Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of exchange on which registered | ||||||||||||
Large Accelerated Filer | ☐ | ☒ | |||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
Emerging Growth Company |
Year | (in thousands) | |||||||
2021 | $ | 120,393 | ||||||
2022 | 75,835 | |||||||
2023 | 28,452 | |||||||
2024 | 15,091 | |||||||
2025 | 5,647 | |||||||
Thereafter | 8,002 | |||||||
$ | 253,420 |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||||||||
(a) | (b) | (c) | ||||||||||||||||||
Plans Not Approved by Shareholders: | ||||||||||||||||||||
None | n/a | n/a | n/a | |||||||||||||||||
Plans Approved by Shareholders: | ||||||||||||||||||||
Employee Stock Purchase Plan | — | n/a | 51,538 | |||||||||||||||||
2007 Stock Incentive Plan | — | n/a | — | |||||||||||||||||
2018 Stock Incentive Plan | — | n/a | 295,846 | |||||||||||||||||
Total | — | n/a | 347,384 |
Years Ended December 31, | |||||||||||||||||
2020 | 2019 | % Change | |||||||||||||||
(dollars in thousands) | |||||||||||||||||
Lease rent revenue | $ | 142,895 | $ | 190,690 | (25.1) | % | |||||||||||
Maintenance reserve revenue | 105,365 | 108,998 | (3.3) | % | |||||||||||||
Spare parts and equipment sales | 18,625 | 74,651 | (75.1) | % | |||||||||||||
Gain on sale of leased equipment | 3,391 | 20,044 | (83.1) | % | |||||||||||||
Other revenue | 18,416 | 14,777 | 24.6 | % | |||||||||||||
Total revenue | $ | 288,692 | $ | 409,160 | (29.4) | % |
Payment due by period (in thousands) | |||||||||||||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||||||||||||
Debt obligations | $ | 1,712,886 | $ | 51,497 | $ | 109,810 | $ | 879,037 | $ | 672,542 | |||||||||||||||||||
Interest payments under debt obligations | 258,609 | 52,113 | 96,778 | 69,572 | 40,146 | ||||||||||||||||||||||||
Operating lease obligations | 4,350 | 1,227 | 1,743 | 788 | 592 | ||||||||||||||||||||||||
Purchase obligations | 470,974 | 215,493 | 255,481 | — | — | ||||||||||||||||||||||||
Total | $ | 2,446,819 | $ | 320,330 | $ | 463,812 | $ | 949,397 | $ | 713,280 |
Exhibit Number | Description | ||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
4.1 | |||||||||||
4.2 | |||||||||||
4.3 | |||||||||||
4.3.1 | |||||||||||
4.4 | |||||||||||
4.5 | |||||||||||
4.6 | |||||||||||
4.7 | |||||||||||
4.8 | |||||||||||
10.1† | |||||||||||
10.2† | |||||||||||
10.3† | |||||||||||
10.4† | |||||||||||
10.5† | |||||||||||
10.6* | |||||||||||
10.7* | |||||||||||
10.8* | |||||||||||
10.9* | |||||||||||
10.10* |
10.11* | |||||||||||
10.12† | |||||||||||
10.13† | |||||||||||
10.14 | |||||||||||
10.15 | |||||||||||
10.16 | |||||||||||
10.17* | |||||||||||
10.18* | |||||||||||
10.19* | |||||||||||
10.20* | |||||||||||
10.21* | |||||||||||
10.22* | |||||||||||
10.23* | |||||||||||
10.24* | |||||||||||
10.25* | |||||||||||
10.26* | |||||||||||
10.27* | |||||||||||
10.28* | |||||||||||
10.29 | |||||||||||
10.30† | |||||||||||
10.31* | |||||||||||
10.32* | |||||||||||
10.33* | |||||||||||
10.34* |
10.35* | |||||||||||
10.36* | |||||||||||
10.37* | |||||||||||
10.38* | |||||||||||
10.39* | |||||||||||
10.40* | |||||||||||
10.41* | |||||||||||
10.42* | |||||||||||
10.43* | |||||||||||
10.44* | |||||||||||
10.45* | |||||||||||
10.46* | |||||||||||
10.47* | |||||||||||
10.48* | |||||||||||
10.49* | |||||||||||
10.50* | |||||||||||
10.51* | |||||||||||
10.52* | |||||||||||
10.53* | |||||||||||
10.54* | |||||||||||
10.55* | |||||||||||
10.56* |
10.57* | |||||||||||
14.1 | |||||||||||
16.1 | |||||||||||
21.1 | |||||||||||
23.1 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32 | |||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||||||
101 | The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Redeemable Preferred Stock and Shareholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | ||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Dated: | March 15, 2021 | ||||||||||
Willis Lease Finance Corporation | |||||||||||
By: | /s/ CHARLES F. WILLIS, IV | ||||||||||
Charles F. Willis, IV | |||||||||||
Chairman of the Board and | |||||||||||
Chief Executive Officer |
Dated: | Title | Signature | ||||||||||||
Date: March 15, 2021 | Chief Executive Officer and Director | /s/ CHARLES F. WILLIS, IV | ||||||||||||
(Principal Executive Officer) | Charles F. Willis, IV | |||||||||||||
Date: March 15, 2021 | Chief Financial Officer | /s/ SCOTT B. FLAHERTY | ||||||||||||
(Principal Financial and Accounting Officer) | Scott B. Flaherty | |||||||||||||
Date: March 15, 2021 | Director | /s/ HANS JOERG HUNZIKER | ||||||||||||
Hans Joerg Hunziker | ||||||||||||||
Date: March 15, 2021 | Director | /s/ ROBERT J. KEADY | ||||||||||||
Robert J. Keady | ||||||||||||||
Date: March 15, 2021 | Director | /s/ RAE ANN MCKEATING | ||||||||||||
Rae Ann McKeating | ||||||||||||||
Date: March 15, 2021 | Director | /s/ AUSTIN C. WILLIS | ||||||||||||
Austin C. Willis |
December 31, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Equipment held for operating lease, less accumulated depreciation of $ | |||||||||||
Maintenance rights | |||||||||||
Equipment held for sale | |||||||||||
Receivables, net of allowances of $ | |||||||||||
Spare parts inventory | |||||||||||
Investments | |||||||||||
Property, equipment & furnishings, less accumulated depreciation of $ | |||||||||||
Intangible assets, net | |||||||||||
Notes receivable | |||||||||||
Other assets | |||||||||||
Total assets (1) | $ | $ | |||||||||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY | |||||||||||
Liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Deferred income taxes | |||||||||||
Debt obligations | |||||||||||
Maintenance reserves | |||||||||||
Security deposits | |||||||||||
Unearned revenue | |||||||||||
Total liabilities (2) | |||||||||||
Redeemable preferred stock ($ | |||||||||||
Shareholders’ equity: | |||||||||||
Common stock ($ | |||||||||||
Paid-in capital in excess of par | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss, net of income tax benefit of $ | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities, redeemable preferred stock and shareholders’ equity | $ | $ |
Years Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
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 | |||||||||||
Write-down of equipment | |||||||||||
General and administrative | |||||||||||
Technical expense | |||||||||||
Net finance costs: | |||||||||||
Interest expense | |||||||||||
Loss on debt extinguishment | |||||||||||
Total net finance costs | |||||||||||
Total expenses | |||||||||||
Earnings from operations | |||||||||||
Earnings from joint ventures | |||||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | |||||||||||
Preferred stock dividends | |||||||||||
Accretion of preferred stock issuance costs | |||||||||||
Net income attributable to common shareholders | $ | $ | |||||||||
Basic weighted average earnings per common share: | $ | $ | |||||||||
Diluted weighted average earnings per common share: | $ | $ | |||||||||
Basic weighted average common shares outstanding | |||||||||||
Diluted weighted average common shares outstanding |
Years Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Net income | $ | $ | |||||||||
Other comprehensive loss: | |||||||||||
Currency translation adjustment | ( | ||||||||||
Unrealized loss on derivative instruments | ( | ( | |||||||||
Unrealized loss on derivative instruments at joint venture | ( | ( | |||||||||
Net loss recognized in other comprehensive income | ( | ( | |||||||||
Tax benefit related to items of other comprehensive loss | |||||||||||
Other comprehensive loss | ( | ( | |||||||||
Total comprehensive income | $ | $ |
Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in Capital in | Retained | Comprehensive | Total Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Excess of par | Earnings | Income/(Loss) | Equity | |||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2018 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net unrealized loss from currency translation adjustment, net of tax benefit of $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net unrealized loss from derivative instruments, net of tax benefit of $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | — | — | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Shares issued under stock compensation plans | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of restricted stock units in satisfaction of withholding tax | — | — | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred shares issuance costs | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends ($ | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net unrealized gain from currency translation adjustment, net of tax expense of $ | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net unrealized loss from derivative instruments, net of tax benefit of $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Shares repurchased | — | — | (56) | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Shares issued under stock compensation plans | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of restricted stock in satisfaction of withholding tax | — | — | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net of forfeitures | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred shares issuance costs | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends ($ | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 | $ | $ | $ | $ | $ | ( | $ |
Years Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | |||||||||||
Write-down of equipment | |||||||||||
Stock-based compensation expenses | |||||||||||
Amortization of deferred costs | |||||||||||
Allowances and provisions | ( | ||||||||||
Gain on sale of leased equipment | ( | ( | |||||||||
Income from joint ventures | ( | ( | |||||||||
Loss on sale of note receivable | |||||||||||
(Gain) Loss on disposal of property, equipment and furnishings | ( | ||||||||||
Loss on debt extinguishment | |||||||||||
Deferred income taxes | |||||||||||
Changes in assets and liabilities: | |||||||||||
Receivables | ( | ( | |||||||||
Distributions received from joint ventures | |||||||||||
Inventory | |||||||||||
Other assets | ( | ( | |||||||||
Accounts payable and accrued expenses | ( | ||||||||||
Maintenance reserves | ( | ||||||||||
Security deposits | ( | ( | |||||||||
Unearned revenue | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sale of equipment (net of selling expenses) | |||||||||||
Proceeds from sale of note receivable (net of selling expenses) | |||||||||||
Issuance of notes receivable | ( | ( | |||||||||
Payments received on notes receivable | |||||||||||
Capital contributions to joint ventures | ( | ||||||||||
Purchase of equipment held for operating lease | ( | ( | |||||||||
Purchase of property, equipment and furnishings | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of debt obligations | |||||||||||
Debt issuance costs | ( | ( | |||||||||
Principal payments on debt obligations | ( | ( | |||||||||
Interest bearing security deposits | ( | ||||||||||
Debt prepayment costs | ( | ||||||||||
Proceeds from shares issued under stock compensation plans | |||||||||||
Repurchase of common stock | ( | ( | |||||||||
Preferred stock dividends | ( | ( | |||||||||
Cancellation of restricted stock units in satisfaction of withholding tax | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Increase/(Decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Net cash paid for: | |||||||||||
Interest | $ | $ | |||||||||
Income Taxes | $ | $ | |||||||||
Supplemental disclosures of non-cash activities: | |||||||||||
Liabilities assumed in purchase of equipment held for operating lease | $ | $ | |||||||||
Transfers from Equipment held for operating lease to Equipment held for sale | $ | $ | |||||||||
Transfers from Equipment held for operating lease to Spare parts inventory | $ | $ | |||||||||
Transfers from Equipment held for sale to Spare parts inventory | $ | $ | |||||||||
Accretion of preferred stock issuance costs | $ | $ |
As of December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Gross value | Accumulated depreciation | Net book value | Gross value | Accumulated depreciation | Net book value | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Engines and related equipment | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||
Aircraft and airframes | ( | ( | |||||||||||||||||||||
Marine vessel | ( | ( | |||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( | $ |
Leases | Classification | December 31, 2020 | December 31, 2019 | |||||||||||||||||
(in thousands, except lease term and discount rate) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Other assets | $ | $ | ||||||||||||||||||
Total leased assets | $ | $ | ||||||||||||||||||
Liabilities | ||||||||||||||||||||
Accounts payable and accrued expenses | $ | $ | ||||||||||||||||||
Total lease liabilities | $ | $ | ||||||||||||||||||
Weighted average remaining lease term (years) | ||||||||||||||||||||
Operating leases | ||||||||||||||||||||
Weighted average discount rate | ||||||||||||||||||||
Operating leases | % | % |
Year | (in thousands) | |||||||
2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total lease payments | ||||||||
Less: interest | ( | |||||||
Total lease liabilities | $ |
Year | (in thousands) | |||||||
2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
$ |
Years Ended December 31, | ||||||||||||||||||||
Lease expense | Classification | 2020 | 2019 | |||||||||||||||||
(in thousands) | ||||||||||||||||||||
Operating lease cost | General and administrative | $ | $ | |||||||||||||||||
Net lease cost | $ | $ |
Years Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
Operating cash flows from operating leases | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for lease obligations: | ||||||||||||||
Operating leases | $ | $ |
Year ended December 31, 2020 | Leasing and Related Operations | Spare Parts Sales | Eliminations (1) | Total | ||||||||||||||||||||||
Leasing revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Maintenance reserve revenue | ||||||||||||||||||||||||||
Spare parts and equipment sales | ( | |||||||||||||||||||||||||
Gain on sale of leased equipment | ||||||||||||||||||||||||||
Managed services | ||||||||||||||||||||||||||
Other revenue | ( | |||||||||||||||||||||||||
Total revenue | $ | $ | $ | ( | $ |
Year ended December 31, 2019 | Leasing and Related Operations | Spare Parts Sales | Eliminations (1) | Total | ||||||||||||||||||||||
Leasing revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Maintenance reserve revenue | ||||||||||||||||||||||||||
Spare parts and equipment sales | ||||||||||||||||||||||||||
Gain on sale of leased equipment | ||||||||||||||||||||||||||
Managed services | ||||||||||||||||||||||||||
Other revenue | ( | |||||||||||||||||||||||||
Total revenue | $ | $ | $ | ( | $ |
Years Ended December 31, | ||||||||||||||
Lease rent revenue | 2020 | 2019 | ||||||||||||
Region | (in thousands) | |||||||||||||
Europe | $ | $ | ||||||||||||
United States | ||||||||||||||
Asia | ||||||||||||||
South America | ||||||||||||||
Mexico | ||||||||||||||
Middle East | ||||||||||||||
Canada | ||||||||||||||
Africa | ||||||||||||||
Totals | $ | $ |
As of December 31, | ||||||||||||||
Net book value of equipment held for operating lease | 2020 | 2019 | ||||||||||||
Region | (in thousands) | |||||||||||||
Europe | $ | $ | ||||||||||||
United States | ||||||||||||||
Asia | ||||||||||||||
Mexico | ||||||||||||||
South America | ||||||||||||||
Middle East | ||||||||||||||
Canada | ||||||||||||||
Africa | ||||||||||||||
Off-lease and other | ||||||||||||||
Totals | $ | $ |
Lease Term | Net Book Value | |||||||
Off-lease and other | $ | |||||||
Month-to-month leases | ||||||||
Leases expiring 2021 | ||||||||
Leases expiring 2022 | ||||||||
Leases expiring 2023 | ||||||||
Leases expiring 2024 | ||||||||
Leases expiring 2025 | ||||||||
Leases expiring thereafter | ||||||||
$ |
Year | (in thousands) | |||||||
2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
$ |
As of December 31, 2020 | WMES | CASC Willis | Total | |||||||||||||||||
(in thousands) | ||||||||||||||||||||
Investment in joint ventures as of December 31, 2018 | $ | $ | $ | |||||||||||||||||
Earnings from joint ventures | ||||||||||||||||||||
Contribution | ||||||||||||||||||||
Distribution | ( | ( | ||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ||||||||||||||||||
Other comprehensive loss from joint ventures | ( | ( | ||||||||||||||||||
Investment in joint ventures as of December 31, 2019 | ||||||||||||||||||||
Earnings from joint ventures | ||||||||||||||||||||
Contribution | ||||||||||||||||||||
Distribution | ( | ( | ||||||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||||
Other comprehensive loss from joint ventures | ( | ( | ||||||||||||||||||
Investment in joint ventures as of December 31, 2020 | $ | $ | $ |
Years Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Revenue | $ | $ | |||||||||
Expenses | |||||||||||
WMES net income | $ | $ |
As of December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Total assets | $ | $ | |||||||||
Total liabilities | |||||||||||
Total WMES net equity | $ | $ |
As of December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Credit facility at a floating rate of interest of one-month LIBOR plus | $ | $ | |||||||||
WEST V Series A 2020 term notes payable at a fixed rate of interest of | |||||||||||
WEST V Series B 2020 term notes payable at a fixed rate of interest of | |||||||||||
WEST V Series C 2020 term notes payable at a fixed rate of interest of | |||||||||||
WEST IV Series A 2018 term notes payable at a fixed rate of interest of | |||||||||||
WEST IV Series B 2018 term notes payable at a fixed rate of interest of | |||||||||||
WEST III Series A 2017 term notes payable at a fixed rate of interest of | |||||||||||
WEST III Series B 2017 term notes payable at a fixed rate of interest of | |||||||||||
WEST II Series A 2012 term notes payable at a fixed rate of interest of | |||||||||||
Note payable at three-month LIBOR plus a margin ranging from | |||||||||||
Note payable at a fixed rate of interest of | |||||||||||
Less: unamortized debt issuance costs | ( | ( | |||||||||
Total debt obligations | $ | $ |
Year | (in thousands) | |||||||
2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total | $ |
Derivatives in Cash Flow Hedging Relationships | Amount of Loss Recognized in OCI on Derivatives (Effective Portion) | |||||||||||||
Years Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
(in thousands) | ||||||||||||||
Interest rate contracts | $ | $ | ||||||||||||
Total | $ | $ |
Years ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
United States | $ | $ | |||||||||
Foreign | |||||||||||
Income before income taxes | $ | $ |
Federal | State | Foreign | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
2020 | |||||||||||||||||||||||
Current | $ | $ | ( | $ | $ | ||||||||||||||||||
Deferred | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
2019 | |||||||||||||||||||||||
Current | $ | $ | $ | $ | |||||||||||||||||||
Deferred | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Years Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Statutory federal income tax expense | $ | $ | |||||||||
State taxes, net of federal benefit | |||||||||||
Foreign tax paid | |||||||||||
Foreign jurisdiction rate differential | |||||||||||
Permanent differences-nondeductible executive compensation | |||||||||||
Permanent differences and other | ( | ||||||||||
Effective income tax expense | $ | $ |
(in thousands) | |||||
Balance as of December 31, 2018 | $ | ||||
Increases related to current year tax positions | |||||
Decreases due to tax positions expired | ( | ||||
Balance as of December 31, 2019 | |||||
Increases related to current year tax positions | |||||
Decreases due to tax positions expired | ( | ||||
Balance as of December 31, 2020 | $ |
As of December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Unearned lease revenue | $ | $ | |||||||||
State taxes | |||||||||||
Inventory | |||||||||||
Reserves and allowances | |||||||||||
Other accruals | |||||||||||
Foreign tax credit | |||||||||||
Lease liability | |||||||||||
Net operating loss carry forward | |||||||||||
California alternative minimum tax credit | |||||||||||
Charitable contributions | |||||||||||
Total deferred tax assets | |||||||||||
Less: valuation allowance | ( | ( | |||||||||
Net deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Depreciation and impairment on aircraft engines and equipment | ( | ( | |||||||||
Inventory | ( | ||||||||||
Notes receivable | ( | ( | |||||||||
Right of use liability | ( | ( | |||||||||
Other deferred tax assets (liabilities) | ( | ( | |||||||||
Net deferred tax liabilities | ( | ( | |||||||||
Other comprehensive loss deferred tax liability | |||||||||||
Net deferred tax liabilities | $ | ( | $ | ( |
Total Losses | |||||||||||
Years Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Equipment held for lease | $ | $ | |||||||||
Equipment held for sale | |||||||||||
Total | $ | $ |
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
Net income attributable to common shareholders | $ | $ | |||||||||
Basic weighted average common shares outstanding | |||||||||||
Potentially dilutive common shares | |||||||||||
Diluted weighted average common shares outstanding | |||||||||||
Basic weighted average earnings per common share | $ | $ | |||||||||
Diluted weighted average earnings per common share | $ | $ |
Year Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
(in thousands) | |||||||||||
2007 Stock Incentive Plan | $ | $ | |||||||||
2018 Stock Incentive Plan | |||||||||||
Employee Stock Purchase Plan | |||||||||||
Total Stock Compensation Expense | $ | $ |
Number Outstanding | Weighted Average Grant Date Fair Value | Aggregate Grant Date Fair Value (in thousands) | |||||||||||||||
Balance as of December 31, 2018 | $ | $ | |||||||||||||||
Shares granted | |||||||||||||||||
Shares forfeited | ( | ( | |||||||||||||||
Shares vested | ( | ( | |||||||||||||||
Balance as of December 31, 2019 | |||||||||||||||||
Shares granted | |||||||||||||||||
Shares forfeited | |||||||||||||||||
Shares vested | ( | ( | |||||||||||||||
Balance as of December 31, 2020 | $ | $ |
2020 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Full Year | |||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net income (loss) attributable to common shareholders | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Basic earnings (loss) per common share | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Basic weighted average common shares outstanding | ||||||||||||||||||||||||||||||||
Diluted weighted average common shares outstanding |
2019 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Full Year | |||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Basic weighted average common shares outstanding | ||||||||||||||||||||||||||||||||
Diluted weighted average common shares outstanding |
For the year ended December 31, 2020 | Leasing and 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 | ||||||||||||||||||||||||||
Write-down of equipment | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Technical expense | ||||||||||||||||||||||||||
Net finance costs: | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Loss on debt extinguishment | ||||||||||||||||||||||||||
Total finance costs | ||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||
Earnings (loss) from operations | $ | $ | ( | $ | ( | $ |
For the Year ended December 31, 2019 | Leasing and 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 | ||||||||||||||||||||||||||
Write-down of equipment | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Technical expense | ||||||||||||||||||||||||||
Net finance costs: | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Loss on debt extinguishment | ||||||||||||||||||||||||||
Total finance costs | ||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||
Earnings from operations | $ | $ | $ | ( | $ |
Leasing and Related Operations | Spare Parts Sales | Eliminations | Total | |||||||||||||||||||||||
Total assets as of December 31, 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
Total assets as of December 31, 2019 | $ | $ | $ | $ |
Balance at Beginning of Period | Additions Charged (Credited) to Expense | Net (Deductions) Recoveries | Balance at End of Period | ||||||||||||||||||||
Year Ended December 31, 2019 | |||||||||||||||||||||||
Accounts receivable, allowance for doubtful accounts | $ | $ | ( | $ | $ | ||||||||||||||||||
Deferred tax valuation allowance | $ | $ | ( | $ | $ | ||||||||||||||||||
Year Ended December 31, 2020 | |||||||||||||||||||||||
Accounts receivable, allowance for doubtful accounts | $ | $ | $ | ( | $ | ||||||||||||||||||
Deferred tax valuation allowance | $ | $ | $ | $ |
TABLE OF CONTENTS | ||||||||
Article | Page Number | |||||||
1. | DEFINITIONS | 1 | ||||||
2. | DESCRIPTION OF SALE, DATE OF SALE AND DELIVERY LOCATION | 3 | ||||||
3. | PURCHASE PRICE AND PAYMENT | 4 | ||||||
4. | INSPECTION | 4 | ||||||
5. | CONDITIONS PRECEDENT | 5 | ||||||
6. | CLOSING AND DELIVERY | 5 | ||||||
7. | RISK OF LOSS AND TITLE | 6 | ||||||
8. | COVENANTS OF BUYER | 6 | ||||||
9. | REPRESENTATIONS AND WARRANTIES | 7 | ||||||
10. | LIMITED WARRANTIES AND DISCLAIMERS | 8 | ||||||
11. | EXCUSABLE DELAYS | 9 | ||||||
12. | INDEMNITIES | 9 | ||||||
13. | EXPENSES AND TAXES | 10 | ||||||
14. | EXPORT | 10 | ||||||
15. | MISCELLANEOUS | 11 | ||||||
Appendix I [*] Engines List | ||||||||
Appendix II Demountable Powerplant Specification | ||||||||
Appendix III Collins Aerospace QEC Kit Excluded Parts | ||||||||
Appendix IV Form of Acceptance Certificate | ||||||||
Appendix V Form of Engine Bill of Sale | ||||||||
Appendix VI [*] Engine and Parts Service Policy | ||||||||
Appendix VII List of Permitted Affiliates | ||||||||
Appendix VIII Form of Pre-closing Engine Certification | ||||||||
Appendix IX Post-close Engine Documentation Short List |
If to Seller, to: | Pratt & Whitney Engine Leasing, LLC c/o: Pratt & Whitney 400 Main Street, Mail Stop [*] East Hartford, CT 06118 Attention: Associate General Counsel & Executive Director, Commercial Engines Contracts E-Fax: [*] Email: | ||||
If to Buyer, to: | Willis Lease Finance Corporation 60 East Sir Francis Drake Boulevard, Suite 209 Larkspur, California 94939 Attention: Dean Poulakidas, General Counsel Email: |
TABLE OF CONTENTS | ||||||||
Article | Page Number | |||||||
1. | DEFINITIONS | 1 | ||||||
2. | DESCRIPTION OF SALE, DATE OF SALE AND DELIVERY LOCATION | 3 | ||||||
3. | PURCHASE PRICE AND PAYMENT | 4 | ||||||
4. | INSPECTION | 4 | ||||||
5. | CONDITIONS PRECEDENT | 5 | ||||||
6. | CLOSING AND DELIVERY | 5 | ||||||
7. | RISK OF LOSS AND TITLE | 6 | ||||||
8. | COVENANTS OF BUYER | 6 | ||||||
9. | REPRESENTATIONS AND WARRANTIES | 7 | ||||||
10. | LIMITED WARRANTIES AND DISCLAIMERS | 8 | ||||||
11. | EXCUSABLE DELAYS | 9 | ||||||
12. | INDEMNITIES | 9 | ||||||
13. | EXPENSES AND TAXES | 10 | ||||||
14. | EXPORT | 10 | ||||||
15. | MISCELLANEOUS | 11 | ||||||
Appendix I [*] Engines List | ||||||||
Appendix II Demountable Powerplant Specification | ||||||||
Appendix III Collins Aerospace QEC Kit Excluded Parts | ||||||||
Appendix IV [*] Engines Delivery Location | ||||||||
Appendix V Form of Acceptance Certificate | ||||||||
Appendix VI Form of Engine Bill of Sale | ||||||||
Appendix VII [*] Engine and Parts Service Policy | ||||||||
Appendix VIII List of Permitted Affiliates | ||||||||
Appendix IX Form of Pre-closing Engine Certification | ||||||||
Appendix X Post-closing Engine Documentation Short List |
If to Seller, to: | [*] Engine Leasing, LLC c/o: International Aero Engines, LLC 400 Main Street, Mail Stop [*] East Hartford, CT 06118 Attention: Chief Legal Officer E-Fax: [*] Email: | ||||
If to Buyer, to: | Willis Lease Finance Corporation 60 East Sir Francis Drake Boulevard, Suite 209 Larkspur, California 94939 Attention: Dean Poulakidas, General Counsel Email: |
1. PERIOD OF COVER AND SCOPE | 4 | ||||
2. EXCLUSIVITY | 4 | ||||
3. MINIMUM SHOP VISIT COMMITMENT | 4 | ||||
4. FPA SERVICES | 5 | ||||
5. FIXED PRICE, RATES, AND ESCALATION | 6 | ||||
6. LLP COMMITMENT AND LIFE ASSURANCE PLAN | 8 | ||||
7. OPERATING CONDITIONS | 8 | ||||
8. FPA SHOP VISIT COVERAGE | 9 | ||||
9. EXCESS WORK | 11 | ||||
10. OBLIGATIONS OF WILLIS | 14 | ||||
11. PARTIES' RESPONSIBILITY | 17 | ||||
12. WARRANTY BENEFITS AND REMEDIES | 18 | ||||
13. TURNAROUND TIME (“TAT”) | 18 | ||||
14. TRANSPORTATION | 19 | ||||
15. PAYMENT | 20 | ||||
16. DUPLICATE BENEFITS | 22 | ||||
17. TERMINATION | 22 | ||||
18. TERMS AND CONDITIONS | 23 | ||||
19. ENTIRE AGREEMENT | 23 | ||||
20. COMMUNICATION AND NOTICES | 24 | ||||
21. ACCEPTANCE | 24 |
Flight Length | [*] | ||||
Takeoff Derate | [*] | ||||
Average Equivalent Sea Level Ambient Takeoff Temperature | [*] |
RAYTHEON TECHNOLOGIES CORPORATION, Pratt & Whitney Division | |||||||||||
By | /s/ Hendrik Deurloo | ||||||||||
Typed Name | Hendrik Deurloo | ||||||||||
Title | Senior Vice President and Chief Commercial Officer |
WILLIS LEASE FINANCE CORPORATION | |||||||||||
By | /s/ Austin Willis | ||||||||||
Typed Name | Austin Willis | ||||||||||
Title | Senior Vice President, Corporate Development |
1. PERIOD OF COVER AND SCOPE | |||||
2. EXCLUSIVITY | |||||
3. MINIMUM SHOP VISIT COMMITMENT | |||||
4. FPA SERVICES | 5 | ||||
5. FIXED PRICE, RATES, AND ESCALATION | 6 | ||||
6. LLP COMMITMENT AND LIFE ASSURANCE PLAN | 8 | ||||
7. OPERATING CONDITIONS | 9 | ||||
8. FPA SHOP VISIT COVERAGE | 9 | ||||
9. EXCESS WORK | 12 | ||||
10. OBLIGATIONS OF WILLIS | 14 | ||||
11. PARTIES' RESPONSIBILITY | 17 | ||||
12. WARRANTY BENEFITS AND REMEDIES | 18 | ||||
13. TURNAROUND TIME (“TAT”) | 19 | ||||
14. TRANSPORTATION | 19 | ||||
15. PAYMENT | 20 | ||||
16. DUPLICATE BENEFITS | 22 | ||||
17. TERMINATION | 22 | ||||
18. TERMS AND CONDITIONS | 23 | ||||
19. ENTIRE AGREEMENT | 24 | ||||
20. COMMUNICATION AND NOTICES | 24 | ||||
21. ACCEPTANCE | 24 |
Flight Length | [*] | ||||
Takeoff Derate | [*] | ||||
Average Equivalent Sea Level Ambient Takeoff Temperature | [*] |
INTERNATIONAL AERO ENGINES | |||||||||||
By | /s/ Hendrik Deurloo | ||||||||||
Typed Name | Hendrik Deurloo | ||||||||||
Title | Vice President, Sales |
WILLIS LEASE FINANCE CORPORATION | |||||||||||
By | /s/ Austin Willis | ||||||||||
Typed Name | Austin Willis | ||||||||||
Title | Senior Vice President, Corporate Development |
Subsidiary | State or Jurisdiction of Incorporation | |||||||
WEST Engine Funding LLC | Delaware | |||||||
Willis Lease (Ireland) Limited | Rep. of Ireland | |||||||
WLFC (Ireland) Limited | Rep. of Ireland | |||||||
WLFC Funding (Ireland) Limited | Rep. of Ireland | |||||||
Willis Lease Finance (Ireland) Limited | Rep. of Ireland | |||||||
Willis Lease France | France | |||||||
Willis Lease Finance (China) Limited | People’s Republic of China | |||||||
Willis Engine Structured Trust V | Delaware | |||||||
WEST Engine Acquisition LLC | Delaware | |||||||
Facility Engine Acquisition LLC | Delaware | |||||||
WEST V Engines (Ireland) Limited | Rep. of Ireland | |||||||
Willis Aeronautical Services, Inc. | Delaware | |||||||
Willis Lease Singapore Pte. Ltd. | Singapore | |||||||
Willis Asset Management Limited | United Kingdom | |||||||
Willis Engine Structured Trust III | Delaware | |||||||
Coconut Creek Aviation Assets LLC | Delaware | |||||||
Willis Engine Structured Trust IV | Delaware | |||||||
WEST III Engines (Ireland) Limited | Rep. of Ireland | |||||||
WEST IV Engines (Ireland) Limited | Rep. of Ireland | |||||||
WEST V France | France | |||||||
WEST III France | France | |||||||
WEST IV France | France | |||||||
Willis Lease Marine LLC | Cayman Islands | |||||||
/s/ KPMG LLP | ||
Fort Lauderdale, Florida | ||
March 15, 2021 |
Date: | March 15, 2021 | /s/ Charles F. Willis, IV | |||||||||
Charles F. Willis, IV | |||||||||||
Chief Executive Officer | |||||||||||
Chairman of the Board |
Date: | March 15, 2021 | /s/ Scott B. Flaherty | |||||||||
Scott B. Flaherty | |||||||||||
Chief Financial Officer |
Date: March 15, 2021 | |||||
/s/ Charles F. Willis, IV | |||||
Charles F. Willis, IV | |||||
Chairman of the Board and Chief Executive Officer | |||||
/s/ Scott B. Flaherty | |||||
Scott B. Flaherty | |||||
Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accumulated depreciation | $ 11,356 | $ 8,666 |
Receivables, allowances | $ 1,372 | $ 1,730 |
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 issued (in shares) | 2,500,000 | 2,500,000 |
Redeemable preferred stock - shares outstanding (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) | 6,570,000 | 6,356,000 |
Accumulated other comprehensive loss, income tax expense (benefit) | $ 1,428 | $ 896 |
Restricted cash | 36,385 | 56,948 |
Maintenance rights | 20,097 | 3,133 |
Spare parts inventory | 59,434 | 41,759 |
Other assets | 43,778 | 28,038 |
Debt obligations | 1,693,753 | 1,251,006 |
Variable Interest Entity | ||
Cash | 0 | 134 |
Restricted cash | 35,262 | 56,523 |
Equipment | 1,037,684 | 1,004,851 |
Maintenance rights | 767 | 3,133 |
Spare parts inventory | 5,437 | 2,832 |
Other assets | 558 | 668 |
Debt obligations | 907,550 | 842,996 |
Assets Leased to Others | ||
Accumulated depreciation | $ 454,123 | $ 414,835 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
REVENUE | ||
Leasing and maintenance reserve revenue | $ 142,895 | $ 190,690 |
Gain on sale of leased equipment | 3,391 | 20,044 |
Total revenue | 288,692 | 409,160 |
EXPENSES | ||
Depreciation and amortization expense | 94,541 | 86,236 |
Cost of spare parts and equipment sales | 16,762 | 62,647 |
Write-down of equipment | 20,540 | 18,220 |
General and administrative | 67,910 | 86,523 |
Technical expense | 6,533 | 8,122 |
Net finance costs: | ||
Interest expense | 63,024 | 66,889 |
Loss on debt extinguishment | 4,688 | 220 |
Total net finance costs | 67,712 | 67,109 |
Total expenses | 273,998 | 328,857 |
Earnings from operations | 14,694 | 80,303 |
Earnings from joint ventures | 2,642 | 8,578 |
Income before income taxes | 17,336 | 88,881 |
Income tax expense | 7,588 | 21,959 |
Net income | 9,748 | 66,922 |
Preferred stock dividends | 3,259 | 3,250 |
Accretion of preferred stock issuance costs | 84 | 84 |
Net income attributable to common shareholders | $ 6,405 | $ 63,588 |
Basic weighted average earnings per common share (in dollars per share) | $ 1.07 | $ 10.90 |
Diluted weighted average earnings per common share (in dollars per share) | $ 1.05 | $ 10.50 |
Basic weighted average common shares outstanding (in shares) | 5,963 | 5,836 |
Diluted weighted average common shares outstanding (in shares) | 6,128 | 6,058 |
Lease rent revenue | ||
REVENUE | ||
Leasing and maintenance reserve revenue | $ 142,895 | $ 190,690 |
Maintenance reserve revenue | ||
REVENUE | ||
Leasing and maintenance reserve revenue | 105,365 | 108,998 |
Spare parts and equipment sales | ||
REVENUE | ||
Spare parts, managed services, and other revenues | 18,625 | 74,651 |
Other revenue | ||
REVENUE | ||
Spare parts, managed services, and other revenues | $ 18,416 | $ 14,777 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 9,748 | $ 66,922 |
Other comprehensive loss: | ||
Currency translation adjustment | 1,018 | (222) |
Unrealized loss on derivative instruments | (2,298) | (3,331) |
Unrealized loss on derivative instruments at joint venture | (1,121) | (774) |
Net loss recognized in other comprehensive income | (2,401) | (4,327) |
Tax benefit related to items of other comprehensive loss | 532 | 977 |
Other comprehensive loss | (1,869) | (3,350) |
Total comprehensive income | $ 7,879 | $ 63,572 |
Consolidated Statements of Redeemable Preferred Stock and Shareholders' Equity - USD ($) $ in Thousands |
Total |
Cumulative Effect, Period of Adoption, Adjustment |
Preferred Stock |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
|
Accumulated Other Comprehensive Income/(Loss) |
---|---|---|---|---|---|---|---|---|
Balances, beginning of period (in shares) at Dec. 31, 2018 | 2,500,000 | 6,176,000 | ||||||
Balances, beginning of period at Dec. 31, 2018 | $ 286,787 | $ 233 | $ 49,554 | $ 62 | $ 0 | $ 286,623 | $ 233 | $ 102 |
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 66,922 | 66,922 | ||||||
Net unrealized gain (loss) from currency translation adjustment, net of tax (benefit) expense | (172) | (172) | ||||||
Net unrealized gain (loss) from derivative instruments, net of tax (benefit) expense | (3,178) | (3,178) | ||||||
Shares repurchased (in shares) | (72,324) | |||||||
Shares repurchased | (3,567) | $ (1) | (2,087) | (1,479) | ||||
Shares issued under stock compensation plans (in shares) | 289,000 | |||||||
Shares issued under stock compensation plans | 335 | $ 3 | 332 | |||||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (37,000) | |||||||
Cancellation of restricted stock units in satisfaction of withholding tax | (1,475) | (1,475) | ||||||
Stock-based compensation, net of forfeitures | 7,787 | 7,787 | ||||||
Accretion of preferred shares issuance costs | (84) | $ 84 | (84) | |||||
Preferred stock dividends | (3,250) | (3,250) | ||||||
Balances, end of period (in shares) at Dec. 31, 2019 | 2,500,000 | 6,356,000 | ||||||
Balances, end of period at Dec. 31, 2019 | 350,338 | $ 49,638 | $ 64 | 4,557 | 348,965 | (3,248) | ||
Increase (Decrease) in Shareholders' Equity | ||||||||
Net income | 9,748 | 9,748 | ||||||
Net unrealized gain (loss) from currency translation adjustment, net of tax (benefit) expense | 793 | 793 | ||||||
Net unrealized gain (loss) from derivative instruments, net of tax (benefit) expense | (2,662) | (2,662) | ||||||
Shares repurchased (in shares) | (55,426) | |||||||
Shares repurchased | (1,510) | $ 0 | (1,510) | 0 | ||||
Shares issued under stock compensation plans (in shares) | 331,000 | |||||||
Shares issued under stock compensation plans | 428 | $ 3 | 425 | |||||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (61,000) | |||||||
Cancellation of restricted stock units in satisfaction of withholding tax | (1,155) | $ (1) | (1,154) | |||||
Stock-based compensation, net of forfeitures | 11,378 | 11,378 | ||||||
Accretion of preferred shares issuance costs | (84) | $ 84 | (84) | |||||
Preferred stock dividends | (3,259) | (3,259) | ||||||
Balances, end of period (in shares) at Dec. 31, 2020 | 2,500,000 | 6,570,000 | ||||||
Balances, end of period at Dec. 31, 2020 | $ 364,015 | $ 49,722 | $ 66 | $ 13,696 | $ 355,370 | $ (5,117) |
Consolidated Statements of Redeemable Preferred Stock and Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2020 |
Dec. 31, 2019 |
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Statement of Stockholders' Equity [Abstract] | ||
Net unrealized gain (loss) from currency translation adjustment, tax (benefit) expense | $ 225 | $ (50) |
Net unrealized gain (loss) from derivative instruments, tax benefit | $ 757 | $ 927 |
Preferred stock, dividends (in dollars per share) | $ 1.30 | $ 1.30 |
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2020 |
Dec. 31, 2019 |
|
Cash flows from operating activities: | ||
Net income | $ 9,748 | $ 66,922 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 94,541 | 86,236 |
Write-down of equipment | 20,540 | 18,220 |
Stock-based compensation expenses | 11,378 | 7,787 |
Amortization of deferred costs | 5,140 | 6,364 |
Allowances and provisions | 5 | (272) |
Gain on sale of leased equipment | (3,391) | (20,044) |
Income from joint ventures | (2,642) | (8,578) |
Loss on sale of note receivable | 79 | 0 |
(Gain) Loss on disposal of property, equipment and furnishings | (9) | 42 |
Loss on debt extinguishment | 4,688 | 220 |
Deferred income taxes | 6,953 | 21,074 |
Changes in assets and liabilities: | ||
Receivables | (4,215) | (517) |
Distributions received from joint ventures | 7,200 | 3,300 |
Inventory | 7,026 | 29,114 |
Other assets | (16,252) | (2,519) |
Accounts payable and accrued expenses | (18,441) | 2,131 |
Maintenance reserves | (24,386) | 22,282 |
Security deposits | (1,166) | (2,108) |
Unearned revenue | (3,352) | 661 |
Net cash provided by operating activities | 93,444 | 230,315 |
Cash flows from investing activities: | ||
Proceeds from sale of equipment (net of selling expenses) | 26,078 | 191,891 |
Proceeds from sale of note receivable (net of selling expenses) | 8,431 | 0 |
Issuance of notes receivable | (136,583) | (42,857) |
Payments received on notes receivable | 7,630 | 4,950 |
Capital contributions to joint ventures | 0 | (5,713) |
Purchase of equipment held for operating lease | (409,250) | (289,385) |
Purchase of property, equipment and furnishings | (2,976) | (6,330) |
Net cash used in investing activities | (506,670) | (147,444) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt obligations | 973,200 | 340,120 |
Debt issuance costs | (6,065) | (3,142) |
Principal payments on debt obligations | (530,783) | (428,081) |
Interest bearing security deposits | 0 | (2,092) |
Debt prepayment costs | (2,373) | 0 |
Proceeds from shares issued under stock compensation plans | 428 | 335 |
Repurchase of common stock | (1,510) | (3,567) |
Preferred stock dividends | (3,259) | (3,250) |
Cancellation of restricted stock units in satisfaction of withholding tax | (1,155) | (1,475) |
Net cash provided by (used in) financing activities | 428,483 | (101,152) |
Increase/(Decrease) in cash, cash equivalents and restricted cash | 15,257 | (18,281) |
Cash, cash equivalents and restricted cash at beginning of period | 63,668 | 81,949 |
Cash, cash equivalents and restricted cash at end of period | 78,925 | 63,668 |
Net cash paid for: | ||
Interest | 54,339 | 63,585 |
Income Taxes | 510 | 222 |
Supplemental disclosures of non-cash activities: | ||
Liabilities assumed in purchase of equipment held for operating lease | 8,868 | 2,515 |
Transfers from Equipment held for operating lease to Equipment held for sale | 2,800 | 10,131 |
Transfers from Equipment held for operating lease to Spare parts inventory | 24,702 | 23,931 |
Transfers from Equipment held for sale to Spare parts inventory | 0 | 422 |
Accretion of preferred stock issuance costs | $ 84 | $ 84 |
Organization and Summary of Significant Accounting Policies |
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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 this Annual Report 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 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 subsidiary whose primary focus is the engine management and consulting business. Willis Engine Securitization Trust II (“WEST II” or the “WEST II 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 II is a variable interest entity (“VIE”) which the Company owns 100% of the interest and consolidates in its financial statements. 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 ABS, of which the Company is the sole beneficiary. WEST III is a 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. In March 2020, the Company and its direct, consolidated VIE Willis Engine Structured Trust V (“WEST V”) (formerly WEST II), closed its offering of $366.2 million aggregate principal amount of fixed rate notes (the “WEST V Notes”). The WEST V Notes were issued in three series, with the Series A Notes issued in an aggregate principal amount of $303.0 million, the Series B Notes issued in an aggregate principal amount of $42.1 million and the Series C Notes issued in an aggregate principal amount of $21.1 million. Principal and interest on the WEST III, IV and V 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, IV and V 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 and WEST V Notes have scheduled amortizations and are payable solely from revenue received from the engines and the engine leases, after payment of certain expenses of the respective ABS. The assets of WEST III, WEST IV and WEST V are not available to satisfy the Company’s obligations other than the obligations specific to the respective ABS. WEST III, WEST IV and WEST V are consolidated for financial statement presentation purposes, with the respective assets and liabilities on the Company’s balance sheet. The ABS’ 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 and WEST V, 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 and WEST V 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 where 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. Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2020, the Company had an aggregate of approximately $4.6 million in lease rent and $1.9 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. One customer accounted for 11.4% of total lease rent revenue during the year ended December 31, 2020. No customer accounted for more than 10% of total lease rent revenue during the year ended December 31, 2019. 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. 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, and 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 the asset holds standalone 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 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 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, 2020, unbilled revenue was $0.8 million and the Company expects it to be fully recognized by June 30, 2021. Additionally, managed services are presented within the Other revenue line in the Consolidated Statements of Income. Other Revenue Other revenue consists primarily of management fee income, lease administration fees, third party consignment commissions earned, service fee revenue, interest income on notes receivable related to failed sale-leasebacks where the Company was the buyer-lessor, 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 life and residual values of all engines periodically as demand changes to accurately depreciate the cost of equipment over the useful life of the engines. The aircraft and airframes owned by the Company are depreciated on a straight-line basis over an estimated useful life of 13 to 20 years to a 15% to 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 depreciated on a straight-line basis over an estimated useful life of 14 to 15 years to a 25% residual value. The following table disaggregates equipment held for operating lease by asset class (in thousands):
The useful life 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 life and the remaining expected holding period 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, 2020, 50 engines having a net book value of $51.6 million were depreciated under this policy with estimated useful lives ranging from 1 to 125 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 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 conducts a formal annual review of the carrying value of long-lived assets and also evaluates assets during the year if a triggering event is identified indicating impairment is possible. Such annual review resulted in an impairment charge of $4.9 million and $6.4 million in 2020 and 2019, respectively (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. (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 where 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 regression analysis at the inception of the hedge and 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 to 37 years. Leasehold improvements are recorded at cost and depreciated by the straight-line method over the shorter of the lease term or useful life of the leasehold. (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 and WEST V 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 $10.0 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 $5.0 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 III, WEST IV and WEST V, 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. 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. (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 five years. The Company has no intangible assets with indefinite useful lives. Goodwill is assessed for impairment annually. (n)Other assets Other assets typically include prepaid purchase deposits and other prepaid expenses. As of December 31, 2020 and 2019, other assets included prepaid deposits of $10.5 million and $10.6 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. 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 and bad debts. 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, 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, 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 information 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, where 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 and legal fees, 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 $1.5 million and $2.0 million for the years ended December 31, 2020 and 2019, 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 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 their 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. (u)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. (v)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 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. (w)Risks and Uncertainties As a result of the COVID-19 pandemic, the Company has temporarily closed its headquarters and other offices, required its employees and contractors to predominately work remotely, and implemented travel restrictions, all of which represent a significant disruption in how the Company operates its business. In addition, during 2020, 9% of our employees have been either furloughed, or subject to a form of reduced compensation. The operations of the Company’s partners and customers have likewise been disrupted. The worldwide spread of the COVID-19 virus has resulted in a global slowdown of economic activity. While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment actions, it has had an adverse effect on the global economy and the ultimate societal and economic impact of the COVID-19 pandemic remains unknown. In particular, the ongoing COVID-19 pandemic has caused significant disruptions to the airline industry and has resulted in a dramatic reduction in demand for air travel domestically and abroad, which is likely to continue for the foreseeable future. In addition to the impacts described below, dramatically lower demand for air travel in turn presents significant risks to the Company, not all of which the Company is able to fully evaluate or even to foresee at the current time, and could negatively impact collections of accounts receivable, cause the Company’s lessee customers to not enter into new leases, reduce spending from new and existing customers for leases or spare parts or equipment, lower usage fees, cause some of the Company’s customers to go out of business, and limit the ability of the Company’s personnel to travel to customers and potential customers, all of which could adversely affect the Company’s business, results of operations, and financial condition. While significant uncertainty exists as to the full impact of the COVID-19 pandemic on our liquidity and capital resources, as of the date of this report, we believe our cash liquidity, equity base, internally generated funds and existing debt facilities are sufficient to maintain our level of operations through the next twelve months. Due to the impact of recent events, including challenges from declines in market conditions, the Company performed quarterly interim impairment analysis during 2020. The results of the analysis indicated $0.5 million additional impairment in 2020 for two engines having net book values in excess of their respective fair value. During 2020, we experienced declining average utilization and a corresponding decrease in revenue, as well as a significant decline in spare parts and equipment sales, in each case as compared to the prior year. Additionally, as of December 31, 2020, the Company has, in certain situations, agreed to rent concessions which resulted in a total reduction to rent revenues of $6.5 million for the year ended December 31, 2020. The rent concessions provide lessees with payment deferral options or reduced rent, where the revised cash flows are substantially the same or less (i.e., the rights of the lessor and obligations of the lessee have not substantially increased) as the original lease agreements. There is no impact on the timing of revenue recognition for rent concessions that result in short term payment deferrals. The rent concessions with reduced rent qualify for the COVID-19 practical expedient to account for the rent concessions outside of the modification framework. Other than what has been reflected in the Consolidated Financial Statements, the Company is not aware of any specific event or circumstance related to the COVID-19 pandemic that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. Actual results could differ from those estimates and any such differences may be material to the Consolidated Financial Statements. (x)Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted by the Company In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-03, “Codification Improvements to Financial Instruments” (“ASU 2020-03”). The ASU improves a variety of codification topics by eliminating inconsistencies and providing clarifications making the codification easier to apply. The conforming amendments are effective upon issuance and did not materially impact our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting", which provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Among other things, for all types of hedging relationships, the guidance allows an entity to change the reference rate and other critical terms related to reference rate reform without having to remeasure the value or reassess a previous accounting determination. The amendments in this guidance should be applied on a prospective basis and, for companies with a fiscal year ending December 31, are effective from January 1, 2020 through December 31, 2022. The Company adopted this guidance effective January 1, 2020. When the transition occurs, the Company expects to apply this expedient to its existing debt instruments and interest rate swaps that reference LIBOR, and to any other new transactions that reference LIBOR or another reference rate that is discontinued, through December 31, 2022. The adoption of this ASU did not impact the Company’s consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, “Codification Improvements” (“ASU 2020-10”). The ASU improves a variety of codification topics by improving the consistency of the codification and providing clarifications. The Company adopted this guidance effective October 1, 2020 and it did not materially impact our consolidated financial statements. Recent Accounting Pronouncements To Be Adopted by the Company In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). 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. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” This ASU clarifies receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” This ASU clarifies various scoping and other issues arising from ASU 2016-13. In March 2020, the FASB issued ASU 2020-03, “Codification Improvements to Financial Instruments.” This ASU improves the Codification and amends the interaction of Topic 842 and Topic 326. The amendments in this ASU are effective for the Company on January 1, 2023, with early adoption permitted. The Company expects to adopt this accounting standard update effective January 1, 2023. The Company is evaluating the potential effects on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt this guidance effective January 1, 2021 and is currently evaluating the potential impact adoption will have on the consolidated financial statements and related disclosures.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases As lessor, and as of December 31, 2020, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable 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. Leases with terms of 12 months or less are not recorded on the balance sheet; 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 to six years, some of which include options to renew or extend the lease term from to five years. Our automobile leases include an option to purchase the vehicle at lease termination. The depreciable life of assets is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The exercise of lease renewal options or purchase at lease termination is at the Company’s sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our ROU assets and lease liabilities. Supplemental balance sheet information related to leases was as follows:
The weighted average discount rate is based on the discount 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 operating lease liabilities at December 31, 2020 are as follows:
The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2020:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
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Leases | Leases As lessor, and as of December 31, 2020, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable 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. Leases with terms of 12 months or less are not recorded on the balance sheet; 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 to six years, some of which include options to renew or extend the lease term from to five years. Our automobile leases include an option to purchase the vehicle at lease termination. The depreciable life of assets is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The exercise of lease renewal options or purchase at lease termination is at the Company’s sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our ROU assets and lease liabilities. Supplemental balance sheet information related to leases was as follows:
The weighted average discount rate is based on the discount 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 operating lease liabilities at December 31, 2020 are as follows:
The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2020:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of December 31, 2020, the Company’s $1,886.6 million equipment held for operating lease portfolio and $158.7 million notes receivable represented 291 engines, eight aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2019, the Company’s $1,650.9 million equipment held for operating lease portfolio and $38.1 million notes receivable represented 263 engines, 12 aircraft, one marine vessel and other leased parts and equipment. 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 eight 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):
As of December 31, 2020, the lease status of the equipment held for operating lease (in thousands) was as follows:
As of December 31, 2020, minimum future payments under non-cancelable leases were as follows:
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Revenue from Contracts with Customers |
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Revenue from Contracts with Customers | Revenue from Contracts with Customers The following tables disaggregate revenue by major source for the years ended December 31, 2020 and 2019 (in thousands):
________________________________________________________ (1)Represents revenue generated between our reportable segments.
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Equipment Held for Operating Lease |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment Held for Operating Lease | Leases As lessor, and as of December 31, 2020, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable 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. Leases with terms of 12 months or less are not recorded on the balance sheet; 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 to six years, some of which include options to renew or extend the lease term from to five years. Our automobile leases include an option to purchase the vehicle at lease termination. The depreciable life of assets is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The exercise of lease renewal options or purchase at lease termination is at the Company’s sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our ROU assets and lease liabilities. Supplemental balance sheet information related to leases was as follows:
The weighted average discount rate is based on the discount 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 operating lease liabilities at December 31, 2020 are as follows:
The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2020:
The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
As of December 31, 2020, the Company’s $1,886.6 million equipment held for operating lease portfolio and $158.7 million notes receivable represented 291 engines, eight aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2019, the Company’s $1,650.9 million equipment held for operating lease portfolio and $38.1 million notes receivable represented 263 engines, 12 aircraft, one marine vessel and other leased parts and equipment. 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 eight 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):
As of December 31, 2020, the lease status of the equipment held for operating lease (in thousands) was as follows:
As of December 31, 2020, minimum future payments under non-cancelable leases were as follows:
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Investments |
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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 – Willis Mitsui & Company Engine Support Limited (“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, 2020, WMES owned a lease portfolio, inclusive of a note receivable, of 36 engines and five aircraft with a net book value of $289.2 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, 2020, CASC Willis owned a lease portfolio of four engines with a net book value of $50.1 million.
“Other revenue” on the Consolidated Statements of Income includes management fees earned of $1.6 million and $2.9 million during the years ended December 31, 2020 and 2019, respectively, related to the servicing of engines for the WMES lease portfolio. Unaudited summarized financial information for 100% of WMES is presented in the following table:
The difference between the Company’s investment in WMES and 50% of total WMES net equity is primarily attributable to the recognition of deferred gains related to engines sold by the Company to WMES.
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Debt Obligations |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | Debt Obligations Debt obligations consisted of the following:
One-month LIBOR was 0.14% and 1.76% as of December 31, 2020 and December 31, 2019, respectively. Three-month LIBOR was 0.24% and 1.91% as of December 31, 2020 and December 31, 2019, respectively. Principal outstanding at December 31, 2020, is expected to be repayable as follows:
At December 31, 2020, 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. In June 2019, the Company entered into the Fourth Amended and Restated Credit Agreement (“Amended Credit Agreement”) which increased the revolving credit facility from $890.0 million to $1.0 billion. The Amended Credit Agreement incorporates an accordion feature that can expand the credit facility up to $1.3 billion, extends the maturity of the credit facility to June 2024 and provides for certain other amendments to covenants, interest rates and commitment fees. In connection with entering into the Amended Credit Agreement in June 2019, the Company incurred and deferred an additional $2.8 million of debt issuance costs, and recognized a loss on debt extinguishment of $0.2 million. Unamortized debt issuance costs are included as a reduction to “Debt Obligations” in the consolidated balance sheets and are amortized to “Interest expense” on a straight-line basis through the maturity date of the Amended Credit Agreement. Pursuant to the Amended Credit Agreement, all obligations under the revolving credit facility are collateralized by the title and interest of the Company and certain of its subsidiaries, and to substantially all of its assets and properties. On October 30, 2020, the Company entered into a Limited Waiver (the “Waiver”) to its Amended Credit Agreement. The Waiver provides for the partial exclusion for specified periods of certain asset book values in the calculation of customer concentration limits, as such limits are defined in the Amended Credit Agreement. As of December 31, 2020 and 2019, $223.0 million and $603.0 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, and WEST V 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 March 2020, WLFC and its direct, wholly-owned subsidiary WEST V, closed its offering of $366.2 million aggregate principal amount of fixed rate notes. The WEST V Notes were issued in three series, with the Series A Notes issued in an aggregate principal amount of $303.0 million, the Series B Notes issued in an aggregate principal amount of $42.1 million and the Series C Notes issued in an aggregate principal amount of $21.1 million. The WEST V Notes are secured by, among other things, WEST V’s direct and indirect ownership interests in a portfolio of 54 aircraft engines and three airframes, including 25 aircraft engines and three airframes which WEST V acquired from WLFC pursuant to an asset purchase agreement. The Series A Notes have a fixed coupon of 3.228%, an expected maturity of approximately eight years and a final maturity date of March 15, 2045, the Series B Notes have a fixed coupon of 4.212%, an expected maturity of approximately eight years and a final maturity date of March 15, 2045 and the Series C Notes have a fixed coupon of 6.657%, an expected maturity of approximately eight years and a final maturity date of March 15, 2045. The Series A Notes were issued at a price of 99.99859% of par, the Series B Notes were issued at a price of 99.99493% of par and the Series C Notes were issued at a price of 99.99918% of par. Principal on the WEST V Notes is payable monthly to the extent of available cash in accordance with a priority of payments included in the indenture for the WEST V Notes. Proceeds from asset sales by WEST V will be used, at WEST V’s election subject to certain conditions, to reduce WEST V's debt or to acquire other engines or airframes. The Company recognized a $4.7 million loss on debt extinguishment upon the repayment of the WEST II Series A 2012 term notes in March 2020. The assets of WEST III, WEST IV and WEST V are not available to satisfy the Company’s obligations other than the obligations specific to that WEST entity. WEST III, WEST IV and WEST V are consolidated for financial statement presentation purposes. WEST III, WEST IV and WEST V’s ability 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 and WEST V, 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 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, and WEST V indentures require that a minimum threshold of maintenance reserve and security deposit balances be held in restricted cash accounts. In July 2019, the Company’s note payable secured by a corporate aircraft was repriced at a fixed interest rate of 3.18% and will continue to mature in July 2024. The balance outstanding on this loan was $7.2 million and $9.1 million as of December 31, 2020 and December 31, 2019, respectively. In February 2019, the Company entered into a new $8.1 million loan with a financial institution and has a maturity date of July 2022. Interest is payable at three-month LIBOR plus a margin ranging from 1.85% to 2.50% and principal and interest are paid quarterly. The loan is secured by two engines. Virtually all of the above 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. These covenants are tested either monthly or quarterly and the Company was in full compliance with all financial covenant requirements at December 31, 2020.
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Derivative Instruments |
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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, to predominantly one-month LIBOR, with $783.1 million and $404.3 million of variable rate borrowings at December 31, 2020 and 2019, respectively. As a matter of policy, management does not use derivatives for speculative purposes. As of December 31, 2020, the Company has two interest rate swap agreements. One interest rate swap agreement was entered into during 2016 which has notional outstanding amount of $100.0 million, with remaining terms of four months as of December 31, 2020. During October 2019, the Company entered into one additional fixed-rate interest swap agreement which has a notional outstanding amount of $100.0 million, with remaining terms of 42 months as of December 31, 2020. The derivative instruments were designated as a cash flow hedge and recorded at fair value. 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. The Company estimates the fair value of derivative instruments using a discounted cash flow technique and has used creditworthiness inputs that corroborate 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. 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 all derivative instruments. The net fair value of the interest rate swaps were net liabilities of $4.0 million and $1.7 million at December 31, 2020 and 2019, respectively. The Company recorded interest expense of $2.0 million and a reduction to interest expense of $0.7 million during the years ended December 31, 2020 and 2019, respectively, from derivative investments. Effect of Derivative Instruments on Earnings in the 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, 2020 and 2019:
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, 2020 and 2019. Counterparty Credit Risk The Company evaluates the creditworthiness of the counterparties under its hedging agreements. The counterparties for both interest rate swaps are large financial institutions that possessed an investment grade credit rating. Based on this rating, the Company believes that the counterparties were credit-worthy and that their continuing performance under the hedging agreement was probable and did not require the counterparties to provide collateral or other security to the Company. Subsequent Event In January 2021, the Company entered into four additional fixed-rate interest swap agreements to mitigate the exposure on the variable rate borrowings. All four of the swaps have notional amounts of $100.0 million, two of which mature in January 2024 and the other two maturing in January 2026.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of income before income taxes are as follows:
The components of income tax expense for the years ended December 31, 2020 and 2019 were as follows:
The following is a reconciliation of the federal income tax expense at the statutory rate of 21% for the years ended December 31, 2020 and 2019 to the effective income tax expense:
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:
A $0.3 million and $0.2 million reserve was established as of December 31, 2020 and 2019, respectively, for the exposure in Europe. If the Company is able to eventually recognize these uncertain tax positions, all of the unrecognized benefit would reduce the Company’s effective tax rate. 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, 2020, the Company had net operating loss carry forwards of approximately $348.0 million for federal tax purposes and $1.2 million (tax effected) for state tax purposes. The majority of the federal net operating loss carry forwards were generated this year and can be carried forward indefinitely, the remainder will expire at various times from 2032 to 2037, and the state net operating loss carry forwards will expire at various times from 2026 to 2042. There is a $0.4 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 2003-2020, respectively. It is the Company's intention to reinvest undistributed earnings of their wholly owned foreign operations and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes or U.S. Income taxes.
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Fair Value Measurements |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and 2019 was estimated to have a fair value of approximately $159.2 million and $39.7 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, 2020 and 2019 was estimated to have a fair value of approximately $1,691.0 million and $1,262.6 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 As of December 31, 2020 and 2019, 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 and has used creditworthiness inputs that corroborate observable market data evaluating the Company’s and counterparties’ risk of non-performance. The interest rate swaps had a net fair value of $4.0 million and $1.7 million representing a net liability as of December 31, 2020 and 2019, respectively. The Company recorded interest expense of $2.0 million and a reduction to interest expense of $0.7 million during the years ended December 31, 2020 and 2019, respectively, from derivative investments. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis 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.
Write-downs of equipment to their estimated fair values totaled $20.5 million for the year ended December 31, 2020 which included write-downs of $15.2 million due to a management decision to monetize 10 engines and two airframes either by sale to a third party or for part-out and $5.3 million for the adjustment of the carrying value of seven impaired engines. Write-downs of equipment to their estimated fair values totaled $18.2 million for the year ended December 31, 2019 which included write-downs of $11.8 million due to a management decision to monetize 11 engines either by sale to a third party or for part-out and $6.4 million for the adjustment of the carrying value of seven impaired engines. As of December 31, 2020, $37.6 million book value for 21 of these engines remains within equipment held for operating lease, equipment held for sale and spare parts inventory.
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Earnings Per Share |
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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, 2020 and 2019. The following table presents the calculation of basic and diluted EPS:
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Commitments, Contingencies, Guarantees and Indemnities |
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Dec. 31, 2020 | |
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, 2020, the Company had $471.0 million in purchase commitments of equipment that will be satisfied within 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 25 modern technology aircraft engines. As part of the purchase, the Company has committed to certain future overhaul and maintenance services which is anticipated to range between $67.1 million and $112.0 million.
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Equity |
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Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Common Stock Repurchase Effective December 31, 2018, the Board of Directors approved the renewal of the existing common stock repurchase plan extending the plan through December 31, 2020 and amending the plan to allow for repurchases of up to $60.0 million of the Company’s common stock until such date. Effective December 31, 2020, the Board of Directors approved the renewal of the existing common stock repurchase plan extending the plan through December 31, 2022. Repurchased shares are immediately retired. During 2020, the Company repurchased 55,426 shares of common stock for approximately $1.5 million under the plan, at a weighted average price of $27.24 per share. During 2019, the Company repurchased 72,324 shares of common stock for approximately $3.6 million under the plan, at a weighted average price of $49.29 per share. As of July 2, 2020, the Company terminated its 10b-18 plan. At December 31, 2020, approximately $54.9 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 6.5% 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 6.5% 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 and Series A-2 Preferred Stock accrue quarterly dividends at the rate per annum of 6.5% per share. During the years ended December 31, 2020 and 2019, the Company paid total dividends of $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 (October 2023 for the Series A Preferred Stock and September 2024 for the Series A-2 Preferred Stock), such that the carrying amounts of the securities will equal the redemption amounts at the earliest redemption dates.
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Stock-Based Compensation Plans |
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Stock-Based Compensation Plans | Stock-Based Compensation Plans The components of stock compensation expense were as follows:
The significant stock compensation plans are described below. The 2007 Stock Incentive Plan (the “2007 Plan”) was adopted in May 2007. Under this 2007 Plan, a total of 2,800,000 shares were authorized for stock-based compensation available in the form of either restricted stock awards (“RSAs”) or stock options. The RSAs are subject to service-based vesting, typically between and four years, where a specific period of continued employment must pass before an award vests. The expense associated with these awards is recognized on a straight-line basis over the respective vesting period, with forfeitures accounted for as they occur. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is equal to the portion of the grant date fair value of the award tranche that is actually vested at that date. As of December 31, 2020, there are no stock options outstanding under the 2007 Plan. The 2018 Stock Incentive Plan (the “2018 Plan”) was adopted in May 2018. Under this 2018 Plan, a total of 800,000 shares were authorized for stock-based compensation, plus the number of shares remaining under the 2007 Plan and any future forfeited awards under the 2007 Plan, in the form of RSAs. The RSAs are subject to service-based vesting, typically between and four years, where a specific period of continued employment must pass before an award vests. The expense associated with these awards is recognized on a straight-line basis over the respective vesting period, with forfeitures accounted for as they occur. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is equal to the portion of the grant date fair value of the award tranche that is actually vested at that date. As of December 31, 2020, the Company has granted 598,750 RSAs under the 2018 Plan and has 295,846 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 2007 and 2018 Plans for the years ended December 31, 2020 and 2019:
At December 31, 2020 the stock compensation expense related to the RSAs that will be recognized over the average remaining vesting period of 1.3 years totaled $9.2 million. At December 31, 2020, the intrinsic value of unvested RSAs was $17.7 million. Under the Employee Stock Purchase Plan (“ESPP”), as amended and restated effective April 1, 2018, 325,000 shares of common stock have been reserved for issuance. Eligible 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 1000 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 2020 and 2019, 11,394 and 13,193 shares of common stock, respectively, were issued under the ESPP. The Company issues new shares through its transfer agent upon employee stock purchase.
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Employee 401(k) Plan |
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Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee 401(k) Plan | Employee 401(k) PlanThe 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 United States. In 2020, 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 $19,500 (or $26,000 for employees at least 50 years of age). The Company matches 50% of employee contributions and was capped at $13,000 per employee in 2020. The Company match totaled $0.8 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively. |
Quarterly Consolidated Financial Information (Unaudited) |
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Quarterly Consolidated Financial Information (Unaudited) | Quarterly Consolidated Financial Information (Unaudited) The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2020 and 2019 (in thousands, except per share data):
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Related Party Transactions |
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Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Joint Ventures “Other revenue” on the Consolidated Statement of Income includes management fees earned of $1.6 million and $2.9 million during the years ended December 31, 2020 and 2019, respectively, related to the servicing of engines for the WMES lease portfolio. During 2020, the Company sold one note receivable to WMES for $8.4 million. During 2019, the Company sold five aircraft and other equipment to WMES for $76.4 million. Additionally, during 2019, WMES sold one engine to Willis Aeronautical Services, Inc., a wholly-owned subsidiary of the Company, for $2.6 million. There were no aircraft or engine sales to CASC Willis during 2020 or 2019. Other During 2019, the Special Committee of the Board of Directors approved a transaction in which the Company’s Chief Executive Officer (“CEO”), Charles F. Willis, purchased a car at its market value of $0.1 million from the Company. During 2019, the Company’s CEO was charged $0.2 million for usage of the Company’s marine vessel in the Company’s lease portfolio. During 2019, the Company paid approximately $36,000 of expenses payable to Mikchalk Lake, LLC, an entity in which our CEO retains an ownership interest. These expenses were for lodging and other business related services. These transactions were approved by the Board’s independent Directors. During 2020, the Board's independent directors approved the Company’s agreement to a lease with our CEO in support of the Company’s vessel leasing business. That lease provides for a payment to our CEO of $500 per day for the use of his tender in support of our vessel lease to a third-party lessee. In addition, the Company has purchased a hull insurance policy, for our CEO’s tender, at a rate of $6,800 per annum, plus a one-time subscriber fee of $695 to insure his tender while in the service of the Company’s vessel leasing business. The lease agreement was subsequently amended and approved by the Board’s independent directors to increase the daily rate to $750 per day. The Company has paid a total of $9,750 for usage of the tender. Additionally, our CEO was charged $4,000 for personal expenses while onboard the Company’s marine vessel. During 2020, the Company’s CEO was charged $9,100 for the purchase of artwork.
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Reportable Segments |
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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 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 following tables present a summary of the reportable segments (in thousands):
________________________ (1) Represents revenue generated between our operating segments.
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Subsequent Events |
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Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
SCHEDULE II - VALUATION ACCOUNTS |
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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)
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Organization and Summary of Significant Accounting Policies (Policies) |
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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 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 subsidiary whose primary focus is the engine management and consulting business. Willis Engine Securitization Trust II (“WEST II” or the “WEST II 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 II is a variable interest entity (“VIE”) which the Company owns 100% of the interest and consolidates in its financial statements. 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 ABS, of which the Company is the sole beneficiary. WEST III is a 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. In March 2020, the Company and its direct, consolidated VIE Willis Engine Structured Trust V (“WEST V”) (formerly WEST II), closed its offering of $366.2 million aggregate principal amount of fixed rate notes (the “WEST V Notes”). The WEST V Notes were issued in three series, with the Series A Notes issued in an aggregate principal amount of $303.0 million, the Series B Notes issued in an aggregate principal amount of $42.1 million and the Series C Notes issued in an aggregate principal amount of $21.1 million. Principal and interest on the WEST III, IV and V 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, IV and V 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 and WEST V Notes have scheduled amortizations and are payable solely from revenue received from the engines and the engine leases, after payment of certain expenses of the respective ABS. The assets of WEST III, WEST IV and WEST V are not available to satisfy the Company’s obligations other than the obligations specific to the respective ABS. WEST III, WEST IV and WEST V are consolidated for financial statement presentation purposes, with the respective assets and liabilities on the Company’s balance sheet. The ABS’ 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 and WEST V, 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 and WEST V are consolidated for financial statement reporting purposes, all fees eliminate upon consolidation.
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Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of ConsolidationThe accompanying consolidated financial statements include the accounts of WLFC and its wholly owned subsidiaries, including VIEs where 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2020, the Company had an aggregate of approximately $4.6 million in lease rent and $1.9 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. One customer accounted for 11.4% of total lease rent revenue during the year ended December 31, 2020. No customer accounted for more than 10% of total lease rent revenue during the year ended December 31, 2019. 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. 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, and 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 the asset holds standalone 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 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 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, 2020, unbilled revenue was $0.8 million and the Company expects it to be fully recognized by June 30, 2021. Additionally, managed services are presented within the Other revenue line in the Consolidated Statements of Income. Other Revenue Other revenue consists primarily of management fee income, lease administration fees, third party consignment commissions earned, service fee revenue, interest income on notes receivable related to failed sale-leasebacks where the Company was the buyer-lessor, and other discrete revenue items.
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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 life and residual values of all engines periodically as demand changes to accurately depreciate the cost of equipment over the useful life of the engines. The aircraft and airframes owned by the Company are depreciated on a straight-line basis over an estimated useful life of 13 to 20 years to a 15% to 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 depreciated on a straight-line basis over an estimated useful life of 14 to 15 years to a 25% residual value. The following table disaggregates equipment held for operating lease by asset class (in thousands):
The useful life 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 life and the remaining expected holding period 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, 2020, 50 engines having a net book value of $51.6 million were depreciated under this policy with estimated useful lives ranging from 1 to 125 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 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 conducts a formal annual review of the carrying value of long-lived assets and also evaluates assets during the year if a triggering event is identified indicating impairment is possible.
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Equipment Held for Sale | Equipment Held for SaleEquipment 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 FeesFees 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 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 where 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 regression analysis at the inception of the hedge and 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.
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Income Taxes | Income TaxesThe 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.
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Property, Equipment and Furnishings | Property, Equipment and FurnishingsProperty, 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 | to 37 years. Leasehold improvements are recorded at cost and depreciated by the straight-line method over the shorter of the lease term or useful life of the leasehold.||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers highly liquid investments readily convertible into known amounts of cash, with original maturities of 90 days or less, as cash equivalents. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Cash | Restricted CashThe Company has certain bank accounts that are subject to restrictions in connection with its WEST III, WEST IV and WEST V 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 $10.0 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 $5.0 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 III, WEST IV and WEST V, 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. 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Spare Parts Inventory | Spare Parts InventorySpare 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 five years. The Company has no intangible assets with indefinite useful lives. Goodwill is assessed for impairment annually.
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Other assets | Other assetsOther assets typically include prepaid purchase deposits and other prepaid expenses. As of December 31, 2020 and 2019, other assets included prepaid deposits of $10.5 million and $10.6 million, respectively, relating to commitments to purchase equipment. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Management Estimates | Management EstimatesThese 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 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 and bad debts. 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, 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, 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.
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Earnings per share information | Earnings per share informationBasic 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 | InvestmentsThe Company’s investments are joint ventures, where 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 CompensationThe 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 LeasesThe Company accounts for the initial direct costs, including sales commissions and legal fees, 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 their 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.
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Foreign Currency Translation | Foreign Currency TranslationThe 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 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.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted by the Company In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-03, “Codification Improvements to Financial Instruments” (“ASU 2020-03”). The ASU improves a variety of codification topics by eliminating inconsistencies and providing clarifications making the codification easier to apply. The conforming amendments are effective upon issuance and did not materially impact our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting", which provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Among other things, for all types of hedging relationships, the guidance allows an entity to change the reference rate and other critical terms related to reference rate reform without having to remeasure the value or reassess a previous accounting determination. The amendments in this guidance should be applied on a prospective basis and, for companies with a fiscal year ending December 31, are effective from January 1, 2020 through December 31, 2022. The Company adopted this guidance effective January 1, 2020. When the transition occurs, the Company expects to apply this expedient to its existing debt instruments and interest rate swaps that reference LIBOR, and to any other new transactions that reference LIBOR or another reference rate that is discontinued, through December 31, 2022. The adoption of this ASU did not impact the Company’s consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, “Codification Improvements” (“ASU 2020-10”). The ASU improves a variety of codification topics by improving the consistency of the codification and providing clarifications. The Company adopted this guidance effective October 1, 2020 and it did not materially impact our consolidated financial statements. Recent Accounting Pronouncements To Be Adopted by the Company In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). 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. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” This ASU clarifies receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.” This ASU clarifies various scoping and other issues arising from ASU 2016-13. In March 2020, the FASB issued ASU 2020-03, “Codification Improvements to Financial Instruments.” This ASU improves the Codification and amends the interaction of Topic 842 and Topic 326. The amendments in this ASU are effective for the Company on January 1, 2023, with early adoption permitted. The Company expects to adopt this accounting standard update effective January 1, 2023. The Company is evaluating the potential effects on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU 2019-12 also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company plans to adopt this guidance effective January 1, 2021 and is currently evaluating the potential impact adoption will have on the consolidated financial statements and related disclosures.
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Organization and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts of Assets Subject to Leases | The following table disaggregates equipment held for operating lease by asset class (in thousands):
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental balance sheet information | Supplemental balance sheet information related to leases was as follows:
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Schedule of future maturities operating lease liabilities | Future maturities of the Company’s operating lease liabilities at December 31, 2020 are as follows:
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Schedule of future minimum lease payments under noncancelable operating leases | The following table represents future minimum lease payments under non-cancelable operating leases at December 31, 2020:
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Schedule of components lease expense | The components of lease expense were as follows:
Supplemental cash flow information related to leases was as follows:
|
Revenue from Contracts with Customers (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and 2019 (in thousands):
________________________________________________________ (1)Represents revenue generated between our reportable segments.
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Equipment Held for Operating Lease (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Schedule of lease status of the equipment held for operating lease |
As of December 31, 2020, the lease status of the equipment held for operating lease (in thousands) was as follows:
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Schedule of minimum future payments under non-cancelable leases | As of December 31, 2020, minimum future payments under non-cancelable leases were as follows:
|
Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments |
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Summarized financial information | Unaudited summarized financial information for 100% of WMES is presented in the following table:
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Debt Obligations (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notes payable | Debt obligations consisted of the following:
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Schedule or principal outstanding | Principal outstanding at December 31, 2020, is expected to be repayable as follows:
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Derivative Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and 2019:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of income (loss) from continuing operation before income taxes | The components of income before income taxes are as follows:
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Schedule of components of income tax expense | The components of income tax expense for the years ended December 31, 2020 and 2019 were as follows:
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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, 2020 and 2019 to the effective income tax expense:
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Summary of activity related to the Company's unrecognized tax benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits:
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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:
|
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value hierarchy of assets measured on nonrecurring basis and gain (losses) recorded |
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted EPS | The following table presents the calculation of basic and diluted EPS:
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Stock-Based Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of stock compensation expense | The components of stock compensation expense were as follows:
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Summary of restricted stock activity | The following table summarizes restricted stock activity under the 2007 and 2018 Plans for the years ended December 31, 2020 and 2019:
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Quarterly Consolidated Financial Information (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the unaudited quarterly results of operations | The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2020 and 2019 (in thousands, except per share data):
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Reportable Segments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the reportable segments | The following tables present a summary of the reportable segments (in thousands):
________________________ (1) Represents revenue generated between our operating segments.
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Organization and Summary of Significant Accounting Policies - Organization and Revenue Recognition (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Mar. 31, 2020 |
|
Revenue Recognition | ||
Lease rent receivables past due | $ 4.6 | |
Maintenance reserve receivables past due | $ 1.9 | |
Minimum number of days for which lease rent and maintenance reserve payments are past due | 30 days | |
Unbilled revenue associated with outstanding contracts | $ 0.8 | |
Revenue Benchmark | Customer Concentration Risk | One Customer | ||
Revenue Recognition | ||
Concentration risk, percentage | 11.40% | |
WEST II | ||
Organizations [Line Items] | ||
Acquisition of the remaining outstanding shares | 100.00% | |
WEST III | ||
Organizations [Line Items] | ||
Acquisition of the remaining outstanding shares | 100.00% | |
West IV | ||
Organizations [Line Items] | ||
Acquisition of the remaining outstanding shares | 100.00% | |
West V | WEST V Notes | ||
Organizations [Line Items] | ||
Aggregate principal amount | $ 366.2 | |
West V | WEST V Series A Notes | ||
Organizations [Line Items] | ||
Aggregate principal amount | 303.0 | |
West V | WEST V Series B Notes | ||
Organizations [Line Items] | ||
Aggregate principal amount | 42.1 | |
West V | WEST V Series C Notes | ||
Organizations [Line Items] | ||
Aggregate principal amount | $ 21.1 |
Organization and Summary of Significant Accounting Policies - Equipment Held of Operating Lease (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
engine
|
Dec. 31, 2019
USD ($)
|
|
Equipment Held for Operating Lease | ||
Accumulated depreciation | $ (11,356) | $ (8,666) |
Engines and related equipment | 31,753 | 31,520 |
Write-down of equipment | $ 20,540 | 18,220 |
Minimum | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 3 years | |
Maximum | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 37 years | |
Equipment held for lease | ||
Equipment Held for Operating Lease | ||
Gross value | $ 2,340,736 | 2,065,753 |
Accumulated depreciation | (454,123) | (414,835) |
Engines and related equipment | 1,886,613 | 1,650,918 |
Write-down of equipment | $ 4,900 | 6,400 |
Equipment held for lease | Engines and related equipment | ||
Equipment Held for Operating Lease | ||
Residual value, percent | 55.00% | |
Estimated useful life | 15 years | |
Gross value | $ 2,238,160 | 1,920,215 |
Accumulated depreciation | (445,780) | (401,776) |
Engines and related equipment | 1,792,380 | 1,518,439 |
Equipment held for lease | Aircraft and airframes | ||
Equipment Held for Operating Lease | ||
Gross value | 89,613 | 133,424 |
Accumulated depreciation | (7,312) | (12,630) |
Engines and related equipment | $ 82,301 | 120,794 |
Equipment held for lease | Spare part packages | ||
Equipment Held for Operating Lease | ||
Residual value, percent | 25.00% | |
Equipment held for lease | Marine Vessel | ||
Equipment Held for Operating Lease | ||
Residual value, percent | 15.00% | |
Estimated useful life | 18 years | |
Gross value | $ 12,963 | 12,114 |
Accumulated depreciation | (1,031) | (429) |
Engines and related equipment | 11,932 | $ 11,685 |
Equipment held for lease | Older generation engines | ||
Equipment Held for Operating Lease | ||
Gross value | $ 51,600 | |
Number of engines | engine | 50 | |
Equipment held for lease | Minimum | Aircraft and airframes | ||
Equipment Held for Operating Lease | ||
Residual value, percent | 15.00% | |
Estimated useful life | 13 years | |
Equipment held for lease | Minimum | Spare part packages | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 14 years | |
Equipment held for lease | Minimum | Older generation engines | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 1 month | |
Equipment held for lease | Maximum | New engine | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 25 years | |
Equipment held for lease | Maximum | Aircraft and airframes | ||
Equipment Held for Operating Lease | ||
Residual value, percent | 17.00% | |
Estimated useful life | 20 years | |
Equipment held for lease | Maximum | Spare part packages | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 15 years | |
Equipment held for lease | Maximum | Older generation engines | ||
Equipment Held for Operating Lease | ||
Estimated useful life | 125 months |
Organization and Summary of Significant Accounting Policies - Property, Equipment and Furnishings and Restricted Cash (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Restricted Cash | ||
Security deposits | $ 19,522 | $ 20,569 |
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 | $ 10,000 | |
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 | $ 5,000 | |
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 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 | 37 years |
Organization and Summary of Significant Accounting Policies - Intangibles and Other Assets (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Other Assets [Abstract] | ||
Prepaid Deposits | $ 10,500,000 | $ 10,600,000 |
Customer Relationships | ||
Intangible Assets | ||
Useful life | 5 years | |
Indefinite-lived Intangible Assets | ||
Intangible Assets | ||
Intangible assets with indefinite useful lives | $ 0 |
Organization and Summary of Significant Accounting Policies - Investments and Lease Costs (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Ownership interest | 50.00% | |
Previously held interest | 50.00% | |
Amortization of initial direct costs associated with leases | $ 1.5 | $ 2.0 |
Organization and Summary of Significant Accounting Policies - Risks and Uncertainties (Details) - Contingencies related to COVID-19 $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
engine
| |
Unusual Risk or Uncertainty [Line Items] | |
Workforce furloughed or subject o reduced compensation | 9.00% |
Increase (decrease) in asset impairment charges | $ 0.5 |
Number of assets impaired | engine | 2 |
Reduction to rent revenues | $ 6.5 |
Leases - Additional Information (Details) |
Dec. 31, 2020 |
---|---|
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 | 6 years |
Options to renew lease term | 5 years |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent |
Operating lease right-of-use assets | $ 3,784 | $ 4,084 |
Operating lease right-of-use liabilities | $ 3,873 | $ 3,835 |
Weighted average remaining lease term | 4 years 2 months 12 days | 5 years 2 months 1 day |
Weighted average discount rate | 3.10% | 4.50% |
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
2021 | $ 1,189 | |
2022 | 1,033 | |
2023 | 708 | |
2024 | 394 | |
2025 | 394 | |
Thereafter | 591 | |
Total lease payments | 4,309 | |
Less: interest | (436) | |
Total lease liabilities | $ 3,873 | $ 3,835 |
Leases - Schedule of Future Minimum Lease Payments Under ASU 840 (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2021 | $ 1,227 |
2022 | 1,055 |
2023 | 688 |
2024 | 394 |
2025 | 394 |
Thereafter | 592 |
Total | $ 4,350 |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 1,141 | $ 1,326 |
Net lease cost | 1,141 | 1,326 |
Cash paid for amounts included in the measurement of lease liabilities, operating leases | 1,083 | 920 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | $ 705 | $ 495 |
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | $ 142,895 | $ 190,690 | ||||||||
Gain on sale of leased equipment | 3,391 | 20,044 | ||||||||
Revenue | $ 61,487 | $ 70,613 | $ 74,983 | $ 81,609 | $ 89,228 | $ 120,366 | $ 95,797 | $ 103,769 | 288,692 | 409,160 |
Lease rent revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 142,895 | 190,690 | ||||||||
Maintenance reserve revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 105,365 | 108,998 | ||||||||
Spare parts and equipment sales | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 18,625 | 74,651 | ||||||||
Managed services | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 8,753 | 10,843 | ||||||||
Other revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 9,663 | 3,934 | ||||||||
Operating Segments | Leasing and Related Operations | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Gain on sale of leased equipment | 3,391 | 20,044 | ||||||||
Revenue | 271,569 | 353,154 | ||||||||
Operating Segments | Leasing and Related Operations | Lease rent revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 142,895 | 190,690 | ||||||||
Operating Segments | Leasing and Related Operations | Maintenance reserve revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 105,365 | 108,998 | ||||||||
Operating Segments | Leasing and Related Operations | Spare parts and equipment sales | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 1,514 | 18,684 | ||||||||
Operating Segments | Leasing and Related Operations | Managed services | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 8,753 | 10,843 | ||||||||
Operating Segments | Leasing and Related Operations | Other revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 9,651 | 3,895 | ||||||||
Operating Segments | Spare Parts Sales | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Gain on sale of leased equipment | 0 | 0 | ||||||||
Revenue | 17,841 | 56,244 | ||||||||
Operating Segments | Spare Parts Sales | Lease rent revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 0 | 0 | ||||||||
Operating Segments | Spare Parts Sales | Maintenance reserve revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 0 | 0 | ||||||||
Operating Segments | Spare Parts Sales | Spare parts and equipment sales | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 17,514 | 55,967 | ||||||||
Operating Segments | Spare Parts Sales | Managed services | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 0 | 0 | ||||||||
Operating Segments | Spare Parts Sales | Other revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 327 | 277 | ||||||||
Eliminations | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Gain on sale of leased equipment | 0 | 0 | ||||||||
Revenue | (718) | (238) | ||||||||
Eliminations | Lease rent revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 0 | 0 | ||||||||
Eliminations | Maintenance reserve revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Leasing and maintenance reserve revenue | 0 | 0 | ||||||||
Eliminations | Spare parts and equipment sales | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | (403) | 0 | ||||||||
Eliminations | Managed services | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | 0 | 0 | ||||||||
Eliminations | Other revenue | ||||||||||
Revenue from Contracts with Customers | ||||||||||
Spare parts, managed services, and other revenues | $ (315) | $ (238) |
Equipment Held for Operating Lease - Narrative (Details) $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
regions
|
Dec. 31, 2020
engine
|
Dec. 31, 2020
aircraft.
|
Dec. 31, 2020
vessel
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2019
engine
|
Dec. 31, 2019
aircraft.
|
Dec. 31, 2019
marineVessel
|
|
Leases [Abstract] | ||||||||
Net book value of equipment held for operating lease | $ 1,886,613 | $ 1,650,918 | ||||||
Net investment in lease, notes receivable | $ 158,700 | $ 38,100 | ||||||
Number of equipment pieces held for lease | 291 | 8 | 1 | 263 | 12 | 1 | ||
Number of geographic regions in which aircraft lessees are domiciled in | regions | 8 |
Equipment Held for Operating Lease - Lease Revenue by Geographic Region (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | $ 142,895 | $ 190,690 |
Europe | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 57,972 | 84,335 |
United States | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 33,291 | 39,178 |
Asia | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 32,198 | 42,127 |
South America | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 11,686 | 10,030 |
Mexico | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 3,670 | 5,284 |
Middle East | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 2,067 | 4,117 |
Canada | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | 2,011 | 3,279 |
Africa | ||
Lessor, Lease, Description [Line Items] | ||
Lease rent revenue | $ 0 | $ 2,340 |
Equipment Held for Operating Lease - Leased Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | $ 1,886,613 | $ 1,650,918 |
Month-to-month leases | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 339,868 | |
Leases expiring 2021 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 208,302 | |
Lease expiring 2022 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 526,244 | |
Leases expiring 2023 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 252,186 | |
Leases expiring 2024 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 78,496 | |
Leases expiring 2025 | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 44,430 | |
Leases expiring thereafter | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 28,218 | |
Off-lease and other | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 408,869 | 214,584 |
Europe | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 460,664 | 554,529 |
United States | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 362,471 | 240,454 |
Asia | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 324,946 | 427,246 |
Mexico | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 168,593 | 51,573 |
South America | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 104,671 | 110,563 |
Middle East | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 47,899 | 26,732 |
Canada | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | 8,500 | 22,640 |
Africa | ||
Lessor, Lease, Description [Line Items] | ||
Net book value of equipment held for operating lease | $ 0 | $ 2,597 |
Equipment Held for Operating Lease - Payments to be Received, Maturity by Year (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2021 | $ 120,393 |
2022 | 75,835 |
2023 | 28,452 |
2024 | 15,091 |
2025 | 5,647 |
Thereafter | 8,002 |
Total operating lease payments to be received | $ 253,420 |
Investments - Additional Information (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
engine
aircraft.
|
Dec. 31, 2019
USD ($)
|
|
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest | 50.00% | |
Net book value of equipment held for operating lease | $ 31,753 | $ 31,520 |
Assets Leased to Others | ||
Schedule of Equity Method Investments [Line Items] | ||
Net book value of equipment held for operating lease | $ 1,886,613 | 1,650,918 |
WMES | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest | 50.00% | |
Number of engines in lease portfolio | engine | 36 | |
Number of aircraft in lease portfolio | aircraft. | 5 | |
WMES | Other Revenue | ||
Schedule of Equity Method Investments [Line Items] | ||
Management fees earned | $ 1,600 | $ 2,900 |
WMES | Assets Leased to Others | ||
Schedule of Equity Method Investments [Line Items] | ||
Net book value of equipment held for operating lease | $ 289,200 | |
CASC Willis | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest | 50.00% | |
Number of engines in lease portfolio | engine | 4 | |
CASC Willis | Assets Leased to Others | ||
Schedule of Equity Method Investments [Line Items] | ||
Net book value of equipment held for operating lease | $ 50,100 |
Investments - Schedule of Investments (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Equity Method Investment Balances [Roll Forward] | ||
Investment in WMES joint ventures at beginning of the period | $ 57,936 | $ 47,941 |
Earnings from joint ventures | 2,642 | 8,578 |
Contribution | 0 | 5,713 |
Distribution | (7,200) | (3,300) |
Foreign currency translation adjustment | (1,018) | 222 |
Unrealized loss on derivative instruments at joint venture | (1,121) | (774) |
Investment in WMES joint ventures at end of the period | 53,275 | 57,936 |
WMES | ||
Equity Method Investment Balances [Roll Forward] | ||
Investment in WMES joint ventures at beginning of the period | 44,134 | 34,183 |
Earnings from joint ventures | 1,552 | 8,312 |
Contribution | 0 | 5,713 |
Distribution | (7,200) | (3,300) |
Foreign currency translation adjustment | 0 | 0 |
Unrealized loss on derivative instruments at joint venture | (1,121) | (774) |
Investment in WMES joint ventures at end of the period | 37,365 | 44,134 |
CASC Willis | ||
Equity Method Investment Balances [Roll Forward] | ||
Investment in WMES joint ventures at beginning of the period | 13,802 | 13,758 |
Earnings from joint ventures | 1,090 | 266 |
Contribution | 0 | 0 |
Distribution | 0 | 0 |
Foreign currency translation adjustment | (1,018) | 222 |
Unrealized loss on derivative instruments at joint venture | 0 | 0 |
Investment in WMES joint ventures at end of the period | $ 15,910 | $ 13,802 |
Investments - Summarized Financial Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|||||
Consolidated Statements of Income | |||||||||||||||
Revenue | $ 61,487 | $ 70,613 | $ 74,983 | $ 81,609 | $ 89,228 | $ 120,366 | $ 95,797 | $ 103,769 | $ 288,692 | $ 409,160 | |||||
Expenses | 273,998 | 328,857 | |||||||||||||
Net income | 9,748 | 66,922 | |||||||||||||
Consolidated Balance Sheets | |||||||||||||||
Total assets | [1] | 2,364,948 | 1,940,608 | 2,364,948 | 1,940,608 | ||||||||||
Total liabilities | [2] | 1,951,211 | 1,540,632 | 1,951,211 | 1,540,632 | ||||||||||
Total shareholders’ equity | 364,015 | 350,338 | 364,015 | 350,338 | $ 286,787 | ||||||||||
WMES | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
Revenue | 38,086 | 55,770 | |||||||||||||
Expenses | 35,190 | 41,253 | |||||||||||||
Net income | 2,896 | 14,517 | |||||||||||||
Consolidated Balance Sheets | |||||||||||||||
Total assets | 303,886 | 322,606 | 303,886 | 322,606 | |||||||||||
Total liabilities | 219,836 | 227,052 | 219,836 | 227,052 | |||||||||||
Total shareholders’ equity | $ 84,050 | $ 95,554 | $ 84,050 | $ 95,554 | |||||||||||
|
Debt Obligations - Schedule of Notes Payable (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Jul. 31, 2019 |
Jun. 30, 2019 |
Feb. 28, 2019 |
|
Long Term Debt [Line Items] | |||||
Long-term debt outstanding | $ 1,712,886,000 | $ 1,270,469,000 | |||
Less: unamortized debt issuance costs | (19,133,000) | (19,463,000) | |||
Total debt obligations | 1,693,753,000 | 1,251,006,000 | |||
Credit facility at a floating rate of interest of one-month LIBOR plus 1.38% at December 31, 2020, secured by engines. The facility has a committed amount of $1.0 billion at December 31, 2020, which revolves until the maturity date of June 2024 | |||||
Long Term Debt [Line Items] | |||||
Line of credit facility outstanding amount | $ 777,000,000 | 397,000,000 | |||
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 | 3.23% | ||||
Long-term debt outstanding | $ 286,863,000 | 0 | |||
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 | 4.21% | ||||
Long-term debt outstanding | $ 39,855,000 | 0 | |||
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 | 6.66% | ||||
Long-term debt outstanding | $ 19,043,000 | 0 | |||
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 | 4.75% | ||||
Long-term debt outstanding | $ 277,481,000 | 307,014,000 | |||
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 | 5.44% | ||||
Long-term debt outstanding | $ 39,640,000 | 43,859,000 | |||
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 | 4.69% | ||||
Long-term debt outstanding | $ 227,138,000 | 257,754,000 | |||
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 | 6.36% | ||||
Long-term debt outstanding | $ 32,481,000 | $ 36,860,000 | |||
WEST II Series A 2012 term notes payable at a fixed rate of interest of 5.50%, repaid in March 2020, secured by engines | |||||
Long Term Debt [Line Items] | |||||
Fixed rate | 5.50% | ||||
Long-term debt outstanding | 0 | $ 211,572,000 | |||
Note payable at three-month LIBOR plus a margin ranging from 1.85% to 2.50% at December 31, 2020, maturing in July 2022, secured by engines | |||||
Long Term Debt [Line Items] | |||||
Long-term debt outstanding | $ 6,138,000 | 7,286,000 | $ 8,100,000 | ||
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 | 3.18% | ||||
Long-term debt outstanding | $ 7,247,000 | $ 9,124,000 | |||
Note payable at a fixed rate of interest of 3.18%, maturing in July 2024, secured by an aircraft | Maximum | |||||
Long Term Debt [Line Items] | |||||
Fixed rate | 3.18% | ||||
Revolving credit facility | Credit facility at a floating rate of interest of one-month LIBOR plus 1.38% at December 31, 2020, secured by engines. The facility has a committed amount of $1.0 billion at December 31, 2020, which revolves until the maturity date of June 2024 | |||||
Long Term Debt [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000.0 | ||||
LIBOR | Credit facility at a floating rate of interest of one-month LIBOR plus 1.38% at December 31, 2020, secured by engines. The facility has a committed amount of $1.0 billion at December 31, 2020, which revolves until the maturity date of June 2024 | |||||
Long Term Debt [Line Items] | |||||
Variable rate spread | 1.38% | ||||
LIBOR | Note payable at three-month LIBOR plus a margin ranging from 1.85% to 2.50% at December 31, 2020, maturing in July 2022, secured by engines | Minimum | |||||
Long Term Debt [Line Items] | |||||
Variable rate spread | 1.85% | ||||
LIBOR | Note payable at three-month LIBOR plus a margin ranging from 1.85% to 2.50% at December 31, 2020, maturing in July 2022, secured by engines | Maximum | |||||
Long Term Debt [Line Items] | |||||
Variable rate spread | 2.50% |
Debt Obligations - Narrative (Details) |
1 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
engine
|
Dec. 31, 2019
USD ($)
|
Mar. 31, 2020
USD ($)
|
Mar. 31, 2020 |
Mar. 31, 2020
engine
|
Mar. 31, 2020
airframe
|
Jul. 31, 2019 |
Jun. 30, 2019
USD ($)
|
Feb. 28, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Long Term Debt [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 4,688,000 | $ 220,000 | |||||||||
Long-term debt outstanding | $ 1,712,886,000 | 1,270,469,000 | |||||||||
WEST V | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Number of assets used to secure debt | 54 | 3 | |||||||||
WEST V | Assets Under Purchase Agreement With WEST V [Member] | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Number of assets used to secure debt | 25 | 3 | |||||||||
WEST V Notes | WEST V | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Debt instrument, face amount | $ 366,200,000 | ||||||||||
WEST V Series A Notes | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Fixed rate | 3.23% | ||||||||||
Long-term debt outstanding | $ 286,863,000 | 0 | |||||||||
WEST V Series A Notes | WEST V | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Debt instrument, face amount | 303,000,000.0 | ||||||||||
Fixed rate | 3.228% | ||||||||||
Debt term | 8 years | ||||||||||
Notes issue price, percentage of par | 99.99859% | ||||||||||
WEST V Series B Notes | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Fixed rate | 4.21% | ||||||||||
Long-term debt outstanding | $ 39,855,000 | 0 | |||||||||
WEST V Series B Notes | WEST V | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Debt instrument, face amount | 42,100,000 | ||||||||||
Fixed rate | 4.212% | ||||||||||
Debt term | 8 years | ||||||||||
Notes issue price, percentage of par | 99.99493% | ||||||||||
WEST V Series C Notes | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Fixed rate | 6.66% | ||||||||||
Long-term debt outstanding | $ 19,043,000 | 0 | |||||||||
WEST V Series C Notes | WEST V | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Debt instrument, face amount | $ 21,100,000 | ||||||||||
Fixed rate | 6.657% | ||||||||||
Debt term | 8 years | ||||||||||
Notes issue price, percentage of par | 99.99918% | ||||||||||
WEST II Notes | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Loss on extinguishment of debt | $ 4,700,000 | ||||||||||
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 | 3.18% | ||||||||||
Long-term debt outstanding | $ 7,247,000 | 9,124,000 | |||||||||
Note payable due July 2022 | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Number of assets used to secure debt | engine | 2 | ||||||||||
Long-term debt outstanding | $ 6,138,000 | 7,286,000 | $ 8,100,000 | ||||||||
Maximum | 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 | 3.18% | ||||||||||
LIBOR | Revolving credit facility | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Variable rate spread | 1.38% | ||||||||||
LIBOR | Minimum | Note payable due July 2022 | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Variable rate spread | 1.85% | ||||||||||
LIBOR | Maximum | Note payable due July 2022 | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Variable rate spread | 2.50% | ||||||||||
Revolving credit facility | Revolving credit facility | |||||||||||
Long Term Debt [Line Items] | |||||||||||
Line of credit facility maximum borrowing Capacity before amendment | $ 890,000,000.0 | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000.0 | ||||||||||
Line of credit facility, maximum borrowing capacity under accordion feature | $ 1,300,000,000 | ||||||||||
Debt issuance costs, line of credit | $ 2,800,000 | ||||||||||
Loss on extinguishment of debt | 200,000 | ||||||||||
Line of credit facility, remaining borrowing capacity | $ 223,000,000.0 | $ 603,000,000.0 |
Debt Obligations - Schedule of Principal Outstanding (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
2021 | $ 51,497 | |
2022 | 57,341 | |
2023 | 52,469 | |
2024 | 828,636 | |
2025 | 50,401 | |
Thereafter | 672,542 | |
Total | $ 1,712,886 | $ 1,270,469 |
Derivative Instruments - Interest rate swap agreement (Details) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
agreement
|
Dec. 31, 2019
USD ($)
|
Jan. 31, 2021
USD ($)
agreement
|
Oct. 31, 2019
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Interest rate contracts | |||||
Derivative instruments | |||||
Borrowings at variable interest rates | $ 783.1 | $ 404.3 | |||
Number of interest rate swap agreements | agreement | 2 | ||||
Notional amount outstanding | $ 100.0 | $ 100.0 | |||
Net fair value of swap liability | $ 4.0 | 1.7 | |||
Interest rate contracts | Subsequent Event | |||||
Derivative instruments | |||||
Number of interest rate swap agreements | agreement | 4 | ||||
Notional amount outstanding | $ 100.0 | ||||
Interest rate contracts | Level 2 | Fair Value, Recurring | |||||
Derivative instruments | |||||
Loss recorded to net finance costs | $ 2.0 | $ (0.7) | |||
2016 Swap Agreement | |||||
Derivative instruments | |||||
Remaining maturity term | 4 months | ||||
2019 Swap Agreement | |||||
Derivative instruments | |||||
Remaining maturity term | 42 months | ||||
Swap agreement maturing January 2024 | Subsequent Event | |||||
Derivative instruments | |||||
Number of interest rate swap agreements | agreement | 2 | ||||
Swap agreement maturing January 2026 | Subsequent Event | |||||
Derivative instruments | |||||
Number of interest rate swap agreements | agreement | 2 |
Derivative Instruments - Cash flow hedges (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Effects of derivative instruments | ||
Unrealized loss on derivative instruments | $ (2,298) | $ (3,331) |
Cash flow hedging | ||
Effects of derivative instruments | ||
Unrealized loss on derivative instruments | 2,298 | 3,331 |
Cash flow hedging | Interest rate contracts | Interest expense | ||
Effects of derivative instruments | ||
Unrealized loss on derivative instruments | $ 2,298 | $ 3,331 |
Income Taxes - Components of Income Before Taxes and of Income Tax Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
United States | $ 16,990 | $ 88,182 |
Foreign | 346 | 699 |
Income before income taxes | 17,336 | 88,881 |
Federal | ||
Current | 0 | 0 |
Deferred | 6,251 | 20,205 |
Total | 6,251 | 20,205 |
State | ||
Current | (88) | 722 |
Deferred | 702 | 869 |
Total | 614 | 1,591 |
Foreign | ||
Current | 723 | 163 |
Deferred | 0 | 0 |
Total | 723 | 163 |
Total | ||
Current | 635 | 885 |
Deferred | 6,953 | 21,074 |
Effective income tax expense | 7,588 | 21,959 |
Reconciliation of the federal income tax expense at the statutory rate to the effective income tax expense | ||
Statutory federal income tax expense | 3,640 | 18,665 |
State taxes, net of federal benefit | 633 | 1,440 |
Foreign tax paid | 0 | 0 |
Foreign jurisdiction rate differential | 508 | 475 |
Permanent differences-nondeductible executive compensation | 2,748 | 2,083 |
Permanent differences and other | 59 | (704) |
Effective income tax expense | $ 7,588 | $ 21,959 |
Income Taxes - Summary of Unrecognized Tax Benefits and Temporary Differences (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Unrecognized tax benefits | ||
Balance at the beginning of the period | $ 270 | $ 182 |
Increases related to current year tax positions | 66 | 250 |
Decreases due to tax positions expired | (6) | (162) |
Balance at the end of the period | 330 | 270 |
Uncertain tax positions, reserved for tax exposure in Europe | 300 | 200 |
Deferred tax assets: | ||
Unearned lease revenue | 2,519 | 1,277 |
State taxes | 10 | 152 |
Inventory | 2,153 | 0 |
Reserves and allowances | 4,356 | 1,988 |
Other accruals | 1,769 | 4,974 |
Foreign tax credit | 0 | 19 |
Lease liability | 198 | 271 |
Net operating loss carry forward | 74,045 | 12,091 |
California alternative minimum tax credit | 33 | 0 |
Charitable contributions | 65 | 57 |
Total deferred tax assets | 85,148 | 20,829 |
Less: valuation allowance | (468) | (153) |
Net deferred tax assets | 84,680 | 20,676 |
Deferred tax liabilities: | ||
Depreciation and impairment on aircraft engines and equipment | (163,773) | (118,595) |
Inventory | 0 | (2,350) |
Notes receivable | (34,426) | (6,640) |
Right of use liability | (184) | (260) |
Other deferred tax assets (liabilities) | (4,616) | (4,198) |
Net deferred tax liabilities | (202,999) | (132,043) |
Other comprehensive loss deferred tax liability | 1,481 | 949 |
Net deferred tax liabilities | (116,838) | $ (110,418) |
Federal | ||
Deferred tax liabilities: | ||
Operating loss carryforwards | 348,000 | |
State | ||
Deferred tax liabilities: | ||
Operating loss carryforwards | 1,200 | |
State | California Franchise Tax Board | ||
Deferred tax liabilities: | ||
Valuation allowance of net operating loss | 400 | |
State | Georgia Department of Revenue | ||
Deferred tax liabilities: | ||
Valuation allowance of net operating loss | $ 100 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Fair value of notes receivable | $ 159.2 | $ 39.7 |
Fair value of notes payable | $ 1,691.0 | $ 1,262.6 |
Fair Value Measurements - Recurring Basis (Details) - Fair Value, Recurring - Level 2 - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Assets and (Liabilities) at Fair Value | ||
Liabilities at fair value | $ 4.0 | $ 1.7 |
Interest rate contracts | ||
Assets and (Liabilities) at Fair Value | ||
Loss recorded to net finance costs | $ 2.0 | $ (0.7) |
Fair Value Measurements - Nonrecurring Basis (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020
USD ($)
engine
|
Dec. 31, 2020
USD ($)
engine
|
Dec. 31, 2020
USD ($)
engine
aircraft.
|
Dec. 31, 2019
USD ($)
engine
|
|
Assets and (Liabilities) at Fair Value | ||||
Write-down of equipment | $ 20,540 | $ 18,220 | ||
Net book value of equipment held for operating lease | 31,753 | $ 31,753 | $ 31,753 | 31,520 |
Equipment held for lease | ||||
Assets and (Liabilities) at Fair Value | ||||
Write-down of equipment | 4,900 | 6,400 | ||
Net book value of equipment held for operating lease | 1,886,613 | $ 1,886,613 | $ 1,886,613 | $ 1,650,918 |
Assets To Be Sold Or Parted Out | ||||
Assets and (Liabilities) at Fair Value | ||||
Write-down of equipment | 15,200 | |||
Number of assets impaired | 10 | 2 | 11 | |
Assets To Be Sold Or Parted Out | Equipment held for lease | ||||
Assets and (Liabilities) at Fair Value | ||||
Net book value of equipment held for operating lease | $ 37,600 | $ 37,600 | $ 37,600 | |
Number of engines | engine | 21 | 21 | 21 | |
Impaired Assets | ||||
Assets and (Liabilities) at Fair Value | ||||
Write-down of equipment | $ 5,300 | |||
Number of assets impaired | engine | 7 | 7 | ||
Nonrecurring | ||||
Assets and (Liabilities) at Fair Value | ||||
Equipment held for lease | 20,470 | $ 18,132 | ||
Equipment held for sale | 70 | 88 | ||
Total | 20,540 | 18,220 | ||
Write-down of equipment | $ 20,500 | 18,200 | ||
Nonrecurring | Assets To Be Sold Or Parted Out | ||||
Assets and (Liabilities) at Fair Value | ||||
Write-down of equipment | 11,800 | |||
Nonrecurring | Impaired Assets | ||||
Assets and (Liabilities) at Fair Value | ||||
Write-down of equipment | $ 6,400 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
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 | $ (3,734) | $ 2,144 | $ 4,540 | $ 3,455 | $ 4,156 | $ 23,232 | $ 16,144 | $ 20,056 | $ 6,405 | $ 63,588 |
Basic weighted average common shares outstanding (in shares) | 5,988 | 5,985 | 6,016 | 5,860 | 5,850 | 5,847 | 5,866 | 5,779 | 5,963 | 5,836 |
Potentially dilutive common shares (in shares) | 165 | 222 | ||||||||
Diluted weighted average common shares outstanding (in shares) | 5,988 | 6,084 | 6,103 | 6,124 | 6,099 | 6,094 | 6,061 | 5,978 | 6,128 | 6,058 |
Basic weighted average earnings per common share (in dollars per share) | $ (0.62) | $ 0.36 | $ 0.75 | $ 0.59 | $ 0.71 | $ 3.97 | $ 2.75 | $ 3.47 | $ 1.07 | $ 10.90 |
Diluted weighted average earnings per common share (in dollars per share) | $ (0.62) | $ 0.35 | $ 0.74 | $ 0.56 | $ 0.68 | $ 3.81 | $ 2.66 | $ 3.35 | $ 1.05 | $ 10.50 |
Commitments, Contingencies, Guarantees and Indemnities (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
modernEngine
| |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | $ 471.0 |
Purchase commitment, settlement period | 3 years |
Capital Addition Purchase Commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Minimum quantity required under purchase obligation (in engines) | modernEngine | 25 |
Capital Addition Purchase Commitments | Minimum | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | $ 67.1 |
Capital Addition Purchase Commitments | Maximum | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | $ 112.0 |
Equity (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Oct. 31, 2016 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Common Stock Repurchase | ||||
Repurchase of common stock authorized by Board of Directors | $ 60,000,000.0 | |||
Common stock repurchased, value | $ 1,510,000 | $ 3,567,000 | ||
Weighted average price per share (in dollars per share) | $ 27.24 | $ 49.29 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 54,900,000 | |||
Redeemable preferred stock - shares issued (in shares) | 2,500,000 | 2,500,000 | ||
Dividend rate | 6.50% | |||
Redeemable preferred stock - par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Liquidation preference (in dollars per share) | 20.00 | |||
Redemption price (in dollars per share) | $ 20.00 | |||
Common Stock | ||||
Common Stock Repurchase | ||||
Shares repurchased (in shares) | 55,426 | 72,324 | ||
Common stock repurchased, value | $ 0 | $ 1,000 | ||
Series A-1 Preferred Stock | ||||
Common Stock Repurchase | ||||
Redeemable preferred stock - shares issued (in shares) | 1,000,000 | |||
Dividend rate | 6.50% | |||
Redeemable preferred stock - par value (in dollars per share) | $ 0.01 | |||
Purchase price (in dollars per share) | $ 20.00 | |||
Net proceeds after deducting investor fees | $ 19,800,000 | |||
Preferred stock dividends | $ 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) | $ 20.00 | |||
Net proceeds after deducting investor fees | $ 29,700,000 | |||
Preferred stock dividends | $ 3,300,000 |
Stock-Based Compensation Plans - Stock Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | $ 11,378 | $ 7,787 |
2007 Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 3,142 | 4,584 |
2018 Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 7,960 | 3,117 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | $ 276 | $ 86 |
Stock-Based Compensation Plans - 2007 Stock Incentive Plan (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
May 31, 2018 |
May 31, 2007 |
|
2007 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Number of shares authorized (in shares) | 2,800,000 | ||
2018 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Number of shares authorized (in shares) | 800,000 | ||
Restricted Stock | 2018 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Number of shares awarded (in shares) | 598,750 | ||
Number of shares available (in shares) | 295,846 | ||
Equity Options | 2007 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Stock options outstanding (in shares) | 0 | ||
Minimum | 2007 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Vesting period | 1 year | ||
Minimum | 2018 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Vesting period | 1 year | ||
Maximum | 2007 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Vesting period | 4 years | ||
Maximum | 2018 Stock Incentive Plan | |||
Stock-based compensation plans | |||
Vesting period | 4 years |
Stock-Based Compensation Plans - Restricted Stock Activity (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Apr. 01, 2018 |
May 31, 2007 |
|
2007 Stock Incentive Plan | ||||
Aggregate Grant Date Fair Value | ||||
Number of shares authorized (in shares) | 2,800,000 | |||
Employee Stock Purchase Plan | ||||
Aggregate Grant Date Fair Value | ||||
Number of shares authorized (in shares) | 325,000 | |||
Maximum percentage of cash compensation allowed to be deducted for the purchase of common stock by eligible employees | 10.00% | |||
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 | 85.00% | |||
Shares issued (in shares) | 11,394 | 13,193 | ||
Restricted Stock | ||||
Number Outstanding | ||||
Balance at the beginning of the period (in shares) | 505,467 | 417,890 | ||
Shares granted (in shares) | 319,350 | 279,400 | ||
Shares forfeited (in shares) | 0 | (3,866) | ||
Shares vested (in shares) | (243,102) | (187,957) | ||
Balance at the end of the period (in shares) | 581,715 | 505,467 | ||
Weighted Average Grant Date Fair Value | ||||
Balance at the beginning of the period (in dollars per share) | $ 37.70 | $ 30.54 | ||
Shares granted (in dollars per share) | 19.00 | 42.28 | ||
Shares cancelled (in dollars per share) | 0 | 30.43 | ||
Shares vested (in dollars per share) | 28.35 | 28.74 | ||
Balance at the end of the period (in dollars per share) | $ 31.34 | $ 37.70 | ||
Aggregate Grant Date Fair Value | ||||
Balance at beginning of period | $ 19,056,000 | $ 12,763,000 | ||
Granted | 6,068,000 | 11,813,000 | ||
Forfeited | 0 | (118,000) | ||
Vested | (6,892,000) | (5,402,000) | ||
Balance at end of period | $ 18,232,000 | $ 19,056,000 | ||
Restricted Stock | 2007 Stock Incentive Plan | ||||
Aggregate Grant Date Fair Value | ||||
Remaining average vesting period for recognition of unrecognized compensation expense | 1 year 3 months 18 days | |||
Unrecognized compensation expense | $ 9,200,000 | |||
Intrinsic value of unvested shares | $ 17,700,000 |
Employee 401(k) Plan (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Retirement Benefits [Abstract] | ||
Maximum percentage of pretax salary, which can be deferred by employees | 75.00% | |
Maximum amount of wages, which can be deferred by employees | $ 19,500 | |
Maximum amount of wages, which can be deferred by employees at least 50 years of age | $ 26,000 | |
Minimum age of employees for a specified contribution amount of wages | 50 years | |
Percentage of employee's salary for which the company contributes a matching contribution | 50.00% | |
Maximum amount of employee's salary for which the company contributes a matching contribution | $ 13,000,000 | |
Amount of employer contribution | $ 800,000 | $ 500,000 |
Quarterly Consolidated Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Revenue | $ 61,487 | $ 70,613 | $ 74,983 | $ 81,609 | $ 89,228 | $ 120,366 | $ 95,797 | $ 103,769 | $ 288,692 | $ 409,160 |
Net income attributable to common shareholders | $ (3,734) | $ 2,144 | $ 4,540 | $ 3,455 | $ 4,156 | $ 23,232 | $ 16,144 | $ 20,056 | $ 6,405 | $ 63,588 |
Basic earnings per common share (in dollars per share) | $ (0.62) | $ 0.36 | $ 0.75 | $ 0.59 | $ 0.71 | $ 3.97 | $ 2.75 | $ 3.47 | $ 1.07 | $ 10.90 |
Diluted earnings common share (in dollars per share) | $ (0.62) | $ 0.35 | $ 0.74 | $ 0.56 | $ 0.68 | $ 3.81 | $ 2.66 | $ 3.35 | $ 1.05 | $ 10.50 |
Basic weighted average common shares outstanding (in shares) | 5,988 | 5,985 | 6,016 | 5,860 | 5,850 | 5,847 | 5,866 | 5,779 | 5,963 | 5,836 |
Diluted weighted average common shares outstanding (in shares) | 5,988 | 6,084 | 6,103 | 6,124 | 6,099 | 6,094 | 6,061 | 5,978 | 6,128 | 6,058 |
Related Party Transactions (Details) |
1 Months Ended | 2 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 31, 2019
USD ($)
|
Mar. 11, 2021
USD ($)
|
Dec. 31, 2020
engine
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
noteReceivable
|
Dec. 31, 2020
aircraft.
|
Dec. 31, 2019
engine
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2019
aircraft.
|
|
Related Party and Similar Transactions | |||||||||
Proceeds from sale of assets | $ 2,600,000 | ||||||||
WMES | |||||||||
Related Party and Similar Transactions | |||||||||
Number of assets sold | 1 | 5 | |||||||
Proceeds from sale of assets | $ 8,400,000 | 76,400,000 | |||||||
WMES | Other Revenue | |||||||||
Related Party and Similar Transactions | |||||||||
Spare parts, managed services, and other revenues | 1,600,000 | 2,900,000 | |||||||
Willis Aeronautical Services, Inc. | |||||||||
Related Party and Similar Transactions | |||||||||
Number of assets sold | engine | 1 | ||||||||
CASC Willis | |||||||||
Related Party and Similar Transactions | |||||||||
Number of assets sold | 0 | 0 | 0 | 0 | |||||
Chief Executive Officer | |||||||||
Related Party and Similar Transactions | |||||||||
Daily lease payment made to related party | 500 | ||||||||
Annual insurance premium | 6,800 | ||||||||
One-time subscriber fee | 695 | ||||||||
Aggregate lease payment made to related party | 9,750 | ||||||||
Payment received for use of vessel | 4,000 | ||||||||
Related party transaction, proceeds from sale of artwork | $ 9,100 | ||||||||
Chief Executive Officer | Subsequent Event | |||||||||
Related Party and Similar Transactions | |||||||||
Daily lease payment made to related party | $ 750 | ||||||||
Mikchalk Lake LLC | |||||||||
Related Party and Similar Transactions | |||||||||
Expenses paid | 36,000 | ||||||||
Sale of Vehicle | Chief Executive Officer | |||||||||
Related Party and Similar Transactions | |||||||||
Amounts related party transaction | $ 100,000 | ||||||||
Use of Marine Vessel | Chief Executive Officer | |||||||||
Related Party and Similar Transactions | |||||||||
Amounts related party transaction | $ 200,000 |
Reportable Segments (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2020
USD ($)
segment.
|
Dec. 31, 2019
USD ($)
|
|||
Reportable Segments | ||||||||||||
Number of operating segments | segment. | 2 | |||||||||||
Revenue: | ||||||||||||
Lease rent revenue | $ 142,895 | $ 190,690 | ||||||||||
Gain on sale of leased equipment | 3,391 | 20,044 | ||||||||||
Total revenue | $ 61,487 | $ 70,613 | $ 74,983 | $ 81,609 | $ 89,228 | $ 120,366 | $ 95,797 | $ 103,769 | 288,692 | 409,160 | ||
Expenses: | ||||||||||||
Depreciation and amortization expense | 94,541 | 86,236 | ||||||||||
Cost of spare parts and equipment sales | 16,762 | 62,647 | ||||||||||
Write-down of equipment | 20,540 | 18,220 | ||||||||||
General and administrative | 67,910 | 86,523 | ||||||||||
Technical expense | 6,533 | 8,122 | ||||||||||
Interest expense | 63,024 | 66,889 | ||||||||||
Loss on extinguishment of debt | 4,688 | 220 | ||||||||||
Net finance costs | 67,712 | 67,109 | ||||||||||
Total expenses | 273,998 | 328,857 | ||||||||||
Earnings from operations | 14,694 | 80,303 | ||||||||||
Total assets | [1] | 2,364,948 | 1,940,608 | 2,364,948 | 1,940,608 | |||||||
Eliminations | ||||||||||||
Revenue: | ||||||||||||
Gain on sale of leased equipment | 0 | 0 | ||||||||||
Total revenue | (718) | (238) | ||||||||||
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 | 403 | 0 | ||||||||||
Technical expense | 0 | 0 | ||||||||||
Interest expense | 0 | 0 | ||||||||||
Loss on extinguishment of debt | 0 | |||||||||||
Net finance costs | 0 | 0 | ||||||||||
Total expenses | 403 | 0 | ||||||||||
Earnings from operations | (1,121) | (238) | ||||||||||
Total assets | 0 | 0 | 0 | 0 | ||||||||
Leasing and Related Operations | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Gain on sale of leased equipment | 3,391 | 20,044 | ||||||||||
Total revenue | 271,569 | 353,154 | ||||||||||
Expenses: | ||||||||||||
Depreciation and amortization expense | 94,442 | 86,159 | ||||||||||
Cost of spare parts and equipment sales | 156 | 15,241 | ||||||||||
Write-down of equipment | 20,540 | 18,220 | ||||||||||
General and administrative | 63,993 | 81,302 | ||||||||||
Technical expense | 6,533 | 8,122 | ||||||||||
Interest expense | 63,024 | 66,889 | ||||||||||
Loss on extinguishment of debt | 4,688 | 220 | ||||||||||
Net finance costs | 67,712 | 67,109 | ||||||||||
Total expenses | 253,376 | 276,153 | ||||||||||
Earnings from operations | 18,193 | 77,001 | ||||||||||
Total assets | 2,312,172 | 1,898,313 | 2,312,172 | 1,898,313 | ||||||||
Spare Parts Sales | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Gain on sale of leased equipment | 0 | 0 | ||||||||||
Total revenue | 17,841 | 56,244 | ||||||||||
Expenses: | ||||||||||||
Depreciation and amortization expense | 99 | 77 | ||||||||||
Cost of spare parts and equipment sales | 16,606 | 47,406 | ||||||||||
Write-down of equipment | 0 | 0 | ||||||||||
General and administrative | 3,514 | 5,221 | ||||||||||
Technical expense | 0 | 0 | ||||||||||
Interest expense | 0 | 0 | ||||||||||
Loss on extinguishment of debt | 0 | |||||||||||
Net finance costs | 0 | 0 | ||||||||||
Total expenses | 20,219 | 52,704 | ||||||||||
Earnings from operations | (2,378) | 3,540 | ||||||||||
Total assets | $ 52,776 | $ 42,295 | 52,776 | 42,295 | ||||||||
Lease rent revenue | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 142,895 | 190,690 | ||||||||||
Lease rent revenue | Eliminations | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 0 | 0 | ||||||||||
Lease rent revenue | Leasing and Related Operations | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 142,895 | 190,690 | ||||||||||
Lease rent revenue | Spare Parts Sales | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 0 | 0 | ||||||||||
Maintenance reserve revenue | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 105,365 | 108,998 | ||||||||||
Maintenance reserve revenue | Eliminations | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 0 | 0 | ||||||||||
Maintenance reserve revenue | Leasing and Related Operations | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 105,365 | 108,998 | ||||||||||
Maintenance reserve revenue | Spare Parts Sales | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Lease rent revenue | 0 | 0 | ||||||||||
Spare parts and equipment sales | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | 18,625 | 74,651 | ||||||||||
Spare parts and equipment sales | Eliminations | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | (403) | 0 | ||||||||||
Spare parts and equipment sales | Leasing and Related Operations | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | 1,514 | 18,684 | ||||||||||
Spare parts and equipment sales | Spare Parts Sales | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | 17,514 | 55,967 | ||||||||||
Other revenue | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | 18,416 | 14,777 | ||||||||||
Other revenue | Eliminations | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | (315) | (238) | ||||||||||
Other revenue | Leasing and Related Operations | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | 18,404 | 14,738 | ||||||||||
Other revenue | Spare Parts Sales | Operating Segments | ||||||||||||
Revenue: | ||||||||||||
Spare parts, managed services, and other revenues | $ 327 | $ 277 | ||||||||||
|
SCHEDULE II - VALUATION ACCOUNTS (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounts receivable, allowance for doubtful accounts | ||
Valuation accounts | ||
Balance at Beginning of Period | $ 1,730 | $ 2,559 |
Additions Charged (Credited) to Expense | 5 | (829) |
Net (Deductions) Recoveries | (363) | 0 |
Balance at End of Period | 1,372 | 1,730 |
Deferred tax valuation allowance | ||
Valuation accounts | ||
Balance at Beginning of Period | 153 | 652 |
Additions Charged (Credited) to Expense | 315 | (499) |
Net (Deductions) Recoveries | 0 | 0 |
Balance at End of Period | $ 468 | $ 153 |
Label | Element | Value |
---|---|---|
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201602Member |
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