Reportable Segments

9 Months Ended

Sep. 30, 2020

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 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.

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


Three Months Ended September 30, 2020	Leasing and Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	30,025	$	—	$	—	$	30,025
Maintenance reserve revenue	32,302		—		—		32,302
Spare parts and equipment sales	115		3,000		(227)		2,888

Other revenue	5,397		35		(34)		5,398
Total revenue	67,839		3,035		(261)		70,613

Expenses:
Depreciation and amortization expense	23,993		29		—		24,022
Cost of spare parts and equipment sales	2		4,123		—		4,125
Write-down of equipment	5,245		—		—		5,245
General and administrative	15,578		656		227		16,461
Technical expense	827		—		—		827
Net finance costs:
Interest expense	15,351		—		—		15,351
Loss on debt extinguishment	—		—		—		—
Total finance costs	15,351		—		—		15,351
Total expenses	60,996		4,808		227		66,031
Earnings (loss) from operations	$	6,843	$	(1,773)	$	(488)	$	4,582


Three Months Ended September 30, 2019	Leasing and Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	49,090	$	—	$	—	$	49,090
Maintenance reserve revenue	39,173		—		—		39,173
Spare parts and equipment sales	9,583		14,826		—		24,409
Gain on sale of leased equipment	4,589		—		—		4,589
Other revenue	3,098		72		(65)		3,105
Total revenue	105,533		14,898		(65)		120,366

Expenses:
Depreciation and amortization expense	22,716		20		—		22,736
Cost of spare parts and equipment sales	7,825		12,370		—		20,195
Write-down of equipment	6,954		—		—		6,954
General and administrative	22,081		1,176		—		23,257
Technical expense	1,739		—		—		1,739
Net finance costs:
Interest expense	16,572		—		—		16,572
Loss on debt extinguishment	—		—		—		—
Total finance costs	16,572		—		—		16,572
Total expenses	77,887		13,566		—		91,453
Earnings from operations	$	27,646	$	1,332	$	(65)	$	28,913


Nine Months Ended September 30, 2020	Leasing and Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	114,874	$	—	$	—	$	114,874
Maintenance reserve revenue	82,816		—		—		82,816
Spare parts and equipment sales	1,442		13,633		(227)		14,848
Gain on sale of leased equipment	1,367		—		—		1,367
Other revenue	13,293		302		(295)		13,300
Total revenue	213,792		13,935		(522)		227,205

Expenses:
Depreciation and amortization expense	71,107		69		—		71,176
Cost of spare parts and equipment sales	154		13,307		—		13,461
Write-down of equipment	14,371		—		—		14,371
General and administrative	48,928		2,101		227		51,256
Technical expense	3,422		—		—		3,422
Net finance costs:
Interest expense	47,136		—		—		47,136
Loss on debt extinguishment	4,688		—		—		4,688
Total finance costs	51,824		—		—		51,824
Total expenses	189,806		15,477		227		205,510
Earnings (loss) from operations	$	23,986	$	(1,542)	$	(749)	$	21,695


Nine Months Ended September 30, 2019	Leasing and Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	142,484	$	—	$	—	$	142,484
Maintenance reserve revenue	90,998		—		—		90,998
Spare parts and equipment sales	12,334		44,163		—		56,497
Gain on sale of leased equipment	19,279		—		—		19,279
Other revenue	10,659		197		(182)		10,674
Total revenue	275,754		44,360		(182)		319,932

Expenses:
Depreciation and amortization expense	62,975		62		—		63,037
Cost of spare parts and equipment sales	9,913		37,279		—		47,192
Write-down of equipment	11,321		—		—		11,321
General and administrative	61,974		4,112		—		66,086
Technical expense	4,933		1		—		4,934
Net finance costs:
Interest expense	51,232		—		—		51,232
Loss on debt extinguishment	220		—		—		220
Total finance costs	51,452		—		—		51,452
Total expenses	202,568		41,454		—		244,022
Earnings from operations	$	73,186	$	2,906	$	(182)	$	75,910

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(1) Represents revenue generated between our operating segments.


	Leasing and Related Operations		Spare Parts Sales		Eliminations		Total
Total assets as of September 30, 2020	$	2,096,376	$	52,847	$	—	$	2,149,223
Total assets as of December 31, 2019	$	1,898,313	$	42,295	$	—	$	1,940,608