11. Reportable Segments

The Company has two reportable 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 other related businesses 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.

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

During the second quarter of 2018, the Company moved certain sales of leased equipment to the Spare Parts Sales segment from the Leasing and Related Operations segment and had no change in the determination of operating segments. In accordance with ASC 280-10, the Company has restated prior period information presented below to reflect this change in composition of its reportable segments.

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


	Leasing and
Three months ended June 30, 2018	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	43,081	$	—	$	—	$	43,081
Maintenance reserve revenue		22,045		—		—		22,045
Spare parts and equipment sales		—		7,061		—		7,061
Gain on sale of leased equipment		187		58		—		245
Other revenue		1,856		210		(195)		1,871
Total revenue		67,169		7,329		(195)		74,303

Expenses:
Depreciation and amortization expense		18,297		87		—		18,384
Cost of spare parts and equipment sales		—		5,906		—		5,906
Write-down of equipment		3,578		—		—		3,578
General and administrative		15,683		1,099		—		16,782
Technical expense		3,232		—		—		3,232
Interest expense		15,138		—		—		15,138
Total expenses		55,928		7,092		—		63,020
Earnings from operations	$	11,241	$	237	$	(195)	$	11,283

	Leasing and
Six months ended June 30, 2018	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	82,726	$	—	$	—	$	82,726
Maintenance reserve revenue		37,485		—		—		37,485
Spare parts and equipment sales		—		13,347		—		13,347
Gain on sale of leased equipment		767		119		—		886
Other revenue		3,706		1,323		(1,277)		3,752
Total revenue		124,684		14,789		(1,277)		138,196

Expenses:
Depreciation and amortization expense		35,565		174		—		35,739
Cost of spare parts and equipment sales		—		10,689		—		10,689
Write-down of equipment		3,578		—		—		3,578
General and administrative		30,178		2,215		—		32,393
Technical expense		6,909		—		—		6,909
Interest expense		28,732		—		—		28,732
Total expenses		104,962		13,078		—		118,040
Earnings from operations	$	19,722	$	1,711	$	(1,277)	$	20,156


	Leasing and
Three months ended June 30, 2017	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	31,337	$	—	$	—	$	31,337
Maintenance reserve revenue		11,881		—		—		11,881
Spare parts and equipment sales		12,874		6,509		—		19,383
Gain on sale of leased equipment		3,484		43		—		3,527
Other revenue		1,649		276		(209)		1,716
Total revenue		61,225		6,828		(209)		67,844

Expenses:
Depreciation and amortization expense		15,929		86		—		16,015
Cost of spare parts and equipment sales (2)		9,918		4,738		—		14,656
Write-down of equipment (2)		1,351		—		—		1,351
General and administrative		12,207		858		—		13,065
Technical expense		2,448		—		—		2,448
Interest expense		11,312		—		—		11,312
Total expenses		53,165		5,682		—		58,847
Earnings from operations	$	8,060	$	1,146	$	(209)	$	8,997

	Leasing and
Six months ended June 30, 2017	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	61,572	$	—	$	—	$	61,572
Maintenance reserve revenue		43,843		—		—		43,843
Spare parts and equipment sales		19,299		12,680		—		31,979
Gain on sale of leased equipment		4,440		69		—		4,509
Other revenue		3,774		450		(336)		3,888
Total revenue		132,928		13,199		(336)		145,791

Expenses:
Depreciation and amortization expense		32,470		174		—		32,644
Cost of spare parts and equipment sales (2)		14,623		10,350		—		24,973
Write-down of equipment (2)		13,442		—		—		13,442
General and administrative		24,620		1,645		—		26,265
Technical expense		4,740		—		—		4,740
Interest expense		22,178		—		—		22,178
Total expenses		112,073		12,169		—		124,242
Earnings from operations	$	20,855	$	1,030	$	(336)	$	21,549

(1)

Represents revenue generated between our operating segments.

(2)

The amounts herein include reclassifications of scrap inventory write-offs and lower of cost or market write-downs that were previously presented within Write-down of equipment to the Costs of spare parts and equipment sales expense line item. The three and six months ended June 30, 2017 were impacted by a reclassification of $0.9 million and $1.8 million, respectively, reflected as an increase to Cost of spare parts and equipment sales and a decrease to Write-down of equipment.


	Leasing and
	Related Operations		Spare Parts Sales		Eliminations		Total
Total assets as of June 30, 2018	$	1,737,537	$	45,898	$	—	$	1,783,435
Total assets as of December 31, 2017	$	1,556,406	$	47,025	$	—	$	1,603,431