Investments

12 Months Ended

Dec. 31, 2023

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, 2023, WMES owned a lease portfolio of 35 engines and four aircraft with a net book value of $232.2 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, 2023, CASC Willis owned a lease portfolio of four engines with a net book value of $39.8 million.


As of December 31, 2023	WMES		CASC Willis		Total
	(in thousands)
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
Income (loss) from joint ventures	(437)		3,345		2,908


Foreign currency translation adjustment	—		(523)		(523)
Other comprehensive loss from joint ventures	(530)		—		(530)
Investment in joint ventures as of December 31, 2023	$	40,047	$	17,997	$	58,044

“Other revenue” on the Consolidated Statements of Income includes management fees earned of $2.4 million and $2.0 million during the years ended December 31, 2023 and 2022, respectively, related to the servicing of engines for the WMES lease portfolio.

During 2023, WMES sold an engine to the Company for $22.3 million, and the Company sold two engines to WMES for $28.8 million. During 2022, the Company sold two engines to WMES for $12.6 million.

During 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,
	2023		2022
	(in thousands)
Revenue	$	47,617	$	52,106
Expenses	46,317		51,953
WMES net income	$	1,300	$	153


	As of December 31,
	2023		2022
	(in thousands)
Total assets	$	236,732	$	267,580
Total liabilities	150,604		183,083
Total WMES net equity	$	86,128	$	84,497

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