Investments

6 Months Ended

Jun. 30, 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 June 30, 2019, WMES owned a lease portfolio of 33 engines and six aircraft with a net book value of $309.0 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 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, 2019, CASC Willis owned a lease portfolio of four engines with a net book value of $51.9 million.



Six Months Ended June 30, 2019	WMES			CASC Willis			Total
	(in thousands)
Investment in joint ventures as of December 31, 2018	$	34,183		$	13,758		$	47,941
Earnings from joint ventures	2,565			57			2,622
Investment	5,013			—			5,013
Distribution	(3,300		)	—			(3,300		)
Foreign currency translation adjustment	—			(34		)	(34		)
Investment in joint ventures as of June 30, 2019	$	38,461		$	13,781		$	52,242

“Other revenue” on the Condensed Consolidated Statements of Income includes management fees earned of $0.6 million and $0.5 million during the three months ended June 30, 2019 and 2018, respectively, and $1.1 million and $1.2 million during the six months ended June 30, 2019 and 2018, respectively. These fees related to the servicing of engines for the WMES lease portfolio.

During the six months ended June 30, 2019, the Company sold five aircraft to WMES for $75.5 million. During the six months ended June 30, 2018, the Company sold one aircraft and one engine to WMES for $21.4 million. There were no aircraft or engine sales to CASC Willis during the six months ended June 30, 2019 and 2018.

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



	Three Months Ended June 30				Six Months Ended June 30,
	2019		2018		2019		2018
	(in thousands)				(in thousands)
Revenue	$	13,594	$	9,040	$	23,137	$	16,646
Expenses	9,516		7,551		17,721		14,354
WMES income before income taxes	$	4,078	$	1,489	$	5,416	$	2,292



	June 30, 2019		December 31, 2018
	(in thousands)
Total assets	$	315,173	$	274,744
Total liabilities	230,759		198,534
Total WMES net equity	$	84,414	$	76,210