Operating Segments

9 Months Ended

Sep. 30, 2015

Operating Segments

Operating Segments

10. Operating Segments

The Company operates in two business 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 (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 and leasing of engines destined for disassembly and sale of parts.

The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses and inter-company allocation of interest expense. 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 operating segments (amounts in thousands):

	Leasing and
For the three months ended September 30, 2015	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	28,083	$	—	$	—	$	28,083
Maintenance reserve revenue		16,119		—		—		16,119
Spare parts  and equipment sales		4,600		4,533		—		9,133
Gain on sale of leased equipment		3,804		—		—		3,804
Other revenue		597		135		(113)		619
Total revenue		53,203		4,668		(113)		57,758
Expenses:
Depreciation and amortization expense		17,022		67		—		17,089
Cost of spare parts and equipment sales		2,461		3,458		—		5,919
General and administrative		10,948		794		—		11,742
Net finance costs		9,707		98		—		9,805
Other expense		9,068		—		—		9,068
Total expenses		49,206		4,417		—		53,623
Earnings from operations	$	3,997	$	251	$	(113)	$	4,135
	Leasing and
For the nine months ended September 30, 2015	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	78,993	$	—	$	—	$	78,993
Maintenance reserve revenue		40,744		—		—		40,744
Spare parts  and equipment sales		5,450		9,550		—		15,000
Gain on sale of leased equipment		7,700		—		—		7,700
Other revenue		1,796		531		(349)		1,978
Total revenue		134,683		10,081		(349)		144,415
Expenses:
Depreciation and amortization expense		52,251		211		—		52,462
Cost of spare parts and equipment sales		3,081		7,138		—		10,219
General and administrative		28,751		2,075		—		30,826
Net finance costs		27,789		292		—		28,081
Other expense		16,416		—		—		16,416
Total expenses		128,288		9,716		—		138,004
Earnings from operations	$	6,395	$	365	$	(349)	$	6,411
(1) Represents revenue generated between our        operating segments

	Leasing and
For the three months ended September 30, 2014	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	25,165	$	—	$	—	$	25,165
Maintenance reserve revenue		13,066		—		—		13,066
Spare parts  and equipment sales		—		4,628		—		4,628
Gain on sale of leased equipment		1,891		—		—		1,891
Other revenue		673		862		(766)		769
Total revenue		40,795		5,490		(766)		45,519
Expenses:
Depreciation and amortization expense		16,643		71		—		16,714
Cost of spare parts and equipment sales		—		4,218		—		4,218
General and administrative		8,405		702		—		9,107
Net finance costs		9,111		70		—		9,181
Other expense		4,305		—		—		4,305
Total expenses		38,464		5,061		—		43,525
Earnings from operations	$	2,331	$	429	$	(766)	$	1,994
	Leasing and
For the nine months ended September 30, 2014	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	76,865	$	—	$	—	$	76,865
Maintenance reserve revenue		41,657		—		—		41,657
Spare parts  and equipment sales		—		6,690		—		6,690
Gain on sale of leased equipment		3,713		—		—		3,713
Other revenue		2,908		2,295		(1,403)		3,800
Total revenue		125,143		8,985		(1,403)		132,725
Expenses:
Depreciation and amortization expense		47,943		216		—		48,159
Cost of spare parts and equipment sales		—		6,173		—		6,173
General and administrative		26,072		1,983		—		28,055
Net finance costs		27,807		128		—		27,935
Other expense		10,671		—		—		10,671
Total expenses		112,493		8,500		—		120,993
Earnings from operations	$	12,650	$	485	$	(1,403)	$	11,732
Total assets as of September 30, 2015	$	1,262,748	$	22,357	$	—	$	1,285,105
Total assets as of December 31, 2014	$	1,241,837	$	19,789	$	—	$	1,261,626

(1) Represents revenue generated between our
       operating segments