Concentration of credit risk and major customers

12 Months Ended

Dec. 31, 2011

Concentration of credit risk and major customers

3. Concentration of credit risk and major customers:

The Partnership leases equipment to lessees in diversified industries. Leases are subject to AFS’s credit committee review. The leases provide for the return of the equipment upon default.

As of December 31, 2011 and 2010, there were concentrations (defined as greater than 10%) of equipment leased to lessees in certain industries (as a percentage of total equipment cost) as follows:

	2011			2010
Transportation		53	%		54	%
Marine vessels		30	%		30	%

During 2011 and 2010, certain lessees generated significant portions (defined as 10% or more) of the Partnership’s total lease revenues as follows:

	Type of Equipment		Percentage of Total Lease Revenues
Lessee			2011			2010
AET Offshore Services, Inc. (formerly Gulfmark Management, Inc.)		Marine vessel		28	%		24	%
Paneltech Products, Inc.		Transportation		12	%		*
Genesee & Wyoming Inc.		Transportation		11	%		*
Interstate Commodities		Transportation		11	%		*
GATX Corporation		Transportation		*			11	%

* Less than 10%

These percentages are not expected to be comparable in future periods. Whereas the above indicated percentages may appear to present an operating exposure, the exposure is mitigated as the lessee is in essence a fleet manager for the Partnership’s leased vessels. In the event that such manager was to encounter operational difficulties, the Partnership believes it could, in a relatively short period, engage a replacement manager.