Investments

12 Months Ended

Dec. 31, 2021

In 2011, the Company entered into an agreement with Mitsui & Co., Ltd. to participate in a joint venture formed as a Dublin-based Irish limited company – Willis Mitsui & Company Engine Support Limited (“WMES”) for the purpose of acquiring and leasing jet engines. Each partner holds a 50% interest in the joint venture and the Company uses the equity method in recording investment activity. As of December 31, 2021, WMES owned a lease portfolio, inclusive of a note receivable, of 37 engines and five aircraft with a net book value of $292.5 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, 2021, CASC Willis owned a lease portfolio of four engines with a net book value of $49.0 million.


As of December 31, 2021	WMES		CASC Willis		Total
	(in thousands)
Investment in joint ventures as of December 31, 2019	$	44,134	$	13,802	$	57,936
Earnings from joint ventures	1,552		1,090		2,642
Distribution	(7,200)		—		(7,200)
Foreign currency translation adjustment	—		1,018		1,018
Other comprehensive loss from joint ventures	(1,121)		—		(1,121)
Investment in joint ventures as of December 31, 2020	37,365		15,910		53,275
Earnings from joint ventures	250		550		800


Foreign currency translation adjustment	—		398		398
Other comprehensive loss from joint ventures	1,454		—		1,454
Investment in joint ventures as of December 31, 2021	$	39,069	$	16,858	$	55,927

“Other revenue” on the Consolidated Statements of Income includes management fees earned of $2.1 million and $1.6 million during the years ended December 31, 2021 and 2020, respectively, related to the servicing of engines for the WMES lease portfolio.

During 2021, the Company sold two engines to WMES for $25.0 million. During 2020, the Company sold one note receivable to WMES for $8.4 million.

There were no aircraft or engine sales to CASC Willis during 2021 or 2020.

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


	Years Ended December 31,
	2021		2020
	(in thousands)
Revenue	$	29,596	$	38,086
Expenses	29,303		35,190
WMES net income	$	293	$	2,896


	As of December 31,
	2021		2020
	(in thousands)
Total assets	$	310,260	$	303,886
Total liabilities	225,917		219,836
Total WMES net equity	$	84,343	$	84,050

The difference between the Company’s investment in WMES and 50% of total WMES net equity is primarily attributable to the recognition of deferred gains, prior to the adoption of ASU 2017-05, related to engines sold by the Company to WMES.