•

Operating lease revenue was lower for the quarter and the six-month period ended June 30, 2010 compared to the same periods in 2009 by approximately $0.7 million and $0.4 million, respectively.  This was due primarily to a greater number of aircraft that were off lease for all or part of the 2010 periods and certain assets that were re-leased at lower rates than were collected in the 2009 periods. In the 2010 periods, the Company also recorded a reduction in operating lease revenue due to uncertainty about the collectibility of the related receivable.

•

Maintenance reserves revenue increased by approximately $1.7 million and $1.6 million in the quarter and six months ended June 30, 2010, respectively, compared to the same periods in 2009.  Although the Company recorded less maintenance reserves revenue because of lower average usage by some lessees in the 2010 periods, the effect of this decrease was more than offset by maintenance reserves revenue related to maintenance reserves retained by the Company in connection with two aircraft returned in early 2010.  The funds are being used for maintenance required by the lease return conditions.  The Company also recorded a reduction in maintenance reserves revenue in the 2010 periods due to uncertainty about the collectibility of the related receivables.

•

Maintenance expense increased by approximately $2.0 million and $2.3 million in the quarter and six months ended June 30, 2010, respectively, compared to the same periods in 2009, due to higher expenses related to both the Company’s maintenance of off-lease aircraft and maintenance performed by lessees using non-refundable reserves.   The 2010 periods included maintenance performed on two aircraft returned in early 2010, for which the Company retained reserves that are being used for maintenance required by the lease return conditions.  Such amounts are recorded as both maintenance reserves revenue and maintenance expense at the time maintenance is performed and, as a result, have no affect on the Company's net income.

•

Interest expense decreased by approximately $0.2 million and $0.6 million in the quarter and six months ended June 30, 2010, respectively, compared to the same periods in 2009, primarily because of a lower average balance on the Company’s subordinated debt and a decrease in interest expense as a result of the Company’s interest rate swap which expired in December 2009.  The effect of these decreases was partially offset by increases in the rate, margin and fee amortization applicable to the Company’s new $90 million senior debt credit facility, which replaced the Company’s previous credit facility during the second quarter of 2010.

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2010				2009				2010				2009
Revenues and other income:
Operating lease revenue		$	5,747			$	6,441			$	12,468			$	12,910
Maintenance reserves revenue			3,225				1,542				4,703				3,111
Other income			78				258				725				264
			9,050				8,241				17,896				16,285
Expenses:
Maintenance costs			3,690				1,710				5,502				3,215
Depreciation			1,822				1,908				3,658				3,816
Interest			1,140				1,381				2,197				2,791
Management fees			917				913				1,850				1,840
Professional fees and other			678				252				994				659
			8,247				6,164				14,201				12,321
Income before income tax provision			803				2,077				3,695				3,964
Income tax provision			275				709				1,272				1,358
Net income		$	528			$	1,368			$	2,423			$	2,606
Earnings per share:
Basic		$	0.34			$	0.89			$	1.57			$	1.69
Diluted		$	0.33			$	0.89			$	1.53			$	1.69
Weighted average shares used in earnings per share computations:
Basic			1,543,257				1,543,257				1,543,257				1,543,257
Diluted			1,590,814				1,543,257				1,586,697				1,543,257

 

 

 

Summary Balance Sheet:		June 30,    2010				December 31,   2009				June 30,   2009
		(Unaudited)				(Audited)				(Unaudited)
Total assets		$	129,779			$	132,179			$	127,874
Total liabilities		$	86,863			$	91,687			$	90,433
Shareholders’ equity		$	42,916			$	40,492			$	37,441