Investments

9 Months Ended

Sep. 30, 2024

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 September 30, 2024, WMES owned a lease portfolio, inclusive of 49 engines with a net book value of $335.5 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 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 September 30, 2024, CASC Willis owned a lease portfolio of four engines with a net book value of $38.7 million.


As of September 30, 2024	WMES		CASC Willis		Total
	(in thousands)
Investment in joint ventures as of December 31, 2023	$	40,047	$	17,997	$	58,044
Income from joint ventures	7,069		186		7,255
Distribution	(2,756)		(246)		(3,002)
Foreign currency translation adjustment	—		245		245
Other comprehensive loss from joint ventures	(651)		—		(651)
Investment in joint ventures as of September 30, 2024	$	43,709	$	18,182	$	61,891

“Other revenue” on the Condensed Consolidated Statements of Income includes $1.2 million and $0.8 million during the three months ended September 30, 2024 and 2023, respectively, and $4.0 million and $1.9 million during the nine months ended September 30, 2024 and 2023, respectively, consisting of management fees related to the servicing of engines for the WMES lease portfolio.

During the nine months ended September 30, 2024, the Company sold three engines to WMES for $44.7 million. During the nine months ended September 30, 2023, WMES sold one engine to the Company for $22.3 million, and the Company sold one engine to WMES for $15.5 million.

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


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
	(in thousands)				(in thousands)
Revenue	$	15,342	$	13,149	$	56,491	$	34,999
Expenses	14,045		12,659		42,557		35,212
WMES net income (loss)	$	1,297	$	490	$	13,934	$	(213)


	September 30, 2024		December 31, 2023
	(in thousands)
Total assets	$	355,272	$	236,732
Total liabilities	260,722		150,604
Total WMES net equity	$	94,550	$	86,128

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 from WMES and 50% of total WMES net income or loss, 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.