WILLIS LEASE FINANCE CORP 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. Based on management’s evaluation (with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”)), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. (b) Inherent Limitations on Controls. Management, including the CEO and CFO, does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. (c) Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting includes policies and procedures that: (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and Board of Directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Our internal control over financial reporting is a process designed with the participation of our principal executive officer and principal financial officer or persons performing similar functions to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounted principles. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013) . Based on this assessment our management believes that, as of December 31, 2024, our internal control over financial reporting is effective under those criteria. Grant Thornton LLP, the independent registered public accounting firm that audited the Company’s 2024 consolidated financial statements included in this Annual Report, issued an audit report on the Company’s internal control over financial reporting. Grant Thornton’s audit report appears on page 45. 35 Table of Contents (d) Changes in internal control over financial reporting. There has been no change in our internal control over financial reporting during our fourth fiscal quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Rule 10b5-1 Trading Plans During the quarter ended December 31, 2024, none of the Company’s Section 16 officers or directors informed us of the adoption , modification, or termination of a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT We have adopted a Standards of Ethical Conduct Policy (the “Code of Ethics”) that applies to all directors and employees including our Chief Executive Officer, President, and Chief Financial Officer. The Code of Ethics is available on our website at www.wlfc.global. If we make any substantive amendments to the Code of Ethics or grant any waiver from a provision of the code to our Chief Executive Officer, President, or Chief Financial Officer, we will disclose the nature of the amendment or waiver on our website at www.wlfc.global under “Corporate Governance” or in a report on Form 8-K. We have a long-standing commitment to ethical business conduct and compliance with applicable laws and regulations. As part of this commitment, we have adopted an Insider Trading Policy, which is filed as Exhibit 19.1 to our Annual Report on Form 10-K for the year ended December 31, 2024. The remainder of the information required by this item is incorporated by reference to our Proxy Statement. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to our Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information in Item 5 of this report regarding our Equity Compensation Plans is incorporated herein by reference. The remainder of the information required by this item is incorporated by reference to our Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is incorporated by reference to our Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated by reference to our Proxy Statement. PART IV 36 Table of Contents ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) (1) Financial Statements The response to this portion of Item 15 is submitted as a separate section of this report beginning on page 44. (a) (2) Financial Statement Schedules Schedule II, Valuation Accounts, is submitted as a separate section of this report starting on page 82. All other financial statement schedules have been omitted as the required information is not pertinent to the Registrant or is not material or because the required information is included in the Financial Statements and Notes thereto. (a) (3),(b) and (c):Exhibits: The response to this portion of Item 15 is submitted below. 37 Table of Contents EXHIBITS Exhibit Number Description 3.1 Amended and Restated Certificate of Incorporation, dated March 12, 1998, as amended by the Certificate of Amendment of Certificate of Incorporation, dated April 28, 1998 and further amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation dated May 22, 2024. 3.2 Bylaws, dated April 18, 2001 as amended by (1) Amendment to Bylaws, dated November 13, 2001, (2) Amendment to Bylaws, dated December 16, 2008, (3) Amendment to Bylaws, dated September 28, 2010, (4) Amendment to Bylaws, dated August 5, 2013, and (5) Amendment to Bylaws, dated October 7, 2016. 4.1 Rights Agreement dated as of September 24, 1999, by and between the Registrant and American Stock Transfer and Trust C ompany, as Rights Agent (incorporated by reference to Exhibit 4.1 to our report on Form 8-K filed on October 4, 1999). 4.2 First Amendment to Rights Agreement dated as of November 30, 2000, by and between the registrant and American Stock Transfer and Trust Company, as Rights Agent (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed on December 15, 2000). 4.3 Second Amendment to Rights Agreement dated as of December 15, 2005, by and between the Registrant and American Stock Transfer and Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.5 to our report on Form 10-K filed on March 31, 2009). 4.3.1 Third Amendment to Rights Agreement dated as of September 30, 2008, by and between the Registrant and American Stock Transfer and Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.6 to our report on Form 10-K filed on March 31, 2009). 4.4 Fourth Amendment to Rights Agreement dated August 27, 2018, by and between the Registrant and American Stock Transfer and Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.3.1 to our report on Form 10-K filed on March 12, 2020). 4.5 Form of Certificate of Designations of the Registrant with respect to the Series I Junior Participating Preferred Stock (forme rly known as “Series A Junior Participating Preferred Stock”) (incorporated by reference to Exhibit 4.7 to our report on Form 10-K filed on March 31, 2009). 4.6 Form of Amendment No. 1 to Certificate of Designations of the Registrant with respect to Series I Junior Participating Pref erred Stock (incorporated by reference to Exhibit 4.8 to our report on Form 10-K filed on March 31, 2009). 4.7 Second Amended and Restated Certificate of Designations, Preferences, and Relative Rights and Limitations of Series A Cumulative Redeemable Preferred S tock dated as of September 25, 2017 (incorporated by reference to Exhibit 10.2 to our report on Form 8-K filed on September 28, 2017). 4.8 Description of Securities (incorporated by referenc e to Exhibit 4.7 to our report on Form 10-K filed March 12, 2020). 4.9 Certificate Eliminating Series I Junior Participating Preferred Stock of Willis Lease Finance Corporation dated as of October 7, 2016 (incorporated by reference to Exhibit 10.3 to our report on Form 8-K filed October 18, 2016). 4.10 First Amendment to Second Amended and Restated Certificate of Designations, Preferences, and Relative Rights and Limitations of Series A Cumulative Redeemable Preferred Stock, dated as of September 28, 2023 (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed September 28, 2023) 4.11 Third Amended and Restated Certificate of Designations, Preferences, and Relative Rights and Limitations of Series A Preferred Stock, dated as of September 12, 2024 (incorporated by reference to Exhibit 10.2 to our report on Form 10-Q filed November 4, 2024). 10.1† Form of Indemnification Agreement entered into between the Registrant and its directors and officers (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed on October 1, 2010). 10.2† Amended and Restated 2007 Stock Incentive Plan (incorporated by reference to the Registrant’s Proxy Statement for 2015 Annual Meeting of Stockholders filed on April 28, 2015). 10.3† Employment Agreement, dated as of March 3, 2022 and effective as of April 1, 2022, by and between the Registrant and Charles F. Willis IV (incorporated by reference to Exhibit 10.2 to our report on Form 10-Q filed on May 10, 2022). 10.4† Employment Agreement between th e Registrant and Scott B. Flaherty dated May 20, 2016 (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed on May 25, 2016). 10.5† Employment Agreement between the Registrant and De an M. Poulakidas dated March 31, 2013 (incorporated by reference to Exhibit 10.23 to our report on Form 8-K filed on June 19, 2013). 10.6* Trust Indenture dated as of September 14, 2012 among Willis Engine Securitization Trust II, Deutsche Bank Trust Company Americas, as trustee, the Registrant and Crédit Agricol e Corporate and Investment Bank (incorporated by reference to Exhibit 10.14 to our report on Form 10-Q filed on November 9, 2012). 10.7* Security Trust Agreement dated as of September 14, 2012 by and among Willis Engine Securitization Trust II, Willis Engine Securitization (Ireland) Limited, the Engine Trusts listed on Schedule V thereto, each of the additional grantors referred to therein and from time to time made a party thereto and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 10.15 to our report on Form 10-Q filed on November 9, 2012). 38 Table of Contents 10.8* Note Purchase Agreement dated as of September 6, 2012 by and among Willis Engine Securitization Trust II, the Registrant, Credit Agricole Secu rities (USA) Inc. and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.16 to our report on Form 10-Q filed on November 9, 2012). 10.9* Servicing Agreement dated as of September 17, 2012 between Willis Engine Securitization Trust II, the Registrant and the entities listed on App endix A thereto (incorporated by reference to Exhibit 10.17 to our report on Form 10-Q filed on November 9, 2012). 10.10* A dministrative Agency Agreement dated as of September 17, 2012 among Willis Engine Securitization Trust II, the Registrant, Deutsche Bank Trust Compan y Americas, as trustee, and the entities listed on Appendix A thereto (incorporated by reference to Exhibit 10.18 to our report on Form 10-Q filed on November 9, 2012). 10.11† Employment Agreement, dated as of August 2, 2022, by and between the Registrant and Brian R. Hole (incorporated by reference to Exhibit 10.1 to our report on Form 10-Q filed on November 4, 2022). 10.12† Employment Agreement, dated as of March 2022 and effective as of April 1, 2022, by and between the Registrant and Austin C. Willis (incorporated by reference to Exhibit 10.1 to our report on Form 10-Q filed on May 10, 2022). 10.13 Trust Amendment No. 2 dated as of September 9, 2016 to Amended and Restated Trust Agreement of Willis Engine Securitizatio n Trust II dated as of September 14, 2012 (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed September 20, 2016). 10.14 General Supplement 2016-1 dated as of September 9, 2016 to Trust Indenture dated as of September 14, 2012 (incorporated by reference to Exhibit 10.2 to our report on Form 8-K filed September 20, 2016). 10.15 Series A Preferred Stock Purchase Agreement dated as of October 11, 2016 (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed October 18, 2016). 10.16* Asset Purchase Agreement dated as of August 4, 2017 between the Registrant and Willis Engine Structured Trust III. (incorporated by reference to Exhibit 10.20 to our rep ort on Form 10-Q filed on November 9, 2017). 10.17* Security Trust Agreement dated as of August 4, 2017 among Willis Engine Structured Trust III, each Grantor referred to therein and from time to time made a party th ereto and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 10.21 to our report on Form 10-Q filed on November 9, 2017). 10.18* Servicing Agreement dated as of August 4, 2017 among Willis Engine Structured Trust III, the Registrant and each Service Group Member referred to therein and from time t o time made a party thereto (incorporated by reference to Exhibit 10.22 to our report on Form 10-Q filed on November 9, 2017). 10.19* Administrative Agency Agreement dated as of August 4, 2017 among Willis Engine Structured Trust III, the Registrant, Deutsche Bank Tru st Company Americas, as trustee, and each Managed Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.23 to our report on Form 10-Q filed on November 9, 2017). 10.20* Revolving Credit Agreement dated as of August 4, 2017 among Willis Engine Structured Trust III, BNP Paribas and the Registrant (incorporated by reference to Exhibit 10.24 to our report on Form 10-Q filed on November 9, 2017). 10.21* Series A-2 Preferred Stock Purchase Agreement dated as of September 22, 2017 (incorporated by reference to Exhibit 10.1 to our report on Form 8-K filed on September 28, 2017). 10.22* General Terms Agreement No. CFM-1-1028985 dated December 22, 2017 between CFM International, Inc. and the Registrant (incorporated by reference to Ex hibit 10.26 to our report on Form 10-K filed on March 15, 2018). 10.23* Letter Agreement No. 1 to GTA No. 1-1028985 dated D ecember 22, 2017 between CFM International, Inc. and the Registrant (incorporated by reference to Exhibit 10.27 to our report on Form 10-K filed March 15, 2018). 10.24* General Terms Agreement No. GE-1-2299982290-2 dated May 26, 2010 by and amongst General Electric Company, GE Engine Services Distribution, LLC, the Registrant an d WEST Engine Funding LLC (incorporated by reference to Exhibit 10.28 to our report on Form 10-K filed March 15, 2018). 10.25* Letter Agreement No. 3 to GTA No. 1-2299982290 dated December 22, 2017 between General Electric Corporation and the Registrant (incorporated by reference to Exhibit 10.29 to our report on Form 10-K filed March 15, 2018). 10.26* Amendment No. 2 to General T erms Agreement No. GE-1-2299982290-2 dated December 22, 2017 between General Electric Company and the Registrant (incorporated by reference to Exhibit 10.30 to our report on Form 10-K filed March 15, 2018). 10.27* Agreement by and between IAE International Aero Engines AG and the Registrant, dated March 16, 2018, to purchase spare engines (incorporated by reference to Exhibit 10.31 to our report on Form 10-Q filed May 10, 2018). 10.28 Redemption Agreement to purchase 294,787 shares of common stock dated as of March 29, 2018 between the Registrant and M3 Partners, LP (incorporated by reference to Exhibit 10.32 to our report on Form 10-Q filed May 10, 2018). 10.29† 2018 Stock Incentive Plan (inco rporated by reference to the Registrant’s Proxy Statement for 2018 Annual Meeting of Stockholders filed on April 27, 2018). 10.30* Administrative Agency Agreement dated as of August 22, 2018 among Willis Engine Structured Trust IV, the Registrant, Deutsche Bank Trust Company Americas, as trustee, and each Managed Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.34 to our report on Form 10-Q filed November 7, 2018). 10.31* Asset Purchase Agreement dated as of August 22, 2018 between the Registrant and Willis Engine Structured Trust IV (incorporated by reference to Exhibit 10.35 to our report on Form 10-Q filed November 7, 201 8). 39 Table of Contents 10.32* Trust Indenture dated as of August 22, 2018 among Willis Engine Structured Trust IV, Deutsche Bank Trust Company Americas, as Trustee, the Registrant and Bank of America, N.A. (incorporated by reference to Exhibit 10.36 to our report on Form 10-Q filed November 7, 2018). 10.33* Revolving Credit Agreement dated as of August 22, 2018 among Willis Engine Structured Trust IV, Bank of America, N.A. and the Registrant (incorporated by reference to Exhibit 10.37 to our report on Form 10-Q filed November 7, 2018). 10.34* Servicing Agreement dated as of Au gust 22, 2018 among Willis Engine Structured Trust IV, the Registrant and each Service Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.38 to our report on Form 10-Q filed November 7, 2018). 10.35* Security Trust Agreement dated as of August 22, 2018 among Willis Engine Structured Trust IV, each Grantor referred to therein and from time to time made a party thereto and Deutsche Bank Trust Company Americas, as security trustee and operating bank (incorporated by reference to Exhibit 10.39 to our report on Form 10-Q filed November 7, 2018). 10.36* Amendment No. 1 to Agreement to Purcha se Spare Engines, dated July 25, 2018, between IAE International Aero Engines AG and Willis Lease Finance Corporation (incorporated by reference to Exhibit 10.40 to our report on Form 10-Q filed November 7, 2018). 10.37* Amendment No. 2 to Agreement to Purchase Spare Engines, dated August 9, 2018, between IAE International Aero Engines AG and Willis Lease Finance Corporation (incorporated by reference to Exhibit 10.41 to our report on Form 10-Q filed November 7, 2018). 10.38* Trust Indenture dated as of August 4, 2017 among Willis Engine Structured Trust III, Deutsche Bank Trust Company Americas, as trustee, the Registrant and BNP Paribas (inc orporated by reference to Exhibit 4.6 to our report on Form 10-Q filed on November 9, 2017). 10.39* Amendment No. 3 to Agreement to Purchase Spare Engines, dated March 22, 2019, between IAE International Aero Engines AG and Willis Lease Finance Corp oration (incorporated by reference to Exhibit 10.43 to our report on Form 10-Q filed on May 8, 2019). 10.40* Amendment No. 4 to Agreement to Purchase Spare Engines, dated June 27, 2019, between IAE International Aero Engines AG and Willis Lease Finance Corp oration (incorporated by reference to Exhibit 10.44 to our report on Form 10-Q filed on August 7, 2019). 10.41* Letter Agreement No. 2 to GTA No. 1-1028985 dated December 12, 2019 between CFM International, Inc. and Willis Lease Finance Corporation (incorporated by reference to Exhibit 10.43 to our report on Form 10-K filed on March 12, 2020). 10.42* Amended and Restated Administrative Agency Agreement, dated as of March 3, 2020, among Willis Engine Structured Trust V, the Registrant, Deutsche Bank Trust Company Americas, as trustee, and each Managed Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.45 to our report on Form 10-Q filed May 6, 2020). 10.43* Asset Purchase Agreement, dated as of March 3, 2020, between the Registrant and Willis Engine Structured Trust V (incorporated by reference to Exhibit 10.46 to our report on Form 10-Q filed May 6, 2020). 10.44* Amended and Restated Trust Indenture, dated as of March 3, 2020 among Willis Engine Structured Trust V, Deutsche Bank Trust Company Americas, as Trustee, the Registrant, and Bank of America, N.A. (incorporated by reference to Exhibit 10.47 to our report on Form 10-Q filed May 6, 2020). 10.45* Revolving Credit Agreement, dated March 3, 2020, among Willis Engine Structured Trust V, Bank of America, N.A., and the Registrant (incorporated by reference to Exhibit 10.48 to our report on Form 10-Q filed May 6, 2020). 10.46* Amended and Restated Servicing Agreement, dated as of March 3, 2020, among Willis Engine Structured Trust V, the Registrant, and each Serviced Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.49 to our report on Form 10-Q filed May 6, 2020). 10.47* Amended and Restated Security Trust Agreement, dated as of March 3, 2020, among Willis Engine Structured Trust V, each Grantor referred to therein and from time to time made a party thereto and Deutsche Bank Trust Company Americas, as Security Trustee and Operating Bank (incorporated by reference to Exhibit 10.50 to our report on Form 10-Q filed May 6, 2020). 10.48* Excluded Property Purchase Agreement, dated as of March 3, 2020, among the Registrant, West Engine Acquisition LLC, and Willis Engine Structured Trust V (incorporated by reference to Exhibit 10.51 to our report on Form 10-Q filed May 6, 2020). 10.49* Agreement by and between International Aero Engines, LLC and the Registrant, dated March 27, 2020, to purchase spare engines (incorporated by reference to Exhibit 10.52 to our report on Form 10-Q filed May 6, 2020). 10.50* Letter Agreement No. 4 to GTA No. 1-2299982290 dated March 31, 2020 between General Electric Company and the Registrant (incorporated by reference to Exhibit 10.53 to our report on Form 10-Q filed May 6, 2020). 10.51* Used Engines Sales Agreement dated December 3, 2020 between Pratt & Whitney Engine Leasing, LLC and the Registrant (incorporated by reference to Exhibit 10.54 to our report on Form 10-K filed March 15, 2021). 10.52* Used Engine Sales Agreement dated Decemb er 3, 2020 between [*] Engine Leasing, LLC and the Registrant (incorporated by reference to Exhibit 10.55 to our report on Form 10-K filed March 15, 2021). 10.53* [*] Fixed Price Repai r Agreement by and between the Registrant and Raytheon Technologies Corporation dated December 3, 2020 (incorporated by reference to Exhibit 10.56 to our report on Form 10-K filed March 15, 2021) . 40 Table of Contents 10.54* [*] Fixed Price Repair Agreement by and between the Registrant and International Aero Engines, LLC dated December 3, 2020 (incorporated by reference to Exhibit 10.57 to our report on Form 10-K filed March 15, 2021). 10.55* Administrative Agency Agreement, dated as of May 17, 2021, among Willis Engine Structured Trust VI, the Registrant, U.S. Bank National Association, as trustee, and each Managed Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.59 to our report on Form 10-Q filed August 8, 2021). 10.56* Asset Purchase Agreement, dated as of May 17, 2021, between the Registrant and Willis Engine Structured Trust VI (incorporated by reference to Exhibit 10.60 to our report on Form 10-Q filed August 8, 2021). 10.57*# Trust Indenture, dated as of May 17, 2021, among Willis Engine Structured Trust VI, U.S. Bank National Association, as Trustee, the Registrant and Bank of America, N.A. (incorporated by reference to Exhibit 10.61 to our report on Form 10-Q filed August 8, 2021). 10.58 Revolving Credit Agreement, dated as of M ay 17, 2021, among Willis Engine Structured Trust VI, Bank of America, N.A. and the Registrant (incorporated by reference to Exhibit 10.62 to our report on Form 10-Q filed August 8, 2021). 10.59 Servicing Agreement, dated as of May 17, 2021, among Willis Engine Structured Trust VI, the Registrant and each Service Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.63 to our report on Form 10-Q filed August 8, 2021). 10.60* Security Trust Agreement, dated as of May 17, 2021, among Willis Engine Structured Trust VI, each Grantor referred to therein and from time to time made a party thereto and U.S. Bank National Association, as security trustee and operating bank (incorporated by reference to Exhibit 10.64 to our report on Form 10-Q filed August 8, 2021). 10.61* Administrative Agency Agreement, dated as of October 31, 2023, among Willis Engine Structured Trust VII, the Registrant, U.S. Bank National Association, as trustee, and each Managed Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.69 to our report on Form 10-K filed March 15, 2024). 10.62* Asset Purchase Agreement, dated as of October 31, 2023, between the Registrant and Willis Engine Structured Trust VII (incorporated by reference to Exhibit 10.70 to our report on Form 10-K filed March 15, 2024). 10.63* Trust Indenture, dated as of October 31, 2023, among Willis Engine Structured Trust VII, U.S. Bank National Association, as Trustee, the Registrant and Bank of America, N.A. (incorporated by reference to Exhibit 10.71 to our report on Form 10-K filed March 15, 2024). 10.64* Revolving Credit Agreement, dated as of October 31, 2023, among Willis Engine Structured Trust VII, Bank of America, N.A. and the Registrant (incorporated by reference to Exhibit 10.72 to our report on Form 10-K filed March 15, 2024). 10.65 Servicing Agreement, dated as of October 31, 2023, among Willis Engine Structured Trust VII, the Registrant and each Service Group Member referred to therein and from time to time made a party thereto (incorporated by reference to Exhibit 10.73 to our report on Form 10-K filed March 15, 2024). 10.66* Security Trust Agreement, dated as of October 31, 2023, among Willis Engine Structured Trust VII, each Grantor referred to therein and from time to time made a party thereto and U.S. Bank National Association, as security trustee and operating bank (incorporated by reference to Exhibit 10.74 to our report on Form 10-K filed March 15, 2024). 10.67* Secured Credit Agreement, dated as of May 3, 2024, among Willis Warehouse Facility, LLC, as Borrower, Bank of Utah, as Security Trustee and Administrative Agent, Bank of America, N.A., as Facility Agent, and the Lenders party thereto (incorporated by reference to E xhibit 10.1 to our report on Form 10-Q filed August 2, 2024) . 10.68* Servicing Agreement, dated as of May 3, 2024, among Willis Warehouse Facility LLC, the Registrant, as Servicer, and each Serviced Group Member (incorporated by reference to Exhibit 10.2 to our report on Form 10-Q filed August 2, 2024). 10.69* Security Agreement, dated as of May 3, 2024, among Willis Warehouse Facility, LLC as Borrower, Bank of Utah, as Security Trustee and the other Grantors party thereto (incorporated by reference to Exhibit 10.3 to our report on Form 10-Q filed August 2, 2024). 10.70* Pledge Agreement, dated as of May 3, 2024, among Registrant, and Bank of Utah, as Security Trustee (incorporated by reference to Exhibit 10.4 to our report on Form 10-Q filed August 2, 2024). 10.71* Contract to Purchase [*] Spare Engines and QEC Kits dated June 19, 2024 between International Aero Engines, LLC and Registrant (incorporated by reference to Exhibit 10.5 to our report on Form 10-Q filed August 2, 2024). 10.72* Series A Preferred Stock Purchase Agreement, dated as of September 12, 2024 (incorporated by reference to Exhibit 10.1 to our report on Form 10-Q filed November 4, 2024). 10.73† Employment Agreement, dated as of October 8, 2024, by and between the Company and Brian R. Hole (incorporated by reference to Exhibit 10.3 to our report on Form 10-Q filed November 4, 2024). 10.74* Credit Agreement, dated as of October 31, 2024, among, inter alia, the Company, as Borrower, Bank of America, N.A., as Administrative Agent, and the Lenders party thereto. 10.75 Limited Waiver No. 1 to Credit Agreement, among the Company, as Borrower, Bank of America, N.A., as Administrative Agent, and the Guarantors party thereto. 10.76 Contract to Purchase PW1133G-JM Spare Engines, dated as of December 17, 2024, by and between International Aero Engines, LLC and the Registrant. 19.1 Insider Trading Policy. 41 Table of Contents 21.1 Subsidiaries of the Registrant . 23.1 Consent of Grant Thornton LLP. 31.1 Certification of Austin C. Willis, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Scott B. Flaherty, pursuant to Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Annual Report on Form 10-K filed with the SEC on March 15, 2024). 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101 The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Redeemable Preferred Stock and Shareholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). ________________________________________________________ * Certain portions of this exhibit have been redacted pursuant to a Securities and Exchange Commission order granting confidential treatment or constitute confidential information have been redacted in accordance with Regulation S-K, Item 601(b)(10). # Portions of this exhibit have been omitted in accordance with Item 601(b)(10)(iv) of Regulation S-K. † Indicates a management contract or compensatory plan or arrangement. ITEM 16. FORM 10-K SUMMARY None. 42 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, duly authorized officers and directors. Dated: March 11, 2025 Willis Lease Finance Corporation By: /s/ AUSTIN C. WILLIS Austin C. Willis Chief Executive Officer and Director Dated: Title Signature Date: March 11, 2025 Chief Executive Officer and Director /s/ AUSTIN C. WILLIS (Principal Executive Officer) Austin C. Willis Date: March 11, 2025 Chief Financial Officer /s/ SCOTT B. FLAHERTY (Principal Financial and Accounting Officer) Scott B. Flaherty Date: March 11, 2025 Director /s/ BRENDAN J. CURRAN Brendan J. Curran Date: March 11, 2025 Director /s/ STEPHEN F. JONES Stephen F. Jones Date: March 11, 2025 Director /s/ COLM BARRINGTON Colm Barrington Date: March 11, 2025 Executive Chairman and Director /s/ CHARLES F. WILLIS, IV Charles F. Willis, IV 43 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 45 Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023 48 Consolidated Statements of Income for the years ended December 31, 2024 and December 31, 2023 50 Consolidated Statements of Comprehensive Income for the years ended December 31, 2024 and December 31, 2023 51 Consolidated Statements of Redeemable Preferred Stock and Shareholders’ Equity for the years ended December 31, 2024 and December 31, 2023 52 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and December 31, 2023 53 Notes to Consolidated Financial Statements 55 Schedule II - Valuation Accounts 82 44 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Willis Lease Finance Corporation Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Willis Lease Finance Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, redeemable preferred stock and shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 11, 2025 expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of equipment held for operating lease 45 Table of Contents As described further in Notes 1(d) and 8 to the consolidated financial statements, the Company reviews its equipment held for operating lease (which is inclusive of certain failed sale-leaseback transactions classified as notes receivable and investments in sales-type leases), for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, and annually, for certain equipment held for operating lease. With respect to the annual review, indicators of impairment are identified by review of independent appraisals. If an indicator of impairment is identified, the Company performs an analysis of undiscounted forecasted cash flows over the life of the asset as compared to the asset book value. When an asset’s undiscounted forecasted cash flows are less than the book value, an impairment charge is recorded for the difference between carrying value and fair value. Fair value is determined by reference to independent appraisals, quoted market prices (e.g., an offer to purchase) and other factors considered relevant by the Company. As a result of the annual impairment test, the Company recorded impairment charges of $6.3 million for the year ended December 31, 2024. As of December 31, 2024, the balance of equipment held for operating lease, notes receivable and investments in sales-type leases was $2.6 billion, $184 million and $22 million, respectively. We identified the valuation of equipment held for operating lease as a critical audit matter. The principal considerations for our determination that the valuation of equipment held for operating lease is a critical audit matter are that subjective auditor judgment was required to evaluate: (i) the assumptions used by management engaged independent appraisers, including the accuracy of data provided to management’s specialist to determine the fair value; and (ii) the assumptions used by management to calculate the undiscounted future cash flows, including assumptions of estimated lease rates, maintenance revenues, future shop visits and remaining lease periods. Our audit procedures related to the valuation of equipment held for operating lease included the following, among others: • We evaluated the design and operating effectiveness of certain internal controls related to management’s review of the independent appraiser’s report, including the accuracy of data provided to management’s specialist and the review of assumptions used to determine undiscounted future cash flows. • We evaluated management’s method for determining indicators of impairment, including the potential of management bias. • We tested the annual impairment analysis as follows: • Evaluated the completeness and accuracy of the population of assets included in the analysis; • For a selection of assets, validated the relevant asset condition data that management provided to the independent appraisers; • Evaluated the reasonableness of the following assumptions used in the undiscounted cash flows by comparing them to historical and Company specific data: estimated lease rates, maintenance revenues, future shop visits and remaining lease periods; • With the assistance of valuation professionals with specialized skills and knowledge, we: (i) evaluated the qualification of management engaged independent appraisers; and (ii) assessed the reasonableness of the methodologies used and appraised values determined by comparing a selection of appraised values to published industry benchmark values of comparable assets. /s/ Grant Thornton LLP We have served as the Company’s auditor since 2021. Cincinnati, Ohio March 11, 2025 46 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Willis Lease Finance Corporation Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Willis Lease Finance Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2024, and our report dated March 11, 2025 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Grant Thornton LLP Cincinnati, Ohio March 11, 2025 47 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share data) December 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 9,110 $ 7,071 Restricted cash 123,392 160,958 Equipment held for operating lease, less accumulated depreciation of $ 613,118 and $ 594,293 at December 31, 2024 and 2023, respectively 2,635,910 2,112,837 Maintenance rights 31,134 9,180 Equipment held for sale 12,269 805 Receivables, net of allowances of $ 1,316 and $ 2,311 at December 31, 2024 and 2023, respectively 38,291 58,485 Spare parts inventory 72,150 40,954 Investments 62,670 58,044 Property, equipment & furnishings, less accumulated depreciation of $ 22,784 and $ 19,374 at December 31, 2024 and 2023, respectively 48,061 37,160 Intangible assets, net 2,929 1,040 Notes receivable, net of allowances of $ 247 and $ 69 at December 31, 2024 and 2023, respectively 183,629 92,621 Investments in sales-type leases, net of allowances of $ 22 and $ 9 at December 31, 2024 and 2023, respectively 21,606 8,759 Other assets 56,045 64,430 Total assets (1) $ 3,297,196 $ 2,652,344 LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY Liabilities: Accounts payable and accrued expenses $ 75,983 $ 52,937 Deferred income taxes 185,049 147,779 Debt obligations 2,264,552 1,802,881 Maintenance reserves 97,817 92,497 Security deposits 23,424 23,790 Unearned revenue 37,911 43,533 Total liabilities (2) 2,684,736 2,163,417 Redeemable preferred stock ($ 0.01 par value, 5,000 shares authorized; 3,250 shares and 2,500 issued at December 31, 2024 and December 31, 2023, respectively) 63,122 49,964 Shareholders’ equity: Common stock ($ 0.01 par value, 20,000 shares authorized; 7,173 and 6,849 shares issued at December 31, 2024 and 2023, respectively) 72 68 Paid-in capital in excess of par 50,928 29,667 Retained earnings 491,439 397,781 Accumulated other comprehensive income, net of income tax expense of $ 1,981 and $ 3,276 at December 31, 2024 and 2023, respectively 6,899 11,447 Total shareholders’ equity 549,338 438,963 Total liabilities, redeemable preferred stock and shareholders’ equity $ 3,297,196 $ 2,652,344 ________________________________________________________ 1. Total assets at December 31, 2024 and 2023 include the following assets of variable interest entities (“VIEs”) that can only be used to settle the liabilities of the VIEs: Restricted cash $ 123,392 and $ 160,958 ; Equipment $ 1,681,197 and $ 1,518,050 ; Maintenance rights $ 12,708 and $ 7,806 ; Notes receivable $ 139,853 and $ 91,960 ; Investments in sales-type leases $ 17,752 and $ 3,564 ; and Other assets $ 11,973 and $ 13,339 , respectively. 48 Table of Contents 2. Total liabilities at December 31, 2024 and 2023 include the following liabilities of VIEs for which the VIEs’ creditors do not have recourse to Willis Lease Finance Corporation: Debt obligations $ 1,518,391 and $ 1,411,680 , respectively. Further, refer to Note 10 of the consolidated financial statements for details of the Company’s commitments and contingencies. See accompanying notes to the consolidated financial statements. 49 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Years Ended December 31, 2024 2023 REVENUE Lease rent revenue $ 238,236 $ 213,138 Maintenance reserve revenue 213,908 133,668 Spare parts and equipment sales 27,099 20,359 Interest revenue 11,683 8,721 Gain on sale of leased equipment 45,063 10,581 Maintenance services revenue 24,158 24,168 Other revenue 9,076 7,920 Total revenue 569,223 418,555 EXPENSES Depreciation and amortization expense 92,460 90,925 Cost of spare parts and equipment sales 22,852 15,207 Cost of maintenance services 24,470 21,159 Write-down of equipment 11,228 4,398 General and administrative 146,757 115,740 Technical expense 22,294 28,109 Net finance costs: Interest expense 104,764 78,795 Total net finance costs 104,764 78,795 Total expenses 424,825 354,333 Income from operations 144,398 64,222 Income from joint ventures 8,247 2,908 Income before income taxes 152,645 67,130 Income tax expense 44,033 23,349 Net income 108,612 43,781 Preferred stock dividends 4,126 3,334 Accretion of preferred stock issuance costs 108 75 Net income attributable to common shareholders $ 104,378 $ 40,372 Basic weighted average earnings per common share: $ 15.97 $ 6.40 Diluted weighted average earnings per common share: $ 15.34 $ 6.23 Basic weighted average common shares outstanding 6,536 6,305 Diluted weighted average common shares outstanding 6,804 6,481 See accompanying notes to the consolidated financial statements. 50 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) Years Ended December 31, 2024 2023 Net income $ 108,612 $ 43,781 Other comprehensive income: Currency translation adjustment ( 414 ) ( 523 ) Unrealized loss on derivative instruments ( 5,472 ) ( 18,309 ) Reclassification of gain on derivative instruments to interest expense — ( 247 ) Unrealized loss on derivative instruments at joint venture ( 205 ) ( 530 ) Net loss recognized in other comprehensive income ( 6,091 ) ( 19,609 ) Tax benefit related to items of other comprehensive income ( 1,349 ) ( 4,313 ) Other comprehensive loss ( 4,742 ) ( 15,296 ) Total comprehensive income $ 103,870 $ 28,485 See accompanying notes to the consolidated financial statements. 51 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES Consolidated Statements of Redeemable Preferred Stock and Shareholders’ Equity Years Ended December 31, 2024 and 2023 (In thousands, except per share data) Shareholders' Equity Redeemable Accumulated Other Preferred Stock Common Stock Paid-in Capital in Retained Comprehensive Total Shareholders’ Shares Amount Shares Amount Excess of par Earnings Income Equity Balances at December 31, 2022 2,500 $ 49,889 6,615 $ 66 $ 20,386 $ 357,493 $ 26,743 $ 404,688 Net income — — — — — 43,781 — 43,781 Net unrealized loss from currency translation adjustment, net of tax benefit of $ 115 — — — — — — ( 408 ) ( 408 ) Net unrealized loss from derivative instruments, net of tax benefit of $ 4,143 — — — — — — ( 14,696 ) ( 14,696 ) Net realized gain from derivative instruments, net of tax expense of $ 55 — — — — — — ( 192 ) ( 192 ) Shares issued under stock compensation plans — — 345 3 271 — — 274 Cancellation of restricted stock units in satisfaction of withholding tax — — ( 111 ) ( 1 ) ( 5,792 ) — — ( 5,793 ) Stock-based compensation, net of forfeitures — — — — 14,802 — — 14,802 Accretion of preferred shares issuance costs — 75 — — — ( 75 ) — ( 75 ) Preferred stock dividends ($ 1.33 per share) — — — — — ( 3,334 ) — ( 3,334 ) Cumulative effect due to adoption of new accounting standard — — — — — ( 84 ) — ( 84 ) Balances at December 31, 2023 2,500 49,964 6,849 68 29,667 397,781 11,447 438,963 Net income — — — — 108,612 — 108,612 Net unrealized loss from currency translation adjustment, net of tax benefit of $ 105 — — — — — — ( 309 ) ( 309 ) Net unrealized loss from derivative instruments, net of tax benefit of $ 1,244 — — — — — — ( 4,239 ) ( 4,239 ) Shares issued under stock compensation plans — — 470 5 257 — — 262 Cancellation of restricted stock in satisfaction of withholding tax — — ( 146 ) ( 1 ) ( 8,243 ) — — ( 8,244 ) Stock-based compensation, net of forfeitures — — — — 29,247 — — 29,247 Issuance of preferred stock 750 13,050 — — — — — — Accretion of preferred shares issuance costs — 108 — — — ( 108 ) — ( 108 ) Common stock cash dividends paid ($ 1.50 per share) — — — — — ( 10,720 ) — ( 10,720 ) Preferred stock dividends ($ 1.53 per share) — — — — — ( 4,126 ) — ( 4,126 ) Balances at December 31, 2024 3,250 $ 63,122 7,173 $ 72 $ 50,928 $ 491,439 $ 6,899 $ 549,338 See accompanying notes to the consolidated financial statements. 52 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Years Ended December 31, 2024 2023 Cash flows from operating activities: Net income $ 108,612 $ 43,781 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 92,460 90,925 Gain on sale of leased equipment ( 45,063 ) ( 10,581 ) Payments received on sales-type leases 30,510 4,570 Stock-based compensation expense 29,247 14,802 Accretion of deferred costs and note discounts 10,293 6,150 Income from joint ventures ( 8,247 ) ( 2,908 ) Write-down of equipment 11,228 4,398 Allowances and provisions ( 716 ) 838 Amortization of contract-based intangible asset 2,749 — Gain on insurance proceeds ( 73 ) ( 761 ) Gain on derivative instruments — ( 247 ) Loss on disposal of property, equipment and furnishings — 9 Deferred income taxes 38,581 19,652 Changes in assets and liabilities: Receivables 21,100 ( 17,375 ) Inventory ( 31,189 ) ( 1,710 ) Other assets 676 3,247 Distributions received from joint ventures 3,002 — Accounts payable and accrued expenses 20,698 17,154 Maintenance reserves 5,592 32,159 Security deposits ( 366 ) 3,300 Unearned revenue ( 4,688 ) 22,334 Net cash provided by operating activities 284,406 229,737 Cash flows from investing activities: Purchase of equipment held for operating lease and for sale ( 830,479 ) ( 163,640 ) Proceeds from sale of equipment (net of selling expenses) 171,153 85,061 Issuance of notes receivable ( 101,768 ) ( 15,397 ) Purchase of property, equipment and furnishings ( 15,631 ) ( 5,140 ) Payments received on notes receivable 10,582 4,147 Insurance proceeds received on property, equipment and furnishings 1,235 — Insurance proceeds received on equipment — 2,189 Net cash used in investing activities ( 764,908 ) ( 92,780 ) Cash flows from financing activities: Proceeds from issuance of debt obligations 1,305,705 625,727 Principal payments on debt obligations ( 840,038 ) ( 665,480 ) Proceeds from issuance of preferred stock, net 13,050 — Debt issuance costs ( 11,580 ) ( 9,431 ) Common stock cash dividends paid ( 10,720 ) — Cancellation of restricted stock units in satisfaction of withholding tax ( 8,244 ) ( 5,793 ) Preferred stock dividends ( 3,460 ) ( 3,241 ) Proceeds from shares issued under stock compensation plans 262 274 Net cash provided by (used in) financing activities 444,975 ( 57,944 ) (Decrease) increase in cash, cash equivalents and restricted cash ( 35,527 ) 79,013 Cash, cash equivalents and restricted cash at beginning of period 168,029 89,016 Cash, cash equivalents and restricted cash at end of period $ 132,502 $ 168,029 Supplemental disclosures of cash flow information: Net cash paid for: Interest $ 100,680 $ 76,913 Income Taxes $ 7,091 $ 505 53 Table of Contents Supplemental disclosures of non-cash activities: Transfers from Equipment held for operating lease to Investments in sales-type leases $ 43,370 $ 6,898 Transfers from Equipment held for operating lease to Equipment held for sale $ 25,907 $ 1,901 Transfers from Equipment held for operating lease to Spare parts inventory $ 4,521 $ 667 Transfers from Spare parts inventory to Equipment held for operating lease $ 4,514 $ — Non-cash additions to Equipment held for operating lease (1) $ 8,939 $ 2,817 Accretion of preferred stock issuance costs $ 108 $ 75 ________________________________________________________ 1. During 2024, the Company engaged in exchange transactions involving monetary consideration with third parties in which the Company sold aircraft engine(s) in exchange for the purchase of aircraft engine(s). These transactions were accounted for under ASC 805 and ASC 845 and resulted in a total of $ 7.7 million in non-cash additions to equipment held for operating lease for the associated total gain. In addition, the Company had $ 1.2 million in non-cash additions to equipment held for operating lease related to purchases included in accrued expenses. During 2023, the Company engaged in exchange transactions involving monetary consideration with third parties in which the Company sold aircraft engine(s) in exchange for the purchase of aircraft engine(s). These transactions were accounted for under ASC 805 and ASC 845 and resulted in a total of $ 2.8 million in non-cash additions to equipment held for operating lease for the associated total gain, $ 0.4 million of which was deferred. See accompanying notes to the consolidated financial statements. 54 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements 1. Organization and Summary of Significant Accounting Policies Unless the context requires otherwise, references to the “Company,” “WLFC,” “we,” “us” or “our” in these consolidated financial statements on Form 10-K refer to Willis Lease Finance Corporation and its subsidiaries. (a) Organization Willis Lease Finance Corporation with its subsidiaries is a provider of aviation services whose primary focus is providing operating leases of commercial aircraft, aircraft engines and other aircraft-related equipment to air carriers, manufacturers and overhaul/repair facilities worldwide. The Company also engages in the selective purchase and resale of commercial aircraft engines. Willis Aeronautical Services, Inc. (“Willis Aero”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the sale of aircraft engine parts and materials through the acquisition or consignment of aircraft engines. Willis Asset Management Limited (“Willis Asset Management”) is a wholly-owned and vertically-integrated subsidiary whose primary focus is the engine management and consulting business. Willis Engine Securitization Trust III (“WEST III” or the “WEST III Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an asset-backed securitization (“ABS”), of which the Company is the sole beneficiary. WEST III is a variable interest entity (“VIE”) which the Company owns 100 % of the interest and consolidates in its financial statements. Willis Engine Securitization Trust IV (“WEST IV” or the “WEST IV Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST IV is a VIE which the Company owns 100 % of the interest and consolidates in its financial statements. Willis Engine Structured Trust V (“WEST V” or the “WEST V Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST V is a VIE which the Company owns 100 % of the interest and consolidates in its financial statements. Willis Engine Securitization Trust VI (“WEST VI” or the “WEST VI Notes”) is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST VI is a VIE which the Company owns 100 % of the interest and consolidates in its financial statements. In 2023, the Company and its direct, wholly-owned subsidiary, Willis Engine Structured Trust VII (“WEST VII”), closed its offering of $ 410.0 million aggregate principal amount of fixed rate notes (the “WEST VII Notes”). WEST VII is a bankruptcy remote special purpose vehicle which was established for the purpose of financing aircraft engines through an ABS, of which the Company is the sole beneficiary. WEST VII is a VIE which the Company owns 100 % of the interest and consolidates in its financial statements. In 2024, the Company and its direct, wholly-owned subsidiary, Willis Warehouse Facility LLC (“WWFL”), 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. The secured credit agreement provides for a five-year non-recourse, senior secured warehouse credit facility with an availability period of two years and an initial committed amount of up to $ 500.0 million. Proceeds from the Credit Facility will be used to finance the acquisition of certain assets, including (i) aircraft engines, (ii) airframes and (iii) loan assets that are secured by aircraft engines or airframes. WWFL is a VIE which the Company owns 100 % of the interest and consolidates in its financial statements. Principal and interest on the WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes are payable monthly to the extent of available cash in accordance with a priority of payments included in the respective indenture agreements. Interest on the loans under the senior secured warehouse credit facility are payable monthly. 55 Table of Contents The WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes, as well as the loans under the senior secured warehouse credit facility, are secured by, among other things, the direct and indirect interests in a portfolio of assets of the respective ABS or senior secured warehouse credit facility. The WEST III, WEST IV, WEST V, WEST VI, and WEST VII Notes have scheduled amortizations and are payable solely from revenue received from the lease portfolios, after payment of certain expenses of the respective ABS. The assets of WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL are not available to satisfy the Company’s obligations other than the obligations specific to the respective ABS or senior secured warehouse credit facility. WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL are consolidated for financial statement presentation purposes, with the respective assets and liabilities on the Company’s Consolidated Balance Sheets. The ability of each ABS, as well as WWFL’s ability to make distributions and pay dividends to the Company are subject to the prior payments of its debt and other obligations and maintenance of adequate reserves and capital. Under each ABS, as well as under WWFL, cash is collected in a restricted account, which is used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of the maintenance reserve payments and lease security deposits are formulaically accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Additionally, in connection with WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL, the Company entered into servicing agreements and administrative agency agreements to provide certain engine, lease management and reporting functions in return for fees based on a percentage of collected lease revenues and asset sales. Because WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL are consolidated for financial statement reporting purposes, all fees eliminate upon consolidation. (b) Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of WLFC and its wholly-owned subsidiaries, including VIEs in which the Company is the primary beneficiary, in accordance with consolidation guidance. The Company first evaluates all entities in which it has an economic interest to determine whether for accounting purposes the entity is either a VIE or voting interest entity. If the entity is a VIE, the Company consolidates the financial statements of that entity if it is the primary beneficiary of such entities’ activities. If the entity is a voting interest entity, the Company consolidates the entity when it has a majority of voting interests in such entity. Intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. These reclassifications had no effect on the reported total revenue, income from operations, or net income. The following is a summary of the changes to the presentation in the Consolidated Statements of Income for the year ended December 31, 2023: • Maintenance services revenue predominantly represents fleet management, engine and aircraft storage and repair services, and revenue related to management of fixed base operator services. In prior years, these revenues were included in Other revenue. For the year ended December 31, 2023, the reclassification resulted in an increase of $ 24.2 million in Maintenance services revenues and a decrease of $ 24.2 million in Other revenue. • Cost of maintenance services predominantly represents the costs of fleet management, engine and aircraft storage and repair services, and the management of fixed base operator services. In prior years, these expenses were predominantly included in General and administrative expense. For the year ended December 31, 2023, the reclassification resulted in a net increase of $ 21.2 million in Cost of maintenance services, a decrease of $ 29.0 million in General and administrative expense, and a net increase in Technical expense of $ 7.9 million. (c) Revenue Recognition Leasing revenue Revenue from leasing of engines, aircraft and related parts and equipment is recognized as operating lease revenue on a straight-line basis over the terms of the applicable lease agreements. Revenue is not recognized when cash collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status, and revenue is recognized when cash payments are received. Lease rent payments are typically due in advance of the first day of each rental period. Under the terms of some of the Company’s leases, the lessees pay use fees (also known as maintenance reserves) to the Company based on usage of the leased asset, which are designed to cover expected future maintenance costs. Some of these amounts are reimbursable to the lessee if they make specifically defined maintenance expenditures. Use fees received are recognized in revenue as maintenance reserve revenue if they are not reimbursable to the lessee. Use fees that are reimbursable are recorded as a maintenance reserve liability until they are reimbursed to the lessee, the lease terminates, or the obligation to reimburse the lessee for such reserves ceases to exist, at which time they are recognized in revenue as maintenance reserve revenue. Use fees are due in arrears, typically 15 days after each month-end. 56 Table of Contents Unearned Revenue includes deferred nonrefundable use fees which qualify as in-substance fixed lease payments due to the lessee’s requirement to make certain minimum payments. These in-substance fixed lease payments are recognized ratably over the expected lease term rather than when the variable use fees are invoiced. As of December 31, 2024 and 2023, there were $ 21.7 million and $ 28.4 million, respectively, of deferred in-substance fixed payment use fees included in Unearned Revenue. Certain lessees may be significantly delinquent in their rental payments and may default on their lease obligations. As of December 31, 2024, the Company had an aggregate of approximately $ 3.9 million in lease rent and $ 3.6 million in maintenance reserve receivables more than 30 days past due. Inability to collect receivables or to repossess engines or other leased equipment in the event of a default by a lessee could have a material adverse effect on the Company. The Company estimates an allowance for doubtful accounts for receivables it does not consider fully collectible. The allowance for doubtful accounts includes the following: (1) specific reserves for receivables which are impaired for which management believes full collection is doubtful, and (2) a general reserve for estimated losses based on historical experience. The Company also estimates an allowance for credit losses. Receivables, net of allowances, include amounts billed to customers in which the right to payment is unconditional. The Company maintains an allowance for trade receivables to provide for the estimated amount that will not be collected, even when the risk of loss is remote. The allowance is measured on a collective pool basis when similar risk characteristics exist and is established as a percentage of accounts receivable. The percentage is based on all available and relevant information including age of outstanding receivables, historical payment experience and loss history, current economic conditions, and, when reasonable and supportable factors exist, management’s expectation of future economic conditions. A write-off is recorded when all or part of the receivable is deemed uncollectible. Write-offs are charged against the previously established allowance for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowance for credit losses. Notes receivable and investments in sales-type leases, net of allowances, represent the current remaining balances that the Company expects to collect for failed sale-leaseback transactions and sales-type leases. The Company establishes allowances for credit losses to cover probable but specifically unknown losses existing in the portfolio. In doing so, the Company categorizes financial assets by pools with similar risk characteristics, including whether the financial asset is collateral-backed and whether the customer is placed on non-accrual status. A write-off is recorded when all or part of the financial asset is deemed uncollectible. Write-offs are charged against previously established allowances for credit losses. Partial or full recoveries of amounts previously written off are generally recognized as a reduction in the allowances for credit losses. 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 11 % and 12 %, respectively, of total receivables during the years ended December 31, 2024 and 2023. Spare parts sales The Spare Parts Sales reportable segment primarily engages in the sale of aircraft engine parts and materials through the acquisition or consignment of engines from third parties or the Company’s leasing operations. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, the buyer is responsible for any loss in transit, and the Company has a legal right to payment for the spare parts. Management has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) 606-10-5-86. The spare parts transaction price is a fixed dollar amount and is stated on each purchase order for a fixed amount by total number of parts. Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and, as a result, all of the transaction price is allocated to that performance obligation. Management has determined that it is appropriate for the Company to recognize spare parts sales at a point in time ( i.e. , the date the parts are shipped) under ASC 606. Spare parts sales generally have 30-day payment terms. Equipment sales 57 Table of Contents Equipment sales represent the selective purchase and resale of commercial aircraft engines and other aircraft equipment. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, payment terms, condition of the asset, bill of sale, and the assignment of rights and warranties from the Company to the customer. Management has identified the promise in the equipment sale contract to be the transfer of ownership of the asset. Management believes that the asset holds stand-alone value to the customer as it is not dependent on any other services for functionality purposes, and therefore is distinct within the context of the contract and as described in ASC 606-10. As such, management has identified the transfer of the asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of assets) and is explicitly stated in each contract. Equipment sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer to be the date that the customer obtains control and title over the asset and the date which revenue is to be recognized and payment is due. Payment on equipment sales is generally due upon closing of the sale. Interest revenue Interest revenue represents interest earned on notes receivable related to failed sale-leasebacks in which the Company was the buyer-lessor and on sales-type leases. Gain on sale of leased equipment The Company regularly sells equipment from its lease portfolio. This equipment may or may not be subject to a lease at the time of sale. The net gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the equipment are not included in the sale, any such amount is included in the calculation of gain or loss. Gain on sale of financial assets Some of the Company’s leases are recorded as financial assets and classified as notes receivable under ASC 842 as they are failed sale-leaseback transactions. The Company may sell its engines that are classified as notes receivable, and the net gain or loss on such sales is recognized as revenue and consists of proceeds associated with the sale less the net book value of the asset sold and any direct costs associated with the sale. To the extent that deposits associated with the equipment are not included in the sale, any such amount is included in the calculation of gain or loss. Maintenance services revenue Maintenance services revenue predominantly represents fleet management, engine and aircraft storage and repair services, and revenue related to fixed base operator services provided to third parties, such as refueling, maintenance, and hangar services. Fleet management services are performed for a stated fixed fee as agreed upon in the services agreement, and customers are billed monthly. Engine and aircraft storage services are for a fixed monthly fee. For a contract containing more than one performance obligation, the allocation of the transaction price is generally performed on the basis of the relative stand-alone selling price of each distinct good or service in the contract. As each of the services provided within the contract have separate prices, the Company allocates the price to its related performance obligation described above. Management has determined that each of the revenue elements contain performance obligations that are satisfied over time and therefore recognizes revenue over time in accordance with ASC 606-10-25-27. The Company utilizes the percentage-of-completion method (input method) for recognizing fleet management services and will calculate revenues based on labor hours incurred. Additionally, as is required by ASC 606-10-25-35, as circumstances change over time, the Company will update its measure of progress to reflect any changes in the outcome of the performance obligation. Engine and aircraft storage services are recognized on a monthly basis, utilizing the input method of days passed. Maintenance and repair related services are typically billed once the related maintenance is completed. Maintenance services revenue generally has 30-day payment terms. Other revenue Other revenue consists primarily of managed service fee revenue related to the servicing of engines for the Willis Mitsui & Company Engine Support Limited (“WMES”) lease portfolio. 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. Revenue related to ongoing services is recognized on a monthly basis, and revenue related to transactional services is recognized upon close of the sale. Payments are typically due upon receipt. 58 Table of Contents The following table presents a summary of revenue based on location of customer (in thousands): Year Ended December 31, 2024 2023 Region or Country (in thousands) United States $ 153,045 $ 133,629 Europe 134,509 99,961 Asia-Pacific (excluding India) 106,837 68,581 India 92,483 67,531 Canada 42,077 17,307 South America 36,059 23,374 Central America 3,130 4,495 Middle East 937 3,330 Other 146 347 Total revenue $ 569,223 $ 418,555 (d) Equipment Held for Operating Lease Aircraft assets held for operating lease are stated at cost, less accumulated depreciation. Certain costs incurred in connection with the acquisition of aircraft assets are capitalized as part of the cost of such assets. Major overhauls paid for by the Company, which improve functionality or extend the original useful life, are capitalized and depreciated over the shorter of the estimated period to the next overhaul (“deferral method”) or the remaining useful life of the equipment. The Company does not accrue for planned major maintenance. The cost of overhauls of aircraft assets under long-term leases, for which the lessee is responsible for maintenance during the period of the lease, are paid for by the lessee or from reimbursable maintenance reserves paid to the Company in accordance with the lease and are not capitalized. Based on specific aspects of the equipment, the Company generally depreciates engines on a straight-line basis over a 15-year period from the acquisition date to a 55 % residual value. This methodology reflects the Company’s typical holding period for the engine assets and that the residual value assumption reasonably approximates the selling price of the assets 15 years from the date of acquisition. The typical 15-year holding period is the estimated useful life of the Company’s engines based on its business model and plans and represents how long the Company anticipates holding a newly acquired engine. The technical useful life of a new engine can be in excess of 25 years. The Company reviews the useful lives and residual values of all engines periodically as demand changes to accurately depreciate the cost of equipment over the useful lives of the engines. The aircraft and airframes owned by the Company are generally depreciated on a straight-line basis over an estimated useful life of 13 to 20 years to a 17 % residual value. The marine vessel owned by the Company is depreciated on a straight-line basis over an estimated useful life of 18 years to a 15 % residual value. The other leased parts and related equipment owned by the Company are generally depreciated on a straight-line basis over an estimated useful life of 14 to 15 years to a 25 % residual value. The useful lives of older generation engines and aircraft may be significantly less based upon the technical status of the engine, as well as supply and demand factors. For these older generation engines and aircraft, the remaining useful lives and the remaining expected holding periods are typically the same. For older generation engines or aircraft that are unlikely to be repaired at the end of the current expected useful lives, the Company depreciates the engines or aircraft over their estimated lives to a residual value based on an estimate of the wholesale value of the parts after disassembly. As of December 31, 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. The Company adjusts its estimates annually for these older generation assets, including updating estimates of an engine’s or aircraft’s remaining operating life as well as future residual value expected from part-out based on the current technical status of the engine or aircraft. 59 Table of Contents The Company reviews its long-lived assets, including certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under ASC 842, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets to be disposed are reported at the lower of carrying amount or fair value less cost to sell. Impairment is identified by review of appraisals or by comparison of undiscounted forecasted cash flows, including estimated sales proceeds, over the life of the asset with the assets’ book value. If the undiscounted forecasted cash flows are less than the book value, the asset is written down to its fair value. Fair value is determined per individual asset by reference to independent appraisals, quoted market prices ( e.g. , an offer to purchase) and other factors considered relevant by the Company. The Company evaluates assets during the year if a triggering event is identified indicating impairment is possible and also conducts a formal annual review of the carrying values of long-lived assets. The formal annual review resulted in $ 6.3 million in impairment charge in 2024 and $ 2.0 million in impairment charge in 2023. Additionally, the Company recorded impairment charges of $ 4.9 million and $ 2.4 million in 2024 and 2023, respectively, as a result of triggering events occurring during the year. These write-downs are included in “Write-down of equipment” in the Consolidated Statements of Income. (e) Equipment Held for Sale Equipment held for sale includes assets being marketed for sale as well as third-party consigned assets. The assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell. (f) Debt Issuance Costs and Related Fees Fees paid in order to secure debt are capitalized, included in Debt obligations on the Consolidated Balance Sheets, and amortized over the life of the related loan using the effective interest method. Interest expense related to the accretion of debt issuance costs and note discounts was $ 7.6 million and $ 4.8 million in 2024 and 2023, respectively. (g) Interest Rate Hedging The Company enters into various derivative instruments periodically to mitigate the exposure on variable rate borrowings. The derivative instruments are fixed-rate interest swaps that are recorded at fair value as either an asset or liability. While substantially all of the Company’s derivative transactions are entered into for the purposes described above, hedge accounting is only applied when specific criteria have been met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and it must be highly effective. The hedging instrument’s effectiveness is assessed utilizing both a dollar offset and regression testing approach at the inception of the hedge and either a dollar offset and regression testing approach or qualitative analysis on at least a quarterly basis throughout its life. All of the transactions that the Company has designated as hedges are cash flow hedges. The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings. The ineffective portion of the hedges is recorded in earnings in the current period. (h) Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in the tax rates is recognized in income in the period that includes the enactment date. The Company recognizes in the financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see Note 7). The Company files income tax returns in various states and countries which may have different statutes of limitations. The Company records penalties and accrued interest related to uncertain tax positions in income tax expense. Such adjustments have historically been minimal and immaterial to our financial results. 60 Table of Contents (i) Property, Equipment and Furnishings Property, equipment and furnishings are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets, which range from three to 39 years. Leasehold improvements are recorded at cost and depreciated by the straight-line method over the shorter of the lease term or useful life of the leasehold. (j) Cash and Cash Equivalents The Company considers highly liquid investments readily convertible into known amounts of cash, with original maturities of 90 days or less, as cash equivalents. (k) Restricted Cash The Company has certain bank accounts that are subject to restrictions in connection with its WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL debt. Under these borrowings, cash is collected in restricted accounts, which are used to service the debt and any remaining amounts, after debt service and defined expenses, are distributed to the Company. Additionally, a portion of projected maintenance obligations and some or all of the lease security deposits are accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. Under WEST III, cash equal to a portion of the projected maintenance obligations for the subsequent nine months is held in a restricted account and is subject to a minimum balance of $ 9.4 million. Under WEST IV, cash equal to a portion of the projected maintenance obligations for the subsequent ten months is held in a restricted account and is subject to a minimum balance of $ 4.5 million. Under WEST V, cash equal to a portion of the projected maintenance obligations for the subsequent twelve months is held in a restricted account and is subject to a minimum balance of $ 5.0 million. Under WEST VI, WEST VII, and WWFL, cash equal to a portion of the projected maintenance obligations for the subsequent twelve months is held in a restricted account and is subject to a minimum balance of $ 1.0 million. Under WEST III, WEST IV, WEST V, and WEST VII, security deposits are held in restricted accounts equal to a portion of the security deposits for leases scheduled to terminate over the subsequent four months , in each case, subject to a minimum balance of $ 1.0 million. Under WEST VI, all security deposits for leases scheduled to terminate before the expected maturity date of the notes are held in a restricted account, subject to a minimum balance of $ 1.0 million. Provided lease return conditions have been met, these deposits will be returned to the lessee. To the extent return conditions are not met, these deposits may be retained by the Company. The Company had total cash and cash equivalents and restricted cash, as presented in the Consolidated Statements of Cash Flows, as follows: December 31, 2024 2023 (in thousands) Cash and cash equivalents $ 9,110 $ 7,071 Restricted cash 123,392 160,958 Total as presented in the consolidated statements of cash flows $ 132,502 $ 168,029 (l) Spare Parts Inventory Spare parts inventory consists of spare aircraft and engine parts purchased either directly by Willis Aero and also engines removed from the lease portfolio to be parted out. Spare parts inventory is stated at lower of cost or net realizable value. An impairment charge for excess or inactive inventory is recorded based upon an analysis that considers current inventory levels, historical usage patterns, future sales expectations, and salvage value. (m) Intangible Assets Intangible assets include customer relationships and goodwill at Willis Asset Management, which are accounted for in accordance with ASC 350, “Intangibles — Goodwill and Other.” Intangible assets also include contract assets, which result when lease contract terms are favorable as compared to market terms in asset acquisitions. As of December 31, 2024, intangible assets included goodwill of $ 1.0 million and a contract-based intangible asset of $ 1.9 million. Customer relationships are amortized on a straight-line basis over their estimated useful life of eight years . Contract assets amortize over the term of the respective contract. Aside from goodwill, the Company has no intangible assets with indefinite useful lives. Goodwill is assessed for impairment annually, at each year end. 61 Table of Contents (n) Other Assets Other assets typically include prepaid purchase deposits and other prepaid expenses. As of December 31, 2024 and 2023, Other assets included prepaid deposits of $ 4.4 million and $ 5.8 million, respectively, relating to commitments to purchase equipment. (o) Management Estimates These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S.”). The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management evaluates estimates on an ongoing basis, including those related to residual values, estimated asset lives, impairments, bad debts and credit losses. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the accounting policies on revenue recognition, useful life of equipment, asset residual values, asset impairment, allowance for doubtful accounts, and allowance for credit losses are critical to the results of operations. If the useful lives or residual values are lower than those estimated, upon sale of the asset a loss may be realized. Significant management judgment is required in the forecasting of future operating results, which are used in the preparation of projected undiscounted cash flows and should different conditions prevail, material impairment write-downs may occur. (p) Earnings Per Share Basic earnings per common share is computed by dividing net income attributable to holders of common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is computed by dividing net income attributable to holders of common stock by the weighted average number of shares outstanding, adjusted for the dilutive effect of unvested restricted stock awards (“RSAs”). See Note 9 for more information on the computation of earnings per share. (q) Investments The Company’s investments are joint ventures, in which it owns 50 % of the equity of the ventures and are accounted for using the equity method of accounting. The investments are recorded at the amount invested plus or minus our 50 % share of net income or loss, less any distributions or return of capital received from the entities. (r) Stock-Based Compensation The Company recognizes stock-based compensation expense in the financial statements for share-based awards based on the grant-date fair value of those awards. Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. Forfeitures are accounted for as they occur. (s) Initial Direct Costs Associated with Leases The Company accounts for the initial direct costs, including sales commissions, incurred in obtaining a new lease by deferring and amortizing those costs over the term of the lease. The amortization of these costs is recorded under general and administrative expenses in the Consolidated Statements of Income. The amounts amortized were $ 2.7 million and $ 1.4 million for the years ended December 31, 2024 and 2023, respectively. (t) Maintenance Rights The Company identifies, measures and accounts for maintenance right assets and liabilities associated with acquisitions of equipment with in-place leases. A maintenance right asset represents the fair value of the contractual right under a lease to receive equipment in an improved maintenance condition as compared to the maintenance condition on the acquisition date. A maintenance right liability represents the Company’s obligation to pay the lessee for the difference between the lease-end contractual maintenance condition of the equipment and the actual maintenance condition of the equipment on the acquisition date. The equipment condition at the end of the lease term may result in either overhaul work being performed by the lessee to meet the required return condition or a financial settlement. 62 Table of Contents When a capital event is performed on the equipment by the lessee, which satisfies the lessee’s maintenance right obligation, the maintenance rights are added to the equipment basis and depreciated to the next capital event. When equipment is sold before the end of the pre-existing lease, the maintenance rights are applied against any accumulated maintenance reserves, if paid by the lessee, and the remaining balance is applied to the disposition gain or loss. When a lease terminates, an end of lease true-up is performed, and the maintenance right is applied against the accumulated maintenance reserves or, for non-reserve lessees, the final settlement payment, and any remaining net maintenance right is recorded in the Consolidated Statements of Income. (u) Foreign Currency Translation The Company’s foreign investments have been converted at rates of exchange in effect at the balance sheet dates. The changes in exchange rates in our foreign investments reported under the equity method are included in the Consolidated Balance Sheets as Accumulated other comprehensive income. (v) Risk Concentrations Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash deposits, lease receivables and interest rate swaps. The Company places its cash deposits, which exceed federally insured limits, with financial institutions and other credit-worthy institutions, such as money market funds, and limits the amount of credit exposure to any one party. Management opts for security of principal as opposed to yield. Concentrations of credit risk with respect to lease receivables are limited due to the large number of customers comprising the customer base, and their dispersion across different geographic areas. Some lessees are required to make payments for maintenance reserves at the end of the lease. The Company enters into interest rate swap agreements with counterparties that are investment grade financial institutions. (w) Risks and Uncertainties Given the uncertainty in the rapidly changing market and economic conditions related to the current high interest rate and inflationary environment, we will continue to evaluate the nature and extent of the impact on the Company’s business and financial position. The ultimate extent of the effects of the current high interest rate and inflationary environment on the Company will depend on future developments, and such effects could exist for an extended period of time. Other than what has been reflected in the Consolidated Financial Statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. Actual results could differ from those estimates and any such differences may be material to the Consolidated Financial Statements. (x) Recent Accounting Pronouncements Recent Accounting Pronouncements To Be Adopted by the Company In August 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-05, “Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement.” The amendments in this ASU apply to the formation of a joint venture, and under this ASU, a joint venture formation is the creation of a new reporting entity that would trigger a new basis of accounting. This ASU requires net assets contributed to the joint venture in a formation transaction to be measured at fair value at the formation date. The amendments in this ASU are effective for all joint ventures within the ASU’s scope that are formed on or after January 1, 2025, with early adoption permitted. Joint ventures formed on or after the effective date of ASU 2023-05 will be required to apply the new guidance prospectively. Joint ventures formed before the ASU’s effective date are permitted to apply the new guidance (1) retrospectively if they have “sufficient information” to do so or (2) prospectively if financial statements have not yet been issued (or made available for issuance). The Company adopted this accounting standard update effective January 1, 2025, and the Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” Under the ASU, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted. The Company expects to adopt this accounting standard update for the year ended December 31, 2025, and the Company does not expect the adoption of this guidance to have a significant impact on the consolidated financial statement disclosures. 63 Table of Contents In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-04) Disaggregation of Income Statement Expenses.” The ASU requires public entities, on both an interim and annual basis, to disclose additional disaggregated information about specific expense categories in the notes to the financial statements. The ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company expects to adopt this accounting standard update for the year ended December 31, 2027 and is currently evaluating the potential effects on the consolidated financial statements and related disclosures. 2. Leases As lessor, and 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 or investments in sales-type leases under the guidance provided by ASC 842. As lessee, the significant majority of leases the Company enters are for real estate (office and warehouse space for our operations) as well as automobiles. These lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with terms of 12 months or less are not recorded on the Consolidated Balance Sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include variable non-lease components ( e.g. , taxes) which are not separated from associated lease components ( e.g. , fixed rent, common-area maintenance costs, vehicle protection plans and other service fees) as elected under the practical expedient package provided by ASC 842. The Company’s leases have remaining lease terms of approximately two months to 13 years, some of which include options to renew or extend the lease term from one to five years . Our automobile leases include an option to purchase the vehicle at lease termination. The depreciable lives of assets are limited by the expected lease terms, unless there is a transfer of title or purchase option reasonably certain of exercise. The exercise of lease renewal options or purchase at lease termination is at the Company’s sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our ROU assets and lease liabilities. Supplemental information to the Consolidated Balance Sheets related to leases was as follows: Leases Classification December 31, 2024 December 31, 2023 (in thousands, except lease term and discount rate) Assets Operating lease right-of-use assets Other assets $ 6,584 $ 8,652 Liabilities Lease liabilities Accounts payable and accrued expenses $ 5,848 $ 7,941 Weighted average remaining lease term (years) Operating leases 2.70 2.90 Weighted average discount rate Operating leases 5.2 % 4.6 % The weighted average discount rate is based on the incremental borrowing rate for each lease and the remaining balance of the lease payments for each lease at the reporting date. 64 Table of Contents Future maturities of the Company’s lease liabilities at December 31, 2024 are as follows: Year (in thousands) 2025 $ 3,147 2026 1,114 2027 801 2028 577 2029 504 Thereafter 210 Total undiscounted lease liabilities 6,353 Less: interest ( 505 ) Total lease liabilities $ 5,848 The components of lease expense were as follows: Years Ended December 31, Lease expense Classification 2024 2023 (in thousands) Operating lease cost General and administrative $ 4,235 $ 3,709 Net lease cost $ 4,235 $ 3,709 Supplemental cash flow information related to leases was as follows: Years Ended December 31, 2024 2023 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,538 $ 3,327 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 1,016 $ 307 65 Table of Contents 3. Equipment Held for Operating Lease As of December 31, 2024, the Company 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. As of December 31, 2023, the Company had $ 2,112.8 million of equipment held in our operating lease portfolio, $ 92.6 million of notes receivable, $ 9.2 million of maintenance rights, and $ 8.8 million of investments in sales-type leases, which represented 337 engines, 12 aircraft, one marine vessel and other leased parts and equipment. The following table disaggregates equipment held for operating lease by asset class (in thousands): As of December 31, 2024 2023 Gross value Accumulated depreciation Net book value Gross value Accumulated depreciation Net book value (in thousands) Engines and related equipment $ 3,060,020 $ ( 595,340 ) $ 2,464,680 $ 2,535,148 $ ( 569,596 ) $ 1,965,552 Aircraft and airframes 174,642 ( 13,634 ) 161,008 157,616 ( 21,409 ) 136,207 Marine vessel 14,366 ( 4,144 ) 10,222 14,366 ( 3,288 ) 11,078 $ 3,249,028 $ ( 613,118 ) $ 2,635,910 $ 2,707,130 $ ( 594,293 ) $ 2,112,837 Notes Receivable and Investments in Sales-Type Leases During the years ended December 31, 2024 and 2023, the Company recorded interest revenue related to the notes receivable and investments in sales-type leases of $ 11.7 million and $ 8.7 million, respectively. The effective interest rates on our notes receivable and investments in sales-type leases ranged from 6.0 % to 12.2 % as of December 31, 2024 and 7.1 % to 12.2 % as of December 31, 2023. Under some of the Company’s notes receivable and investments in sales-type leases, the lessee has the option to purchase the underlying asset at fixed amounts throughout the lease term. A majority of the equipment is leased and operated internationally. Substantially all leases relating to this equipment are denominated and payable in U.S. dollars. The Company leases equipment to lessees domiciled in eight geographic regions or countries. The tables below set forth geographic information about the leased equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location): Years Ended December 31, Lease rent revenue 2024 2023 Region or Country (in thousands) United States $ 72,959 $ 71,436 Europe 53,465 43,790 Asia-Pacific (excluding India) 40,661 32,700 India 31,512 36,992 South America 20,291 17,375 Canada 18,659 8,293 Central America 689 1,921 Middle East — 631 Totals $ 238,236 $ 213,138 66 Table of Contents As of December 31, Net book value of equipment held for operating lease 2024 2023 Region or Country (in thousands) United States $ 658,128 $ 464,088 Asia-Pacific (excluding India) 344,946 235,948 India 314,714 294,361 Europe 299,322 443,901 South America 176,380 136,917 Canada 133,286 109,056 Central America 17,047 43,192 Middle East 6,239 42,965 Off-lease 685,848 342,409 Totals $ 2,635,910 $ 2,112,837 As of December 31, 2024, the lease status of the equipment held for operating lease (in thousands) was as follows: Lease Term Net Book Value Off-lease and other $ 685,848 Month-to-month leases 266,521 Leases expiring 2025 702,083 Leases expiring 2026 326,353 Leases expiring 2027 373,017 Leases expiring 2028 126,522 Leases expiring 2029 28,990 Leases expiring thereafter 126,576 $ 2,635,910 67 Table of Contents 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 4. Investments In 2011, the Company entered into an agreement with Mitsui & Co., Ltd. to participate in a joint venture formed as a Dublin-based Irish limited company, WMES, for the purpose of acquiring and leasing jet engines. Each partner holds a 50 % interest in the joint venture, and the Company uses the equity method in recording investment activity. As of December 31, 2024, WMES owned a lease portfolio of 50 engines with a net book value of $ 328.9 million. In 2014, the Company entered into an agreement with China Aviation Supplies Import & Export Corporation (“CASC”) to participate in a joint venture named CASC Willis Lease Finance Company Limited (“CASC Willis”), a joint venture based in Shanghai, China. Each partner holds a 50 % interest in the joint venture and the Company uses the equity method in recording investment activity. CASC Willis acquires and leases jet engines to Chinese airlines and concentrates on the demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. As of December 31, 2024, CASC Willis owned a lease portfolio of four engines with a net book value of $ 37.3 million. WMES CASC Willis Total (in thousands) Investment in joint ventures as of December 31, 2022 $ 41,014 $ 15,175 $ 56,189 Income (loss) from joint ventures ( 437 ) 3,345 2,908 Foreign currency translation adjustment — ( 523 ) ( 523 ) Other comprehensive loss from joint ventures ( 530 ) — ( 530 ) Investment in joint ventures as of December 31, 2023 40,047 17,997 58,044 Income from joint ventures 7,670 577 8,247 Distribution ( 2,756 ) ( 246 ) ( 3,002 ) Foreign currency translation adjustment — ( 414 ) ( 414 ) Other comprehensive loss from joint ventures ( 205 ) — ( 205 ) Investment in joint ventures as of December 31, 2024 $ 44,756 $ 17,914 $ 62,670 68 Table of Contents As of December 31, 2024 and 2023, the currency translation adjustment balance was $ 2.1 million and $ 1.8 million, respectively. “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. 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. The Company subleases a WMES engine to a third party, with WMES as the head lessor. As of December 31, 2024 and 2023, the ROU asset and lease liability balances under this lease were $ 1.6 million, each, and $ 3.3 million, each, respectively. Unaudited summarized financial information for 100% of WMES is presented in the following table: Years Ended December 31, 2024 2023 (in thousands) Revenue $ 75,551 $ 47,617 Expenses 60,484 46,317 WMES net income $ 15,067 $ 1,300 As of December 31, 2024 2023 (in thousands) Total assets $ 352,783 $ 236,732 Total liabilities 256,055 150,604 Total WMES net equity $ 96,728 $ 86,128 The difference between the Company’s investment in WMES and 50 % of total WMES net equity, as well as the difference between the Company’s income or loss from WMES and 50 % of total WMES net income, is primarily attributable to the recognition of deferred gains, which are related to engines sold by WMES to the Company, and prior to the adoption of ASU 2017-05, related to engines sold by the Company to WMES. 69 Table of Contents 5. Debt Obligations Debt obligations consisted of the following: As of December 31, 2024 2023 (in thousands) Credit facility at a floating rate of interest of one-month term Secured Overnight Financing Rate (“SOFR”) plus 2.60 % at December 31, 2024, secured by engines, airframes, and loan assets. The facility has a committed amount of $ 1.0 billion at December 31, 2024, which revolves until the maturity date of October 2029. $ 693,000 $ 353,000 WEST VII Series A 2023 term notes payable at a fixed rate of interest of 8.00 %, maturing in October 2048, secured by engines, airframes, and loan assets 356,355 406,894 WEST VI Series A 2021 term notes payable at a fixed rate of interest of 3.10 %, maturing in May 2046, secured by engines, airframes, and loan assets 241,065 252,986 WEST VI Series B 2021 term notes payable at a fixed rate of interest of 5.44 %, maturing in May 2046, secured by engines, airframes, and loan assets 33,486 35,142 WEST VI Series C 2021 term notes payable at a fixed rate of interest of 7.39 %, maturing in May 2046, secured by engines, airframes, and loan assets 9,926 12,361 WEST V Series A 2020 term notes payable at a fixed rate of interest of 3.23 %, maturing in March 2045, secured by engines 226,572 240,371 WEST V Series B 2020 term notes payable at a fixed rate of interest of 4.21 %, maturing in March 2045, secured by engines 31,563 33,485 WEST V Series C 2020 term notes payable at a fixed rate of interest of 6.66 %, maturing in March 2045, secured by engines 8,142 10,695 WEST IV Series A 2018 term notes payable at a fixed rate of interest of 4.75 %, maturing in September 2043, secured by engines 199,846 212,157 WEST IV Series B 2018 term notes payable at a fixed rate of interest of 5.44 %, maturing in September 2043, secured by engines 27,338 29,024 WEST III Series A 2017 term notes payable at a fixed rate of interest of 4.69 %, maturing in August 2042, secured by engines 161,308 175,705 WEST III Series B 2017 term notes payable at a fixed rate of interest of 6.36 %, maturing in August 2042, secured by engines 21,659 23,592 WWFL credit facility at a floating rate of interest of one-month term SOFR, plus 2.25 % at December 31, 2024, maturing in May 2029, secured by engines, airframes, and loan assets 221,882 — Note payable at a fixed rate of interest of 5.00 %, maturing in February 2033, secured by an engine 20,780 — Note payable at a fixed rate of interest of 4.59 %, maturing in November 2032, secured by an engine 22,094 22,610 Note payable at a fixed rate of interest of 4.23 %, maturing in June 2032, secured by an engine 17,710 17,802 Note payable at a fixed rate of interest of 3.18 %, matured in July 2024, secured by an aircraft — 1,235 2,292,726 1,827,059 Less: unamortized debt issuance costs and note discounts ( 28,174 ) ( 24,178 ) Total debt obligations $ 2,264,552 $ 1,802,881 One-month term SOFR was 4.37% and 5.38% as of December 31, 2024 and 2023, respectively. As it relates to the $ 20.8 million, $ 22.1 million, and $ 17.7 million notes payable resulting from failed sale-leaseback transactions that are secured by engines, the Company has options to repurchase the engines in in March 2032 for $ 18.4 million, January 2032 for $ 17.7 million, and July 2031 for $ 17.0 million, respectively. Principal outstanding at December 31, 2024, is expected to be repayable as follows: 70 Table of Contents Year (in thousands) 2025 $ 70,690 2026 269,922 2027 192,331 2028 238,289 2029 1,465,942 Thereafter 55,552 Total $ 2,292,726 In October 2024, the Company entered into a new, $ 1.0 billion, five-year , revolving credit facility with a consortium of lenders, refinancing its $ 500.0 million credit facility. The purpose of the revolving credit facility is to finance the acquisition of equipment for lease as well as for general working capital purposes, with the amounts drawn under the facility not to exceed that which is allowed under the borrowing base as defined by the credit agreement. As of December 31, 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. 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. 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. The secured credit agreement provides for a five-year non-recourse, senior secured warehouse credit facility with an availability period of two years and an initial committed amount of up to $ 500.0 million. The purpose of the senior secured warehouse credit facility is to finance the acquisition of equipment for lease as well as for general working capital purposes, with the amounts drawn under the facility not to exceed that which is allowed under the borrowing base as defined by the credit agreement. As of December 31, 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. Under 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. In October 2023, the Company and its direct, wholly-owned subsidiary WEST VII, closed its offering of $ 410.0 million aggregate principal amount of fixed rate notes. The notes are secured by, among other things, WEST VII’s direct and indirect interests in a portfolio of aircraft engines and airframes. The notes have a fixed coupon of 8.00 %, an expected maturity in October 2029, and a final maturity date in October 2048. The notes were issued at a price of 98.84814 % of par. Principal on the notes is payable monthly to the extent of available cash in accordance with a priority of payments included in the indenture. 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. 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. 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. Additionally, a portion of maintenance reserve payments and lease security deposits are formulaically accumulated in restricted accounts and are available to fund future maintenance events and to secure lease payments, respectively. The WEST III, WEST IV, WEST V, WEST VI, WEST VII, and WWFL indentures require that a minimum threshold of maintenance reserve and security deposit balances be held in restricted cash accounts. Virtually all of the Company’s debt requires ongoing compliance with the covenants of each financing, including debt and tangible net worth ratios, minimum interest coverage ratios, and other eligibility criteria including asset type, customer and geographic concentration restrictions. 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. 71 Table of Contents 6. Derivative Instruments The Company periodically holds interest rate derivative instruments to mitigate exposure to changes in interest rates, predominantly one-month SOFR, with $ 914.9 million and $ 353.0 million of variable rate borrowings at December 31, 2024 and 2023, respectively. As a matter of policy, management does not use derivatives for speculative purposes. As of December 31, 2024, the Company had six interest rate swap agreements. During 2021, the Company entered into four fixed-rate interest swap agreements, each having notional amounts of $ 100.0 million, two 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. 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 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 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. The following table displays the total notional amount of the Company’s outstanding fixed-rate interest swap agreements: Derivatives in Cash Flow Hedging Relationships As of December 31, 2024 2023 (in thousands) Interest rate contracts $ 425,000 $ 500,000 The Company evaluated the effectiveness of the swap agreements to hedge the interest rate risk associated with its variable rate debt and concluded at the swap inception dates that each swap was highly effective in hedging that risk. The Company evaluates the effectiveness of the hedging relationships on an ongoing basis and concluded there was no ineffectiveness in the hedges for the year ended December 31, 2024. The Company estimates the fair value of derivative instruments using a discounted cash flow technique. Valuation of the derivative instruments requires certain assumptions for underlying variables and the use of different assumptions would result in a different valuation. Management believes it has applied assumptions consistently during the period. The Company applies hedge accounting and accounts for the change in fair value of its cash flow hedges through other comprehensive income for all derivative instruments that are effective and for which the related forecasted transaction is probable of occurring. The following table displays the total fair value of the Company’s outstanding fixed-rate interest swap agreements in the Consolidated Balance Sheets (each representing an asset and reflected within Other assets): Derivatives in Cash Flow Hedging Relationships As of December 31, 2024 2023 (in thousands) Interest rate contracts $ 10,989 $ 16,483 The Company recorded an adjustment to interest expense of $( 12.0 ) million and $( 23.4 ) million during the years ended December 31, 2024 and 2023, respectively, from derivative investments. As of December 31, 2024, the accumulative derivative gain was $ 11.0 million, and as of December 31, 2023, the accumulative derivative gain was $ 16.5 million. Effect of Derivative Instruments on Earnings in the Consolidated Statements of Income and of Comprehensive Income The following table provides additional information about the financial statement effects related to the cash flow hedges for the years ended December 31, 2024 and 2023: Derivatives in Cash Flow Hedging Relationships Amount of Unrealized Loss Recognized in OCI on Derivatives (Effective Portion) Years Ended December 31, 2024 2023 (in thousands) Interest rate contracts $ ( 5,472 ) $ ( 18,309 ) Total $ ( 5,472 ) $ ( 18,309 ) 72 Table of Contents The effective portion of the change in fair value on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period during which the transaction being hedged affects earnings or it is probable that the forecasted transaction will not occur. The ineffective portion of the hedges, if any, is recorded in earnings in the current period. There was no ineffectiveness in the hedges for the years ended December 31, 2024 and 2023. Counterparty Credit Risk The Company evaluates the creditworthiness of the counterparties under its hedging agreements. The counterparties for the interest rate swaps are large financial institutions that possess investment grade credit ratings. Based on these ratings, the Company believes that the counterparties were credit-worthy and that their continuing performance under the hedging agreement is probable and does not require the counterparties to provide collateral or other security to the Company. 7. Income Taxes The components of income before income taxes are as follows: Years ended December 31, 2024 2023 (in thousands) United States $ 165,339 $ 73,853 Foreign ( 12,694 ) ( 6,723 ) Income before income taxes $ 152,645 $ 67,130 The components of income tax expense for the years ended December 31, 2024 and 2023 were as follows: Federal State Foreign Total (in thousands) 2024 Current $ 2,331 $ 2,916 $ 205 $ 5,452 Deferred 38,871 ( 290 ) — 38,581 Total $ 41,202 $ 2,626 $ 205 $ 44,033 2023 Current $ 2,449 $ 1,387 $ ( 139 ) $ 3,697 Deferred 16,338 3,314 — 19,652 Total $ 18,787 $ 4,701 $ ( 139 ) $ 23,349 The following is a reconciliation of the federal income tax expense at the statutory rate of 21% for the years ended December 31, 2024 and 2023 to the effective income tax expense: Years Ended December 31, 2024 2023 (in thousands) Statutory federal income tax expense $ 32,055 $ 14,097 State taxes, net of federal benefit 2,014 4,410 Foreign tax paid ( 559 ) ( 169 ) Foreign jurisdiction rate differential 445 545 Permanent differences - nondeductible executive compensation 6,553 2,929 Permanent differences and other 1,355 1,046 Valuation allowance 2,170 491 Effective income tax expense $ 44,033 $ 23,349 Permanent differences and other includes Subpart F income of $ 1.4 million from foreign operations for the year ended December 31, 2024. The Company records tax expense or benefit for unusual or infrequent items discretely in the period in which they occur. 73 Table of Contents The following table summarizes the activity related to the Company’s unrecognized tax benefits: (in thousands) Balance as of December 31, 2022 $ 19 Increases related to current year tax positions 435 Decreases due to tax positions expired ( 5 ) Balance as of December 31, 2023 449 Increases related to current year tax positions 123 Decreases due to tax positions expired ( 5 ) Balance as of December 31, 2024 $ 567 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: As of December 31, 2024 2023 (in thousands) Deferred tax assets: Unearned lease revenue $ 8,335 $ 9,614 State taxes 590 167 Inventory 2,770 2,426 Reserves and allowances 4,629 5,471 Other accruals 46,144 29,231 Lease liability 584 934 Net operating loss carry forward 40,906 51,240 Charitable contributions — 2 Total deferred tax assets 103,958 99,085 Less: valuation allowance ( 3,137 ) ( 978 ) Net deferred tax assets 100,821 98,107 Deferred tax liabilities: Depreciation and impairment on aircraft engines and equipment ( 272,492 ) ( 231,694 ) Notes receivable ( 5,181 ) ( 5,405 ) Lease liability ( 597 ) ( 930 ) Other deferred tax liabilities ( 5,619 ) ( 4,622 ) Net deferred tax liabilities ( 283,889 ) ( 242,651 ) Other comprehensive income deferred tax liability ( 1,981 ) ( 3,235 ) Net deferred tax liabilities $ ( 185,049 ) $ ( 147,779 ) 74 Table of Contents As of December 31, 2024, the Company had net operating loss carry forwards of approximately $ 177.4 million for federal tax purposes, $ 0.7 million (tax effected) for state tax purposes, and $ 12.2 million for foreign tax purposes. The majority of the federal net operating loss carry forwards were generated in 2020 and can be carried forward indefinitely, and the state net operating loss carry forwards will expire at various times from 2026 to 2043. There is a $ 0.4 million valuation allowance for net operating losses in California that expires between 2034 and 2042 and a $ 0.1 million valuation allowance for net operating losses in Georgia that expires between 2032 and 2040. As of December 31, 2024, the Company had a $ 2.7 million valuation allowance for net operating losses in the UK, and there is a $ 3.1 million net operating loss carryforward in the UK that can be carried forward indefinitely. The Company’s ability to utilize the net operating loss and tax credit carry forwards in the future may be subject to restriction in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code and similar state tax law. Management believes that no valuation allowance is required on deferred tax assets related to federal net operating loss carry forwards, as it is more likely than not that all amounts are recoverable through future taxable income. The Company files U.S. federal, state, and foreign tax returns. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple foreign and state jurisdictions. The tax years that remain subject to examination are from 2021 onwards. To the extent that the Company claims a net operating loss carryforward against future taxable income, those losses may be examined by the taxing authorities. The net change in the total valuation allowance during the year ended December 31, 2024 was $ 2.2 million. It is the Company’s intention to reinvest undistributed earnings of their wholly-owned foreign operations and thereby indefinitely postpone their remittance. A determination of the deferred tax liability is not practical. Accordingly, no provision has been made for foreign withholding taxes or U.S. income taxes. 8. Fair Value Measurements The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision. Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: • Cash and cash equivalents, restricted cash, receivables, and accounts payable : The amounts reported in the accompanying Consolidated Balance Sheets approximate fair value due to their short-term nature. • Notes receivable : The carrying amount of the Company’s outstanding balance on its Notes receivable as of December 31, 2024 and 2023 was estimated to have a fair value of approximately $ 176.7 million and $ 90.3 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each period end (Level 2 inputs). • Investments in sales-type leases: The carrying amount of the Company's outstanding balance on its Investments in sales-type leases as of December 31, 2024 and 2023 was estimated to have a fair value of approximately $ 21.5 million and $ 8.7 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each period end (Level 2 inputs). 75 Table of Contents • Debt obligations : The carrying amount of the Company’s outstanding balance on its Debt obligations as of December 31, 2024 and 2023 was estimated to have a fair value of approximately $ 1,928.3 million and $ 1,598.5 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each year end (Level 2 inputs). Assets Measured and Recorded at Fair Value on a Recurring Basis and a Nonrecurring Basis As of December 31, 2024 and 2023, the Company measured the fair value of its interest rate swaps based on Level 2 inputs, due to the usage of inputs that can be corroborated by observable market data. The Company estimates the fair value of derivative instruments using a discounted cash flow technique. The net fair value of the interest rate swaps as of December 31, 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. The Company recorded an adjustment to interest expense of $( 12.0 ) million and $( 23.4 ) million during the years ended December 31, 2024 and 2023, respectively, from derivative investments. Goodwill is assessed for impairment annually, at each year end by comparing the fair values of the reporting units to their carrying amounts. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. The Company determines fair value of long-lived assets held and used, such as Equipment held for operating lease and Equipment held for sale, by reference to independent appraisals, quoted market prices ( e.g. , an offer to purchase) and other factors. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. The Company used Level 2 inputs to measure write-downs of equipment held for lease and equipment held for sale. Total Losses Years Ended December 31, 2024 2023 (in thousands) Equipment held for lease $ 11,057 $ 4,083 Equipment held for sale 171 315 Total $ 11,228 $ 4,398 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. As of December 31, 2024, included within equipment held for lease and equipment held for sale was $ 50.8 million in remaining book value of 16 assets which were previously written down. Write-downs of equipment to their estimated fair values totaled $ 4.4 million for the year ended December 31, 2023, primarily reflecting an adjustment of the carrying value of five engines and two airframes. As of December 31, 2023, included within equipment held for lease and equipment held for sale was $ 31.9 million in remaining book value of 15 assets which were previously written down. 9. Earnings Per Share Basic earnings per common share is computed by dividing net income, less preferred stock dividends and accretion of preferred stock issuance costs, by the weighted average number of common shares outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the vesting of restricted stock using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is anti-dilutive. Additionally, redeemable preferred stock is not convertible and does not affect dilutive shares. There were approximately 900 anti-dilutive weighted shares excluded in the computations of diluted weighted average earnings per common share for the year ended December 31, 2024. There were no anti-dilutive shares for the year ended December 31, 2023. The following table presents the calculation of basic and diluted EPS: 76 Table of Contents Year Ended December 31, 2024 2023 (in thousands) Net income attributable to common shareholders $ 104,378 $ 40,372 Basic weighted average common shares outstanding 6,536 6,305 Potentially dilutive common shares 268 176 Diluted weighted average common shares outstanding 6,804 6,481 Basic weighted average earnings per common share $ 15.97 $ 6.40 Diluted weighted average earnings per common share $ 15.34 $ 6.23 10. Commitments, Contingencies, Guarantees and Indemnities Other obligations Other obligations, such as certain purchase obligations are not recognized as liabilities in the consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. As of December 31, 2024, the Company had $ 374.6 million in purchase commitments of equipment that will be satisfied within three fiscal years. The purchase obligations are subject to escalation based on the closing date of each transaction. Our purchase agreements generally contain terms that allow the Company to defer or cancel purchase commitments in certain situations. 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. 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. 11. Equity Common Stock Repurchase 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. Repurchased shares are immediately retired. During 2024 and 2023, no shares were repurchased. At December 31, 2024, approximately $ 39.6 million was available to purchase shares under the plan. Redeemable Preferred Stock In September 2024, the Company entered into a Series A Preferred Stock Purchase Agreement with Development Bank of Japan Inc. (the “Stock Purchase Agreement”), 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 net proceeds after deducting issuance costs were $ 13.1 million. The rights and privileges of the Series A Preferred Stock are described below: Voting Rights : Holders of the Series A Preferred Stock do not have general voting rights. Dividends : The Company’s Series A-1 Preferred Stock accrued quarterly dividends at the rate per annum of 6.5 % per share through October 15, 2023 and 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. During the years ended December 31, 2024 and 2023, the Company paid total preferred stock dividends of $ 3.5 million and $ 3.2 million, respectively. As of December 31, 2024, the Company had approximately $ 1.4 million in preferred stock dividends accrued but not paid, or approximately $ 0.44 per share of the Series A Preferred Stock. 77 Table of Contents Liquidation Preference : The holders of the Series A Preferred Stock have preference in the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the corporation, including a merger or consolidation. Upon such liquidation event, the Preferred Stockholders are entitled to be paid out of the assets of the Company available for distribution to its stockholders after payment of all the Company’s indebtedness and other obligations and before any payment shall be made to the holders of common stock or any other class or series of stock ranking on liquidation junior to the Preferred Stock an amount equal to $ 20.00 per share, plus any declared but unpaid dividends. Redemption : The Series A Preferred Stock has no stated maturity date. The holders of the Series A Preferred Stock have the option to require the Company to redeem all or any portion of the Series A Preferred Stock for cash upon occurrence of any of the following: (i) a material breach of the Stock Purchase Agreement, (ii) changes in the ownership structure of the Company, including by means of a change of control transaction, (iii) incurrence of operating loss or ordinary loss by the Company for two consecutive fiscal years, (iv) the Company’s surplus is less than its liquidation value at certain specified measurement dates, (v) occurrence of a merger, consolidation, or sale of greater than 50% of the Company’s assets, or (vi) the occurrence of liquidity events as set forth in the Stock Purchase Agreement. The redemption price is $ 20.00 per share plus dividends accrued but not paid. The Company is accreting the Series A Preferred Stock to redemption value over the period from the date of issuance to the date first callable by the Series A Preferred stockholders (September 27, 2031), such that the carrying amount of the security will equal the redemption amount at the earliest redemption date. 12. Stock-Based Compensation Plans The components of stock compensation expense were as follows: Year Ended December 31, 2024 2023 (in thousands) 2023 Stock Incentive Plan $ 29,105 $ 14,667 Employee Stock Purchase Plan 142 135 Total Stock Compensation Expense $ 29,247 $ 14,802 The significant stock compensation plans are described below. The 2023 Incentive Stock Plan (the “2023 Plan”) amended and restated the prior 2021 Incentive Stock Plan. The 2023 Plan authorized 1,750,000 shares for issuance, plus the number of shares remaining for issuance under the prior stock plan and any future forfeited awards under the prior plan. Stock-based compensation is in the form of restricted stock awards (“RSAs”). The RSAs are subject to either service-based vesting, which is typically between one 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 expense associated with these awards is recognized on a straight-line basis over the respective vesting period, with forfeitures accounted for as they occur. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is equal to the portion of the grant-date fair value of the award tranche that is actually vested at that date. As of December 31, 2024, the Company has granted 2,052,254 RSAs under the 2023 Plan 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. The following table summarizes restricted stock activity under the 2023 Plan for the years ended December 31, 2024 and 2023: Number Outstanding Weighted Average Grant Date Fair Value Balance as of December 31, 2022 495,948 $ 32.30 Shares granted 335,100 56.06 Shares forfeited ( 7,665 ) 42.99 Shares vested ( 357,527 ) 31.34 Balance as of December 31, 2023 465,856 $ 49.95 Shares granted 460,454 56.11 Shares forfeited ( 3,916 ) 63.40 Shares vested ( 352,969 ) 58.19 Balance as of December 31, 2024 569,425 $ 49.73 78 Table of Contents At December 31, 2024, the stock compensation expense related to the RSAs that will be recognized over the average remaining vesting period of approximately 1.5 years totaled $ 51.6 million. At December 31, 2024, the intrinsic value of unvested RSAs was $ 118.2 million. Under the Employee Stock Purchase Plan (“ESPP”), as amended and restated effective November 10, 2021, 425,000 shares of common stock have been reserved for issuance. Full-time employees may designate no more than 10 % of their base cash compensation to be deducted each pay period for the purchase of common stock under the Purchase Plan. Participants may purchase no more than 1,000 shares or $ 25,000 of common stock in any one calendar year. Each January 31 and July 31, shares of common stock are purchased with the employees’ payroll deductions from the immediately preceding six months at a price per share of 85 % of the lesser of the market price of the common stock on the purchase date or the market price of the common stock on the date of entry into an offering period. In 2024 and 2023, 9,843 and 9,832 shares of common stock, respectively, were issued under the ESPP. The Company issues new shares through its transfer agent upon employee stock purchase. 13. Employee 401(k) Plan The Company adopted The Willis 401(k) Plan (the “401(k) Plan”) effective as of January 1997. The 401(k) Plan provides for deferred compensation as described in Section 401(k) of the Internal Revenue Code. The 401(k) Plan is a contributory plan available to all full-time and part-time employees in the U.S. In 2024, employees who participated in the 401(k) Plan could elect to defer and contribute to the 401(k) Plan up to 75 % of pretax salary or wages up to $ 23,000 (or $ 30,500 for employees at least 50 years of age). The Company matches 50 % of employee contributions and was capped at $ 11,500 per employee (or $ 15,250 for employees at least 50 years of age) in 2024. The Company match totaled $ 1.0 million and $ 0.9 million during the years ended December 31, 2024 and 2023, respectively. 14. 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. 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. The Company subleases a WMES engine to a third party, with WMES as the head lessor. As of December 31, 2024 and 2023, the ROU asset and lease liability balances under this lease were $ 1.6 million, each, and $ 3.3 million, each, respectively. 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. 15. Reportable Segments The Company has two reportable segments: (i) Leasing and Related Operations, which involves acquiring and leasing, primarily pursuant to operating leases, commercial aircraft, aircraft engines, and other aircraft equipment, the selective purchase and resale of commercial aircraft engines and other aircraft equipment, and service and maintenance related businesses and (ii) Spare Parts Sales, which involves the purchase and resale of after-market engine parts, whole engines, engine modules, and portable aircraft components. The Company’s Chief Operating Decision Maker (“CODM”) is Austin Willis, Chief Executive Officer. The CODM evaluates the performance and allocation of resources to each of the segments based on income or loss from operations. While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies. The following tables present a summary of the reportable segments (in thousands): 79 Table of Contents For the year ended December 31, 2024 Leasing and Related Operations Spare Parts Sales Eliminations Total Revenue: Lease rent revenue $ 238,236 $ — $ — $ 238,236 Maintenance reserve revenue 213,908 — — 213,908 Spare parts and equipment sales 1,640 25,459 — 27,099 Interest revenue 11,683 — — 11,683 Gain on sale of leased equipment 45,063 — — 45,063 Maintenance services revenue 24,158 — — 24,158 Other revenue 8,412 890 ( 226 ) 9,076 Total revenue 543,100 26,349 ( 226 ) 569,223 Expenses: Depreciation and amortization expense 92,386 74 — 92,460 Cost of spare parts and equipment sales 197 22,655 — 22,852 Cost of maintenance services 24,470 — — 24,470 Write-down of equipment 11,228 — — 11,228 General and administrative 141,199 5,558 — 146,757 Technical expense 22,294 — — 22,294 Net finance costs: Interest expense 104,764 — — 104,764 Total net finance costs 104,764 — — 104,764 Total expenses 396,538 28,287 — 424,825 Income from operations $ 146,562 $ ( 1,938 ) $ ( 226 ) $ 144,398 80 Table of Contents For the Year ended December 31, 2023 Leasing and Related Operations Spare Parts Sales Eliminations Total Revenue: Lease rent revenue $ 213,138 $ — $ — $ 213,138 Maintenance reserve revenue 133,668 — — 133,668 Spare parts and equipment sales 476 19,883 — 20,359 Interest revenue 8,721 — — 8,721 Gain on sale of leased equipment 10,581 — — 10,581 Maintenance services revenue 24,168 — — 24,168 Other revenue 7,442 689 ( 211 ) 7,920 Total revenue 398,194 20,572 ( 211 ) 418,555 Expenses: Depreciation and amortization expense 90,834 91 — 90,925 Cost of spare parts and equipment sales 56 15,151 — 15,207 Cost of maintenance services 21,159 — — 21,159 Write-down of equipment 4,398 — — 4,398 General and administrative 110,819 4,921 — 115,740 Technical expense 28,109 — — 28,109 Net finance costs: Interest expense 78,795 — — 78,795 Total net finance costs 78,795 — — 78,795 Total expenses 334,170 20,163 — 354,333 Income from operations $ 64,024 $ 409 $ ( 211 ) $ 64,222 Leasing and Related Operations Spare Parts Sales Eliminations Total Total assets as of December 31, 2024 $ 3,219,856 $ 77,340 $ — $ 3,297,196 Total assets as of December 31, 2023 $ 2,602,907 $ 49,437 $ — $ 2,652,344 16. Subsequent Events In January 2025, the Board of Directors of the Company declared a quarterly dividend of $ 0.25 per share on the Company’s outstanding common stock. The dividend was paid on February 21, 2025 to stockholders of record at the close of business on February 12, 2025. 81 Table of Contents WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION ACCOUNTS (In thousands) Balance at Beginning of Period Cumulative Effect Due to Adoption of New Accounting Standard Additions Charged (Credited) to Expense Net (Deductions) Recoveries Balance at End of Period Year Ended December 31, 2023 Accounts receivable, allowance for doubtful accounts and credit losses $ 1,511 $ 20 $ 824 $ ( 44 ) $ 2,311 Notes receivable, allowance for credit losses $ — $ 58 $ 11 $ — $ 69 Investments in sales-type leases, allowance for credit losses $ — $ 6 $ 3 $ — $ 9 Deferred tax valuation allowance $ 536 $ — $ 442 $ — $ 978 Year Ended December 31, 2024 Accounts receivable, allowance for doubtful accounts and credit losses $ 2,311 $ — $ ( 907 ) $ ( 88 ) $ 1,316 Notes receivable, allowance for credit losses $ 69 $ — $ 178 $ — $ 247 Investments in sales-type leases, allowance for credit losses $ 9 $ — $ 13 $ — $ 22 Deferred tax valuation allowance $ 978 $ — $ 2,159 $ — $ 3,137 Deductions in allowance for doubtful accounts and credit losses represent uncollectible accounts written off, net of recoveries. 82