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.