Investments

3 Months Ended

Mar. 31, 2025

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 50% interest in the joint venture, and the Company uses the equity method in recording investment activity. As of March 31, 2025, WMES owned a lease portfolio, inclusive of 53 engines with a net book value of $363.1 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 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 March 31, 2025, CASC Willis owned a lease portfolio of four engines with a net book value of $37.3 million.

In March 2025, the Company entered into an agreement with independent MRO (Maintenance, Repair and Overhaul) provider Global Engine Maintenance to create a joint venture named Willis Global Engine Testing (“WGET”) to build an engine test facility in West Palm Beach, Florida. The Company has a 70% membership interest, and Global Engine Maintenance has a 30% membership interest. WGET is a VIE that the Company is not the primary beneficiary of since the power to direct the activities that most significantly impact WGET’s economic performance is shared between the Company and Global Engine Maintenance. The Company’s considerations in determining the VIE’s most significant activities and whether the Company has the power to direct those activities include, but are not limited to, the VIE’s purpose and design and the matters that require unanimous approval from both parties. Accordingly, the Company does not consolidate WGET, and the Company uses the equity method in recording investment activity. The Company made an initial capital contribution of $1.6 million, which represents 70% of the cost of the land that the engine test facility is being built on.


As of March 31, 2025	WMES		CASC Willis		WGET		Total
	(in thousands)
Investment in joint ventures as of December 31, 2024	$	44,756	$	17,914	$	—	$	62,670
Income from joint ventures	1,106		245		—		1,351
Foreign currency translation adjustment	—		5		—		5
Other comprehensive loss from joint ventures	(411)		—		—		(411)
Initial capital contribution	—		—		1,595		1,595
Investment in joint ventures as of March 31, 2025	$	45,451	$	18,164	$	1,595	$	65,210

“Other revenue” on the Condensed Consolidated Statements of Income includes management fees earned of $1.2 million and $1.4 million during the three months ended March 31, 2025 and 2024, respectively, related to the servicing of engines for the WMES lease portfolio.

During the three months ended March 31, 2025, the Company sold three engines and one airframe to WMES for a total of $32.2 million, which resulted in a total net gain of $1.6 million for the Company.

As of March 31, 2025, the Company subleased two WMES engines to a third party, with WMES as the head lessor. As of March 31, 2025, the total ROU asset and lease liability balances under these leases were $2.1 million, each. As of March 31, 2024, the Company subleased one WMES engine to a third party, with WMES as the head lessor. As of March 31, 2024, the ROU asset and lease liability balances under this lease were $2.9 million, each.

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


	Three months ended March 31,
	2025		2024
	(in thousands)
Revenue	$	18,251	$	18,926
Expenses	16,107		13,762
WMES net income	$	2,144	$	5,164


	March 31, 2025		December 31, 2024
	(in thousands)
Total assets	$	385,711	$	352,783
Total liabilities	287,661		256,055
Total WMES net equity	$	98,050	$	96,728

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 both sold by WMES to the Company or sold by the Company to WMES.

The following table presents information about our nonconsolidated VIE in which we hold a variable interest:


	March 31, 2025
	VIE Assets		VIE Liabilities		Maximum Exposure to Loss
	(in thousands)
WGET	$	2,279	$	—	$	1,595

Our maximum exposure to loss is limited to our investment.