Investments

9 Months Ended

Sep. 30, 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 fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity. As of September 30, 2021, WMES owned a lease portfolio, inclusive of a note receivable, of 37 engines and five aircraft with a net book value of $297.3 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 September 30, 2021, CASC Willis owned a lease portfolio of four engines with a net book value of $48.9 million.


As of September 30, 2021	WMES		CASC Willis		Total
	(in thousands)
Investment in joint ventures as of December 31, 2020	$	37,365	$	15,910	$	53,275
(Loss) earnings from joint ventures	(1,462)		279		(1,183)

Foreign currency translation adjustment	—		143		143
Other comprehensive gain from joint ventures	918		—		918
Investment in joint ventures as of September 30, 2021	$	36,821	$	16,332	$	53,153

“Other revenue” on the Condensed Consolidated Statements of Income includes $0.9 million and $0.4 million of management fees earned during the three months ended September 30, 2021 and 2020, respectively, and $1.6 million and $1.2 million during the nine months ended September 30, 2021 and 2020, respectively, related to the servicing of engines for the WMES lease portfolio.

During the nine months ended September 30, 2021, the Company sold two engines to WMES for $25.0 million. During the nine months ended September 30, 2020, the Company sold one note receivable to WMES for $8.4 million.

There were no aircraft or engine sales to CASC Willis during the nine months ended September 30, 2021 or 2020.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in thousands)				(in thousands)
Revenue	$	7,269	$	9,610	$	16,915	$	29,525
Expenses	7,217		7,539		19,992		25,718
WMES net income (loss)	$	52	$	2,071	$	(3,077)	$	3,807


	September 30, 2021		December 31, 2020
	(in thousands)
Total assets	$	314,110	$	303,886
Total liabilities	233,137		219,836
Total WMES net equity	$	80,973	$	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.