, one of the Company’s wholly-owned and vertically-integrated subsidiaries, leased one of its hangars to Fur Feather and Fin Limited, an entity in which the Company’s Executive Chairman retains an ownership interest, for quarterly rent payments of approximately $7,700. The lease was approved by the Board’s Independent Directors. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments The Company has two reportable business segments: (i) Leasing and Related Operations which involves acquiring and leasing, primarily pursuant to operating leases, commercial aircraft, aircraft engines and other aircraft equipment and the selective purchase and resale of commercial aircraft engines and other aircraft equipment and other related businesses and (ii) Spare Parts Sales which involves the purchase and resale of after-market engine parts, whole engines, engine modules and portable aircraft components. The Company evaluates the performance and allocation of resources of each of the segments based on profit or loss after general and administrative expenses. While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies. The Company’s CODM is Austin Willis, Chief Executive Officer. The following tables present a summary of the reportable segments (in thousands): For the year ended December 31, 2023 Leasing and Spare Parts Sales Eliminations Total Revenue: Lease rent revenue $ 213,138 $ — $ — $ 213,138 Maintenance reserve revenue 133,668 — — 133,668 Spare parts and equipment sales 476 19,883 — 20,359 Interest income 8,721 — — 8,721 Gain on sale of leased equipment 10,581 — — 10,581 Other revenue 31,610 689 (211) 32,088 Total revenue 398,194 20,572 (211) 418,555 Expenses: Depreciation and amortization expense 90,834 91 — 90,925 Cost of spare parts and equipment sales 56 15,151 — 15,207 Write-down of equipment 4,398 — — 4,398 General and administrative 139,867 4,921 — 144,788 Technical expense 20,220 — — 20,220 Net finance costs: Interest expense 78,795 — — 78,795 Total finance costs 78,795 — — 78,795 Total expenses 334,170 20,163 — 354,333 Income from operations $ 64,024 $ 409 $ (211) $ 64,222 For the Year ended December 31, 2022 Leasing and Spare Parts Sales Eliminations Total Revenue: Lease rent revenue $ 162,571 $ — $ — $ 162,571 Maintenance reserve revenue 83,424 — — 83,424 Spare parts and equipment sales 1,595 25,414 — 27,009 Interest income 7,579 — — 7,579 Gain on sale of leased equipment 3,133 — — 3,133 Gain on sale of financial assets 3,116 — — 3,116 Other revenue 24,607 673 (185) 25,095 Total revenue 286,025 26,087 (185) 311,927 Expenses: Depreciation and amortization expense 88,124 136 — 88,260 Cost of spare parts and equipment sales 96 20,737 — 20,833 Write-down of equipment 21,849 — — 21,849 General and administrative 87,996 4,534 — 92,530 Technical expense 14,415 — — 14,415 Net finance costs: Interest expense 66,743 — — 66,743 Gain on debt extinguishment (2,558) — — (2,558) Total finance costs 64,185 — — 64,185 Total expenses 276,665 25,407 — 302,072 Income from operations $ 9,360 $ 680 $ (185) $ 9,855 Leasing and Related Operations Spare Parts Sales Eliminations Total Total assets as of December 31, 2023 $ 2,602,907 $ 49,437 $ — $ 2,652,344 Total assets as of December 31, 2022 $ 2,530,130 $ 45,087 $ — $ 2,575,217 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 31, 2024, the Company detected unauthorized activity on portions of its information technology (IT) systems. WLFC believes it has fully contained the unauthorized activity and continues to operate and service customers. However, the investigation to assess the complete nature, scope, and impact of the incident, including what data has been exfiltrated or otherwise impacted, remains ongoing. Effective March 8, 2024, in accordance with Amendment No. 4, the Company’s credit facility was reduced from $708.0 million to $658.2 million following the novation of the final WEST VII asset. |
SCHEDULE II - VALUATION ACCOUNT
SCHEDULE II - VALUATION ACCOUNTS | 12 Months Ended |
Dec. 31, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION ACCOUNTS | WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION ACCOUNTS (In thousands) Balance at Cumulative Effect Due to Adoption of New Accounting Standard Additions Net Balance at Year Ended December 31, 2022 Accounts receivable, allowance for doubtful accounts $ 1,154 $ — $ 837 $ (480) $ 1,511 Deferred tax valuation allowance $ 518 $ — $ 18 $ — $ 536 Year Ended December 31, 2023 Accounts receivable, allowance for doubtful accounts and credit losses $ 1,511 $ 20 $ 824 $ (44) $ 2,311 Notes receivable, allowance for credit losses $ — $ 58 $ 11 $ — $ 69 Investments in sales-type leases, allowance for credit losses $ — $ 6 $ 3 $ — $ 9 Deferred tax valuation allowance $ 536 $ — $ 442 $ — $ 978 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net income | $ 43,781 | $ 5,439 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Willis Lease Finance Corporation with its subsidiaries is a provider of aviation services whose primary focus is providing operating leases of commercial aircraft, aircraft engines and other aircraft-related equipment to air carriers, manufacturers and overhaul/repair facilities worldwide. The Company also engages in the selective purchase and resale of commercial aircraft engines. Willis Aeronautical Services, Inc. (“Willis Aero”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft engines. Willis Asset Management Limited (“Willis Asset Management”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the engine management and consulting business. Willis Engine Securitization Trust III (“WEST III” or the “WEST III Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an asset-backed securitization (“ABS”), of which the Company is the sole beneficiary. WEST III is a variable interest entity (“VIE”) which the Company owns 100% of the interest and consolidates in its financial statements. Willis Engine Securitization Trust IV (“WEST IV” or the “WEST IV Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST IV is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. Willis Engine Structured Trust V (“WEST V” or the “WEST V Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST V is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. Willis Engine Securitization Trust VI (“WEST VI” or the “WEST VI Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST VI is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. In October 2023, the Company and its direct, wholly-owned subsidiary, Willis Engine Structured Trust VII (“WEST VII”), closed its offering of $410.0 million aggregate principal amount of fixed rate notes (the “WEST VII Notes”). WEST VII is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST VII is a VIE which the Company owns 100% of the interest and consolidates in its financial statements. Principal and interest on the WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes are payable monthly to the extent of available cash in accordance with a priority of payments included in the respective indenture agreements. The WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes are secured by, among other things, the respective ABS’s direct and indirect interests in a portfolio of assets. The WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes have scheduled amortizations and are payable solely from revenue received from the lease portfolios, after payment of certain expenses of the respective ABS. The assets of WEST III, WEST IV, WEST V, WEST VI, and WEST VII are not available to satisfy the Company’s obligations other than the obligations specific to the respective ABS. WEST III, WEST IV, WEST V, WEST VI, and WEST VII are consolidated for financial statement presentation purposes, with the respective assets and liabilities on the Company’s Consolidated Balance Sheets. Each ABS’s ability to make distributions and pay dividends to the Company is subject to the prior payments of its debt and other obligations and maintenance of adequate reserves and capital. Under each ABS, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of the maintenance reserve payments and lease security deposits are formulaically accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Additionally, in connection with WEST III, WEST IV, WEST V, WEST VI, and WEST VII, the Company entered into servicing agreements and administrative agency agreements to provide certain engine, lease management and reporting functions in return for fees based on a percentage of collected lease revenues and asset sales. Because WEST III, WEST IV, WEST V, WEST VI, and WEST VII are consolidated for financial statement reporting purposes, all fees eliminate upon consolidation. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation |
Revenue Recognition | Revenue Recognition Leasing revenue Revenue from leasing of engines, aircraft and related parts and equipment is recognized as operating lease revenue on a straight-line basis over the terms of the applicable lease agreements. Revenue is not recognized when cash collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status, and revenue is recognized when cash payments are received. Under the terms of some of the Company’s leases, the lessees pay use fees (also known as maintenance reserves) to the Company based on usage of the leased asset, which are designed to cover expected future maintenance costs. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures. Use fees received are recognized in revenue as maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are recorded as a maintenance reserve liability until they are reimbursed to the lessee, the lease terminates, or the obligation to reimburse the lessee for such reserves ceases to exist, at which time they are recognized in revenue as maintenance reserve revenue. Unearned Revenue includes deferred nonrefundable use fees which qualify as in-substance fixed lease payments due to the lessee’s requirement to make certain minimum payments. These in-substance fixed lease payments are recognized ratably over the expected lease term rather than when the variable use fees are invoiced. As of December 31, 2023 and 2022, there were $28.4 million and $6.3 million, respectively, of deferred in-substance fixed payment use fees included in Unearned Revenue. Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2023, the Company had an aggregate of approximately $10.5 million in lease rent and $8.9 million in maintenance reserve receivables more than 30 days past due. Inability to collect receivables or to repossess engines or other leased equipment in the event of a default by a lessee could have a material adverse effect on the Company. The Company estimates an allowance for doubtful accounts for receivables it does not consider fully collectible. The allowance for doubtful accounts includes the following: (1) specific reserves for receivables which are impaired for which management believes full collection is doubtful, and (2) a general reserve for estimated losses based on historical experience. The Company also estimates an allowance for credit losses. Receivables, net of allowances, include amounts billed to customers in which the right to payment is unconditional. The Company maintains an allowance for trade receivables to provide for the estimated amount that will not be collected, even when the risk of loss is remote. The allowance is measured on a collective pool basis when similar risk characteristics exist and is established as a percentage of accounts receivable. The percentage is based on all available and relevant information including age of outstanding receivables, historical payment experience and loss history, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions. A write-off is recorded when all or part of the receivable is deemed uncollectible. Write-offs are charged against the previously established allowance for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowance for credit losses. Notes receivable and investments in sales-type leases, net of allowances, represent the current remaining balances that the Company expects to collect for failed sale-leaseback transactions and sales-type leases. The Company establishes allowances for credit losses to cover probable but specifically unknown losses existing in the portfolio. In doing so, the Company categorizes financial assets by pools with similar risk characteristics, including whether the financial asset is collateral-backed and whether the customer is placed on non-accrual status. A write-off is recorded when all or part of the financial asset is deemed uncollectible. Write-offs are charged against previously established allowances for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowances for credit losses. One customer accounted for more than 10% of total lease rent revenue during the years ended December 31, 2023 and 2022. One customer accounted for more than 10% of total receivables during the year ended December 31, 2023. Spare parts sales The Spare Parts Sales reportable segment primarily engages in the sale of aircraft engine parts and materials through the acquisition or consignment of engines from third parties or the Company’s leasing operations. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, the buyer is responsible for any loss in transit, and the Company has a legal right to payment for the spare parts. Management has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) 606-10-5-86. The spare parts transaction price is a fixed dollar amount and is stated on each purchase order for a fixed amount by total number of parts. Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and, as a result, all of the transaction price is allocated to that performance obligation. Management has determined that it is appropriate for the Company to recognize spare parts sales at a point in time ( i.e. , the date the parts are shipped) under ASC 606. Equipment sales Equipment sales represent the selective purchase and resale of commercial aircraft engines and other aircraft equipment. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, payment terms, condition of the asset, bill of sale, and the assignment of rights and warranties from the Company to the customer. Management has identified the promise in the equipment sale contract to be the transfer of ownership of the asset. Management believes that the asset holds stand-alone value to the customer as it is not dependent on any other services for functionality purposes, and therefore is distinct within the context of the contract and as described in ASC 606-10. As such, management has identified the transfer of the asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of assets) and is explicitly stated in each contract. Equipment sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer to be the date that the customer obtains control and title over the asset and the date which revenue is to be recognized and payment is due. Managed services Managed services revenue predominantly represents fleet management and engine storage services which may be combined on a single contract with a customer. Fleet management services are performed for a stated fixed fee as agreed upon in the services agreement. Engine storage services are for a fixed monthly fee. For a contract containing more than one performance obligation, the allocation of the transaction price is generally performed on the basis of the relative stand-alone selling price of each distinct good or service in the contract. As each of the services provided within the contract have separate prices, the Company allocates the price to its related performance obligation described above. Management has determined that each of the revenue elements contain performance obligations that are satisfied over time and therefore recognizes revenue over time in accordance with ASC 606-10-25-27. The Company utilizes the percentage-of-completion method (input method) for recognizing fleet management services and will calculate revenues based on labor hours incurred. Additionally, as is required by ASC 606-10-25-35, as circumstances change over time, the Company will update its measure of progress to reflect any changes in the outcome of the performance obligation. Engine storage services are recognized on a monthly basis, utilizing the input method of days passed. Amounts owed for managed services are typically billed upon contract completion. At December 31, 2023, unbilled revenue was $1.7 million, and the Company expects the remaining revenue to be fully recognized by June 30, 2024. Additionally, managed services are presented within the Other revenue line in the Consolidated Statements of Income. Interest income Interest income represents interest earned on notes receivable related to failed sale-leasebacks in which the Company was the buyer-lessor and on sales-type leases. Gain on sale of leased equipment The Company regularly sells equipment from its lease portfolio. This equipment may or may not be subject to a lease at the time of sale. The net gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the equipment are not included in the sale, any such amount is included in the calculation of gain or loss. Gain on sale of financial assets Some of the Company’s leases are recorded as financial assets and classified as notes receivable under ASC 842 as they are failed sale-leaseback transactions. The Company may sell its engines that are classified as notes receivable, and the net gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the equipment are not included in the sale, any such amount is included in the calculation of gain or loss. Other revenue Other revenue consists primarily of management fee income, lease administration fees, third-party consignment commissions earned, service and maintenance fee revenue, revenue related to the management of fixed base operator services, and other discrete revenue items. |
Equipment Held for Operating Lease | Equipment Held for Operating Lease Aircraft assets held for operating lease are stated at cost, less accumulated depreciation. Certain costs incurred in connection with the acquisition of aircraft assets are capitalized as part of the cost of such assets. Major overhauls paid for by the Company, which improve functionality or extend the original useful life, are capitalized and depreciated over the shorter of the estimated period to the next overhaul (“deferral method”) or the remaining useful life of the equipment. The Company does not accrue for planned major maintenance. The cost of overhauls of aircraft assets under long-term leases, for which the lessee is responsible for maintenance during the period of the lease, are paid for by the lessee or from reimbursable maintenance reserves paid to the Company in accordance with the lease and are not capitalized. Based on specific aspects of the equipment, the Company generally depreciates engines on a straight-line basis over a 15-year period from the acquisition date to a 55% residual value. This methodology is believed to accurately reflect the Company’s typical holding period for the engine assets and that the residual value assumption reasonably approximates the selling price of the assets 15 years from the date of acquisition. The typical 15-year holding period is the estimated useful life of the Company’s engines based on its business model and plans and represents how long the Company anticipates holding a newly acquired engine. The technical useful life of a new engine can be in excess of 25 years. The Company reviews the useful lives and residual values of all engines periodically as demand changes to accurately depreciate the cost of equipment over the useful lives of the engines. The aircraft and airframes owned by the Company are generally depreciated on a straight-line basis over an estimated useful life of 13 to 20 years to a 17% residual value. The marine vessel owned by the Company is depreciated on a straight-line basis over an estimated useful life of 18 years to a 15% residual value. The other leased parts and related equipment owned by the Company are generally depreciated on a straight-line basis over an estimated useful life of 14 to 15 years to a 25% residual value. The useful lives of older generation engines and aircraft may be significantly less based upon the technical status of the engine, as well as supply and demand factors. For these older generation engines and aircraft, the remaining useful lives and the remaining expected holding periods are typically the same. For older generation engines or aircraft that are unlikely to be repaired at the end of the current expected useful lives, the Company depreciates the engines or aircraft over their estimated lives to a residual value based on an estimate of the wholesale value of the parts after disassembly. As of December 31, 2023, 24 engines having a net book value of $17.2 million were depreciated under this policy with estimated remaining useful lives ranging from 1 to 83 months. The Company adjusts its estimates annually for these older generation assets, including updating estimates of an engine’s or aircraft’s remaining operating life as well as future residual value expected from part-out based on the current technical status of the engine or aircraft. The Company reviews its long-lived assets, including certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under ASC 842, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets to be disposed are reported at the lower of carrying amount or fair value less cost to sell. Impairment is identified by review of appraisals or by comparison of undiscounted forecasted cash flows, including estimated sales proceeds, over the life of the asset with the assets’ book value. If the undiscounted forecasted cash flows are less than the book value, the asset is written down to its fair value. Fair value is determined per individual asset by reference to independent appraisals, quoted market prices ( e.g. |
Equipment Held for Sale | Equipment Held for Sale Equipment held for sale includes assets being marketed for sale as well as third-party consigned assets. The assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell. |
Debt Issuance Costs and Related Fees | Debt Issuance Costs and Related Fees Fees paid in order to secure debt are capitalized, included in Debt obligations on the Consolidated Balance Sheets, and amortized over the life of the related loan using the effective interest method. Interest expense related to the accretion of debt issuance costs and note discounts was $4.8 million and $4.4 million in 2023 and 2022, respectively. |
Interest Rate Hedging | Interest Rate Hedging The Company enters into various derivative instruments periodically to mitigate the exposure on variable rate borrowings. The derivative instruments are fixed-rate interest swaps that are recorded at fair value as either an asset or liability. While substantially all of the Company’s derivative transactions are entered into for the purposes described above, hedge accounting is only applied when specific criteria have been met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and it must be highly effective. The hedging instrument’s effectiveness is assessed utilizing both a dollar offset and regression testing approach at the inception of the hedge and either a dollar offset and regression testing approach or qualitative analysis on at least a quarterly basis throughout its life. All of the transactions that the Company has designated as hedges are cash flow hedges. The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings. The ineffective portion of the hedges is recorded in earnings in the current period. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date. The Company recognizes in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 8). The Company files income tax returns in various states and countries which may have different statutes of limitations. The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Such adjustments have historically been minimal and immaterial to our financial results. |
Property, Equipment and Furnishings | Property, Equipment and Furnishings Property, equipment and furnishings are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash | Restricted Cash |
Spare Parts Inventory | Spare Parts Inventory Spare parts inventory consists of spare aircraft and engine parts purchased either directly by Willis Aero and also engines removed from the lease portfolio to be parted out. Spare parts inventory is stated at lower of cost or net realizable value. An impairment charge for excess or inactive inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns, future sales expectations, and salvage value. |
Intangible Assets | Intangible Assets Intangible assets include customer relationships and goodwill at Willis Asset Management. Intangible assets are accounted for in accordance with ASC 350, “Intangibles — Goodwill and Other.” Customer relationships are amortized on a straight-line basis over their estimated useful life of eight years. Aside from goodwill, the Company has no intangible assets with indefinite useful lives. Goodwill is assessed for impairment annually, at each year end. |
Other assets | Other Assets |
Management Estimates | Management Estimates These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S.”). The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management evaluates estimates on an ongoing basis, including those related to residual values, estimated asset lives, impairments, bad debts and credit losses. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the accounting policies on revenue recognition, useful life of equipment, asset residual values, asset impairment, allowance for doubtful accounts, and allowance for credit losses are critical to the results of operations. If the useful lives or residual values are lower than those estimated, upon sale of the asset a loss may be realized. Significant management judgment is required in the forecasting of future operating results, which are used in the preparation of projected undiscounted cash flows and should different conditions prevail, material impairment write-downs may occur. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of shares outstanding, adjusted for the dilutive effect of unvested restricted stock awards (“RSAs”). See Note 10 for more information on the computation of earnings per share. |
Investments | Investments The Company’s investments are joint ventures, in which it owns 50% of the equity of the ventures and are accounted for using the equity method of accounting. The investments are recorded at the amount invested plus or minus our 50% share of net income or loss, less any distributions or return of capital received from the entities. |
Stock Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense in the financial statements for share-based awards based on the grant-date fair value of those awards. Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. Forfeitures are accounted for as they occur. |
Initial Direct Costs Associated with Leases | Initial Direct Costs Associated with Leases |
Maintenance Rights | Maintenance Rights The Company identifies, measures and accounts for maintenance right assets and liabilities associated with acquisitions of equipment with in-place leases. A maintenance right asset represents the fair value of the contractual right under a lease to receive equipment in an improved maintenance condition as compared to the maintenance condition on the acquisition date. A maintenance right liability represents the Company’s obligation to pay the lessee for the difference between the lease-end contractual maintenance condition of the equipment and the actual maintenance condition of the equipment on the acquisition date. The equipment condition at the end of the lease term may result in either overhaul work being performed by the lessee to meet the required return condition or a financial settlement. When a capital event is performed on the equipment by the lessee, which satisfies the lessee’s maintenance right obligation, the maintenance rights are added to the equipment basis and depreciated to the next capital event. When equipment is sold before the end of the pre-existing lease, the maintenance rights are applied against any accumulated maintenance reserves, if paid by the lessee, and the remaining balance is applied to the disposition gain or loss. When a lease terminates, an end of lease true-up is performed, and the maintenance right is applied against the accumulated maintenance reserves or, for non-reserve lessees, the final settlement payment, and any remaining net maintenance right is recorded in the income statement. |
Foreign Currency Translation | Foreign Currency Translation The Company’s foreign investments have been converted at rates of exchange in effect at the balance sheet dates. The changes in exchange rates in our foreign investments reported under the equity method are included in stockholders’ equity as accumulated other comprehensive income. |
Risk Concentrations | Risk Concentrations Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash deposits, lease receivables and interest rate swaps. The Company places its cash deposits, which exceed federally insured limits, with financial institutions and other credit-worthy institutions, such as money market funds, and limits the amount of credit exposure to any one party. Management opts for security of principal as opposed to yield. Concentrations of credit risk with respect to lease receivables are limited due to the large number of customers comprising the customer base, and their dispersion across different geographic areas. Some lessees are required to make payments for maintenance reserves at the end of the lease however, this risk is considered limited due to the relatively few lessees which have this provision in the lease. The Company enters into interest rate swap agreements with counterparties that are investment grade financial institutions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted by the Company At the beginning of January 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected loss methodology. ASU 2016-13 affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. There was not a significant impact on the Consolidated Financial Statements upon adoption of the standard. Receivables, net of allowances, include amounts billed to customers in which the right to payment is unconditional. We maintain an allowance for our trade receivables to provide for the estimated amount that will not be collected, even when the risk of loss is remote. The allowance is measured on a collective pool basis when similar risk characteristics exist and is established as a percentage of accounts receivable. The percentage is based on all available and relevant information including age of outstanding receivables, historical payment experience and loss history, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions. A write-off is recorded when all or part of the receivable is deemed uncollectible. Write-offs are charged against the previously established allowance for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowance for credit losses. Notes receivable and investments in sales-type leases, net of allowances, represent the current remaining balances we expect to collect for our failed sale-leaseback transactions and sales-type leases. We establish allowances for credit losses to cover probable but specifically unknown losses existing in the portfolio. In doing so, we categorize our financial assets by pools with similar risk characteristics, including whether the financial asset is collateral-backed and whether the customer is placed on non-accrual status. A write-off is recorded when all or part of the financial asset is deemed uncollectible. Write-offs are charged against previously established allowances for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowances for credit losses. In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures .” The amendments in this ASU improve segment reporting requirements, primarily through enhanced disclosures on significant segment expenses. Other disclosures that the ASU requires public entities to provide include the title and position of the Chief Operating Decision Maker (“CODM”) and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company adopted this ASU for the year ended December 31, 2023. There was not a significant impact to the Company’s disclosures. Recent Accounting Pronouncements To Be Adopted by the Company In August 2023, the FASB issued ASU 2023-05, “Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement.” The amendments in this ASU apply to the formation of a joint venture, and under this ASU, a joint venture formation is the creation of a new reporting entity that would trigger a new basis of accounting. This ASU requires net assets contributed to the joint venture in a formation transaction to be measured at fair value at the formation date. The amendments in this ASU are effective for all joint ventures within the ASU’s scope that are formed on or after January 1, 2025, with early adoption permitted. Joint ventures formed on or after the effective date of ASU 2023-05 will be required to apply the new guidance prospectively. Joint ventures formed before the ASU’s effective date are permitted to apply the new guidance (1) retrospectively if they have “sufficient information” to do so or (2) prospectively if financial statements have not yet been issued (or made available for issuance). The Company expects to adopt this accounting standard update effective January 1, 2025 and is currently evaluating the potential effects on the consolidated financial statements. In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The ASU amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”), the purpose of which is to update and simplify disclosure requirements. The effective dates of the ASU will depend, in part, on whether an entity is already subject to the current disclosure requirements of the Securities and Exchange Commission (“SEC”). For such entities and those that must “file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer,” the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years after the date of such removal. Entities must apply the amended content to financial statements issued after the ASU’s effective date. For each of the Codification subtopics that the Company is already subject to, the Company expects to adopt the accounting standard update on each of the removal dates of the related disclosure requirements. The Company is currently evaluating the potential effects on the consolidated financial statements. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Restrictions on Cash and Cash Equivalents | The Company had total cash and cash equivalents and restricted cash, as presented in the Consolidated Statements of Cash Flows, as follows: December 31, 2023 2022 (in thousands) Cash and cash equivalents $ 7,071 $ 12,146 Restricted cash 160,958 76,870 Total as presented in the consolidated statements of cash flows $ 168,029 $ 89,016 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of the Reportable Segments | Supplemental information to the Consolidated Balance Sheets related to leases was as follows: Leases Classification December 31, 2023 December 31, 2022 (in thousands, except lease term and discount rate) Assets Operating lease right-of-use assets Other assets $ 8,652 $ 11,382 Liabilities Lease liabilities Accounts payable and accrued expenses $ 7,941 $ 10,365 Weighted average remaining lease term (years) Operating leases 2.90 3.45 Weighted average discount rate Operating leases 4.6 % 4.9 % |
Schedule of Future Maturities Operating Lease Liabilities and Future Minimum Lease Payments Under Non-cancelable Operating Lease | Future maturities of the Company’s lease liabilities at December 31, 2023 are as follows: Year (in thousands) 2024 $ 3,341 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 Total lease payments 8,599 Less: interest (658) Total lease liabilities $ 7,941 The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2023: Year (in thousands) 2024 $ 3,363 2025 2,797 2026 822 2027 604 2028 409 Thereafter 626 $ 8,621 |
Schedule of Components Lease Expense | The components of lease expense were as follows: Years Ended December 31, Lease expense Classification 2023 2022 (in thousands) Operating lease cost General and administrative $ 3,709 $ 1,692 Net lease cost $ 3,709 $ 1,692 Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2023 2022 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,327 $ 1,388 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 307 $ 6,478 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Major Source | The following tables disaggregate revenue by major source for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 Leasing and Spare Parts Sales Eliminations Total Lease rent revenue $ 213,138 $ — $ — $ 213,138 Maintenance reserve revenue 133,668 — — 133,668 Spare parts and equipment sales 476 19,883 — 20,359 Interest income 8,721 — — 8,721 Gain on sale of leased equipment 10,581 — — 10,581 Gain on sale of financial assets — — — — Managed services 29,246 — — 29,246 Other revenue 2,364 689 (211) 2,842 Total revenue $ 398,194 $ 20,572 $ (211) $ 418,555 Year ended December 31, 2022 Leasing and Spare Parts Sales Eliminations Total Lease rent revenue $ 162,571 $ — $ — $ 162,571 Maintenance reserve revenue 83,424 — — 83,424 Spare parts and equipment sales 1,595 25,414 — 27,009 Interest income 7,579 — — 7,579 Gain on sale of leased equipment 3,133 — — 3,133 Gain on sale of financial assets 3,116 — — 3,116 Managed services 23,613 — — 23,613 Other revenue 994 673 (185) 1,482 Total revenue $ 286,025 $ 26,087 $ (185) $ 311,927 |
Equipment Held for Operating _2
Equipment Held for Operating Lease (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Carrying Amounts of Assets Subject to Leases | The following table disaggregates equipment held for operating lease by asset class (in thousands): As of December 31, 2023 2022 Gross value Accumulated depreciation Net book value Gross value Accumulated depreciation Net book value (in thousands) Engines and related equipment $ 2,535,148 $ (569,596) $ 1,965,552 $ 2,491,448 $ (525,172) $ 1,966,276 Aircraft and airframes 157,616 (21,409) 136,207 150,089 (15,543) 134,546 Marine vessel 14,366 (3,288) 11,078 13,581 (2,468) 11,113 $ 2,707,130 $ (594,293) $ 2,112,837 $ 2,655,118 $ (543,183) $ 2,111,935 |
Schedule of Geographic Information About the Entity's Leased Aircraft Equipment Grouped by Domicile of the Lessee | The tables below set forth geographic information about the leased equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location): Years Ended December 31, Lease rent revenue 2023 2022 Region (in thousands) United States $ 71,436 $ 64,767 Asia-Pacific 69,692 40,270 Europe 43,790 35,621 South America 17,375 12,246 Canada 8,293 5,083 Central America 1,921 3,391 Middle East 631 1,193 Totals $ 213,138 $ 162,571 |
Schedule of Lease Status of the Equipment Held for Operating Lease | As of December 31, Net book value of equipment held for operating lease 2023 2022 Region (in thousands) Asia-Pacific $ 530,309 $ 485,737 United States 464,088 471,184 Europe 443,901 353,661 South America 136,917 141,145 Canada 109,056 69,030 Central America 43,192 130,187 Middle East 42,965 42,853 Off-lease 342,409 418,138 Totals $ 2,112,837 $ 2,111,935 As of December 31, 2023, the lease status of the equipment held for operating lease (in thousands) was as follows: Lease Term Net Book Value Off-lease and other $ 342,409 Month-to-month leases 360,550 Leases expiring 2024 613,557 Leases expiring 2025 230,389 Leases expiring 2026 180,004 Leases expiring 2027 105,166 Leases expiring 2028 118,635 Leases expiring thereafter 162,127 $ 2,112,837 |
Schedule of Minimum Future Payments Under Non-Cancelable Leases | As of December 31, 2023, minimum future payments under non-cancelable leases were as follows: Year (in thousands) 2024 $ 158,408 2025 78,803 2026 50,926 2027 36,122 2028 6,431 Thereafter 45,031 $ 375,721 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Investments [Abstract] | |
Schedule of Investments | As of December 31, 2023 WMES CASC Willis Total (in thousands) Investment in joint ventures as of December 31, 2021 $ 39,069 $ 16,858 $ 55,927 Income (loss) from joint ventures 248 (310) (62) Foreign currency translation adjustment — (1,373) (1,373) Other comprehensive gain from joint ventures 1,697 — 1,697 Investment in joint ventures as of December 31, 2022 41,014 15,175 56,189 Income (loss) from joint ventures (437) 3,345 2,908 Foreign currency translation adjustment — (523) (523) Other comprehensive loss from joint ventures (530) — (530) Investment in joint ventures as of December 31, 2023 $ 40,047 $ 17,997 $ 58,044 |
Schedule of Financial Information | Unaudited summarized financial information for 100% of WMES is presented in the following table: Years Ended December 31, 2023 2022 (in thousands) Revenue $ 47,617 $ 52,106 Expenses 46,317 51,953 WMES net income $ 1,300 $ 153 As of December 31, 2023 2022 (in thousands) Total assets $ 236,732 $ 267,580 Total liabilities 150,604 183,083 Total WMES net equity $ 86,128 $ 84,497 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Debt obligations consisted of the following: As of December 31, 2023 2022 (in thousands) Credit facility at a floating rate of interest of one-month term Secured Overnight Financing Rate (“SOFR”) plus 1.75% at December 31, 2023, secured by engines. The facility has a committed amount of $708.0 million at December 31, 2023. $49.8 million revolves until the earlier of the final WEST VII novated asset or the maturity date of March 31, 2024, $158.2 million revolves until the maturity date of June 2024, and $500.0 million revolves until the maturity date of June 2025. $ 353,000 $ 727,000 WEST VII Series A 2023 term notes payable at a fixed rate of interest of 8.00%, maturing in October 2048, secured by engines 406,894 — WEST VI Series A 2021 term notes payable at a fixed rate of interest of 3.10%, maturing in May 2046, secured by engines 252,986 262,779 WEST VI Series B 2021 term notes payable at a fixed rate of interest of 5.44%, maturing in May 2046, secured by engines 35,142 36,502 WEST VI Series C 2021 term notes payable at a fixed rate of interest of 7.39%, maturing in May 2046, secured by engines 12,361 14,738 WEST V Series A 2020 term notes payable at a fixed rate of interest of 3.23%, maturing in March 2045, secured by engines 240,371 255,136 WEST V Series B 2020 term notes payable at a fixed rate of interest of 4.21%, maturing in March 2045, secured by engines 33,485 35,542 WEST V Series C 2020 term notes payable at a fixed rate of interest of 6.66%, maturing in March 2045, secured by engines 10,695 13,314 WEST IV Series A 2018 term notes payable at a fixed rate of interest of 4.75%, maturing in September 2043, secured by engines 212,157 238,072 WEST IV Series B 2018 term notes payable at a fixed rate of interest of 5.44%, maturing in September 2043, secured by engines 29,024 36,386 WEST III Series A 2017 term notes payable at a fixed rate of interest of 4.69%, maturing in August 2042, secured by engines 175,705 209,061 WEST III Series B 2017 term notes payable at a fixed rate of interest of 6.36%, maturing in August 2042, secured by engines 23,592 30,255 Note payable at a fixed rate of interest of 4.59%, maturing in January 2032, secured by an engine 22,610 — Note payable at a fixed rate of interest of 4.23%, maturing in July 2031, secured by an engine 17,802 — Note payable at a fixed rate of interest of 3.18%, maturing in July 2024, secured by an aircraft 1,235 3,304 1,827,059 1,862,089 Less: unamortized debt issuance costs and note discounts (24,178) (14,811) Total debt obligations $ 1,802,881 $ 1,847,278 |
Schedule or Principal Outstanding | Principal outstanding at December 31, 2023, is expected to be repayable as follows: Year (in thousands) 2024 $ 73,206 2025 424,958 2026 271,175 2027 193,761 2028 239,778 Thereafter 624,181 Total $ 1,827,059 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Information About Financial Statement Effects Related to Cash Flow Hedges | The following table provides additional information about the financial statement effects related to the cash flow hedges for the years ended December 31, 2023 and 2022: Derivatives in Cash Flow Hedging Relationships Amount of Unrealized (Loss) Gain Recognized in OCI on Derivatives Years Ended December 31, 2023 2022 (in thousands) Interest rate contracts $ (18,309) $ 27,508 Total $ (18,309) $ 27,508 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income From Continuing Operation Before Income Taxes | The components of income before income taxes are as follows: Years ended December 31, 2023 2022 (in thousands) United States $ 73,853 $ 11,864 Foreign (6,723) (2,071) Income before income taxes $ 67,130 $ 9,793 |
Schedule of Components of Income Tax Expense | The components of income tax expense for the years ended December 31, 2023 and 2022 were as follows: Federal State Foreign Total (in thousands) 2023 Current $ 2,449 $ 1,387 $ (139) $ 3,697 Deferred 16,338 3,314 — 19,652 Total $ 18,787 $ 4,701 $ (139) $ 23,349 2022 Current $ — $ 128 $ 2,161 $ 2,289 Deferred 3,758 (1,693) — 2,065 Total $ 3,758 $ (1,565) $ 2,161 $ 4,354 |
Schedule of Reconciliation of the Federal Income Tax Expense at the Statutory Rate to the Effective Income Tax Expense | The following is a reconciliation of the federal income tax expense at the statutory rate of 21% for the years ended December 31, 2023 and 2022 to the effective income tax expense: Years Ended December 31, 2023 2022 (in thousands) Statutory federal income tax expense $ 14,097 $ 2,057 State taxes, net of federal benefit 4,410 (1,593) Foreign tax paid (169) 1,509 Foreign jurisdiction rate differential 545 666 Permanent differences-nondeductible executive compensation 2,929 2,180 Permanent differences and other 1,537 (465) Effective income tax expense $ 23,349 $ 4,354 |
Schedule of Activity Related to the Company's Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits: (in thousands) Balance as of December 31, 2021 $ 13 Increases related to current year tax positions 11 Decreases due to tax positions expired (5) Balance as of December 31, 2022 19 Increases related to current year tax positions 435 Decreases due to tax positions expired (5) Balance as of December 31, 2023 $ 449 |
Schedule of Tax Effects of Temporary Differences of the Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: As of December 31, 2023 2022 (in thousands) Deferred tax assets: Unearned lease revenue $ 9,614 $ 3,867 State taxes 167 2 Inventory 2,426 2,123 Reserves and allowances 5,471 4,425 Other accruals 29,231 15,973 Lease liability 934 1,366 Net operating loss carry forward 51,240 67,595 California alternative minimum tax credit — 33 Charitable contributions 2 2 Total deferred tax assets 99,085 95,386 Less: valuation allowance (978) (536) Net deferred tax assets 98,107 94,850 Deferred tax liabilities: Depreciation and impairment on aircraft engines and equipment (231,694) (208,389) Notes receivable (5,405) (5,479) Lease liability (930) (1,360) Other deferred tax liabilities (4,622) (4,590) Net deferred tax liabilities (242,651) (219,818) Other comprehensive income deferred tax liability (3,235) (7,548) Net deferred tax liabilities $ (147,779) $ (132,516) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy of Assets Measured on Nonrecurring Basis | The Company used Level 2 inputs to measure write-downs of equipment held for lease and equipment held for sale. Total Losses Years Ended December 31, 2023 2022 (in thousands) Equipment held for lease $ 4,083 $ 21,771 Equipment held for sale 315 78 Total $ 4,398 $ 21,849 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Eps | The following table presents the calculation of basic and diluted EPS: Year Ended December 31, 2023 2022 (in thousands) Net income attributable to common shareholders $ 40,372 $ 2,105 Basic weighted average common shares outstanding 6,305 6,071 Potentially dilutive common shares 176 226 Diluted weighted average common shares outstanding 6,481 6,297 Basic weighted average earnings per common share $ 6.40 $ 0.35 Diluted weighted average earnings per common share $ 6.23 $ 0.33 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of Components of Stock Compensation Expense | The components of stock compensation expense were as follows: Year Ended December 31, 2023 2022 (in thousands) 2023 Stock Incentive Plan $ 14,667 $ 13,401 Employee Stock Purchase Plan 135 150 Total Stock Compensation Expense $ 14,802 $ 13,551 |
Schedule of Restricted Stock Activity | The following table summarizes restricted stock activity under the 2023 Plan for the years ended December 31, 2023 and 2022: Number Outstanding Weighted Average Balance as of December 31, 2021 560,608 $ 36.30 Shares granted 330,400 32.44 Shares forfeited — — Shares vested (395,060) 38.09 Balance as of December 31, 2022 495,948 $ 32.30 Shares granted 335,100 56.06 Shares forfeited (7,665) 42.99 Shares vested (357,527) 31.34 Balance as of December 31, 2023 465,856 $ 49.95 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of the Reportable Segments | The following tables present a summary of the reportable segments (in thousands): For the year ended December 31, 2023 Leasing and Spare Parts Sales Eliminations Total Revenue: Lease rent revenue $ 213,138 $ — $ — $ 213,138 Maintenance reserve revenue 133,668 — — 133,668 Spare parts and equipment sales 476 19,883 — 20,359 Interest income 8,721 — — 8,721 Gain on sale of leased equipment 10,581 — — 10,581 Other revenue 31,610 689 (211) 32,088 Total revenue 398,194 20,572 (211) 418,555 Expenses: Depreciation and amortization expense 90,834 91 — 90,925 Cost of spare parts and equipment sales 56 15,151 — 15,207 Write-down of equipment 4,398 — — 4,398 General and administrative 139,867 4,921 — 144,788 Technical expense 20,220 — — 20,220 Net finance costs: Interest expense 78,795 — — 78,795 Total finance costs 78,795 — — 78,795 Total expenses 334,170 20,163 — 354,333 Income from operations $ 64,024 $ 409 $ (211) $ 64,222 For the Year ended December 31, 2022 Leasing and Spare Parts Sales Eliminations Total Revenue: Lease rent revenue $ 162,571 $ — $ — $ 162,571 Maintenance reserve revenue 83,424 — — 83,424 Spare parts and equipment sales 1,595 25,414 — 27,009 Interest income 7,579 — — 7,579 Gain on sale of leased equipment 3,133 — — 3,133 Gain on sale of financial assets 3,116 — — 3,116 Other revenue 24,607 673 (185) 25,095 Total revenue 286,025 26,087 (185) 311,927 Expenses: Depreciation and amortization expense 88,124 136 — 88,260 Cost of spare parts and equipment sales 96 20,737 — 20,833 Write-down of equipment 21,849 — — 21,849 General and administrative 87,996 4,534 — 92,530 Technical expense 14,415 — — 14,415 Net finance costs: Interest expense 66,743 — — 66,743 Gain on debt extinguishment (2,558) — — (2,558) Total finance costs 64,185 — — 64,185 Total expenses 276,665 25,407 — 302,072 Income from operations $ 9,360 $ 680 $ (185) $ 9,855 Leasing and Related Operations Spare Parts Sales Eliminations Total Total assets as of December 31, 2023 $ 2,602,907 $ 49,437 $ — $ 2,652,344 Total assets as of December 31, 2022 $ 2,530,130 $ 45,087 $ — $ 2,575,217 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Organization and Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Oct. 31, 2023 | |
Revenue Recognition | |||
Deferred in substance fixed payment | $ 28.4 | $ 6.3 | |
Lease rent receivables past due | 10.5 | ||
Maintenance reserve receivables past due | $ 8.9 | ||
Minimum number of days for which lease rent and maintenance reserve payments are past due | 30 days | ||
Unbilled revenue associated with outstanding contracts | $ 1.7 | ||
Revenue Benchmark | Customer Concentration Risk | One Customer | |||
Revenue Recognition | |||
Concentration risk, percentage, more than | 10% | 10% | |
Accounts Receivable Benchmark | Customer Concentration Risk | One Customer | |||
Revenue Recognition | |||
Concentration risk, percentage, more than | 10% | ||
WEST III | |||
Organizations [Line Items] | |||
Subsidiary, percentage owned | 100% | ||
WEST IV | |||
Organizations [Line Items] | |||
Subsidiary, percentage owned | 100% | ||
WEST VII | |||
Organizations [Line Items] | |||
Subsidiary, percentage owned | 100% | ||
WEST VII | WEST VII Notes | |||
Organizations [Line Items] | |||
Aggregate principal amount | $ 410 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Equipment Held for Operating Lease (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) engine | Dec. 31, 2022 USD ($) | |
Equipment Held for Operating Lease | ||
Operating lease, impairment loss | $ 2 | $ 0 |
Write down of equipment | 2.4 | 21.8 |
Expense related to accretion of debt issuance costs and discounts | $ 4.8 | $ 4.4 |
Engines And Related Equipment | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 15 years | |
Residual value, percent | 55% | |
Marine Vessels | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 18 years | |
Residual value, percent | 15% | |
Spare part packages | ||
Equipment Held for Operating Lease | ||
Residual value, percent | 25% | |
Older generation engines | ||
Equipment Held for Operating Lease | ||
Number of engines | engine | 24 | |
Gross value | $ 17.2 | |
Maximum | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 39 years | |
Maximum | New engine | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 25 years | |
Maximum | Aircraft | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 20 years | |
Residual value, percent | 17% | |
Maximum | Spare part packages | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 15 years | |
Maximum | Older generation engines | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 83 months | |
Minimum | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 3 years | |
Minimum | Aircraft | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 13 years | |
Minimum | Spare part packages | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 14 years | |
Minimum | Older generation engines | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 1 month |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Property, Equipment and Furnishings and Restricted Cash (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Cash | |||
Security deposits | $ 23,790 | $ 20,490 | |
Cash and cash equivalents | 7,071 | 12,146 | |
Restricted cash | 160,958 | 76,870 | |
Total as presented in the consolidated statements of cash flows | $ 168,029 | $ 89,016 | $ 95,641 |
WEST III Notes | |||
Restricted Cash | |||
Projected maintenance obligation period | 9 months | ||
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 9,400 | ||
WEST IV Notes | |||
Restricted Cash | |||
Projected maintenance obligation period | 10 months | ||
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 4,500 | ||
WEST V Notes | |||
Restricted Cash | |||
Projected maintenance obligation period | 12 months | ||
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 5,000 | ||
WEST VI Notes | |||
Restricted Cash | |||
Projected maintenance obligation period | 12 months | ||
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 1,000 | ||
Security deposits | $ 1,000 | ||
WEST III Notes, WEST IV Notes, and WEST V Notes | |||
Restricted Cash | |||
Projected maintenance obligation period for security deposit | 4 months | ||
Security deposits | $ 1,000 | ||
Minimum | |||
Property, Equipment and Furnishings | |||
Useful life of property, equipment and furnishings | 3 years | ||
Maximum | |||
Property, Equipment and Furnishings | |||
Useful life of property, equipment and furnishings | 39 years |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Intangibles and Other Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Prepaid deposits | $ 5,800,000 | $ 7,000,000 |
Customer Relationships | ||
Intangible Assets | ||
Useful life | 8 years | |
Indefinite-lived Intangible Assets | ||
Intangible Assets | ||
Intangible assets with indefinite useful lives | $ 0 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Investments and Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Equity ownership of the venture | 50% | |
Amortization of initial direct costs associated with leases | $ 1.4 | $ 0.9 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
ROU assets | $ 8,652 | $ 11,382 |
Total lease liabilities | $ 7,941 | 10,365 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 1 year | |
Options to renew lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 14 years | |
Options to renew lease term | 5 years | |
WMES | ||
Lessee, Lease, Description [Line Items] | ||
ROU assets | 4,900 | |
Total lease liabilities | $ 4,900 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Operating lease right-of-use assets | $ 8,652 | $ 11,382 |
Lease liabilities | $ 7,941 | $ 10,365 |
Weighted average remaining lease term | 2 years 10 months 24 days | 3 years 5 months 12 days |
Weighted average discount rate | 4.60% | 4.90% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 3,341 | |
2025 | 2,797 | |
2026 | 822 | |
2027 | 604 | |
2028 | 409 | |
Thereafter | 626 | |
Total lease payments | 8,599 | |
Less: interest | (658) | |
Total lease liabilities | $ 7,941 | $ 10,365 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 3,363 |
2025 | 2,797 |
2026 | 822 |
2027 | 604 |
2028 | 409 |
Thereafter | 626 |
Total | $ 8,621 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 3,709 | $ 1,692 |
Net lease cost | 3,709 | 1,692 |
Operating cash flows from operating leases | 3,327 | 1,388 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 307 | $ 6,478 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contracts with Customers | ||
Interest income | $ 8,721 | $ 7,579 |
Gain on sale of leased equipment | 10,581 | 3,133 |
Gain on sale of financial assets | 0 | 3,116 |
Total revenue | 418,555 | 311,927 |
Lease rent revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 213,138 | 162,571 |
Maintenance reserve revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 133,668 | 83,424 |
Spare parts and equipment sales | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 20,359 | 27,009 |
Managed services | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 29,246 | 23,613 |
Other revenue | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 2,842 | 1,482 |
Operating Segments | Leasing and Related Operations | ||
Revenue from Contracts with Customers | ||
Interest income | 8,721 | 7,579 |
Gain on sale of leased equipment | 10,581 | 3,133 |
Gain on sale of financial assets | 0 | 3,116 |
Total revenue | 398,194 | 286,025 |
Operating Segments | Leasing and Related Operations | Lease rent revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 213,138 | 162,571 |
Operating Segments | Leasing and Related Operations | Maintenance reserve revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 133,668 | 83,424 |
Operating Segments | Leasing and Related Operations | Spare parts and equipment sales | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 476 | 1,595 |
Operating Segments | Leasing and Related Operations | Managed services | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 29,246 | 23,613 |
Operating Segments | Leasing and Related Operations | Other revenue | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 2,364 | 994 |
Operating Segments | Spare Parts Sales | ||
Revenue from Contracts with Customers | ||
Interest income | 0 | 0 |
Gain on sale of leased equipment | 0 | 0 |
Gain on sale of financial assets | 0 | 0 |
Total revenue | 20,572 | 26,087 |
Operating Segments | Spare Parts Sales | Lease rent revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 0 | 0 |
Operating Segments | Spare Parts Sales | Maintenance reserve revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 0 | 0 |
Operating Segments | Spare Parts Sales | Spare parts and equipment sales | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 19,883 | 25,414 |
Operating Segments | Spare Parts Sales | Managed services | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 0 | 0 |
Operating Segments | Spare Parts Sales | Other revenue | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 689 | 673 |
Eliminations | ||
Revenue from Contracts with Customers | ||
Interest income | 0 | 0 |
Gain on sale of leased equipment | 0 | 0 |
Gain on sale of financial assets | 0 | 0 |
Total revenue | (211) | (185) |
Eliminations | Lease rent revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 0 | 0 |
Eliminations | Maintenance reserve revenue | ||
Revenue from Contracts with Customers | ||
Lease rent and maintenance reserve revenue | 0 | 0 |
Eliminations | Spare parts and equipment sales | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 0 | 0 |
Eliminations | Managed services | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | 0 | 0 |
Eliminations | Other revenue | ||
Revenue from Contracts with Customers | ||
Other sales and revenues | $ (211) | $ (185) |
Equipment Held for Operating _3
Equipment Held for Operating Lease - Additional Information (Details) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2023 USD ($) region | Dec. 31, 2022 USD ($) | Dec. 31, 2023 engine | Dec. 31, 2023 aircraft | Dec. 31, 2023 marine_vessel | Dec. 31, 2022 engine | Dec. 31, 2022 aircraft | Dec. 31, 2022 marine_vessel | |
Lessor, Lease, Description [Line Items] | ||||||||
Equipment held for operating lease | $ 2,112,837 | $ 2,111,935 | ||||||
Notes receivable, net of allowances of $69 and $0 at December 31, 2023 and 2022, respectively | 92,621 | 81,439 | ||||||
Maintenance rights | 9,180 | 17,708 | ||||||
Investments in sales-type leases, net of allowances of $9 and $0 at December 31, 2023 and 2022, respectively | 8,800 | |||||||
Number of equipment pieces held for lease | 337 | 12 | 1 | 339 | 13 | 1 | ||
Interest income | $ 8,721 | 7,579 | ||||||
Number of geographic regions in which aircraft lessees are domiciled in | region | 7 | |||||||
Investments in sales-type leases, net of allowances of $9 and $0 at December 31, 2023 and 2022, respectively | $ 8,759 | $ 6,440 | ||||||
Notes Receivable | Minimum | ||||||||
Lessor, Lease, Description [Line Items] | ||||||||
Note receivable, effective interest rate | 7.10% | 7.10% | ||||||
Notes Receivable | Maximum | ||||||||
Lessor, Lease, Description [Line Items] | ||||||||
Note receivable, effective interest rate | 12.20% | 12.20% |
Equipment Held for Operating _4
Equipment Held for Operating Lease - Schedule of Carrying Values (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Equipment Held For Operating Lease | ||
Lessor, Lease, Description [Line Items] | ||
Gross value | $ 2,707,130 | $ 2,655,118 |
Accumulated depreciation | (594,293) | (543,183) |
Net book value | 2,112,837 | 2,111,935 |
Engines and related equipment | ||
Lessor, Lease, Description [Line Items] | ||
Gross value | 2,535,148 | 2,491,448 |
Accumulated depreciation | (569,596) | (525,172) |
Net book value | 1,965,552 | 1,966,276 |
Aircraft and airframes | ||
Lessor, Lease, Description [Line Items] | ||
Gross value | 157,616 | 150,089 |
Accumulated depreciation | (21,409) | (15,543) |
Net book value | 136,207 | 134,546 |
Marine vessel | ||
Lessor, Lease, Description [Line Items] | ||
Gross value | 14,366 | 13,581 |
Accumulated depreciation | (3,288) | (2,468) |
Net book value | $ 11,078 | $ 11,113 |
Equipment Held for Operating _5
Equipment Held for Operating Lease - Lease Revenue by Geographic Region (Details) - Lease rent revenue - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | $ 213,138 | $ 162,571 |
United States | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 71,436 | 64,767 |
Asia-Pacific | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 69,692 | 40,270 |
Europe | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 43,790 | 35,621 |
South America | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 17,375 | 12,246 |
Canada | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 8,293 | 5,083 |
Central America | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 1,921 | 3,391 |
Middle East | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | $ 631 | $ 1,193 |
Equipment Held for Operating _6
Equipment Held for Operating Lease - Leased Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | $ 2,112,837 | $ 2,111,935 |
Off-lease | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 342,409 | 418,138 |
Month-to-month leases | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 360,550 | |
Lease expiring 2024 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 613,557 | |
Lease expiring 2025 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 230,389 | |
Leases expiring 2026 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 180,004 | |
Leases expiring 2027 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 105,166 | |
Leases expiring 2028 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 118,635 | |
Leases expiring thereafter | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 162,127 | |
Asia-Pacific | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 530,309 | 485,737 |
United States | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 464,088 | 471,184 |
Europe | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 443,901 | 353,661 |
South America | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 136,917 | 141,145 |
Central America | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 43,192 | 130,187 |
Canada | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 109,056 | 69,030 |
Middle East | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | $ 42,965 | $ 42,853 |
Equipment Held for Operating _7
Equipment Held for Operating Lease - Payments to be Received, Maturity by Year (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 158,408 |
2025 | 78,803 |
2026 | 50,926 |
2027 | 36,122 |
2028 | 6,431 |
Thereafter | 45,031 |
Total operating lease payments to be received | $ 375,721 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) engine aircraft | Dec. 31, 2022 USD ($) engine | |
Schedule of Equity Method Investments [Line Items] | ||
ROU assets | $ 8,652 | $ 11,382 |
Total lease liabilities | $ 7,941 | $ 10,365 |
WMES | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of assets sold | engine | 2 | 2 |
Proceeds from sale of assets | $ 28,800 | $ 12,600 |
ROU assets | 4,900 | |
Total lease liabilities | 4,900 | |
Equipment Held For Operating Lease | ||
Schedule of Equity Method Investments [Line Items] | ||
Net book value | $ 2,112,837 | 2,111,935 |
WMES | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest | 50% | |
Number of engines in lease portfolio | engine | 35 | |
Number of aircraft in lease portfolio | aircraft | 4 | |
Proceeds from sale of assets | $ 22,300 | |
WMES | Other Revenue | Asset Management | ||
Schedule of Equity Method Investments [Line Items] | ||
Management fees earned | 2,400 | $ 2,000 |
WMES | Equipment Held For Operating Lease | ||
Schedule of Equity Method Investments [Line Items] | ||
Net book value | $ 232,200 | |
CASC Willis | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest | 50% | |
Number of engines in lease portfolio | engine | 4 | |
CASC Willis | Equipment Held For Operating Lease | ||
Schedule of Equity Method Investments [Line Items] | ||
Net book value | $ 39,800 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity Method Investment Balances [Roll Forward] | ||
Investment in WMES joint ventures at beginning of the period | $ 56,189 | $ 55,927 |
Income (loss) from joint ventures | 2,908 | (62) |
Foreign currency translation adjustment | (523) | (1,373) |
Other comprehensive gain from joint ventures | (530) | 1,697 |
Investment in WMES joint ventures at end of the period | 58,044 | 56,189 |
WMES | ||
Equity Method Investment Balances [Roll Forward] | ||
Investment in WMES joint ventures at beginning of the period | 41,014 | 39,069 |
Income (loss) from joint ventures | (437) | 248 |
Foreign currency translation adjustment | 0 | 0 |
Other comprehensive gain from joint ventures | (530) | 1,697 |
Investment in WMES joint ventures at end of the period | 40,047 | 41,014 |
CASC Willis | ||
Equity Method Investment Balances [Roll Forward] | ||
Investment in WMES joint ventures at beginning of the period | 15,175 | 16,858 |
Income (loss) from joint ventures | 3,345 | (310) |
Foreign currency translation adjustment | (523) | (1,373) |
Other comprehensive gain from joint ventures | 0 | 0 |
Investment in WMES joint ventures at end of the period | $ 17,997 | $ 15,175 |
Investments - Summarized Financ
Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Consolidated Statements of Income | ||||
Revenue | $ 418,555 | $ 311,927 | ||
Expenses | 354,333 | 302,072 | ||
WMES net income | 43,781 | 5,439 | ||
Consolidated Balance Sheets | ||||
Total assets | 2,652,344 | [1] | 2,575,217 | |
Total liabilities | 2,163,417 | [2] | 2,120,640 | |
Total WMES net equity | 438,963 | 404,688 | $ 375,885 | |
WMES | ||||
Consolidated Statements of Income | ||||
Revenue | 47,617 | 52,106 | ||
Expenses | 46,317 | 51,953 | ||
WMES net income | 1,300 | 153 | ||
Consolidated Balance Sheets | ||||
Total assets | 236,732 | 267,580 | ||
Total liabilities | 150,604 | 183,083 | ||
Total WMES net equity | $ 86,128 | $ 84,497 | ||
[1] Total assets at December 31, 2023 and 2022 include the following assets of variable interest entities (“VIEs”) that can only be used to settle the liabilities of the VIEs: Restricted cash $160,958 and $76,870; Equipment $1,518,050 and $1,167,970; Maintenance rights $7,806 and $5,433; Notes receivable $91,960 and $80,220; Investments in sales-type leases $3,564 and $0; and Other assets $13,339 and $6,470, respectively. Total liabilities at December 31, 2023 and 2022 include the following liabilities of VIEs for which the VIEs’ creditors do not have recourse to Willis Lease Finance Corporation: Debt obligations $1,411,680 and $1,118,721, respectively. |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Notes Payable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Oct. 31, 2023 | Dec. 31, 2022 | |
Long Term Debt [Line Items] | |||
Gross amount of debt | $ 1,827,059,000 | $ 1,862,089,000 | |
Less: unamortized debt issuance costs and note discounts | (24,178,000) | (14,811,000) | |
Total debt obligations | 1,802,881,000 | 1,847,278,000 | |
WEST V | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 8% | ||
Revolving credit facility | |||
Long Term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | ||
Revolving credit facility | Maturity in March 2024 | |||
Long Term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 49,800,000 | ||
Revolving credit facility | Maturity in June 2024 | |||
Long Term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 158,200,000 | ||
Revolving credit facility | Maturity In June 2025 | |||
Long Term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 500,000,000 | ||
Credit facility at a floating rate of interest of one-month term Secured Overnight Financing Rate (“SOFR”) plus 1.75% at December 31, 2023, secured by engines. The facility has a committed amount of $708.0 million at December 31, 2023. $49.8 million revolves until the earlier of the final WEST VII novated asset or the maturity date of March 31, 2024, $158.2 million revolves until the maturity date of June 2024, and $500.0 million revolves until the maturity date of June 2025. | |||
Long Term Debt [Line Items] | |||
Line of credit facility outstanding amount | $ 353,000,000 | 727,000,000 | |
West Vii Series a 2023 Term Notes Payable at a Fixed Rate of Interest of 8.00%, Maturing in October 2048, Secured by Engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 8% | ||
Gross amount of debt | $ 406,894,000 | 0 | |
WEST VI Series A 2021 term notes payable at a fixed rate of interest of 3.10%, maturing in May 2046, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 3.10% | ||
Gross amount of debt | $ 252,986,000 | 262,779,000 | |
WEST VI Series B 2021 term notes payable at a fixed rate of interest of 5.44%, maturing in May 2046, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 5.44% | ||
Gross amount of debt | $ 35,142,000 | 36,502,000 | |
WEST VI Series C 2021 term notes payable at a fixed rate of interest of 7.39%, maturing in May 2046, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 7.39% | ||
Gross amount of debt | $ 12,361,000 | 14,738,000 | |
WEST V Series A 2020 term notes payable at a fixed rate of interest of 3.23%, maturing in March 2045, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 3.23% | ||
Gross amount of debt | $ 240,371,000 | 255,136,000 | |
WEST V Series B 2020 term notes payable at a fixed rate of interest of 4.21%, maturing in March 2045, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 4.21% | ||
Gross amount of debt | $ 33,485,000 | 35,542,000 | |
WEST V Series C 2020 term notes payable at a fixed rate of interest of 6.66%, maturing in March 2045, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 6.66% | ||
Gross amount of debt | $ 10,695,000 | 13,314,000 | |
WEST IV Series A 2018 term notes payable at a fixed rate of interest of 4.75%, maturing in September 2043, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 4.75% | ||
Gross amount of debt | $ 212,157,000 | 238,072,000 | |
WEST IV Series B 2018 term notes payable at a fixed rate of interest of 5.44%, maturing in September 2043, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 5.44% | ||
Gross amount of debt | $ 29,024,000 | 36,386,000 | |
WEST III Series A 2017 term notes payable at a fixed rate of interest of 4.69%, maturing in August 2042, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 4.69% | ||
Gross amount of debt | $ 175,705,000 | 209,061,000 | |
WEST III Series B 2017 term notes payable at a fixed rate of interest of 6.36%, maturing in August 2042, secured by engines | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 6.36% | ||
Gross amount of debt | $ 23,592,000 | 30,255,000 | |
Note payable at a fixed rate of interest of 4.59%, maturing in January 2032, secured by an engine | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 4.59% | ||
Gross amount of debt | $ 22,610,000 | 0 | |
Note payable at a fixed rate of interest of 4.23%, maturing in July 2031, secured by an engine | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 4.23% | ||
Gross amount of debt | $ 17,802,000 | 0 | |
Note payable at a fixed rate of interest of 3.18%, maturing in July 2024, secured by an aircraft | |||
Long Term Debt [Line Items] | |||
Fixed rate (as a percent) | 3.18% | ||
Gross amount of debt | $ 1,235,000 | $ 3,304,000 | |
Revolving credit facility | Credit facility at a floating rate of interest of one-month term Secured Overnight Financing Rate (“SOFR”) plus 1.75% at December 31, 2023, secured by engines. The facility has a committed amount of $708.0 million at December 31, 2023. $49.8 million revolves until the earlier of the final WEST VII novated asset or the maturity date of March 31, 2024, $158.2 million revolves until the maturity date of June 2024, and $500.0 million revolves until the maturity date of June 2025. | |||
Long Term Debt [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 708,000,000 | ||
Secured Overnight Financing Rate (SOFR) | Credit facility at a floating rate of interest of one-month term Secured Overnight Financing Rate (“SOFR”) plus 1.75% at December 31, 2023, secured by engines. The facility has a committed amount of $708.0 million at December 31, 2023. $49.8 million revolves until the earlier of the final WEST VII novated asset or the maturity date of March 31, 2024, $158.2 million revolves until the maturity date of June 2024, and $500.0 million revolves until the maturity date of June 2025. | |||
Long Term Debt [Line Items] | |||
Variable rate (as a percent) | 1.75% |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Oct. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) tranche | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) tranche | |
Long Term Debt [Line Items] | |||||
Gross amount of debt | $ 1,827,059,000 | $ 1,862,089,000 | $ 1,827,059,000 | $ 1,862,089,000 | |
Gain on debt extinguishment | 0 | 2,558,000 | |||
Repayments of long-term debt | 665,480,000 | 228,840,000 | |||
WEST V | |||||
Long Term Debt [Line Items] | |||||
Fixed rate (as a percent) | 8% | ||||
Notes issue price, percentage of par | 98.84814% | ||||
Revolving credit facility | |||||
Long Term Debt [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | ||||
Repayments of debt | 292,000,000 | ||||
Revolving credit facility | Maturity in March 2024 | |||||
Long Term Debt [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 49,800,000 | 49,800,000 | |||
Revolving credit facility | Maturity in June 2024 | |||||
Long Term Debt [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | 158,200,000 | 158,200,000 | |||
WEST VI Notes | WEST VI | |||||
Long Term Debt [Line Items] | |||||
Debt instrument, face amount | $ 410,000,000 | ||||
WEST VI Series A Notes | |||||
Long Term Debt [Line Items] | |||||
Gross amount of debt | $ 252,986,000 | 262,779,000 | $ 252,986,000 | 262,779,000 | |
Fixed rate (as a percent) | 3.10% | 3.10% | |||
WEST VI Series B Notes | |||||
Long Term Debt [Line Items] | |||||
Gross amount of debt | $ 35,142,000 | 36,502,000 | $ 35,142,000 | 36,502,000 | |
Fixed rate (as a percent) | 5.44% | 5.44% | |||
WEST VI Series C Notes | |||||
Long Term Debt [Line Items] | |||||
Gross amount of debt | $ 12,361,000 | 14,738,000 | $ 12,361,000 | $ 14,738,000 | |
Fixed rate (as a percent) | 7.39% | 7.39% | |||
ABS Notes | |||||
Long Term Debt [Line Items] | |||||
Gain on debt extinguishment | $ 2,600,000 | ||||
Number of tranches of notes repurchased | tranche | 6 | 6 | |||
Repayments of long-term debt | $ 12,200,000 | ||||
Note payable at a fixed rate of interest of 4.23%, maturing in July 2031, secured by an engine | |||||
Long Term Debt [Line Items] | |||||
Gross amount of debt | $ 17,802,000 | 0 | $ 17,802,000 | $ 0 | |
Option to repurchase amount | $ 17,000,000 | $ 17,000,000 | |||
Fixed rate (as a percent) | 4.23% | 4.23% | |||
Note payable at a fixed rate of interest of 4.59%, maturing in January 2032, secured by an engine | |||||
Long Term Debt [Line Items] | |||||
Gross amount of debt | $ 22,610,000 | 0 | $ 22,610,000 | 0 | |
Option to repurchase amount | $ 17,700,000 | $ 17,700,000 | |||
Fixed rate (as a percent) | 4.59% | 4.59% | |||
Revolving credit facility | Revolving credit facility | |||||
Long Term Debt [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 708,000,000 | $ 708,000,000 | |||
Line of credit facility, remaining borrowing capacity | $ 355,000,000 | $ 273,000,000 | $ 355,000,000 | $ 273,000,000 |
Debt Obligations - Schedule o_2
Debt Obligations - Schedule of Principal Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 73,206 | |
2025 | 424,958 | |
2026 | 271,175 | |
2027 | 193,761 | |
2028 | 239,778 | |
Thereafter | 624,181 | |
Total | $ 1,827,059 | $ 1,862,089 |
Derivative Instruments - Additi
Derivative Instruments - Additional information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 USD ($) agreement | Dec. 31, 2023 USD ($) agreement | Dec. 31, 2022 USD ($) | Dec. 31, 2019 USD ($) agreement | |
Derivative instruments | ||||
Interest income, interest-earning asset, increase (decrease) | $ 0.2 | |||
Interest rate contracts | ||||
Derivative instruments | ||||
Borrowings at variable interest rates | $ 353 | $ 727 | ||
Number of interest rate swap agreements | agreement | 5 | |||
Number of interest rate derivatives entered into | agreement | 4 | |||
Notional amount outstanding | $ 100 | |||
Net fair value of swap asset (liability) | $ 16.5 | 34.8 | ||
Adjustment to interest expense | $ (23.4) | (7.8) | ||
Derivative, accumulated gain (loss), net | $ 34.8 | |||
2021 Swap Agreements, Group 1 | ||||
Derivative instruments | ||||
Number of interest rate swap agreements | agreement | 2 | |||
Remaining maturity term | 1 month | |||
2021 Swap Agreements, Group 2 | ||||
Derivative instruments | ||||
Number of interest rate swap agreements | agreement | 2 | |||
Remaining maturity term | 25 months | |||
2019 Swap Ageement | ||||
Derivative instruments | ||||
Number of interest rate swap agreements | agreement | 1 | |||
Notional amount outstanding | $ 100 | |||
Remaining maturity term | 6 months |
Derivative Instruments - Cash f
Derivative Instruments - Cash flow hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Effects of derivative instruments | ||
Unrealized (loss) gain on derivative instruments | $ (18,309) | $ 27,508 |
Cash flow hedging | ||
Effects of derivative instruments | ||
Unrealized (loss) gain on derivative instruments | (18,309) | 27,508 |
Cash flow hedging | Interest rate contracts | Interest expense | ||
Effects of derivative instruments | ||
Unrealized (loss) gain on derivative instruments | $ (18,309) | $ 27,508 |
Income Taxes - Components of In
Income Taxes - Components of Income Before Taxes and of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
United States | $ 73,853 | $ 11,864 |
Foreign | (6,723) | (2,071) |
Income before income taxes | 67,130 | 9,793 |
Federal | ||
Current | 2,449 | 0 |
Deferred | 16,338 | 3,758 |
Total | 18,787 | 3,758 |
State | ||
Current | 1,387 | 128 |
Deferred | 3,314 | (1,693) |
Total | 4,701 | (1,565) |
Foreign | ||
Current | (139) | 2,161 |
Deferred | 0 | 0 |
Total | (139) | 2,161 |
Total | ||
Current | 3,697 | 2,289 |
Deferred | 19,652 | 2,065 |
Effective income tax expense | 23,349 | 4,354 |
Reconciliation of the federal income tax expense at the statutory rate to the effective income tax expense | ||
Statutory federal income tax expense | 14,097 | 2,057 |
State taxes, net of federal benefit | 4,410 | (1,593) |
Foreign tax paid | (169) | 1,509 |
Foreign jurisdiction rate differential | 545 | 666 |
Permanent differences-nondeductible executive compensation | 2,929 | 2,180 |
Permanent differences and other | 1,537 | (465) |
Effective income tax expense | 23,349 | $ 4,354 |
Subpart F income from foreign operations, amount | $ 1,300 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits and Temporary Differences (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Unrecognized tax benefits | ||
Balance at the beginning of the period | $ 19 | $ 13 |
Increases related to current year tax positions | 435 | 11 |
Decreases due to tax positions expired | (5) | (5) |
Balance at the end of the period | 449 | 19 |
Deferred tax assets: | ||
Unearned lease revenue | 9,614 | 3,867 |
State taxes | 167 | 2 |
Inventory | 2,426 | 2,123 |
Reserves and allowances | 5,471 | 4,425 |
Other accruals | 29,231 | 15,973 |
Lease liability | 934 | 1,366 |
Net operating loss carry forward | 51,240 | 67,595 |
California alternative minimum tax credit | 0 | 33 |
Charitable contributions | 2 | 2 |
Total deferred tax assets | 99,085 | 95,386 |
Less: valuation allowance | (978) | (536) |
Net deferred tax assets | 98,107 | 94,850 |
Deferred tax liabilities: | ||
Depreciation and impairment on aircraft engines and equipment | (231,694) | (208,389) |
Notes receivable | (5,405) | (5,479) |
Lease liability | (930) | (1,360) |
Other deferred tax liabilities | (4,622) | (4,590) |
Net deferred tax liabilities | (242,651) | (219,818) |
Other comprehensive income deferred tax liability | (3,235) | (7,548) |
Net deferred tax liabilities | (147,779) | $ (132,516) |
Federal | ||
Deferred tax liabilities: | ||
Operating loss carryforwards | 235,400 | |
State | ||
Deferred tax liabilities: | ||
Operating loss carryforwards | 1,000 | |
State | California Franchise Tax Board | ||
Deferred tax liabilities: | ||
Valuation allowance of net operating loss | 500 | |
State | Georgia Department of Revenue | ||
Deferred tax liabilities: | ||
Valuation allowance of net operating loss | $ 100 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) equipment | Dec. 31, 2023 USD ($) engine equipment | Dec. 31, 2023 USD ($) equipment airframe | Dec. 31, 2022 USD ($) engine | |
Derivative instruments | ||||
Fair value of notes receivable | $ 90,300 | $ 90,300 | $ 90,300 | $ 83,500 |
Investment in sales type leases | 8,700 | 8,700 | 8,700 | |
Investments in sales-type leases, net of allowances of $9 and $0 at December 31, 2023 and 2022, respectively | 8,759 | 8,759 | 8,759 | 6,440 |
Fair value of notes payable | 1,598,500 | $ 1,598,500 | $ 1,598,500 | 1,540,200 |
Write-down of equipment | 4,398 | $ 21,849 | ||
Number of assets impaired | 5 | 2 | 4 | |
Engines Located In Russia | ||||
Derivative instruments | ||||
Number of assets impaired | engine | 2 | |||
Assets To Be Sold Or Parted Out | ||||
Derivative instruments | ||||
Net book value | $ 31,900 | $ 31,900 | $ 31,900 | |
Number of assets previously impaired | equipment | 15 | 15 | 15 | |
Nonrecurring | ||||
Derivative instruments | ||||
Write-down of equipment | $ 4,400 | $ 21,800 | ||
Nonrecurring | Assets To Be Sold Or Parted Out | ||||
Derivative instruments | ||||
Write-down of equipment | 20,400 | |||
Interest rate contracts | ||||
Derivative instruments | ||||
Net fair value of swap asset (liability) | 16,500 | $ 16,500 | $ 16,500 | 34,800 |
Adjustment to interest expense | $ (23,400) | $ (7,800) |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Equipment held for lease | $ 4,083 | $ 21,771 |
Equipment held for sale | 315 | 78 |
Total | $ 4,398 | $ 21,849 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Shares not included in computation of diluted weighted average earnings per common (in shares) | 0 | 0 |
Net income attributable to common shareholders | $ 40,372 | $ 2,105 |
Basic weighted average common shares outstanding (in shares) | 6,305,000 | 6,071,000 |
Potentially dilutive common shares (in shares) | 176,000 | 226,000 |
Diluted weighted average common shares outstanding (in shares) | 6,481,000 | 6,297,000 |
Basic weighted average earnings per common share (in dollars per share) | $ 6.40 | $ 0.35 |
Diluted weighted average earnings per common share (in dollars per share) | $ 6.23 | $ 0.33 |
Commitments, Contingencies, G_2
Commitments, Contingencies, Guarantees and Indemnities (Details) $ in Millions | Dec. 31, 2023 USD ($) | Dec. 31, 2020 USD ($) modernEngine |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Purchase commitments | $ 459.7 | |
Capital Addition Purchase Commitments | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Minimum quantity required under purchase obligation (in engines) | modernEngine | 21 | |
Capital Addition Purchase Commitments | Minimum | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Purchase commitments | $ 74.5 | |
Capital Addition Purchase Commitments | Maximum | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Purchase commitments | $ 102.3 |
Equity (Details)
Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 15, 2023 | Sep. 30, 2017 | Oct. 31, 2016 | Dec. 31, 2023 | Dec. 31, 2022 | Oct. 31, 2022 | |
Common Stock Repurchase | ||||||
Repurchase of common stock authorized by Board of Directors | $ 60,000,000 | |||||
Common stock repurchased, value | $ 5,245,000 | |||||
Weighted average price per share (in dollars per share) | $ 33.98 | |||||
Stock repurchase program, remaining authorized repurchase amount | $ 39,600,000 | |||||
Redeemable preferred stock - shares issued (in shares) | 2,500,000 | 2,500,000 | ||||
Redeemable preferred stock - par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Liquidation preference (in dollars per share) | 20 | |||||
Redemption price (in dollars per share) | $ 20 | |||||
Series A-1 Preferred Stock | ||||||
Common Stock Repurchase | ||||||
Redeemable preferred stock - shares issued (in shares) | 1,000,000 | |||||
Dividend rate | 8.50% | 6.50% | ||||
Redeemable preferred stock - par value (in dollars per share) | $ 0.01 | |||||
Purchase price (in dollars per share) | $ 20 | |||||
Net proceeds after deducting investor fees | $ 19,800,000 | |||||
Preferred stock dividends | $ 3,200,000 | $ 3,300,000 | ||||
Series A-2 Preferred Stock | ||||||
Common Stock Repurchase | ||||||
Redeemable preferred stock - shares issued (in shares) | 1,500,000 | |||||
Dividend rate | 6.50% | |||||
Redeemable preferred stock - par value (in dollars per share) | $ 0.01 | |||||
Purchase price (in dollars per share) | $ 20 | |||||
Net proceeds after deducting investor fees | $ 29,700,000 | |||||
Preferred stock dividends | $ 3,200,000 | $ 3,300,000 | ||||
Common Stock | ||||||
Common Stock Repurchase | ||||||
Shares repurchased (in shares) | 154,215 | |||||
Common stock repurchased, value | $ 1,000 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total Stock Compensation Expense | $ 14,802 | $ 13,551 |
2023 Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total Stock Compensation Expense | 14,667 | 13,401 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total Stock Compensation Expense | $ 135 | $ 150 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Nov. 10, 2021 | |
Stock-based compensation plans | |||
Total Stock Compensation Expense | $ 14,802,000 | $ 13,551,000 | |
2023 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Total Stock Compensation Expense | $ 14,667,000 | $ 13,401,000 | |
Employee Stock Purchase Plan | |||
Stock-based compensation plans | |||
Number of shares authorized (in shares) | 425,000 | ||
Maximum percentage of cash compensation allowed to be deducted for the purchase of common stock by eligible employees | 10% | ||
Maximum number of shares to be purchased by employee in one calendar year (in shares) | 1,000 | ||
Maximum amount of shares to be purchased by employee in one calendar year | $ 25,000 | ||
Purchase price expressed as a percentage of the market price of the common stock on the purchase date or on the date of entry | 85% | ||
Shares issued (in shares) | 9,832 | 19,789 | |
Total Stock Compensation Expense | $ 135,000 | $ 150,000 | |
Restricted Stock | 2023 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Number of shares authorized (in shares) | 1,750,000 | ||
Number of shares awarded (in shares) | 1,591,800 | ||
Number of shares available (in shares) | 2,052,796 | ||
Remaining average vesting period for recognition of unrecognized compensation expense | 1 year | ||
Intrinsic value of unvested shares | $ 22,800,000 | ||
Total Stock Compensation Expense | $ 18,500,000 | ||
Minimum | 2023 Stock Incentive Plan | Service-Based Vesting | |||
Stock-based compensation plans | |||
Vesting period | 1 year | ||
Minimum | 2023 Stock Incentive Plan | Performance-Based Vesting | |||
Stock-based compensation plans | |||
Vesting period | 1 year | ||
Maximum | 2023 Stock Incentive Plan | Service-Based Vesting | |||
Stock-based compensation plans | |||
Vesting period | 4 years | ||
Maximum | 2023 Stock Incentive Plan | Performance-Based Vesting | |||
Stock-based compensation plans | |||
Vesting period | 2 years |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Restricted Stock Activity (Details) - Restricted Stock - 2023 Stock Incentive Plan - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number Outstanding | ||
Balance at the beginning of the period (in shares) | 495,948 | 560,608 |
Shares granted (in shares) | 335,100 | 330,400 |
Shares forfeited (in shares) | (7,665) | 0 |
Shares vested (in shares) | (357,527) | (395,060) |
Balance at the end of the period (in shares) | 465,856 | 495,948 |
Weighted Average Grant Date Fair Value | ||
Balance at the beginning of the period (in dollars per share) | $ 32.30 | $ 36.30 |
Shares granted (in dollars per share) | 56.06 | 32.44 |
Shares cancelled (in dollars per share) | 42.99 | 0 |
Shares vested (in dollars per share) | 31.34 | 38.09 |
Balance at the end of the period (in dollars per share) | $ 49.95 | $ 32.30 |
Employee 401(k) Plan (Details)
Employee 401(k) Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Maximum percentage of pretax salary, which can be deferred by employees | 75% | |
Maximum amount of wages, which can be deferred by employees | $ 22,500 | |
Maximum amount of wages, which can be deferred by employees at least 50 years of age | $ 30,000 | |
Minimum age of employees for a specified contribution amount of wages | 50 years | |
Maximum amount of wages company will match for participants 50 years or older | $ 15,000 | |
Percentage of employee's salary for which the company contributes a matching contribution | 50% | |
Maximum amount of employee's salary for which the company contributes a matching contribution | $ 11,250 | |
Amount of employer contribution | $ 900,000 | $ 700,000 |
Related Party Transactions (Det
Related Party Transactions (Details) | 7 Months Ended | 12 Months Ended | |
Jul. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) engine | Dec. 31, 2022 USD ($) engine | |
Related Party and Similar Transactions | |||
ROU assets | $ 8,652,000 | $ 11,382,000 | |
Total lease liabilities | 7,941,000 | 10,365,000 | |
Revenue | 418,555,000 | $ 311,927,000 | |
Mikchalk Lake, LLC | |||
Related Party and Similar Transactions | |||
Purchases from related party | $ 44,000 | ||
Executive Chairman of the Board | Hangar Lease | |||
Related Party and Similar Transactions | |||
Revenue | $ 7,700 | ||
WMES | |||
Related Party and Similar Transactions | |||
Number of assets sold | engine | 2 | 2 | |
Proceeds from sale of assets | $ 28,800,000 | $ 12,600,000 | |
ROU assets | 4,900,000 | ||
Total lease liabilities | 4,900,000 | ||
WMES | |||
Related Party and Similar Transactions | |||
Proceeds from sale of assets | 22,300,000 | ||
WMES | Other Revenue | Asset Management | |||
Related Party and Similar Transactions | |||
Other sales and revenues | $ 2,400,000 | $ 2,000,000 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | ||
Reportable Segments | |||
Number of operating segments | segment | 2 | ||
Revenue: | |||
Interest income | $ 8,721 | $ 7,579 | |
Gain on sale of leased equipment | 10,581 | 3,133 | |
Gain on sale of financial assets | 0 | 3,116 | |
Total revenue | 418,555 | 311,927 | |
Expenses: | |||
Depreciation and amortization expense | 90,925 | 88,260 | |
Cost of spare parts and equipment sales | 15,207 | 20,833 | |
Write-down of equipment | 4,398 | 21,849 | |
General and administrative | 144,788 | 92,530 | |
Technical expense | 20,220 | 14,415 | |
Interest expense | 78,795 | 66,743 | |
Total finance costs | 78,795 | 64,185 | |
Total expenses | 354,333 | 302,072 | |
Income from operations | 64,222 | 9,855 | |
Total assets | 2,652,344 | [1] | 2,575,217 |
Gain on debt extinguishment | 0 | (2,558) | |
Eliminations | |||
Revenue: | |||
Interest income | 0 | 0 | |
Gain on sale of leased equipment | 0 | 0 | |
Gain on sale of financial assets | 0 | 0 | |
Total revenue | (211) | (185) | |
Expenses: | |||
Depreciation and amortization expense | 0 | 0 | |
Cost of spare parts and equipment sales | 0 | 0 | |
Write-down of equipment | 0 | 0 | |
General and administrative | 0 | 0 | |
Technical expense | 0 | 0 | |
Interest expense | 0 | 0 | |
Total finance costs | 0 | 0 | |
Total expenses | 0 | 0 | |
Income from operations | (211) | (185) | |
Total assets | 0 | 0 | |
Gain on debt extinguishment | 0 | ||
Leasing and Related Operations | Operating Segments | |||
Revenue: | |||
Interest income | 8,721 | 7,579 | |
Gain on sale of leased equipment | 10,581 | 3,133 | |
Gain on sale of financial assets | 0 | 3,116 | |
Total revenue | 398,194 | 286,025 | |
Expenses: | |||
Depreciation and amortization expense | 90,834 | 88,124 | |
Cost of spare parts and equipment sales | 56 | 96 | |
Write-down of equipment | 4,398 | 21,849 | |
General and administrative | 139,867 | 87,996 | |
Technical expense | 20,220 | 14,415 | |
Interest expense | 78,795 | 66,743 | |
Total finance costs | 78,795 | 64,185 | |
Total expenses | 334,170 | 276,665 | |
Income from operations | 64,024 | 9,360 | |
Total assets | 2,602,907 | 2,530,130 | |
Gain on debt extinguishment | (2,558) | ||
Spare Parts Sales | Operating Segments | |||
Revenue: | |||
Interest income | 0 | 0 | |
Gain on sale of leased equipment | 0 | 0 | |
Gain on sale of financial assets | 0 | 0 | |
Total revenue | 20,572 | 26,087 | |
Expenses: | |||
Depreciation and amortization expense | 91 | 136 | |
Cost of spare parts and equipment sales | 15,151 | 20,737 | |
Write-down of equipment | 0 | 0 | |
General and administrative | 4,921 | 4,534 | |
Technical expense | 0 | 0 | |
Interest expense | 0 | 0 | |
Total finance costs | 0 | 0 | |
Total expenses | 20,163 | 25,407 | |
Income from operations | 409 | 680 | |
Total assets | 49,437 | 45,087 | |
Gain on debt extinguishment | 0 | ||
Lease rent revenue | |||
Revenue: | |||
Lease rent revenue | 213,138 | 162,571 | |
Lease rent revenue | Eliminations | |||
Revenue: | |||
Lease rent revenue | 0 | 0 | |
Lease rent revenue | Leasing and Related Operations | Operating Segments | |||
Revenue: | |||
Lease rent revenue | 213,138 | 162,571 | |
Lease rent revenue | Spare Parts Sales | Operating Segments | |||
Revenue: | |||
Lease rent revenue | 0 | 0 | |
Maintenance reserve revenue | |||
Revenue: | |||
Lease rent revenue | 133,668 | 83,424 | |
Maintenance reserve revenue | Eliminations | |||
Revenue: | |||
Lease rent revenue | 0 | 0 | |
Maintenance reserve revenue | Leasing and Related Operations | Operating Segments | |||
Revenue: | |||
Lease rent revenue | 133,668 | 83,424 | |
Maintenance reserve revenue | Spare Parts Sales | Operating Segments | |||
Revenue: | |||
Lease rent revenue | 0 | 0 | |
Spare parts and equipment sales | |||
Revenue: | |||
Other sales and revenues | 20,359 | 27,009 | |
Spare parts and equipment sales | Eliminations | |||
Revenue: | |||
Other sales and revenues | 0 | 0 | |
Spare parts and equipment sales | Leasing and Related Operations | Operating Segments | |||
Revenue: | |||
Other sales and revenues | 476 | 1,595 | |
Spare parts and equipment sales | Spare Parts Sales | Operating Segments | |||
Revenue: | |||
Other sales and revenues | 19,883 | 25,414 | |
Other revenue | |||
Revenue: | |||
Other sales and revenues | 32,088 | 25,095 | |
Other revenue | Eliminations | |||
Revenue: | |||
Other sales and revenues | (211) | (185) | |
Other revenue | Leasing and Related Operations | Operating Segments | |||
Revenue: | |||
Other sales and revenues | 31,610 | 24,607 | |
Other revenue | Spare Parts Sales | Operating Segments | |||
Revenue: | |||
Other sales and revenues | $ 689 | $ 673 | |
[1] Total assets at December 31, 2023 and 2022 include the following assets of variable interest entities (“VIEs”) that can only be used to settle the liabilities of the VIEs: Restricted cash $160,958 and $76,870; Equipment $1,518,050 and $1,167,970; Maintenance rights $7,806 and $5,433; Notes receivable $91,960 and $80,220; Investments in sales-type leases $3,564 and $0; and Other assets $13,339 and $6,470, respectively. |
Subsequent Events (Details)
Subsequent Events (Details) - Revolving credit facility - USD ($) | Mar. 08, 2024 | Mar. 07, 2024 | Oct. 31, 2023 |
Subsequent Event [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 658,200,000 | $ 708,000,000 |
SCHEDULE II - VALUATION ACCOU_2
SCHEDULE II - VALUATION ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts receivable, allowance for doubtful accounts | ||
Valuation accounts | ||
Balance at Beginning of Period | $ 1,511 | $ 1,154 |
Additions Charged (Credited) to Expense | 824 | 837 |
Net (Deductions) Recoveries | (44) | (480) |
Balance at End of Period | 2,311 | 1,511 |
Accounts receivable, allowance for doubtful accounts | Cumulative Effect, Period of Adoption, Adjustment | ||
Valuation accounts | ||
Balance at Beginning of Period | 20 | 0 |
Balance at End of Period | 20 | |
Deferred tax valuation allowance | ||
Valuation accounts | ||
Balance at Beginning of Period | 536 | 518 |
Additions Charged (Credited) to Expense | 442 | 18 |
Net (Deductions) Recoveries | 0 | 0 |
Balance at End of Period | 978 | 536 |
Deferred tax valuation allowance | Cumulative Effect, Period of Adoption, Adjustment | ||
Valuation accounts | ||
Balance at Beginning of Period | 0 | 0 |
Balance at End of Period | 0 | |
Notes receivable, allowance for credit losses | ||
Valuation accounts | ||
Balance at Beginning of Period | 0 | |
Additions Charged (Credited) to Expense | 11 | |
Net (Deductions) Recoveries | 0 | |
Balance at End of Period | 69 | 0 |
Notes receivable, allowance for credit losses | Cumulative Effect, Period of Adoption, Adjustment | ||
Valuation accounts | ||
Balance at Beginning of Period | 58 | |
Balance at End of Period | 58 | |
Investments in sales-type leases, allowance for credit losses | ||
Valuation accounts | ||
Balance at Beginning of Period | 0 | |
Additions Charged (Credited) to Expense | 3 | |
Net (Deductions) Recoveries | 0 | |
Balance at End of Period | 9 | 0 |
Investments in sales-type leases, allowance for credit losses | Cumulative Effect, Period of Adoption, Adjustment | ||
Valuation accounts | ||
Balance at Beginning of Period | $ 6 | |
Balance at End of Period | $ 6 |