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Reportable Segments | 6 Months Ended
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Jun. 30, 2018
Reportable Segments |
Reportable Segments | 11. Reportable Segments The Company has two reportable 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 other related businesses 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. The Company evaluates the performance of each of the segments based on profit or loss after general and administrative expenses. While the Company believes there are synergies between the two business segments, the segments are managed separately because each requires different business strategies. During the second quarter of 2018, the Company moved certain sales of leased equipment to the Spare Parts Sales segment from the Leasing and Related Operations segment and had no change in the determination of operating segments. In accordance with ASC 280-10, the Company has restated prior period information presented below to reflect this change in composition of its reportable segments. The following tables present a summary of the reportable segments (in thousands):
|  | Leasing and |  |  |  |  |  |  |  |
Three months ended June 30, 2018 |  | Related Operations |  | Spare Parts Sales |  | Eliminations (1) |  | Total
Revenue: |  |  |  |  |  |  |  |  |  |  |  |
Lease rent revenue |  | $ | 43,081 |  | $ | — |  | $ | — |  | $ | 43,081
Maintenance reserve revenue |  |  | 22,045 |  |  | — |  |  | — |  |  | 22,045
Spare parts and equipment sales |  |  | — |  |  | 7,061 |  |  | — |  |  | 7,061
Gain on sale of leased equipment |  |  | 187 |  |  | 58 |  |  | — |  |  | 245
Other revenue |  |  | 1,856 |  |  | 210 |  |  | (195) |  |  | 1,871
Total revenue |  |  | 67,169 |  |  | 7,329 |  |  | (195) |  |  | 74,303
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 18,297 |  |  | 87 |  |  | — |  |  | 18,384
Cost of spare parts and equipment sales |  |  | — |  |  | 5,906 |  |  | — |  |  | 5,906
Write-down of equipment |  |  | 3,578 |  |  | — |  |  | — |  |  | 3,578
General and administrative |  |  | 15,683 |  |  | 1,099 |  |  | — |  |  | 16,782
Technical expense |  |  | 3,232 |  |  | — |  |  | — |  |  | 3,232
Interest expense |  |  | 15,138 |  |  | — |  |  | — |  |  | 15,138
Total expenses |  |  | 55,928 |  |  | 7,092 |  |  | — |  |  | 63,020
Earnings from operations |  | $ | 11,241 |  | $ | 237 |  | $ | (195) |  | $ | 11,283
|  | Leasing and |  |  |  |  |  |  |  |
Six months ended June 30, 2018 |  | Related Operations |  | Spare Parts Sales |  | Eliminations (1) |  | Total
Revenue: |  |  |  |  |  |  |  |  |  |  |  |
Lease rent revenue |  | $ | 82,726 |  | $ | — |  | $ | — |  | $ | 82,726
Maintenance reserve revenue |  |  | 37,485 |  |  | — |  |  | — |  |  | 37,485
Spare parts and equipment sales |  |  | — |  |  | 13,347 |  |  | — |  |  | 13,347
Gain on sale of leased equipment |  |  | 767 |  |  | 119 |  |  | — |  |  | 886
Other revenue |  |  | 3,706 |  |  | 1,323 |  |  | (1,277) |  |  | 3,752
Total revenue |  |  | 124,684 |  |  | 14,789 |  |  | (1,277) |  |  | 138,196
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 35,565 |  |  | 174 |  |  | — |  |  | 35,739
Cost of spare parts and equipment sales |  |  | — |  |  | 10,689 |  |  | — |  |  | 10,689
Write-down of equipment |  |  | 3,578 |  |  | — |  |  | — |  |  | 3,578
General and administrative |  |  | 30,178 |  |  | 2,215 |  |  | — |  |  | 32,393
Technical expense |  |  | 6,909 |  |  | — |  |  | — |  |  | 6,909
Interest expense |  |  | 28,732 |  |  | — |  |  | — |  |  | 28,732
Total expenses |  |  | 104,962 |  |  | 13,078 |  |  | — |  |  | 118,040
Earnings from operations |  | $ | 19,722 |  | $ | 1,711 |  | $ | (1,277) |  | $ | 20,156
|  | Leasing and |  |  |  |  |  |  |  |
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 |  |  | 3,484 |  |  | 43 |  |  | — |  |  | 3,527
Other revenue |  |  | 1,649 |  |  | 276 |  |  | (209) |  |  | 1,716
Total revenue |  |  | 61,225 |  |  | 6,828 |  |  | (209) |  |  | 67,844
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 15,929 |  |  | 86 |  |  | — |  |  | 16,015
Cost of spare parts and equipment sales (2) |  |  | 9,918 |  |  | 4,738 |  |  | — |  |  | 14,656
Write-down of equipment (2) |  |  | 1,351 |  |  | — |  |  | — |  |  | 1,351
General and administrative |  |  | 12,207 |  |  | 858 |  |  | — |  |  | 13,065
Technical expense |  |  | 2,448 |  |  | — |  |  | — |  |  | 2,448
Interest expense |  |  | 11,312 |  |  | — |  |  | — |  |  | 11,312
Total expenses |  |  | 53,165 |  |  | 5,682 |  |  | — |  |  | 58,847
Earnings from operations |  | $ | 8,060 |  | $ | 1,146 |  | $ | (209) |  | $ | 8,997
|  | Leasing and |  |  |  |  |  |  |  |
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 |  |  | 4,440 |  |  | 69 |  |  | — |  |  | 4,509
Other revenue |  |  | 3,774 |  |  | 450 |  |  | (336) |  |  | 3,888
Total revenue |  |  | 132,928 |  |  | 13,199 |  |  | (336) |  |  | 145,791
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 32,470 |  |  | 174 |  |  | — |  |  | 32,644
Cost of spare parts and equipment sales (2) |  |  | 14,623 |  |  | 10,350 |  |  | — |  |  | 24,973
Write-down of equipment (2) |  |  | 13,442 |  |  | — |  |  | — |  |  | 13,442
General and administrative |  |  | 24,620 |  |  | 1,645 |  |  | — |  |  | 26,265
Technical expense |  |  | 4,740 |  |  | — |  |  | — |  |  | 4,740
Interest expense |  |  | 22,178 |  |  | — |  |  | — |  |  | 22,178
Total expenses |  |  | 112,073 |  |  | 12,169 |  |  | — |  |  | 124,242
Earnings from operations |  | $ | 20,855 |  | $ | 1,030 |  | $ | (336) |  | $ | 21,549
| (1) |  | Represents revenue generated between our operating segments.
| (2) |  | The amounts herein include reclassifications of scrap inventory write-offs and lower of cost or market write-downs that were previously presented within Write-down of equipment to the Costs of spare parts and equipment sales expense line item. The three and six months ended June 30, 2017 were impacted by a reclassification of $0.9 million and $1.8 million, respectively, reflected as an increase to Cost of spare parts and equipment sales and a decrease to Write-down of equipment.
|  | Leasing and |  |  |  |  |  |  |  |
|  | Related Operations |  | Spare Parts Sales |  | Eliminations |  | Total
Total assets as of June 30, 2018 |  | $ | 1,737,537 |  | $ | 45,898 |  | $ | — |  | $ | 1,783,435
Total assets as of December 31, 2017 |  | $ | 1,556,406 |  | $ | 47,025 |  | $ | — |  | $ | 1,603,431

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- 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
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