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ACQUISITION OF LOCKHEED MARTIN COMMERCIAL ENGINE SOLUTIONS
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITION OF LOCKHEED MARTIN COMMERCIAL ENGINE SOLUTIONS
3. ACQUISITION OF LOCKHEED MARTIN COMMERCIAL ENGINE SOLUTIONS
On September 9, 2024, the Company, through its subsidiary FTAIC Aviation Inc. (“FTAIC”) created on April 25, 2024, acquired certain assets and assumed certain liabilities of Lockheed Martin Commercial Engine Solutions (“LMCES”) from Lockheed Martin Canada for total consideration of $170.0 million. LMCES is a 526,000-square-foot aircraft engine maintenance repair facility located in Montréal, Quebec. We acquired LMCES to further enhance our MRE business and establish permanent engine and module manufacturing capabilities in Canada. The facility operates within our Aerospace Products segment, providing extensive engine and piece-part repair capabilities for the CFM56-5B and CFM56-7B engines. The results of operations of LMCES have been included in the Company’s results since the effective date of the acquisition.
The acquisition of LMCES was accounted for as a business combination and, as such, the following fair values were assigned to assets acquired and liabilities assumed based on the Company’s estimates and assumptions and are preliminary. The significant assumptions used to estimate the fair values of the property, plant, and equipment and inventory included replacement cost estimates and market data for similar assets where available. The consideration paid and final valuation and related allocation of the purchase price is subject to change as additional information is received and will be completed no later than 12 months after the closing date. The final acquisition accounting adjustments may be materially different and may include (i) changes in fair values of property, plant and equipment and associated salvage values; (ii) changes in fair values of inventory; (iii) changes in goodwill; (iv) changes due to net working capital adjustments; and (v) changes to other assets and other liabilities.
The following table summarizes the preliminary allocation of the net assets acquired:
September 9, 2024
Fair value of assets acquired:
Current Assets
Accounts receivable$10,758 
Inventory25,947 
Other current assets6,795 
Total current assets43,500 
Property, plant, and equipment72,414 
Leasing equipment5,675 
Other non-current assets10,270 
Total assets131,859 
Fair value of liabilities assumed:
Current Liabilities
Accounts payable7,669 
Accrued liabilities1,692 
Other current liabilities5,130 
Total current liabilities14,491 
Other non-current liabilities 14,347 
Total liabilities28,838 
Goodwill (1)
56,476 
Net assets acquired (2)
$159,497 
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(1) Goodwill is primarily attributable to the assembled workforce of FTAIC and the synergies expected to be achieved. This goodwill is assigned to the Aerospace Products segment and is deductible for income tax purposes.
(2) Total consideration is calculated as cash paid, adjusted for the settlement of pre-existing relationships. Cash consideration is also preliminary, as it is subject to net working capital adjustments.
The following table presents preliminary fair values of the components of property, plant and equipment acquired and their estimated useful lives:
Estimated useful life in yearsEstimated Fair value
Buildings and improvements
25
$40,953 
Machinery and equipment
2 - 21
30,660 
Other N/A801 
Total$72,414 
The unaudited financial information in the table below summarizes the combined results of operations of FTAI and LMCES on a pro forma basis. These pro forma results were based on estimates and assumptions which we believe are reasonable. The pro forma adjustments are primarily comprised of the following:
•The allocation of the purchase price and related adjustments, including adjustments to depreciation and amortization expense related to the fair value of property, plant and equipment;
•Associated tax-related impacts of adjustments.
The following unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2024.
Three Months Ended March 31, 2024
Total revenue$338,276 
Net income attributable to shareholders$32,102