4. Investments

On May 25, 2011, we 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. The initial capital contribution by the Company for its investment in WMES was $8.0 million. The Company provided the initial lease portfolio by transferring 7 engines to the joint venture in June 2011. In addition, the Company made $1.0 million, $5.6 million and $6.1 million capital contributions to WMES in the years ended December 31, 2011, 2012 and the six months ended June 30, 2013, respectively, for the purchase of 16 engines from third parties, increasing the number of engines in the lease portfolio to 23. Mitsui & Co., Ltd. contributed equally the capital contribution to support all of these purchases. The $20.7 million of capital contributions has been partially offset by $3.6 million, resulting in a net investment of $17.1 million, which has increased to $17.7 million as a result of the Company’s share of WMES reported earnings to date. The $3.6 million reduction in investment represents 50% of the $7.2 million gain related to the sale by the Company of the 7 engines to WMES.

WMES has a loan agreement with JA Mitsui Leasing, Ltd. which provides a credit facility of up to $180.0 million to support the funding of future engine acquisitions. Funds are available under the loan agreement have been extended through March 31, 2014. WMES also established a separate credit facility for $8.0 million to fund the purchase of an engine, which is repayable over the 7 year term of the facility. Our investment in the joint venture is $17.7 million and $11.8 million as of June 30, 2013 and December 31, 2012, respectively.

We hold a fifty percent membership interest in a joint venture, WOLF A340, LLC, a Delaware limited liability company, (“WOLF”). On December 30, 2005, WOLF completed the purchase of two Airbus A340-313 aircraft from Boeing Aircraft Holding Company for a purchase price of $96.0 million. The purchase was funded by four term notes with one financial institution totaling $76.8 million, with interest payable at one-month LIBOR plus 1.0% to 2.5% and matured in May 2013. Two of the term notes were paid off in May 2013 and the remaining two term notes totaling $36.0 million were amended and extended, with a maturity date of May 2017 and interest payable at one-month LIBOR plus 4.0%. At June 30, 2013, the return of both aircraft from the prior lessee, Emirates, has been completed. As part of the lease return process, upon termination of the aircraft leases, Emirates made maintenance reserve payments totaling $9.0 million, which was recorded by WOLF as maintenance reserve revenue in the period.

The airframes are being disassembled and parted out and the eight engines are being marketed for lease separately to airline customers. On June 28, 2013, we signed a Security Purchase Agreement to purchase the remaining fifty percent membership interest from the joint venture partner. The Security Purchase is contingent upon certain key conditions being met which are expected to be satisfied by September 30, 2013. On June 28, 2013, we also signed a Remarketing and Servicing Agreement with WOLF to provide certain engine, lease management and reporting functions for WOLF. Our investment in the joint venture is $13.7 million and $10.1 million as of June 30, 2013 and December 31, 2012, respectively.

Six Months Ended June 30, 2013 (in thousands)	WOLF		WMES			Total

Investment in joint ventures as of December 31, 2012	$	10,065	$	11,766		$	21,831
Capital contribution	—		6,145			6,145
Earnings (losses) from joint ventures	3,672		(197		)	3,475
Distribution	—		—			—
Investment in joint ventures as of June 30, 2013	$	13,737	$	17,714		$	31,451