11.	Segment Information

The Company has

six

business segments. The overnight air cargo segment, composed of the Company

’s Mountain Air Cargo, Inc. (“MAC”) and CSA Air, Inc. (“CSA”) subsidiaries, operates in the air express delivery services industry. The ground equipment sales segment, composed of the Company’s Global Ground Support, LLC (“GGS”) subsidiary, manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the U.S. military and industrial customers. The ground support services segment, composed of the Company’s Global Aviation Services, LLC (“GAS”) subsidiary, provides ground support equipment maintenance and facilities maintenance services to domestic airlines and aviation service providers. The printing equipment and maintenance segment is composed of Delphax and its subsidiaries, which was consolidated for financial accounting purposes beginning

November 24, 2015.

Delphax designs, manufactures and sells advanced digital print production equipment, maintenance contracts, spare parts, supplies and consumable items for these systems. The equipment is sold through Delphax and its subsidiaries located in the United Kingdom and France. In

July 2016,

the Company’s majority owned subsidiary, Contrail Aviation Support, LLC (“Contrail Aviation”), acquired the principal assets of a business based in Verona, Wisconsin engaged in acquiring surplus commercial jet engines or components and supplying surplus and aftermarket commercial jet engine component. In

October 2016,

the Company, through a wholly owned subsidiary, acquired

100%

of the outstanding equity interests of Jet Yard, LLC (“Jet Yard”) to provide commercial aircraft storage, storage maintenance and aircraft disassembly/part-out services at facilities leased at the Pinal Air Park in Marana, Arizona. In

May 2017,

our newly formed subsidiaries AirCo, LLC and AirCo Services, LLC (collectively “AirCo”), acquired the inventory and principal assets of a business based in Wichita, Kansas that distributes and sells airplane and aviation parts. Contrail Aviation, Jet Yard and AirCo comprise the commercial jet engines and parts segment of the Company’s operations. This segment, formerly referred to as the commercial jet engines segment, was renamed to reflect its broader product and service offerings. The Company’s leasing segment, comprised of the Company’s Air T Global Leasing, LLC (“ATGL”) subsidiary, provides funding for equipment leasing transactions, which

may

include transactions for the leasing of equipment manufactured by GGS and Delphax and transactions initiated by

third

parties unrelated to equipment manufactured by the Company or any of its subsidiaries. ATGL commenced operations during the quarter ended

December 31, 2015.

March 2014,

the Company formed Space Age Insurance Company (“SAIC”), a captive insurance company licensed in Utah. SAIC insures risks of the Company and its subsidiaries that were

not

previously insured by the various Company insurance programs (including the risk of loss of key customers and contacts, administrative actions and regulatory changes); and

may

from time to time underwrite

third

-party risk through certain reinsurance arrangements.

Each business segment has separate management teams and infrastructures that offer different products and services. We evaluate the performance of our business segments based on opera

ting income. For the quarters ended

June 30, 2017

and

2016,

the premiums paid to SAIC by the Company were allocated among the operating segments based on segment revenue and certain identified corporate expense were allocated to the segments based on the relative benefit of those expenses to each segment.

Segment data is summarized as follows:

	Three Months Ended June 30,
	2017			2016
Operating Revenues:
Overnight Air Cargo	$	16,742,175		$	16,637,165
Ground Equipment Sales:
Domestic		5,276,366			5,386,069
International		673,290			1,284,619
Total Ground Equipment Sales		5,949,656			6,670,688
Ground Support Services		9,113,073			6,800,042
Printing Equipment and Maintenance
Domestic		1,443,982			2,232,706
International		1,687,399			977,382
Total Printing Equipment and Maintenance		3,131,381			3,210,088
Commercial Jet Engines and Parts:
Domestic		8,190,885			-
International		4,535,456			-
Total Commercial Jet Engines		12,726,341			-
Leasing		35,747			241,770
Corporate		290,532			281,926
Intercompany		(291,532	)		(3,348,426	)
Total	$	47,697,373		$	30,493,253

Operating Income (Loss):
Overnight Air Cargo	$	816,666		$	979,177
Ground Equipment Sales		165,794			342,320
Ground Support Services		356,824			(110,052	)
Printing Equipment and Maintenance		924,036			(6,935,359	)
Commercial Jet Engines and Parts		810,940			-
Leasing		6,898			107,258
Corporate		(869,916	)		(931,837	)
Intercompany		1,326			(524,989	)
Total	$	2,212,568		$	(7,073,482	)

Capital Expenditures:
Overnight Air Cargo	$	-		$	-
Ground Equipment Sales		-			19,596
Ground Support Services		25,365			101,411
Printing Equipment and Maintenance		-			9,927
Commercial Jet Engines and Parts		4,977			-
Corporate		459,653			388,635
Leasing		-			3,066,500
Intercompany		-			(3,066,500	)
Total	$	489,995		$	519,569

Depreciation, Amortization and Impairment:
Overnight Air Cargo	$	31,016		$	29,209
Ground Equipment Sales		132,880			47,594
Ground Support Services		111,631			83,436
Printing Equipment and Maintenance		4,691			296,081
Commercial Jet Engines and Parts		45,776			-
Leasing		14,812			132,369
Corporate		59,347			30,743
Intercompany		(1,326	)		(14,351	)
Total	$	398,827		$	605,081

The elimination of intercompany revenues is related to the sale during the

three

months ended

June 30, 2016

ten

commercial deicing units by GGS to ATGL and

two

élan printers by Delphax to ATGL and premiums paid to SAIC, and the elimination of intercompany operating income for such period reflects the margins on the sales of those assets, elimination of excess depreciation and amortization related to the margin on those assets, and the premiums paid to SAIC. The sales of the deicing units and élan printers did

not

reoccur during the

three

months ended

June 30, 2017.