SEGMENT AND REVENUE INFORMATION

The Company operates in two 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 Company's aircraft maintenance and modification services, ground services and other activities 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):



	Three Months Ending
	March 31,
	2019			2018
Total revenues:
CAM	$	70,350		$	52,376
ACMI Services	257,956			119,374
All other	67,362			71,898
Eliminate inter-segment revenues	(47,485		)	(40,608		)
Total	$	348,183		$	203,040
Customer revenues:
CAM	$	41,609		$	35,887
ACMI Services	257,953			119,374
All other	48,621			47,779
Total	$	348,183		$	203,040

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.)

The Company's 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 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. 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 ground services revenues include load transfer and sorting services and related facility and equipment maintenance services. These revenues are recognized as the services are performed for the customer over time. Revenues from related facility and equipment maintenance services are recognized over time and at a point in time depending on the nature of the customer contracts.

The Company's external customer revenues from other activities for the three month periods ended March 31, 2019 and 2018 are presented below (in thousands):



	Three Months Ended
	March 31, 2019
	2019		2018
Aircraft maintenance, modifications and part sales	$	33,981	$	30,939
Ground services	13,938		16,154
Other	702		686
Total customer revenues	$	48,621	$	47,779

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. CAM's leases do not contain residual guarantees. Approximately 5% of CAM's leases to external customers contain purchase options at projected market values. As of March 31, 2019, minimum future payments from external customers for leased aircraft and equipment were scheduled to be $124.2 million for the remainder of 2019, $156.0 million, $150.2 million, $124.7 million, $84.8 million respectively for each of the next 4 years years ending December 31, 2023 and $121.5 million thereafter. Minimum future payments from external customers for leased aircraft and equipment as of December 31, 2018 was scheduled to be $142.3 million, $127.1 million, $124.3 million, $121.2 million , $87.1 million for each of the next five years ending December 31, 2023 and $119.8 million thereafter.

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. During the three month periods ending March 31, 2019 and 2018, the Company recognized $2.7 million and $5.9 million of non lease revenue that was reported in deferred revenue at the beginning of the respective year. Deferred revenue was $1.8 million and $3.1 million at March 31, 2019 and December 31, 2018, respectively, for contracts with customers.

Additional segment information from continuing operations is presented below (in thousands):



	Three Months Ending
	March 31,
	2019			2018
Depreciation and amortization expense:
CAM	$	38,795		$	28,925
ACMI Services	23,095			10,225
All other	747			854
Total	$	62,637		$	40,004
Segment earnings (loss):
CAM	$	16,174		$	15,464
ACMI Services	12,310			3,415
All other	1,903			3,718
Net unallocated interest expense	(780		)	(293		)
Net loss on financial instruments	4,500			(885		)
Transaction fees	(373		)	—
Other non-service components of retiree benefit (costs) credits, net	(2,351		)	2,045
Loss from non-consolidated affiliate	(3,816		)	(2,536		)
Pre-tax earnings from continuing operations	$	27,567		$	20,928

Interest expense allocated to CAM and ACMI Services was $10.0 million and $6.5 million for the three months period ending March 31, 2019, respectively, compared to $4.5 million and $0.5 million for the corresponding periods of 2018.

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



	March 31,		December 31,
	2019		2018
Assets:
CAM	$	1,709,864	$	1,577,182
ACMI Services	741,496		759,131
All other	180,602		134,272
Total	$	2,631,962	$	2,470,585