Investments

12 Months Ended

Dec. 31, 2019

In 2011, the Company entered into an agreement with Mitsui & Co., Ltd. to participate in a joint venture formed as a Dublin-based Irish limited company – Willis Mitsui & Company Engine Support Limited (“WMES”) for the purpose of acquiring and leasing jet engines. Each partner holds a fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity. As of December 31, 2019, WMES owned a lease portfolio of 36 engines and five aircraft with a net book value of $306.0 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 Engine Lease Company Limited (“CASC Willis”), a joint venture based in Shanghai, China. Each partner holds a fifty percent interest in the joint venture. 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. During 2016, CASC was reorganized, with portions of its partnership interest in CASC Willis being transferred to three Chinese airlines and another government-owned entity. The 2016 CASC reorganization resulted in no voting structure change to the joint venture. CASC Willis owned a lease portfolio of four engines with a net book value of $49.2 million as of December 31, 2019.



Years Ending December 31, 2019 and 2018 (in thousands)	WMES			CASC Willis			Total
Investment in joint ventures as of December 31, 2017	$	36,014		$	14,627		$	50,641
Earnings (loss) from joint ventures	3,899			(99		)	3,800
Distribution	(5,730		)	—			(5,730		)
Foreign currency translation adjustment	—			(770		)	(770		)
Investment in joint ventures as of December 31, 2018	34,183			13,758			47,941
Earnings from joint ventures	8,312			266			8,578
Contribution	5,713			—			5,713
Distribution	(3,300		)	—			(3,300		)
Foreign currency translation adjustment	—			(222		)	(222		)
Other comprehensive loss from joint ventures	(774		)	—			(774		)
Investment in joint ventures as of December 31, 2019	$	44,134		$	13,802		$	57,936

“Other revenue” on the Consolidated Statements of Income includes management fees earned of $2.9 million and $2.6 million during the years ended December 31, 2019 and 2018, respectively, related to the servicing of engines for the WMES lease portfolio.

Unaudited summarized financial information for 100% of WMES is presented in the following table:



	Years Ended December 31,
	2019		2018
	(in thousands)
Revenue	$	55,770	$	38,465
Expenses	41,253		30,934
WMES net income	$	14,517	$	7,531



	As of December 31,
	2019		2018
	(in thousands)
Total assets	$	322,606	$	274,744
Total liabilities	227,052		198,534
Total WMES net equity	$	95,554	$	76,210