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What changed in WILLIS LEASE FINANCE CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WILLIS LEASE FINANCE CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+304 added−250 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-11)

Top changes in WILLIS LEASE FINANCE CORP's 2025 10-K

304 paragraphs added · 250 removed · 220 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

47 edited+20 added−8 removed43 unchanged
Biggest changeFINANCING/SOURCE OF FUNDS 8 Table of Contents We, directly or through our Willis Engine Structured Trust III, IV, V, VI, and VII (“WEST III,” “WEST IV,” “WEST V,” “WEST VI,” and “WEST VII”) asset-backed securitizations, revolving credit facility, and senior secured warehouse credit facility, typically acquire engines with a combination of equity capital and funds borrowed from financial institutions.
Biggest changeFINANCING/SOURCE OF FUNDS We, directly or through our Willis Engine Structured Trust III, V, VI, VII, VIII, and IX (“WEST III,” “WEST V,” “WEST VI,” “WEST VII,” “WEST VIII,” and “WEST IX”) asset-backed securitizations, revolving credit facility, and senior secured warehouse credit facility, typically acquire engines with a combination of equity capital and funds borrowed from financial institutions. 8 Table of Contents In 2025: • The Company and its direct, wholly-owned subsidiary WEST VIII, closed WEST VIII’s offering of $596.0 million in aggregate principal amount of fixed rate notes. • The Company and its direct, wholly-owned subsidiary WEST IX, closed WEST IX’s offering of $392.9 million in aggregate principal amount of fixed rate notes. • The Company paid off both its WEST IV Series A and Series B 2018 term notes payable.
In certain circumstances, we may require our lessees to provide additional credit support, such as a letter of credit or a guaranty from a bank or a third party or a security deposit.
In certain circumstances, we may require our lessees to provide additional credit support, such as a letter of credit, a guaranty from a bank or a third party, or a security deposit.
Furthermore, unscheduled events such as mechanical failure, Federal Aviation Administration (“FAA”) airworthiness directives, or manufacturer-recommended actions for maintenance, repair and overhaul of engines result in the need for spare engines. Our engine portfolio primarily consists of noise-compliant Stage IV commercial jet engines manufactured by CFMI, General Electric, Pratt & Whitney, Rolls Royce, and International Aero Engines.
Furthermore, unscheduled events such as mechanical failure, aircraft utilization, Federal Aviation Administration (“FAA”) airworthiness directives, or manufacturer-recommended actions for maintenance, repair and overhaul of engines result in the need for spare engines. Our engine portfolio primarily consists of noise-compliant Stage IV commercial jet engines manufactured by CFMI, General Electric, Pratt & Whitney, Rolls Royce, and International Aero Engines.
Under operating leases, we retain the potential benefit and assume the risk of the residual value of the equipment, in contrast to finance leases in which the lessee has more of the potential benefits and risks of ownership.
Under operating leases, we retain the potential benefit and assume the risk of the residual value of the equipment, in contrast to finance leases in which the lessee has the potential benefits and risks of ownership.
As of December 31, 2024, most of the engines in our lease portfolio are Stage IV engines and are generally suitable for use on one or more commonly used aircraft. We believe that the aviation industry will be subject to continued regulatory activity. Additionally, increased oversight will continue to originate from the quality assurance departments of airline operators.
As of December 31, 2025, most of the engines in our lease portfolio are Stage IV engines and are generally suitable for use on one or more commonly used aircraft. We believe that the aviation industry will be subject to continued regulatory activity. Additionally, increased oversight will continue to originate from the quality assurance departments of airline operators.
The SEC also maintains an electronic Internet site that contains our reports, proxies and information statements, and other information that we file or furnish at http://www.sec.gov. References to our and the SEC ’s website do not constitute incorporation by reference of the information contained on those websites and should not be considered part of this document.
The SEC also maintains an electronic Internet site that contains our reports, proxies and information statements, and other information that we file or furnish at http://www.sec.gov. References to our and the SEC’s website do not constitute incorporation by reference of the information contained on those websites and should not be considered part of this document.
Our principal business objective is to build value for our shareholders by acquiring commercial aircraft and engines and managing those assets in order to provide a return on investment, primarily through lease rent and maintenance reserve revenues, as well as through management fees earned for managing assets owned by other parties.
Our principal business objective is to build value for our shareholders by acquiring commercial aircraft and engines and managing those assets in order to provide a return on investment, primarily through lease rent and maintenance reserve revenues, as well as through management fees earned for managing assets owned by third parties.
During the lease period, our leases require that maintenance and inspection of the leased engines be performed at qualified maintenance facilities certified by the FAA or its foreign equivalent. In addition, when an engine becomes off-lease, it undergoes inspection to verify compliance with lease return conditions.
During the lease period, our leases require that maintenance and inspection of the leased engines be performed at qualified maintenance facilities certified by the FAA or its foreign equivalent. In addition, when an asset becomes off-lease, it undergoes inspection to verify compliance with lease return conditions.
Under longer-term leases, to the extent that cumulative use fee billings are inadequate to fund expenditures required prior to return of the engine to us, the lessee is obligated to cover the shortfall.
Under longer-term leases, to the extent that cumulative use fee billings are inadequate to fund expenditures required prior to return of the asset to us, the lessee is obligated to cover the shortfall.
Our aircraft leases are “triple-net” leases, and the lessee is responsible for making the full lease payment and paying any other expenses associated with the use of the aircraft, such as maintenance, casualty and liability insurance, sales or use taxes and personal property taxes.
Like our engine leases, our aircraft leases are “triple-net” leases, where the lessee is responsible for making the full lease payment and paying any other expenses associated with the use of the aircraft, such as maintenance, casualty and liability insurance, sales or use taxes and personal property taxes.
As mentioned above, under the terms of some of our leases, during the term of the lease, the lessee pays amounts to us based on usage of the engine, which is referred to as maintenance reserves or use fees, which are designed to cover the expected future maintenance costs.
Under the terms of some of our leases, during the term of the lease, the lessee pays amounts to us based on usage of the asset, which is referred to as maintenance reserves or use fees, which are designed to cover the expected future maintenance costs.
We believe that commercial aircraft operators are increasingly considering their spare engines as significant capital assets, in which operating or finance leases may be more attractive than the outright ownership of spare engines.
We believe that commercial aircraft operators are increasingly considering their spare engines as significant capital assets, in which operating or finance leases may be more attractive than the outright ownership of spare engines, regardless of whether or not financed.
During the term of the lease, we require the lessee to maintain the engine in accordance with an approved maintenance program designed to meet applicable regulatory requirements in the jurisdictions in which the lessee operates. We enter into both long-term and short-term leases which typically provide for monthly payment.
During the term of the lease, we require the lessee to maintain the engine in accordance with an approved maintenance program designed to meet applicable regulatory requirements in the jurisdictions in which the lessee operates. We periodically inspect our leased engines. We enter into both long-term and short-term leases which typically provide for monthly payment.
This business segment enables our Company to provide end-of-life solutions for the growing supply of surplus aircraft and engines, as well as manage the full life cycle of our lease assets, enhance the returns on our engine portfolio, and create incremental value for our shareholders. As of December 31, 2024, spare parts inventory had a carrying value of $72.2 million.
This business segment enables our Company to provide end-of-life solutions for the growing supply of surplus aircraft and engines, as well as manage the full life cycle of our lease assets, enhance the returns on our engine portfolio, and create incremental value for our shareholders. As of December 31, 2025, spare parts inventory had a carrying value of $56.6 million.
This business segment enables us to provide end-of-life solutions for the growing supply of surplus aircraft and engines, as well as manage the full life cycle of our lease assets, enhance the returns on our engine portfolio, and create incremental value for our shareholders.
This business segment enables us to provide end-of-life solutions for the growing supply of surplus aircraft and engines, as well as manage the full life cycle of our lease assets, enhance the returns on our engine portfolio through our usage of used serviceable material, and create incremental value for our shareholders.
The demand for aftermarket engines for either sale or lease may be affected by a number of variables, including: 5 Table of Contents • general market conditions; • regulatory changes (particularly those imposing environmental, maintenance, and other requirements on the operation of engines); • changes in demand for air travel; • fuel costs; • changes in the supply and cost of aircraft equipment; and • technological developments.
The demand for after-market engines for either sale or lease may be affected by a number of variables, including: • general market conditions; • regulatory changes (particularly those imposing environmental, maintenance, and other requirements on the operation of engines); • changes in domestic and international trade policy; • changes in demand for air travel; • fuel costs; • changes in the supply and cost of aircraft equipment; and 5 Table of Contents • technological developments in the industry.
From time to time, we selectively acquire engines prior to a firm commitment to lease or sell the engine, depending on the price of the engine and market demand with the expectation that we can lease or sell such engines in the future.
We typically acquire engines from airlines, engine manufacturers or from other lessors. From time to time, we selectively acquire engines prior to a firm commitment to lease or sell the engine, depending on the price of the engine and market demand with the expectation that we can lease or sell such engines in the future.
At December 31, 2024 the Company had $1.4 billion of fixed rate financing. We also evaluate insurance and expropriation risk and evaluate and monitor the political and legal climate of the country in which a particular lessee is located in order to determine our ability to repossess our engines should the need arise.
At December 31, 2025 the Company had $2.0 billion of fixed-rate financing. We also evaluate both insurance and expropriation risk and evaluate and monitor the political and legal climate of the country in which a particular lessee is located in order to determine our ability to repossess our engines should the need arise.
ENGINE LEASING 4 Table of Contents As of December 31, 2024, the majority of our leases to air carriers, manufacturers and MROs were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable under Accounting Standards Codification (“ASC”) 842 and investments in sales-type leases.
ENGINE LEASING As of December 31, 2025, the majority of our leases to air carriers, manufacturers and MROs were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable under Accounting Standards Codification (“ASC”) 842, “Leases,” and investments in sales-type leases.
In addition to our owned portfolio, as of December 31, 2024, we managed a total lease portfolio of 277 engines, aircraft and related equipment for other parties. Willis Aeronautical Services, Inc. (“Willis Aero”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft and engines.
In addition to our owned portfolio, as of December 31, 2025, we managed 116 engines and related equipment for third parties. Willis Aeronautical Services, Inc. (“Willis Aero”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft and engines.
The maturity profile of the ABS term financings tend to better match the long-life characteristics of our long-life asset base. Furthermore, the Company also manages interest rate exposure through the purchasing of interest rate swaps which immunizes us from short-term rate movements that would influence the cost of our floating rate borrowings.
The maturity profile of the ABS term financings tend to better match the long-life characteristics of our long-life asset base. Furthermore, the Company also manages interest rate exposure through the purchasing of interest rate swaps which mitigates adverse short-term rate movements that would increase the cost of our floating rate borrowings.
CASC Willis acquires and leases jet engines to Chinese airlines and concentrates on meeting the fast-growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. CASC Willis owned a lease portfolio of four engines with a net book value of $37.3 million as of December 31, 2024.
CASC Willis acquires and leases jet engines to Chinese airlines and concentrates on meeting the fast-growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. CASC Willis owned a lease portfolio of six engines with a net book value of $50.4 million as of December 31, 2025.
Our executive offices are located at 4700 Lyons Technology Parkway, Coconut Creek, Florida 33073. We transact business directly and through our subsidiaries and consolidated variable interest entities (“VIE”) unless otherwise indicated.
We are a Delaware corporation, incorporated in 1998. Our executive offices are located at 4700 Lyons Technology Parkway, Coconut Creek, Florida 33073. We transact business directly and through our subsidiaries and consolidated variable interest entities (“VIE”) unless otherwise indicated.
Increased number of aircraft, and therefore engines, in the market We believe that the number of commercial and cargo aircraft, and hence spare engines, will increase. Boeing projects 3.2% annual growth in the global commercial jet fleet, increasing the current fleet to 50,170 aircraft by 2043.
Increased number of aircraft, and therefore engines, in the market We believe that the number of commercial and cargo aircraft, and hence spare engines, will increase. Boeing projects 3.1% annual growth in the global commercial jet fleet, increasing the current fleet to 49,640 aircraft by 2044.
We believe this is due to the increasing cost of newer engines, the anticipated modernization of the worldwide aircraft fleet and the significant cost associated therewith, and the emergence of new niche-focused airlines which generally use leasing in order to obtain their capital assets.
We believe the percentage of leased engines is likely to increase as engine leasing follows the historical growth of aircraft leasing due to the increasing cost of newer engines, the anticipated modernization of the worldwide aircraft fleet and the significant cost associated therewith, and the emergence of new niche-focused airlines which generally use leasing in order to obtain their capital assets.
As of December 31, 2024, we had $2,635.9 million of equipment held in our operating lease portfolio, $183.6 million of notes receivable, $31.1 million of maintenance rights, and $21.6 million of investments in sales-type leases, which represented 354 engines, 16 aircraft, one marine vessel and other leased parts and equipment with 70 lessees in 37 countries.
As of December 31, 2025, we had $2,801.7 million of equipment held in our operating lease portfolio, $139.9 million of notes receivable, $30.6 million of maintenance rights, and $16.6 million of investments in sales-type leases, which represented 363 engines, 20 aircraft, one marine vessel and other leased parts and equipment with 69 lessees in 37 countries.
Payment terms of our leases are predominantly monthly in advance for rent and in arrears for the expenses associated with the use of the engines. As of December 31, 2024 and 2023, 47% and 46%, respectively, of the Company’s leases by net book value were short-term leases. We try to mitigate risk where possible.
Payment terms of our leases are predominantly monthly in advance for rent and in arrears for the expenses associated with the use of the engines. As of December 31, 2025 and 2024, 40% and 47%, respectively, of the Company’s leases by net book value were short-term leases. We have a robust risk management program.
As of December 31, 2023, we had $2,112.8 million of equipment held in our operating lease portfolio, $92.6 million of notes receivable, $9.2 million of maintenance rights, and $8.8 million of investments in sales-type leases, which represented 337 engines, 12 aircraft, one marine vessel and other leased parts and equipment.
As of December 31, 2025, we had $2,801.7 million of equipment held in our operating lease portfolio, $139.9 million of notes receivable, $30.6 million of maintenance rights, and $16.6 million of investments in sales-type leases, which represented 363 engines, 20 aircraft, one marine vessel and other leased parts and equipment.
Spare Parts Sales Our wholly-owned and vertically-integrated subsidiary Willis Aero primarily engages in the sale of aircraft engine parts and materials through the acquisition or consignment of engines from third parties or from the leasing portfolio.
In 2025, we leased our equipment to lessees domiciled in eight geographic regions. 3 Table of Contents Spare Parts Sales Our wholly-owned and vertically-integrated subsidiary Willis Aero primarily engages in the sale of aircraft engine parts and materials through the acquisition or consignment of engines from third parties or from the leasing portfolio.
Operating leases allow commercial aircraft operators greater fleet and financial flexibility due to the relatively small initial capital outlay necessary to obtain use of the aircraft equipment and the availability of short-term and long-term leases to better meet their needs. Operating lease rates are generally higher than finance lease rates, in part because of the lessor retained residual value risk.
Operating leases allow commercial aircraft operators greater fleet and financial flexibility due to the relatively small initial capital outlay necessary to obtain use of the aircraft equipment and the availability of short-term and long-term leases to better meet their needs.
Our investment in the joint venture was $17.9 million as of December 31, 2024. AIRCRAFT LEASING As of December 31, 2024, our operating lease portfolio included six ATR 72-500 aircraft, three Boeing 737-700 aircraft, two A319-100 aircraft, two A320-214 aircraft, one A320-200 aircraft, one A320-232 aircraft, and one A320-233 aircraft, with an aggregate net book value of $161.0 million.
Our investment in the joint venture was $3.7 million as of December 31, 2025. AIRCRAFT LEASING As of December 31, 2025, our operating lease portfolio included six ATR 72-500 aircraft, six Dash 8-400 aircraft, two A319-100 aircraft, two A320-214 aircraft, two A320-271N aircraft, one A320-200 aircraft, and one A320-233 aircraft, with an aggregate net book value of $219.4 million.
INDUSTRY BACKGROUND - THE DEMAND FOR LEASED AIRCRAFT ENGINES Historically, commercial aircraft operators owned rather than leased their spare engines. As engines become more powerful and technically sophisticated, they have also become more expensive to acquire and maintain.
INDUSTRY Historically, commercial aircraft operators owned rather than leased their spare engines. As engines have grown in power and technological sophistication, they have also become more expensive to acquire and maintain.
Each partner holds a 50% interest in the joint venture. WMES owned a lease portfolio of 50 engines with a net book value of $328.9 million as of December 31, 2024. Our investment in the joint venture was $44.8 million as of December 31, 2024.
Each partner holds a 50% interest in the joint venture. WMES owned a lease portfolio of 65 engines, one aircraft, and other parts and equipment with a net book value of $575.3 million as of December 31, 2025. Our investment in the joint venture was $78.9 million as of December 31, 2025.
Those resources may include greater name recognition, larger product lines, complementary lines of business, greater financial, marketing, and information systems, and other resources. In addition, equipment manufacturers, aircraft maintenance providers, FAA certified repair facilities and other aviation aftermarket suppliers may vertically integrate into the markets that we serve, thereby significantly increasing industry competition and negatively impacting the Company.
In addition, equipment manufacturers, aircraft maintenance providers, FAA certified repair facilities and other aviation after-market suppliers may vertically integrate into the markets that we serve, thereby significantly increasing industry competition and negatively impacting the Company.
The value of a particular used engine or airframe varies greatly depending upon its condition, the maintenance services performed during the lease term and, as applicable, the number of hours or cycles remaining until the next major maintenance interval.
Engine values also may decline due to manufacturing defects that surface after initial manufacture and deployment. The value of any particular used engine or airframe varies greatly depending upon its condition, the maintenance services performed during the lease term, and the number of hours or cycles remaining until the next major maintenance interval.
If we are unable to lease or sell engines on favorable terms, our financial results and our ability to service debt may be adversely affected. See “Risk Factors” below. The value of a particular model of engine is heavily dependent on the status of the types of aircraft on which it can be installed.
If we are unable to lease or sell engines on favorable terms, our financial results and our ability to service debt may be adversely affected. See “Risk Factors” below.
We describe our leases as “triple-net” operating leases. A triple-net operating lease requires the lessee to make the full lease payment and pay any other expenses associated with the use of the engines, such as maintenance, casualty and liability insurance, sales or use taxes and personal property taxes.
Operating lease rates are generally higher than finance lease rates, in part because of the lessor retained residual value risk. 4 Table of Contents Our leases are “triple-net” operating leases, meaning the lease requires the lessee to make the full lease payment and pay any other expenses associated with the use of the engines, such as maintenance, casualty and liability insurance, sales or use taxes and personal property taxes.
Many of our competitors have greater financial resources than we have, or are affiliates of larger companies. We emphasize the quality of our portfolio of aircraft engines, supply reliability, and high level of customer service to our aircraft equipment lessees.
To distinguish ourselves, we emphasize the quality of our portfolio of aircraft engines, supply reliability, and high level of customer service to our aircraft equipment lessees.
We believe engine values tend to be stable as long as the host aircraft for the engines and the engines themselves are still being manufactured. Prices tend to remain stable and may even rise after a host aircraft is no longer manufactured as long as there is sufficient remaining demand for the host aircraft in the market.
Prices tend to remain stable and may even rise after a host aircraft is no longer manufactured as long as there is sufficient remaining demand for the host aircraft in the market. However, the value of an engine begins to decline rapidly once the host aircraft is retired from service and/or parted out in significant numbers.
Our management believes that our attention to our lessees and our emphasis on maintenance and inspection helps preserve residual values and generally helps us to recover our investment in our leased engines. Upon termination of a lease, we will either enter into a new lease, sell, or part out (disassemble and sell the parts separately), the related engines or airframe.
Upon termination of a lease, we will either enter into a new lease, overhaul, sell, or part out (disassemble and sell the parts separately), the related engines or airframe.
As of December 31, 2024, minimum future payments under non-cancelable operating leases were as follows: Year (in thousands) 2025 $ 174,309 2026 80,143 2027 46,988 2028 19,096 2029 12,059 Thereafter 17,209 $ 349,804 As of December 31, 2024, minimum future payments under non-cancelable notes receivable and investments in sales-type leases were as follows: Year (in thousands) 2025 $ 51,878 2026 24,569 2027 23,543 2028 22,518 2029 48,114 Thereafter 103,781 Total undiscounted lease receivables 274,403 Less: interest (69,168) Total notes receivable and investments in sales-type leases $ 205,235 As of December 31, 2024, we had 70 lessees of commercial aircraft engines and related equipment, aircraft, and other leased parts and equipment in 37 countries.
As of December 31, 2025, minimum future payments due to the Company under non-cancelable operating leases were as follows: Year (in thousands) 2026 $ 234,170 2027 140,801 2028 84,316 2029 32,140 2030 17,869 Thereafter 16,640 $ 525,936 As of December 31, 2025, minimum future payments due to the Company under non-cancelable notes receivable and investments in sales-type leases were as follows: Year (in thousands) 2026 $ 22,920 2027 21,790 2028 21,608 2029 47,205 2030 19,726 Thereafter 75,337 Total undiscounted lease receivables 208,586 Less: interest 52,046 Total notes receivable and investments in sales-type leases $ 156,540 As of December 31, 2025, we had 69 lessees of commercial aircraft engines and related equipment, aircraft, and other leased parts and equipment in 37 countries.
In May 2024, Willis Warehouse Facility (“WWFL”), a wholly-owned subsidiary of the Company, entered into a secured credit agreement for the new senior secured warehouse credit facility. In order to facilitate financing and leasing of engines, most of our engines are generally owned through a statutory or common law trust that is wholly-owned by us or our subsidiaries.
In order to facilitate financing and leasing of engines, most of our engines are generally owned through a statutory or common law trust that is wholly-owned by us or our subsidiaries. We usually borrow up to 85% of an engine’s purchase price. Substantially all of our assets secure our related indebtedness.
Total revenues from our Leasing and Related Operations reportable segment was 95.4% and 95.1% of the respective total consolidated revenue for the years ended December 31, 2024 and 2023, respectively. 3 Table of Contents At December 31, 2024, approximately 66.3% of our on-lease engines, aircraft, and related equipment (all of which we sometimes refer to as “equipment”) by net book value are leased and operated internationally.
We also purchase both new and used engines that are subject to a lease when purchased, as well as some without a lease attached when purchased. Total revenues from our Leasing and Related Operations reportable segment was 94.9% and 95.4% of the respective total consolidated revenue for the years ended December 31, 2025 and 2024, respectively.
These competitors include aircraft engine and aircraft parts manufacturers, aircraft and aircraft engine lessors, airline and aircraft service and repair companies, and aircraft and aircraft engine spare parts distributors. Many of our competitors have substantially greater resources than us.
COMPETITION The markets for our products and services are very competitive, and we face competition from a number of sources. These competitors include aircraft engine and aircraft parts manufacturers, aircraft and aircraft engine lessors, airline and aircraft service and repair companies, and aircraft and aircraft engine spare parts distributors.
It is common for commercial aircraft operators and MROs to utilize several leasing companies to meet their aircraft engine needs and to minimize reliance on a single leasing company. 7 Table of Contents Our competitors compete with us in many ways, including pricing, technical expertise, lease flexibility, engine availability, supply reliability, customer service, and the quality and condition of engines.
We can give no assurance that competitive pressures will not materially and adversely affect our business, financial condition, or results of operations. 7 Table of Contents It is common for commercial aircraft operators and MROs to utilize several leasing companies to meet their aircraft engine needs and to minimize reliance on a single leasing company.
None of our employees are covered by a collective bargaining agreement, and we believe our employee relations are satisfactory.
None of our employees are covered by a collective bargaining agreement, and we believe our employee relations are good. Talent Attraction and Retention The Company’s talent attraction and retention efforts are focused on hiring the right talent and retaining employees in critical roles necessary to support operational effectiveness and business continuity.
Substantially all leases relating to this equipment are denominated and payable in United States (“U.S.”) dollars, which is customary in the industry. Future leases may provide for payments to be made in other foreign currencies. In 2024, we leased our equipment to lessees domiciled in eight geographic regions or countries.
At December 31, 2025, approximately 64.8% of our on-lease engines, aircraft, and related equipment (all of which we sometimes refer to as “equipment”) by net book value are leased and operated internationally. Substantially all leases relating to this equipment are denominated and payable in United States (“U.S.”) dollars, which is customary in the industry.
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Willis Asset Management Limited (“Willis Asset Management”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the engine management and consulting business. Willis Asset Management had 225 engines, excluding WLFC engines, under management as of December 31, 2024. We are a Delaware corporation, incorporated in 1998.
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Future leases may provide for payments to be made in other foreign currencies.
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We also purchase both new and used engines that are subject to a lease when purchased and on a speculative basis ( i.e. , without a lease attached from manufacturers or other parties which own such engines).
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Our management believes that our attention to our lessees and our emphasis on maintenance and inspection helps preserve residual values and generally helps us to recover our investment in our leased assets.
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Industry analysts have forecasted that the percentage of leased engines is likely to increase over the next 15 years as engine leasing follows the growth of aircraft leasing.
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The value of a particular model of engine is heavily dependent on the status of the types of aircraft on which it can be installed. We believe engine values tend to be stable as long as the host aircraft for the engines and the engines themselves are still being manufactured.
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However, the value of an engine begins to decline rapidly once the host aircraft is retired from service and/or parted out in significant numbers. Engine values also may decline because of manufacturing defects that surface subsequent to initial manufacture and deployment.
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Our investment in the joint venture was $21.6 million as of December 31, 2025. In 2025, we entered into an agreement with independent MRO (Maintenance, Repair and Overhaul) provider Global Engine Maintenance to create a joint venture named Willis Global Engine Testing (“WGET”) to build an engine test facility in West Palm Beach, Florida.
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ASSET MANAGEMENT Willis Asset Management is a wholly-owned and vertically-integrated subsidiary whose primary focus is the engine management and consulting business. Willis Asset Management had 225 engines, excluding WLFC engines, under management as of December 31, 2024. COMPETITION The markets for our products and services are very competitive, and we face competition from a number of sources.
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The Company has a 70% membership interest, and Global Engine Maintenance has a 30% membership interest. WGET is a VIE that the Company is not the primary beneficiary of since the power to direct the activities that most significantly impact WGET’s economic performance is shared between the Company and Global Engine Maintenance.
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We can give no assurance that competitive pressures will not materially and adversely affect our business, financial condition, or results of operations. We compete primarily with aircraft engine manufacturers as well as with other aircraft engine lessors.
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The Company’s considerations in determining the VIE most significant activities and whether the Company has the power to direct those activities include, but are not limited to, the VIE’s purpose and design and the matters that require unanimous approval from both parties. Accordingly, the Company does not consolidate WGET, and the Company uses the equity method in recording investment activity.
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We usually borrow up to 85% of an engine’s purchase price. Substantially all of our assets secure our related indebtedness. We typically acquire engines from airlines, engine manufacturers or from other lessors.
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Many of our competitors have substantially greater resources than us, and some are part of larger organizations. Those resources may include greater name recognition, larger product lines, complementary lines of business, greater financial, marketing, and information systems, and other resources.
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Additionally, for discrete financing purposes, we may enter into bi-lateral and preferred financing arrangements from time to time. EMPLOYEES As of December 31, 2024, we had a total of 447 employees, of which 445 are full-time employees (excluding consultants), in sales and marketing, technical service, and administration.
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Additionally, for discrete financing purposes, we may enter into bi-lateral and preferred financing arrangements from time to time. HUMAN CAPITAL MANAGEMENT The Company’s human capital priorities are focused on attracting, developing, and retaining a skilled and engaged workforce to support its business strategy and long-term performance.
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Employees As of December 31, 2025, the Company employed a total of 475 employees worldwide across North America (United States and Canada), the United Kingdom, Europe, India, and Asia, working in sales and marketing, technical service, and administrative roles. Of these employees, 467 were full-time (excluding consultants).
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These efforts include initiatives aimed at reducing turnover in hourly operational positions. In addition, the Company emphasizes succession planning for leadership and other key roles to support continuity, mitigate talent risk, and maintain organizational capability.
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Leadership Development and Capability Building The Company’s leadership development and capability-building efforts focus on ensuring that management practices, internal people processes, and organizational structures effectively support current operations and future growth. Existing management training programs and onboarding frameworks are reviewed to assess their relevance, consistency, and alignment with business needs across roles and geographies.
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These efforts are intended to strengthen leadership capability, support effective people management, and promote organizational clarity and accountability. Culture, Engagement and Performance Practices The Company emphasizes culture, engagement, and performance practices intended to support accountability, alignment, and employee engagement across the organization.
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These practices include an annual global employee engagement survey used to gather feedback and inform leadership priorities, as well as a performance management process that incorporates annual goal setting and year-end performance reviews to assess progress and establish objectives for the following year.
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The Company also maintains an annual incentive compensation program, under which bonus awards are based on company performance and individual contribution, reinforcing alignment between employee performance and business results. Total Rewards and Well-Being The Company’s total rewards and well-being strategy is designed to support the attraction, motivation, and retention of employees while aligning with business performance and market practices.
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The Company periodically reviews compensation programs to assess market competitiveness and internal equity and provides opportunities for annual merit-based increases and annual incentive compensation. 9 Table of Contents In addition, the Company offers a benefits program that includes health and wellness resources, with wellness initiatives aimed at promoting employee well-being, education and supporting a productive workforce.
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All these strategies combined are to ensure alignment with operational and growth objectives. INVESTMENT FUND PARTNERSHIPS In December 2025, the Company entered into a new investment fund partnership with Liberty Mutual Investments (“LMI”), the investment firm for Liberty Mutual Group.
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The fund will invest up to $600 million in loan and loan-like engine financings and will be supported by a warehouse debt facility. The Company has a General Partner interest through its equity investment in the fund but is not the majority holder.
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LMI as the Limited Partner has substantive kick-out rights and can liquidate the fund upon a simple majority vote. Per ASC 810, “Consolidation,” the fund is a Voting Interest Entity (“VOE”) that the Company does not consolidate.
Added
In December 2025, the Company entered into a new investment fund partnership with Blackstone Credit & Insurance (“BXCI”) to invest in current and next generation aircraft engines. The fund plans to deploy over $1 billion into target asset types. The Company has a General Partner interest through its equity investment in the fund but is not the majority holder.
Added
BXCI as the Limited Partner has substantive kick-out rights and can liquidate the fund upon a simple majority vote. Per ASC 810, the fund is a VOE that the Company does not consolidate.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

51 edited+12 added−1 removed178 unchanged
Biggest changeThe airline industry has also come under increased scrutiny by the press, the public and investors regarding the impact of air travel on the environment, including emissions to the air, discharges to surface and subsurface waters, safe drinking water, aircraft noise, the management of hazardous substances, oils and waste materials and other environmental impacts related to aircraft operations.
Biggest changeScrutiny of the airline industry and its potential negative impacts on the environment may result in decreased demand for air travel, which may in turn cause lessees to default on their lease payment obligations to us which would negatively affect our financial condition, cash flow and results of operations. 12 Table of Contents The airline industry has also come under increased scrutiny by the press, the public and investors regarding the impact of air travel on the environment, including emissions to the air, discharges to surface and subsurface waters, safe drinking water, aircraft noise, the management of hazardous substances, oils and waste materials and other environmental impacts related to aircraft operations.
We seek to manage these risks by trying to anticipate demand for particular engine and aircraft types, maintaining a portfolio mix of engines that we believe is diversified and that will have long-term value and will be sought by lessees in the global market for jet engines, and by selling engines and aircraft that we expect will experience obsolescence or declining usefulness in the foreseeable future.
We seek to manage these risks by trying to anticipate demand for particular engine and aircraft types, maintaining a portfolio mix of engines that we believe is diversified, will have long-term value, and will be sought by lessees in the global market for jet engines, and by selling engines and aircraft that we expect will experience obsolescence or declining usefulness in the foreseeable future.
The nature, timing and economic effects of potential changes to the current legal and regulatory framework affecting our business under the new administration remain highly uncertain and may impact our results of operations, costs, or liabilities. There can be no assurance that any changes in laws, regulations or governmental policy will not have an adverse impact on our business.
The nature, timing and economic effects of potential changes to the current legal and regulatory framework affecting our business under the current administration remain highly uncertain and may impact our results of operations, costs, or liabilities. There can be no assurance that any changes in laws, regulations or governmental policy will not have an adverse impact on our business.
Limitations on emissions, such as the ETS and CORSIA, could favor the use of younger, more fuel-efficient aircraft, since they generally produce lower levels of emissions per passenger, which could adversely affect our ability to re-lease or otherwise dispose of less efficient older aircraft on a timely basis, on favorable terms, or at all.
Limitations on emissions, such as the ETS and CORSIA, could favor the use of younger, more fuel-efficient aircraft, since they generally produce lower levels of emissions per passenger, which could adversely affect our ability to re-lease or otherwise dispose of less efficient older engines and aircraft on a timely basis, on favorable terms, or at all.
We also can give no assurance that political instability abroad and changes in the policies of foreign nations will not present expropriation risks in the future that are not covered by insurance. 19 Table of Contents Substantially all of our leases require payments in U.S. dollars but many of our customers operate in other currencies; if foreign currencies devalue against the U.S. dollar, our lessees may be unable to make their payments to us.
We also can give no assurance that political instability abroad and changes in the policies of foreign nations will not present expropriation risks in the future that are not covered by insurance. 20 Table of Contents Substantially all of our leases require payments in U.S. dollars but many of our customers operate in other currencies; if foreign currencies devalue against the U.S. dollar, our lessees may be unable to make their payments to us.
Any acquisition or expansion involves various risks, which may include some or all of the following: • incurring or assuming additional debt; 21 Table of Contents • diversion of management’s time and attention from ongoing business operations; • future charges to earnings related to the possible impairment of goodwill and the write down of other intangible assets; • risks of unknown or contingent liabilities; • difficulties in the assimilation of operations, services, products and personnel; • unanticipated costs and delays; • risks that the acquired business does not perform consistently with our growth and profitability expectations; • risks that growth will strain our infrastructure, staff, internal controls, and management, which may require additional personnel, time, and expenditures; and • potential loss of key employees and customers.
Any acquisition or expansion involves various risks, which may include some or all of the following: • incurring or assuming additional debt; • diversion of management’s time and attention from ongoing business operations; • future charges to earnings related to the possible impairment of goodwill and the write down of other intangible assets; • risks of unknown or contingent liabilities; • difficulties in the assimilation of operations, services, products and personnel; • unanticipated costs and delays; • risks that the acquired business does not perform consistently with our growth and profitability expectations; • risks that growth will strain our infrastructure, staff, internal controls, and management, which may require additional personnel, time, and expenditures; and • potential loss of key employees and customers.
This may be affected by factors beyond our control, including: • general economic conditions in the countries in which our customers operate, including changes in gross domestic product; • demand for air travel and air cargo shipments; • increased competition; • the availability of government support, which may be in the form of subsidies, loans (including export/import financing), guarantees, equity investments or otherwise; • changes in interest rates and the availability and terms of credit available to commercial aircraft operators including covenants in financings, terms imposed by credit card issuers, collateral posting requirements contained in fuel hedging contracts and the ability of airlines and MROs to make or refinance principal payments as they come due; • geopolitical and other events, including those arising from war, concerns about security, terrorism, war, pandemics and similar public health concerns and political instability; • changing political conditions, including risk of rising protectionism and imposition of new trade barriers; • inclement weather and natural disasters; • environmental compliance and other regulatory costs, including noise regulations, emissions regulations, climate change initiatives, and aircraft age limitations; • potential and actual cyberattacks, including information hacking, viruses and malware; 9 Table of Contents • labor contracts, labor costs and strikes or stoppages at commercial aircraft operators; • operating costs, including the price and availability of fuel, maintenance costs, and insurance costs and coverages; • technological developments; • airport access and air traffic control infrastructure constraints; • industry capacity, utilization and general market conditions; and • market prices for aviation equipment.
This may be affected by factors beyond our control, including: • general economic conditions in the countries in which our customers operate, including changes in gross domestic product; • demand for air travel and air cargo shipments; • increased competition; • the availability of government support, which may be in the form of subsidies, loans (including export/import financing), guarantees, equity investments or otherwise; • changes in interest rates and the availability and terms of credit available to commercial aircraft operators including covenants in financings, terms imposed by credit card issuers, collateral posting requirements contained in fuel hedging contracts and the ability of airlines and MROs to make or refinance principal payments as they come due; • geopolitical and other events, including those arising from war, concerns about security, terrorism, war, pandemics and similar public health concerns and political instability; • changing political conditions, including risk of rising protectionism and imposition of new trade barriers; • inclement weather and natural disasters; • environmental compliance and other regulatory costs, including noise regulations, emissions regulations, climate change initiatives, and aircraft age limitations; • potential and actual cyberattacks, including information hacking, viruses and malware; 10 Table of Contents • labor contracts, labor costs and strikes or stoppages at commercial aircraft operators; • operating costs, including the price and availability of fuel, maintenance costs, and insurance costs and coverages; • technological developments, including the increasing use of Artificial Intelligence; • airport access and air traffic control infrastructure constraints; • industry capacity, utilization and general market conditions; and • market prices for aviation equipment.
Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs, and liabilities. In turn, this could adversely affect our business strategy, operating results, and financial condition. 13 Table of Contents We have been subject to cybersecurity incidents in the past and may be again in the future.
Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs, and liabilities. In turn, this could adversely affect our business strategy, operating results, and financial condition. 14 Table of Contents We have been subject to cybersecurity incidents in the past and may be again in the future.
Risks Related to Our Small Size and Corporate Structure Intense competition in our industry, particularly with major companies with substantially greater financial, personnel, marketing and other resources, could cause our revenues and business to suffer. The engine and aircraft leasing and related services industry is highly competitive and global.
Risks Related to Our Competition and Corporate Structure Intense competition in our industry, particularly with major companies with substantially greater financial, personnel, marketing and other resources, could cause our revenues and business to suffer. The engine and aircraft leasing and related services industry is highly competitive and global.
Willis, IV, who is the founder of WLFC and currently serves as our Executive Chairman, has served as a Director since our establishment in 1985, served as Chief Executive Officer from 1985 until April 2022, served as President until July 2011, and has served as Chairman of the Board of Directors from 1996 until April 2022, when he became Executive Chairman.
Willis, IV, who is the founder of WLFC and currently serves as our Executive Chairman, has served as a Director since our establishment in 1985, served as Chief Executive Officer from 1985 until 2022, served as President until 2011, and has served as Chairman of the Board of Directors from 1996 until 2022, when he became Executive Chairman.
We could incur substantial costs, including capital and other expenditures, to comply with such requirements, as well as fines, penalties, or civil or criminal sanctions and third-party claims, if we were to violate or become liable under such laws or regulations.
We could incur substantial costs, including capital and other expenditures, complying with such requirements, as well as fines, penalties, or civil or criminal sanctions and third-party claims, if we were to violate or become liable under such laws or regulations.
Risks Related to Our Foreign Operations A substantial portion of our lease revenue comes from foreign customers, subjecting us to divergent regulatory requirements. For the year ended December 31, 2024, approximately 69% of our lease rent revenue was generated by leases to foreign customers.
Risks Related to Our Foreign Operations A substantial portion of our lease revenue comes from foreign customers, subjecting us to divergent regulatory requirements. For the year ended December 31, 2025, approximately 69% of our lease rent revenue was generated by leases to foreign customers.
Changes to trade policy, tariff, sanction and import/export regulations may have a material adverse effect on our business, financial condition and results of operations. 20 Table of Contents Changes in U.S. or international, political, regulatory and economic conditions or in laws and policies governing foreign trade and investment in the territories or countries where we currently conduct our business, could adversely affect our business.
Changes to trade policy, tariff, sanction and import/export regulations may have a material adverse effect on our business, financial condition and results of operations. Changes in U.S. or international, political, regulatory and economic conditions or in laws and policies governing foreign trade and investment in the territories or countries where we currently conduct our business, could adversely affect our business.
Our aircraft, engines or parts could cause bodily injury or property damage, exposing us to liability claims. 12 Table of Contents We are exposed to potential liability claims if the use of our aircraft, engines or parts is alleged to have caused bodily injury or property damage.
Our aircraft, engines or parts could cause bodily injury or property damage, exposing us to liability claims. 13 Table of Contents We are exposed to potential liability claims if the use of our aircraft, engines or parts is alleged to have caused bodily injury or property damage.
If we are removed from such role with those facilities, our expenses would increase as our consolidated VIE’s WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL would have to hire an outside provider to replace the servicer and administrative agent functions, and we would be materially and adversely affected.
If we are removed from such role with those facilities, our expenses would increase as our consolidated VIE’s WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL would have to hire an outside provider to replace the servicer and administrative agent functions, and we would be materially and adversely affected.
Any of these risks could have a material adverse impact on our financial condition and results of operations. 14 Table of Contents We carry the risk of maintenance for our leased assets. Our maintenance reserves may be inadequate or lessees may default on their obligations to perform maintenance, which could increase our expenses.
Any of these risks could have a material adverse impact on our financial condition and results of operations. We carry the risk of maintenance for our leased assets. Our maintenance reserves may be inadequate or lessees may default on their obligations to perform maintenance, which could increase our expenses.
Risks Related to Our Capital Structure Our future growth and profitability will depend on our ability to acquire aviation equipment and make other strategic investments. As a result, our inability to obtain sufficient capital to finance these acquisitions would constrain our ability to grow our portfolio and to increase our revenues. Our business is capital intensive and highly leveraged.
Our future growth and profitability will depend on our ability to acquire aviation equipment and make other strategic investments. As a result, our inability to obtain sufficient capital to finance these acquisitions would constrain our ability to grow our portfolio and to increase our revenues. Our business is capital intensive and highly leveraged.
Changes in tax laws or accounting principles that make operating leases less attractive to our lessees could have a material adverse effect on demand for our leases and on our business. Our consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).
Changes in tax laws or accounting principles that make operating leases less attractive to our lessees could have a material adverse effect on demand for our leases and on our business. Our consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States.
We receive monthly fees of 11.5% as servicer (3.5% of which is subordinated in each case) and 2.0% as administrative agent of the aggregate net rents actually received by WEST III, WEST IV, WEST V, WEST VI, and WEST VII on their engines.
We receive monthly fees of 11.5% as servicer (3.5% of which is subordinated in each case) and 2.0% as administrative agent of the aggregate net rents actually received by WEST III, WEST V, WEST VI, WEST VII, WEST VIII, and WEST IX on their engines.
We and our customers operate in a highly regulated industry and changes in laws or regulations may adversely affect our ability to lease or sell our engines or aircraft. Licenses and consents 10 Table of Contents We and our customers operate in a highly regulated industry. A number of our leases require specific governmental or regulatory licenses, consents or approvals.
We and our customers operate in a highly regulated industry and changes in laws or regulations may adversely affect our ability to lease or sell our engines or aircraft. Licenses and consents We and our customers operate in a highly regulated industry. A number of our leases require specific governmental or regulatory licenses, consents or approvals.
As of December 31, 2024, engines on-lease with lease terms of 12 months or less and engines off-lease constituted approximately 75% of our assets. These engines may frequently need to be remarketed, which could drive up our operating costs associated with such equipment. Such higher operating costs could have a material, adverse impact on our results of operations and profitability.
As of December 31, 2025, engines on-lease with lease terms of 12 months or less and engines off-lease constituted approximately 50% of our assets. These engines may frequently need to be remarketed, which could drive up our operating costs associated with such equipment. Such higher operating costs could have a material, adverse impact on our results of operations and profitability.
Our customers face intense competition and some carriers are in troubled financial condition. As a general matter, commercial aircraft operators with weak capital structures are more likely than well-capitalized operators to seek operating leases, and, at any time, investors should expect some lessees and sub-lessees to experience payment difficulties.
Our customers face intense competition and some carriers are in troubled financial condition. 16 Table of Contents As a general matter, commercial aircraft operators with weak capital structures are more likely than well-capitalized operators to seek operating leases, and, at any time, investors should expect some lessees and sub-lessees to experience payment difficulties.
These include consents for certain payments under the leases and for the export, import, or re-export of our engines or aircraft. Failure by our customers or us to obtain certain licenses and approvals could negatively affect our ability to conduct our business.
These include consents for certain payments under the leases and for the export, import, or re-export of our engines or aircraft. Failure by our customers or us to obtain certain licenses and approvals could negatively affect our ability to 11 Table of Contents conduct our business.
Substantially all of our assets are pledged to secure our obligations to creditors. Our revolving credit and senior secured warehouse credit banks have a lien on all of our assets, including our residual interests in WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL.
Substantially all of our assets are pledged to secure our obligations to creditors. Our revolving credit and senior secured warehouse credit banks have a lien on all of our assets, including our residual interests in WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL.
There can be no assurance that we will be in compliance with these covenants in the future or will not otherwise be terminated as servicer and or administrative agent for the WEST III, WEST IV, WEST V, WEST VI, WEST VII, and or WWFL facilities.
There can be no assurance that we will be in compliance with these covenants in the future or will not otherwise be terminated as servicer and or administrative agent for the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and or WWFL facilities.
The agreements governing our debt, including the issuance of notes by WEST III, WEST IV, WEST V, WEST VI, and WEST VII, as well as the loans under our senior secured warehouse credit facility, also include restrictive financial covenants.
The agreements governing our debt, including the issuance of notes by WEST III, WEST V, WEST VI, WEST VII, WEST VIII, and WEST IX, as well as the loans under our senior secured warehouse credit facility, also include restrictive financial covenants.
We may be removed as servicer and or administrative agent of our WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL facilities by an affirmative vote of a requisite number of the WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL note holders.
We may be removed as servicer and or administrative agent of our WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL facilities by an affirmative vote of a requisite number of the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL note holders.
If they do not, we may, in the future, find it necessary to pay the claims secured by such liens to repossess such assets. In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine.
If they do not, we may, in the future, find it necessary to pay the claims secured by such liens to repossess such assets. 21 Table of Contents In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine.
Such vote could happen upon the occurrence of certain specified events as outlined in the WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL servicing and or administrative agency agreements.
Such vote could happen upon the occurrence of certain specified events as outlined in the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL servicing and or administrative agency agreements.
Continued inflationary pressures could impact our profitabilit y and have a material adverse effect on our business, results of operations and financial condition. 18 Table of Contents Risks Related to The Common Stock Trading Price The Company’s common stock trading price may be affected by numerous factors that may impose a financial risk on the Company’s stockholders.
Continued inflationary pressures could impact our profitability and have a material adverse effect on our business, results of operations and financial condition. 19 Table of Contents Risks Related to The Common Stock Trading Price The Company’s common stock trading price may be affected by numerous factors that may impose a financial risk on the Company’s stockholders.
Due to WEST III’s, WEST IV’s, WEST V’s, WEST VI’s, WEST VII’s, and WWFL’s bankruptcy remote structures, that interest is subject to the prior payments of WEST III’s, WEST IV’s, WEST V’s, WEST VI’s, WEST VII’s, and WWFL’s debt and other obligations.
Due to WEST III’s, WEST V’s, WEST VI’s, WEST VII’s, WEST VIII’s, WEST IX’s, and WWFL’s bankruptcy remote structures, that interest is subject to the prior payments of WEST III’s, WEST V’s, WEST VI’s, WEST VII’s, WEST VIII’s, WEST IX’s, and WWFL’s debt and other obligations.
As of December 31, 2024, we had an aggregate of approximately $3.9 million in lease rent and $3.6 million in maintenance reserve payments more than 30 days past due, compared to $10.5 million in lease rent and $8.9 million in maintenance reserve payments more than 30 days past due as of December 31, 2023.
As of December 31, 2025, we had an aggregate of approximately $3.8 million in lease rent and $3.3 million in maintenance reserve payments more than 30 days past due, compared to $3.9 million in lease rent and $3.6 million in maintenance reserve payments more than 30 days past due as of December 31, 2024.
As of December 31, 2024, 65 of our leases comprising approximately 24% of the net book value of our on-lease assets do not provide for any monthly maintenance reserve payments to be made by lessees, and we can give no assurance that future leases of our engines or aircraft will require maintenance reserves.
As of December 31, 2025, 56 of our leases comprising approximately 20% of the net book value of our on-lease assets do not provide for any monthly maintenance reserve payments to be made by lessees, and we can give no assurance that future leases of our engines or aircraft will require maintenance reserves.
We are the servicer and administrative agent with respect to engines in the WEST III, WEST IV, WEST V, WEST VI, and WEST VII facilities and the servicer agent with respect to engines in WWFL.
We are the servicer and administrative agent with respect to engines in the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, and WEST IX facilities and the servicer agent with respect to engines in WWFL.
We are exposed to interest rate risk on our leases, which could have a negative impact on our margins. We are affected by fluctuations in interest rates.
We are exposed to interest rate risk on our leases, which could have a negative impact on our margins. 18 Table of Contents We are affected by fluctuations in interest rates.
As of December 31, 2024, we were in compliance with the financial covenants set forth in the WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL servicing and or administrative agency agreements.
As of December 31, 2025, we were in compliance with the financial covenants set forth in the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL servicing and or administrative agency agreements.
If we are unable to obtain commitments for the remaining deliveries or otherwise satisfy our contractual obligations to the engine manufacturers, we will be subject to several potential risks, including: • forfeiting advance deposits, as well as incurring certain significant costs related to these commitments, such as contractual damages and legal, accounting, and financial advisory expenses; 16 Table of Contents • defaulting on any future lease commitments we may have entered into with respect to these engines, which could result in monetary damages and strained relationships with lessees; • failing to realize the benefits of purchasing and leasing the engines; and • risking harm to our business reputation, which would make it more difficult to purchase and lease engines in the future on agreeable terms, if at all.
If we are unable to obtain commitments for the remaining deliveries or otherwise satisfy our contractual obligations to the engine manufacturers, we will be subject to several potential risks, including: • forfeiting advance deposits, as well as incurring certain significant costs related to these commitments, such as contractual damages and legal, accounting, and financial advisory expenses; • defaulting on any future lease commitments we may have entered into with respect to these engines, which could result in monetary damages and strained relationships with lessees; • failing to realize the benefits of purchasing and leasing the engines; and • risking harm to our business reputation, which would make it more difficult to purchase and lease engines in the future on agreeable terms, if at all. 17 Table of Contents Risks Related to Our Capital Structure Our level of indebtedness and significant debt service obligations could adversely affect our financial condition or our ability to fulfill our obligations, including the notes, and make it more difficult for us to fund our operations.
Our ability to recover engines installed on airframes may depend on the cooperation of the airframe owner. Risks Related to Our Orders of New Engines We have committed to purchase new engines in 2025 with an aggregate value of up to $107.6 million.
Our ability to recover engines installed on airframes may depend on the cooperation of the airframe owner. Risks Related to Our Orders of New Engines We have committed to purchase new engines in 2026 with an aggregate value of up to $244.5 million.
Therefore, our rights and the rights of our creditors to participate in any distribution of the assets of WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL upon liquidation, reorganization, dissolution or winding up will be subject to the prior claims of WEST III’s, WEST IV’s, WEST V’s, WEST VI’s, WEST VII’s, and WWFL’s creditors.
Therefore, our rights and the rights of our creditors to participate in any distribution of the assets of WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL upon liquidation, reorganization, dissolution or winding up will be subject to the prior claims of WEST III’s, WEST V’s, WEST VI’s, 22 Table of Contents WEST VII’s, WEST VIII’s, WEST IX’s, and WWFL’s creditors.
Provisions in Delaware law and our charter and bylaws might prevent or delay a change of control. 22 Table of Contents Certain provisions of law, our amended certificate of incorporation, bylaws and amended rights agreement could make the following more difficult: (1) an acquisition of us by means of a tender offer, a proxy contest or otherwise, and (2) the removal of incumbent officers and directors.
Certain provisions of law, our amended certificate of incorporation, bylaws and amended rights agreement could make the following more difficult: (1) an acquisition of us by means of a tender offer, a proxy contest or otherwise, and (2) the removal of incumbent officers and directors.
As of December 31, 2024, Mr. Willis beneficially owned or had the ability to direct the voting of 3,018,806 shares of our common stock, representing approximately 42% of the issued shares of our common stock. As a result, Mr.
As of December 31, 2025, Mr. Willis beneficially owned or had the ability to direct the voting of 3,075,576 shares of our common stock, representing approximately 40% of the issued shares of our common stock. As a result, Mr.
To the extent we do not have hedges or other derivatives in place, or if our hedges or other derivatives do not mitigate our interest rate exposure from an economic standpoint, we would be adversely affected by increasing interest rates.
To the extent we do not have hedges or other derivatives in place, or if our hedges or other derivatives do not mitigate our interest rate exposure from an economic standpoint, we would be adversely affected by increasing interest rates. One-month term SOFR was approximately 3.87% and 4.37% on December 31, 2025 and 2024, respectively.
This next generation of engines and aircraft is expected to deliver improved fuel consumption and reduced noise and emissions with lower operating costs compared to current-technology aircraft. 15 Table of Contents The introduction of new models of engines and aircraft and the potential resulting overcapacity in supply, could adversely affect the residual values and the lease rates for our engines and aircraft, our ability to lease or sell our engines and aircraft on favorable terms, or at all, or result in us recording future impairment charges.
The introduction of new models of engines and aircraft and the potential resulting overcapacity in supply, could adversely affect the residual values and the lease rates for our engines and aircraft, our ability to lease or sell our engines and aircraft on favorable terms, or at all, or result in us recording future impairment charges.
One-month term SOFR was approximately 4.37% and 5.38% on December 31, 2024 and 2023, respectively. 17 Table of Contents An increase in interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our profitability. A significant portion of our outstanding debt bears interest at floating rates.
An increase in interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our profitability. A significant portion of our outstanding debt bears interest at floating rates.
Under most of our engine and aircraft leases, the lessee makes monthly maintenance reserve payments to us based on the asset’s usage and management’s estimate of maintenance costs. A certain level of maintenance reserve payments on the WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL engines are held in related engine reserve restricted cash accounts.
Under most of our engine and aircraft leases, the lessee makes monthly maintenance reserve payments to us based on the asset’s usage and management’s estimate of maintenance costs.
Consequently, our business, financial condition, results of operations and cash flows would be adversely affected.
Consequently, our business, financial condition, results of operations and cash flows would be adversely affected. Provisions in Delaware law and our charter and bylaws might prevent or delay a change of control.
We are the servicer and administrative agent for the WEST III, WEST IV, WEST V, WEST VI, and WEST VII facilities and the servicer agent for WWFL, and our cash flows would be materially and adversely affected if we were removed from these positions.
Loss of any of these employees, particularly our Executive Chairman, could have a material adverse effect on our business as our key employees have specialized knowledge of our industry and customers and would be difficult to replace. 23 Table of Contents We are the servicer and administrative agent for the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, and WEST IX facilities and the servicer agent for WWFL, and our cash flows would be materially and adversely affected if we were removed from these positions.
Generally, the lessee under long-term leases is responsible for all scheduled maintenance costs, even if they exceed the amounts of maintenance reserves paid.
A certain level of maintenance reserve payments on the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL engines are held in related engine reserve restricted cash accounts. Generally, the lessee under long-term leases is responsible for all scheduled maintenance costs, even if they exceed the amounts of 15 Table of Contents maintenance reserves paid.
Our bylaws also limit the ability of stockholders to raise matters at a meeting of stockholders without giving advance notice. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 23 Table of Contents
Our bylaws also limit the ability of stockholders to raise matters at a meeting of stockholders without giving advance notice. Risks Related to Our Investment Fund Partnerships Valuations for the investment fund partnerships are inherently uncertain and are not an indicator for actual realizations.
Similarly, the rights of our shareholders are subject to satisfaction of the claims of our lenders and other creditors. We may be unable to manage the expansion of our operations.
Similarly, the rights of our shareholders are subject to satisfaction of the claims of our lenders and other creditors. We experience risks related to customer concentration. While we strive to ensure we lease our assets to a diverse group of participants in the commercial aviation industry, we can be subject to customer concentration risks.
Concerns over global warming, climate change, or other environmental issues could result in more stringent limitations on the operation of older, non-compliant engines and aircraft. 11 Table of Contents Scrutiny of the airline industry and its potential negative impacts on the environment may result in decreased demand for air travel, which may in turn cause lessees to default on their lease payment obligations to us which would negatively affect our financial condition, cash flow and results of operations.
Concerns over global warming, climate change, or other environmental issues could result in more stringent limitations on the operation of older, non-compliant engines and aircraft.
Removed
Loss of any of these employees, particularly our Executive Chairman, could have a material adverse effect on our business as our key employees have knowledge of our industry and customers and would be difficult to replace.
Added
This next generation of engines and aircraft is expected to deliver improved fuel consumption and reduced noise and emissions with lower operating costs compared to current-technology aircraft.
Added
As of December 31, 2025, we had $2.7 billion of indebtedness outstanding. In addition, on such date, we had approximately $350.0 million of borrowing availability under our revolving credit facility.
Added
Our level of indebtedness could have important negative consequences to you and us, including: we may have difficulty servicing our indebtedness; we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions or other purposes; we will need to use a portion of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities; our debt level increases our vulnerability to general economic downturns and adverse industry conditions; our debt level could limit our flexibility in planning for, or reacting to, changes in our business and in our industry in general; our leverage could place us at a competitive disadvantage compared to our competitors that have less debt; and our failure to comply with the financial and other restrictive covenants in our debt instruments which, among other things, may require us to maintain specified financial ratios and will limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could have a material adverse effect on our business or prospects.
Added
We have 69 lessees in 37 countries, and our business is exposed to geopolitical and economic risks beyond our control. Currently, global markets are experiencing volatility and uncertainty connected to the United States-Israel-Iran war and U.S intervention in Venezuela.
Added
Following the February 2026 missile strikes in Iran, there has been increased instability, including airspace closures in the Middle East, damage to airports, the de facto closure of Strait of Hormuz, a waterway that transports approximately 20% of the world’s petroleum.
Added
The duration and impact of these ongoing armed conflicts, and the potential of these conflicts spreading to more regions is uncertain and could adversely affect the global economy, financial markets, our customers and in turn us. Any such disruptions may also heighten the impacts of other risks described in this Annual Report.
Added
For instance, in 2025, one customer accounted for approximately 13% of total lease rent revenue, and in 2024, two customers accounted for approximately 11%, each, of total lease rent revenue. In addition, as of December 31, 2025, one customer accounted for 15% of total receivables, and as of December 31, 2024, one customer accounted for 11% of total receivables.
Added
To the extent that any customer that leases a significant number of our assets experiences financial or other hardships it could have an adverse effect on our results of operations and financial condition. We may be unable to manage the expansion of our operations.
Added
We have entered into two investment partnerships that we do not consolidate but that do affect our financial results.
Added
We value the illiquid investments held by our investment fund partnerships based on our estimate of their fair value as of the valuation date, which is based, among other things, third-party appraisals and or interest rates that approximate prevailing market rates through observable inputs. Furthermore, we will recognize carried interest, based in part, on these estimated fair values.
Added
As these valuations are inherently uncertain, they may fluctuate greatly from period to period. There can be no assurance that the investment values that we record from time to time will ultimately be realized.
Added
If investment values turn out to be materially different, fund investors may lose confidence which could, in turn, result in liquidation of the fund or difficulties in raising additional capital. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCYBERSECURITY RISK MANAGEMENT AND STRATEGY The Company has policies, controls, and procedures in place for assessing, identifying, and managing material risks from cybersecurity threats, including, but not limited to: • Reviewing financial reporting systems and subsystems to ensure that access is limited to approved users; • Reviewing data recorded, processed, and reported to ensure that the data remains complete, accurate, and valid; • Conducting regular network and endpoint monitoring and vulnerability assessments to improve our information systems; • Reviewing system changes of financial reporting significance to ensure that they have been authorized and appropriately tested before being moved to production; • Monitoring and identifying cybersecurity threats in connection with the use of third-party providers; • Responding to and remediating any incident of damage or interruption to our information technology systems, including cyberattacks, internally and through the use of third-party providers as necessary; • Carrying information security risk insurance that provides protection against potential losses arising from a cybersecurity incident; and • Requiring regular cybersecurity training programs for employees, management, and directors.
Biggest changeAs discussed below, we employ a range of mitigation strategies that aid us in protecting our customers from cybersecurity risks. 24 Table of Contents As part of the Company’s overall risk mitigation strategy, the Company has policies, controls, and procedures in place for assessing, identifying, and managing material risks from cybersecurity threats, including, but not limited to: • Reviewing financial reporting systems and subsystems to ensure that access is limited to approved users; • Reviewing data recorded, processed, and reported to ensure that the data remains complete, accurate, and valid; • Conducting regular network and endpoint monitoring and vulnerability assessments to improve our information systems; • Reviewing system changes of financial reporting significance to ensure that they have been authorized and appropriately tested before being moved to production; • Monitoring and identifying cybersecurity threats in connection with the use of third-party providers; • Responding to and remediating any incident of damage or interruption to our information technology systems, including cyberattacks, internally and through the use of third-party providers as necessary; • Carrying information security risk insurance that provides protection against potential losses arising from a cybersecurity incident; and • Requiring regular cybersecurity training programs for employees, management, and directors.
Additionally, as the dynamic cybersecurity environment is continuously evolving, management has periodic meetings with our cybersecurity insurance providers to reevaluate the Company’s cybersecurity risks and related information technology resiliency. The Board of Directors shall be informed of any material information technology breaches that the Company has experienced in a timely manner. 24 Table of Contents
Additionally, as the dynamic cybersecurity environment is continuously evolving, management has periodic meetings with our cybersecurity insurance providers to reevaluate the Company’s cybersecurity risks and related information technology resiliency. The Board of Directors is informed of any material information technology breaches that the Company has experienced in a timely manner.
Members of the Board of Directors have access to, and relationships with, cybersecurity experts in the organization, including the Company’s Head of Information Technology, who has extensive experience in network operations and an understanding of cybersecurity.
Members of the Board of Directors have access to, and relationships with, cybersecurity experts in the organization, including the Company’s Head of Information Technology, who has extensive experience in network operations and cybersecurity. The Company’s Head of Information Technology reports to the Company’s Chief Financial Officer, who relays cyber-related information to the Board of Directors.
These approaches vary in maturity across our business, and we work to continually improve them. GOVERNANCE The Company’s Board of Directors and management have discussions to stay vigilant and engaged as it relates to cyber exposures, risk management strategy, monitoring, and cyber-incident response and recovery plans.
GOVERNANCE The Company’s Board of Directors and management have regular discussions related to cyber risks and exposures, risk management and mitigation strategy, monitoring, and cyber-incident response and recovery plans.
Added
ITEM 1C. CYBERSECURITY RISK MANAGEMENT AND STRATEGY Our cybersecurity program works to address, identify, and mitigate the material risk that may arise from a cybersecurity threat. Our goal is to continually assess the current known risks and work towards both predicting and combating future risks that may arise in our business and the industry at large.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease 45,000 square feet of warehouse space in Pompano Beach, Florida. We sub-lease 1,615 square feet of office and warehouse space for our operations in San Diego, California. We lease 4,166 square feet of office space in Dublin, Ireland and 1,348 square feet of office space in London, UK.
Biggest changeWe sub-lease approximately 1,000 square feet of office and warehouse space for our operations in San Diego, California. We lease 4,166 square feet of office space in Dublin, Ireland and 1,348 square feet of office space in London, UK. We also lease facilities for sales and operations in Larkspur, California; Singapore; Blagnac, France; and Gandhinagar, India.
ITEM 2. PROPERTIES Our principal offices are located in Coconut Creek, Florida where we own 60,000 square feet of office and warehouse space. We also own 130,000 square feet of office and warehouse space in Bridgend, Wales, UK. We lease 60,000 square feet of hangar and office space in Darlington, UK.
ITEM 2. PROPERTIES Aircraft, aircraft engines, and spare parts inventories are the primary physical assets of the Company. Our principal offices are located in Coconut Creek, Florida where we own approximately 60,000 square feet of office and warehouse space. We also own approximately 130,000 square feet of office and warehouse space in Bridgend, Wales, UK.
We also lease facilities for sales and operations in Larkspur, California; Shanghai, China; Singapore; Blagnac, France; and Gandhinagar, India. The Company’s Leasing and Related Operations segment conducts business in all of the properties above except for Pompano Beach. The Spare Parts segment primarily conducts business in the Coconut Creek and Pompano Beach, Florida facilities. ITEM 3. LEGAL PROCEEDINGS None.
The Company’s Leasing and Related Operations segment conducts business in all of the properties above except for Pompano Beach. The Spare Parts segment primarily conducts business in the Pompano Beach facility.
Removed
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Added
We lease approximately 145,000 square feet of hangar and office space and approximately 50 acres of land in Darlington, UK. We lease approximately 45,000 square feet of warehouse space in Pompano Beach, Florida and approximately 25,000 square feet of warehouse space in Sunrise, Florida.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn December 2024, the Board of Directors approved the renewal of the existing common stock repurchase plan which allows for repurchases of up to $60.0 million of the Company’s common stock, extending the plan through December 31, 2026. Repurchased shares are immediately retired. During 2024 and 2023, no shares were repurchased.
Biggest changeThe following table provides information with respect to purchases by the Company of shares of its Common Stock during the fourth quarter of 2025: Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs d) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2025 to October 31, 2025 — — — $ 39,595 November 1, 2025 to November 30, 2025 — — — $ 39,595 December 1, 2025 to December 31, 2025 — — — $ 39,595 Total — — — $ 39,595 In December 2024, the Board of Directors approved the renewal of the existing common stock repurchase plan which allows for repurchases of up to $60.0 million of the Company’s common stock, extending the plan through December 31, 2026.
In September 2024, the Company entered into a Series A Preferred Stock Purchase Agreement with DBJ, which refinanced the Company’s Series A-1 and Series A-2 Preferred Stock into one $65.0 million Series A Preferred Stock series (the “Series A Preferred Stock”), which accrues quarterly dividends at the rate per annum of 8.35% per share.
In September 2024, the Company entered into a Series A Preferred Stock Purchase Agreement with DBJ, which refinanced and expanded the Company’s Series A-1 and Series A-2 Preferred Stock into one $65.0 million Series A Preferred Stock series (the “Series A Preferred Stock”), which accrues quarterly dividends at the rate per annum of 8.35% per share.
The 2023 Plan authorized 1,750,000 shares for issuance, plus the number of shares remaining for issuance under the prior stock plan and any future forfeited awards under the prior plan. Stock-based compensation is in the form of restricted stock awards (“RSAs”).
The 2023 Plan authorized 1,750,000 shares for issuance, plus the number of shares remaining for issuance under the prior stock plan and any future forfeited awards under the prior plan. Stock-based compensation is primarily in the form of restricted stock awards (“RSAs”).
The RSAs are subject to either service-based vesting, which is typically between one and four years, in which a specific period of continued employment must pass before an award vests, or performance-based vesting, which is typically between one and two years.
The RSAs are subject to either service-based vesting, which is typically between one and four years, in which a specific period of continued employment must pass before an award vests, or performance-based vesting, which is typically between one and three years.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS Our Common Stock is listed on the Nasdaq Global Market under the symbol WLFC. As of March 3, 2025, there were 5,567 shareholders of record of our Common Stock. We paid $10.7 million in dividends to our common shareholders during the year ended December 31, 2024.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS Our Common Stock is listed on the Nasdaq Global Market under the symbol WLFC. As of March 2, 2026, there were 8,834 shareholders of record of our Common Stock. We paid $8.7 million in dividends to our common shareholders during the year ended December 31, 2025.
The following table outlines our Equity Compensation Plan Information: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Plans Not Approved by Shareholders: None n/a n/a n/a Plans Approved by Shareholders: Employee Stock Purchase Plan — n/a 93,863 2023 Stock Incentive Plan — n/a 1,592,342 Total — n/a 1,686,205 25 Table of Contents The 2023 Incentive Stock Plan (the “2023 Plan”) amended and restated the prior 2021 Incentive Stock Plan.
The following table outlines our Equity Compensation Plan Information: Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Plans Not Approved by Shareholders: None n/a n/a n/a Plans Approved by Shareholders: Employee Stock Purchase Plan — n/a 90,669 2023 Stock Incentive Plan 300,000 $126.55 684,254 Total 300,000 n/a 774,923 The 2023 Incentive Stock Plan (the “2023 Plan”) amended and restated the prior 2021 Incentive Stock Plan.
At December 31, 2024, approximately $39.6 million was available to purchase shares under the plan. As of December 31, 2024, the total number of shares of common stock issued was approximately 7.2 million. ITEM 6. [RESERVED]
Repurchased shares are immediately retired. During 2025 and 2024, no shares were repurchased under the plan. At December 31, 2025, approximately $39.6 million was available to purchase shares under the plan. As of December 31, 2025, the total number of shares of common stock issued was approximately 7.6 million.
The Series A Preferred Stock has a redemption price of $20.00 per share plus dividends accrued but not paid.
The Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 8.5% per share and the Series A-2 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share. The Series A Preferred Stock has a redemption price of $20.00 per share plus dividends accrued but not paid.
The expense associated with these awards is recognized on a straight-line basis over the respective vesting period, with forfeitures accounted for as they occur. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is equal to the portion of the grant-date fair value of the award tranche that is actually vested at that date.
For any vesting tranche of an award, the cumulative amount of compensation cost recognized is equal to the portion of the grant-date fair value of the award tranche that is actually vested at that date.
Removed
The Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share through October 15, 2023 and accrued at the rate per annum of 8.5% per share thereafter through September 26, 2024. The Series A-2 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share.
Added
The expense associated with these awards is recognized on a straight-line basis over the respective vesting period, with forfeitures accounted for as they occur. As it relates to performance-based awards, accrual of compensation expense is based on the probable outcome of the performance condition.
Removed
As of December 31, 2024, the Company had granted 2,052,254 RSAs under the 2023 Plan and prior plans and has 1,592,342 shares available for future issuance. The fair value of the restricted stock awards equaled the stock price at the grant date.
Added
In November 2025, the Compensation Committee of the Board of Directions approved the grant of a non-qualified stock option to our Executive Chairman, to purchase up to 300,000 shares of the Company’s common stock. The option award vests in four equal annual installments and has a six-year term.
Added
The expense associated with this option is recognized on a straight-line basis over the vesting period. 26 Table of Contents As of December 31, 2025, the Company had granted 2,965,206 shares under the 2023 Plan, which included the 300,000 non-qualified stock option, and has 684,254 shares available for future issuance.
Added
The fair value of the RSAs equaled the stock price at the grant date. The fair value of the non-qualified stock option was determined under the Black-Scholes model.
Added
The Black-Scholes model requires inputs such as the exercise price of the option, the expected term of the option, the current share price, the expected share price volatility, the expected dividend yield, the risk-free interest rate for the expected term of the option, and the effect of potential dilution.
Added
In December 2025, the Company agreed to repurchase 30,000 shares of the common stock of the Company from the Company’s Executive Chairman, at a price of $126.28 per share, which price represents the volume weighted average price as of December 4, 2025, discounted by 2% (the “Repurchase Transaction”).
Added
The Repurchase Transaction was made outside of the Company’s common stock purchase plan. A special committee of the Board of the Company, composed of only independent directors, approved the Repurchase Transaction pursuant to authority delegated by the Board. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRECENT ACCOUNTING PRONOUNCEMENTS The most recent adopted and to be adopted accounting pronouncements are described in Note 1(x) to our Consolidated financial statements included in this Annual Report on Form 10-K. 28 Table of Contents RESULTS OF OPERATIONS Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Revenue is summarized as follows: Years Ended December 31, 2024 2023 % Change (dollars in thousands) Lease rent revenue $ 238,236 $ 213,138 11.8 % Maintenance reserve revenue 213,908 133,668 60.0 % Spare parts and equipment sales 27,099 20,359 33.1 % Interest revenue 11,683 8,721 34.0 % Gain on sale of leased equipment 45,063 10,581 325.9 % Maintenance services revenue 24,158 24,168 — % Other revenue 9,076 7,920 14.6 % Total revenue $ 569,223 $ 418,555 36.0 % Lease Rent Revenue .
Biggest changeRESULTS OF OPERATIONS Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue is summarized as follows: Year Ended December 31, 2025 2024 % Change (dollars in thousands) Lease rent revenue $ 291,633 $ 238,236 22.4 % Maintenance reserve revenue 231,980 213,908 8.4 % Spare parts and equipment sales 95,483 27,099 252.3 % Interest revenue 14,093 11,683 20.6 % Gain on sale of leased equipment 54,025 45,063 19.9 % Gain on sale of financial assets 378 — nm Maintenance services revenue 25,492 24,158 5.5 % Other revenue 17,157 9,076 89.0 % Total revenue $ 730,241 $ 569,223 28.3 % Lease Rent Revenue .
Actual results could differ materially for a variety of reasons, including, among others: the effects on the airline industry and the global economy of events such as the current high interest rate and inflationary environment; changes in oil prices and other disruptions to the world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; managing the risks and impacts of potential and actual security breaches, cyberattacks, privacy breaches or data breaches, including business, service, or operational disruptions, the unauthorized access to or disclosure of data, financial loss, reputational damage, increased response and remediation costs, legal and regulatory proceedings or other unfavorable outcomes; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet the changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and the impact of pandemics or other public health crises on our business, financial condition, and results of operations.
Actual results could differ materially for a variety of reasons, including, among others: the effects on the airline industry and the global economy of events such as the current high interest rate and inflationary environment; changes in oil prices and other disruptions to the world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with our growth strategies and strategic priorities; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; managing the risks and impacts of potential and actual security breaches, cyberattacks, privacy breaches or data breaches, including business, service, or operational disruptions, the unauthorized access to or disclosure of data, financial loss, reputational damage, increased response and remediation costs, legal and regulatory proceedings or other unfavorable outcomes; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet the changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and the impact of pandemics or other public health crises on our business, financial condition, and results of operations.
Our core business is acquiring and leasing commercial aircraft and aircraft engines and related aircraft equipment pursuant to operating leases, all of which we sometimes collectively refer to as “equipment.” As of December 31, 2024, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable under the guidance provided by ASC 842 and investments in sales-type leases.
Our core business is acquiring and leasing commercial aircraft and aircraft engines and related aircraft equipment pursuant to operating leases, all of which we sometimes collectively refer to as “equipment.” As of December 31, 2025, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable under the guidance provided by ASC 842 and investments in sales-type leases.
Cash flows provided by financing activities for the year ended December 31, 2024 were $445.0 million and primarily reflected $1,305.7 million and $13.1 million in proceeds from the issuance of debt obligations and preferred stock, respectively, partly offset by $840.0 million in principal payments, $11.6 million in new debt issuance costs, and $10.7 million in common stock cash dividends paid.
Cash flows provided by financing activities for the year ended December 31, 2024 were $445.0 million and primarily reflected $1,305.7 million and $13.1 million in proceeds from the issuance of debt obligations and preferred stock, respectively, partially offset by $840.0 million in principal payments, $11.6 million in new debt issuance costs, and $10.7 million in common stock cash dividends paid.
This Annual Report on Form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding prospects or future results of operations or financial position, made in this Annual Report on Form 10-K are forward-looking.
This Annual Report on Form 10-K, including the MD&A, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding prospects or future results of operations or financial position, made in this Annual Report on Form 10-K are forward-looking.
Under the revolving credit facility, some subsidiaries except WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL 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.
Under the revolving credit facility, some subsidiaries except WEST III, WEST IV, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL 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.
At December 31, 2024, we were in compliance with the covenants specified in our revolving credit facility, including the Interest Coverage Ratio requirement of at least 2.25 to 1.00, and the Total Leverage Ratio requirement of not greater than 4.50 to 1.00.
At December 31, 2025, we were in compliance with the covenants specified in our revolving credit facility, including the Interest Coverage Ratio requirement of at least 2.25 to 1.00, and the Total Leverage Ratio requirement of not greater than 4.25 to 1.00.
Pursuant to the secured warehouse credit facility, some subsidiaries except WEST III, WEST IV, WEST V, WEST VI, and WEST VII jointly and severally guarantee payment and performance of the terms of the loan agreement. The guarantee would be triggered by a default under the agreement.
Pursuant to the secured warehouse credit facility, some subsidiaries except WEST III, WEST V, WEST VI, WEST VII, WEST VIII, and WEST IX 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.
When a long-lived asset is written down and moved to equipment held for sale from equipment held for lease, it is no longer depreciated. 27 Table of Contents On a quarterly basis, management monitors the lease portfolio for events which may indicate that a particular asset may need to be evaluated for potential impairment.
When a long-lived asset is written down and moved to equipment held for sale from equipment held for lease, it is no longer depreciated. On a quarterly basis, management monitors the lease portfolio for events which may indicate that a particular asset may need to be evaluated for potential impairment.
The assets of WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL are not available to satisfy the Company’s obligations other than the obligations specific to that WEST entity or WWFL. WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL are consolidated for financial statement presentation purposes.
The assets of WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL are not available to satisfy the Company’s obligations other than the obligations specific to that WEST entity or WWFL. WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL are consolidated for financial statement presentation purposes.
Under WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL, cash is collected in restricted accounts, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company.
Under WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL, cash is collected in restricted accounts, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company.
WEST III’s, WEST IV’s, WEST V’s, WEST VI’s, WEST VII’s, and WWFL’s abilities to make distributions and pay dividends to the Company are subject to the prior payments of their debt and other obligations and their maintenance of adequate reserves and capital.
WEST III’s, WEST V’s, WEST VI’s, WEST VII’s, WEST VIII's, WEST IX's, and WWFL’s abilities to make distributions and pay dividends to the Company are subject to the prior payments of their debt and other obligations and their maintenance of adequate reserves and capital.
Beyond cash provided through operations, we generally fund the growth of our business through a combination of equity and corporate borrowings secured by our equipment lease portfolio. Cash of approximately $1.3 billion and $625.7 million in the years ended December 31, 2024 and 2023, respectively, was derived from this borrowing activity.
Beyond cash provided through operations, we generally fund the growth of our business through a combination of equity and borrowings secured by our equipment lease portfolio. Cash of approximately $1.7 billion and $1.3 billion in the years ended December 31, 2025 and 2024, respectively, was derived from this borrowing activity.
The increase for the year ended December 31, 2024 compared to that of the prior year primarily reflects increased managed service revenue. These services include management of the WMES lease portfolio, which occurs on an ongoing basis, as well as marketing, which occurs on a transactional basis. Depreciation and Amortization Expense .
The increase for the year ended December 31, 2025 compared to that of the prior year primarily reflects increased managed service revenue. These services include management of the WMES lease portfolio, which occurs on an ongoing basis, as well as marketing, procurement, and financing arrangement, which occurs on a transactional basis. Depreciation and Amortization Expense .
As of December 31, 2024 and 2023, $307.0 million and $355.0 million were available under this facility, respectively. On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the revolving credit facility.
As of December 31, 2025 and 2024, $350.0 million and $307.0 million were available under this facility, respectively. On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the revolving credit facility.
Actual interest payments made will vary due to actual changes in the rates for one-month term SOFR. We believe our equity base, internally generated funds and existing debt facilities are sufficient to maintain our level of operations through 2025.
Actual interest payments made will vary due to actual changes in the rates for one-month term SOFR. We believe our equity base, internally generated funds, existing debt facilities, and access to capital markets are sufficient to maintain our level of operations through 2026.
During 2021, the Company entered into four fixed-rate interest swap agreements, each having notional amounts of $100.0 million, two of which matured during the year ended December 31, 2024 and two of which had remaining terms of 13 months as of December 31, 2024.
During 2021, the Company entered into four fixed-rate interest swap agreements, each having notional amounts of $100.0 million, two of which matured during the year ended December 31, 2024 and two of which had remaining terms of one month as of December 31, 2025.
If we are not able to access additional capital, our ability to continue to grow our asset base consistent with historical trends will be impaired and our future growth limited to that which can be funded from internally generated capital. 33 Table of Contents MANAGEMENT OF INTEREST RATE EXPOSURE At December 31, 2024, $914.9 million of our borrowings were on a variable rate basis at various interest rates tied to one-month term SOFR.
If we are not able to access additional capital, our ability to continue to grow our asset base consistent with historical trends will be impaired and our future growth limited to that which can be funded from internally generated capital. 36 Table of Contents MANAGEMENT OF INTEREST RATE EXPOSURE At December 31, 2025, $732.7 million of our borrowings were on a variable rate basis at rates tied to one-month term SOFR.
Debt Obligations and Covenant Compliance At December 31, 2024, debt obligations totaled $2,264.6 million, net of unamortized debt issuance costs and note discounts, payable with interest rates varying between approximately 2.3% and 8.0%. Substantially all of our assets are pledged to secure our obligations to creditors.
Debt Obligations and Covenant Compliance At December 31, 2025, debt obligations totaled $2,700.3 million, net of unamortized debt issuance costs and note discounts, payable with interest rates varying between approximately 3.1% and 8.0%. Substantially all of our assets are pledged to secure our obligations to creditors.
Write-downs of equipment to their estimated fair values totaled $11.2 million for the year ended December 31, 2024, primarily reflecting an adjustment of the carrying value of one airframe and 11 engines.
Write-downs of equipment to their estimated fair values totaled $11.2 million for the year ended December 31, 2024, primarily reflecting an adjustment of the carrying value of one airframe and 11 engines. 31 Table of Contents General and Administrative Expenses .
During the year ended December 31, 2024, the Company also entered into one fixed-rate interest swap agreement, having a notional amount of $75.0 million, and with a remaining term of 53 months as of December 31, 2024. The derivative instruments were each designated as cash flow hedges at inception and recorded at fair value.
During the year ended 2025, the Company entered into one fixed-rate interest swap agreement, having a notional amount of $50.0 million, and with a remaining term of 46 months as of December 31, 2025. The derivative instruments were each designated as cash flow hedges at inception and recorded at fair value.
In these same time periods $840.0 million and $665.5 million, respectively, was used to pay down related debt. Our credit facility and senior secured warehouse credit facility are our primary source of capital to grow our business. We also access the ABS and other markets to establish term fixed rate debt financing to better match our long-lived assets.
In these same time periods $1.2 billion and $0.8 billion, respectively, was used to pay down related debt. Our credit facility and senior secured warehouse credit facility are our primary source of capital to grow our business. We also access the ABS and other markets to establish term fixed rate debt financing to better match our long-lived assets.
During the year ended December 31, 2024, we sold 35 engines, eight airframes, and other parts and equipment from the lease portfolio for a net gain of $45.1 million.
During the year ended December 31, 2025, we sold 38 engines, five airframes, and other parts and equipment from the lease portfolio for a net gain of $54.0 million. During the year ended December 31, 2024, we sold 35 engines, eight airframes, and other parts and equipment from the lease portfolio for a net gain of $45.1 million.
Two customers accounted for approximately 11% each of total lease rent revenue during the year ended December 31, 2024. One customer accounted for approximately 15% of total lease rent revenue during the year ended December 31, 2023.
One customer accounted for approximately 13% of total lease rent revenue during the year ended December 31, 2025. Two customers accounted for approximately 11%, each, of total lease rent revenue during the year ended December 31, 2024.
A discussion of our results of operations for our fiscal year ended December 31, 2023 compared to the year ended December 31, 2022 is included our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 15, 2024 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” OVERVIEW Forward-Looking Statements.
A discussion of our results of operations for our fiscal year ended December 31, 2024 compared to the year ended December 31, 2023 is included our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 11, 2025 under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 27 Table of Contents Forward-Looking Statements.
As of December 31, 2024, we had 70 lessees in 37 countries. Our portfolio is continually changing due to acquisitions and sales.
As of December 31, 2025, we had 69 lessees in 37 countries. Our portfolio is continually changing due to acquisitions and sales.
As of December 31, 2024, $278.1 million was available under this facility. On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the senior secured warehouse credit facility.
As of December 31, 2025, $417.3 million was available under this facility. On a quarterly basis, the interest rate is adjusted based on the Company’s leverage ratio, as calculated under the terms of the senior secured warehouse credit facility.
We base our estimates on historical experience and on various other assumptions that we believe 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.
We base our estimates on historical experience and on various other assumptions that we believe 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.
RELATED PARTY TRANSACTIONS Joint Ventures “Other revenue” on the Consolidated Statements of Income includes management fees earned of $4.8 million and $2.4 million during the years ended December 31, 2024 and 2023, respectively, related to the servicing of engines for the WMES lease portfolio.
“Other revenue” on the Consolidated Statements of Income includes management fees earned of $7.8 million and $4.8 million during the years ended December 31, 2025 and 2024, respectively, related to the servicing of engines for the WMES lease portfolio.
As part of the purchase, we have committed to certain future overhaul and maintenance services which are anticipated to range between $93.3 million and $121.4 million by 2030. $297.1 million of variable interest payments due under debt obligations, scheduled above, are estimated by applying the interest rates applicable at December 31, 2024 to the remaining debt, adjusted for the estimated debt repayments identified in the table above.
As part of the purchase, we have committed to certain future overhaul and maintenance services which are anticipated to range between $106.6 million and $131.9 million by 2030. $176.9 million of variable interest payments due under debt obligations, scheduled above, are estimated by applying the interest rates applicable at December 31, 2025 to the remaining debt, adjusted for the estimated debt repayments identified in the table above.
Preferred Stock Dividends In October 2016, the Company sold and issued to DBJ an aggregate of 1,000,000 shares of the Company’s Series A Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”) at a purchase price of $20.00 per share. The net proceeds to the Company after deducting investor fees were $19.8 million.
Preferred Stock Dividends In October 2016, the Company sold and issued to DBJ an aggregate of 1,000,000 shares of the Company’s Series A Preferred Stock, $0.01 par value per share (the “Series A-1 Preferred Stock”) at a purchase price of $20.00 per share.
Other revenue increased by $1.2 million, or 14.6%, to $9.1 million for the year ended December 31, 2024 from $7.9 million in 2023. Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the WMES lease portfolio.
Other Revenue. Other revenue increased by $8.1 million, or 89.0%, to $17.2 million for the year ended December 31, 2025 from $9.1 million in 2024. Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the WMES lease portfolio.
As of December 31, 2024, 14 engines having a net book value of $11.6 million were depreciated under this policy with estimated remaining useful lives up to 34 months. Asset Valuation .
As of December 31, 2025, 19 engines having a net book value of $34.3 million were depreciated under this policy with estimated remaining useful lives up to 51 months. Asset Valuation .
At December 31, 2024, $7.3 million in cash and cash equivalents and restricted cash were held in foreign subsidiaries. We generate significant cash flow from our core business as evidenced by our net cash provided by operating activities, which was $284.4 million in 2024.
At December 31, 2025, $12.6 million in cash and cash equivalents and restricted cash were held in foreign subsidiaries. We generate significant cash flow from our core business as evidenced by our net cash provided by operating activities, which was $283.2 million in 2025.
The net fair value of the interest rate swaps as of December 31, 2024 and December 31, 2023 was $11.0 million and $16.5 million, respectively, each representing an asset and reflected within Other assets on the Consolidated Balance Sheets. We record derivative instruments at fair value as either an asset or liability.
The net fair value of the interest rate swaps as of December 31, 2024 was $11.0 million, representing an asset and reflected within Other assets on the Consolidated Balance Sheets. We record derivative instruments at fair value as either an asset or liability. We have used derivative instruments (primarily interest rate swaps) to manage the risk of interest rate fluctuation.
Cash flows used in investing activities were $92.8 million for the year ended December 31, 2023 and primarily reflected $163.6 million for the purchase of equipment held for operating lease (including capitalized costs and prepaid deposits made during the year), and $15.4 million related to a lease entered into during 2023 which was classified as a note receivable under ASC 842, partly offset by $85.1 million in proceeds from sales of equipment (net of selling expenses).
Cash flows used in investing activities were $764.9 million for the year ended December 31, 2024 and primarily reflected $830.5 million for the purchase of equipment held for operating lease (including capitalized costs and prepaid deposits made during the year), and $101.8 million related to leases entered into during 2024 which were classified as a note receivable under ASC 842, partly offset by $171.2 million in proceeds from sales of equipment (net of selling expenses).
As of December 31, 2024, we had $2,635.9 million of equipment held in our operating lease portfolio, $183.6 million of notes receivable, $31.1 million of maintenance rights, and $21.6 million of investments in sales-type leases, which represented, in aggregate, 354 engines, 16 aircraft, one marine vessel and other leased parts and equipment.
As of December 31, 2025, we had $2,801.7 million of equipment held in our operating lease portfolio, $139.9 million of notes receivable, $30.6 million of maintenance rights, and $16.6 million of investments in sales-type leases, which represented, in aggregate, 363 engines, 20 aircraft, one marine vessel and other leased parts and equipment.
Lease rent revenue consists of rental income from long-term and short-term engine leases, aircraft leases, and other leased parts and equipment. Lease rent revenue increased by $25.1 million, or 11.8%, to $238.2 million for the year ended December 31, 2024 from $213.1 million for the year ended December 31, 2023.
Lease rent revenue consists of rental income from long-term and short-term engine leases, aircraft leases, and other leased parts and equipment. Lease rent revenue increased by $53.4 million, or 22.4%, to $291.6 million for the year ended December 31, 2025 from $238.2 million for the year ended December 31, 2024.
All of the transactions that we have designated as hedges are accounted for as cash flow hedges. The effective portion of the gain or loss 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 effective portion of the gain or loss 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 these hedges flows through earnings in the current period.
Write-downs of equipment to their estimated fair values totaled $4.4 million for the year ended December 31, 2023, primarily reflecting an adjustment of the carrying value of five engines and two airframes.
Write-downs of equipment to their estimated fair values totaled $32.9 million for the year ended December 31, 2025, primarily reflecting an adjustment of the carrying value of 28 engines.
Write-downs of equipment to their estimated fair values totaled $11.2 million for the year ended December 31, 2024, primarily reflecting an adjustment of the carrying value of one airframe and 11 engines.
Write-downs of equipment to their estimated fair values totaled $32.9 million for the year ended December 31, 2025, primarily reflecting an adjustment of the carrying value of 28 engines.
Net finance costs increased by $26.0 million, or 33.0%, to $104.8 million for the year ended December 31, 2024, from $78.8 million for the year ended December 31, 2023, primarily due to an overall higher level of debt obligations, including increased borrowing costs.
Net finance costs increased by $30.4 million, or 29.0%, to $135.1 million for the year ended December 31, 2025, from $104.8 million for the year ended December 31, 2024, primarily due to an overall higher level of debt obligations.
As of December 31, 2024, we also managed 277 engines, aircraft and related equipment on behalf of other parties. 26 Table of Contents Willis Aero is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft engines.
As of December 31, 2025, we also managed 116 engines and related equipment on behalf of third parties. Willis Aero is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft engines. As of December 31, 2025, we had $56.6 million in spare parts inventory.
Engines out on lease with “non-reimbursable” usage fees generated $174.5 million of short-term maintenance revenues for the year ended December 31, 2024 compared to $118.3 million for the year ended December 31, 2023, an increase of $56.2 million or 47.5%.
Engines on lease with “non-reimbursable” usage fees generated $187.5 million of short-term maintenance revenues for the year ended December 31, 2025 compared to $174.5 million for the year ended December 31, 2024, an increase of $13.0 million, or 7.4%.
The net proceeds after deducting issuance costs were $13.1 million. The Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share through October 15, 2023 and accrued at the rate per annum of 8.5% per share thereafter through September 26, 2024.
The net proceeds after deducting issuance costs were $13.1 million. Prior to issuing the new Series A Preferred Stock, the Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 8.5% per share and the Series A-2 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5% per share.
As of December 31, 2024, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable under the guidance provided by ASC 842 and investments in sales-type leases.
In addition, any deterioration in the financial condition of our customers may adversely affect future lease revenues. As of December 31, 2025, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable under the guidance provided by ASC 842 and investments in sales-type leases.
In September 2024, the Company entered into a Series A Preferred Stock Purchase Agreement with DBJ, which refinanced and expanded the Company’s Series A-1 and Series A-2 Preferred Stock into one $65.0 million Series A Preferred Stock series (the “Series A Preferred Stock”), which accrues quarterly dividends at the rate per annum of 8.35% per share.
In September 2017, the Company sold and issued to DBJ an aggregate of 1,500,000 shares of the Company’s Series A-2 Preferred Stock, $0.01 par value per share (the “Series A-2 Preferred Stock”) at a purchase price of $20.00 per share. 33 Table of Contents In September 2024, the Company entered into a Series A Preferred Stock Purchase Agreement with DBJ, which refinanced and expanded the Company’s Series A-1 and Series A-2 Preferred Stock into one $65.0 million Series A Preferred Stock series (the “Series A Preferred Stock”), which accrues quarterly dividends at the rate per annum of 8.35% per share.
During the year ended December 31, 2024, the Company entered into three fixed-rate interest swap agreements, each having notional amounts of $50.0 million, and with remaining terms of 53 months as of December 31, 2024.
During the year ended December 31, 2024, the Company entered into three fixed-rate interest swap agreements, each having notional amounts of $50.0 million, two of which were terminated during the year ended December 31, 2025 and one of which had a remaining term of 41 months as of December 31, 2025.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of our 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.
These engines are the most widely used engines in the world, powering Airbus, Boeing, Bombardier, and Embraer aircraft. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of our 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.
Historically, we have entered into interest rate derivative instruments to mitigate our exposure to interest rate risk; such investments are not intended to speculate or trade in derivative products. As of December 31, 2024, we have six interest rate swap agreements.
Historically, we have entered into interest rate derivative instruments to mitigate our exposure to interest rate risk; such investments are not intended to speculate or trade in derivative products. As of December 31, 2025, the Company had five interest rate swap agreements, with a total notional amount of $334.5 million.
Cost of spare parts and equipment sales increased by $7.6 million, or 50.3%, to $22.9 million for the year ended December 31, 2024 compared to $15.2 million in the prior year period, reflecting the increase in spare parts and equipment sales. Cost of equipment sales were $0.1 million for the year ended December 31, 2024.
Cost of spare parts and equipment sales increased by $69.4 million to $92.3 million for the year ended December 31, 2025 compared to $22.9 million in the prior year period, reflecting the increase in spare parts and equipment sales.
Maintenance Reserve Revenue . Maintenance reserve revenue for the year ended December 31, 2024 increased $80.2 million, or 60.0%, to $213.9 million from $133.7 million for the year ended December 31, 2023. Long-term maintenance revenue was $39.4 million for the year ended December 31, 2024 compared to $15.4 million for the year ended December 31, 2023.
Maintenance reserve revenue for the year ended December 31, 2025 increased $18.1 million, or 8.4%, to $232.0 million from $213.9 million for the year ended December 31, 2024. Long-term maintenance revenue was $44.5 million for the year ended December 31, 2025 compared to $39.4 million for the year ended December 31, 2024.
The Company also has certain negative financial covenants such as liens, advances, changes in business, sales of assets, dividends and stock repurchases. Compliance with these covenants is tested either monthly, quarterly, or annually, as required, and the Company was in full compliance with all financial covenant requirements at December 31, 2024.
Compliance with these covenants is tested either monthly, quarterly, or annually, as required, and the Company was in full compliance with all financial covenant requirements at December 31, 2025.
Each partner holds a 50% interest in the joint venture. CASC Willis acquires and leases jet engines to Chinese airlines and concentrates on meeting the fast-growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China.
CASC Willis acquires and leases jet engines to Chinese airlines and concentrates on meeting the fast-growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. CASC Willis owned a lease portfolio of six engines with a net book value of $50.4 million as of December 31, 2025.
As of December 31, 2023, the Company had $2,112.8 million of equipment held in our operating lease portfolio, $92.6 million of notes receivable, $9.2 million of maintenance rights, and $8.8 million of investments in sales-type leases. Average utilization (based on net book value) was approximately 83% and 84% for the years ended December 31, 2024 and 2023, respectively.
Average utilization (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) was approximately 85% and 83% for the years ended December 31, 2025 and 2024, respectively. 30 Table of Contents Maintenance Reserve Revenue .
Additionally, derivative-related receipts were $12.0 million for the year ended December 31, 2024, as compared to $23.4 million for the year ended December 31, 2023, as certain swap positions ran off.
Additionally, derivative-related receipts were $5.8 million for the year ended December 31, 2025, as compared to $12.0 million for the year ended December 31, 2024 as certain interest rate swap positions were terminated and certain interest rate metrics fluctuated.
We have used derivative instruments (primarily interest rate swaps) to manage the risk of interest rate fluctuation. While substantially all of our derivative transactions are entered into for the purposes described above, hedge accounting is only applied when specific criteria have been met and it is practical to do so.
While substantially all of our derivative transactions are entered into for the purposes described above, hedge accounting is only applied when specific criteria have been met and it is practical to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and the hedge relationship must be highly effective.
Cash Flows Discussion Cash flows provided by operating activities were $284.4 million and $229.7 million in the years ended December 31, 2024 and 2023, respectively.
During the years ended December 31, 2025 and 2024, the Company paid total preferred stock dividends of $5.7 million and $3.5 million, respectively. Cash Flows Discussion Cash flows provided by operating activities were $283.2 million and $284.4 million in the years ended December 31, 2025 and 2024, respectively.
In May 2024, WWFL, a wholly-owned subsidiary of the Company, entered into a secured credit agreement with the Bank of Utah as security trustee and administrative agent and Bank of America, N.A. as facility agent.
In May 2024, WWFL entered into a non-recourse, senior secured warehouse credit agreement with the Bank of Utah as security trustee and administrative agent and Bank of America, N.A. as facility agent. The secured credit agreement provides for an initial committed amount of up to $500.0 million.
During 2024, the Company sold four engines to WMES for $50.5 million, which resulted in a net gain of $12.7 million for the Company. During 2023, WMES sold one engine to the Company for $22.3 million, and the Company sold two engines to WMES for $28.8 million, which resulted in a net gain of $6.5 million for the Company.
During 2024, the Company sold four engines to WMES for $50.5 million, which resulted in a net gain of $12.7 million for the Company. 37 Table of Contents During 2025, the Company purchased one engine from WMES for $7.2 million. During 2024, the Company did not purchase any engines from WMES.
In order to apply hedge accounting, the transaction must be designated as a hedge and the hedge relationship must be highly effective. The hedging instrument’s effectiveness is assessed utilizing regression at the inception of the hedge and either regression or qualitative analysis on at least a quarterly basis throughout its life.
The hedging instrument’s effectiveness is assessed utilizing regression at the inception of the hedge and either regression or qualitative analysis on at least a quarterly basis throughout its life. All of the transactions that we have designated as hedges are accounted for as cash flow hedges.
If the forecasted undiscounted cash flows are less than the book value, the asset is written down to its fair value. When evaluating for impairment, we test at the individual asset level ( e.g. , engine or aircraft), as each asset generates its own stream of cash flows, including lease rents, maintenance reserves and repair costs.
When evaluating for impairment, we test at the individual asset level ( e.g. , engine or aircraft), as each asset generates its own stream of cash flows, including lease rents, maintenance reserves and repair costs. We must make assumptions which underlie the most significant and subjective estimates in determining whether any impairment exists.
These deferrals or conversions would not result in penalties or increased costs other than any potential increase due to the normal year-over-year change in engine list prices, which is akin to ordinary inflation. In December 2020, we entered into definitive agreements for the purchase of 25 Pratt & Whitney aircraft engines.
Our purchase agreements generally contain terms that allow the Company to defer or cancel purchase commitments in certain situations. These deferrals or cancellations would not result in penalties or increased costs other than any potential increase due to the normal year-over-year change in engine list prices, which is akin to ordinary inflation.
On an annual basis, even absent any such ‘triggering event’, we evaluate the carrying value of the assets in our lease portfolio to determine if any impairment exists. Impairment may be identified by several factors, including, comparison of estimated sales proceeds or forecasted undiscounted cash flows over the life of the asset with the asset’s book value.
On an annual basis, even absent any such ‘triggering event’, we evaluate the carrying value of the assets in our lease portfolio to determine if any impairment exists.
Equipment sales for the year ended December 31, 2024 were $1.0 million for the sale of one engine. There were no equipment sales for the year ended December 31, 2023. Interest Revenue .
Equipment sales for the year ended December 31, 2024 were $1.0 million related to the sale of one engine. Interest Revenue . Interest revenue increased by $2.4 million, or 20.6%, to $14.1 million for the year ended December 31, 2025, from $11.7 million for the year ended December 31, 2024.
Other During 2024, the Company paid approximately $0.1 million expense to Mikchalk Lake, LLC, an entity in which our Executive Chairman retains an ownership interest. These expenses were for lodging and other business-related services and were approved by the Board’s Independent Directors.
During 2025, the Company paid WMES $1.2 million for fleet management services, which WMES provided in connection with its purchase of BAML. Other During 2025 and 2024, the Company paid approximately $0.1 million, each, to Mikchalk Lake, LLC, an entity in which our Executive Chairman retains an ownership interest.
Contractual Obligations and Commitments Repayments of our gross debt obligations primarily consist of scheduled installments due under term loans and are funded by the use of unrestricted cash reserves and from cash flows from ongoing operations.
At December 31, 2025, we were in compliance with the covenants specified in the WEST III, WEST V, WEST VI, WEST VII, WEST VIII, WEST IX, and WWFL indentures and servicing and other debt related agreements. 35 Table of Contents Contractual Obligations and Commitments Repayments of our gross debt obligations primarily consist of scheduled installments due under term loans and are funded by the use of unrestricted cash reserves and from cash flows from ongoing operations.
Spare parts and equipment sales for the year ended December 31, 2024 increased by $6.7 million, or 33.1%, to $27.1 million compared to $20.4 million for the year ended December 31, 2023. The increase in spare parts sales reflects the demand for surplus material that we are seeing as operators extend the lives of their current generation engine portfolios.
The increase in spare parts sales reflects the demand for surplus material as operators seek to extend the lives of their current generation engine portfolios. Equipment sales for the year ended December 31, 2025 were $57.8 million related to the sale of four engines.
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.
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. RECENT ACCOUNTING PRONOUNCEMENTS The most recent adopted and to be adopted accounting pronouncements are described in Note 1(x) to our Consolidated financial statements included in this Annual Report on Form 10-K.
General and administrative expenses increased by $31.0 million, or 26.8%, to $146.8 million for the year ended December 31, 2024 compared to $115.7 million in 2023. The increase primarily reflects a $35.5 million increase in personnel costs, partially offset by a $3.3 million decrease in other taxes related to international tax treaties.
General and administrative expenses increased by $48.0 million, or 32.7%, to $194.7 million for the year ended December 31, 2025 compared to $146.8 million in 2024. The increase primarily reflects a $23.7 million increase in personnel costs, which included an increase of $15.3 million in share-based compensation and an increase of $4.2 million in wages.
Technical expenses consist of the non-capitalized cost of engine repairs, engine thrust rental fees, outsourced technical support services, sublease engine rental expense, engine storage, and freight costs. These expenses decreased by $5.8 million, or 20.7%, to $22.3 million for the year ended December 31, 2024, compared to $28.1 million in 2023.
Technical Expense . Technical expenses consist of the non-capitalized cost of engine repairs, engine thrust rental fees, outsourced technical support services, sublease engine rental expense, engine storage, and freight costs.
These increases were offset by a decrease in interest expense of $18.2 million associated with the Company’s credit facility for the year ended December 31, 2024, due to a decrease in the average outstanding balance of the credit facility over the course of the year. Income Taxes .
Interest expense associated with the Company’s credit facility increased by $9.7 million for the year ended December 31, 2025, due to an increase in the average outstanding balance of the credit facility for the year ended December 31, 2025, as compared to that of the prior year.
Cash flows used in financing activities for the year ended December 31, 2023 were $57.9 million and primarily reflected $665.5 million in principal payments and $9.4 million in new debt issuance costs, partly offset by $625.7 million in proceeds from the issuance of debt obligation.
Cash flows provided by financing activities for the year ended December 31, 2025 were $387.6 million and primarily reflected $1,661.0 million in proceeds from the issuance of debt obligations, partly offset by $1,221.5 million in principal payments on debt obligations, $19.3 million in cancellation of restricted stock units in satisfaction of withholding tax, $14.6 million in new debt issuance costs, and $8.7 million in common stock cash dividends paid.
One interest rate swap agreement was entered into during 2019, having a notional amount of $100.0 million, which matured during the year ended December 31, 2024.
During the year ended December 31, 2024, the Company also entered into one fixed-rate interest swap agreement, having a notional amount of $75.0 million. During the year ended December 31, 2025, this fixed-rate interest swap agreement was partially terminated, reducing its notional amount to $34.5 million. It had a remaining term of 41 months as of December 31, 2025.
We believe the following critical accounting policies, grouped by our activities, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements: Leasing Related Activities . 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.
Actual results may differ from these estimates under different assumptions or conditions. 28 Table of Contents We believe the following critical accounting policies, grouped by our activities, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements: Leasing-Related Activities .
CASC Willis owned a lease portfolio of four engines with a net book value of $37.3 million as of December 31, 2024. Our investment in the joint venture was $17.9 million as of December 31, 2024. We actively manage our portfolio and structure our leases to maximize the residual values of our leased assets.
WMES owned a lease portfolio of 65 engines, one aircraft, and other parts and equipment with a net book value of $575.3 million at December 31, 2025. Our investment in the joint venture was $78.9 million as of December 31, 2025.
The increase is primarily related to an increase in personnel costs, as a result of expansion of our aircraft tear down and repair services business, as well as an increase in facility related costs. Write-down of Equipment.
Cost of maintenance services increased by $3.4 million, or 14.1%, to $27.9 million for the year ended December 31, 2025, compared to $24.5 million for the year ended December 31, 2024. The increase is primarily related to an increase in personnel costs as a result of expansion of our aircraft disassembly and repair services. Write-down of Equipment.
The increase is primarily due to an increase in the average size of the portfolio as compared to that of the prior period, offset by a slight decrease in average utilization (based on net book value) of equipment held in our operating lease portfolio, primarily as a result of the Company’s significant purchases of engines during December 2024, the majority of which were off-lease as of December 31, 2024.
The increase is primarily due to an increase in the average size of the portfolio as compared to that of the prior period as well as an increase in average utilization from 83% to 85% (based on net book value of equipment held for operating lease, maintenance rights, and notes receivable and investments in sales-type leases net of allowances) of equipment held in our operating lease portfolio.
Depreciation and amortization expense increased $1.5 million, or 1.7%, to $92.5 million for the year ended December 31, 2024 compared to $90.9 million for the year ended December 31, 2023. The increase is primarily due to an increase in the size of our lease portfolio. Cost of Spare Parts and Equipment Sales .
Depreciation and amortization expense increased $19.1 million, or 20.7%, to $111.6 million for the year ended December 31, 2025 compared to $92.5 million for the year ended December 31, 2024.
Write-downs of equipment to their estimated fair values totaled $4.4 million for the year ended December 31, 2024, primarily reflecting an adjustment of the carrying value of two airframes and five engines. General and Administrative Expenses .
As of December 31, 2025, included within equipment held for lease and equipment held for sale was $78.2 million in remaining book value of 29 assets which were previously written down. 29 Table of Contents Write-downs of equipment to their estimated fair values totaled $11.2 million for the year ended December 31, 2024, primarily reflecting an adjustment of the carrying value of one airframe and 11 engines.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe estimate that for every 1% increase or decrease in interest rate, the annual interest expense for our variable rate debt, would increase or decrease $4.9 million, as compared to $0.5 million as of December 31, 2023. 34 Table of Contents We hedge a portion of our borrowings from time to time, effectively fixing the rate of these borrowings.
Biggest changeWe estimate that for every 1% increase or decrease in interest rate, the annual interest expense for our variable rate debt, would increase or decrease $4.0 million, as compared to $4.9 million as of December 31, 2024. We hedge a portion of our borrowings from time to time, effectively fixing the rate of these borrowings.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary market risk exposure is that of interest rate risk. A change in SOFR rates would affect our cost of borrowing. Increases in interest rates, which may cause us to raise the implicit rates charged to our customers, could result in a reduction in demand for our leases.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary market risk exposure is that of interest rate risk. A change in SOFR rates would affect our cost of borrowing. Increases in interest rates, which may cause us to raise the rates charged to our customers, could result in a reduction in demand for our leases.
During the years ended December 31, 2024 and 2023, 69% and 66% of our total lease rent revenues came from non-U.S. domiciled lessees, respectively. Substantially all of our leases require payment in U.S. dollars. If these lessees’ currency devalues against the U.S. dollar, the lessees could potentially encounter difficulty in making their lease payments. ITEM 8.
During the years ended December 31, 2025 and 2024, 69% and 69% of our total lease rent revenues came from non-U.S. domiciled lessees, respectively. Substantially all of our leases require payment in U.S. dollars. If these lessees’ currency devalues against the U.S. dollar, the lessees could potentially encounter difficulty in making their lease payments. ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is submitted as a separate section of this report beginning on page 44. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is submitted as a separate section of this report beginning on page 48. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 38 Table of Contents
Alternatively, we may price our leases based on market rates so as to keep the fleet on-lease and suffer a decrease in our operating margin due to interest costs that we are unable to pass on to our customers. As of December 31, 2024, $914.9 million of our outstanding debt is variable rate debt.
Alternatively, we may price our leases based on market rates so as to keep the fleet on-lease and suffer a decrease in our operating margin due to interest costs that we are unable to pass on to our customers. As of December 31, 2025, $732.7 million of our outstanding debt was variable rate debt.

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