SEGMENT AND REVENUE INFORMATION

The Company operates in three reportable segments. The CAM segment consists of the Company's aircraft leasing operations and its segment earnings include an allocation of interest expense. The ACMI Services segment consists of the Company's airline operations, including CMI agreements as well as ACMI, charter service and passenger service agreements that the Company has with its customers. The MRO Services segment provides airframe maintenance services, aircraft modifications and other maintenance services. The MRO Services became reportable during 2018 due to the size of its revenues. Prior periods presented below have been prepared by separating MRO Services from "All other" for comparative purposes. The Company's ground services and other activities, which include load transfer and sorting service, maintenance services for ground equipment, facilities and material handling equipment, the sales of aviation fuel and other services, are not large enough to constitute reportable segments and are combined in All other. Intersegment revenues are valued at arms-length market rates.

The Company's segment information from continuing operations is presented below (in thousands):



	Year Ended December 31
	2018			2017			2016
Total revenues:
CAM	$	228,956		$	209,560		$	195,092
ACMI Services	548,839			614,741			492,859
MRO Services	207,539			205,401			111,913
All other	79,040			227,807			150,117
Eliminate inter-segment revenues	(172,029		)	(189,309		)	(181,111		)
Total	$	892,345		$	1,068,200		$	768,870
Customer revenues:
CAM	$	156,516		$	140,434		$	117,642
ACMI Services	548,804			614,721			492,859
MRO Services	117,832			106,767			40,754
All other (primarily ground services)	69,193			206,278			117,615
Total	$	892,345		$	1,068,200		$	768,870

The Company adopted Topic 606 for revenue recognition using a modified retrospective approach, under which financial statements are prepared under the revised guidance for the year of adoption, but not for prior years. The effects of Topic 606 on the Company's customer revenues and earnings are summarized below:



	For the year ended December 31, 2018
	As Reported			Without Topic 606			Increase (decrease)
Revenue
CAM	$	156,516		$	156,516		$	—
ACMI Services	548,804			743,112			(194,308		)
MRO Services	117,832			100,790			17,042
All other	69,193			249,222			(180,029		)
Total Revenue	892,345			1,249,640			(357,295		)
Operating Expense	781,327			1,138,462			(357,135		)
Earnings (Loss) from Continuing Operations before Income Taxes	87,478			87,638			(160		)
Income Tax Benefit (Expense)	(19,595		)	(19,559		)	(36		)
Income from Continuing Operations	$	67,883		$	68,079		$	(196	)

ACMI Services revenues are generated from airline service agreements and are typically based on hours flown, the amount of aircraft operated and crew resources provided during a month. ACMI Services revenues are recognized over time using the invoice practical expedient as flight hours are performed for the customer. Certain agreements include provisions for incentive payments based upon on-time reliability. These incentives are measured on a monthly basis and recorded to revenue in the corresponding month earned. Under CMI agreements, the Company's airlines have an obligation to provide integrated services including flight crews, aircraft maintenance and insurance for the customer's cargo network. Under ACMI agreements, the Company's airlines are also obligated to provide aircraft. Under CMI and ACMI agreements, customers are generally responsible for aviation fuel, landing fees, navigation fees and certain other flight expenses. When functioning as the customers' agent for arranging such services, the Company records amounts reimbursable from the customer as revenues net of the related expenses as the costs are incurred. Under charter agreements the Company's airline is obligated to provide full services for one or more flights having specific origins and destinations. Under charter agreements in which the Company's airline is responsible for fuel, airport fees and all flight services, the related costs are recorded in operating expenses. ACMI Services are invoiced monthly or more frequently. (There are no customer rewards programs associated with services offered by the Company nor does the Company sell passenger tickets or issue freight bills.)

MRO Services revenues for customer contracts for airframe maintenance and aircraft modification services that do not have an alternative use and for which the Company has an enforceable right to payment are generally recognized over time based on the percentage of costs completed. Other MRO Services revenues for aircraft part sales, component repairs and line service are recognized at a point in time typically when the parts are delivered to the customer and the the services are completed. For airframe maintenance, aircraft modifications and aircraft component repairs, contracts include assurance warranties that are not sold separately. Effective January 1, 2018 the Company records revenues and estimated earnings over time for its airframe maintenance and aircraft modification contracts using the percentage-of-completion cost input method. For such services, the Company estimates the earnings on a contract as the difference between the expected revenue and estimated costs to complete a contract and recognizes revenues and earnings based on the proportion of costs incurred compared to the total estimated costs. The Company's estimates consider the timing and extent of the services, including the amount and rates of labor, materials and other resources required to perform the services. The Company recognizes adjustments in estimated earnings on a contract under the cumulative catch-up method in which the impact of the adjustment on estimated earnings of a contract is recognized in the period the adjustment is identified. The Company's external customer revenues for providing load transfer and sorting services and related equipment maintenance were $66.6 million, $204.1 million and $114.8 million for 2018, 2017 and 2016 respectively. During 2018, the Company netted $180.0 million of customer reimbursable revenues against the related expenses when functioning as the customers' agent for arranging ground services. These revenues are reported in All other. The Company's external customer revenues from providing load transfer and sorting services are recognized as the services are performed for the customer over time. Revenues from related equipment maintenance services are recognized over time and at a point in time depending on the nature of the customer contracts. For customers that are not a governmental agency or department, the Company generally receives partial payment in advance of services, otherwise customer balances are typically paid within 30 to 60 days of service. The Company recognized $9.3 million of non lease revenue that was reported in deferred revenue at the beginning of the year. Deferred revenue was $3.1 million and $9.5 million at December 31, 2018 and 2017, respectively, for contracts with customers.

CAM's aircraft lease revenues are recognized as operating lease revenues on a straight-line basis over the term of the applicable lease agreements. Customer payments for leased aircraft and equipment are typically paid monthly in advance.

The Company had revenues of approximately $231.8 million, $170.1 million and $168.2 million for 2018, 2017 and 2016, respectively, derived primarily from aircraft leases in foreign countries, routes with flights departing from or arriving in foreign countries or aircraft maintenance and modification services performed in foreign countries. All revenues from the CMI agreement with DHL and the ATSA agreement with ASI are attributed to U.S. operations. As of December 31, 2018 and 2017, the Company had 23 and 16 aircraft, respectively, deployed outside of the United States.

The Company's other segment information from continuing operations is presented below (in thousands):



	Year Ended December 31
	2018			2017			2016
Depreciation and amortization expense:
CAM	$	126,856		$	108,106		$	92,396
ACMI Services	49,068			41,929			41,487
MRO Services	3,397			3,324			1,477
All other	(426		)	1,197			136
Total	$	178,895		$	154,556		$	135,496
Segment earnings (loss):
CAM	$	65,576		$	61,510		$	68,608
ACMI Services	17,717			8,557			(25,016		)
MRO Services	14,499			19,741			12,308
All other	9,107			5,590			9,519
Inter-segment earnings eliminated	(12,436		)	(11,583		)	(5,498		)
Net unallocated interest expense	(6,729		)	(1,322		)	(545		)
Net gain (loss) on financial instruments	7,296			(79,789		)	(18,107		)
Transaction fees	(5,264		)	—			—
Other non-service components of retiree benefit costs, net	8,180			(6,105		)	(6,815		)
Loss from non-consolidated affiliate	(10,468		)	(3,135		)	—
Pre-tax earnings from continuing operations	$	87,478		$	(6,536	)	$	34,454

The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other..



	December 31
	2018		2017		2016
Assets:
CAM	$	1,577,182	$	1,192,890	$	971,986
ACMI Services	759,131		189,379		164,489
MRO Services	108,244		87,177		77,918
All other	26,028		79,398		44,937
Total	$	2,470,585	$	1,548,844	$	1,259,330

Interest expense allocated to CAM was $21.8 million, $15.6 million and $10.6 million for the years ending December 31, 2018, 2017 and 2016, respectively.

During 2018, the Company had capital expenditures for property and equipment of $38.9 million, $249.4 million and $2.2 million for the ACMI Services, CAM and MRO Services segments, respectively.