Operating Segments

9 Months Ended

Sep. 30, 2016

Operating Segments

Operating Segments

8. 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):

	Leasing and
For the three months ended September 30, 2016	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	31,270	$	—	$	—	$	31,270
Maintenance reserve revenue		14,229		—		—		14,229
Spare parts and equipment sales		900		3,260		—		4,160
Gain on sale of leased equipment		180		—		—		180
Other revenue		1,487		786		(651)		1,622
Total revenue		48,066		4,046		(651)		51,461
Expenses:
Depreciation and amortization expense		16,541		87		—		16,628
Cost of spare parts and equipment sales		640		2,426		—		3,066
General and administrative		11,500		757		—		12,257
Net finance costs		10,116		114		—		10,230
Other expense		2,934		475		—		3,409
Total expenses		41,731		3,859		—		45,590
Earnings from operations	$	6,335	$	187	$	(651)	$	5,871
	Leasing and
For the nine months ended September 30, 2016	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	88,727	$	—	$	—	$	88,727
Maintenance reserve revenue		45,562		—		—		45,562
Spare parts and equipment sales		1,800		8,665		—		10,465
Gain on sale of leased equipment		3,430		—		—		3,430
Other revenue		3,392		1,734		(1,512)		3,614
Total revenue		142,911		10,399		(1,512)		151,798
Expenses:
Depreciation and amortization expense		48,981		254		—		49,235
Cost of spare parts and equipment sales		1,288		6,497		—		7,785
General and administrative		32,438		2,256		—		34,694
Net finance costs		30,443		329		—		30,772
Other expense		10,362		475		—		10,837
Total expenses		123,512		9,811		—		133,323
Earnings from operations	$	19,399	$	588	$	(1,512)	$	18,475
(1) Represents revenue generated between our  operating segments

	Leasing and
For the three months ended September 30, 2015	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	28,055	$	—	$	—	$	28,055
Maintenance reserve revenue		16,119		—		—		16,119
Spare parts and equipment sales		4,600		4,533		—		9,133
Gain on sale of leased equipment		3,804		—		—		3,804
Other revenue		597		135		(113)		619
Total revenue		53,175		4,668		(113)		57,730
Expenses:
Depreciation and amortization expense		17,035		67		—		17,102
Cost of spare parts and equipment sales		2,461		3,458		—		5,919
General and administrative		10,948		794		—		11,742
Net finance costs		9,707		98		—		9,805
Other expense		9,068		—		—		9,068
Total expenses		49,219		4,417		—		53,636
Earnings from operations	$	3,956	$	251	$	(113)	$	4,094
	Leasing and
For the nine months ended September 30, 2015	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	79,197	$	—	$	—	$	79,197
Maintenance reserve revenue		39,035		—		—		39,035
Spare parts and equipment sales		5,450		9,550		—		15,000
Gain on sale of leased equipment		7,666		—		—		7,666
Other revenue		1,796		531		(349)		1,978
Total revenue		133,144		10,081		(349)		142,876
Expenses:
Depreciation and amortization expense		52,179		211		—		52,390
Cost of spare parts and equipment sales		3,081		7,138		—		10,219
General and administrative		28,751		2,075		—		30,826
Net finance costs		27,789		292		—		28,081
Other expense		16,416		—		—		16,416
Total expenses		128,216		9,716		—		137,932
Earnings from operations	$	4,928	$	365	$	(349)	$	4,944
(1) Represents revenue generated between our  operating segments
Total assets as of September 30, 2016	$	1,266,245	$	25,083	$	—	$	1,291,328
Total assets as of December 31, 2015	$	1,267,414	$	26,871	$	—	$	1,294,285