Operating Segments

6 Months Ended

Jun. 30, 2016

Operating Segments

Operating Segments

9. 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 June 30, 2016	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	29,181	$	—	$	—	$	29,181
Maintenance reserve revenue		15,514		—		—		15,514
Spare parts and equipment sales		900		2,773		—		3,673
Gain on sale of leased equipment		258		—		—		258
Other revenue		972		590		(570)		992
Total revenue		46,825		3,363		(570)		49,618
Expenses:
Depreciation and amortization expense		16,103		85		—		16,188
Cost of spare parts and equipment sales		648		2,139		—		2,787
General and administrative		9,958		727		—		10,685
Net finance costs		10,414		120		—		10,534
Other expense		3,696		—		—		3,696
Total expenses		40,819		3,071		—		43,890
Earnings from operations	$	6,006	$	292	$	(570)	$	5,728
	Leasing and
For the six months ended June 30, 2016	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	57,457	$	—	$	—	$	57,457
Maintenance reserve revenue		31,333		—		—		31,333
Spare parts and equipment sales		900		5,405		—		6,305
Gain on sale of leased equipment		3,250		—		—		3,250
Other revenue		1,905		948		(861)		1,992
Total revenue		94,845		6,353		(861)		100,337
Expenses:
Depreciation and amortization expense		32,440		167		—		32,607
Cost of spare parts and equipment sales		648		4,071		—		4,719
General and administrative		20,938		1,499		—		22,437
Net finance costs		20,327		215		—		20,542
Other expense		7,428		—		—		7,428
Total expenses		81,781		5,952		—		87,733
Earnings from operations	$	13,064	$	401	$	(861)	$	12,604
(1) Represents revenue generated between our        operating segments

	Leasing and
For the three months ended June 30, 2015	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	25,882	$	—	$	—	$	25,882
Maintenance reserve revenue		10,477		—		—		10,477
Spare parts and equipment sales		850		2,866		—		3,716
Gain on sale of leased equipment		3,132		—		—		3,132
Other revenue		583		100		(80)		603
Total revenue		40,924		2,966		(80)		43,810
Expenses:
Depreciation and amortization expense		17,554		72		—		17,626
Cost of spare parts and equipment sales		620		2,200		—		2,820
General and administrative		8,390		722		—		9,112
Net finance costs		9,756		104		—		9,860
Other expense		5,492		—		—		5,492
Total expenses		41,812		3,098		—		44,910
Earnings from operations	$	(888)	$	(132)	$	(80)	$	(1,100)
	Leasing and
For the Six months ended June 30, 2015	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	51,142	$	—	$	—	$	51,142
Maintenance reserve revenue		22,916		—		—		22,916
Spare parts and equipment sales		850		5,017		—		5,867
Gain on sale of leased equipment		3,862		—		—		3,862
Other revenue		1,199		396		(236)		1,359
Total revenue		79,969		5,413		(236)		85,146
Expenses:
Depreciation and amortization expense		35,144		144		—		35,288
Cost of spare parts and equipment sales		620		3,680		—		4,300
General and administrative		17,729		1,355		—		19,084
Net finance costs		18,082		194		—		18,276
Other expense		7,348		—		—		7,348
Total expenses		78,923		5,373		—		84,296
Earnings from operations	$	1,046	$	40	$	(236)	$	850
(1) Represents revenue generated between our operating segments
Total assets as of June 30, 2016	$	1,267,186	$	25,211	$	—	$	1,292,397
Total assets as of December 31, 2015	$	1,267,414	$	26,871	$	—	$	1,294,285