Investments

12 Months Ended

Dec. 31, 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, 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, 2022, WMES owned a lease portfolio of 35 engines and five aircraft with a net book value of $255.5 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, 2022, CASC Willis owned a lease portfolio of four engines with a net book value of $42.7 million.


As of December 31, 2022	WMES		CASC Willis		Total
	(in thousands)
Investment in joint ventures as of December 31, 2020	$	37,365	$	15,910	$	53,275
Income from joint ventures	250		550		800
Foreign currency translation adjustment	—		398		398
Other comprehensive gain from joint ventures	1,454		—		1,454
Investment in joint ventures as of December 31, 2021	39,069		16,858		55,927
Income (loss) from joint ventures	248		(310)		(62)


Foreign currency translation adjustment	—		(1,373)		(1,373)
Other comprehensive gain from joint ventures	1,697		—		1,697
Investment in joint ventures as of December 31, 2022	$	41,014	$	15,175	$	56,189

“Other revenue” on the Consolidated Statements of Income includes management fees earned of $2.0 million and $2.1 million during the years ended December 31, 2022 and 2021, respectively, related to the servicing of engines for the WMES lease portfolio.

During 2022, the Company sold two engines to WMES for $12.6 million. During 2021, the Company sold two engines to WMES for $25.0 million.

There were no aircraft or engine sales to CASC Willis during 2022 or 2021.

In December 2022, the Company subleased a WMES engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a ROU asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022.

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


	Years Ended December 31,
	2022		2021
	(in thousands)
Revenue	$	52,106	$	29,596
Expenses	51,953		29,303
WMES net income	$	153	$	293


	As of December 31,
	2022		2021
	(in thousands)
Total assets	$	267,580	$	310,260
Total liabilities	183,083		225,917
Total WMES net equity	$	84,497	$	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.