Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | WILLIS LEASE FINANCE CORP | |
Entity Central Index Key | 1,018,164 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,231,243 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 9,245 | $ 13,493 |
Restricted cash | 26,883 | 51,258 |
Equipment held for operating lease, less accumulated depreciation of $300,272 and $281,087 at September 30, 2015 and December 31, 2014, respectively | 1,097,815 | 1,066,448 |
Equipment held for sale | 21,054 | 18,114 |
Spare parts inventory | 16,576 | 8,912 |
Operating lease related receivable, net of allowances of $397 and $215 at September 30, 2015 and December 31, 2014, respectively | 22,811 | 18,593 |
Investments | 41,740 | 41,590 |
Property, equipment & furnishings, less accumulated depreciation of $10,620 and $9,420 at September 30, 2015 and December 31, 2014, respectively | 20,475 | 17,955 |
Intangible assets, net | 990 | 1,164 |
Other assets | 27,516 | 24,099 |
Total assets | 1,285,105 | 1,261,626 |
Liabilities: | ||
Accounts payable and accrued expenses | 18,883 | 21,614 |
Deferred income taxes | 93,341 | 90,510 |
Notes payable - WEST II | 852,156 | 840,956 |
Maintenance reserves | 69,789 | 66,474 |
Security deposits | 25,973 | 20,869 |
Unearned lease revenue | 5,115 | 4,342 |
Total liabilities | 1,065,257 | 1,044,765 |
Shareholders' equity: | ||
Common stock ($0.01 par value, 20,000,000 shares authorized; 8,280,605 and 8,346,304 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively) | 83 | 83 |
Paid-in capital in excess of par | 40,880 | 42,076 |
Retained earnings | 179,085 | 174,702 |
Accumulated other comprehensive loss, net of income tax benefit of $104 at September 30, 2015 | (200) | |
Total shareholders' equity | 219,848 | 216,861 |
Total liabilities and shareholders' equity | $ 1,285,105 | $ 1,261,626 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Equipment held for operating lease, accumulated depreciation (in dollars) | $ 300,272 | $ 281,087 |
Operating lease related receivable, allowances (in dollars) | 397 | 215 |
Property, equipment & furnishings, accumulated depreciation (in dollars) | $ 10,620 | $ 9,420 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 8,280,605 | 8,346,304 |
Common stock, shares outstanding | 8,280,605 | 8,346,304 |
Accumulated other comprehensive loss, income tax benefit (in dollars) | $ 104 | |
Equipment | 20,475 | $ 17,955 |
Other Assets | 27,516 | 24,099 |
Total notes payable | 852,156 | 840,956 |
Variable Interest Entity [Member] | ||
Cash | 27,759 | 50,053 |
Equipment | 341,069 | 371,526 |
Other Assets | 21,052 | 11,271 |
Total notes payable | $ 305,182 | $ 351,899 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUE | ||||
Lease rent revenue | $ 28,083 | $ 25,165 | $ 78,993 | $ 76,865 |
Maintenance reserve revenue | 16,119 | 13,066 | 40,744 | 41,657 |
Spare parts equipment sales | 9,133 | 4,628 | 15,000 | 6,690 |
Gain on sale of leased equipment | 3,804 | 1,891 | 7,700 | 3,713 |
Other revenue | 619 | 769 | 1,978 | 3,800 |
Total revenue | 57,758 | 45,519 | 144,415 | 132,725 |
EXPENSES | ||||
Depreciation and amortization expense | 17,089 | 16,714 | 52,462 | 48,159 |
Cost of spare parts sales | 5,919 | 4,218 | 10,219 | 6,173 |
Write-down of equipment | 5,498 | 450 | 8,580 | 2,928 |
General and administrative | 11,742 | 9,107 | 30,826 | 28,055 |
Technical expense | 3,570 | 3,855 | 7,836 | 7,743 |
Net finance costs: | ||||
Interest expense | 9,805 | 9,181 | 29,232 | 27,935 |
Gain on debt extinguishment | (1,151) | |||
Total net finance costs | 9,805 | 9,181 | 28,081 | 27,935 |
Total expenses | 53,623 | 43,525 | 138,004 | 120,993 |
Earnings from operations | 4,135 | 1,994 | 6,411 | 11,732 |
Earnings from joint ventures | 558 | 269 | 1,127 | 819 |
Income before income taxes | 4,693 | 2,263 | 7,538 | 12,551 |
Income tax expense | (2,116) | (1,284) | (3,155) | (5,026) |
Net income | $ 2,577 | $ 979 | $ 4,383 | $ 7,525 |
Basic earnings per common share: (in dollars per share) | $ 0.33 | $ 0.12 | $ 0.56 | $ 0.95 |
Diluted earnings per common share: (in dollars per share) | $ 0.32 | $ 0.12 | $ 0.55 | $ 0.92 |
Average common shares outstanding (in shares) | 7,839 | 7,938 | 7,843 | 7,943 |
Diluted average common shares outstanding (in shares) | 7,963 | 8,123 | 8,011 | 8,163 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 2,577 | $ 979 | $ 4,383 | $ 7,525 |
Other comprehensive loss: | ||||
Currency translation adjustment | (304) | (304) | ||
Derivative instruments | ||||
Reclassification adjustment for gains included in net income | (122) | (371) | ||
Net loss recognized in other comprehensive income | (304) | (122) | (304) | (371) |
Tax benefit related to items of other comprehensive income | 104 | 45 | 104 | 135 |
Other comprehensive loss | (200) | (77) | (200) | (236) |
Total comprehensive income | $ 2,377 | $ 902 | $ 4,183 | $ 7,289 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Paid-in Capital in Excess of par | Accumulated Other Comprehensive Income | Retained Earnings | Total |
Balances at Dec. 31, 2013 | $ 84 | $ 44,741 | $ 325 | $ 167,455 | $ 212,605 |
Balances (in shares) at Dec. 31, 2013 | 8,400 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 7,525 | 7,525 | |||
Unrealized loss from derivative instruments, net of tax benefit | (236) | (236) | |||
Shares repurchased | $ (2) | (4,005) | (4,007) | ||
Shares repurchased (in shares) | (187) | ||||
Shares issued under stock compensation plans | $ 1 | 409 | 410 | ||
Shares issued under stock compensation plans (in shares) | 92 | ||||
Cancellation of restricted stock units in satisfaction of withholding tax | $ (1) | (1,308) | (1,309) | ||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (66) | ||||
Stock-based compensation, net of forfeitures | 2,447 | 2,447 | |||
Balances at Sep. 30, 2014 | $ 82 | 42,284 | 89 | 174,980 | 217,435 |
Balances (in shares) at Sep. 30, 2014 | 8,239 | ||||
Balances at Dec. 31, 2014 | $ 83 | 42,076 | 174,702 | 216,861 | |
Balances (in shares) at Dec. 31, 2014 | 8,346 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 4,383 | 4,383 | |||
Unrealized loss from derivative instruments, net of tax benefit | (200) | (200) | |||
Shares repurchased | $ (2) | (3,648) | (3,650) | ||
Shares repurchased (in shares) | (208) | ||||
Shares issued under stock compensation plans | $ 3 | 516 | 519 | ||
Shares issued under stock compensation plans (in shares) | 207 | ||||
Cancellation of restricted stock units in satisfaction of withholding tax | $ (1) | (1,100) | (1,101) | ||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (64) | ||||
Stock-based compensation, net of forfeitures | 2,961 | 2,961 | |||
Tax benefit on disqualified disposition of shares | 75 | 75 | |||
Balances at Sep. 30, 2015 | $ 83 | $ 40,880 | $ (200) | $ 179,085 | $ 219,848 |
Balances (in shares) at Sep. 30, 2015 | 8,281 |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Shareholders' Equity | ||
Net unrealized gain (loss) from derivative instruments, tax expense (benefit) | $ (104) | $ (135) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 4,383 | $ 7,525 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 52,462 | 48,159 |
Write-down of equipment | 8,580 | 2,928 |
Stock-based compensation expenses | 2,961 | 2,447 |
Amortization of deferred costs | 3,254 | 3,207 |
Amortization of interest rate derivative cost | (371) | |
Allowances and provisions | 181 | (18) |
Gain on sale of leased equipment | (7,700) | (3,713) |
Gain on debt extinguishment | (1,151) | |
Income from joint ventures | 1,127 | 819 |
Deferred income taxes | 2,936 | 4,649 |
Changes in assets and liabilities: | ||
Receivables | (7,845) | 1,772 |
Spare parts inventory | 1,843 | (9,487) |
Other assets | (1,221) | (7,877) |
Accounts payable and accrued expenses | (7,740) | 5,331 |
Restricted cash | 10,238 | (2,688) |
Maintenance reserves | 3,315 | (4,037) |
Security deposits | 5,204 | 188 |
Unearned lease revenue | 773 | (503) |
Net cash provided by operating activities | 69,346 | 46,693 |
Cash flows from investing activities: | ||
Proceeds from sale of equipment (net of selling expenses) | 39,300 | 27,331 |
Restricted cash for investing activities | (11,222) | 6,366 |
Capital contribution to joint ventures | (630) | (2,623) |
Dividends received from joint ventures | 1,304 | 500 |
Purchase of equipment held for operating lease and for sale | (132,157) | (34,767) |
Purchase of property, equipment and furnishings | (3,734) | (13,784) |
Net cash provided by (used in) investing activities | (107,139) | (16,977) |
Cash flows from financing activities: | ||
Proceeds from issuance of notes payable | 140,700 | 34,395 |
Debt issuance cost | (13) | (4,939) |
Interest bearing security deposits | 4,553 | |
Proceeds from shares issued under stock compensation plans | 519 | 410 |
Cancellation of restricted stock units in satisfaction of withholding tax | (1,101) | (1,309) |
Excess tax benefit from stock-based compensation | 75 | |
Repurchase of common stock | (3,650) | (4,007) |
Principal payments on notes payable | (128,344) | (60,779) |
Decrease in restricted cash | 25,359 | |
Net cash provided by (used in) financing activities | 33,545 | (31,676) |
Increase (decrease) in cash and cash equivalents | (4,248) | (1,960) |
Cash and cash equivalents at beginning of period | 13,493 | 12,801 |
Cash and cash equivalents at end of period | 9,245 | 10,841 |
Net cash paid for: | ||
Interest | 26,637 | 25,120 |
Income Taxes | 99 | 129 |
Supplemental disclosures of non-cash investing activities: | ||
Purchase of aircraft and engines, liability incurred but not paid | 3,260 | 295 |
Engines and equipment, transferred from Held for Operating Lease to Held for Sale but not settled | $ 19,441 | $ 1,456 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies (a) Basis of Presentation: Our unaudited consolidated financial statements include the accounts of Willis Lease Finance Corporation and its subsidiaries (“we” or the “Company”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Pursuant to such rules and regulations, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal and recurring adjustments) necessary to present fairly our financial position as of September 30, 2015 and December 31, 2014, and the results of our operations for the three and nine months ended September 30, 2015 and 2014, and our cash flows for the nine months ended September 30, 2015 and 2014. The results of operations and cash flows for the period ended September 30, 2015 are not necessarily indicative of the results of operations or cash flows which may be reported for the remainder of 2015. (b) Principals of Consolidation: We evaluate all entities in which we have an economic interest firstly to determine whether for accounting purposes the entity is a variable interest entity or voting interest entity. If the entity is a variable interest entity we consolidate the financial statements of that entity if we are the primary beneficiary of the entities activities. If the entity is a voting interest entity we consolidate the entity when we have a majority of voting interests. All inter-company balances are eliminated upon consolidation. (c) Correction of Immaterial Errors – Consolidated Statements of Income : As previously disclosed, during the second quarter of 2015, we identified errors in the Unaudited Consolidated Statements of Income related to the recorded amounts of Spare Parts Sales, Cost of Spare Parts Sales and Gain on Sale of Equipment. During the nine months ended September 30, 2014, we inappropriately recorded spare parts on a net basis and the gross margin was recorded to Gain on Sale of Equipment. There was no impact to net income for any period presented. The associated reclassification entries within the Statements of Income were to increase Spare Parts Sales by $2.8 million and $4.2 million for the three and nine months ended September 30, 2014 and increase Cost of Spare Parts Sales by $2.8 million and $4.2 million for the three and nine months ended September 30, 2014. Management evaluated the materiality of the errors described above from a qualitative and quantitative perspective in accordance with the requirements of the Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 99, Materiality (SAB 99). Based on such evaluation, we have concluded that these corrections would not be material to any individual prior period nor did they have an effect on financial results. ( d) Fair Value Measurements : Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible. We use a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value which are the following: 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. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis We determine 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 following table shows by level, within the fair value hierarchy, the Company’s assets measured at fair value on a nonrecurring basis during the nine months ended September 30, 2015 and 2014, and the gains (losses) recorded during the nine months ended September 30, 2015 and 2014 on those assets: Assets at Fair Value Total Losses September 30, 2015 September 30, 2014 Nine Months Ended September 30, Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 2015 2014 (in thousands) (in thousands) Equipment held for sale $ $ — $ $ $ $ — $ $ $ $ Total $ $ — $ $ $ $ — $ $ $ $ At September 30, 2015, the Company used Level 2 inputs to measure the fair value of certain engines and equipment held for sale. Due to the absence of quoted market prices of certain engines that were held for sale and not consigned to third parties, management used Level 3 inputs to measure fair value. The fair value of the assets held for sale categorized as Level 3 were based on management’s estimate considering projected future sales proceeds at September 30, 2015 and September 30, 2014. An impairment charge is recorded when the carrying value of the asset held for sale exceeds its fair value. Write-downs of equipment totaling $5.5 million were recorded in the nine months ended September 30, 2015 due to a management decision to consign four engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out. An additional asset write-down of $3.0 million was recorded in the nine months ended September 30, 2015 based upon a comparison of the asset net book values with the revised net proceeds expected from part sales arising from consignment of the parts. An asset write-down of $2.5 million was recorded in the nine months ended September 30, 2014 due to a management decision to consign five engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out and sale. An additional asset write-down of $0.4 million was recorded in the nine months ended September 30, 2014, based upon a comparison of the asset net book values with the revised net proceeds expected from part sales arising from consignment of the parts. (e) Reclassifications: Reclassifications have been made to our consolidated financial statements for the prior 2015 periods to conform to classifications used during the three months ended September 30, 2015. (f) Foreign Currency Translation: The Company’s foreign investments have been converted at rates of exchange at September 30, 2015. The changes in exchange rates in our foreign investments reported under the equity method are included in stockholders’ equity as accumulated other comprehensive income. (g) Recent Accounting Pronouncements: In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), Simplifying the Measurement of Inventory, which simplifies the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016 and for interim periods therein. We are evaluating the impact that this new guidance will have on our consolidated financial position. In April 2015, the FASB issued ASU, Simplifying the Presentation of Debt Issuance Costs, which will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS standards by requiring that debt issuance costs be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to the presentation of debt discounts or premiums. This accounting guidance is effective for us beginning in the first quarter of 2016. The unamortized debt issuance cost balances were $13. 4 million and $15.5 million as of September 30, 2015 and December 31, 2014, respectively, and would reduce our Notes Payable balances accordingly on our Consolidated Balance Sheet for those periods under this ASU. In May 2014, the FASB issued an ASU, Revenue from Contracts with Customers, which supersedes previous revenue recognition guidance. The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. Companies will need to use more judgment and estimates than under the guidance currently in effect, including estimating the amount of variable revenue to recognize over each identified performance obligation. Additional disclosures will be required to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. |
Management Estimates
Management Estimates | 9 Months Ended |
Sep. 30, 2015 | |
Management Estimates | |
Management Estimates | 2. 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. The preparation of consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to residual values, estimated asset lives, impairments and bad debts. We base our estimates 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, maintenance reserves and expenditures, useful life of equipment, asset residual values, asset impairment and allowance for doubtful accounts are critical to the results of operations. If the useful lives or residual values are lower than those estimated by us, 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. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2015 | |
Commitments | |
Commitments | 3. Commitments, Contingencies, Guarantees and Indemnities We have made purchase commitments to secure the purchase of seven engines and related equipment for a gross purchase price of $63.6 million , for delivery in 2015. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments | |
Investments | 4 . Investments On May 25, 2011, we entered into an agreement with Mitsui & Co., Ltd. to participate in a joint venture formed as a Dublin-based Irish limited company — Willis Mitsui & Company Engine Support Limited (“WMES”) for the purpose of acquiring and leasing jet engines. Each partner holds a fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity . The initial capital contribution by the Company for its investment in WMES was $8.0 million. The Company provided the initial lease portfolio by transferring 7 engines to the joint venture in June 2011. In addition, the Company made $21.0 million capital contributions to WMES from 2011 through 201 5 for the purchase of 21 engines from third parties, increasing the number of engines in the lease portfolio to 28 . The $29.0 million of capital contributions has been partially offset by $3.6 million, resulting in a net investment of $25.4 million, which has been reduced by $2.1 million in distributions and increased further to $ 27.1 million as of September 30, 2015 as a result of the Company’s share of WMES reported earnings to date. The $3.6 million reduction in investment represents 50% of the $7.2 million gain related to the sale by the Company of the 7 engines to WMES. The Company made $0.6 million of capital contributions to WMES , received $ 1.3 million in distributions and recorded $ 1.1 million as a result of the Company’s share of WMES reported earnings during the nine month s ended September 30 , 2015. On June 3, 2014 we entered into an agreement with China Aviation Supplies Import & Export Corporation Limited (“CASC”) to participate in a joint venture named CASC Willis Engine Lease Company Limited (“CASC Willis”), a new joint venture based in Shanghai, China. Each partner holds a fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity . In October 2014, each partner made a $15.0 million initial capital contribution representing the up-front funding for the new joint venture. The new company will acquire and lease jet engines to Chinese airlines and will concentrate on meeting the fast growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China . The investment has been reduced to $14.7 million as of September 30 , 2015 as a result of a foreign currency translation adjustment of $0.3 million partially offset by the Company’ s share of CASC Willis reported income to date of $0.1 million . Nine Months Ended September 30, 2015 WMES CASC Willis Total (in thousands) Investment in joint ventures as of December 31, 2014 $ $ $ Capital contribution — Earnings from joint venture Distribution — Foreign currency translation adjustment — Investment in joint ventures as of September 30, 2015 $ $ $ |
Long Term Debt
Long Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Long Term Debt | |
Long Term Debt | 5 . Long Term Debt At September 30 , 2015, long-term debt consists of loans totaling $852.2 million , payable over periods of approximately 2.3 to 8.8 years with interest rates varying between approximately 2.4% and 5.5% . At September 30 , 2015, we had a revolving credit facility to finance the acquisition of aircraft engines 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. On June 4, 2014, we entered into a Second Amended and Restated Credit Agreement which increased this revolving credit facility to $700.0 million from $450.0 million and extended the maturity date by five years to June 2019. Debt issuance costs totaling $4.9 million were incurred related to the new facility. As of September 30 , 2015 and December 31, 2014, $183.0 million and $270.0 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. Based on the Company’s leverage ratio of 4.25 at June 30 , 201 5 , the interest rate on this facility is one-month LIBOR plus 2.75% as of September 30 , 2015. Under the revolving credit facility, all subsidiaries except WEST II 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. On September 17, 2012, we closed an asset-backed securitization (“ABS”) through a newly-created, bankruptcy-remote, Delaware statutory trust, Willis Engine Securitization Trust II, or “WEST II”, of which the Company is the sole beneficiary. WEST II issued and sold $390 million aggregate principal amount of Class 2012-A Term Notes (the “Notes”) and received $384.9 million in net proceeds. We used these funds, net of transaction expenses and swap termination costs, in combination with our revolving credit facility to pay off the prior WEST notes totaling $435.9 million. At closing, 22 engines were pledged as collateral from WEST to the Company’s revolving credit facility, which provided the remaining funds to pay off the WEST notes. The assets and liabilities of WEST II are included on the Company’s balance sheet. The current portfolio of 63 commercial jet aircraft engines and leases thereof secures the obligations of WEST II under the ABS. The Notes have no fixed amortization and are payable solely from revenue received by WEST II from the engines and the engine leases, after payment of certain expenses of WEST II. The Notes bear interest at a fixed rate of 5.50% per annum. The Notes may be accelerated upon the occurrence of certain events, including the failure to pay interest for five business days after the due date thereof. The Notes are expected to be paid 10 years from the issuance date by September 17, 2022. The legal final maturity of the Notes is September 15, 2037. In connection with the transactions described above, effective September 17, 2012, the Company entered into a Servicing Agreement and Administrative Agency Agreement with WEST II to provide certain engine, lease management and reporting functions for WEST II in return for fees based on a percentage of collected lease revenues and asset sales. Because WEST II is consolidated for financial statement reporting purposes, all fees eliminate upon consolidation. At September 30 , 2015 and December 31, 2014, $305.2 million and $351.9 million of WEST II term notes were outstanding, respectively. The assets of WEST II are not available to satisfy our obligations or any of our affiliates other than the obligations specific to WEST II. WEST II is consolidated for financial statement presentation purposes. WEST II’s ability to make distributions and pay dividends to the Company is subject to the prior payments of its debt and other obligations and WEST II’s maintenance of adequate reserves and capital. Under WEST II, 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 maintenance reserve payments and all lease security deposits are accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Cash from maintenance reserve payments are held in the restricted cash account equal to the maintenance obligations projected for the subsequent six month s, and are subject to a minimum balance of $9.0 million. On March 25, 2015, we paid off the $23.1 million balance of the two term notes associated with the WOLF assets at a 5% discount. This transaction result ed in the recording of a $1.2 million gain on debt extinguishment which has been included in our statement of operations for the nine month s ended September 30 , 2015. On July 16, 2014, we closed on a loan for a ten year term totaling $13.4 million. During the second quarter of 2015, we closed on two additional loans totaling $4.7 million, repayable over the same ten year term. The interest is payable at fixed rates ranging from 2.60% to 2.97% for the initial five years of the loan term and principal and interest is paid monthly. The loans provided 100% of the funding for the purchase of a corporate aircraft and subsequent modifications and upgrades. The balance outstanding on these loans is $16.5 million and $12.9 million as of September 30 , 2015 and December 31, 2014, respectively. On January 10, 2014, we extended the term of an existing loan that was scheduled to mature on January 11, 2014. The loan has a term of 4 years with a maturity date of January 11, 2018. Interest is payable at one-month LIBOR plus 2.25% and principal and interest is paid quarterly. The loan is secured by three engines. The balance outstanding on this loan is $13.4 million and $14.5 million as of September 30 , 2015 and December 31, 2014, respectively. On July 10 , 201 5 , we paid off the $ 7 .4 million balance of a 5.50% fixed rate loan that was secured by one engine. The balance outstanding on this loan was $7.7 million as of December 31, 2014 . One-month LIBOR was 0.19% and 0.17% at September 30 , 2015 and December 31, 2014, respectively. The following is a summary of the aggregate maturities of our long-term debt at September 30 , 2015 : Year (in thousands) 2015 $ 2016 2017 2018 2019 Thereafter $ |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments | |
Derivative Instruments | 6 . Derivative Instruments We have periodically held interest rate derivative instruments to mitigate exposure to changes in interest rates, in particular one-month LIBOR , with $530.4 million and $468.5 million of our borrowings at September 30 , 2015 and December 31, 2014, respectively, at variable rates. As a matter of policy, we do not use derivatives for speculative purposes. We currently have no interest rate swap agreements in place. During 2013 we were a party to one interest rate swap agreement with a notional outstanding amount of $100.0 million with a fixed rate of 2.10% . The swap agreement expired in November 2013. The remaining effective portion of these hedges at the swap expiration date was amortized into earnings over the term of the underlying borrowings. We recorded a $0.1 million and $0.4 million benefit to net finance costs during the three and nine month periods ended September 30 , 201 4, respectively . The Company estimates the fair value of derivative instruments using a discounted cash flow technique and uses creditworthiness inputs that can be corroborated by observable market data evaluating the Company’s and counterparties’ risk of non-performance. Valuation of the derivative instruments requires certain assumptions for underlying variables and the use of different assumptions would result in a different valuation. We apply hedge accounting and account for the change in fair value of our cash flow hedges through other comprehensive income for all derivative instruments. Earnings Effects of Derivative Instruments on the Consolidated Statements of Income The following table provides information about the income effects of our cash flow hedging relationships for the three and nine month periods ended September 30 , 2015 and 2014: Amount of Gain Recognized on Derivatives in the Statements of Income Location of Gain Three Months Ended Nine Months Ended Derivatives in Cash Flow Recognized on Derivatives in the September 30, September 30, Hedging Relationships Statements of Income 2015 2014 2015 2014 (in thousands) Interest rate contracts Interest expense $ — $ $ — $ Total $ — $ $ — $ Our derivatives are designated in a cash flow hedging relationship with the effective portion of the change in fair value of the derivative reported in the cash flow hedges subaccount of accumulated other comprehensive income. Effect of Derivative Instruments on Cash Flow Hedging The following tables provide additional information about the financial statement effects related to our cash flow hedges for the three and nine month periods ended September 30 , 2015 and 2014 : Location of Gain Amount of Gain Reclassified from Reclassified Accumulated OCI into Income (Effective Portion) from Accumulated OCI into Three Months Ended Nine Months Ended Income September 30, September 30, (Effective Portion) 2015 2014 2015 2014 (in thousands) (in thousands) Interest expense $ — $ $ $ Total $ — $ S $ We hold interest rate derivative instruments from time to time to mitigate exposure to changes in interest rates, in particular one-month LIBOR, with $5 30.4 million of our borrowings at September 30 , 201 5 at variable rates. The last of our interest rate derivatives terminated on November 25, 2013, at which time the liabilities under derivative instruments decreased to nil. The change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of accumulated 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. As of September 30 , 2014, we had $0.1 million in accumulated other comprehensive income related to a previously held derivative instrument designated as a cash flow hedge. This amount was reclassified into interest expense through December 2014, the remaining term of the associated debt. For the quarters ended September 30 , 2015 and September 30 , 2014, interest expense was reduced by zero and $0.1 million respectively, as a result of this reclassification out of accumulated other comprehensive income. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 7 . Stock-Based Compensation Plans Our 2007 Stock Incentive Plan (the 2007 Plan) was adopted on May 24, 2007. Under this 2007 Plan, a total of 2,000,000 shares are authorized for stock based compensation available in the form of either restricted stock or stock options . On May 28, 2015, the Company’s shareholders authorized an increase in the number of shares of Common Stock available for grant by 800,000 shares bringing the total to 2,800,000 shares authorized. 2,263,712 shares of restricted stock were granted under the 2007 Stock Incentive Plan by September 30 , 2015. Of this amount, 135,368 shares of restricted stock were cancelled and returned to the pool of shares which could be granted under the 2007 Stock Incentive Plan resulting in a net number of 671,656 shares which were available as of September 30 , 2015 for future issuance under the 2007 Incentive Plan. The fair value of the restricted stock awards equaled the stock price at the date of grants. The following table summarizes restricted stock activity during the year ended December 31, 2014 and the nine month s ended September 30 , 2015 . Shares Restricted stock at December 31, 2013 Granted in 2014 (vesting over 3 years) Granted in 2014 (vesting over 4 years) Granted in 2014 (vesting on first anniversary from date of issuance) Cancelled in 2014 Vested in 2014 Restricted stock at December 31, 2014 Granted in 2015 (vesting over 1 year) Granted in 2015 (vesting over 4 years) Granted in 2015 (vesting over 3 years) Vested in 2015 Restricted stock at September 30, 2015 All cancelled shares have reverted to the share reserve and are available for issuance at a later date, in accordance with the 2007 Plan. Our accounting policy is to recognize the associated expense of such awards on a straight-line basis over the vesting period. At September 30 , 2015 , the stock compensation expense related to the restricted stock awards that will be recognized over the average remaining vesting period of 1.9 years totals $5.8 million. At September 30 , 2015 , the intrinsic value of unvested restricted stock awards is $7.9 million. The 2007 Plan terminates on May 24, 2017. In the nine month s ended September 30 , 2015 , 49,000 stock options under the 1996 Stock Options/Stock Issuance Plan (the 1996 Plan) were exercised. As of September 30 , 2015 , there are no options remaining under the 1996 Plan. In the nine months ended September 30, 2014, 26,437 options under the 1996 Stock Options/Stock Issuance Plan (the 1996 Plan) were exercised. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | 8 . Income Taxes Income tax expense for the three and nine month s ended September 30 , 2015 was $2.1 million and $3.2 million, respectively. Income tax expense for the three and nine month s ended September 30 , 201 4 was $ 1.3 million and $5.0 million , respectively. The effective tax rate for the three and nine month s ended September 30 , 2015 was 45.1% and 41.9% , respectively. The effective tax rate for the three and nine month s ended September 30 , 201 4 was 56.7% and 40.0% , respectively. These increases were due to the impact of the IRS code 162(m) calculation for executive compensation for the three and nine months ended September 30, 2015. The Company records tax expense or benefit for unusual or infrequent items discretely in the period in which they occur. Our tax rate is subject to change based on changes in the mix of assets leased to domestic and foreign lessees, the proportions of revenue generated within and outside of California, the amount of executive compensation exceeding $1.0 million as defined in IRS code 162(m) and numerous other factors, including changes in tax law. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 9 . Fair Value of Financial Instruments The carrying amount reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, operating lease related receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. The carrying amount of the Company’s outstanding balance on its Notes Payable as of September 30 , 2015 and December 31, 2014 was estimated to have a fair value of approximately $863.4 million and $847.0 million, respectively, based on the fair value of estimated future payments calculated using the prevailing interest rates at each period end. |
Operating Segments
Operating Segments | 9 Months Ended |
Sep. 30, 2015 | |
Operating Segments | |
Operating Segments | 10 . Operating Segments The Company operates in two 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 (ii) Spare Parts Sales which involves the purchase and resale of after-market engine and airframe parts, whole engines, engine modules and portable aircraft components and leasing of engines destined for disassembly and sale of parts. The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses and inter-company allocation of interest expense. While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies. The following tables present a summary of the operating segments (amounts in thousands): Leasing and For the three months ended September 30, 2015 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Leasing and For the nine months ended September 30, 2015 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ (1) Represents revenue generated between our operating segments Leasing and For the three months ended September 30, 2014 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Leasing and For the nine months ended September 30, 2014 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Total assets as of September 30, 2015 $ $ $ — $ Total assets as of December 31, 2014 $ $ $ — $ (1) Represents revenue generated between our operating segments |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Basis of Presentation: | (a) Basis of Presentation: Our unaudited consolidated financial statements include the accounts of Willis Lease Finance Corporation and its subsidiaries (“we” or the “Company”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Pursuant to such rules and regulations, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal and recurring adjustments) necessary to present fairly our financial position as of September 30, 2015 and December 31, 2014, and the results of our operations for the three and nine months ended September 30, 2015 and 2014, and our cash flows for the nine months ended September 30, 2015 and 2014. The results of operations and cash flows for the period ended September 30, 2015 are not necessarily indicative of the results of operations or cash flows which may be reported for the remainder of 2015. |
Principles of Consolidation | (a) Principals of Consolidation: We evaluate all entities in which we have an economic interest firstly to determine whether for accounting purposes the entity is a variable interest entity or voting interest entity. If the entity is a variable interest entity we consolidate the financial statements of that entity if we are the primary beneficiary of the entities activities. If the entity is a voting interest entity we consolidate the entity when we have a majority of voting interests. All inter-company balances are eliminated upon consolidation. |
Correction of Immaterial Errors – Consolidated Statements of Income | (c) Correction of Immaterial Errors – Consolidated Statements of Income : As previously disclosed, during the second quarter of 2015, we identified errors in the Unaudited Consolidated Statements of Income related to the recorded amounts of Spare Parts Sales, Cost of Spare Parts Sales and Gain on Sale of Equipment. During the nine months ended September 30, 2014, we inappropriately recorded spare parts on a net basis and the gross margin was recorded to Gain on Sale of Equipment. There was no impact to net income for any period presented. The associated reclassification entries within the Statements of Income were to increase Spare Parts Sales by $2.8 million and $4.2 million for the three and nine months ended September 30, 2014 and increase Cost of Spare Parts Sales by $2.8 million and $4.2 million for the three and nine months ended September 30, 2014. Management evaluated the materiality of the errors described above from a qualitative and quantitative perspective in accordance with the requirements of the Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 99, Materiality (SAB 99). Based on such evaluation, we have concluded that these corrections would not be material to any individual prior period nor did they have an effect on financial results. |
Fair Value Measurements | ( d) Fair Value Measurements : Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible. We use a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value which are the following: 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. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis We determine 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 following table shows by level, within the fair value hierarchy, the Company’s assets measured at fair value on a nonrecurring basis during the nine months ended September 30, 2015 and 2014, and the gains (losses) recorded during the nine months ended September 30, 2015 and 2014 on those assets: Assets at Fair Value Total Losses September 30, 2015 September 30, 2014 Nine Months Ended September 30, Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 2015 2014 (in thousands) (in thousands) Equipment held for sale $ $ — $ $ $ $ — $ $ $ $ Total $ $ — $ $ $ $ — $ $ $ $ At September 30, 2015, the Company used Level 2 inputs to measure the fair value of certain engines and equipment held for sale. Due to the absence of quoted market prices of certain engines that were held for sale and not consigned to third parties, management used Level 3 inputs to measure fair value. The fair value of the assets held for sale categorized as Level 3 were based on management’s estimate considering projected future sales proceeds at September 30, 2015 and September 30, 2014. An impairment charge is recorded when the carrying value of the asset held for sale exceeds its fair value. Write-downs of equipment totaling $5.5 million were recorded in the nine months ended September 30, 2015 due to a management decision to consign four engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out. An additional asset write-down of $3.0 million was recorded in the nine months ended September 30, 2015 based upon a comparison of the asset net book values with the revised net proceeds expected from part sales arising from consignment of the parts. An asset write-down of $2.5 million was recorded in the nine months ended September 30, 2014 due to a management decision to consign five engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out and sale. An additional asset write-down of $0.4 million was recorded in the nine months ended September 30, 2014, based upon a comparison of the asset net book values with the revised net proceeds expected from part sales arising from consignment of the parts. |
Reclassifications | (e) Reclassifications: Reclassifications have been made to our consolidated financial statements for the prior 2015 periods to conform to classifications used during the three months ended September 30, 2015. |
Foreign Currnecy Translation | (f) Foreign Currency Translation: The Company’s foreign investments have been converted at rates of exchange at September 30, 2015. The changes in exchange rates in our foreign investments reported under the equity method are included in stockholders’ equity as accumulated other comprehensive income. |
Recent Accounting Pronouncements | (g) Recent Accounting Pronouncements: In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), Simplifying the Measurement of Inventory, which simplifies the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016 and for interim periods therein. We are evaluating the impact that this new guidance will have on our consolidated financial position. In April 2015, the FASB issued ASU, Simplifying the Presentation of Debt Issuance Costs, which will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS standards by requiring that debt issuance costs be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to the presentation of debt discounts or premiums. This accounting guidance is effective for us beginning in the first quarter of 2016. The unamortized debt issuance cost balances were $13. 4 million and $15.5 million as of September 30, 2015 and December 31, 2014, respectively, and would reduce our Notes Payable balances accordingly on our Consolidated Balance Sheet for those periods under this ASU. In May 2014, the FASB issued an ASU, Revenue from Contracts with Customers, which supersedes previous revenue recognition guidance. The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. Companies will need to use more judgment and estimates than under the guidance currently in effect, including estimating the amount of variable revenue to recognize over each identified performance obligation. Additional disclosures will be required to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of fair value hierarchy of assets measured on nonrecurring basis and gain (losses) recorded | Assets at Fair Value Total Losses September 30, 2015 September 30, 2014 Nine Months Ended September 30, Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 2015 2014 (in thousands) (in thousands) Equipment held for sale $ $ — $ $ $ $ — $ $ $ $ Total $ $ — $ $ $ $ — $ $ $ $ |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments | |
Schedule of investments | Nine Months Ended September 30, 2015 WMES CASC Willis Total (in thousands) Investment in joint ventures as of December 31, 2014 $ $ $ Capital contribution — Earnings from joint venture Distribution — Foreign currency translation adjustment — Investment in joint ventures as of September 30, 2015 $ $ $ |
Long Term Debt (Tables)
Long Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Long Term Debt | |
Schedule of notes payable | Year (in thousands) 2015 $ 2016 2017 2018 2019 Thereafter $ |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments | |
Schedule of income effects of cash flow hedging relationships | Amount of Gain Recognized on Derivatives in the Statements of Income Location of Gain Three Months Ended Nine Months Ended Derivatives in Cash Flow Recognized on Derivatives in the September 30, September 30, Hedging Relationships Statements of Income 2015 2014 2015 2014 (in thousands) Interest rate contracts Interest expense $ — $ $ — $ Total $ — $ $ — $ |
Schedule of information about financial statement effects related to cash flow hedges | Location of Gain Amount of Gain Reclassified from Reclassified Accumulated OCI into Income (Effective Portion) from Accumulated OCI into Three Months Ended Nine Months Ended Income September 30, September 30, (Effective Portion) 2015 2014 2015 2014 (in thousands) (in thousands) Interest expense $ — $ $ $ Total $ — $ S $ |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation Plans | |
Summary of activity under the 2007 Plan | Shares Restricted stock at December 31, 2013 Granted in 2014 (vesting over 3 years) Granted in 2014 (vesting over 4 years) Granted in 2014 (vesting on first anniversary from date of issuance) Cancelled in 2014 Vested in 2014 Restricted stock at December 31, 2014 Granted in 2015 (vesting over 1 year) Granted in 2015 (vesting over 4 years) Granted in 2015 (vesting over 3 years) Vested in 2015 Restricted stock at September 30, 2015 |
Operating Segments (Tables)
Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Operating Segments | |
Summary of the operating segments | Leasing and For the three months ended September 30, 2015 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Leasing and For the nine months ended September 30, 2015 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ (1) Represents revenue generated between our operating segments Leasing and For the three months ended September 30, 2014 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Leasing and For the nine months ended September 30, 2014 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Total assets as of September 30, 2015 $ $ $ — $ Total assets as of December 31, 2014 $ $ $ — $ (1) Represents revenue generated between our operating segments |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Asset write-down | $ 5,498 | $ 450 | $ 8,580 | $ 2,928 |
Spare Parts Sales [Member] | ||||
Prior Period Reclassification Adjustment | 2,800 | 4,200 | ||
Cost Of Spare Parts Sales [Member] | ||||
Prior Period Reclassification Adjustment | $ 2,800 | $ 4,200 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Assets measured at fair value on nonrecurring basis (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | $ 21,054 | $ 18,114 | |
Total losses on assets | (8,580) | $ (2,928) | |
Total losses on equipment held for sale | $ (8,580) | $ (2,928) | |
Level 1 | |||
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | |||
Assets at fair value | |||
Nonrecurring | |||
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | $ 10,189 | $ 20,795 | |
Assets at fair value | 10,189 | 20,795 | |
Nonrecurring | Level 2 | |||
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | 7,524 | 13,666 | |
Assets at fair value | 7,524 | 13,666 | |
Nonrecurring | Level 3 | |||
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | 2,665 | 7,129 | |
Assets at fair value | $ 2,665 | $ 7,129 |
Commitments (Details)
Commitments (Details) - Engines Aircraft and Related Equipment [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)engine | |
Purchase commitments | |
Number of engines commited to purchase | engine | 7 |
Purchase price | $ 63.6 |
Investments (Details)
Investments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 46 Months Ended | |||||
Oct. 31, 2014USD ($) | Jun. 30, 2011engine | Sep. 30, 2015USD ($)engine | Sep. 30, 2015USD ($)engine | Sep. 30, 2014USD ($) | Mar. 31, 2015USD ($)engine | Dec. 31, 2014USD ($) | Jun. 03, 2014 | May. 25, 2011USD ($) | |
Investments | |||||||||
Investment in joint venture | $ 41,740 | $ 41,740 | $ 41,590 | ||||||
Capital contribution to joint ventures | (630) | $ (2,623) | |||||||
Gain On Sale Of Engines | 7,200 | ||||||||
Distributions | 1,303 | ||||||||
Foreign currency translation adjustment | (304) | (304) | |||||||
WMES | |||||||||
Investments | |||||||||
Ownership interest (as a percent) | 50.00% | ||||||||
Initial capital contribution | $ 8,000 | ||||||||
Number of engines transferred to the joint venture | engine | 7 | ||||||||
Additional capital contributions | 2,100 | ||||||||
Capital Contribution Offset | 3,600 | ||||||||
Number of engines purchased | engine | 21 | ||||||||
Capital contributions to date | 29,000 | 29,000 | $ 21,000 | ||||||
Net Investment In Joint Venture | 25,400 | ||||||||
Investment in joint venture | $ 27,051 | 27,051 | 26,672 | ||||||
Number of engines in lease portfolio | engine | 28 | ||||||||
Capital contribution to joint ventures | $ (630) | ||||||||
Percent Of Gain Related To Sale Of Engines | 50.00% | ||||||||
Reduction of investment | $ 3,600 | ||||||||
Distributions | $ 1,303 | ||||||||
Number of Engines Sold | engine | 7 | ||||||||
CASC | |||||||||
Investments | |||||||||
Ownership interest (as a percent) | 50.00% | ||||||||
Investment in joint venture | $ 14,689 | $ 14,689 | $ 14,918 | ||||||
Capital contribution to joint ventures | $ 15,000 | ||||||||
Foreign currency translation adjustment | $ (304) |
Investments - Investment in joi
Investments - Investment in joint ventures (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Investments | |||||
Investment in WMES joint ventures at beginning of the period | $ 41,590 | ||||
Capital contribution | 630 | $ 2,623 | |||
Earnings from joint ventures | $ 558 | $ 269 | 1,127 | $ 819 | |
Distribution | (1,303) | ||||
Foreign currency translation adjustment | (304) | (304) | |||
Investment in WMES joint ventures at end of the period | 41,740 | 41,740 | |||
WMES | |||||
Investments | |||||
Investment in WMES joint ventures at beginning of the period | 26,672 | ||||
Capital contribution | 630 | ||||
Earnings from joint ventures | 1,052 | ||||
Distribution | (1,303) | ||||
Investment in WMES joint ventures at end of the period | 27,051 | 27,051 | |||
CASC | |||||
Investments | |||||
Investment in WMES joint ventures at beginning of the period | 14,918 | ||||
Capital contribution | $ (15,000) | ||||
Earnings from joint ventures | 75 | ||||
Foreign currency translation adjustment | (304) | ||||
Investment in WMES joint ventures at end of the period | $ 14,689 | $ 14,689 |
Long Term Debt (Details)
Long Term Debt (Details) $ in Thousands | Jun. 04, 2014USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Long Term Debt | |||
Notes payable - WEST II | $ 852,156 | $ 840,956 | |
Notes payable Member | |||
Long Term Debt | |||
Interest rate, minimum (as a percent) | 2.40% | ||
Interest rate, maximum (as a percent) | 5.50% | ||
Notes payable Member | Minimum | |||
Long Term Debt | |||
Maturity term | 2 years 3 months 18 days | ||
Notes payable Member | Maximum | |||
Long Term Debt | |||
Maturity term | 8 years 9 months 18 days | ||
Revolving credit facility | |||
Long Term Debt | |||
Maximum borrowing capacity under credit facility | $ 700,000 | ||
Maximum borrowing capacity under credit facility before amendment | $ 450,000 | ||
Extended maturity term | 5 years | ||
Debt issuance costs | $ 4,900 | ||
Remaining borrowing capacity available | $ 183,000 | $ 270,000 | |
Leverage ratio | 4.25 | ||
Variable rate of debt | one-month LIBOR | ||
Basis spread on variable rate (as a percent) | 2.75% |
Long Term Debt - Narrative 2 (D
Long Term Debt - Narrative 2 (Details) | Sep. 17, 2012USD ($)engine | Sep. 30, 2015USD ($)engine | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Long Term Debt | |||||
Net proceeds received from notes issued and sold | $ 140,700,000 | $ 34,395,000 | |||
Total notes payable | $ 852,156,000 | 852,156,000 | $ 840,956,000 | ||
WEST II Series 2012-A term notes payable at a fixed rate of interest maturing in September 2037. Secured by engines | WEST II | |||||
Long Term Debt | |||||
Face amount | $ 390,000,000 | ||||
Net proceeds received from notes issued and sold | $ 384,900,000 | ||||
Debt Instrument Expected Payoff Period | 10 years | ||||
Total notes payable | $ 305,200,000 | $ 305,200,000 | $ 351,900,000 | ||
Number of engines pledged as collateral | engine | 22 | 63 | |||
Fixed amortization of notes payable | $ 0 | ||||
Fixed rate (as a percent) | 5.50% | 5.50% | |||
Number of business days to pay interest | 5 days | ||||
WEST II Series 2012-A term notes payable at a fixed rate of interest maturing in September 2037. Secured by engines | WEST II | Minimum | |||||
Long Term Debt | |||||
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 9,000,000 | $ 9,000,000 | |||
Prior WEST notes | |||||
Long Term Debt | |||||
Total notes payable | $ 435,900,000 |
Long Term Debt - Narrative 3 (D
Long Term Debt - Narrative 3 (Details) | Mar. 25, 2015item | Jul. 17, 2014USD ($) | Jan. 10, 2014engine | Sep. 28, 2012engine | Sep. 26, 2015USD ($) | Mar. 25, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Sep. 17, 2012USD ($) |
Long Term Debt | ||||||||||
Remaining balance on notes paid off | $ 128,344,000 | $ 60,779,000 | ||||||||
Gain on debt extinguishment | 1,151,000 | |||||||||
Total notes payable | $ 852,156,000 | $ 840,956,000 | ||||||||
One-month LIBOR rate (as a percent) | 0.19% | 0.17% | ||||||||
WOLF | ||||||||||
Long Term Debt | ||||||||||
Repayments of Debt | $ 23,100,000 | |||||||||
Number of term notes paid | item | 2 | |||||||||
Prior WEST notes | ||||||||||
Long Term Debt | ||||||||||
Total notes payable | $ 435,900,000 | |||||||||
Secured Debt 2.83 Percent Ten Year Member | ||||||||||
Long Term Debt | ||||||||||
Face amount | $ 13,400,000 | |||||||||
Maturity term | 10 years | |||||||||
Variable rate of debt | one-month LIBOR | |||||||||
Note payable at a fixed interest rate of 5.50%, maturing in September 2017. Secured by one engine. | ||||||||||
Long Term Debt | ||||||||||
Repayments of Debt | $ 7,400,000 | |||||||||
Fixed rate (as a percent) | 5.50% | |||||||||
Total notes payable | $ 7,700,000 | |||||||||
Number of engines pledged as collateral | engine | 1 | |||||||||
Term Notes Fixed Rate 2.60% to 2.97% [Member] | ||||||||||
Long Term Debt | ||||||||||
Face amount | $ 4,700,000 | |||||||||
Maturity term | 10 years | |||||||||
Initial term for interest payment | 5 years | |||||||||
Percentage of the funding for the purchase of a corporate aircraft | 100.00% | |||||||||
Total notes payable | $ 16,500,000 | 12,900,000 | ||||||||
Note payable at a fixed interest rate of 2.25%, maturing in January 2018, secured by three engines | ||||||||||
Long Term Debt | ||||||||||
Maturity term | 4 years | |||||||||
Total notes payable | $ 13,400,000 | $ 14,500,000 | ||||||||
Basis spread on variable rate (as a percent) | 2.25% | |||||||||
Number of engines pledged as collateral | engine | 3 | |||||||||
Minimum | Term Notes Fixed Rate 2.60% to 2.97% [Member] | ||||||||||
Long Term Debt | ||||||||||
Fixed rate (as a percent) | 2.60% | |||||||||
Maximum | Term Notes Fixed Rate 2.60% to 2.97% [Member] | ||||||||||
Long Term Debt | ||||||||||
Fixed rate (as a percent) | 2.97% |
Long Term Debt - Maturities of
Long Term Debt - Maturities of notes payable (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Principal outstanding repayable | ||
2,015 | $ 5,472 | |
2,016 | 22,702 | |
2,017 | 23,718 | |
2,018 | 33,391 | |
2,019 | 540,529 | |
Thereafter | 226,344 | |
Notes payable | $ 852,156 | $ 840,956 |
Derivative Instruments (Details
Derivative Instruments (Details) - Interest rate contracts $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015USD ($) | Mar. 31, 2015agreement | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($)agreement | Dec. 31, 2013USD ($)agreement | |
Derivative instruments | |||||
Variable rate of debt | one-month LIBOR | one-month LIBOR | |||
Borrowings at variable interest rates | $ 530.4 | $ 530.4 | $ 468.5 | ||
Number of interest rate swap agreements | agreement | 0 | 0 | |||
Number of interest rate swap agreements during the period | agreement | 1 | ||||
Notional amount outstanding | $ 100 | ||||
Fixed interest rate (as a percent) | 2.10% | ||||
(Benefit) expense recorded to net finance costs | $ 0.1 | $ 0.4 |
Derivative Instruments -Income
Derivative Instruments -Income effects of our cash flow hedging (Details) - Cash Flow Hedging - Designated as Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Effects of derivative instruments | ||
Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income | $ (122) | $ (371) |
Interest rate contracts | Interest expense Member | ||
Effects of derivative instruments | ||
Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income | $ (122) | $ (371) |
Derivative Instruments -Additio
Derivative Instruments -Additional information about the financial statement effects related to our cash flow hedges (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | |
Effects of derivative instruments | |||
AOCI related to a previously held derivative instrument designated as a cash flow hedge | $ 100,000 | $ 100,000 | |
Amount of interest expense reduction from ineffective derivative instrument | $ 0 | 100,000 | |
Cash Flow Hedging | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Effects of derivative instruments | |||
Amount of Gain Recognized in OCI on Derivatives (Effective Portion) | 122,000 | 371,000 | |
Cash Flow Hedging | Interest expense Member | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Effects of derivative instruments | |||
Amount of Gain Recognized in OCI on Derivatives (Effective Portion) | $ 122,000 | $ 371,000 |
Stock-Based Compensation Plan38
Stock-Based Compensation Plans (Details) - The 2007 plan - shares | 9 Months Ended | |
Sep. 30, 2015 | May. 24, 2007 | |
Stock-based compensation plans | ||
Number of shares authorized | 2,800,000 | 2,000,000 |
Additional shares authorized | 800,000 | |
Restricted stock | ||
Stock-based compensation plans | ||
Number of shares awarded | 2,263,712 | |
Number of shares available | 135,368 | |
Restricted stock, forfeited, and returned to pool | 671,656 |
Stock-Based Compensation Plan39
Stock-Based Compensation Plans - Restricted stock activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Awards vesting over four years | ||||
Number Outstanding | ||||
Vesting period | 4 years | |||
The 2007 plan | Awards Vesting Over One Year [Member] | ||||
Number Outstanding | ||||
Shares granted | 16,440 | |||
The 2007 plan | Awards vesting over four years | ||||
Number Outstanding | ||||
Shares granted | 5,000 | |||
The 2007 plan | Restricted stock | ||||
Number Outstanding | ||||
Balance at the beginning of the period (in shares) | 525,356 | 515,130 | 515,130 | |
Shares cancelled | (5,750) | |||
Shares vested | (187,856) | (221,732) | ||
Balance at the end of the period (in shares) | 483,940 | 483,940 | 525,356 | |
Remaining average vesting period for recognition of unrecognized compensation expense | 1 year 10 months 24 days | |||
Unrecognized compensation expense (in dollars) | $ 5.8 | $ 5.8 | ||
Intrinsic value of unvested awards (in dollars) | $ 7.9 | $ 7.9 | ||
The 2007 plan | Restricted stock | Awards Vesting Over One Year [Member] | ||||
Number Outstanding | ||||
Vesting period | 1 year | |||
The 2007 plan | Restricted stock | Awards vesting over four years | ||||
Number Outstanding | ||||
Vesting period | 3 years | 4 years | ||
The 2007 plan | Restricted stock | Awards Vesting Over Three Years [Member] | ||||
Number Outstanding | ||||
Shares granted | 174,500 | |||
Vesting period | 3 years | |||
The 2007 plan | Restricted Stock Four Year Vesting [Member] | ||||
Number Outstanding | ||||
Shares granted | 125,000 | 13,000 | ||
The 2007 plan | Restricted Stock One Year Vesting [Member] | ||||
Number Outstanding | ||||
Shares granted | 50,208 | |||
1996 Plan | ||||
Number Outstanding | ||||
Stock options exercised (in shares) | 49,000 | 26,437 | ||
Stock options outstanding (in shares) | 0 | 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes | ||||
Income tax expense (benefit) | $ 2,116 | $ 1,284 | $ 3,155 | $ 5,026 |
Effective tax rate (as a percent) | 45.10% | 56.70% | 41.90% | 40.00% |
Fair Value of Financial Instr41
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Level 3 | ||
Fair value of financial instruments | ||
Fair value of notes payable | $ 863.4 | $ 847 |
Operating Segments (Details)
Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Revenue: | |||||
Lease rent revenue | $ 28,083 | $ 25,165 | $ 78,993 | $ 76,865 | |
Maintenance reserve revenue | 16,119 | 13,066 | 40,744 | 41,657 | |
Spare parts equipment sales | 9,133 | 4,628 | 15,000 | 6,690 | |
Gain on sale of leased equipment | 3,804 | 1,891 | 7,700 | 3,713 | |
Other revenue | 619 | 769 | 1,978 | 3,800 | |
Total revenue | 57,758 | 45,519 | 144,415 | 132,725 | |
Expenses: | |||||
Depreciation and amortization expense | 17,089 | 16,714 | 52,462 | 48,159 | |
Cost of spare parts sales | 5,919 | 4,218 | 10,219 | 6,173 | |
General and administrative | 11,742 | 9,107 | 30,826 | 28,055 | |
Net finance costs | 9,805 | 9,181 | 28,081 | 27,935 | |
Other expense | 9,068 | 4,305 | 16,416 | 10,671 | |
Total expenses | 53,623 | 43,525 | 138,004 | 120,993 | |
Interest expense | 9,805 | 9,181 | 29,232 | 27,935 | |
Earnings from operations | 4,135 | 1,994 | 6,411 | 11,732 | |
Total assets | 1,285,105 | 1,285,105 | $ 1,261,626 | ||
Operating Segments [Member] | Leasing and Related Operations | |||||
Revenue: | |||||
Lease rent revenue | 28,083 | 25,165 | 78,993 | 76,865 | |
Maintenance reserve revenue | 16,119 | 13,066 | 40,744 | 41,657 | |
Spare parts equipment sales | 4,600 | 5,450 | |||
Gain on sale of leased equipment | 3,804 | 1,891 | 7,700 | 3,713 | |
Other revenue | 597 | 673 | 1,796 | 2,908 | |
Total revenue | 53,203 | 40,795 | 134,683 | 125,143 | |
Expenses: | |||||
Depreciation and amortization expense | 17,022 | 16,643 | 52,251 | 47,943 | |
Cost of spare parts sales | 2,461 | 3,081 | |||
General and administrative | 10,948 | 8,405 | 28,751 | 26,072 | |
Net finance costs | 9,707 | 9,111 | 27,789 | 27,807 | |
Other expense | 9,068 | 4,305 | 16,416 | 10,671 | |
Total expenses | 49,206 | 38,464 | 128,288 | 112,493 | |
Earnings from operations | 3,997 | 2,331 | 6,395 | 12,650 | |
Total assets | 1,262,748 | 1,262,748 | 1,241,837 | ||
Operating Segments [Member] | Spare Parts Sales | |||||
Revenue: | |||||
Spare parts equipment sales | 4,533 | 4,628 | 9,550 | 6,690 | |
Other revenue | 135 | 862 | 531 | 2,295 | |
Total revenue | 4,668 | 5,490 | 10,081 | 8,985 | |
Expenses: | |||||
Depreciation and amortization expense | 67 | 71 | 211 | 216 | |
Cost of spare parts sales | 3,458 | 4,218 | 7,138 | 6,173 | |
General and administrative | 794 | 702 | 2,075 | 1,983 | |
Net finance costs | 98 | 70 | 292 | 128 | |
Total expenses | 4,417 | 5,061 | 9,716 | 8,500 | |
Earnings from operations | 251 | 429 | 365 | 485 | |
Total assets | 22,357 | 22,357 | $ 19,789 | ||
Intersegment Eliminations [Member] | |||||
Revenue: | |||||
Other revenue | (113) | (766) | (349) | (1,403) | |
Total revenue | (113) | (766) | (349) | (1,403) | |
Expenses: | |||||
Earnings from operations | $ (113) | $ (766) | $ (349) | $ (1,403) |