3. 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 and the Company uses the equity method in recording investment activity. The investment has increased to $31.4 million as of September 30, 2016 as a result of the Company making $5.5 million in capital contributions to WMES, receiving $1.2 million in distributions, recording $1.2 million as deferred gain as a result of the Company selling four engines to WMES and the Company’s share of WMES reported income of $0.9 million during the nine months ended September 30, 2016.

On June 3, 2014 we entered into an agreement with China Aviation Supplies Import & Export Corporation Limited (“CASC”) to participate in a joint venture named CASC Willis Engine Lease Company Limited (“CASC Willis”), a new joint venture based in Shanghai, China. Each partner holds a fifty percent interest in the joint venture and the Company uses the equity method in recording investment activity. In October 2014, each partner made a $15.0 million initial capital contribution representing the up-front funding for the new joint venture. The new company will acquire and lease jet engines to Chinese airlines and will concentrate on meeting the fast growing demand for leased commercial aircraft engines and aviation assets in the People’s Republic of China. The investment has decreased to $11.9 million as of September 30, 2016 as a result of a foreign currency translation adjustment of $2.0 million and by the Company’s share of CASC Willis reported loss of $0.1 million during the nine months ended September 30, 2016.


Nine Months Ended September 30, 2016	WMES		CASC		Total
	(in thousands)
Investment in joint ventures as of December 31, 2015	$	27,272	$	14,023	$	41,295
Capital contribution		5,545		—		5,545
Earnings from joint venture		929		(55)		874
Deferred gain on engine sale		(1,212)		—		(1,212)
Distribution		(1,167)		—		(1,167)
Foreign currency translation adjustment		—		(2,021)		(2,021)
Investment in joint ventures as of September 30, 2016	$	31,367	$	11,947	$	43,314

“Other revenue” on the Consolidated Statement of Income includes management fees earned of $0.5 million and $0.4 million during the three months ended September 30, 2016 and 2015, respectively, related to the servicing of engines for the WMES lease portfolio. “Other revenue” on the Consolidated Statement of Income includes management fees earned of $1.3 million and $1.2 million during the nine months ended September 30, 2016 and 2015, respectively, related to the servicing of engines for the WMES lease portfolio. “Gain on sale of leased equipment” on the Consolidated Statement of Income includes $1.2 million for the nine months ended September 30, 2016 related to the sale of four engines to WMES for $46.1 million. As 50% owners of WMES, we deferred an incremental $1.2 million gain to our investment which is being amortized over a 15-year period to a 55% residual value.

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


	Three Months Ended September 30,
	2016		2015
	(in thousands)
Revenue	$	8,549	$	7,067
Expenses		7,496		6,302
WMES net income	$	1,053	$	765


	Nine Months Ended September 30,
	2016		2015

	(in thousands)
Revenue	$	25,547	$	19,997
Expenses		23,886		18,052
WMES net income	$	1,661	$	1,945

		September 30,		December 31,
		2016		2015
	(in thousands)
Total assets	$	292,412	$	256,126
Total liabilities		221,127		195,258
Total WMES net equity	$	71,285	$	60,868