Operating Segments

6 Months Ended

Jun. 30, 2017

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, 2017	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	31,337	$	—	$	—	$	31,337
Maintenance reserve revenue		11,881		—		—		11,881
Spare parts and equipment sales		12,874		6,509		—		19,383
Gain on sale of leased equipment		3,527		—		—		3,527
Other revenue		1,649		276		(209)		1,716
Total revenue		61,268		6,785		(209)		67,844
Expenses:
Depreciation and amortization expense		15,929		86		—		16,015
Cost of spare parts and equipment sales		9,918		3,812		—		13,730
Write-down of equipment		1,351		926		—		2,277
General and administrative		12,207		858		—		13,065
Technical expense		2,448		—		—		2,448
Net finance costs		11,312		—		—		11,312
Total expenses		53,165		5,682		—		58,847
Earnings (loss) from operations	$	8,103	$	1,103	$	(209)	$	8,997
	Leasing and
For the six months ended June 30, 2017	Related Operations		Spare Parts Sales		Eliminations (1)		Total
Revenue:
Lease rent revenue	$	61,572	$	—	$	—	$	61,572
Maintenance reserve revenue		43,843		—		—		43,843
Spare parts and equipment sales		19,299		12,680		—		31,979
Gain on sale of leased equipment		4,509		—		—		4,509
Other revenue		3,774		450		(336)		3,888
Total revenue		132,997		13,130		(336)		145,791
Expenses:
Depreciation and amortization expense		32,470		174		—		32,644
Cost of spare parts and equipment sales		14,623		8,507		—		23,130
Write-down of equipment		13,442		1,843		—		15,285
General and administrative		24,620		1,645		—		26,265
Technical expense		4,740		—		—		4,740
Net finance costs		22,178		—		—		22,178
Total expenses		112,073		12,169		—		124,242
Earnings (loss) from operations	$	20,924	$	961	$	(336)	$	21,549
	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 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
Write-down of equipment		1,893		—		—		1,893
General and administrative		9,958		727		—		10,685
Technical expense		1,803		—		—		1,803
Net finance costs		10,414		120		—		10,534
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 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 sales		648		4,071		—		4,719
Write-down of equipment		3,929		—		—		3,929
General and administrative		20,938		1,499		—		22,437
Technical expense		3,499		—		—		3,499
Net finance costs		20,327		215		—		20,542
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
Total assets as of June 30, 2017	$	1,359,406	$	26,948	$	—	$	1,386,354
Total assets as of December 31, 2016	$	1,307,460	$	30,427	$	—	$	1,337,887