Investments

6 Months Ended

Jun. 30, 2022

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 June 30, 2022, WMES owned a lease portfolio, inclusive of 36 engines and five aircraft with a net book value of $258.9 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 Engine Lease Company Limited (“CASC Willis”), a joint venture based in Shanghai, China. Each partner holds a fifty percent interest in the joint venture, and the Company uses the equity method in recording investment activity. 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 June 30, 2022, CASC Willis owned a lease portfolio of four engines with a net book value of $45.5 million.


As of June 30, 2022	WMES		CASC Willis		Total
	(in thousands)
Investment in joint ventures as of December 31, 2021	$	39,069	$	16,858	$	55,927
Loss from joint ventures	(931)		(216)		(1,147)

Foreign currency translation adjustment	—		(848)		(848)
Other comprehensive gain from joint ventures	1,409		—		1,409
Investment in joint ventures as of June 30, 2022	$	39,547	$	15,794	$	55,341

“Other revenue” on the Condensed Consolidated Statements of Income includes $0.5 million and $0.4 million of management fees earned during the three months ended June 30, 2022 and 2021, respectively, and $1.0 million and $0.7 million during the six months ended June 30, 2022 and 2021, respectively, related to the servicing of engines for the WMES lease portfolio.

There were no aircraft or engine sales to WMES or CASC Willis during the six months ended June 30, 2022 and 2021.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)				(in thousands)
Revenue	$	21,185	$	4,885	$	30,726	$	9,646
Expenses	17,687		6,606		32,690		12,775
WMES net income (loss)	$	3,498	$	(1,721)	$	(1,964)	$	(3,129)


	June 30, 2022		December 31, 2021
	(in thousands)
Total assets	$	285,114	$	310,260
Total liabilities	202,735		225,917
Total WMES net equity	$	82,379	$	84,343

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.