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Segment Information | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Segment Information | NOTE 24: SEGMENT INFORMATION The Company’s CODM is the Company’s Chief Executive Officer. Consistent with how the Company evaluates its performance and the way the Company is organized internally; the Company reports its activities in two segments: Engine Services and Component Repair Services. The CODM regularly uses the below financial measures to allocate financial and human resources to individual segments and evaluate segment performance. The CODM also uses these measures in the annual budget and quarterly forecasting processes. The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. The Company's CODM is regularly provided and evaluates the performance of our segments based on segment Revenue and segment Adjusted EBITDA. Management believes segment Adjusted EBITDA is indicative of operational performance and ongoing profitability and is used to evaluate the operating performance of the Company’s segments and for planning and forecasting purposes, including the allocation of resources and capital. The Company defines Segment Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization directly attributable to each operating segment and adjusted for certain non-cash items that the Company may record each period, as well as non-recurring items such as acquisition costs, integration and severance costs, refinance fees, business transformation costs and other discrete expenses, when applicable. Expense information is provided to and reviewed by the CODM on a consolidated basis to evaluate cost efficiency and company level performance. The Company’s Engine Services segment provides a full suite of aftermarket services, including maintenance, repair and overhaul, on-wing and field service support, asset management, and engineering and related solutions to customers in the commercial aerospace, military & helicopter, and business aviation end markets. Revenue in the Engine Services segment is primarily derived from the repair and overhaul of a wide variety of gas turbine engines and auxiliary power units that power fixed and rotary wing aircraft. The Company also provides complementary maintenance, repair, upgrade and other related services for airframes and avionics systems in the business aviation and helicopter end markets. Cost of revenue consists primarily of cost of materials, direct labor and overhead. The Company’s Component Repair Services segment provides engine component and accessory repairs to the Commercial Aerospace, Military & Helicopter, and Other, including land and marine, and oil and gas end markets. Revenue in the Component Repair Services segment is derived from the engine piece part and accessory repairs that we perform, repair development engineering and other related services, and some engine new part manufacturing. Cost of revenue consists primarily of cost of materials, direct labor and overhead. Our segment disclosure includes intersegment revenues, which primarily consist of subcontract services between segments. The revenue and corresponding cost of revenue are eliminated on consolidation. The elimination of such intersegment transactions is included within intersegment revenue in the table below. The revenue is eliminated with the segment receiving the subcontract services. The segment providing services retains revenue while the segment receiving the services records the elimination. The Company does not report total assets by segment for internal or external reporting purposes as the Company's CODM does not assess performance, make strategic decisions or allocate resources based on assets. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (see Note 1, Summary of Significant Accounting Policies). Selected financial information for each segment is as follows:
|  | Year ended December 31, 2024 |
|  | Engine Services |  |  | Component Repair Services |  |  | Total Segments |
|  | (in thousands) |
Revenue from external customers |  | $ | 4,712,468 |  |  | $ | 524,693 |  |  | $ | 5,237,161 |
Intersegment revenue |  |  | (67,729 | ) |  |  | 67,729 |  |  |  | — |
Total segment revenue |  |  | 4,644,739 |  |  |  | 592,422 |  |  |  | 5,237,161 |
Other segment items (1) |  |  | 4,033,833 |  |  |  | 437,688 |  |  |  | 4,471,521 |
Segment Adjusted EBITDA |  | $ | 610,906 |  |  | $ | 154,734 |  |  | $ | 765,640 |
Corporate (2) |  |  |  |  |  |  |  |  | 75,108 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 188,164 |
Interest expense |  |  |  |  |  |  |  |  | 282,507 |
Business transformation costs (LEAP and CFM) (6) |  |  |  |  |  |  |  |  | 43,238 |
IPO-related costs |  |  |  |  |  |  |  |  | 26,909 |
Refinancing costs |  |  |  |  |  |  |  |  | 23,700 |
Loss on debt extinguishment |  |  |  |  |  |  |  |  | 15,255 |
Stock compensation (4) |  |  |  |  |  |  |  |  | 17,376 |
Integration costs and severance (3) |  |  |  |  |  |  |  |  | 2,782 |
Acquisition costs (5) |  |  |  |  |  |  |  |  | 1,374 |
Other (7) |  |  |  |  |  |  |  |  | 7,470 |
Profit before tax |  |  |  |  |  |  |  | $ | 81,757 |
(1) Other segment items for each reportable segment primarily includes cost of sales and other selling general and administrative expenses. (2) Corporate primarily consists of costs related to executive and staff functions, including Information Technology, Human Resources, Legal, Finance, Marketing, Corporate Supply Chain and Corporate Engineering Services finance, which benefit the enterprise as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of programs, policies, and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. The Corporate function also includes expenses associated with the Company's debt. (3) Represents integration costs incurred, including any facility or platform consolidation associated with the integration of an acquisition that does not meet capitalization criteria and severance related to reduction in workforce or acquisitions. Examples of integration costs may include lease breakage or run-off fees, consulting costs, demolition costs or training costs. (4) Represents non-cash stock compensation expense associated with awards issued under 2019 Long-Term Incentive Plan in connection with Carlyle’s ownership. Because those awards do not vest until a liquidity event, the Company did not begin recognizing any associated stock compensation expense until the Company’s IPO on October 2, 2024, when a liquidity event became probable.” See Note 19, “Stock Based Compensation”. (5) Represents transaction costs incurred in connection with planned and completed acquisitions, including legal and professional fees, debt arrangement fees and other third-party costs. (6) Represents new product industrialization costs with the business transformation of the LEAP 1A/1B engine line in San Antonio, Texas and the expansion of our CFM56 capabilities into Dallas, Texas. (7) Represents quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions, that are the result of other, non-comparable events to measure operating performance as these events arise outside of our ordinary course of continuing operations. See Note 17, "Related Party Transactions" for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc.
|  | Year ended December 31, 2023 |
|  | Engine Services |  |  | Component Repair Services |  |  | Total Segments |
|  | (in thousands) |
Revenue from external customers |  | $ | 4,097,621 |  |  | $ | 465,663 |  |  | $ | 4,563,284 |
Intersegment revenue |  |  | (47,753 | ) |  |  | 47,753 |  |  |  | — |
Total segment revenue |  |  | 4,049,868 |  |  |  | 513,416 |  |  |  | 4,563,284 |
Other segment items (1) |  |  | 3,530,757 |  |  |  | 388,108 |  |  |  | 3,918,865 |
Segment Adjusted EBITDA |  | $ | 519,111 |  |  | $ | 125,308 |  |  | $ | 644,419 |
Corporate (2) |  |  |  |  |  |  |  |  | 83,301 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 197,104 |
Interest expense |  |  |  |  |  |  |  |  | 309,645 |
Business transformation costs (LEAP and CFM) (5) |  |  |  |  |  |  |  |  | 11,363 |
Refinancing costs |  |  |  |  |  |  |  |  | 19,921 |
Loss on debt extinguishment |  |  |  |  |  |  |  |  | 6,182 |
Integration costs and severance (3) |  |  |  |  |  |  |  |  | 1,374 |
Acquisition costs (4) |  |  |  |  |  |  |  |  | 1,514 |
Other (6) |  |  |  |  |  |  |  |  | 8,896 |
Profit before tax |  |  |  |  |  |  |  | $ | 5,119 |
(1) Other segment items for each reportable segment primarily includes cost of sales and other selling general and administrative expenses. (2) Corporate primarily consists of costs related to executive and staff functions, including Information Technology, Human Resources, Legal, Finance, Marketing, Corporate Supply Chain and Corporate Engineering Services finance, which benefit the enterprise as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of programs, policies, and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. The Corporate function also includes expenses associated with the Company's debt. (3) Represents integration costs incurred, including any facility or platform consolidation associated with the integration of an acquisition that does not meet capitalization criteria and severance related to reduction in workforce or acquisitions. Examples of integration costs may include lease breakage or run-off fees, consulting costs, demolition costs or training costs. (4) Represents transaction costs incurred in connection with planned and completed acquisitions, including legal and professional fees, debt arrangement fees and other third-party costs. (5) Represents new product industrialization costs with the business transformation of the LEAP 1A/1B engine line in San Antonio, Texas and the expansion of our CFM56 capabilities into Dallas, Texas. (6) Represents quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions, that are the result of other, non-comparable events to measure operating performance as these events arise outside of our ordinary course of continuing operations. See Note 17, "Related Party Transactions" for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc.
|  | Year ended December 31, 2022 |
|  | Engine Services |  |  | Component Repair Services |  |  | Total Segments |
|  | (in thousands) |
Revenue from external customers |  | $ | 3,765,744 |  |  | $ | 384,734 |  |  | $ | 4,150,478 |
Intersegment revenue |  |  | (42,431 | ) |  |  | 42,431 |  |  |  | — |
Total segment revenue |  |  | 3,723,313 |  |  |  | 427,165 |  |  |  | 4,150,478 |
Other segment items (1) |  |  | 3,275,628 |  |  |  | 330,488 |  |  |  | 3,606,116 |
Segment Adjusted EBITDA |  | $ | 447,685 |  |  | $ | 96,677 |  |  | $ | 544,362 |
Corporate (2) |  |  |  |  |  |  |  |  | 68,931 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 195,223 |
Interest expense |  |  |  |  |  |  |  |  | 242,987 |
Integration costs and severance (3) |  |  |  |  |  |  |  |  | 4,717 |
Acqusition costs (4) |  |  |  |  |  |  |  |  | 1,282 |
Other (5) |  |  |  |  |  |  |  |  | 9,226 |
Profit before tax |  |  |  |  |  |  |  | $ | 21,996 |
(1) Other segment items for each reportable segment primarily includes cost of sales and other selling general and administrative expenses. (2) Corporate primarily consists of costs related to executive and staff functions, including Information Technology, Human Resources, Legal, Finance, Marketing, Corporate Supply Chain and Corporate Engineering Services finance, which benefit the enterprise as a whole. These costs are primarily related to the general management of these functions on a corporate level and the design and development of programs, policies, and procedures that are then implemented in the individual segments, with each segment bearing its own cost of implementation. The Corporate function also includes expenses associated with the Company's debt. (3) Represents integration costs incurred, including any facility or platform consolidation associated with the integration of an acquisition that does not meet capitalization criteria and severance related to reduction in workforce or acquisitions. Examples of integration costs may include lease breakage or run-off fees, consulting costs, demolition costs or training costs. (4) Represents transaction costs incurred in connection with planned and completed acquisitions, including legal and professional fees, debt arrangement fees and other third-party costs. (5) Represents quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions, that are the result of other, non-comparable events to measure operating performance as these events arise outside of our ordinary course of continuing operations. See Note 17, "Related Party Transactions" for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc. The following table presents revenues from external customers by geographic area based on location of the customer:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in thousands) |
United States |  | $ | 3,073,521 |  |  | $ | 2,862,358 |  |  | $ | 2,467,871 |
United Kingdom |  |  | 604,292 |  |  |  | 453,886 |  |  |  | 528,620 |
Canada |  |  | 591,232 |  |  |  | 372,578 |  |  |  | 434,714 |
Rest of Europe (1) |  |  | 402,111 |  |  |  | 360,258 |  |  |  | 292,300 |
Asia (1) |  |  | 233,738 |  |  |  | 209,736 |  |  |  | 184,301 |
Rest of the world (1) |  |  | 332,267 |  |  |  | 304,468 |  |  |  | 242,672 |
Total revenue |  | $ | 5,237,161 |  |  | $ | 4,563,284 |  |  | $ | 4,150,478 |
(1) Countries grouped within Rest of Europe, Asia, and Rest of world are individually immaterial as compared to total revenue with no country representing more than 3% of total revenue for the years ended December 31, 2024, 2023, and 2022. The following table presents long-lived assets by geographic area:
|  | As of December 31, |
|  | 2024 |  |  | 2023 |
|  | (in thousands) |
United States |  | $ | 418,990 |  |  | $ | 356,098 |
Canada |  |  | 160,883 |  |  |  | 172,994 |
United Kingdom |  |  | 107,659 |  |  |  | 108,879 |
France |  |  | 17,625 |  |  |  | 18,512 |
Singapore |  |  | 14,758 |  |  |  | 16,370 |
Rest of the world |  |  | 20,898 |  |  |  | 17,829 |
Total long-lived assets |  | $ | 740,813 |  |  | $ | 690,682 |

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