XML 34 R20.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Business Segments and Major Customers | 9 Months Ended
--- | ---
Sep. 30, 2017
Segment Reporting [Abstract] |
Business Segments and Major Customers | 14. Business Segments and Major Customers We operate our business through three operating segments: Commercial Aviation North America, or “CA-NA”, Commercial Aviation Rest of World, or “CA-ROW,” and Business Aviation, or “BA”. See Note 1, “Basis of Presentation,” for further information regarding our segments. The accounting policies of the operating segments are the same as those described in Note 2, “Summary of Significant Accounting Policies,” in our 2016 10-K. Intercompany transactions between segments are excluded as they are not included in management’s performance review of the segments. We currently do not generate a material amount of foreign revenue. We do not segregate assets between segments for internal reporting. Therefore, asset-related information has not been presented. We do not disclose assets outside of the United States as these assets are not material as of September 30, 2017 and December 31, 2016. For our airborne assets, we consider only those assets installed in aircraft associated with international commercial airline partners to be owned outside of the United States. Management evaluates performance and allocates resources to each segment based on segment profit (loss), which is calculated internally as net income (loss) attributable to common stock before interest expense, interest income, income taxes, depreciation and amortization, certain non-cash charges (including amortization of deferred airborne lease incentives, stock-based compensation expense and adjustment to deferred financing costs) and other income (expense). Segment profit (loss) is a measure of performance reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and evaluating segment performance. In addition, segment profit (loss) is included herein in conformity with ASC 280-10, Segment Reporting. Management believes that segment profit (loss) provides useful information for analyzing and evaluating the underlying operating results of each segment. However, segment profit (loss) should not be considered in isolation or as a substitute for net income (loss) attributable to common stock or other measures of financial performance prepared in accordance with GAAP. Additionally, our computation of segment profit (loss) may not be comparable to other similarly titled measures computed by other companies. Information regarding our reportable segments is as follows (in thousands):
|  | For the Three Months Ended |
|  | September 30, 2017 |
|  | CA-NA |  |  | CA-ROW |  |  | BA |  |  | Total |
Service revenue |  | $ | 94,436 |  |  | $ | 15,687 |  |  | $ | 43,224 |  |  | $ | 153,347 |
Equipment revenue |  |  | 1,291 |  |  |  | 953 |  |  |  | 17,283 |  |  |  | 19,527 |
Total revenue |  | $ | 95,727 |  |  | $ | 16,640 |  |  | $ | 60,507 |  |  | $ | 172,874 |
Segment profit (loss) |  | $ | 15,966 |  |  | $ | (24,110 | ) |  | $ | 21,329 |  |  | $ | 13,185 |
|  | For the Three Months Ended |
|  | September 30, 2016 |
|  | CA-NA |  |  | CA-ROW |  |  | BA |  |  | Total |
Service revenue |  | $ | 88,534 |  |  | $ | 7,235 |  |  | $ | 33,330 |  |  | $ | 129,099 |
Equipment revenue |  |  | 2,191 |  |  |  | 360 |  |  |  | 15,617 |  |  |  | 18,168 |
Total revenue |  | $ | 90,725 |  |  | $ | 7,595 |  |  | $ | 48,947 |  |  | $ | 147,267 |
Segment profit (loss) |  | $ | 14,509 |  |  | $ | (19,924 | ) |  | $ | 20,655 |  |  | $ | 15,240 |
|  | For the Nine Months Ended |
|  | September 30, 2017 |
|  | CA-NA |  |  | CA-ROW |  |  | BA |  |  | Total |
Service revenue |  | $ | 290,260 |  |  | $ | 38,243 |  |  | $ | 125,415 |  |  | $ | 453,918 |
Equipment revenue |  |  | 5,234 |  |  |  | 2,756 |  |  |  | 49,172 |  |  |  | 57,162 |
Total revenue |  | $ | 295,494 |  |  | $ | 40,999 |  |  | $ | 174,587 |  |  | $ | 511,080 |
Segment profit (loss) |  | $ | 43,316 |  |  | $ | (82,068 | ) |  | $ | 72,646 |  |  | $ | 33,894 |
|  | For the Nine Months Ended |
|  | September 30, 2016 |
|  | CA-NA |  |  | CA-ROW |  |  | BA |  |  | Total |
Service revenue |  | $ | 261,751 |  |  | $ | 17,213 |  |  | $ | 96,442 |  |  | $ | 375,406 |
Equipment revenue |  |  | 8,708 |  |  |  | 731 |  |  |  | 51,707 |  |  |  | 61,146 |
Total revenue |  | $ | 270,459 |  |  | $ | 17,944 |  |  | $ | 148,149 |  |  | $ | 436,552 |
Segment profit (loss) |  | $ | 46,966 |  |  | $ | (62,945 | ) |  | $ | 59,895 |  |  | $ | 43,916 |
A reconciliation of segment profit (loss) to the relevant consolidated amounts is as follows (in thousands):
|  | For the Three Months |  |  | For the Nine Months |
|  | Ended September 30, |  |  | Ended September 30, |
|  | 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
CA-NA segment profit |  | $ | 15,966 |  |  | $ | 14,509 |  |  | $ | 43,316 |  |  | $ | 46,966 |
CA-ROW segment loss |  |  | (24,110 | ) |  |  | (19,924 | ) |  |  | (82,068 | ) |  |  | (62,945 | )
BA segment profit |  |  | 21,329 |  |  |  | 20,655 |  |  |  | 72,646 |  |  |  | 59,895 |
Total segment profit |  |  | 13,185 |  |  |  | 15,240 |  |  |  | 33,894 |  |  |  | 43,916 |
Interest income |  |  | 683 |  |  |  | 852 |  |  |  | 1,999 |  |  |  | 1,064 |
Interest expense |  |  | (27,585 | ) |  |  | (24,848 | ) |  |  | (81,754 | ) |  |  | (58,701 | )
Depreciation and amortization |  |  | (35,824 | ) |  |  | (26,779 | ) |  |  | (96,821 | ) |  |  | (76,042 | )
Amortization of deferred airborne lease incentives (1) |  |  | 10,121 |  |  |  | 7,765 |  |  |  | 28,099 |  |  |  | 20,650 |
Stock-based compensation expense |  |  | (5,283 | ) |  |  | (5,000 | ) |  |  | (15,007 | ) |  |  | (12,986 | )
Adjustment to deferred financing costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 792 |
Loss of extinguishment of debt |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (15,406 | )
Other income (expense) |  |  | (228 | ) |  |  | (34 | ) |  |  | (322 | ) |  |  | 137 |
Loss before income taxes |  | $ | (44,931 | ) |  | $ | (32,804 | ) |  | $ | (129,912 | ) |  | $ | (96,576 | )
(1) | Amortization of deferred airborne lease incentive relates to our CA-NA and CA-ROW segments. See Note 10, “Leases,” for further information.
Major Customers and Airline Partnerships — During the three and nine month periods ended September 30, 2017 and 2016, no customer accounted for more than 10% of our consolidated revenue. One airline partner, under the Turnkey model, accounted for approximately 19% and 18% of consolidated accounts receivable as of September 30, 2017 and December 31, 2016, respectively. Two customers, under the Airline Directed model, collectively accounted for approximately 22% of consolidated accounts receivable as of September 30, 2017 while no customer accounted for more than 10% of consolidated accounts receivable as of December 31, 2016. Revenue earned through Delta Air Lines and American Airlines accounted for approximately 47% of consolidated revenue for both the three and nine month periods ended September 30, 2017, and 50% for both the prior year periods.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration