Operating Segments

6 Months Ended

Jun. 30, 2014

Operating Segments

Operating Segments

10. Operating Segments

The Company operates in two business segments: (i) Leasing and Related Operations which involves acquiring and leasing, primarily pursuant to operating leases, commercial aircraft, aircraft engines and other aircraft equipment and the selective purchase and resale of commercial aircraft engines and other aircraft equipment and (ii) Spare Parts Sales which involves the purchase and resale of after-market engine and airframe parts, whole engines, engine modules and portable aircraft components and leasing of engines destined for disassembly and sale of parts.

The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses and inter-company allocation of interest expense. While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies.

The following tables present a summary of the operating segments (amounts in thousands):

For the three months ended June 30, 2014	Leasing and Related Operations		Spare Parts Sales		Total
Revenue:
Lease rent revenue	$	24,801	$	—	$	24,801
Maintenance reserve revenue	14,560		—		14,560
Spare parts sales	—		29		29
Gain on sale of leased equipment	1,591		—		1,591
Other revenue	552		718		1,270
Total revenue	41,504		747		42,251
Expenses:
Depreciation and amortization expense	15,662		73		15,735
General and administrative	8,644		617		9,261
Net finance costs	9,396		—		9,396
Other expense	4,553		—		4,553
Total expenses	38,255		690		38,945
Earnings from operations	$	3,249	$	57	$	3,306

For the six months ended June 30, 2014	Leasing and Related Operations		Spare Parts Sales		Total
Revenue:
Lease rent revenue	$	51,701	$	—	$	51,701
Maintenance reserve revenue	28,590		—		28,590
Spare parts sales	—		108		108
Gain on sale of leased equipment	1,821		—		1,821
Other revenue	1,598		1,433		3,031
Total revenue	83,710		1,541		85,251
Expenses:
Depreciation and amortization expense	31,300		145		31,445
General and administrative	17,666		1,281		18,947
Net finance costs	18,755		—		18,755
Other expense	6,368		—		6,368
Total expenses	74,089		1,426		75,515
Earnings from operations	$	9,621	$	115	$	9,736
Total assets as of June 30, 2014	$	1,176,045	$	3,207	$	1,179,252
Total assets as of December 31, 2013	$	1,194,800	$	4,429	$	1,199,229

The Spare Parts Sales segment began operation during the fourth quarter of 2013.  No activity occurred in this segment during the six months ended June 30, 2013.