Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 12, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AEROCENTURY CORP | |
Entity Central Index Key | 1,036,848 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,629,999 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Cash and cash equivalents | $ 2,891,500 | $ 2,721,000 |
Accounts receivable, including deferred rent of $661,500 and $359,200 at March 31, 2016 and December 31, 2015, respectively | 6,155,000 | 5,693,500 |
Finance leases receivable | 10,398,900 | 11,895,600 |
Aircraft and aircraft engines held for lease, net of accumulated depreciation of $33,154,100 and $31,074,600 at March 31, 2016 and December 31, 2015, respectively | 153,178,600 | 155,258,100 |
Assets held for sale | 3,442,500 | 5,228,400 |
Prepaid expenses and other | 320,900 | 228,400 |
Total assets | 176,387,400 | 181,025,000 |
Liabilities: | ||
Accounts payable and accrued expenses | 1,165,700 | 1,138,400 |
Notes payable and accrued interest, net of unamortized debt issuance costs of $2,595,000 and $2,814,000 at March 31, 2016 and December 31, 2015, respectively | 99,216,400 | 107,621,600 |
Maintenance reserves | 14,398,800 | 13,230,000 |
Accrued maintenance costs | 336,200 | 382,300 |
Security deposits | 3,212,500 | 3,212,600 |
Unearned revenues | 3,890,600 | 1,957,400 |
Deferred income taxes | 12,454,200 | 12,204,200 |
Income taxes payable | 800 | 0 |
Total liabilities | $ 134,675,200 | $ 139,746,500 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 2,000,000 shares authorized, no shares issued and outstanding | $ 0 | $ 0 |
Common stock, $0.001 par value, 10,000,000 shares authorized, 1,629,999 shares issued and outstanding | 1,600 | 1,600 |
Paid-in capital | 14,780,100 | 14,780,100 |
Retained earnings | 27,434,600 | 27,000,900 |
Shareholders equity before treasury stock | 42,216,300 | 41,782,600 |
Treasury stock at cost, 63,300 shares | (504,100) | (504,100) |
Total stockholders' equity | 41,712,200 | 41,278,500 |
Total liabilities and stockholders' equity | $ 176,387,400 | $ 181,025,000 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Accounts receivable, deferred rent | $ 661,500 | $ 359,200 |
Aircraft and aircraft engines held for lease, accumulated depreciation | 33,154,100 | 31,074,600 |
Liabilities: | ||
Unamortized debt issuance costs | $ 2,595,000 | $ 2,814,000 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, issued (in shares) | 1,629,999 | 1,629,999 |
Common stock, outstanding (in shares) | 1,629,999 | 1,629,999 |
Treasury stock (in shares) | 63,300 | 63,300 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues and other income: | ||
Operating lease revenue, net | $ 6,044,300 | $ 6,437,800 |
Finance lease revenue | 185,100 | 0 |
Net gain on disposal of assets | 5,400 | 460,000 |
Net gain on sales-type finance leases | 0 | 1,401,900 |
Maintenance reserves revenue, net | 0 | 327,400 |
Other income | 1,300 | 300 |
Total Income | 6,236,100 | 8,627,400 |
Expenses: | ||
Depreciation | 2,079,500 | 2,327,800 |
Interest | 1,289,000 | 1,878,300 |
Management fees | 1,264,000 | 1,433,300 |
Professional fees, general and administrative and other | 424,700 | 410,600 |
Maintenance | 319,900 | 1,382,000 |
Insurance | 76,600 | (14,500) |
Provision for impairment in value of aircraft | 75,000 | 0 |
Other taxes | 22,700 | 57,700 |
Total expenses | 5,551,400 | 7,475,200 |
Income before income tax provision | 684,700 | 1,152,200 |
Income tax provision | 251,000 | 400,000 |
Net income | $ 433,700 | $ 752,200 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.28 | $ 0.49 |
Diluted (in dollars per share) | $ 0.28 | $ 0.48 |
Weighted average shares used in earnings per share computations: | ||
Basic (in shares) | 1,566,699 | 1,543,257 |
Diluted (in shares) | 1,566,699 | 1,552,765 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statements of Cash Flows (Unaudited) [Abstract] | ||
Net cash provided by operating activities | $ 5,529,000 | $ 2,963,000 |
Investing activities: | ||
Proceeds from sale of aircraft and aircraft engines held for lease, net of re-sale fees | 1,485,600 | 700,000 |
Proceeds from sale of assets held for sale, net of re-sale fees | 1,755,900 | 1,687,000 |
Acquisition costs related to aircraft purchases | 0 | (1,309,800) |
Net cash provided by investing activities | 3,241,500 | 1,077,200 |
Financing activity - | ||
Repayments of Credit Facility | (8,600,000) | (4,000,000) |
Net cash used in financing activities | (8,600,000) | (4,000,000) |
Net increase in cash and cash equivalents | 170,500 | 40,200 |
Cash and cash equivalents, beginning of year | 2,721,000 | 1,840,500 |
Cash and cash equivalents, end of year | $ 2,891,500 | $ 1,880,700 |
Statements of Cash Flows (Unau6
Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statements of Cash Flows (Unaudited) [Abstract] | ||
Interest paid | $ 1,115,500 | $ 1,327,300 |
Income taxes paid | $ 0 | $ 0 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. (a) AeroCentury Corp. ("the Company"), a Delaware corporation incorporated in 1997, typically acquires used regional aircraft and engines for lease to foreign and domestic regional carriers. The condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2015. (b) The Company's financial statements have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable for making judgments that are not readily apparent from other sources. The most significant estimates with regard to these financial statements are the residual values and useful lives of the assets, the amount and timing of cash flows associated with each asset that are used to evaluate whether assets are impaired, accrued maintenance costs, accounting for income taxes, and the amounts recorded as allowances for doubtful accounts. (c) Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible. The fair value hierarchy under GAAP is based on three levels of inputs. Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis The carrying amount of the Company's money market funds included in cash and cash equivalents was $1,847,000 and $1,946,600 at March 31, 2016 and December 31, 2015, respectively. The fair value of the Company's money market funds would be categorized as Level 1 under the GAAP fair value hierarchy. As of March 31, 2016 and December 31, 2015, there were no liabilities that were required to be measured and recorded at fair value on a recurring basis. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis The Company determines fair value of long-lived assets held and used, such as aircraft and aircraft engines held for lease and assets held for sale, by reference to independent appraisals, quoted market prices (e.g., offers to purchase) and other factors. An impairment charge is recorded when the Company believes that the carrying value of an asset will not be recovered through future net cash flows and that the asset's carrying value exceeds its fair value. Assets held for lease The Company recorded no impairment charges on its aircraft held for lease during the three months ended March 31, 2016 and 2015. Assets held for sale The Company recorded $75,000 of impairment charges on its aircraft held for sale during the three months ended March 31, 2016, resulting in a carrying value of $1,307,900. The fair value of such assets would be categorized as Level 3 under the GAAP fair value hierarchy. Fair Value of Other Financial Instruments The Company's financial instruments, other than cash and cash equivalents, consist principally of finance leases receivable and amounts borrowed under its credit facility (the "Credit Facility"). The fair value of accounts receivable, finance leases receivable, accounts payable and the Company's maintenance reserves and accrued maintenance costs approximates the carrying value of these financial instruments. Borrowings under the Company's Credit Facility bear floating rates of interest that reset periodically to a market benchmark rate plus a credit margin. The Company believes the effective interest rate under the Credit Facility approximates current market rates for such indebtedness at the balance sheet date, and therefore that the outstanding principal and accrued interest of $101,811,400 and $110,435,600 at March 31, 2016 and December 31, 2015, respectively, approximate its fair value. The fair value of the Company's outstanding balance of its Credit Facility would be categorized as Level 3 under the GAAP fair value hierarchy. (d) The Company has four aircraft finance leases that contain lessee purchase options at prices substantially below the assets' estimated residual values at the exercise date for the option. Consequently, the Company considers the purchase options to be bargain purchase options and has classified the leases as sales-type finance leases for financial accounting purposes. The Company reports the discounted present value of (i) future minimum lease payments (including the bargain purchase option) and (ii) any residual value not subject to a bargain purchase option as a finance lease receivable on its balance sheet and accrues interest on the balance of the finance lease receivable based on the interest rate inherent in the applicable lease over the term of the lease. For sales-type finance leases, the Company recognizes the difference between the net book value of the aircraft and the net investment in sales-type finance leases as a gain or loss, less any initial direct costs and lease incentives. The Company recognized interest earned on finance leases in the amount of $185,100 and $0 in the three months ended March 31, 2016 and 2015, respectively. |
Finance Leases Receivable
Finance Leases Receivable | 3 Months Ended |
Mar. 31, 2016 | |
Finance Leases Receivable [Abstract] | |
Finance Leases Receivable | 2. In January 2016, one of the Company's aircraft that was subject to a sales-type finance lease was sold to the lessee pursuant to a purchase option and recorded a gain of $5,400. During the first quarter of 2015, the Company leased a turboprop aircraft pursuant to a finance lease and recorded a gain of $1,401,900. At March 31, 2016 and December 31, 2015, the net investment included in sales-type finance leases receivable were as follows: March 31 2016 December 31 2015 Gross minimum lease payments receivable $ 12,316,900 $ 14,074,500 Less unearned interest (1,918,000 ) (2,178,900 ) Finance leases receivable $ 10,398,900 $ 11,895,600 As of March 31, 2016, future minimum lease payments receivable under sales-type finance leases were as follows: Years ending Remainder of 2016 $ 1,994,200 2017 2,102,100 2018 1,899,600 2019 3,175,600 2020 963,600 Thereafter 2,181,800 $ 12,316,900 |
Aircraft and Aircraft Engines H
Aircraft and Aircraft Engines Held for Lease or Sale | 3 Months Ended |
Mar. 31, 2016 | |
Aircraft and Aircraft Engines Held for Lease or Sale [Abstract] | |
Aircraft and Aircraft Engines Held for Lease or Sale | 3. (a) At March 31, 2016 and December 31, 2015, the Company's aircraft and aircraft engines held for lease consisted of the following: March 31, 2016 December 31, 2015 Type Number owned % of net book value Number owned % of net book value Turboprop aircraft 16 45 % 16 45 % Regional jet aircraft 8 49 % 8 49 % Engines 5 6 % 5 6 % During the first quarter of 2016, the Company used no cash for asset acquisitions. During the first quarter of 2015, the Company During the first quarter of 2016, the Company repossessed three aircraft that had been on lease to an operator in Asia, and for which the Company had been accounting for lease revenue on a cash basis. During the quarter, the Company extended the leases for four of its assets. Nine of the Company's assets held for lease, comprised of six turboprop aircraft and three engines, were off lease at March 31, 2016, representing 7% of the net book value of the Company's aircraft and engines held for lease. As discussed in Note 8, in April 2016, one of the Company's turboprop aircraft was involved in an accident and was declared a total loss by the lessee's insurer. As of March 31, 2016, minimum future lease revenue payments receivable under noncancelable operating leases were as follows. Such amounts exclude lease revenue related to the Company's aircraft that was declared a total loss in April 2016, discussed above and in Note 8. Years ending Remainder of 2016 $ 19,380,500 2017 14,823,000 2018 12,188,000 2019 11,107,100 2020 10,407,100 Thereafter 14,609,900 $ 82,515,600 (b) During the first quarter of 2016, the Company sold two regional jet aircraft that had been held for sale at December 31, 2015. The Company recorded impairment charges totaling $75,000 for two other regional jet aircraft that were held for sale, based on a reduced sale price. As discussed in Note 8, the Company sold the two aircraft in April 2016. Assets held for sale at March 31, 2016 also included a turboprop aircraft and three turboprop airframes being sold in parts. During the three months ended March 31, 2016 and 2015, the Company received $38,800 and $127,000, respectively, from the sale of parts belonging to two of the airframes, which proceeds reduced their carrying values. |
Notes Payable and Accrued Inter
Notes Payable and Accrued Interest | 3 Months Ended |
Mar. 31, 2016 | |
Notes Payable and Accrued Interest [Abstract] | |
Notes Payable and Accrued Interest | 4. At March 31, 2016 and December 31, 2015, the Company's notes payable and accrued interest consisted of the following: March 31 2016 December 31 2015 Credit Facility principal $ 101,800,000 $ 110,400,000 Unamortized debt issuance costs (2,595,000 ) (2,814,000 ) Credit Facility accrued interest 11,400 35,600 $ 99,216,400 $ 107,621,600 The Company's $150 million Credit Facility is provided by a syndicate of banks and is secured by all of the assets of the Company, including its aircraft and engine portfolio. The Credit Facility, which expires on May 31, 2019, can be expanded to a maximum of $180 million. The Company was in compliance with all covenants under the Credit Facility at March 31, 2016 and December 31, 2015. The unused amount of the Credit Facility was $48,200,000 and $39,600,000 as of March 31, 2016 and December 31, 2015, respectively. The weighted average interest rate on the Credit Facility was 3.79% and 3.80% at March 31, 2016 and 31, 2015, respectively. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Contingencies [Abstract] | |
Contingencies | 5. In the ordinary conduct of the Company's business, the Company is subject to lawsuits, arbitrations and administrative proceedings from time to time. The Company believes that the outcome of any existing or known threatened proceedings, even if determined adversely, should not have a material adverse effect on the Company's business, financial condition, liquidity or results of operations. |
Computation of Earnings Per Sha
Computation of Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Computation of Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | 6. Basic and diluted earnings per share are calculated as follows: For the Three Months Ended March 2016 2015 Net income $ 433,700 $ 752,200 Weighted average shares outstanding for the period 1,566,699 1,543,257 Dilutive effect of warrants - 9,508 Weighted average diluted shares used in calculation of diluted earnings per share 1,566,699 1,552,765 Basic earnings per share $ 0.28 $ 0.49 Diluted earnings per share $ 0.28 $ 0.48 Basic earnings per common share is computed using net income and the weighted average number of common shares outstanding during the period. Diluted earnings per common share are computed using net income and the weighted average number of common shares outstanding, assuming dilution. Weighted average common shares |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7 The Company's portfolio of leased aircraft assets is managed and administered under the terms of a management agreement with JetFleet Management Corp. ("JMC"), which is an integrated aircraft management, marketing and financing business and a subsidiary of JetFleet Holding Corp. ("JHC"). Certain officers of the Company are also officers of JHC and JMC and one such officer also holds a significant ownership position in both JHC and the Company. Under the management agreement, JMC receives a monthly management fee based on the net asset value of the assets under management. JMC also receives an acquisition fee for locating assets for the Company. Acquisition fees are included in the cost basis of the asset purchased. JMC may receive a remarketing fee in connection with the re-lease or sale of the Company's assets. Remarketing fees are amortized over the applicable lease term or included in the gain or loss on sale. Fees incurred during the three months ended March 31, 2016 and 2015 were as follows: For the Three Months Ended March 2016 2015 Management fees $ 1,264,000 $ 1,433,300 Acquisition fees - - Remarketing fees - 199,000 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 8. In April 2016, the Company sold two regional jet aircraft that had been held for sale at March 31, 2016. The aircraft had been written down to their sales prices at March 31, 2016 and, therefore, the Company recorded no gain or loss at the time of sale. In April 2016, one of the Company's turboprop aircraft was involved in an accident and was declared a total loss by the lessee's insurer. The Company anticipates recording a gain upon receipt of insurance proceeds. In May 2016, the Company sold, pursuant to a sales-type finance lease, a turboprop aircraft that the Company had repossessed during the first quarter of 2016 and recorded a gain of approximately $40,000. |
Organization and Summary of S15
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
The Company and Basis of Presentation | (a) AeroCentury Corp. ("the Company"), a Delaware corporation incorporated in 1997, typically acquires used regional aircraft and engines for lease to foreign and domestic regional carriers. The condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2015. |
Use of Estimates | (b) The Company's financial statements have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable for making judgments that are not readily apparent from other sources. The most significant estimates with regard to these financial statements are the residual values and useful lives of the assets, the amount and timing of cash flows associated with each asset that are used to evaluate whether assets are impaired, accrued maintenance costs, accounting for income taxes, and the amounts recorded as allowances for doubtful accounts. |
Fair Value Measurements | (c) Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible. The fair value hierarchy under GAAP is based on three levels of inputs. Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis The carrying amount of the Company's money market funds included in cash and cash equivalents was $1,847,000 and $1,946,600 at March 31, 2016 and December 31, 2015, respectively. The fair value of the Company's money market funds would be categorized as Level 1 under the GAAP fair value hierarchy. As of March 31, 2016 and December 31, 2015, there were no liabilities that were required to be measured and recorded at fair value on a recurring basis. Assets Measured and Recorded at Fair Value on a Nonrecurring Basis The Company determines fair value of long-lived assets held and used, such as aircraft and aircraft engines held for lease and assets held for sale, by reference to independent appraisals, quoted market prices (e.g., offers to purchase) and other factors. An impairment charge is recorded when the Company believes that the carrying value of an asset will not be recovered through future net cash flows and that the asset's carrying value exceeds its fair value. Assets held for lease The Company recorded no impairment charges on its aircraft held for lease during the three months ended March 31, 2016 and 2015. Assets held for sale The Company recorded $75,000 of impairment charges on its aircraft held for sale during the three months ended March 31, 2016, resulting in a carrying value of $1,307,900. The fair value of such assets would be categorized as Level 3 under the GAAP fair value hierarchy. Fair Value of Other Financial Instruments The Company's financial instruments, other than cash and cash equivalents, consist principally of finance leases receivable and amounts borrowed under its credit facility (the "Credit Facility"). The fair value of accounts receivable, finance leases receivable, accounts payable and the Company's maintenance reserves and accrued maintenance costs approximates the carrying value of these financial instruments. Borrowings under the Company's Credit Facility bear floating rates of interest that reset periodically to a market benchmark rate plus a credit margin. The Company believes the effective interest rate under the Credit Facility approximates current market rates for such indebtedness at the balance sheet date, and therefore that the outstanding principal and accrued interest of $101,811,400 and $110,435,600 at March 31, 2016 and December 31, 2015, respectively, approximate its fair value. The fair value of the Company's outstanding balance of its Credit Facility would be categorized as Level 3 under the GAAP fair value hierarchy. |
Finance Leases | (d) The Company has four aircraft finance leases that contain lessee purchase options at prices substantially below the assets' estimated residual values at the exercise date for the option. Consequently, the Company considers the purchase options to be bargain purchase options and has classified the leases as sales-type finance leases for financial accounting purposes. The Company reports the discounted present value of (i) future minimum lease payments (including the bargain purchase option) and (ii) any residual value not subject to a bargain purchase option as a finance lease receivable on its balance sheet and accrues interest on the balance of the finance lease receivable based on the interest rate inherent in the applicable lease over the term of the lease. For sales-type finance leases, the Company recognizes the difference between the net book value of the aircraft and the net investment in sales-type finance leases as a gain or loss, less any initial direct costs and lease incentives. The Company recognized interest earned on finance leases in the amount of $185,100 and $0 in the three months ended March 31, 2016 and 2015, respectively. |
Finance Leases Receivable (Tabl
Finance Leases Receivable (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Finance Leases Receivable [Abstract] | |
Net investment included in sales-type finance leases receivable | At March 31, 2016 and December 31, 2015, the net investment included in sales-type finance leases receivable were as follows: March 31 2016 December 31 2015 Gross minimum lease payments receivable $ 12,316,900 $ 14,074,500 Less unearned interest (1,918,000 ) (2,178,900 ) Finance leases receivable $ 10,398,900 $ 11,895,600 |
Minimum future lease revenue payments receivable under sales-type finance leases | As of March 31, 2016, future minimum lease payments receivable under sales-type finance leases were as follows: Years ending Remainder of 2016 $ 1,994,200 2017 2,102,100 2018 1,899,600 2019 3,175,600 2020 963,600 Thereafter 2,181,800 $ 12,316,900 |
Aircraft and Aircraft Engines17
Aircraft and Aircraft Engines Held for Lease or Sale (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Aircraft and Aircraft Engines Held for Lease or Sale [Abstract] | |
Aircraft and aircraft engines held for lease | At March 31, 2016 and December 31, 2015, the Company's aircraft and aircraft engines held for lease consisted of the following: March 31, 2016 December 31, 2015 Type Number owned % of net book value Number owned % of net book value Turboprop aircraft 16 45 % 16 45 % Regional jet aircraft 8 49 % 8 49 % Engines 5 6 % 5 6 % |
Minimum future lease revenue payments receivable under noncancelable operating eases | As of March 31, 2016, minimum future lease revenue payments receivable under noncancelable operating leases were as follows. Such amounts exclude lease revenue related to the Company's aircraft that was declared a total loss in April 2016, discussed above and in Note 8. Years ending Remainder of 2016 $ 19,380,500 2017 14,823,000 2018 12,188,000 2019 11,107,100 2020 10,407,100 Thereafter 14,609,900 $ 82,515,600 |
Notes Payable and Accrued Int18
Notes Payable and Accrued Interest (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Notes Payable and Accrued Interest [Abstract] | |
Notes payable and accrued interest | At March 31, 2016 and December 31, 2015, the Company's notes payable and accrued interest consisted of the following: March 31 2016 December 31 2015 Credit Facility principal $ 101,800,000 $ 110,400,000 Unamortized debt issuance costs (2,595,000 ) (2,814,000 ) Credit Facility accrued interest 11,400 35,600 $ 99,216,400 $ 107,621,600 |
Computation of Earnings Per S19
Computation of Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Computation of Earnings Per Share [Abstract] | |
Computation of earnings per share | Basic and diluted earnings per share are calculated as follows: For the Three Months Ended March 2016 2015 Net income $ 433,700 $ 752,200 Weighted average shares outstanding for the period 1,566,699 1,543,257 Dilutive effect of warrants - 9,508 Weighted average diluted shares used in calculation of diluted earnings per share 1,566,699 1,552,765 Basic earnings per share $ 0.28 $ 0.49 Diluted earnings per share $ 0.28 $ 0.48 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related party fees | Fees incurred during the three months ended March 31, 2016 and 2015 were as follows: For the Three Months Ended March 2016 2015 Management fees $ 1,264,000 $ 1,433,300 Acquisition fees - - Remarketing fees - 199,000 |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($)Aircraft | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Property Subject to or Available for Operating Lease [Line Items] | |||
Impairment charge | $ 75,000 | $ 0 | |
Notes payable and accrued interest | $ 99,216,400 | $ 107,621,600 | |
Finance Leases [Abstract] | |||
Number of aircraft with finance leases that contain lessee purchase options | Aircraft | 4 | ||
Interest earned on finance lease | $ 185,100 | 0 | |
Credit Facility [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Notes payable and accrued interest | 101,811,400 | 110,435,600 | |
Held for Sale [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Impairment charge | 75,000 | ||
Recurring [Member] | |||
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis [Abstract] | |||
Money market funds included in cash and cash equivalents | 1,847,000 | 1,946,600 | |
Liabilities recorded at fair value | 0 | $ 0 | |
Aircraft [Member] | Held for Lease [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Impairment charge | 0 | $ 0 | |
Aircraft [Member] | Held for Sale [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
Impairment charge | 75,000 | ||
Fair value of assets | $ 1,307,900 |
Finance Leases Receivable (Deta
Finance Leases Receivable (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Finance Leases Receivable [Abstract] | |||
Net gain on disposal of assets | $ 5,400 | $ 460,000 | |
Net gain on sales-type finance leases | 0 | $ 1,401,900 | |
Net Investment [Abstract] | |||
Gross minimum lease payments receivable | 12,316,900 | $ 14,074,500 | |
Less unearned interest | (1,918,000) | (2,178,900) | |
Finance leases receivable | 10,398,900 | 11,895,600 | |
Minimum Future Lease Revenue Payments [Abstract] | |||
Remainder of 2016 | 1,994,200 | ||
2,017 | 2,102,100 | ||
2,018 | 1,899,600 | ||
2,019 | 3,175,600 | ||
2,020 | 963,600 | ||
Thereafter | 2,181,800 | ||
Total | $ 12,316,900 | $ 14,074,500 |
Aircraft and Aircraft Engines23
Aircraft and Aircraft Engines Held for Lease or Sale (Details) | Apr. 30, 2016Aircraft | Mar. 31, 2016USD ($)AircraftAssetLease | Mar. 31, 2015USD ($) | Dec. 31, 2015Aircraft |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Remainder of 2016 | $ 19,380,500 | |||
2,017 | 14,823,000 | |||
2,018 | 12,188,000 | |||
2,019 | 11,107,100 | |||
2,020 | 10,407,100 | |||
Thereafter | 14,609,900 | |||
Total | 82,515,600 | |||
Asset impairment charge | 75,000 | $ 0 | ||
Proceeds from the sale of airframe parts | $ 1,755,900 | 1,687,000 | ||
Held for Lease [Member] | ||||
Aircraft and aircraft engines held for lease or sale [Abstract] | ||||
Percentage of net book value | 7.00% | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Payment for equipment and acquisition costs related to aircraft purchased | $ 1,309,800 | |||
Number of aircraft repossessed | Asset | 3 | |||
Number of assets lease term extended | Lease | 4 | |||
Number of off leased assets leased | Asset | 9 | |||
Percentage of net book value | 7.00% | |||
Held for Sale [Member] | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Asset impairment charge | $ 75,000 | |||
Proceeds from the sale of airframe parts | $ 38,800 | $ 127,000 | ||
Turboprop Aircraft [Member] | ||||
Aircraft and aircraft engines held for lease or sale [Abstract] | ||||
Number owned | Aircraft | 16 | 16 | ||
Percentage of net book value | 45.00% | 45.00% | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Percentage of net book value | 45.00% | 45.00% | ||
Turboprop Aircraft [Member] | Held for Lease [Member] | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Number of off leased assets leased | Asset | 6 | |||
Turboprop Airframe [Member] | Held for Sale [Member] | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Number of aircraft sold | Aircraft | 2 | |||
Number of aircraft held for sale | Aircraft | 3 | |||
Regional Jet Aircraft [Member] | ||||
Aircraft and aircraft engines held for lease or sale [Abstract] | ||||
Number owned | Aircraft | 8 | 8 | ||
Percentage of net book value | 49.00% | 49.00% | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Percentage of net book value | 49.00% | 49.00% | ||
Number of aircraft sold | Aircraft | 2 | |||
Regional Jet Aircraft [Member] | Subsequent Event [Member] | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Number of aircraft sold | Aircraft | 2 | |||
Other Regional Jet Aircraft [Member] | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Number of aircraft held for sale | Aircraft | 2 | |||
Engines [Member] | ||||
Aircraft and aircraft engines held for lease or sale [Abstract] | ||||
Number owned | Aircraft | 5 | 5 | ||
Percentage of net book value | 6.00% | 6.00% | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Percentage of net book value | 6.00% | 6.00% | ||
Engines [Member] | Held for Lease [Member] | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Number of off leased assets leased | Asset | 3 |
Notes Payable and Accrued Int24
Notes Payable and Accrued Interest (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Notes Payable and Accrued Interest [Abstract] | ||
Unamortized debt issuance costs | $ (2,595,000) | $ (2,814,000) |
Notes payable and accrued interest | 99,216,400 | 107,621,600 |
Credit Facility [Member] | ||
Notes Payable and Accrued Interest [Abstract] | ||
Credit Facility principal | 101,800,000 | 110,400,000 |
Unamortized debt issuance costs | (2,595,000) | (2,814,000) |
Credit Facility accrued interest | 11,400 | 35,600 |
Notes payable and accrued interest | 99,216,400 | 107,621,600 |
Credit Facility [Abstract] | ||
Credit facility maximum borrowing capacity | 150,000,000 | |
Credit facility potential maximum borrowing capacity | 180,000,000 | |
Unused amount of the credit facility | $ 48,200,000 | $ 39,600,000 |
Weighted average interest rate on credit facility | 3.79% | 3.80% |
Computation of Earnings Per S25
Computation of Earnings Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Basic and diluted earning/loss per share [Abstract] | ||
Net income | $ 433,700 | $ 752,200 |
Weighted average shares outstanding for the period (in shares) | 1,566,699 | 1,543,257 |
Dilutive effect of warrants (in shares) | 0 | 9,508 |
Weighted average diluted shares used in calculation of diluted earnings per share (in shares) | 1,566,699 | 1,552,765 |
Basic earnings per share (in dollars per share) | $ 0.28 | $ 0.49 |
Diluted earnings per share (in dollars per share) | $ 0.28 | $ 0.48 |
Potentially outstanding shares was not included in the calculation of diluted loss per share (in shares) | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Management fees | $ 1,264,000 | $ 1,433,300 |
Jet Fleet Management Corp. [Member] | ||
Related Party Transaction [Line Items] | ||
Management fees | 1,264,000 | 1,433,300 |
Acquisition fees | 0 | 0 |
Remarketing fees | $ 0 | $ 199,000 |
Subsequent Events (Details)
Subsequent Events (Details) | May. 12, 2016USD ($) | Apr. 30, 2016Aircraft | Mar. 31, 2016Aircraft |
Regional Jet Aircraft [Member] | |||
Subsequent Event [Line Items] | |||
Number of aircraft sold | 2 | ||
Subsequent Event [Member] | Turboprop Aircraft [Member] | |||
Subsequent Event [Line Items] | |||
Gain on sale of asset | $ | $ 40,000 | ||
Subsequent Event [Member] | Regional Jet Aircraft [Member] | |||
Subsequent Event [Line Items] | |||
Number of aircraft sold | 2 |