Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | WILLIS LEASE FINANCE CORP | ||
Entity Central Index Key | 1,018,164 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 97.4 | ||
Entity Common Stock, Shares Outstanding | 7,624,891 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 9,732 | $ 13,493 |
Restricted cash | 33,026 | 51,258 |
Equipment held for operating lease, less accumulated depreciation of $316,532 and $281,087 at December 31, 2015 and December 31, 2014, respectively | 1,122,859 | 1,066,448 |
Equipment held for sale | 23,454 | 18,114 |
Operating lease related receivables, net of allowances of $912 and $215 at December 31, 2015 and 2014, respectively | 14,072 | 8,912 |
Spare parts inventory | 20,526 | 18,593 |
Investments | 41,295 | 41,590 |
Property, equipment & furnishings, less accumulated depreciation of $11,102 and $9,420 at Decemeber 31, 2015 and December 31, 2014, respectively | 20,247 | 17,955 |
Intangible assets, net | 932 | 1,164 |
Other assets | 22,434 | 24,099 |
Total assets | 1,308,577 | 1,261,626 |
Liabilities: | ||
Accounts payable and accrued expenses | 21,665 | 21,614 |
Deferred income taxes | 96,742 | 90,510 |
Notes payable | 878,684 | 840,956 |
Maintenance reserves | 71,054 | 66,474 |
Security deposits | 25,010 | 20,869 |
Unearned lease revenue | 5,090 | 4,342 |
Total liabilities | 1,098,245 | 1,044,765 |
Shareholders' equity: | ||
Common stock ($0.01 par value, 20,000,000 shares authorized; 7,548,395 and 8,346,304 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) | 75 | 83 |
Paid-in capital in excess of par | 28,720 | 42,076 |
Retained earnings | 182,058 | 174,702 |
Accumulated other comprehensive loss, net of income tax benefit of $275 at December 31, 2015 | (521) | |
Total shareholders' equity | 210,332 | 216,861 |
Total liabilities and shareholders' equity | $ 1,308,577 | $ 1,261,626 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Equipment held for operating lease, accumulated depreciation (in dollars) | $ 316,532 | $ 281,087 |
Operating lease related receivable, allowances (in dollars) | 912 | 215 |
Property, equipment & furnishings, accumulated depreciation (in dollars) | $ 11,102 | $ 9,420 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 7,548,395 | 8,346,304 |
Common stock, shares outstanding | 7,548,395 | 8,346,304 |
Accumulated other comprehensive loss, income tax benefit (in dollars) | $ 275 | |
Property, Plant and Equipment, Net | 20,247 | $ 17,955 |
Other Assets | 22,434 | 24,099 |
Total notes payable | 878,684 | 840,956 |
Variable Interest Entity [Member] | ||
Cash | 33,776 | 50,053 |
Property, Plant and Equipment, Net | 335,327 | 371,526 |
Other Assets | 11,490 | 11,095 |
Total notes payable | $ 300,467 | $ 351,899 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
REVENUE | |||||||||||||||
Lease rent revenue | $ 107,866 | $ 101,748 | $ 101,737 | ||||||||||||
Maintenance reserve revenue | 55,064 | 53,363 | 46,694 | ||||||||||||
Gain on sale of leased equipment | 8,354 | 5,753 | 5,675 | ||||||||||||
Other revenue | 2,718 | 4,506 | 4,306 | ||||||||||||
Total revenue | $ 55,195 | $ 57,758 | $ 43,843 | $ 42,814 | $ 41,563 | $ 45,519 | $ 43,865 | $ 43,340 | $ 47,203 | $ 37,952 | $ 37,953 | $ 35,304 | 199,610 | 174,287 | 158,412 |
EXPENSES | |||||||||||||||
Depreciation and amortization expense | 69,586 | 65,441 | 58,727 | ||||||||||||
Cost Of Spare Parts and Equipment Sales | 17,866 | 7,474 | |||||||||||||
Write-down of equipment | 9,181 | 5,602 | 6,461 | ||||||||||||
General and administrative | 42,744 | 35,859 | 33,868 | ||||||||||||
Technical expense | 9,403 | 12,336 | 12,863 | ||||||||||||
Net finance costs: | |||||||||||||||
Interest expense | 39,012 | 37,062 | 38,719 | ||||||||||||
Gain on debt extinguishment | (1,151) | ||||||||||||||
Total net finance costs | 37,861 | 37,062 | 38,719 | ||||||||||||
Total expenses | 186,641 | 163,774 | 150,638 | ||||||||||||
Earnings from operations | 12,969 | 10,513 | 7,774 | ||||||||||||
Earnings from joint ventures | 1,175 | 1,329 | 3,526 | ||||||||||||
Income (loss) before income taxes | 14,144 | 11,842 | 11,300 | ||||||||||||
Income tax expense (benefit) | 6,788 | 4,595 | (4,326) | ||||||||||||
Net income | $ 2,973 | $ 2,577 | $ (492) | $ 2,298 | $ (277) | $ 979 | $ 2,214 | $ 4,331 | $ 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | $ 7,356 | $ 7,247 | $ 15,626 |
Basic earnings per common share: (in dollars per share) | $ 0.38 | $ 0.33 | $ (0.06) | $ 0.29 | $ (0.03) | $ 0.12 | $ 0.28 | $ 0.55 | $ 0.84 | $ (0.29) | $ 1.20 | $ 0.20 | $ 0.94 | $ 0.92 | $ 1.95 |
Diluted earnings per common share: (in dollars per share) | $ 0.37 | $ 0.32 | $ (0.06) | $ 0.29 | $ (0.03) | $ 0.12 | $ 0.27 | $ 0.53 | $ 0.81 | $ (0.28) | $ 1.17 | $ 0.19 | $ 0.92 | $ 0.89 | $ 1.89 |
Average common shares outstanding (in shares) | 7,739 | 7,839 | 7,841 | 7,848 | 7,839 | 7,938 | 7,976 | 7,914 | 7,846 | 8,126 | 8,106 | 8,033 | 7,811 | 7,917 | 8,029 |
Diluted average common shares outstanding (in shares) | 7,872 | 7,963 | 7,991 | 8,044 | 8,037 | 8,123 | 8,179 | 8,129 | 8,084 | 8,329 | 8,303 | 8,273 | 7,982 | 8,141 | 8,289 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||||||||||||||
Net income | $ 2,973 | $ 2,577 | $ (492) | $ 2,298 | $ (277) | $ 979 | $ 2,214 | $ 4,331 | $ 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | $ 7,356 | $ 7,247 | $ 15,626 |
Other comprehensive (loss) income: | |||||||||||||||
Currency translation adjustment | (796) | ||||||||||||||
Unrealized losses on derivative instruments | (187) | ||||||||||||||
Reclassification adjustment for losses (gains) included in net income | (499) | 1,485 | |||||||||||||
Net gain (loss) recognized in other comprehensive income | (796) | (499) | 1,298 | ||||||||||||
Tax benefit (expense) related to items of other comprehensive income | 275 | 174 | (435) | ||||||||||||
Other comprehensive income (loss) | (521) | (325) | 863 | ||||||||||||
Total comprehensive income | $ 6,835 | $ 6,922 | $ 16,489 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Paid-in Capital in Excess of par | Accumulated Other Comprehensive Income | Retained Earnings | Total |
Balances at Dec. 31, 2012 | $ 87 | $ 47,785 | $ (538) | $ 151,829 | $ 199,163 |
Balances (in shares) at Dec. 31, 2012 | 8,716 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 15,626 | 15,626 | |||
Net unrealized loss from derivative instruments, net of tax benefit | 863 | 863 | |||
Shares repurchased | $ (4) | (5,914) | (5,918) | ||
Shares repurchased (in shares) | (395) | ||||
Shares issued under stock compensation plans | $ 2 | 678 | 680 | ||
Shares issued under stock compensation plans (in shares) | 160 | ||||
Cancellation of restricted stock units in satisfaction of withholding tax | $ (1) | (1,247) | (1,248) | ||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (81) | ||||
Stock-based compensation, net of forfeitures | 3,439 | 3,439 | |||
Balances at Dec. 31, 2013 | $ 84 | 44,741 | 325 | 167,455 | 212,605 |
Balances (in shares) at Dec. 31, 2013 | 8,400 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 7,247 | 7,247 | |||
Net unrealized loss from derivative instruments, net of tax benefit | (325) | (325) | |||
Shares repurchased | $ (2) | (5,350) | (5,352) | ||
Shares repurchased (in shares) | (249) | ||||
Shares issued under stock compensation plans | $ 2 | 408 | 410 | ||
Shares issued under stock compensation plans (in shares) | 272 | ||||
Cancellation of restricted stock units in satisfaction of withholding tax | $ (1) | (1,543) | (1,544) | ||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (77) | ||||
Stock-based compensation, net of forfeitures | 3,509 | 3,509 | |||
Tax benefit on disqualified disposition of shares | 311 | 311 | |||
Balances at Dec. 31, 2014 | $ 83 | 42,076 | 174,702 | 216,861 | |
Balances (in shares) at Dec. 31, 2014 | 8,346 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 7,356 | 7,356 | |||
Net unrealized loss from derivative instruments, net of tax benefit | (521) | (521) | |||
Shares repurchased | $ (9) | (16,491) | (16,500) | ||
Shares repurchased (in shares) | (912) | ||||
Shares issued under stock compensation plans | $ 2 | 516 | 518 | ||
Shares issued under stock compensation plans (in shares) | 205 | ||||
Cancellation of restricted stock units in satisfaction of withholding tax | $ (1) | (1,557) | (1,558) | ||
Cancellation of restricted stock units in satisfaction of withholding tax (in shares) | (91) | ||||
Stock-based compensation, net of forfeitures | 4,150 | 4,150 | |||
Tax benefit on disqualified disposition of shares | 26 | 26 | |||
Balances at Dec. 31, 2015 | $ 75 | $ 28,720 | $ (521) | $ 182,058 | $ 210,332 |
Balances (in shares) at Dec. 31, 2015 | 7,548 |
Consolidated Statements of Sha7
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Shareholders' Equity | |||
Net unrealized gain (loss) from derivative instruments, tax expense (benefit) | $ (275) | $ 174 | $ 435 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 7,356 | $ 7,247 | $ 15,626 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 69,586 | 65,441 | 58,727 |
Write-down of equipment | 9,181 | 5,602 | 6,461 |
Stock-based compensation expenses | 4,150 | 3,509 | 3,439 |
Amortization of deferred costs | 4,307 | 4,319 | 4,113 |
Amortization of interest rate derivative cost | (499) | (404) | |
Allowances and provisions | 697 | (81) | (684) |
Gain on sale of leased equipment | (8,354) | (5,753) | (5,675) |
Gain on insurance settlement | (351) | ||
Gain on debt extinguishment | (1,151) | ||
Income from joint ventures | (1,175) | (1,329) | (3,526) |
Deferred income taxes | 6,508 | 3,996 | (4,389) |
Changes in assets and liabilities: | |||
Receivables | (5,857) | 4,454 | 2,269 |
Spare parts inventory | 4,128 | (5,964) | |
Other assets | (2,635) | (590) | (3,158) |
Accounts payable and accrued expenses | 1,669 | (1,881) | (23) |
Restricted cash | 9,636 | (6,831) | (5,701) |
Maintenance reserves | 4,580 | (10,861) | 14,022 |
Security deposits | 5,747 | 1,159 | 614 |
Unearned lease revenue | 748 | 793 | (1,064) |
Net cash provided by operating activities | 109,121 | 62,731 | 80,296 |
Cash flows from investing activities: | |||
Proceeds from sale of equipment (net of selling expenses) | 45,701 | 43,632 | 38,706 |
Restricted cash for investing activities | (16,763) | 6,366 | (20,502) |
Capital contribution to joint ventures | (630) | (17,623) | (11,219) |
Dividends received from joint ventures | 1,304 | 847 | |
Acquisitions of J.T. Power, net of cash acquired | (4,171) | ||
Investment in WOLF, net of cash acquired | 2,020 | ||
Purchase of equipment held for operating lease and for sale | (183,616) | (128,075) | (136,231) |
Purchase of property, equipment and furnishings | (3,988) | (13,831) | (453) |
Net cash used in investing activities | (157,992) | (108,684) | (131,850) |
Cash flows from financing activities: | |||
Proceeds from issuance of notes payable | 192,700 | 154,395 | 130,000 |
Debt issuance cost | (13) | (5,074) | (1,252) |
Interest bearing security deposits | (1,606) | 4,553 | 7,588 |
Proceeds from shares issued under stock compensation plans | 518 | 410 | 680 |
Cancellation of restricted stock units in satisfaction of withholding tax | (1,558) | (1,544) | (1,248) |
Repurchase of common stock | (16,500) | (5,352) | (5,918) |
Excess tax benefit from stock-based compensation | 26 | 311 | |
Principal payments on notes payable | (153,816) | (101,054) | (70,874) |
Decrease in restricted cash | 25,359 | ||
Net cash provided by (used in) financing activities | 45,110 | 46,645 | 58,976 |
Increase/(Decrease) in cash and cash equivalents | (3,761) | 692 | 7,422 |
Cash and cash equivalents at beginning of period | 13,493 | 12,801 | 5,379 |
Cash and cash equivalents at end of period | 9,732 | 13,493 | 12,801 |
Net cash paid for: | |||
Interest | 35,568 | 33,132 | 33,931 |
Income Taxes | 353 | 210 | 111 |
Supplemental disclosures of non-cash investing activities: | |||
Purchase of aircraft and engines, liability incurred but not paid | 4,662 | 8,188 | 63 |
Engines and equipment, transferred from Held for Operating Lease to Held for Sale but not settled | 22,079 | 3,071 | $ 15,166 |
Equipment held for sale, transferred to spare parts inventory | $ 6,061 | $ 9,649 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies - Organization and Investments | |
Organization and Summary of Significant Accounting Policies | (1) Organization and Summary of Significant Accounting Policies (a) Organization Willis Lease Finance Corporation (“Willis” or the “Company”) is a provider of aviation services whose primary focus is providing operating leases of commercial aircraft engines and other aircraft-related equipment to air carriers, manufacturers and overhaul/repair facilities worldwide. Willis also engages in the selective purchase and resale of commercial aircraft engines. WLFC (Ireland) Limited, WLFC Funding (Ireland) Limited and WLFC Lease (Ireland) Limited are wholly-owned Irish subsidiaries of Willis formed to facilitate certain of Willis’ international leasing activities. Willis Aviation Finance Limited in Ireland is a wholly-owned subsidiary formed to facilitate the leasing and technical support of worldwide activities. Willis Lease France is a wholly-owned French subsidiary of Willis formed to facilitate sales and marketing activities in Europe. Willis Lease (China) Limited is a wholly-owned subsidiary of Willis formed to facilitate the acquisition and leasing of assets in China. Willis Engine Securitization Trust II (“WEST II”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an asset-backed securitization. WEST Engine Acquisition LLC and Facility Engine Acquisition LLC are wholly-owned subsidiaries of WEST II and own the engines which secure the notes issued by WEST II. Willis Engine Securitization (Ireland) Limited is another wholly-owned subsidiary of WEST II and was established to facilitate certain international leasing activities by WEST II. WEST II is a variable interest entity which the Company owns 100% of the equity and consolidates in our financial statements. Prior to September 18, 2013, we held a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On September 18, 2013, we completed the acquisition of the fifty percent membership interest held by the other joint venture partner in WOLF. As a result of the transaction, we now own one hundred percent of WOLF. The WOLF assets and liabilities and the results of operations have been included in the accompanying consolidated financial statements as of the acquisition date, September 18, 2013. During 2015 we dissolved WOLF and the associated entities. In 2013, the Company launched Willis Aeronautical Services, Inc. (“Willis Aero”), a wholly-owned subsidiary, whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment from third parties of aircraft and engines. (b) Principles of Consolidation The consolidated financial statements include the accounts of Willis, WEST Engine Funding LLC, WEST Engine Funding (Ireland) Limited, WEST Engine Acquisition LLC, Facility Engine Acquisition LLC, WLFC (Ireland) Limited, Willis Lease (Ireland) Limited, WLFC Funding (Ireland) Limited, Willis Aviation Finance Limited, Willis Lease France, Willis Lease (China) Limited, WEST Engine Securitization Trust II, Willis Engine Securitization (Ireland) Limited, Willis Aero and Willis Lease Singapore Pte. Ltd. (together, the “Company”). We evaluate all entities in which we have an economic interest firstly to determine whether for accounting purposes the entity is a variable interest entity or voting interest entity. If the entity is a variable interest entity we consolidate the financial statements of that entity if we are the primary beneficiary of the entities’ activities. If the entity is a voting interest entity we consolidate the entity when we have a majority of voting interests. All inter-company balances are eliminated upon consolidation. (c) Revenue Recognition Revenue from leasing of aircraft 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. We regularly sell equipment from our lease portfolio. This equipment may or may not be subject to a lease at the time of sale. The 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 engine are not included in the sale we include any such amount in our calculation of gain or loss. The Company evaluates sales arrangements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition: Multiple Element Arrangements (“FASB ASC 605-25”), which addresses accounting for multiple element arrangements. The Company has determined that two deliverables, the sale of equipment and the management services, are separate units of accounting. Therefore, revenue is recognized in accordance with FASB ASC 605-10-S99, Revenue Recognition: Overall: SEC Materials, formerly SAB 104, for each unit. For multiple deliverable revenue arrangements, the Company allocates revenue to equipment sales and management services using the relative selling price method to recognize revenue when the revenue recognition criteria for each deliverable are met. The selling price of a deliverable is based on a hierarchy and if the Company is unable to establish vendor-specific objective evidence of selling price (“VSOE”) it uses third-party evidence of selling price (“TPE”), and if no such data is available, it uses a best estimated selling price (“BSP”). When VSOE cannot be established, the Company attempts to establish the selling price of each element based on TPE. When the Company is unable to establish selling price using VSOE or TPE, the Company uses BSP. The objective of BSP is to determine the price at which the Company would transact a sale if the equipment or service were sold on a stand-alone basis. The selling price of the service elementis based on TPE and is determined by reviewing information from management agreements entered into by other parties on a standalone basis, compared it to the management agreements entered into with the investor group and determined that the fees charged on a standalone basis were comparable to the fees charged when the Company entered into the management agreement concurrent with the sale of the portfolio of engines. Accordingly, the Company determined that the fees charged for its management services were comparable to those charged by other asset managers for the same service. The Company recognizes revenue from management fees under equipment management agreements as earned on a monthly basis. Management fees are based upon a percentage of net lease rents of the investor group’s engine portfolio calculated on an accrual basis and recorded in Other revenue. Under the terms of some of our leases, the lessees pay use fees (also known as maintenance reserves) to us 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 or the lease terminates, 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, 2015, we had an aggregate of approximately $5.3 million in lease rent and $2.9 million in maintenance reserve receivables more than 30 days past due. Our 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 us. The Company estimates an allowance for doubtful accounts for lease 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. We recognize sales of spare parts upon shipping and the amount reported as cost of sales is recorded at specific cost. Our largest customer accounted for approximately 8.4% of total lease rent revenue during 2015. This customer had no past due receivables as of December 31, 2015. No customer accounted for greater than 10% of total lease rent revenue in 2014 and 2013. (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 us, 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. We do 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, we generally depreciate engines on a straight-line basis over a 15 -year period from the acquisition date to a 55% residual value. We believe that this methodology accurately reflects our typical holding period for the assets and, that the residual value assumption reasonably approximates the selling price of the assets 15 years from date of acquisition. Our typical 15 year holding period is the estimated useful life of our engines based on our business model and plans, and represents how long we anticipate holding a newly acquired engine. The technical useful life of a new engine can be in excess of 25 years. We review 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 useful life of older generation engines and aircraft may be significantly less than 15 years, 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 our 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, we depreciate 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, 2015, 52 engines and 5 aircraft having a net book value of $129.6 million were depreciated under this policy with estimated useful lives ranging from 3 to 78 months. We adjust our estimates annually for these older generation assets, including updating our 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. For engines or aircraft that are unlikely to be repaired at the end of the current expected useful lives, we depreciate 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. The aircraft owned by us 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 spare parts packages owned by us are depreciated on a straight-line basis over an estimated useful life of 14 - 15 years to a 25% residual value. The Company reviews its long-lived assets 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 comparison of undiscounted forecasted cash flows, including estimated sales proceeds, over the life of the asset with the assets’ book value. If the forecasted undiscounted 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 Management. We conduct a formal annual review of the carrying value of long-lived assets and also evaluate assets during the year if we note a triggering event indicating impairment is possible. Such review resulted in an impairment charge of $0.6 million and $2.4 million in 2015 and 2014, respectively (Included in “Write-down of equipment” in the Consolidated Statements of Income). No impairment charges were recorded in 2013 as a result of our review. (e) Debt Issuance Costs and Related Fees To the extent that we are required to pay fees in order to secure debt, such fees are capitalized, included in Other Assets on the Consolidate Balance Sheet, and amortized over the life of the related loan using the effective interest method. (f) Maintenance and Repair Costs Maintenance and repair costs under our leases are generally the responsibility of the lessees. Under many of our leases, lessees pay periodic use fees (often called maintenance reserves) to us based on the usage of the asset. Under the terms of some of our leases, the lessees pay amounts to us based on usage, which are designed to cover the expected maintenance cost. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures. Use fees billed are recognized in maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are included in maintenance reserve liability until they are reimbursed to the lessee or the lease terminates, at which time they are recognized in maintenance reserve revenue. Our expenditures for maintenance are expensed as incurred. Expenditures that meet the criteria for capitalization are recorded as an addition to equipment recorded on the balance sheet. Major overhauls paid for by us, which improve functionality or extend the remaining 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. We do not accrue for planned major maintenance. (g) Interest Rate Hedging We enter into various derivative instruments periodically to mitigate the exposure on our variable rate borrowings. The derivative instruments are fixed-rate interest swaps that are recorded at fair value as either an asset or liability. The last of our hedge instruments matured in November 2013. While substantially all our 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 we have 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 We use 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 9). The Company files income tax returns in various states and countries which may have different statutes of limitations. The open tax years for federal and state tax purposes are from 2012-2014 and 2011-2014, respectively. The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Such adjustments have historically been minimal and immaterial to our financial results. (i) Property, Equipment and Furnishings Property, equipment and furnishings are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three to fifteen 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 We consider highly liquid investments readily convertible into known amounts of cash, with original maturities of 90 days or less, as cash equivalents. (k) Restricted Cash We have certain bank accounts that are subject to restrictions in connection with our WEST II borrowings. Under WEST II, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of maintenance reserve payments and all lease security deposits are accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Under WEST II, cash from maintenance reserve payments are held in the restricted cash account equal to the maintenance obligations projected for the subsequent six months, and are subject to a minimum balance of $9.0 million. Security deposits are held until the end of the lease, at which time provided return conditions have been met, the deposit will be returned to the lessee. To the extent return conditions are not met, these deposits may be retained by us. (l) Spare Parts Inventory Inventory consists of spare aircraft and engine parts and 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 arising from the Company’s acquisition of J.T. Power (see Footnote 6. Acquisition). Intangible assets are accounted for in accordance with FASB ASC 350, “Intangibles — Goodwill and Other.” Goodwill is assessed for impairment annually. 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. (n) Management Estimates These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The preparation of consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to residual values, estimated asset lives, impairments and bad debts. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the accounting policies on revenue recognition, maintenance reserves and expenditures, useful life of equipment, asset residual values, asset impairment and allowance for doubtful accounts are critical to the results of operations. If the useful lives or residual values are lower than those estimated by us, upon sale of the asset a loss may be realized. Significant management judgment is required in the forecasting of future operating results, which are used in the preparation of projected undiscounted cash-flows and should different conditions prevail, material impairment write-downs may occur. (o) Per share information Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. The computation of fully diluted earnings per share is similar to the computation of basic earnings per share, except for the inclusion of all potentially dilutive common shares. The reconciliation between basic common shares and fully diluted common shares is presented below: Years Ended December 31, 2015 2014 2013 (in thousands) Shares: Weighted-average number of common shares outstanding Dilutive and potentially dilutive common shares Total shares (p) Investments Our investment in the WMES and CASC Willis joint ventures, where we own 50% of the equity of the ventures, 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. Prior to September 18, 2013, we held a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On September 18, 2013, we completed the acquisition of the fifty percent membership interest held by the other joint venture partner in WOLF. Prior to that date, the investment in the WOLF joint venture was accounted for using the equity method of accounting. As a result of the transaction, we now own one hundred percent of WOLF. The WOLF assets and liabilities and the results of operations have been included in the accompanying consolidated financial statements as of the acquisition date, September 18, 2013. (q) Stock Based Compensation We recognize compensation expense in the financial statements for share-based awards based on the grant-date fair value of those awards. Additionally, stock-based compensation expense includes an estimate for pre-vesting forfeitures and is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. (r) Initial Direct Costs associated with Leases We account for the initial direct costs, including sales commission 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 $1.6 million, $1.5 million and $1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. (s) Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible. We use a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value which are the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis We determine fair value of long-lived assets held and used, such as Equipment held for operating lease and Equipment held for sale, by reference to independent appraisals, quoted market prices (e.g. an offer to purchase) and other factors. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. The following table shows by level, within the fair value hierarchy, the Company’s assets measured at fair value on a nonrecurring basis during the years ended December 31, 2015 and 2014, and the losses recorded during the years ended December 31, 2015 and 2014 on those assets: Assets at Fair Value Total Losses December 31, 2015 December 31, 2014 December 31, Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 2015 2014 (in thousands) (in thousands) Equipment held for lease $ $ — $ $ — $ $ — $ $ — $ $ Equipment held for sale — — — — Spare parts inventory — — — — — — — Total $ $ — $ $ — $ $ — $ $ — $ $ At December 31, 2015, the Company used Level 2 inputs to measure equipment held for lease, equipment held for sale, and spare parts inventory. Level 2 inputs include quoted prices for similar assets in inactive markets. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. Write-downs of equipment to their estimated fair values totaled $9.2 million for the year ended December 31, 2015 compared to $5.6 million recorded in the year ago period. A write-down of equipment totaling $5.5 million was recorded in the year ended December 31, 2015 due to a management decision to consign four engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out. Write-downs on held for use equipment to their estimated fair values totaled $0.6 million for the year ended December 31, 2015 due to an adjustment of carrying values for certain impaired parts packages within the portfolio to reflect estimated market values. A further write-down of $2.8 million was recorded in the year ended December 31, 2015 to adjust the carrying value of engine parts for which market conditions for the sale of parts has changed. An additional write-down of $0.3 million was recorded in the year ended December 31, 2015 based on a comparison of the inventory values with the revised net proceeds expected from part sales. A write-down of equipment totaling $5.6 million was recorded in the year ended December 31, 2014. This amount includes a write-down of equipment totaling $2.6 million due to a management decision to consign six engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out. Write-downs on held for use equipment to their estimated fair values totaled $2.4 million for the year ended December 31, 2014, due to the adjustment of carrying values for certain impaired engines within the portfolio to reflect estimated market values. A further write-down of $0.6 million was recorded in the year ended December 31, 2014 to adjust the carrying value of engine parts for which market conditions for the sale of parts has changed. (t) Foreign Currency Translation The Company’s foreign investments have been converted at rates of exchange at December 31, 2015. The changes in exchange rates in our foreign investments reported under the equity method are included in stockholders’ equity as accumulated other comprehensive income. (u) Recent Accounting Pronouncement s In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, “ Leases ” (topic 842) . The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The updated guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU , Simplifying the Measurement of Inventory, which simplifies the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016 and for interim periods therein. We are evaluating the impact that this new guidance will have on our consolidated financial position. In April 2015, the FASB issued ASU, Simplifying the Presentation of Debt Issuance Costs, which will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS standards by requiring that debt issuance costs be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to the presentation of debt discounts or premiums. This accounting guidance is effective for us beginning in the first quarter of 2016. The unamortized debt issuance cost balances were $12.6 million and $15.5 million as of December 31, 2015 and December 31, 2014, respectively, and would reduce our Notes Payable balances accordingly on our Consolidated Balance Sheet for those periods under this ASU. In May 2014, the FASB issued an ASU, Revenue from Contracts with Customers, which supersedes previous revenue recognition guidance. The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. Companies will need to use more judgment and estimates than under the guidance currently in effect, including estimating the amount of variable revenue to recognize over each identified performance obligation. Additional disclosures will be required to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of periods beginning after December 15, 2016 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. |
Equipment Held for Operating Le
Equipment Held for Operating Lease | 12 Months Ended |
Dec. 31, 2015 | |
Equipment Held for Operating Lease [Abstract] | |
Equipment Held for Lease | (2) Equipment Held for Operating Lease At December 31, 2015, we had 201 aircraft engines and related equipment with a cost of $1, 310.7 million, 5 spare parts packages with a cost of $ 5.2 million and 10 aircraft with a cost of $123.5 million, in our lease portfolio. At December 31, 2014, we had 207 aircraft engines and related equipment with a cost of $1,303.3 million, 5 aircraft with a cost of $38.1 million and 5 spare parts packages with a cost of $6.1 million in our lease portfolio. A majority of our equipment is leased and operated internationally. All leases relating to this equipment are denominated and payable in U.S. dollars. We lease our equipment to lessees domiciled in eight geographic regions. The tables below set forth geographic information about our leased equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location): Years Ended December 31, Lease rent revenue 2015 2014 2013 (in thousands) Region Europe $ $ $ Asia South America United States Mexico Canada Middle East Africa Totals $ $ $ Years Ended December 31, Lease rent revenue less applicable depreciation and interest 2015 2014 2013 (in thousands) Region United States $ $ $ Mexico Canada Europe South America Asia Africa Middle East Off-lease and other Totals $ $ $ Years Ended December 31, Net book value of equipment held for operating lease 2015 2014 2013 (in thousands) Region United States $ $ $ Mexico Canada Europe South America Asia Africa Middle East Off-lease and other Totals $ $ $ As of December 31, 2015 and 2014, the lease status of the equipment held for operating lease was as follows: December 31, 2015 Lease Term Net Book Value (in thousands) Off-lease and other $ Month-to-month leases Leases expiring 2016 Leases expiring 2017 Leases expiring 2018 Leases expiring 2019 Leases expiring 2020 Leases expiring thereafter $ December 31, 2014 Lease Term Net Book Value (in thousands) Off-lease and other $ Month-to-month leases Leases expiring 2015 Leases expiring 2016 Leases expiring 2017 Leases expiring 2018 Leases expiring 2019 Leases expiring thereafter $ As of December 31, 2015, minimum future payments under non-cancelable leases were as follows: Year (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter $ |
Equipment Held for Sale
Equipment Held for Sale | 12 Months Ended |
Dec. 31, 2015 | |
Equipment Held for Sale [Abstract] | |
Equipment Held for Sale | (3) Equipment Held for Sale Equipment held for sale includes engines being marketed for sale as well as engines removed from our lease portfolio that are being parted out, with our investment in the long lived asset being recovered through the sale of spare parts. The assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell. |
Spare Parts Inventory
Spare Parts Inventory | 12 Months Ended |
Dec. 31, 2015 | |
Spare Parts Inventory [Abstract] | |
Spare Parts Inventory | (4) Spare Parts Inventory Inventory consists of spare aircraft and engine parts and 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. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Investments | (5) Investments On May 25, 2011, we entered into an agreement with Mitsui & Co., Ltd. to participate in a joint venture formed as a Dublin-based Irish limited company — Willis Mitsui & Company Engine Support Limited (“WMES”) for the purpose of acquiring and leasing jet engines. Each partner holds a fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity. The initial capital contribution by the Company for its investment in WMES was $8.0 million. The Company provided the initial lease portfolio by transferring 7 engines to the joint venture in June 2011. In addition, the Company made $21.0 million capital contributions to WMES from 2011 through 2015 for the purchase of 21 engines from third parties, increasing the number of engines in the lease portfolio to 28 . The $29.0 million of capital contributions has been partially offset by $3.6 million, resulting in a net investment of $25.4 million, which has been reduced by $2.1 million in distributions and increased further to $27.3 million as a result of the Company’s share of WMES reported earnings to date. The $3.6 million reduction in investment represents 50% of the $7.2 million gain related to the sale by the Company of the 7 engines to WMES . During 2015, the Company recorded $0.6 million of capital contributions, $1.3 million in distributions , $1. 2 million as a result of the Company’s share of WMES reported earnings for the period and $0.1 million of amortization of deferred gain . Our investment in the joint venture is $2 7.3 million and $2 6.7 million as of December 31, 201 5 and December 31, 201 4 , respectively. Prior to September 18, 2013, we held a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”), which was accounted for as an investment under the equity method of accounting. On December 30, 2005, WOLF completed the purchase of two Airbus A340-313 aircraft from Boeing Aircraft Holding Company for a purchase price of $96.0 million. Since their purchase, these two aircraft had been leased to Emirates, with the leases terminating in March and May 2013. The return of both aircraft from the prior lessee, Emirates, was completed by June 2013, with the airframes being disassembled and parted out and the eight engines being marketed for lease separately to airline customers. On September 18, 2013, we completed the acquisition of the fifty percent membership interest held by the other joint venture partner in WOLF for a purchase price of $1.0 million, with the purchase price representing a $12.7 million discount from the JV partner’s equity interest. The transaction has been accounted for as an asset acquisition. We recorded the assets at the cost basis, which represents the allocation of our prior investment basis plus the cash paid to the third party investor. The purchase price was allocated to the eight aircraft engines and two airframes. The fair value of the net assets acquired from this transaction is estimated to be $12.6 million, which is comprised of $27.0 million of equipment, $1.6 million of cash and receivables, offset by $16.0 million of debt and other liabilities. As a result of the transaction, we now own one hundred percent of WOLF. The WOLF assets and liabilities and the results of operations have been included in the accompanying consolidated financial statements as of the acquisition date, September 18, 2013. On June 3, 2014 we entered into an agreement with China Aviation Supplies Import & Export Corporation Limited (“CASC”) to participate in a joint venture named CASC Willis Engine Lease Company Limited (“CASC Willis”), a new joint venture based in Shanghai, China. Each partner holds a fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity. In October 2014, we made a $15.0 million initial capital contribution representing the up-front funding for the new joint venture. The new company will acquire and lease jet engines to Chinese airlines and will concentrate on meeting the fast growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. The investment has been reduced to $14.0 million as of December 31, 2015 as a result of a foreign currency translation adjustment of $0.8 million and the Company’s share of CASC Willis’ reported losses to date of $0.2 million. Years Ending December 31, 2015 and 2014 (in thousands) WMES CASC Willis Total Investment in joint ventures as of December 31, 2013 $ $ — $ Investment Earnings (losses) from joint ventures Amortization of deferred gain — Distribution — Investment in joint ventures as of December 31, 2014 $ $ $ Investment — Earnings (losses) from joint ventures Amortization of deferred gain — Distribution — Foreign Currency Translation Adjustment — Investment in joint ventures as of December 31, 2015 $ $ $ “ Other revenue” on the Consolidated Statement of Income includes management fees earned of $1.7 million, $2.0 million and $1.6 million during the years ended December 31, 2015, 2014 and 2013, respectively, related to the servicing of engines for the WMES lease portfolio. During 2015, WMES consigned an engine for part out and sale to our Willis Aero subsidiary. The value of the engine is $0.2 million as of December 31, 2015. Summarized financial information for 100% of WMES is presented in the following table: Years Ended December 31, 2015 2014 2013 (in thousands) Revenue $ $ $ Expenses WMES net income $ $ $ December 31, December 31, 2015 2014 (in thousands) Total assets $ $ Total liabilities Total WMES net equity $ $ |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition | |
Acquisition | (6) Acquisition On November 6, 2013, the Company purchased certain assets of J.T. Power, an ‘end-of-life’ solution provider for aircraft engines and parts, for $5.6 million. A cash payment of $4.5 million was made to fund the transaction, after deducting amounts owed to the Company, $0.7 million related to the minimum guarantee of an existing consignment program and cash received of $0.4 million. The major classes of assets to which we allocated the purchase price were spare parts inventory of $3.4 million, accounts receivable of $1.7 million, identifiable intangible assets of $1.2 million and goodwill of $0.3 million. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable | |
Notes Payable | (7) Notes Payable Notes payable consisted of the following: As of December 31, 2015 2014 (in thousands) Credit facility at a floating rate of interest of LIBOR plus 2.75% , secured by engines. The facility has a committed amount of $700.0 million at December 31, 2015 , which revolves until the maturity date of June 2019. $ $ WEST II Series 2012-A term notes payable at a fixed rate of interest of 5.50% , maturing in September 2037. Secured by engines. Note payable at fixed interest rates ranging from 2.60% to 2.97% , maturing in July 2024. Secured by an aircraft. Note payable at a variable interest rate of LIBOR plus 2.25% , maturing in January 2018. Secured by engines. Note payable at a variable interest rate of LIBOR plus 4.00% , repaid in March 2015. Secured by engines. — Note payable at a fixed interest rate of 5.50% , repaid in July 2015 . Secured by one engine. — Total notes payable $ $ One-month LIBOR was 0.43% and 0.17% as of December 31, 201 5 and December 31, 201 4, respectively . Principal outstanding at December 31, 201 5 , is repayable as follows: Year (in thousands) 2016 $ 2017 2018 2019 (includes $549.0 million outstanding on revolving credit facility) 2020 Thereafter $ Virtually all of the above debt requires our 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 repurchase. These covenants are tested quarterly and the Company was in full compliance with all covenant requirements at December 31, 201 5 . At December 31, 201 5 , we are in compliance with the covenants specified in the revolving credit facility, including the Interest Coverage Ratio requirement of at least 2.25 to 1.00 , and the Total Leverage Ratio requirement to remain below 5.00 to 1.00 . As defined in the revolving credit facility Credit Agreement, the Interest Coverage Ratio is the ratio of Earnings before Interest, Taxes, Depreciation and Amortization and other one-time charges (EBITDA) to Consolidated Interest Expense and the Total Leverage Ratio is the ratio of Total Indebtedness to Tangible Net Worth. At December 31, 201 5 , we are in compliance with the covenants specified in the WEST II indenture and servicing agreement. At December 31, 201 5 , notes payable consists of loans totaling $878.7 million payable over periods of approximately 2.0 years to 8.6 years with interest rates varying between approximately 2.6% and 5.5% . Substantially all of our assets are pledged to secure our obligations to creditors. Our significant debt instruments are discussed below: At December 31, 201 5 , we 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. On June 4, 2014, we entered into a Second Amended and Restated Credit Agreement which increased this revolving credit facility to $700.0 million from $450.0 million and extended the maturity date by five years to June 2019. Debt issuance costs totaling $4.9 million were incurred related to the new facility. As of December 31, 201 5 and December 31, 2014, $151.0 million and $270.0 million w ere available under this facility , respectively . On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the revolving credit facility. Based on the Company’s leverage ratio of 4.46 at December 31, 201 5 , the interest rate on this facility is one-month LIBOR plus 2.75% as of December 31, 201 5 . Under the revolving credit facility, all subsidiaries except WEST II jointly and severally guarantee payment and performance of the terms of the loan agreement. The guarantee would be triggered by a default under the agreement. On September 17, 2012, we closed an asset-backed securitization (“ABS”) through a newly-created, bankruptcy-remote, Delaware statutory trust, WEST II, of which the Company is the sole beneficiary. WEST II issued and sold $390 million aggregate principal amount of Class 2012-A Term Notes (the “Notes”) and received $384.9 million in net proceeds. We used these funds, net of transaction expenses and swap termination costs in combination with our revolving credit facility, to pay off the prior WEST notes totaling $435.9 million. At closing , 22 engines were pledged as collateral from WEST to the Company’s revolving credit facility, which provided the remaining funds to pay off the WEST notes. The assets and liabilities of WEST II will remain on the Company’s balance sheet. The current portfolio of 63 commercial jet aircraft engines and leases thereof secures the obligations of WEST II under the ABS. The Notes have no fixed amortization and are payable solely from revenue received by WEST II from the engines and the engine leases, after payment of certain expenses of WEST II. The Notes bear interest at a fixed rate of 5.50% per annum. The Notes may be accelerated upon the occurrence of certain events, including the failure to pay interest for five business days after the due date thereof. The Notes are expected to be paid in 10 years. The legal final maturity of the Notes is September 15, 2037. In connection with the transactions described above, effective September 17, 2012, the Company entered into a Servicing Agreement and Administrative Agency Agreement with WEST II to provide certain engine, lease management and reporting functions for WEST II in return for fees based on a percentage of collected lease revenues and asset sales. Because WEST II is consolidated for financial statement reporting purposes, all fees eliminate upon consolidation. At December 31, 2015 and 2014, $ 300.5 million and $3 51.9 million of WEST II term notes were outstanding, respectively. The assets of WEST II are not available to satisfy our obligations or any of our affiliates other than the obligations specific to WEST II. WEST II is consolidated for financial statement presentation purposes. WEST II’s ability to make distributions and pay dividends to the Company is subject to the prior payments of its debt and other obligations and WEST II’s maintenance of adequate reserves and capital. Under WEST II, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of maintenance reserve payments and all lease security deposits are accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Cash from maintenance reserve payments are held in the restricted cash account equal to the maintenance obligations projected for the subsequent six months, and are subject to a minimum balance of $9.0 million. On September 18, 2013, we completed the acquisition of the fifty percent membership interest held by the other joint venture partner in WOLF, with the transaction being accounted for as an asset acquisition. As a result of the transaction, we now own one hundred percent of WOLF. The WOLF assets and liabilities and the results of operations related to the WOLF assets have been included in the accompanying consolidated financial statements as of the acquisition date, September 18, 2013. Two term notes with an original principal amount of $36.0 million , with a balance outstanding of $24.0 million as of December 31, 2014, are included in Notes payable. On March 25, 2015, we paid off the $23.1 million balance of the two term notes associated with the WOLF assets at a 5% discount. This transaction resulted in the recording of a $1.2 million gain on debt extinguishment which has been included in our statement of income for the year ended December 31, 2015 . On July 16 , 2014, we closed on a loan for a ten year term totaling $13.4 million. During the second quarter of 2015, we closed on two additional loans totaling $4.7 million, repayable over the same ten year term. The interest is payable at fixed rates ranging from 2.60% to 2.97% for the initial five years of the loan term and principal and interest is paid monthly. The loans provided 100% of the funding for the purchase of a corporate aircraft and subsequent modifications and upgrades. The balance outstanding on these loans is $16.1 million and $12.9 million as December 31, 2015 and December 31, 2014, respectively. On January 10, 2014, we extended the term of an existing loan that was scheduled to mature on January 11, 2014. The loan has a term of 4 years with a maturity date of January 11, 2018. Interest is payable at one-month LIBOR plus 2.25% and principal and interest is paid quarterly. The loan is secured by three engines. The balance outstanding on this loan is $13.1 million and $14.5 million as of December 31, 2015 and December 31, 2014, respectively. On September 28, 2012, we closed on a loan for a five year term totaling $8.7 million. Interest is payable at a fixed rate of 5.50% and principal and interest is paid quarterly. The loan is secured by one engine. The funds were used to purchase the engine secured under the loan. On July 10, 2015, we paid off the $7.4 million loan balance that was secured by one engine. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments | |
Derivative Instruments | (8) Derivative Instruments We periodically hold interest rate derivative instruments to mitigate exposure to changes in interest rates, in particular one-month LIBOR , with $562.1 million and $468.5 million of our borrowings at December 31, 201 5 and 201 4 , respectively, at variable rates. As a matter of policy, we do not use derivatives for speculative purposes. We currently have no interest rate swap agreements in place. During 2013 we were a party to one interest rate swap agreement with a notional outstanding amount of $100.0 million with a fixed rate of 2.10% . The swap agreement expired in November 2013. The remaining effective portion of these hedges at the swap expiration date was amortized into earnings over the term of the underlying borrowings. There was no expense or benefit recorded related to derivative instruments for the year ended December 31, 2015. We recorded a ($0.5 million) benefit and $1.5 million expense to net finance costs during the years ended December 31, 2014 and December 31, 2013 respectively. 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. We apply hedge accounting and account for the change in fair value of our cash flow hedges through other comprehensive income for all derivative instruments. Earnings Effects of Derivative Instruments on the Statements of Income The following table provides information about the income effects of our cash flow hedging relationships for the years ended December 31, 201 5 , 201 4 , and 201 3 : Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income Derivatives in Cash Flow Hedging Location of Loss (Gain) Recognized on Years Ended December 31, Relationships Derivatives in the Statements of Income 2015 2014 2013 (in thousands) Interest rate contracts Interest expense $ — $ $ Total $ — $ $ Our derivatives were designated in a cash flow hedging relationship with the effective portion of the change in fair value of the derivative reported in the cash flow hedges subaccount of accumulated other comprehensive income. Effect of Derivative Instruments on Cash Flow Hedging The following tables provide additional information about the financial statement effects related to our cash flow hedges for the years ended December 31, 201 5 , 201 4 , and 201 3 : Amount of Gain (Loss) Recognized Location of Loss (Gain) Amount of Loss (Gain) Reclassified in OCI on Derivatives Reclassified from from Accumulated OCI into Income Derivatives in (Effective Portion) Accumulated OCI into (Effective Portion) Cash Flow Hedging Years Ended December 31, Income Years Ended December 31, Relationships 2015 2014 2013 (Effective Portion) 2015 2014 2013 (in thousands) (in thousands) Interest rate contracts* $ — $ — $ Interest expense $ — $ $ Total $ — $ — $ Total $ — $ $ * These amounts are shown net of $1.9 million of interest payments reclassified to the income statement during the year ended December 31, 2013. No interest payments were reclassified to the income statement in 2015 and 2014. 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 is recorded in earnings in the current period. However, these are highly effective hedges and no significant ineffectiveness occurred in either of the periods presented. Counterparty Credit Risk The Company evaluates the creditworthiness of the counterparties under its hedging agreements. The swap counterparty for the interest rate swap in place during the first eleven months of 2013 was a large financial institution in the United States that possessed an investment grade credit rating. Based on this rating, the Company believes that the counterparty was creditworthy and that their continuing performance under the hedging agreement was probable, and did not require the counterparty to provide collateral or other security to the Company. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | (9) Income Taxes The components of income from continuing operations before income taxes are as follows Years ended December 31, 2015 2014 2013 (in thousands) U.S. $ $ $ Non U.S. Income from continuing operations before income taxes $ $ $ The components of income tax expense for the years ended December 31, 201 5 , 201 4 , and 201 3 , included in the accompanying consolidated statements of income were as follows: Federal State Foreign Total (in thousands) December 31, 2015 Current $ $ $ $ Deferred — Total 2015 $ $ $ $ December 31, 2014 Current $ $ $ $ Deferred — Total 2014 $ $ $ $ December 31, 2013 Current $ $ $ $ Deferred — Total 2013 $ $ $ $ The following is a reconciliation of the federal income tax expense at the statutory rate of 34% to the effective income tax expense: Years Ended December 31, 2015 2014 2013 (in thousands and % of pre-tax income) $ % $ % $ % Statutory federal income tax expense State taxes, net of federal benefit Foreign tax paid Tax consequences of the sale of engines to WMES Uncertain tax positions Permanent differences-nondeductible executive compensation ETI basis restoration — — — — Permanent differences and other Effective income tax expense (benefit) In 2013, we recorded an income tax benefit of $8.7 million related to an extraterritorial income (“ETI”) adjustment for certain of our engines. We recognized this income tax benefit in 2013 resulting from adjustments made to the tax basis of certain of our engines due to a decision in a recent court case on behalf of another company in which our circumstances are similar. The Company records tax expense or benefit for unusual or infrequent items discretely in the period in which they occur. The following table summarizes the activity related to the Company’s unrecognized tax benefits: (in thousands) Balance as of December 31, 2013 $ Increases related to current year tax positions Decreases due to tax positions released Balance as of December 31, 2014 Increases related to current year tax positions Decreases due to tax positions expired Balance as of December 31, 2015 $ As of December 31, 2013 we reserved $0.2 million for the benefit resulting from the Extraterritorial Income Exclusion. No reserve was established as of December 31, 2015 and December 31, 2014 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, 2015 2014 (in thousands) Deferred tax assets: Unearned lease revenue $ $ State taxes Reserves and allowances Other accruals Alternative minimum tax credit Net operating loss carry forward Charitable contributions Total deferred tax assets Less: valuation allowance Net deferred tax assets Deferred tax liabilities: Depreciation and impairment on aircraft engines and equipment Other deferred tax assets (liabilities) Net deferred tax liabilities Other comprehensive loss deferred tax asset — Net deferred tax liabilities $ $ As of December 31, 201 5 , we had net operating loss carry forwards of approximately $100.5 million for federal tax purposes and $3.9 million for state tax purposes. The federal net operating loss carry forwards will expire at various times from 202 3 to 203 4 and the state net operating loss carry forwards will expire at various time s from 2016 to 2024. During 2014 , a valuation allowance of $1.3 million was established for the net operating losses expiring in California for the periods 2016 to 2024. 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. As of December 31, 201 5 , we also had alternative minimum tax credit of approximately $0.4 million for federal income tax purposes which has no expiration date and which should be available to offset future regular tax liabilities. 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. Deferred tax assets relating to tax benefits of employee stock option grants have been reduced to reflect exercises in 201 5 . Some exercises resulted in tax deductions in excess of previously recorded benefits based on the option value at the time of grant (“windfall”). Although these additional tax benefits are reflected in net operating tax loss carryforwards, pursuant to ASC 718, in the amount of $3.0 million as of December 31, 201 5 , the additional tax benefit associated with the windfall is not recognized until the deduction reduces taxes payable. The tax effect of windfalls included in net operating loss carryforwards but not reflected in deferred tax assets for 201 5 are $1.0 million and will be recorded to paid-in capital when recognized. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | (10) Fair Value of Financial Instruments The carrying amount reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, operating lease related receivables, and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. The carrying amount of the Company’s outstanding balance on its Notes Payable as of December 31, 2015 and 2014 was estimated to have a fair value of approximately $890.1 million and $847.0 million, respectively, based on the fair value of estimated future payments calculated using the prevailing interest rates at each year end. |
Risk Management - Risk Concentr
Risk Management - Risk Concentrations and Interest Rate Risk | 12 Months Ended |
Dec. 31, 2015 | |
Risk Management - Risk Concentrations and Interest Rate Risk | |
Risk Management - Risk Concentrations and Interest Rate Risk | (11) Risk Management — Risk Concentrations and Interest Rate Risk Risk Concentrations Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash deposits, lease receivables and interest rate swaps. We place our cash deposits with financial institutions and other creditworthy institutions such as money market funds and limit the amount of credit exposure to any one party. We opt 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 our 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, our risk is considered limited due to the relatively few lessees which have this provision in the lease. We enter into interest rate swap agreements with counterparties that are investment grade financial institutions. Interest Rate Risk Management To mitigate exposure to interest rate changes, we periodically enter into interest rate swap agreements. We currently have no interest rate swap agreements in place. In 2015, 2014 and 2013, nil ( $ 0.5 million), and $1.5 m illion was realized through the income statement as an increase (decrease) in interest expense, respectively. |
Commitments, Contingencies, Gua
Commitments, Contingencies, Guarantees and Indemnities | 12 Months Ended |
Dec. 31, 2015 | |
Commitments, Contingencies, Guarantees and Indemnities | |
Commitments, Contingencies, Guarantees and Indemnities | (12) Commitments, Contingencies, Guarantees and Indemnities The following table lists our properties and their remaining lease commitments: Lease Remaining Lease Location Property Type Expiration Commitment (in thousands) Novato, California Principal Office 09/30/18 $ Boynton Beach, Florida Warehouse and office 10/29/19 San Diego, California Warehouse and office 10/31/16 Singapore Office 12/31/16 Shanghai, China Office 12/31/16 Shanghai, China Warehouse 07/31/17 Dublin, Ireland Office 05/31/17 London, United Kingdom Office 07/31/16 Blagnac, France Office 12/31/16 Total $ We have made a purchase commitment to secure the purchase of four engine s and related equipment for a gross purchase price of $31.6 million, for delivery in 201 6 . |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Shareholders' Equity | |
Shareholders' Equity | (13) Shareholders’ Equity Common Stock Repurchase On September 27, 2012, the Company announced that its Board of Directors has authorized a plan to repurchase up to $100.0 million of its common stock over the next 5 years. The Board of Directors reaffirmed the repurchase plan on April 21, 2015. This plan extends the previous plan authorized on December 8, 2009, and increases the number of shares authorized for repurchase to up to $100.0 million. During 2015, the Company repurchased 912,247 shares of common stock , includ ing 643,821 shares repurchased under a modified “Dutch auction” tender offer completed in December 2015 , for approximately $16.5 million under this program, at a weighted average price of $17.75 per share (excluding fees and expenses related to the tender offer) . The repurchased shares were subsequently retired. Share Repurchase - Modified "Dutch auction" Tender Offer On November 17, 2015, the Company announced the commencement of a modified "Dutch auction" tender offer to repurchase shares of its common stock at a price not less than $15.50 per share nor greater than $18.00 per share. The tender offer expired on December 16, 2015 resulting in the Company repurchasing 643,821 shares of the Company’s common stock at a purchase price of $18.00 per share, for an aggregate cost of approximately $11.6 million, excluding fees and expenses relating to the tender offer. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | (14) Stock-Based Compensation Plans The components of stock compensation expense for the years ended December 31, 201 5 , 201 4 , and 201 3 , included in the accompanying consolidated statements of income were as follows: 2015 2014 2013 (in thousands) 2007 Stock Incentive Plan $ $ $ Employee Stock Purchase Plan Total Stock Compensation Expense $ $ $ The significant stock compensation plans are described below. Our 2007 Stock Incentive Plan (the 2007 Plan) was adopted on May 24, 2007. Under this 2007 Plan, a total of 2,000,000 shares are authorized for stock based compensation available in the form of either restricted stock or stock options. On May 28, 2015, the Company’s shareholders authorized an increase in the number of shares of Common Stock available for grant by 800,000 shares bringing the total to 2,800,000 shares authorized. 2,263,712 shares of restricted stock were granted under the 2007 Stock Incentive Plan by December 31 , 2015. Of this amount, 135,368 shares of restricted stock were cancelled and returned to the pool of shares which could be granted under the 2007 Stock Incentive Plan resulting in a net number of 671,656 shares which were available as of December 31 , 2015 for future issuance under the 2007 Incentive Plan. The fair value of the restricted stock awards equaled the stock price at the date of grants. The following table summarizes restricted stock activity during the years ended December 31: Shares Restricted stock at December 31, 2012 Granted in 2013 (vesting over 4 years) Granted in 2013 (vesting on first anniversary from date of issuance) Cancelled in 2013 Vested in 2013 Restricted stock at December 31, 2013 Granted in 2014 (vesting over 3 years) Granted in 2014 (vesting over 4 years) Granted in 2014 (vesting on first anniversary from date of issuance) Cancelled in 2014 Vested in 2014 Restricted stock at December 31, 2014 Granted in 2015 (vesting over 3 years) Granted in 2015 (vesting over 4 years) Granted in 2015 (vesting on first anniversary from date of issuance) Cancelled in 2015 — Vested in 2015 Restricted stock at December 31, 2015 Our accounting policy is to recognize the associated expense of such awards on a straight-line basis over the vesting period. At December 31, 201 5 the stock compensation expense related to the restricted stock awards that will be recognized over the average remaining vesting period of 1.6 years totals $4.7 million. At December 31, 201 5 , the intrinsic value of unvested restricted stock awards is $8.0 million. The Plan terminates on May 24, 2017. A summary of activity under the 2007 Plan for the years ended December 31, 201 5 , 201 4 , and 201 3 is as follows: Weighted Average Number Outstanding Grant Date Fair Value Aggregate Value Balance as of December 31, 2012 $ $ Shares granted Shares cancelled Shares vested Balance as of December 31, 2013 $ $ Shares granted Shares cancelled Shares vested Balance as of December 31, 2014 $ $ Shares granted Shares cancelled — — — Shares vested Balance as of December 31, 2015 $ $ Employee Stock Purchase Plan: Under our Employee Stock Purchase Plan (ESPP), as amended and restated effective May 20, 2010, 250,000 shares of common stock have been reserved for issuance. The Purchase Plan was effective in September 1996. Eligible employees may designate not more than 10% of their cash compensation to be deducted each pay period for the purchase of common stock under the Purchase Plan. Participants may purchase not more than 1,000 shares or $25,000 of common stock in any one calendar year. Each January 31 and July 31 shares of common stock are purchased with the employees’ payroll deductions from the immediately preceding six months at a price per share of 85% of the lesser of the market price of the common stock on the purchase date or the market price of the common stock on the date of entry into an offering period. In 201 5 and 201 4 , 10,374 and 14,06 8 shares of common stock, respectively, were issued under the Purchase Plan. We issue new shares through our transfer agent upon employee stock purchase. The weighted average per share fair value of the employee’s purchase rights under the Purchase Plan for the rights granted was $6.17 , $6.17 and $3.19 for 201 5 , 201 4 and 201 3 , respectively. 1996 Stock Option/Stock Issuance Plan: We granted stock options under our 1996 Stock Option/Stock Issuance Plan (the 1996 Plan), as amended and restated as of March 1, 2003, until the plan terminated in June 2006. Under this Plan, a total of 3,025,000 shares were authorized for grant. These options have a contractual term of ten years and vest at a rate of 25% annually commencing on the first anniversary of the date of grant. For shares outstanding with graded vesting, our accounting policy is to value the options as one award and recognize the associated expense on a straight-line basis over the vesting period. We issue new shares through our transfer agent upon stock option exercise. In the year ended December 31, 2013, 54,991 options were exercised with a total intrinsic value at exercise date of approximately $0.4 million and 6,500 options were cancelled. In the year ended December 31, 2014, 26,437 options were exercised with a total intrinsic value at exercise date of approximately $0.2 million. In the year ended December 31, 201 5 , 49 , 000 options were exercised with a total intrinsic value at exercise date of approximately $0.3 million. As of December 31 , 2015, there are no options remaining under the 1996 Plan. A summary of the activity under the 1996 Plan for the years ended December 31, 201 5 , 201 4, and 2013 is as follows: Weighted Average Remaining Options Weighted Contractual Available Average Term (in Aggregate for Grant Options Exercise Price years) Intrinsic Value Outstanding as of December 31, 2012 — $ $ Options exercised — Options cancelled — Outstanding as of December 31, 2013 — $ $ Options exercised — Options cancelled — — — Outstanding as of December 31, 2014 — $ $ Options exercised — Options cancelled — — — Outstanding as of December 31, 2015 — — $ — — $ — Vested and expected to vest at: December 31, 2015 — $ — — $ — Options exercisable at: December 31, 2013 $ $ December 31, 2014 $ $ December 31, 2015 — $ — — $ — |
Employee 401(k) Plan
Employee 401(k) Plan | 12 Months Ended |
Dec. 31, 2015 | |
Employee 401(k) Plan | |
Employee 401(k) Plan | (15) Employee 401(k) Plan We 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 our full-time and part-time employees in the United States. In 201 5 , employees who participated in the 401(k) Plan could elect to defer and contribute to the 401(k) Plan up to 20% of pretax salary or wages up to $18,000 (or $24,000 for employees at least 50 years of age). We match 50% of employee contributions up to 8% of the employee’s salary which totaled $0.4 million, $0.3 million and $0.3 million for the years ended December, 31, 201 5 , 201 4 , and 201 3, respectively . |
Quarterly Consolidated Financia
Quarterly Consolidated Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Consolidated Financial Information (Unaudited) | |
Quarterly Consolidated Financial Information (Unaudited) | (16) Quarterly Consolidated Financial Information (Unaudited) The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 201 5 , 201 4 , and 201 3 (in thousands, except per share data). Fiscal 2015 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Total revenue $ $ $ $ $ Net income (loss) Basic earnings (loss) per common share Diluted earnings (loss) per common share Average common shares outstanding Diluted average common shares outstanding Fiscal 2014 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Total revenue $ $ $ $ $ Net income (loss) Basic earnings (loss) per common share Diluted earnings (loss) per common share Average common shares outstanding Diluted average common shares outstanding Fiscal 2013 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Total revenue $ $ $ $ $ Net income (loss) Basic earnings (loss) per common share Diluted earnings (loss) per common share Average common shares outstanding Diluted average common shares outstanding |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | ( 17) Related Party Transactions “Other revenue” on the Consolidated Statement of Income includes management fees earned of $1.7 million, $2.0 million and $1.7 million during the years ended December 31, 2015, 2014 and 2013, respectively, related to the servicing of engines for the WMES lease portfolio. Prior to 2014, the Company leased equipment to an airline owned by our CEO and Chairman. The Company received lease payments from the airline and recorded revenue totaling $2.1 million in the year ended December 31, 2013. Our CEO and Chairman no longer owns the airline. In connection with the 2013 sale of its stock to an unrelated third party, the airline prepaid a note to us at a 45% discount of $0.4 million, similar to reductions received by other large creditors. The Company subsequently sold four engines and three aircraft, which had an aggregate net book value of $3.4 million, to the third party for $4.9 million. The $4.9 million proceeds were included in 2013 revenue as follows: Gain on Sale $0.8 million (net of the asset’s $3.4 million net book value), Maintenance Reserve Revenue $0.4 million, Lease Rent Revenue $0.4 million and Other Revenue $0.3 million. J.T. Power, LLC (“J.T. Power”): In the ordinary course of business, the Company uses a number of consignment vendors to sell engine parts. Prior to 2014, the Company consigned equipment for part-out to J.T. Power, an entity owned by Austin Willis, the son of our CEO and Chairman, and directly and indirectly, a shareholder and a Director of the Company. Sales of consigned parts under the Consignment agreements were $22,200 for the year ended December 31, 2013 . On November 6, 2013, the Company purchased certain assets of J.T. Power for $5.6 million. A net cash payment of $4.5 million was made to fund the transaction, after deducting amounts owed to the Company, including $0.7 million related to the minimum guarantee remaining under the note and cash received of $0.4 million. Of the $4.5 million cash payment, $1.2 million was paid to various creditors and $3.3 million was paid to the shareholders of J.T. Power. As part of the acquisition of certain assets of J.T. Power, we launched Willis Aeronautical Services, Inc. (“Willis Aero”), a wholly-owned subsidiary, whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment from third parties of aircraft and engines. |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2015 | |
Operating Segments | |
Operating Segments | (18) Operating Segments The Company operates in two business segments: (i) Leasing and Related Operations which involves acquiring and leasing, primarily pursuant to operating leases, commercial aircraft, aircraft engines and other aircraft equipment and the selective purchase and resale of commercial aircraft engines and other aircraft equipment and (ii) Spare Parts Sales which involves the purchase and resale of after-market engine and airframe parts, whole engines, engine modules and portable aircraft components and leasing of engines destined for disassembly and sale of parts. The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses and inter-company allocation of interest expense. While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies. The following tables present a summary of the operating segments (amounts in thousands): Leasing and For the year ended December 31, 2015 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Leasing and For the year ended December 31, 2014 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — — General and administrative — Net finance costs — Other expense — Total expenses — Earnings (loss) from operations $ $ $ $ (1) Represents revenue generated between our operating segments Total assets as of December 31, 2015 $ $ $ — $ Total assets as of December 31, 2014 $ $ $ — $ |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | (19) Subsequent Events Management has reviewed and evaluated subsequent events through the date that the financial statements were issued. |
SCHEDULE I - Parent Company Inf
SCHEDULE I - Parent Company Information | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE I - Parent Company Information | |
SCHEDULE I - Parent Company Information | WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED BALANCE SHEETS Parent Company Information (In thousands, except share data) December 31, December 31, 2015 2014 ASSETS Cash and cash equivalents $ $ Equipment held for operating lease, less accumulated depreciation Equipment held for sale Operating lease related receivable, net of allowances Spare parts inventory Due from affiliate Investments Investment in subsidiaries Property, equipment & furnishings, less accumulated depreciation Intangible assets, net Other assets, net Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Accounts payable and accrued expenses $ $ Deferred income taxes Notes payable Maintenance reserves Security deposits Unearned lease revenue Total liabilities Shareholders’ equity: Common stock ($0.01 par value, 20,000,000 shares authorized; 7,548,395 and 8,346,304 shares issued and outstanding at December 31, 2015 and 2014, respectively) Paid-in capital in excess of par Retained earnings Accumulated other comprehensive loss, net of income tax benefit — Total shareholders’ equity Total liabilities and shareholders’ equity $ $ WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED STATEMENTS OF INCOME Parent Company Information (In thousands) Years Ended December 31, 2015 2014 2013 REVENUE Lease rent revenue $ $ $ Maintenance reserve revenue Spare parts and equipment sales — Gain on sale of leased equipment Other revenue Total revenue EXPENSES Depreciation expense Cost of spare parts and equipment sales — Write-down of equipment General and administrative Technical expense Interest expense Total expenses Earnings (loss) from operations Earnings from joint ventures Income (loss) before income taxes Income tax expense (benefit) Equity in income of subsidiaries, net of tax of $4,697, $3,553, and $199 at December 31, 2015, 2014 and 2013, respectively Net income $ $ $ WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Parent Company Information (In thousands) Years Ended December 31, 2015 2014 2013 Net income $ $ $ Other comprehensive income (loss): Currency translation adjustment — — Unrealized losses on derivative instruments — — Reclassification adjustment for losses (gains) included in net income — Net gain (loss) recognized in other comprehensive income Tax benefit (expense) related to items of other comprehensive income (loss) Other comprehensive income from parent Total comprehensive income $ $ $ WILLIS LEASE FINANCE CORPORATION AND SUBSIDIA RIES SCHEDULE I — CONDENSED STATEMENTS OF CASH FLOWS Parent Company Information (In thousands) Years Ended December 31, 2015 2014 2013 Cash flows from operating activities: Net income $ $ $ Adjustments to reconcile net income to net cash provided by operating activities: Equity in income of subsidiaries Depreciation expense Write-down of equipment Stock-based compensation expenses Amortization of deferred costs Amortization of interest rate derivative cost — Allowances and provisions Gain on sale of leased equipment Gain on insurance settlement — — Income from joint ventures Deferred income taxes Changes in assets and liabilities: Receivables Spare parts inventory — Other assets Accounts payable and accrued expenses Due to / from subsidiaries Maintenance reserves Security deposits Unearned lease revenue Net cash provided by operating activities Cash flows from investing activities: Increase in investment in subsidiaries Distributions received from subsidiaries Proceeds from sale of equipment held for operating lease (net of selling expenses) Capital contribution to joint venture Distributions received from joint venture — Acquisition of J.T. Power, net of cash acquired — — Acquisition of WOLF, net of cash acquired — — 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 notes payable Debt issuance cost Proceeds from shares issued under stock compensation plans Cancellation of restricted stock units in satisfaction of withholding tax Security deposit Repurchase of common stock Excess tax benefit from stock-based compensation — Principal payments on notes payable Net cash provided by financing activities Increase/(Decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ Supplemental disclosures of cash flow information: Net cash paid for: Interest $ $ $ Income Taxes $ $ $ Supplemental disclosures of non-cash investing activities: During the years ended December 31, 2015, 2014, 2013, engines and equipment totaling $21,786, $3,071 and $422, respectively, were transferred from Held for Operating Lease to Held for Sale. During the years ended December 31, 2015, 2014, 2013, engines and equipment totaling $41,410, $120,880 and $116,020, respectively, were transferred to the parent from its subsidiaries. During the years ended December 31, 2015 and 2014, engines and equipment totaling $6,061 and $9,649, respectively, were transferred from Held for Sale to Spare Parts Inventory. |
SCHEDULE II - VALUATION ACCOUNT
SCHEDULE II - VALUATION ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE II - VALUATION ACCOUNTS | |
SCHEDULE II - VALUATION ACCOUNTS | WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE II — VALUATION ACCOUNTS (In thousands) Additions Balance at Charged Net Beginning (Credited) (Deductions) Balance at of Period to Expense Recoveries End of Period December 31, 2013 Accounts receivable, allowance for doubtful accounts December 31, 2014 Accounts receivable, allowance for doubtful accounts December 31, 2015 Accounts receivable, allowance for doubtful accounts — Deductions in allowance for doubtful accounts represent uncollectible accounts written off, net of recoveries. |
Organization and Summary of S30
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies - Organization and Investments | |
Organization | (a) Organization Willis Lease Finance Corporation (“Willis” or the “Company”) is a provider of aviation services whose primary focus is providing operating leases of commercial aircraft engines and other aircraft-related equipment to air carriers, manufacturers and overhaul/repair facilities worldwide. Willis also engages in the selective purchase and resale of commercial aircraft engines. WLFC (Ireland) Limited, WLFC Funding (Ireland) Limited and WLFC Lease (Ireland) Limited are wholly-owned Irish subsidiaries of Willis formed to facilitate certain of Willis’ international leasing activities. Willis Aviation Finance Limited in Ireland is a wholly-owned subsidiary formed to facilitate the leasing and technical support of worldwide activities. Willis Lease France is a wholly-owned French subsidiary of Willis formed to facilitate sales and marketing activities in Europe. Willis Lease (China) Limited is a wholly-owned subsidiary of Willis formed to facilitate the acquisition and leasing of assets in China. Willis Engine Securitization Trust II (“WEST II”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an asset-backed securitization. WEST Engine Acquisition LLC and Facility Engine Acquisition LLC are wholly-owned subsidiaries of WEST II and own the engines which secure the notes issued by WEST II. Willis Engine Securitization (Ireland) Limited is another wholly-owned subsidiary of WEST II and was established to facilitate certain international leasing activities by WEST II. WEST II is a variable interest entity which the Company owns 100% of the equity and consolidates in our financial statements. Prior to September 18, 2013, we held a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On September 18, 2013, we completed the acquisition of the fifty percent membership interest held by the other joint venture partner in WOLF. As a result of the transaction, we now own one hundred percent of WOLF. The WOLF assets and liabilities and the results of operations have been included in the accompanying consolidated financial statements as of the acquisition date, September 18, 2013. During 2015 we dissolved WOLF and the associated entities. In 2013, the Company launched Willis Aeronautical Services, Inc. (“Willis Aero”), a wholly-owned subsidiary, whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment from third parties of aircraft and engines. |
Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements include the accounts of Willis, WEST Engine Funding LLC, WEST Engine Funding (Ireland) Limited, WEST Engine Acquisition LLC, Facility Engine Acquisition LLC, WLFC (Ireland) Limited, Willis Lease (Ireland) Limited, WLFC Funding (Ireland) Limited, Willis Aviation Finance Limited, Willis Lease France, Willis Lease (China) Limited, WEST Engine Securitization Trust II, Willis Engine Securitization (Ireland) Limited, Willis Aero and Willis Lease Singapore Pte. Ltd. (together, the “Company”). We evaluate all entities in which we have an economic interest firstly to determine whether for accounting purposes the entity is a variable interest entity or voting interest entity. If the entity is a variable interest entity we consolidate the financial statements of that entity if we are the primary beneficiary of the entities’ activities. If the entity is a voting interest entity we consolidate the entity when we have a majority of voting interests. All inter-company balances are eliminated upon consolidation. |
Revenue Recognition | (c) Revenue Recognition Revenue from leasing of aircraft 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. We regularly sell equipment from our lease portfolio. This equipment may or may not be subject to a lease at the time of sale. The 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 engine are not included in the sale we include any such amount in our calculation of gain or loss. The Company evaluates sales arrangements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition: Multiple Element Arrangements (“FASB ASC 605-25”), which addresses accounting for multiple element arrangements. The Company has determined that two deliverables, the sale of equipment and the management services, are separate units of accounting. Therefore, revenue is recognized in accordance with FASB ASC 605-10-S99, Revenue Recognition: Overall: SEC Materials, formerly SAB 104, for each unit. For multiple deliverable revenue arrangements, the Company allocates revenue to equipment sales and management services using the relative selling price method to recognize revenue when the revenue recognition criteria for each deliverable are met. The selling price of a deliverable is based on a hierarchy and if the Company is unable to establish vendor-specific objective evidence of selling price (“VSOE”) it uses third-party evidence of selling price (“TPE”), and if no such data is available, it uses a best estimated selling price (“BSP”). When VSOE cannot be established, the Company attempts to establish the selling price of each element based on TPE. When the Company is unable to establish selling price using VSOE or TPE, the Company uses BSP. The objective of BSP is to determine the price at which the Company would transact a sale if the equipment or service were sold on a stand-alone basis. The selling price of the service elementis based on TPE and is determined by reviewing information from management agreements entered into by other parties on a standalone basis, compared it to the management agreements entered into with the investor group and determined that the fees charged on a standalone basis were comparable to the fees charged when the Company entered into the management agreement concurrent with the sale of the portfolio of engines. Accordingly, the Company determined that the fees charged for its management services were comparable to those charged by other asset managers for the same service. The Company recognizes revenue from management fees under equipment management agreements as earned on a monthly basis. Management fees are based upon a percentage of net lease rents of the investor group’s engine portfolio calculated on an accrual basis and recorded in Other revenue. Under the terms of some of our leases, the lessees pay use fees (also known as maintenance reserves) to us 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 or the lease terminates, 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, 2015, we had an aggregate of approximately $5.3 million in lease rent and $2.9 million in maintenance reserve receivables more than 30 days past due. Our 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 us. The Company estimates an allowance for doubtful accounts for lease 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. We recognize sales of spare parts upon shipping and the amount reported as cost of sales is recorded at specific cost. Our largest customer accounted for approximately 8.4% of total lease rent revenue during 2015. This customer had no past due receivables as of December 31, 2015. No customer accounted for greater than 10% of total lease rent revenue in 2014 and 2013. |
Equipment Held for Operating Lease | (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 us, 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. We do 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, we generally depreciate engines on a straight-line basis over a 15 -year period from the acquisition date to a 55% residual value. We believe that this methodology accurately reflects our typical holding period for the assets and, that the residual value assumption reasonably approximates the selling price of the assets 15 years from date of acquisition. Our typical 15 year holding period is the estimated useful life of our engines based on our business model and plans, and represents how long we anticipate holding a newly acquired engine. The technical useful life of a new engine can be in excess of 25 years. We review 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 useful life of older generation engines and aircraft may be significantly less than 15 years, 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 our 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, we depreciate 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, 2015, 52 engines and 5 aircraft having a net book value of $129.6 million were depreciated under this policy with estimated useful lives ranging from 3 to 78 months. We adjust our estimates annually for these older generation assets, including updating our 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. For engines or aircraft that are unlikely to be repaired at the end of the current expected useful lives, we depreciate 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. The aircraft owned by us 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 spare parts packages owned by us are depreciated on a straight-line basis over an estimated useful life of 14 - 15 years to a 25% residual value. The Company reviews its long-lived assets 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 comparison of undiscounted forecasted cash flows, including estimated sales proceeds, over the life of the asset with the assets’ book value. If the forecasted undiscounted 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 Management. We conduct a formal annual review of the carrying value of long-lived assets and also evaluate assets during the year if we note a triggering event indicating impairment is possible. Such review resulted in an impairment charge of $0.6 million and $2.4 million in 2015 and 2014, respectively (Included in “Write-down of equipment” in the Consolidated Statements of Income). No impairment charges were recorded in 2013 as a result of our review. |
Debt Issuance Costs and Related Fees | (e) Debt Issuance Costs and Related Fees To the extent that we are required to pay fees in order to secure debt, such fees are capitalized, included in Other Assets on the Consolidate Balance Sheet, and amortized over the life of the related loan using the effective interest method. |
Maintenance and Repair Costs | (f) Maintenance and Repair Costs Maintenance and repair costs under our leases are generally the responsibility of the lessees. Under many of our leases, lessees pay periodic use fees (often called maintenance reserves) to us based on the usage of the asset. Under the terms of some of our leases, the lessees pay amounts to us based on usage, which are designed to cover the expected maintenance cost. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures. Use fees billed are recognized in maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are included in maintenance reserve liability until they are reimbursed to the lessee or the lease terminates, at which time they are recognized in maintenance reserve revenue. Our expenditures for maintenance are expensed as incurred. Expenditures that meet the criteria for capitalization are recorded as an addition to equipment recorded on the balance sheet. Major overhauls paid for by us, which improve functionality or extend the remaining 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. We do not accrue for planned major maintenance. |
Interest Rate Hedging | (g) Interest Rate Hedging We enter into various derivative instruments periodically to mitigate the exposure on our variable rate borrowings. The derivative instruments are fixed-rate interest swaps that are recorded at fair value as either an asset or liability. The last of our hedge instruments matured in November 2013. While substantially all our 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 we have designated as hedges are cash flow hedges . The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings. The ineffective portion of the hedges is recorded in earnings in the current period. |
Income Taxes | (h) Income Taxes We use 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 9). The Company files income tax returns in various states and countries which may have different statutes of limitations. The open tax years for federal and state tax purposes are from 2012-2014 and 2011-2014, respectively. The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Such adjustments have historically been minimal and immaterial to our financial results. |
Property, Equipment and Furnishings | (i) Property, Equipment and Furnishings Property, equipment and furnishings are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three to fifteen 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 | (j) Cash and Cash Equivalents We consider highly liquid investments readily convertible into known amounts of cash, with original maturities of 90 days or less, as cash equivalents. |
Restricted Cash | (k) Restricted Cash We have certain bank accounts that are subject to restrictions in connection with our WEST II borrowings. Under WEST II, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of maintenance reserve payments and all lease security deposits are accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Under WEST II, cash from maintenance reserve payments are held in the restricted cash account equal to the maintenance obligations projected for the subsequent six months, and are subject to a minimum balance of $9.0 million. Security deposits are held until the end of the lease, at which time provided return conditions have been met, the deposit will be returned to the lessee. To the extent return conditions are not met, these deposits may be retained by us. |
Spare Parts Inventory | (l) Spare Parts Inventory Inventory consists of spare aircraft and engine parts and 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 | (m) Intangible Assets Intangible assets include customer relationships and goodwill arising from the Company’s acquisition of J.T. Power (see Footnote 6. Acquisition). Intangible assets are accounted for in accordance with FASB ASC 350, “Intangibles — Goodwill and Other.” Goodwill is assessed for impairment annually. 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. |
Management Estimates | (n) Management Estimates These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The preparation of consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to residual values, estimated asset lives, impairments and bad debts. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the accounting policies on revenue recognition, maintenance reserves and expenditures, useful life of equipment, asset residual values, asset impairment and allowance for doubtful accounts are critical to the results of operations. If the useful lives or residual values are lower than those estimated by us, upon sale of the asset a loss may be realized. Significant management judgment is required in the forecasting of future operating results, which are used in the preparation of projected undiscounted cash-flows and should different conditions prevail, material impairment write-downs may occur. |
Per share information | (o) Per share information Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. The computation of fully diluted earnings per share is similar to the computation of basic earnings per share, except for the inclusion of all potentially dilutive common shares. The reconciliation between basic common shares and fully diluted common shares is presented below: Years Ended December 31, 2015 2014 2013 (in thousands) Shares: Weighted-average number of common shares outstanding Dilutive and potentially dilutive common shares Total shares |
Investments | (p) Investments Our investment in the WMES and CASC Willis joint ventures, where we own 50% of the equity of the ventures, 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. Prior to September 18, 2013, we held a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On September 18, 2013, we completed the acquisition of the fifty percent membership interest held by the other joint venture partner in WOLF. Prior to that date, the investment in the WOLF joint venture was accounted for using the equity method of accounting. As a result of the transaction, we now own one hundred percent of WOLF. The WOLF assets and liabilities and the results of operations have been included in the accompanying consolidated financial statements as of the acquisition date, September 18, 2013. |
Stock Based Compensation | (q) Stock Based Compensation We recognize compensation expense in the financial statements for share-based awards based on the grant-date fair value of those awards. Additionally, stock-based compensation expense includes an estimate for pre-vesting forfeitures and is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. |
Initial Direct Costs associated with Leases | (r) Initial Direct Costs associated with Leases We account for the initial direct costs, including sales commission 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 $1.6 million, $1.5 million and $1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Fair Value Measurements | (s) Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible. We use a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value which are the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis We determine fair value of long-lived assets held and used, such as Equipment held for operating lease and Equipment held for sale, by reference to independent appraisals, quoted market prices (e.g. an offer to purchase) and other factors. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. The following table shows by level, within the fair value hierarchy, the Company’s assets measured at fair value on a nonrecurring basis during the years ended December 31, 2015 and 2014, and the losses recorded during the years ended December 31, 2015 and 2014 on those assets: Assets at Fair Value Total Losses December 31, 2015 December 31, 2014 December 31, Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 2015 2014 (in thousands) (in thousands) Equipment held for lease $ $ — $ $ — $ $ — $ $ — $ $ Equipment held for sale — — — — Spare parts inventory — — — — — — — Total $ $ — $ $ — $ $ — $ $ — $ $ At December 31, 2015, the Company used Level 2 inputs to measure equipment held for lease, equipment held for sale, and spare parts inventory. Level 2 inputs include quoted prices for similar assets in inactive markets. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. Write-downs of equipment to their estimated fair values totaled $9.2 million for the year ended December 31, 2015 compared to $5.6 million recorded in the year ago period. A write-down of equipment totaling $5.5 million was recorded in the year ended December 31, 2015 due to a management decision to consign four engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out. Write-downs on held for use equipment to their estimated fair values totaled $0.6 million for the year ended December 31, 2015 due to an adjustment of carrying values for certain impaired parts packages within the portfolio to reflect estimated market values. A further write-down of $2.8 million was recorded in the year ended December 31, 2015 to adjust the carrying value of engine parts for which market conditions for the sale of parts has changed. An additional write-down of $0.3 million was recorded in the year ended December 31, 2015 based on a comparison of the inventory values with the revised net proceeds expected from part sales. A write-down of equipment totaling $5.6 million was recorded in the year ended December 31, 2014. This amount includes a write-down of equipment totaling $2.6 million due to a management decision to consign six engines for part-out and sale, in which the assets’ net book value exceeded the estimated proceeds from part-out. Write-downs on held for use equipment to their estimated fair values totaled $2.4 million for the year ended December 31, 2014, due to the adjustment of carrying values for certain impaired engines within the portfolio to reflect estimated market values. A further write-down of $0.6 million was recorded in the year ended December 31, 2014 to adjust the carrying value of engine parts for which market conditions for the sale of parts has changed. |
Foreign Currency Translation | (t) Foreign Currency Translation The Company’s foreign investments have been converted at rates of exchange at December 31, 2015. The changes in exchange rates in our foreign investments reported under the equity method are included in stockholders’ equity as accumulated other comprehensive income. |
Recent Accounting Pronouncements | (u) Recent Accounting Pronouncement s In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, “ Leases ” (topic 842) . The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The updated guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the update is permitted. The Company is evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU , Simplifying the Measurement of Inventory, which simplifies the measurement of inventory by requiring certain inventory to be measured at the lower of cost or net realizable value. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016 and for interim periods therein. We are evaluating the impact that this new guidance will have on our consolidated financial position. In April 2015, the FASB issued ASU, Simplifying the Presentation of Debt Issuance Costs, which will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable IFRS standards by requiring that debt issuance costs be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to the presentation of debt discounts or premiums. This accounting guidance is effective for us beginning in the first quarter of 2016. The unamortized debt issuance cost balances were $12.6 million and $15.5 million as of December 31, 2015 and December 31, 2014, respectively, and would reduce our Notes Payable balances accordingly on our Consolidated Balance Sheet for those periods under this ASU. In May 2014, the FASB issued an ASU, Revenue from Contracts with Customers, which supersedes previous revenue recognition guidance. The new standard requires that a company recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. Companies will need to use more judgment and estimates than under the guidance currently in effect, including estimating the amount of variable revenue to recognize over each identified performance obligation. Additional disclosures will be required to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of periods beginning after December 15, 2016 (including interim reporting periods within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements. |
Organization and Summary of S31
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies - Organization and Investments | |
Schedule of reconciliation between basic common shares and fully diluted common shares | Years Ended December 31, 2015 2014 2013 (in thousands) Shares: Weighted-average number of common shares outstanding Dilutive and potentially dilutive common shares Total shares |
Schedule of fair value hierarchy of assets measured on nonrecurring basis and gain (losses) recorded | Assets at Fair Value Total Losses December 31, 2015 December 31, 2014 December 31, Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 2015 2014 (in thousands) (in thousands) Equipment held for lease $ $ — $ $ — $ $ — $ $ — $ $ Equipment held for sale — — — — Spare parts inventory — — — — — — — Total $ $ — $ $ — $ $ — $ $ — $ $ |
Equipment Held for Operating 32
Equipment Held for Operating Lease (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equipment Held for Operating Lease [Abstract] | |
Schedule of geographic information about the entity's leased aircraft equipment grouped by domicile of the lessee | Years Ended December 31, Lease rent revenue 2015 2014 2013 (in thousands) Region Europe $ $ $ Asia South America United States Mexico Canada Middle East Africa Totals $ $ $ Years Ended December 31, Lease rent revenue less applicable depreciation and interest 2015 2014 2013 (in thousands) Region United States $ $ $ Mexico Canada Europe South America Asia Africa Middle East Off-lease and other Totals $ $ $ Years Ended December 31, Net book value of equipment held for operating lease 2015 2014 2013 (in thousands) Region United States $ $ $ Mexico Canada Europe South America Asia Africa Middle East Off-lease and other Totals $ $ $ |
Schedule of lease status of the equipment held for operating lease | December 31, 2015 Lease Term Net Book Value (in thousands) Off-lease and other $ Month-to-month leases Leases expiring 2016 Leases expiring 2017 Leases expiring 2018 Leases expiring 2019 Leases expiring 2020 Leases expiring thereafter $ December 31, 2014 Lease Term Net Book Value (in thousands) Off-lease and other $ Month-to-month leases Leases expiring 2015 Leases expiring 2016 Leases expiring 2017 Leases expiring 2018 Leases expiring 2019 Leases expiring thereafter $ |
Schedule of minimum future payments under non-cancelable leases | Year (in thousands) 2016 $ 2017 2018 2019 2020 Thereafter $ |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments [Abstract] | |
Schedule of investments | Years Ending December 31, 2015 and 2014 (in thousands) WMES CASC Willis Total Investment in joint ventures as of December 31, 2013 $ $ — $ Investment Earnings (losses) from joint ventures Amortization of deferred gain — Distribution — Investment in joint ventures as of December 31, 2014 $ $ $ Investment — Earnings (losses) from joint ventures Amortization of deferred gain — Distribution — Foreign Currency Translation Adjustment — Investment in joint ventures as of December 31, 2015 $ $ $ |
Summarized financial information | Years Ended December 31, 2015 2014 2013 (in thousands) Revenue $ $ $ Expenses WMES net income $ $ $ December 31, December 31, 2015 2014 (in thousands) Total assets $ $ Total liabilities Total WMES net equity $ $ |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable | |
Schedule of notes payable | As of December 31, 2015 2014 (in thousands) Credit facility at a floating rate of interest of LIBOR plus 2.75% , secured by engines. The facility has a committed amount of $700.0 million at December 31, 2015 , which revolves until the maturity date of June 2019. $ $ WEST II Series 2012-A term notes payable at a fixed rate of interest of 5.50% , maturing in September 2037. Secured by engines. Note payable at fixed interest rates ranging from 2.60% to 2.97% , maturing in July 2024. Secured by an aircraft. Note payable at a variable interest rate of LIBOR plus 2.25% , maturing in January 2018. Secured by engines. Note payable at a variable interest rate of LIBOR plus 4.00% , repaid in March 2015. Secured by engines. — Note payable at a fixed interest rate of 5.50% , repaid in July 2015 . Secured by one engine. — Total notes payable $ $ |
Schedule or principal outstanding | Year (in thousands) 2016 $ 2017 2018 2019 (includes $549.0 million outstanding on revolving credit facility) 2020 Thereafter $ |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments | |
Schedule of income effects of cash flow hedging relationships | Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income Derivatives in Cash Flow Hedging Location of Loss (Gain) Recognized on Years Ended December 31, Relationships Derivatives in the Statements of Income 2015 2014 2013 (in thousands) Interest rate contracts Interest expense $ — $ $ Total $ — $ $ |
Schedule of information about financial statement effects related to cash flow hedges | Amount of Gain (Loss) Recognized Location of Loss (Gain) Amount of Loss (Gain) Reclassified in OCI on Derivatives Reclassified from from Accumulated OCI into Income Derivatives in (Effective Portion) Accumulated OCI into (Effective Portion) Cash Flow Hedging Years Ended December 31, Income Years Ended December 31, Relationships 2015 2014 2013 (Effective Portion) 2015 2014 2013 (in thousands) (in thousands) Interest rate contracts* $ — $ — $ Interest expense $ — $ $ Total $ — $ — $ Total $ — $ $ * These amounts are shown net of $1.9 million of interest payments reclassified to the income statement during the year ended December 31, 2013. No interest payments were reclassified to the income statement in 2015 and 2014. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of components of income (loss) from continuing operation before income taxes | Years ended December 31, 2015 2014 2013 (in thousands) U.S. $ $ $ Non U.S. Income from continuing operations before income taxes $ $ $ |
Schedule of components of income tax expense | Federal State Foreign Total (in thousands) December 31, 2015 Current $ $ $ $ Deferred — Total 2015 $ $ $ $ December 31, 2014 Current $ $ $ $ Deferred — Total 2014 $ $ $ $ December 31, 2013 Current $ $ $ $ Deferred — Total 2013 $ $ $ $ |
Schedule of reconciliation of the federal income tax expense at the statutory rate to the effective income tax expense | Years Ended December 31, 2015 2014 2013 (in thousands and % of pre-tax income) $ % $ % $ % Statutory federal income tax expense State taxes, net of federal benefit Foreign tax paid Tax consequences of the sale of engines to WMES Uncertain tax positions Permanent differences-nondeductible executive compensation ETI basis restoration — — — — Permanent differences and other Effective income tax expense (benefit) |
Summary of activity related to the Company's unrecognized tax benefits | (in thousands) Balance as of December 31, 2013 $ Increases related to current year tax positions Decreases due to tax positions released Balance as of December 31, 2014 Increases related to current year tax positions Decreases due to tax positions expired Balance as of December 31, 2015 $ |
Schedule of tax effects of temporary differences of the deferred tax assets and liabilities | As of December 31, 2015 2014 (in thousands) Deferred tax assets: Unearned lease revenue $ $ State taxes Reserves and allowances Other accruals Alternative minimum tax credit Net operating loss carry forward Charitable contributions Total deferred tax assets Less: valuation allowance Net deferred tax assets Deferred tax liabilities: Depreciation and impairment on aircraft engines and equipment Other deferred tax assets (liabilities) Net deferred tax liabilities Other comprehensive loss deferred tax asset — Net deferred tax liabilities $ $ |
Commitments, Contingencies, G37
Commitments, Contingencies, Guarantees and Indemnities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments, Contingencies, Guarantees and Indemnities | |
Lease commitments | Lease Remaining Lease Location Property Type Expiration Commitment (in thousands) Novato, California Principal Office 09/30/18 $ Boynton Beach, Florida Warehouse and office 10/29/19 San Diego, California Warehouse and office 10/31/16 Singapore Office 12/31/16 Shanghai, China Office 12/31/16 Shanghai, China Warehouse 07/31/17 Dublin, Ireland Office 05/31/17 London, United Kingdom Office 07/31/16 Blagnac, France Office 12/31/16 Total $ |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-based compensation plans | |
Schedule of components of stock compensation expense | 2015 2014 2013 (in thousands) 2007 Stock Incentive Plan $ $ $ Employee Stock Purchase Plan Total Stock Compensation Expense $ $ $ |
Summary of the activity under the 1996 Plan | Weighted Average Remaining Options Weighted Contractual Available Average Term (in Aggregate for Grant Options Exercise Price years) Intrinsic Value Outstanding as of December 31, 2012 — $ $ Options exercised — Options cancelled — Outstanding as of December 31, 2013 — $ $ Options exercised — Options cancelled — — — Outstanding as of December 31, 2014 — $ $ Options exercised — Options cancelled — — — Outstanding as of December 31, 2015 — — $ — — $ — Vested and expected to vest at: December 31, 2015 — $ — — $ — Options exercisable at: December 31, 2013 $ $ December 31, 2014 $ $ December 31, 2015 — $ — — $ — |
Restricted stock | |
Stock-based compensation plans | |
Summary of activity under the 2007 Plan | Shares Restricted stock at December 31, 2012 Granted in 2013 (vesting over 4 years) Granted in 2013 (vesting on first anniversary from date of issuance) Cancelled in 2013 Vested in 2013 Restricted stock at December 31, 2013 Granted in 2014 (vesting over 3 years) Granted in 2014 (vesting over 4 years) Granted in 2014 (vesting on first anniversary from date of issuance) Cancelled in 2014 Vested in 2014 Restricted stock at December 31, 2014 Granted in 2015 (vesting over 3 years) Granted in 2015 (vesting over 4 years) Granted in 2015 (vesting on first anniversary from date of issuance) Cancelled in 2015 — Vested in 2015 Restricted stock at December 31, 2015 |
Summary of activity under the 2007 Plan | Weighted Average Number Outstanding Grant Date Fair Value Aggregate Value Balance as of December 31, 2012 $ $ Shares granted Shares cancelled Shares vested Balance as of December 31, 2013 $ $ Shares granted Shares cancelled Shares vested Balance as of December 31, 2014 $ $ Shares granted Shares cancelled — — — Shares vested Balance as of December 31, 2015 $ $ |
Quarterly Consolidated Financ39
Quarterly Consolidated Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Consolidated Financial Information (Unaudited) | |
Summary of the unaudited quarterly results of operations | Fiscal 2015 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Total revenue $ $ $ $ $ Net income (loss) Basic earnings (loss) per common share Diluted earnings (loss) per common share Average common shares outstanding Diluted average common shares outstanding Fiscal 2014 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Total revenue $ $ $ $ $ Net income (loss) Basic earnings (loss) per common share Diluted earnings (loss) per common share Average common shares outstanding Diluted average common shares outstanding Fiscal 2013 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year Total revenue $ $ $ $ $ Net income (loss) Basic earnings (loss) per common share Diluted earnings (loss) per common share Average common shares outstanding Diluted average common shares outstanding |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Operating Segments | |
Summary of the operating segments | Leasing and For the year ended December 31, 2015 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — General and administrative — Net finance costs — Other expense — — Total expenses — Earnings from operations $ $ $ $ Leasing and For the year ended December 31, 2014 Related Operations Spare Parts Sales Eliminations (1) Total Revenue: Lease rent revenue $ $ — $ — $ Maintenance reserve revenue — — Spare parts and equipment sales — — Gain on sale of leased equipment — — Other revenue Total revenue Expenses: Depreciation and amortization expense — Cost of spare parts and equipment sales — — General and administrative — Net finance costs — Other expense — Total expenses — Earnings (loss) from operations $ $ $ $ (1) Represents revenue generated between our operating segments Total assets as of December 31, 2015 $ $ $ — $ Total assets as of December 31, 2014 $ $ $ — $ |
Organization and Summary of S41
Organization and Summary of Significant Accounting Policies (Organization and Revenue Recognition) (Details) - USD ($) | Sep. 18, 2013 | Dec. 31, 2015 | Sep. 16, 2013 |
Revenue Recognition | |||
Lease rent to be received, more than 30 days past due | $ 5,300,000 | ||
Maintenance reserve payments to be received, more than 30 days past due | $ 2,900,000 | ||
Minimum number of days for which lease rent and maintenance reserve payments are past due | 30 days | ||
Revenue | Customer concentration risk | One largest customer | |||
Organizations [Line Items] | |||
Percentage of concentration risk | 8.40% | ||
Lease rents due | $ 0 | ||
WOLF | |||
Organizations [Line Items] | |||
Previously held interest (as a percent) | 50.00% | ||
Acquisition of the remaining outstanding shares (as a percent) | 50.00% | ||
Controlling interest assumed (as a percent) | 100.00% | ||
WOLF | |||
Organizations [Line Items] | |||
Previously held interest (as a percent) | 50.00% |
Organization and Summary of S42
Organization and Summary of Significant Accounting Policies (Equipment Held of Operating Lease) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)engineaircraft | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Equipment Held for Operating Lease | |||
Impairment charge | $ 9,181 | $ 5,602 | $ 6,461 |
Minimum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 3 years | ||
Maximum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 15 years | ||
Engines and related equipment | |||
Equipment Held for Operating Lease | |||
Number of engines | engine | 52 | ||
Engines and related equipment | Maximum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 15 years | ||
Aircraft | |||
Equipment Held for Operating Lease | |||
Number of aircraft | aircraft | 5 | ||
Aircraft | Minimum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 13 years | ||
Residual value (as a percent) | 15.00% | ||
Aircraft | Maximum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 20 years | ||
Residual value (as a percent) | 17.00% | ||
Engines and aircraft | |||
Equipment Held for Operating Lease | |||
Equipment net book value | $ 129,600 | ||
Impairment charge | $ 600 | $ 2,400 | $ 0 |
Engines and aircraft | Minimum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 3 years | ||
Engines and aircraft | Maximum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 78 years | ||
New engine [Member] | Maximum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 25 years | ||
Equipment held for lease Member | Engines and related equipment | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 15 years | ||
Residual value (as a percent) | 55.00% | ||
Equipment held for lease Member | Spare part packages | |||
Equipment Held for Operating Lease | |||
Residual value (as a percent) | 25.00% | ||
Equipment held for lease Member | Spare part packages | Minimum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 14 years | ||
Equipment held for lease Member | Spare part packages | Maximum | |||
Equipment Held for Operating Lease | |||
Estimated useful life | 15 years |
Organization and Summary of S43
Organization and Summary of Significant Accounting Policies (Property, Equipment and Furnishings and Restricted Cash) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Restricted Cash | |
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 9 |
Projected maintenance obligation period | 6 months |
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 | 15 years |
Organization and Summary of S44
Organization and Summary of Significant Accounting Policies (Intangibles and Per Share Information) (Details) - USD ($) shares in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Shares: | |||||||||||||||
Weighted-average number of common shares outstanding | 7,739 | 7,839 | 7,841 | 7,848 | 7,839 | 7,938 | 7,976 | 7,914 | 7,846 | 8,126 | 8,106 | 8,033 | 7,811 | 7,917 | 8,029 |
Dilutive and potentially dilutive common shares | 171 | 224 | 260 | ||||||||||||
Total shares | 7,872 | 7,963 | 7,991 | 8,044 | 8,037 | 8,123 | 8,179 | 8,129 | 8,084 | 8,329 | 8,303 | 8,273 | 7,982 | 8,141 | 8,289 |
Indefinite lived intangible assets | |||||||||||||||
Intangible Assets | |||||||||||||||
Intangible assets with indefinite useful lives | $ 0 | $ 0 | |||||||||||||
Customer relationships | |||||||||||||||
Intangible Assets | |||||||||||||||
Useful life | 5 years |
Organization and Summary of S45
Organization and Summary of Significant Accounting Policies (Investments and Lease Costs) (Details) - USD ($) $ in Millions | Sep. 18, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 16, 2013 |
Initial Direct Costs associated with Leases | |||||
Amortization of initial direct costs associated with leases | $ 1.6 | $ 1.5 | $ 1.5 | ||
WOLF | |||||
Investments | |||||
Previously held interest (as a percent) | 50.00% | ||||
Acquisition of remaining outstanding shares of previously held equity method investment (as a percent) | 50.00% | ||||
Controlling interest assumed (as a percent) | 100.00% | ||||
WMES | |||||
Investments | |||||
Ownership interest (as a percent) | 50.00% | ||||
WOLF | |||||
Investments | |||||
Previously held interest (as a percent) | 50.00% |
Organization and Summary of S46
Organization and Summary of Significant Accounting Policies (Fair Value Measurements and Recent Accounting Pronouncements) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | $ 23,454 | $ 18,114 | |
Asset write-down | 9,181 | 5,602 | $ 6,461 |
Unamortized debt issuance cost | 12,600 | 15,500 | |
Equipment | |||
Assets at fair value and gains (losses) recorded | |||
Asset write-down | 2,600 | ||
Asset helf-for-use write-down | 600 | 2,400 | |
Engine Parts | |||
Assets at fair value and gains (losses) recorded | |||
Asset write-down | 2,800 | 600 | |
Additional write-down | 300 | ||
Nonrecurring | |||
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | 4,932 | 3,364 | |
Equipment held for lease | 2,154 | 10,787 | |
Spare parts inventory | 2,371 | ||
Assets at fair value | 7,086 | 16,522 | |
Total losses on equipment held for lease | (2,536) | (2,420) | |
Total losses on equipment held for sale | (6,645) | (3,074) | |
Total losses on spare parts inventory | (108) | ||
Total losses on assets | (9,181) | (5,602) | |
Nonrecurring | Equipment | |||
Assets at fair value and gains (losses) recorded | |||
Asset write-down recorded earlier | 5,500 | ||
Nonrecurring | Level 2 | |||
Assets at fair value and gains (losses) recorded | |||
Equipment held for sale | 4,932 | 3,364 | |
Equipment held for lease | 2,154 | 10,787 | |
Spare parts inventory | 2,371 | ||
Assets at fair value | 7,086 | $ 16,522 | |
Engines and related equipment | Nonrecurring | |||
Assets at fair value and gains (losses) recorded | |||
Asset write-down | $ 9,200 |
Equipment Held for Operating 47
Equipment Held for Operating Lease (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)itemregion | Dec. 31, 2014USD ($)aircraftitem | Dec. 31, 2013USD ($) | |
Equipment Held for Lease | |||
Number of geographic regions in which aircraft lessees are domiciled in | region | 8 | ||
Lease rent revenue | $ 107,866 | $ 101,748 | $ 101,737 |
Lease rent revenue less applicable depreciation and interest | 5,658 | 3,809 | 10,679 |
Net book value of equipment held for operating lease | 1,122,859 | 1,066,448 | 1,033,022 |
Minimum future payments under non-cancelable leases | |||
2,016 | 74,133 | ||
2,017 | 47,513 | ||
2,018 | 35,467 | ||
2,019 | 27,434 | ||
2,020 | 21,914 | ||
Thereafter | 24,689 | ||
Minimum future payments | 231,150 | ||
United States | |||
Equipment Held for Lease | |||
Lease rent revenue | 43,577 | 37,990 | 37,788 |
Lease rent revenue less applicable depreciation and interest | 634 | 2,577 | 6,055 |
Net book value of equipment held for operating lease | 103,492 | 61,521 | 103,515 |
Mexico | |||
Equipment Held for Lease | |||
Lease rent revenue | 31,534 | 21,796 | 21,407 |
Lease rent revenue less applicable depreciation and interest | 2,310 | 2,157 | 1,641 |
Net book value of equipment held for operating lease | 42,246 | 64,770 | 75,628 |
Canada | |||
Equipment Held for Lease | |||
Lease rent revenue | 9,688 | 9,907 | 8,794 |
Lease rent revenue less applicable depreciation and interest | (123) | (100) | 747 |
Net book value of equipment held for operating lease | 18,893 | 11,026 | 12,500 |
Europe | |||
Equipment Held for Lease | |||
Lease rent revenue | 9,177 | 11,880 | 14,258 |
Lease rent revenue less applicable depreciation and interest | 11,074 | 6,988 | 5,061 |
Net book value of equipment held for operating lease | 389,721 | 344,833 | 368,381 |
South America | |||
Equipment Held for Lease | |||
Lease rent revenue | 6,906 | 7,771 | 7,387 |
Lease rent revenue less applicable depreciation and interest | 1,929 | 3,503 | 2,995 |
Net book value of equipment held for operating lease | 112,718 | 107,080 | 78,486 |
Asia | |||
Equipment Held for Lease | |||
Lease rent revenue | 2,789 | 4,997 | 2,947 |
Lease rent revenue less applicable depreciation and interest | 8,867 | 5,891 | 5,652 |
Net book value of equipment held for operating lease | 310,292 | 232,448 | 219,123 |
Africa | |||
Equipment Held for Lease | |||
Lease rent revenue | 2,223 | 4,143 | 6,547 |
Lease rent revenue less applicable depreciation and interest | 206 | 1,041 | 837 |
Net book value of equipment held for operating lease | 9,612 | 12,063 | 3,734 |
Middle East | |||
Equipment Held for Lease | |||
Lease rent revenue | 1,972 | 3,264 | 2,609 |
Lease rent revenue less applicable depreciation and interest | 474 | 1,277 | 1,664 |
Net book value of equipment held for operating lease | 18,937 | 17,125 | 58,509 |
Off-lease and other | |||
Equipment Held for Lease | |||
Lease rent revenue less applicable depreciation and interest | (19,713) | (19,525) | (13,973) |
Net book value of equipment held for operating lease | $ 116,948 | $ 215,582 | $ 113,146 |
Equipment held for lease Member | Engines and related equipment | |||
Equipment Held for Lease | |||
Number of equipments held for lease | item | 201 | 207 | |
Cost of equipments held for lease | $ 1,310,700 | $ 1,303,300 | |
Equipment held for lease Member | Spare parts packages | |||
Equipment Held for Lease | |||
Number of equipments held for lease | item | 5 | 5 | |
Cost of equipments held for lease | $ 5,200 | $ 6,100 | |
Equipment held for lease Member | Aircrafts | |||
Equipment Held for Lease | |||
Number of equipments held for lease | 10 | 5 | |
Cost of equipments held for lease | $ 123,500 | $ 38,100 | |
Month-to-month leases | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 90,173 | 97,951 | |
Leases expiring 2015 | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 331,757 | ||
Leases expiring 2016 | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 434,658 | 151,444 | |
Leases expiring 2017 | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 113,879 | 73,387 | |
Leases expiring 2018 | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 87,916 | 62,972 | |
Leases expiring 2019 | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 60,022 | 24,001 | |
Leases expiring 2020 | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | 88,634 | ||
Leases expiring thereafter | |||
Equipment Held for Lease | |||
Net book value of equipment held for operating lease | $ 130,629 | $ 109,354 |
Investments (Details)
Investments (Details) $ in Thousands | Sep. 18, 2013USD ($)item | Jun. 30, 2011item | Dec. 31, 2005USD ($)item | Dec. 31, 2015USD ($)engineitem | Dec. 31, 2015USD ($)engine | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 16, 2013 | May. 25, 2011USD ($) |
Investments | |||||||||
Investment in joint venture | $ 41,295 | $ 41,295 | $ 41,590 | $ 23,485 | |||||
WOLF | |||||||||
Investments | |||||||||
Previously held interest (as a percent) | 50.00% | ||||||||
Acquisition of the remaining outstanding shares (as a percent) | 50.00% | ||||||||
Purchase price consideration | $ 1,000 | ||||||||
Discount from JV partner's equity interest | $ 12,700 | ||||||||
Number of aircraft engines acquired | item | 8 | ||||||||
Number of aircraft airframes acquired | item | 2 | ||||||||
Fair value of the net assets acquired | $ 12,600 | ||||||||
Amount of equipment acquired | 27,000 | ||||||||
Amount of cash and receivables acquired | 1,600 | ||||||||
Amount of debt and other liabilities | $ 16,000 | ||||||||
Controlling interest assumed (as a percent) | 100.00% | ||||||||
WMES | |||||||||
Investments | |||||||||
Initial capital contribution | $ 8,000 | ||||||||
Additional capital contributions | $ 600 | $ 21,000 | |||||||
Number of engines transferred to the joint venture | item | 7 | ||||||||
Number of engines purchased | engine | 21 | ||||||||
Number of engines in lease portfolio | engine | 28 | ||||||||
Capital contributions to date | $ 29,000 | $ 29,000 | |||||||
Proportionate gain on sale of engines to joint venture interest which is off-set against investments | 3,600 | ||||||||
Net investment after deducting partial offset | 25,400 | 25,400 | |||||||
Gain on sale of engines | 7,200 | ||||||||
Investment in joint venture | 27,272 | 27,272 | 26,672 | $ 23,485 | |||||
Reduction Of Net Investment | $ 2,100 | ||||||||
WOLF | |||||||||
Investments | |||||||||
Previously held interest (as a percent) | 50.00% | ||||||||
Number of engines in lease portfolio | item | 8 | ||||||||
Number of Airbus A340-313 aircraft purchased | item | 2 | ||||||||
Purchase price of aircraft | $ 96,000 | ||||||||
Number of aircraft leased to Emirates | item | 2 | ||||||||
CASC Willis | |||||||||
Investments | |||||||||
Investment in joint venture | $ 14,023 | $ 14,023 | $ 14,918 |
Investments (Details)49
Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||
Oct. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 03, 2014 | |
Investments | |||||||||||||||||
Investment in WMES joint ventures at beginning of the period | $ 41,590 | $ 23,485 | $ 41,590 | $ 23,485 | |||||||||||||
Investment | 630 | 17,623 | $ 11,219 | ||||||||||||||
Earnings (losses) from joint ventures | 1,068 | 1,221 | |||||||||||||||
Amortization of deferred gain | 107 | 108 | |||||||||||||||
Distribution | (1,304) | (847) | |||||||||||||||
Foreign Currency Translation Adjustment | 796 | ||||||||||||||||
Investment in WMES joint ventures at end of the period | $ 41,295 | $ 41,590 | $ 23,485 | 41,295 | 41,590 | 23,485 | |||||||||||
Consolidated Statements of Income | |||||||||||||||||
Revenue | 55,195 | $ 57,758 | $ 43,843 | 42,814 | 41,563 | $ 45,519 | $ 43,865 | 43,340 | 47,203 | $ 37,952 | $ 37,953 | $ 35,304 | 199,610 | 174,287 | 158,412 | ||
Expenses | 186,641 | 163,774 | 150,638 | ||||||||||||||
Net income | 2,973 | $ 2,577 | $ (492) | 2,298 | (277) | $ 979 | $ 2,214 | 4,331 | 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | 7,356 | 7,247 | 15,626 | ||
Total assets | 1,308,577 | 1,261,626 | 1,308,577 | 1,261,626 | |||||||||||||
Total liabilities | 1,098,245 | 1,044,765 | 1,098,245 | 1,044,765 | |||||||||||||
Total liabilities and shareholders' equity | $ 1,308,577 | 1,261,626 | $ 1,308,577 | 1,261,626 | |||||||||||||
WMES | |||||||||||||||||
Investments | |||||||||||||||||
Ownership interest (as a percent) | 50.00% | 50.00% | |||||||||||||||
Investment in WMES joint ventures at beginning of the period | 26,672 | $ 23,485 | $ 26,672 | 23,485 | |||||||||||||
Investment | 630 | 2,623 | |||||||||||||||
Earnings (losses) from joint ventures | 1,167 | 1,303 | |||||||||||||||
Amortization of deferred gain | 107 | 108 | |||||||||||||||
Distribution | (1,304) | (847) | |||||||||||||||
Investment in WMES joint ventures at end of the period | $ 27,272 | 26,672 | $ 23,485 | 27,272 | 26,672 | 23,485 | |||||||||||
Management fees | 1,700 | 2,000 | 1,700 | ||||||||||||||
Engine Value | 200 | 200 | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||||
Revenue | 26,909 | 25,757 | 16,312 | ||||||||||||||
Expenses | 24,574 | 23,150 | 15,538 | ||||||||||||||
Net income | 2,335 | 2,607 | 774 | ||||||||||||||
Total assets | 256,126 | 268,924 | 256,126 | 268,924 | |||||||||||||
Total liabilities | 195,258 | 209,044 | 195,258 | 209,044 | |||||||||||||
Total liabilities and shareholders' equity | 60,868 | 59,880 | 60,868 | 59,880 | |||||||||||||
WMES | Other Revenue | |||||||||||||||||
Investments | |||||||||||||||||
Management fees | 1,700 | 2,000 | $ 1,600 | ||||||||||||||
CASC Willis | |||||||||||||||||
Investments | |||||||||||||||||
Ownership interest (as a percent) | 50.00% | ||||||||||||||||
Reduced Investment | 14,000 | ||||||||||||||||
Loss reported | 200 | ||||||||||||||||
Investment in WMES joint ventures at beginning of the period | $ 14,918 | 14,918 | |||||||||||||||
Investment | $ 15,000 | 15,000 | |||||||||||||||
Earnings (losses) from joint ventures | (99) | (82) | |||||||||||||||
Foreign Currency Translation Adjustment | 796 | ||||||||||||||||
Investment in WMES joint ventures at end of the period | $ 14,023 | $ 14,918 | $ 14,023 | $ 14,918 |
Acquisition (Details)
Acquisition (Details) - Asset Purchase Agreement - USD ($) $ in Millions | Nov. 06, 2013 | Dec. 31, 2013 |
Purchase price allocated to major classes of assets | ||
Spare parts inventory | $ 3.4 | |
Accounts receivables | 1.7 | |
Identifiable intangible assets | 1.2 | |
Goodwill | 0.3 | |
J.T. Power | ||
Acquisitions [Line Items] | ||
Value of certain assets purchased | 5.6 | $ 5.6 |
Cash payment for certain asset purchases | 4.5 | 4.5 |
Cash received | 0.4 | $ 0.4 |
J.T. Power | Consignment agreement with guarantee | ||
Acquisitions [Line Items] | ||
Amount owed to the entity related to the minimum guarantee, which is deducted from payment made in cash | $ 0.7 |
Notes Payable (Details)
Notes Payable (Details) | Jul. 10, 2015USD ($) | Mar. 25, 2015USD ($) | Dec. 31, 2014USD ($)item | Jul. 16, 2014USD ($) | Jun. 04, 2014USD ($) | Jan. 10, 2014engine | Sep. 18, 2013USD ($) | Sep. 28, 2012USD ($) | Sep. 17, 2012USD ($)engine | Dec. 31, 2015USD ($)engineitem | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Jun. 30, 2015USD ($)item |
Long Term Debt | |||||||||||||
Notes payable | $ 840,956,000 | $ 878,684,000 | $ 840,956,000 | ||||||||||
One-month LIBOR rate (as a percent) | 0.17% | 0.43% | 0.17% | ||||||||||
Principal outstanding repayable | |||||||||||||
2,016 | $ 22,702,000 | ||||||||||||
2,017 | 23,718,000 | ||||||||||||
2,018 | 33,391,000 | ||||||||||||
2019 (includes $549.0 million outstanding on revolving credit facility) | 572,529,000 | ||||||||||||
2,020 | 23,127,000 | ||||||||||||
Thereafter | 203,217,000 | ||||||||||||
Notes payable | $ 840,956,000 | 878,684,000 | $ 840,956,000 | ||||||||||
Line of credit facility outstanding amount | 549,000,000 | ||||||||||||
Notes payable | $ 840,956,000 | 878,684,000 | 840,956,000 | ||||||||||
Net proceeds received from notes issued and sold | $ 192,700,000 | $ 154,395,000 | $ 130,000,000 | ||||||||||
WOLF | |||||||||||||
Principal outstanding repayable | |||||||||||||
Acquisition of remaining outstanding shares of previously held equity method investment (as a percent) | 50.00% | ||||||||||||
Controlling interest assumed (as a percent) | 100.00% | ||||||||||||
WEST II Series 2012-A term notes payable at a fixed rate of interest maturing in September 2037. Secured by engines | WEST II | |||||||||||||
Long Term Debt | |||||||||||||
Fixed rate (as a percent) | 5.50% | 5.50% | 5.50% | ||||||||||
Notes payable | $ 351,899,000 | $ 300,467,000 | $ 351,899,000 | ||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | 351,899,000 | $ 300,467,000 | 351,899,000 | ||||||||||
Maturity term | 10 years | ||||||||||||
Face amount | $ 390,000,000 | ||||||||||||
Net proceeds received from notes issued and sold | 384,900,000 | ||||||||||||
Number of engines in portfolio offered as collateral | item | 63 | ||||||||||||
Number of business days to pay interest | 5 days | ||||||||||||
WEST II Series 2012-A term notes payable at a fixed rate of interest maturing in September 2037. Secured by engines | WEST II | Minimum | |||||||||||||
Principal outstanding repayable | |||||||||||||
Minimum amount of cash from maintenance reserve payments required to be held in restricted cash account | $ 9,000,000 | ||||||||||||
Note payable at fixed interest rates ranging from 2.60% to 2.97%, maturing in July 2024. Secured by an aircraft | |||||||||||||
Long Term Debt | |||||||||||||
Initial term for interest payment | 5 years | ||||||||||||
Notes payable | 12,909,000 | $ 16,135,000 | 12,909,000 | ||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | 12,909,000 | $ 16,135,000 | 12,909,000 | ||||||||||
Maturity term | 10 years | ||||||||||||
Face amount | $ 13,400,000 | $ 4,700,000 | |||||||||||
Number of term notes held | item | 2 | ||||||||||||
Note payable at fixed interest rates ranging from 2.60% to 2.97%, maturing in July 2024. Secured by an aircraft | Minimum | |||||||||||||
Long Term Debt | |||||||||||||
Fixed rate (as a percent) | 2.60% | ||||||||||||
Note payable at fixed interest rates ranging from 2.60% to 2.97%, maturing in July 2024. Secured by an aircraft | Maximum | |||||||||||||
Long Term Debt | |||||||||||||
Fixed rate (as a percent) | 2.97% | ||||||||||||
Note payable at a fixed interest rate of 2.25%, maturing in January 2018, secured by engines | |||||||||||||
Long Term Debt | |||||||||||||
Notes payable | 14,455,000 | $ 13,082,000 | 14,455,000 | ||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | 14,455,000 | $ 13,082,000 | $ 14,455,000 | ||||||||||
Maturity term | 4 years | ||||||||||||
Number of engines pledged as collateral | engine | 3 | ||||||||||||
Note payable at a fixed interest rate of 2.25%, maturing in January 2018, secured by engines | LIBOR | |||||||||||||
Long Term Debt | |||||||||||||
Basis spread on variable rate (as a percent) | 2.25% | ||||||||||||
Note payable at a fixed interest rate of 2.25%, maturing in January 2018, secured by engines | One-month LIBOR | |||||||||||||
Long Term Debt | |||||||||||||
Fixed rate (as a percent) | 2.25% | ||||||||||||
Note payable at a fixed interest rate of 4.00%, maturing in March 2015, secured by engines | |||||||||||||
Long Term Debt | |||||||||||||
Basis spread on variable rate (as a percent) | 4.00% | ||||||||||||
Notes payable | 24,000,000 | $ 24,000,000 | |||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | 24,000,000 | 24,000,000 | |||||||||||
Note payable at a fixed interest rate of 5.50%, maturing in July 2015. Secured by one engin. | |||||||||||||
Long Term Debt | |||||||||||||
Fixed rate (as a percent) | 5.50% | ||||||||||||
Notes payable | 7,693,000 | 7,693,000 | |||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | $ 7,693,000 | $ 7,693,000 | |||||||||||
Maturity term | 5 years | ||||||||||||
Face amount | $ 8,700,000 | ||||||||||||
Loan Paid off | $ 7,400,000 | ||||||||||||
Number of engines pledged as collateral | engine | 1 | ||||||||||||
Prior WEST notes | |||||||||||||
Long Term Debt | |||||||||||||
Notes payable | 435,900,000 | ||||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | $ 435,900,000 | ||||||||||||
Notes payable Member | |||||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | $ 878,700,000 | ||||||||||||
Interest rate, minimum (as a percent) | 2.60% | ||||||||||||
Interest rate, maximum (as a percent) | 5.50% | ||||||||||||
Notes payable Member | Minimum | |||||||||||||
Principal outstanding repayable | |||||||||||||
Maturity term | 2 years | ||||||||||||
Notes payable Member | Maximum | |||||||||||||
Principal outstanding repayable | |||||||||||||
Maturity term | 8 years 7 months 6 days | ||||||||||||
Revolving credit facility | |||||||||||||
Long Term Debt | |||||||||||||
Maximum borrowing capacity under credit facility | $ 700,000,000 | ||||||||||||
Principal outstanding repayable | |||||||||||||
Leverage ratio | 4.46 | 4.46 | |||||||||||
Remaining borrowing capacity available | $ 270,000,000 | $ 151,000,000 | $ 270,000,000 | ||||||||||
Debt issuance costs | 4,900,000 | ||||||||||||
Maximum borrowing capacity under credit facility before amendment | $ 450,000,000 | ||||||||||||
Extended maturity term | 5 years | ||||||||||||
Revolving credit facility | One-month LIBOR | |||||||||||||
Long Term Debt | |||||||||||||
Variable rate of debt | one-month LIBOR | ||||||||||||
Basis spread on variable rate (as a percent) | 2.75% | ||||||||||||
Revolving credit facility | WEST | |||||||||||||
Principal outstanding repayable | |||||||||||||
Number of engines pledged as collateral | engine | 22 | ||||||||||||
Revolving credit facility | Credit agreement | Minimum | |||||||||||||
Principal outstanding repayable | |||||||||||||
Interest coverage ratio | 2.25 | ||||||||||||
Revolving credit facility | Credit agreement | Maximum | |||||||||||||
Principal outstanding repayable | |||||||||||||
Leverage ratio | 5 | ||||||||||||
Credit facility at a floating rate of interest of LIBOR plus 2.75%, secured by engines | |||||||||||||
Long Term Debt | |||||||||||||
Maximum borrowing capacity under credit facility | $ 700,000,000 | ||||||||||||
Notes payable | $ 430,000,000 | 549,000,000 | 430,000,000 | ||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | 430,000,000 | $ 549,000,000 | $ 430,000,000 | ||||||||||
Credit facility at a floating rate of interest of LIBOR plus 2.75%, secured by engines | LIBOR | |||||||||||||
Long Term Debt | |||||||||||||
Basis spread on variable rate (as a percent) | 2.75% | 2.75% | |||||||||||
Term notes | WOLF | |||||||||||||
Long Term Debt | |||||||||||||
Notes payable | 24,000,000 | $ 24,000,000 | |||||||||||
Principal outstanding repayable | |||||||||||||
Notes payable | $ 24,000,000 | $ 24,000,000 | |||||||||||
Face amount | $ 36,000,000 | ||||||||||||
Loan Paid off | $ 23,100,000 | ||||||||||||
Discount (in percentage) | 5.00% | ||||||||||||
Number of term notes held | item | 2 | 2 |
Derivative Instruments (Details
Derivative Instruments (Details) - Interest rate contracts $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | |
Derivative instruments | ||
Variable rate of debt | one-month LIBOR | one-month LIBOR |
Borrowings at variable interest rates | $ 562.1 | $ 468.5 |
Number of interest rate swap agreements | item | 0 | 1 |
Notional amount outstanding | $ 100 | |
Fixed interest rate (as a percent) | 2.10% | |
(Benefit) expense recorded to net finance costs | $ (0.5) | $ 1.5 |
Derivative Instruments (Detai53
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest rate contracts | ||||
Effects of derivative instruments | ||||
Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income | $ (1,500) | $ 0 | $ (500) | |
Cash Flow Hedging | ||||
Effects of derivative instruments | ||||
Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income | (499) | $ 1,485 | ||
Cash Flow Hedging | Interest rate contracts | Interest expense Member | ||||
Effects of derivative instruments | ||||
Amount of Loss (Gain) Recognized on Derivatives in the Statements of Income | $ (499) | $ 1,485 |
Derivative Instruments (Detai54
Derivative Instruments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effects of derivative instruments | |||
Amount of Gain Recognized in OCI on Derivatives (Effective Portion) | $ (796,000) | $ (499,000) | $ 1,298,000 |
Parent Company | |||
Effects of derivative instruments | |||
Amount of Gain Recognized in OCI on Derivatives (Effective Portion) | 796,000 | 499,000 | (1,298,000) |
Cash Flow Hedging | |||
Effects of derivative instruments | |||
Amount of Gain Recognized in OCI on Derivatives (Effective Portion) | 1,690,000 | ||
Amount of Loss (Gain) Reclassified from Accumulated OCI into Income (Effective Portion) | (499,000) | 1,485,000 | |
Significant ineffectiveness on held hedges | 0 | 0 | 0 |
Cash Flow Hedging | Interest expense Member | |||
Effects of derivative instruments | |||
Amount of Loss (Gain) Reclassified from Accumulated OCI into Income (Effective Portion) | (499,000) | 1,485,000 | |
Cash Flow Hedging | Interest rate contracts | |||
Effects of derivative instruments | |||
Amount of Gain Recognized in OCI on Derivatives (Effective Portion) | 1,690,000 | ||
Amount of interest payments reclassified to income statement | $ 0 | $ 0 | $ 1,900,000 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Before Taxes and of Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes | |||
U.S. | $ 12,688 | $ 10,535 | $ 10,408 |
Non U.S. | 1,456 | 1,307 | 892 |
Income (loss) before income taxes | 14,144 | 11,842 | 11,300 |
Federal | |||
Current | (208) | 109 | (155) |
Deferred | 5,332 | 3,832 | (3,755) |
Total | 5,124 | 3,941 | (3,910) |
State | |||
Current | 13 | 179 | 123 |
Deferred | 1,175 | 164 | (634) |
Total | 1,188 | 343 | (511) |
Foreign | |||
Current | 476 | 311 | 95 |
Total | 476 | 311 | 95 |
Total | |||
Current | 281 | 599 | 63 |
Deferred | 6,507 | 3,996 | (4,389) |
Total | 6,788 | 4,595 | (4,326) |
Reconciliation of the federal income tax expense at the statutory rate to the effective income tax expense | |||
Statutory federal income tax expense | 4,809 | 4,027 | 3,842 |
State taxes, net of federal benefit | 784 | 117 | (338) |
Foreign tax paid | 476 | 101 | 95 |
Tax consequences of the sale of engines to WMES | (306) | (36) | (36) |
Uncertain tax positions | (195) | (101) | 160 |
Permanent differences-nondeductible executive compensation | 1,117 | 768 | 732 |
ETI basis restoration | (8,728) | ||
Permanent differences and other | 103 | (281) | (53) |
Total | $ 6,788 | $ 4,595 | $ (4,326) |
Reconciliation of the federal income tax expense | |||
Statutory federal income tax expense (as a percent) | 34.00% | 34.00% | 34.00% |
State taxes, net of federal benefit (as a percent) | 5.50% | 1.00% | (3.00%) |
Foreign tax paid (as a percent) | 3.40% | 0.90% | 0.80% |
Tax consequences of the sale of engines to WMES (as a percent) | (2.10%) | (0.30%) | (0.30%) |
Uncertain tax positions (as a percent) | (1.40%) | (0.90%) | 1.40% |
Permanent differences-162(m) (as a percent) | 7.90% | 6.50% | 6.50% |
ETI basis restoration (as a percent) | (77.20%) | ||
Permanent differences and other (as a percent) | 0.70% | (2.40%) | (0.50%) |
Effective income tax expense (benefit) (as a percent) | 48.00% | 38.80% | (38.30%) |
Income Taxes (Summary of Unreco
Income Taxes (Summary of Unrecognized Tax Benefits and Temporary Differences) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized tax benefits | |||
Balance at the beginning of the period | $ 464 | $ 566 | |
Increases related to current year tax positions | 5 | 109 | |
Decreases due to tax positions expired | (195) | (211) | |
Balance at the end of the period | 274 | 464 | |
Uncertain tax positions, reserved resulting from the extraterritorial income exclusion | $ 200 | ||
Uncertain tax positions, reserved for tax exposure in Europe | 0 | 0 | |
Deferred tax assets: | |||
Unearned lease revenue | 1,511 | 1,368 | |
State taxes | 944 | 564 | |
Reserves and allowances | 898 | 938 | |
Other accruals | 1,767 | 582 | |
Alternative minimum tax credit | 377 | 377 | |
Net operating loss carry forward | 35,827 | 37,173 | |
Charitable contributions | 42 | 28 | |
Total deferred tax assets | 41,366 | 41,030 | |
Less: valuation allowance | (1,280) | (1,310) | |
Net deferred tax assets | 40,086 | 39,720 | |
Deferred tax liabilities: | |||
Depreciation and impairment on aircraft engines and equipment | (138,084) | (129,332) | |
Other deferred tax liabilities | 981 | (898) | |
Net deferred tax liabilities | (137,103) | (130,230) | |
Other comprehensive income, deferred tax asset | 275 | ||
Net deferred tax liabilities | (96,742) | $ (90,510) | |
Additional tax benefits reflected in net operating tax loss carryforwards pursuant to SFAS 123R | 3,000 | ||
Tax effects of windfalls included in net operating loss carryforwards | 1,000 | ||
Federal | |||
Deferred tax liabilities: | |||
Operating loss carryforwards | 100,500 | ||
State | |||
Deferred tax liabilities: | |||
Operating loss carryforwards | $ 3,900 |
Fair Value of Financial Instr57
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value of Financial Instruments | ||
Fair value of notes payable | $ 890.1 | $ 847 |
Risk Management - Risk Concen58
Risk Management - Risk Concentrations and Interest Rate Risk (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Interest rate contracts | ||||
Risk Management-Risk Concentrations and Interest Rate Risk | ||||
Number of agreements held | item | 0 | |||
Amount of loss recognized in the income statement as an increase in interest expense | $ 1,500 | $ 0 | $ 500 | |
Cash Flow Hedging | ||||
Risk Management-Risk Concentrations and Interest Rate Risk | ||||
Amount of loss recognized in the income statement as an increase in interest expense | 499 | $ (1,485) | ||
Cash Flow Hedging | Interest expense Member | Interest rate contracts | ||||
Risk Management-Risk Concentrations and Interest Rate Risk | ||||
Amount of loss recognized in the income statement as an increase in interest expense | $ 499 | $ (1,485) |
Commitments, Contingencies, G59
Commitments, Contingencies, Guarantees and Indemnities (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Equipment Held for Operating Lease | |
Remaining lease commitment | $ 2,973 |
Office space | Novato, California | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 1,445 |
Office space | Singapore | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 112 |
Office space | Shanghai, China | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 65 |
Office space | Dublin, Ireland | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 44 |
Office space | London, United Kingdom | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 27 |
Office space | Blagnac, France | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 16 |
Office and warehouse space | Boynton Beach, Florida | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 1,112 |
Office and warehouse space | San Diego, California | |
Equipment Held for Operating Lease | |
Remaining lease commitment | 141 |
Warehouse lease | Shanghai, China | |
Equipment Held for Operating Lease | |
Remaining lease commitment | $ 11 |
Commitments, Contingencies, G60
Commitments, Contingencies, Guarantees and Indemnities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Engines Aircraft and Related Equipment [Member] | |
Purchase commitments | |
Purchase price | $ 31.6 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Dec. 16, 2015 | Nov. 27, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | |
Common Stock Repurchase | |||||||
Repurchase of common stock authorized by Board of Directors | $ 100,000 | $ 100,000 | |||||
Number of years for repurchase of common stock | 5 years | ||||||
Common stock repurchased, value | $ 16,500 | $ 5,352 | $ 5,918 | ||||
Common Stock | |||||||
Common Stock Repurchase | |||||||
Common stock repurchased (in shares) | 912,000 | 249,000 | 395,000 | ||||
Common stock repurchased, value | $ 9 | $ 2 | $ 4 | ||||
Dutch Auction [Member] | |||||||
Common Stock Repurchase | |||||||
Common stock repurchased (in shares) | 643,821 | ||||||
Common stock repurchased, value | $ 11,600 | $ 16,500 | |||||
Weighted average price per share (in dollars per share) | $ 17.75 | ||||||
Share Price | $ 18 | ||||||
Dutch Auction [Member] | Minimum | |||||||
Common Stock Repurchase | |||||||
Weighted average price per share (in dollars per share) | $ 15.50 | ||||||
Dutch Auction [Member] | Maximum | |||||||
Common Stock Repurchase | |||||||
Weighted average price per share (in dollars per share) | $ 18 |
Stock-Based Compensation Plan62
Stock-Based Compensation Plans - Restricted stock activity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Awards Vesting Over Three Years [Member] | ||||
Number Outstanding | ||||
Vesting period | 3 years | |||
The 2007 plan | ||||
Number Outstanding | ||||
Balance at the beginning of the period (in shares) | 525,356 | 515,130 | 682,654 | |
Shares granted | 146,440 | 237,708 | 151,408 | |
Shares cancelled | (5,750) | (60,110) | ||
Shares vested | (275,201) | (221,732) | (258,822) | |
Balance at the end of the period (in shares) | 396,595 | 525,356 | 515,130 | |
Intrinsic value of unvested awards (in dollars) | $ 7,131,787 | $ 8,786,611 | $ 7,060,474 | $ 8,756,990 |
Stock options outstanding (in shares) | 671,656 | |||
The 2007 plan | Restricted stock | ||||
Number Outstanding | ||||
Balance at the beginning of the period (in shares) | 525,356 | 515,130 | 682,654 | |
Shares cancelled | (5,750) | (60,110) | ||
Shares vested | (275,201) | (221,732) | (258,822) | |
Balance at the end of the period (in shares) | 396,595 | 525,356 | 515,130 | |
Remaining average vesting period for recognition of unrecognized compensation expense | 1 year 7 months 6 days | |||
Unrecognized compensation expense (in dollars) | $ 4,700,000 | |||
The 2007 plan | Restricted stock | Awards vesting on first anniversary | ||||
Number Outstanding | ||||
Shares granted | 16,440 | 50,208 | 21,408 | |
The 2007 plan | Restricted stock | Awards vesting over four years | ||||
Number Outstanding | ||||
Shares granted | 5,000 | 13,000 | 130,000 | |
Vesting period | 4 years | 4 years | 4 years | |
The 2007 plan | Restricted stock | Awards Vesting Over Three Years [Member] | ||||
Number Outstanding | ||||
Shares granted | 125,000 | 174,500 | ||
1996 Plan | ||||
Number Outstanding | ||||
Stock options exercised (in shares) | 49,000 | 26,437 | 54,991 | |
Stock options outstanding (in shares) | 0 | 49,000 | 75,437 | 136,928 |
Intrinsic value of outstanding stock options (in dollars) | $ 622,300 | $ 601,991 | $ 781,692 | |
Vesting period | 10 years |
Stock-Based Compensation Plan63
Stock-Based Compensation Plans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | May. 28, 2015 | May. 20, 2010 | May. 24, 2007 | Jun. 30, 2006 | |
The 2007 plan | |||||||||
Stock-based compensation plans | |||||||||
Number of shares authorized | 2,800,000 | 2,800,000 | 800,000 | 2,000,000 | |||||
Options | |||||||||
Options cancelled (in shares) | 135,368 | ||||||||
Outstanding at the end of the period (in shares) | 671,656 | 671,656 | |||||||
1996 Plan | |||||||||
Stock-based compensation plans | |||||||||
Number of shares authorized | 3,025,000 | ||||||||
Vesting period | 10 years | ||||||||
Vesting rate (as a percent) | 25.00% | ||||||||
Period of beginning of vesting of awards from grant date | 1 year | ||||||||
Total intrinsic value of options exercised (in dollars) | $ 300,000 | $ 200,000 | $ 400,000 | ||||||
Options | |||||||||
Outstanding at the beginning of the period (in shares) | 49,000 | 75,437 | 136,928 | ||||||
Options exercised (in shares) | (49,000) | (26,437) | (54,991) | ||||||
Options cancelled (in shares) | (6,500) | ||||||||
Outstanding at the end of the period (in shares) | 0 | 0 | 49,000 | 75,437 | 136,928 | ||||
Options exercisable at the end of the period (in shares) | 49,000 | 75,437 | |||||||
Weighted Average Exercise Price | |||||||||
Outstanding at the beginning of the period (in dollars per share) | $ 9.20 | $ 9.38 | $ 8.60 | ||||||
Options exercised (in dollars per share) | $ 9.20 | 9.71 | 7.96 | ||||||
Options cancelled (in dollars per share) | 5.01 | ||||||||
Outstanding at the end of the period (in dollars per share) | 9.20 | 9.38 | $ 8.60 | ||||||
Options exercisable at the end of the period (in dollars per share) | $ 9.20 | $ 9.38 | |||||||
Weighted Average Remaining Contractual Term | |||||||||
Outstanding at the end of the period | 7 months 2 days | 1 year 5 months 27 days | 2 years 2 months 23 days | ||||||
Options exercisable at the end of the period | 7 months 2 days | 1 year 5 months 27 days | |||||||
Aggregate Intrinsic Value | |||||||||
Outstanding at the end of the period (in dollars) | $ 622,300 | $ 601,991 | $ 781,692 | ||||||
Options exercisable at the end of the period (in dollars) | $ 622,300 | $ 601,991 | |||||||
Employee Stock Purchase Plan | |||||||||
Stock-based compensation plans | |||||||||
Number of shares authorized | 250,000 | ||||||||
Restricted stock | The 2007 plan | |||||||||
Stock-based compensation plans | |||||||||
Number of shares authorized | 2,263,712 | 2,263,712 |
Stock-Based Compensation Plan64
Stock-Based Compensation Plans (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted Average Grant Date Fair Value | ||||
Stock compensation expense (in dollars) | $ 4,150,000 | $ 3,509,000 | $ 3,439,000 | |
The 2007 plan | ||||
Weighted Average Grant Date Fair Value | ||||
Balance at the beginning of the period (in dollars per share) | $ 16.72 | $ 13.71 | $ 12.83 | |
Stock compensation expense (in dollars) | $ 4,102,000 | $ 3,459,000 | $ 3,393,000 | |
Options cancelled (in shares) | (135,368) | |||
Shares granted (in dollars per share) | $ 18.53 | $ 19.84 | $ 14.25 | |
Shares cancelled (in dollars per share) | 14.02 | 12.41 | ||
Shares vested (in dollars per share) | 15.87 | 13.24 | 12.01 | |
Balance at the end of the period (in dollars per share) | $ 17.98 | $ 17.98 | $ 16.72 | $ 13.71 |
Aggregate Value | ||||
Balance at the beginning of the period (in dollars) | $ 8,786,611 | $ 7,060,474 | $ 8,756,990 | |
Shares granted (in dollars) | 2,713,159 | 4,710,362 | 2,158,011 | |
Shares cancelled (in dollars) | (80,630) | (745,876) | ||
Shares vested (in dollars) | (4,367,983) | (2,903,595) | (3,108,651) | |
Balance at the end of the period (in dollars) | $ 7,131,787 | 7,131,787 | 8,786,611 | 7,060,474 |
Employee Stock Purchase Plan | ||||
Weighted Average Grant Date Fair Value | ||||
Stock compensation expense (in dollars) | $ 48,000 | $ 50,000 | $ 46,000 | |
Shares granted (in dollars per share) | $ 6.17 | $ 6.17 | $ 3.19 | |
Aggregate Value | ||||
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 | 1,000 | |||
Maximum amount of shares to be purchased by employee in one calendar year (in dollars) | $ 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 | 10,374 | 14,068 | ||
Restricted stock | The 2007 plan | ||||
Unused Elements Abstract | ||||
Intrinsic value of unvested awards issued(in dollars) | $ 8,000,000 | $ 8,000,000 |
Employee 401(k) Plan (Details)
Employee 401(k) Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee 401(k) Plan | |||
Maximum percentage of pretax salary, which can be deferred by employees | 20.00% | ||
Maximum amount of wages, which can be deferred by employees | $ 18,000 | ||
Maximum amount of wages, which can be deferred by employees at least 50 years of age | $ 24,000 | ||
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 percentage of employee's salary for which the company contributes a matching contribution | 8.00% | ||
Amount of employer contribution | $ 400,000 | $ 300,000 | $ 300,000 |
Quarterly Consolidated Financ66
Quarterly Consolidated Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Consolidated Financial Information (Unaudited) | |||||||||||||||
Total revenue | $ 55,195 | $ 57,758 | $ 43,843 | $ 42,814 | $ 41,563 | $ 45,519 | $ 43,865 | $ 43,340 | $ 47,203 | $ 37,952 | $ 37,953 | $ 35,304 | $ 199,610 | $ 174,287 | $ 158,412 |
Net income | $ 2,973 | $ 2,577 | $ (492) | $ 2,298 | $ (277) | $ 979 | $ 2,214 | $ 4,331 | $ 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | $ 7,356 | $ 7,247 | $ 15,626 |
Basic earnings (loss) per common share (in dollars per share) | $ 0.38 | $ 0.33 | $ (0.06) | $ 0.29 | $ (0.03) | $ 0.12 | $ 0.28 | $ 0.55 | $ 0.84 | $ (0.29) | $ 1.20 | $ 0.20 | $ 0.94 | $ 0.92 | $ 1.95 |
Diluted earnings (loss) per common share (in dollars per share) | $ 0.37 | $ 0.32 | $ (0.06) | $ 0.29 | $ (0.03) | $ 0.12 | $ 0.27 | $ 0.53 | $ 0.81 | $ (0.28) | $ 1.17 | $ 0.19 | $ 0.92 | $ 0.89 | $ 1.89 |
Average common shares outstanding (in shares) | 7,739 | 7,839 | 7,841 | 7,848 | 7,839 | 7,938 | 7,976 | 7,914 | 7,846 | 8,126 | 8,106 | 8,033 | 7,811 | 7,917 | 8,029 |
Diluted average common shares outstanding (in shares) | 7,872 | 7,963 | 7,991 | 8,044 | 8,037 | 8,123 | 8,179 | 8,129 | 8,084 | 8,329 | 8,303 | 8,273 | 7,982 | 8,141 | 8,289 |
Related Party Transactions (Det
Related Party Transactions (Details) | Nov. 06, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)engineitem |
Related Party and Similar Transactions | ||||
Maintenance reserve revenue from sale of engines and aircraft | $ 55,064,000 | $ 53,363,000 | $ 46,694,000 | |
Lease rent revenue from sale of engines and aircraft | 107,866,000 | 101,748,000 | 101,737,000 | |
Other revenue from sale of engines and aircraft | 2,718,000 | 4,506,000 | 4,306,000 | |
WMES | ||||
Related Party and Similar Transactions | ||||
Asset Management Fees | $ 1,700,000 | $ 2,000,000 | 1,700,000 | |
J.T. Power | ||||
Related Party and Similar Transactions | ||||
Cash payment to shareholders for certain asset purchases | 3,300,000 | |||
J.T. Power | Asset Purchase Agreement | ||||
Related Party and Similar Transactions | ||||
Value of certain assets purchased | $ 5,600,000 | 5,600,000 | ||
Cash payment for certain asset purchases | 4,500,000 | 4,500,000 | ||
Cash received | 400,000 | 400,000 | ||
Cash payment to creditors for certain asset purchases | 4,500,000 | |||
Cash payment to shareholders for certain asset purchases | 1,200,000 | |||
J.T. Power | Consignment agreement with guarantee | ||||
Related Party and Similar Transactions | ||||
Sales of consigned parts by related party | 22,200 | |||
J.T. Power | Consignment agreement with guarantee | Asset Purchase Agreement | ||||
Related Party and Similar Transactions | ||||
Amount owed to the entity related to the minimum guarantee, which is deducted from payment made in cash | $ 700,000 | |||
Airline owned by CEO and Chairman | ||||
Related Party and Similar Transactions | ||||
Lease rent revenue | $ 2,100,000 | |||
Percentage of discount at which note is prepaid in cash | 45.00% | |||
Notes receivable prepaid at discount | $ 400,000 | |||
Number of engines sold to third party | engine | 4 | |||
Number of aircraft sold to third party | item | 3 | |||
Aggregate net book value of engines and aircraft sold | $ 3,400,000 | |||
Proceeds from sale of engines and aircraft to third party | 4,900,000 | |||
Gain on sale of engines and aircraft to third party | 800,000 | |||
Maintenance reserve revenue from sale of engines and aircraft | 400,000 | |||
Lease rent revenue from sale of engines and aircraft | 400,000 | |||
Other revenue from sale of engines and aircraft | $ 300,000 |
Operating Segments (Details)
Operating Segments (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Operating segments | |||||||||||||||
Number of operating segments | item | 2 | ||||||||||||||
Revenue: | |||||||||||||||
Lease rent revenue | $ 107,866 | $ 101,748 | $ 101,737 | ||||||||||||
Maintenance reserve revenue | 55,064 | 53,363 | 46,694 | ||||||||||||
Spare parts sales | 25,608 | 8,917 | |||||||||||||
Gain on sale of leased equipment | 8,354 | 5,753 | 5,675 | ||||||||||||
Other revenue | 2,718 | 4,506 | 4,306 | ||||||||||||
Total revenue | $ 55,195 | $ 57,758 | $ 43,843 | $ 42,814 | $ 41,563 | $ 45,519 | $ 43,865 | $ 43,340 | $ 47,203 | $ 37,952 | $ 37,953 | $ 35,304 | 199,610 | 174,287 | 158,412 |
Expenses: | |||||||||||||||
Depreciation and amortization expense | 69,586 | 65,441 | 58,727 | ||||||||||||
Cost Of Spare Parts and Equipment Sales | 17,866 | 7,474 | |||||||||||||
General and administrative | 42,744 | 35,859 | 33,868 | ||||||||||||
Net finance costs | 37,861 | 37,062 | |||||||||||||
Other expense | 18,584 | 17,938 | |||||||||||||
Total expenses | 186,641 | 163,774 | 150,638 | ||||||||||||
Earnings from operations | 12,969 | 10,513 | $ 7,774 | ||||||||||||
Total assets | 1,308,577 | 1,261,626 | 1,308,577 | 1,261,626 | |||||||||||
Intersegment Eliminations [Member] | |||||||||||||||
Revenue: | |||||||||||||||
Other revenue | (458) | (736) | |||||||||||||
Total revenue | (458) | (736) | |||||||||||||
Expenses: | |||||||||||||||
Earnings from operations | (458) | (736) | |||||||||||||
Leasing and Related Operations | |||||||||||||||
Revenue: | |||||||||||||||
Lease rent revenue | 101,748 | ||||||||||||||
Maintenance reserve revenue | 53,363 | ||||||||||||||
Gain on sale of leased equipment | 5,753 | ||||||||||||||
Other revenue | 3,581 | ||||||||||||||
Total revenue | 164,445 | ||||||||||||||
Expenses: | |||||||||||||||
Depreciation and amortization expense | 65,152 | ||||||||||||||
General and administrative | 33,211 | ||||||||||||||
Net finance costs | 36,779 | ||||||||||||||
Other expense | 17,830 | ||||||||||||||
Total expenses | 152,972 | ||||||||||||||
Earnings from operations | 11,473 | ||||||||||||||
Total assets | 1,281,991 | 1,239,227 | 1,281,991 | 1,239,227 | |||||||||||
Leasing and Related Operations | Operating Segments [Member] | |||||||||||||||
Revenue: | |||||||||||||||
Lease rent revenue | 107,866 | ||||||||||||||
Maintenance reserve revenue | 55,064 | ||||||||||||||
Spare parts sales | 9,975 | ||||||||||||||
Gain on sale of leased equipment | 8,354 | ||||||||||||||
Other revenue | 2,517 | ||||||||||||||
Total revenue | 183,776 | ||||||||||||||
Expenses: | |||||||||||||||
Depreciation and amortization expense | 69,299 | ||||||||||||||
Cost Of Spare Parts and Equipment Sales | 5,734 | ||||||||||||||
General and administrative | 39,974 | ||||||||||||||
Net finance costs | 37,474 | ||||||||||||||
Other expense | 18,584 | ||||||||||||||
Total expenses | 171,065 | ||||||||||||||
Earnings from operations | 12,711 | ||||||||||||||
Spare Parts Sales | |||||||||||||||
Revenue: | |||||||||||||||
Spare parts sales | 8,917 | ||||||||||||||
Other revenue | 1,661 | ||||||||||||||
Total revenue | 10,578 | ||||||||||||||
Expenses: | |||||||||||||||
Depreciation and amortization expense | 289 | ||||||||||||||
Cost Of Spare Parts and Equipment Sales | 7,474 | ||||||||||||||
General and administrative | 2,648 | ||||||||||||||
Net finance costs | 283 | ||||||||||||||
Other expense | 108 | ||||||||||||||
Total expenses | 10,802 | ||||||||||||||
Earnings from operations | (224) | ||||||||||||||
Total assets | $ 26,586 | $ 22,399 | 26,586 | $ 22,399 | |||||||||||
Spare Parts Sales | Operating Segments [Member] | |||||||||||||||
Revenue: | |||||||||||||||
Spare parts sales | 15,633 | ||||||||||||||
Other revenue | 659 | ||||||||||||||
Total revenue | 16,292 | ||||||||||||||
Expenses: | |||||||||||||||
Depreciation and amortization expense | 287 | ||||||||||||||
Cost Of Spare Parts and Equipment Sales | 12,132 | ||||||||||||||
General and administrative | 2,770 | ||||||||||||||
Net finance costs | 387 | ||||||||||||||
Total expenses | 15,576 | ||||||||||||||
Earnings from operations | $ 716 |
Subsequent Event (Details)
Subsequent Event (Details) - Note payable at a fixed interest rate of 2.25%, maturing in January 2018, secured by engines - engine | Jan. 10, 2014 | Dec. 31, 2015 |
Subsequent events | ||
Number of engines pledged as collateral | 3 | |
LIBOR | ||
Subsequent events | ||
Basis spread on variable rate (as a percent) | 2.25% |
SCHEDULE I - Parent Company I70
SCHEDULE I - Parent Company Information - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
ASSETS | ||||
Cash and cash equivalents | $ 9,732 | $ 13,493 | $ 12,801 | $ 5,379 |
Equipment held for operating lease, less accumulated depreciation | 1,122,859 | 1,066,448 | 1,033,022 | |
Equipment held for sale | 23,454 | 18,114 | ||
Operating lease related receivable, net of allowances | 14,072 | 8,912 | ||
Spare parts inventory | 20,526 | 18,593 | ||
Investments | 41,295 | 41,590 | ||
Deferred income taxes | 41,366 | 41,030 | ||
Property, equipment & furnishings, less accumulated depreciation | 20,247 | 17,955 | ||
Intangible assets, net | 932 | 1,164 | ||
Other assets, net | 22,434 | 24,099 | ||
Total assets | 1,308,577 | 1,261,626 | ||
Liabilities: | ||||
Accounts payable and accrued expenses | 21,665 | 21,614 | ||
Deferred income taxes | 96,742 | 90,510 | ||
Notes payable | 878,684 | 840,956 | ||
Maintenance reserves | 71,054 | 66,474 | ||
Security deposits | 25,010 | 20,869 | ||
Unearned lease revenue | 5,090 | 4,342 | ||
Total liabilities | 1,098,245 | 1,044,765 | ||
Shareholders' equity: | ||||
Common stock ($0.01 par value, 20,000,000 shares authorized; 7,548,395 and 8,346,304 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) | 75 | 83 | ||
Paid-in capital in excess of par | 28,720 | 42,076 | ||
Retained earnings | 182,058 | 174,702 | ||
Accumulated other comprehensive loss, net of income (loss) tax expense (benefit) | (521) | |||
Total shareholders' equity | 210,332 | 216,861 | 212,605 | 199,163 |
Total liabilities and shareholders' equity | 1,308,577 | 1,261,626 | ||
Parent Company | ||||
ASSETS | ||||
Cash and cash equivalents | 2,894 | 2,411 | $ 1,520 | $ 4,142 |
Equipment held for operating lease, less accumulated depreciation | 763,549 | 628,341 | ||
Equipment held for sale | 22,680 | 15,768 | ||
Operating lease related receivable, net of allowances | 4,502 | 3,379 | ||
Spare parts inventory | 16,120 | 14,906 | ||
Due from affiliate | 20,286 | 19,044 | ||
Investments | 41,295 | 41,590 | ||
Investment in subsidiaries | 118 | 6,054 | ||
Property, equipment & furnishings, less accumulated depreciation | 19,964 | 17,867 | ||
Intangible assets, net | 271 | 271 | ||
Other assets, net | 13,577 | 13,528 | ||
Total assets | 905,256 | 763,159 | ||
Liabilities: | ||||
Accounts payable and accrued expenses | 17,660 | 10,820 | ||
Deferred income taxes | 37,272 | 26,132 | ||
Notes payable | 578,218 | 457,364 | ||
Maintenance reserves | 38,072 | 32,845 | ||
Security deposits | 20,612 | 16,864 | ||
Unearned lease revenue | 3,090 | 2,273 | ||
Total liabilities | 694,924 | 546,298 | ||
Shareholders' equity: | ||||
Common stock ($0.01 par value, 20,000,000 shares authorized; 7,548,395 and 8,346,304 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively) | 75 | 83 | ||
Paid-in capital in excess of par | 28,720 | 42,076 | ||
Retained earnings | 182,058 | 174,702 | ||
Accumulated other comprehensive loss, net of income (loss) tax expense (benefit) | (521) | |||
Total shareholders' equity | 210,332 | 216,861 | ||
Total liabilities and shareholders' equity | $ 905,256 | $ 763,159 |
SCHEDULE I - Parent Company I71
SCHEDULE I - Parent Company Information - Condensed Balance Sheets (Parenthetical) (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Condensed Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 7,548,395 | 8,346,304 |
Common stock, shares outstanding | 7,548,395 | 8,346,304 |
Parent Company | ||
Condensed Balance Sheets | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 7,548,395 | 8,346,304 |
Common stock, shares outstanding | 7,548,395 | 8,346,304 |
SCHEDULE I - Parent Company I72
SCHEDULE I - Parent Company Information - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
REVENUE | |||||||||||||||
Lease rent revenue | $ 107,866 | $ 101,748 | $ 101,737 | ||||||||||||
Maintenance reserve revenue | 55,064 | 53,363 | 46,694 | ||||||||||||
Spare Parts Sales | 25,608 | 8,917 | |||||||||||||
Gain on sale of leased equipment | 8,354 | 5,753 | 5,675 | ||||||||||||
Other revenue | 2,718 | 4,506 | 4,306 | ||||||||||||
Total revenue | $ 55,195 | $ 57,758 | $ 43,843 | $ 42,814 | $ 41,563 | $ 45,519 | $ 43,865 | $ 43,340 | $ 47,203 | $ 37,952 | $ 37,953 | $ 35,304 | 199,610 | 174,287 | 158,412 |
EXPENSES | |||||||||||||||
Cost Of Spare Parts and Equipment Sales | 17,866 | 7,474 | |||||||||||||
Write-down of equipment | 9,181 | 5,602 | 6,461 | ||||||||||||
General and administrative | 42,744 | 35,859 | 33,868 | ||||||||||||
Technical expense | 9,403 | 12,336 | 12,863 | ||||||||||||
Net finance costs: | |||||||||||||||
Interest expense | 39,012 | 37,062 | 38,719 | ||||||||||||
Total net finance costs | 37,861 | 37,062 | 38,719 | ||||||||||||
Total expenses | 186,641 | 163,774 | 150,638 | ||||||||||||
Earnings from operations | 12,969 | 10,513 | 7,774 | ||||||||||||
Earnings from joint ventures | 1,175 | 1,329 | 3,526 | ||||||||||||
Income (loss) before income taxes | 14,144 | 11,842 | 11,300 | ||||||||||||
Income tax (expense) benefit | (6,788) | (4,595) | 4,326 | ||||||||||||
Net income | $ 2,973 | $ 2,577 | $ (492) | $ 2,298 | $ (277) | $ 979 | $ 2,214 | $ 4,331 | $ 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | 7,356 | 7,247 | 15,626 |
Parent Company | |||||||||||||||
REVENUE | |||||||||||||||
Lease rent revenue | 63,214 | 50,749 | 36,593 | ||||||||||||
Maintenance reserve revenue | 29,896 | 22,270 | 14,046 | ||||||||||||
Spare Parts Sales | 20,236 | 7,588 | |||||||||||||
Gain on sale of leased equipment | 2,488 | 2,147 | 3,472 | ||||||||||||
Other revenue | 7,017 | 5,227 | 8,022 | ||||||||||||
Total revenue | 122,851 | 87,981 | 62,133 | ||||||||||||
EXPENSES | |||||||||||||||
Depreciation expense | 40,867 | 29,555 | 19,699 | ||||||||||||
Cost Of Spare Parts and Equipment Sales | 13,576 | 6,354 | |||||||||||||
Write-down of equipment | 6,764 | 4,681 | 4,204 | ||||||||||||
General and administrative | 35,898 | 29,546 | 29,907 | ||||||||||||
Technical expense | 6,805 | 4,455 | 5,478 | ||||||||||||
Net finance costs: | |||||||||||||||
Interest expense | 18,448 | 13,500 | 15,030 | ||||||||||||
Total expenses | 122,358 | 88,091 | 74,318 | ||||||||||||
Earnings from operations | 493 | (110) | (12,185) | ||||||||||||
Earnings from joint ventures | 1,175 | 1,329 | 3,526 | ||||||||||||
Income (loss) before income taxes | 1,668 | 1,219 | (8,659) | ||||||||||||
Income tax (expense) benefit | 2,090 | 1,708 | (4,525) | ||||||||||||
Equity in income of subsidiaries, net of tax of $199, $3,357, and $8,749 at December 31, 2013, 2012 and 2011, respectively | 7,778 | 7,736 | 19,760 | ||||||||||||
Net income | $ 7,356 | $ 7,247 | $ 15,626 |
SCHEDULE I - Parent Company I73
SCHEDULE I - Parent Company Information - Condensed Statements of Income (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Parent Company | |||
Equity in income of subsidiaries | |||
Equity in income of subsidiaries, tax | $ 4,697 | $ 3,553 | $ 199 |
SCHEDULE I - Parent Company I74
SCHEDULE I - Parent Company Information - Condensed Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||
Net income | $ 2,973 | $ 2,577 | $ (492) | $ 2,298 | $ (277) | $ 979 | $ 2,214 | $ 4,331 | $ 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | $ 7,356 | $ 7,247 | $ 15,626 |
Other comprehensive (loss) income: | |||||||||||||||
Currency translation adjustment | (796) | ||||||||||||||
Derivative instruments | |||||||||||||||
Unrealized losses on derivative instruments | (187) | ||||||||||||||
Reclassification adjustment for losses (gains) included in net income | (499) | 1,485 | |||||||||||||
Tax benefit related to items of other comprehensive income (loss) | 275 | 174 | (435) | ||||||||||||
Other comprehensive income (loss) | (521) | (325) | 863 | ||||||||||||
Total comprehensive income | 6,835 | 6,922 | 16,489 | ||||||||||||
Parent Company | |||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||
Net income | 7,356 | 7,247 | 15,626 | ||||||||||||
Other comprehensive (loss) income: | |||||||||||||||
Currency translation adjustment | (796) | ||||||||||||||
Derivative instruments | |||||||||||||||
Unrealized losses on derivative instruments | (187) | ||||||||||||||
Reclassification adjustment for losses (gains) included in net income | (499) | 1,485 | |||||||||||||
Tax benefit related to items of other comprehensive income (loss) | 275 | 174 | (435) | ||||||||||||
Other comprehensive income (loss) from parent | (521) | (325) | 863 | ||||||||||||
Total comprehensive income | $ 6,835 | $ 6,922 | $ 16,489 |
SCHEDULE I - Parent Company I75
SCHEDULE I - Parent Company Information - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||||||||||||||
Net income | $ 2,973 | $ 2,577 | $ (492) | $ 2,298 | $ (277) | $ 979 | $ 2,214 | $ 4,331 | $ 6,553 | $ (2,229) | $ 9,692 | $ 1,610 | $ 7,356 | $ 7,247 | $ 15,626 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Write-down of equipment | 9,181 | 5,602 | 6,461 | ||||||||||||
Stock-based compensation expenses | 4,150 | 3,509 | 3,439 | ||||||||||||
Amortization of deferred costs | 4,307 | 4,319 | 4,113 | ||||||||||||
Amortization of interest rate derivative cost | (499) | (404) | |||||||||||||
Allowances and provisions | 697 | (81) | (684) | ||||||||||||
Gain on sale of leased equipment | (8,354) | (5,753) | (5,675) | ||||||||||||
Gain on insurance settlement | (351) | ||||||||||||||
Income from joint ventures | (1,175) | (1,329) | (3,526) | ||||||||||||
Deferred income taxes | 6,508 | 3,996 | (4,389) | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||
Receivables | (5,857) | 4,454 | 2,269 | ||||||||||||
Spare parts inventory | (4,128) | 5,964 | |||||||||||||
Other assets | (2,635) | (590) | (3,158) | ||||||||||||
Accounts payable and accrued expenses | 1,669 | (1,881) | (23) | ||||||||||||
Maintenance reserves | 4,580 | (10,861) | 14,022 | ||||||||||||
Security deposits | 5,747 | 1,159 | 614 | ||||||||||||
Unearned lease revenue | 748 | 793 | (1,064) | ||||||||||||
Net cash provided by operating activities | 109,121 | 62,731 | 80,296 | ||||||||||||
Cash flows from investing activities: | |||||||||||||||
Proceeds from sale of equipment held for operating lease (net of selling expenses) | 45,701 | 43,632 | 38,706 | ||||||||||||
Capital contribution to joint ventures | (630) | (17,623) | (11,219) | ||||||||||||
Distributions received from joint venture | 1,304 | 847 | |||||||||||||
Acquisitions of J.T. Power, net of cash acquired | (4,171) | ||||||||||||||
Investment in WOLF, net of cash acquired | 2,020 | ||||||||||||||
Purchase of equipment held for operating lease | (183,616) | (128,075) | (136,231) | ||||||||||||
Purchase of property, equipment and furnishings | (3,988) | (13,831) | (453) | ||||||||||||
Net cash used in investing activities | (157,992) | (108,684) | (131,850) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of notes payable | 192,700 | 154,395 | 130,000 | ||||||||||||
Debt issuance cost | (13) | (5,074) | (1,252) | ||||||||||||
Proceeds from shares issued under stock compensation plans | 518 | 410 | 680 | ||||||||||||
Cancellation of restricted stock units in satisfaction of withholding tax | (1,558) | (1,544) | (1,248) | ||||||||||||
Security deposit | (1,606) | 4,553 | 7,588 | ||||||||||||
Repurchase of common stock | (16,500) | (5,352) | (5,918) | ||||||||||||
Excess tax benefit from stock-based compensation | 26 | 311 | |||||||||||||
Principal payments on notes payable | (153,816) | (101,054) | (70,874) | ||||||||||||
Net cash provided by (used in) financing activities | 45,110 | 46,645 | 58,976 | ||||||||||||
Increase/(Decrease) in cash and cash equivalents | (3,761) | 692 | 7,422 | ||||||||||||
Cash and cash equivalents at beginning of period | 13,493 | 12,801 | 5,379 | 13,493 | 12,801 | 5,379 | |||||||||
Cash and cash equivalents at end of period | 9,732 | 13,493 | 12,801 | 9,732 | 13,493 | 12,801 | |||||||||
Net cash paid for: | |||||||||||||||
Interest | 35,568 | 33,132 | 33,931 | ||||||||||||
Income Taxes | 353 | 210 | 111 | ||||||||||||
Supplemental disclosures of non-cash investing activities: | |||||||||||||||
Engines and equipment, transferred from Held for Operating Lease to Held for Sale but not settled | 22,079 | 3,071 | 15,166 | ||||||||||||
Engines and equipment, transferred to (from) the parent to its subsidiaries | 41,410 | ||||||||||||||
Equipment Held For Sale Transfer To Spare Parts Inventory | 6,061 | 9,649 | |||||||||||||
Parent Company | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | 7,356 | 7,247 | 15,626 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Equity in income of subsidiaries | (7,778) | (7,736) | (19,760) | ||||||||||||
Depreciation expense | 40,867 | 29,555 | 19,699 | ||||||||||||
Write-down of equipment | 6,764 | 4,681 | 4,204 | ||||||||||||
Stock-based compensation expenses | 4,150 | 3,509 | 3,439 | ||||||||||||
Amortization of deferred costs | 2,646 | 2,391 | 2,286 | ||||||||||||
Amortization of interest rate derivative cost | (499) | (404) | |||||||||||||
Allowances and provisions | (17) | 34 | (94) | ||||||||||||
Gain on sale of leased equipment | (2,488) | (2,147) | (3,472) | ||||||||||||
Gain on insurance settlement | (351) | ||||||||||||||
Income from joint ventures | (1,175) | (1,329) | (3,526) | ||||||||||||
Deferred income taxes | 2,287 | 1,383 | (4,072) | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||
Receivables | (953) | (1,502) | 1,871 | ||||||||||||
Spare parts inventory | 4,847 | (5,533) | |||||||||||||
Other assets | (2,420) | (942) | (2,165) | ||||||||||||
Accounts payable and accrued expenses | 4,589 | 322 | (943) | ||||||||||||
Due to / from subsidiaries | 1 | (2,208) | (4,041) | ||||||||||||
Maintenance reserves | 5,227 | 8,693 | 3,495 | ||||||||||||
Security deposits | 5,254 | (1,616) | 426 | ||||||||||||
Unearned lease revenue | 646 | 919 | (575) | ||||||||||||
Net cash provided by operating activities | 69,803 | 35,222 | 11,643 | ||||||||||||
Cash flows from investing activities: | |||||||||||||||
Increase in investment in subsidiaries | (23,923) | (9,666) | (34,098) | ||||||||||||
Distributions received from subsidiaries | 3,791 | 17,582 | 69,548 | ||||||||||||
Proceeds from sale of equipment held for operating lease (net of selling expenses) | 22,885 | 21,360 | 21,644 | ||||||||||||
Capital contribution to joint ventures | (630) | (17,623) | (11,219) | ||||||||||||
Distributions received from joint venture | 1,304 | 847 | |||||||||||||
Acquisitions of J.T. Power, net of cash acquired | (4,171) | ||||||||||||||
Investment in WOLF, net of cash acquired | (1,000) | ||||||||||||||
Purchase of equipment held for operating lease | (170,732) | (104,904) | (132,140) | ||||||||||||
Purchase of property, equipment and furnishings | (3,736) | (13,767) | (450) | ||||||||||||
Net cash used in investing activities | (171,041) | (106,171) | (91,886) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of notes payable | 192,700 | 154,395 | 130,000 | ||||||||||||
Debt issuance cost | (13) | (5,074) | (637) | ||||||||||||
Proceeds from shares issued under stock compensation plans | 518 | 410 | 680 | ||||||||||||
Cancellation of restricted stock units in satisfaction of withholding tax | (1,558) | (1,544) | (1,248) | ||||||||||||
Security deposit | (1,606) | 4,553 | 7,588 | ||||||||||||
Repurchase of common stock | (16,500) | (5,352) | (5,918) | ||||||||||||
Excess tax benefit from stock-based compensation | 26 | 311 | |||||||||||||
Principal payments on notes payable | (71,846) | (75,859) | (52,844) | ||||||||||||
Net cash provided by (used in) financing activities | 101,721 | 71,840 | 77,621 | ||||||||||||
Increase/(Decrease) in cash and cash equivalents | 483 | 891 | (2,622) | ||||||||||||
Cash and cash equivalents at beginning of period | $ 2,411 | $ 1,520 | $ 4,142 | 2,411 | 1,520 | 4,142 | |||||||||
Cash and cash equivalents at end of period | $ 2,894 | $ 2,411 | $ 1,520 | 2,894 | 2,411 | 1,520 | |||||||||
Net cash paid for: | |||||||||||||||
Interest | 16,462 | 11,110 | 11,903 | ||||||||||||
Income Taxes | 75 | 76 | 111 | ||||||||||||
Supplemental disclosures of non-cash investing activities: | |||||||||||||||
Engines and equipment, transferred from Held for Operating Lease to Held for Sale but not settled | $ 21,786 | 3,071 | 422 | ||||||||||||
Engines and equipment, transferred to (from) the parent to its subsidiaries | $ 120,880 | $ 116,020 |
SCHEDULE II - VALUATION ACCOU76
SCHEDULE II - VALUATION ACCOUNTS (Details) - Accounts receivable, allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation accounts | |||
Balance at Beginning of Period | $ 215 | $ 296 | $ 980 |
Additions Charged (Credited) to Expense | 697 | (26) | (30) |
Net (Deductions) Recoveries | (55) | (654) | |
Balance at End of Period | $ 912 | $ 215 | $ 296 |