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ACQUISITION OF LOCKHEED MARTIN COMMERCIAL ENGINE SOLUTIONS
 9 Months Ended
Sep. 30, 2024
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 a total cash 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 Maintenance, Repair, and Exchange 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 engines. See Note 13 for additional information. The results of operations at LMCES have been included in the Consolidated Statements of Operations as of the effective date of the acquisition. In connection with the acquisition, we recorded $4.8 million and $5.2 million of acquisition and transaction expense during the three and nine months ended September 30, 2024, respectively.
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 management’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 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 allocations to intangible assets, including goodwill; (iv) changes due to net working capital adjustments; (v) changes due to deferred taxes and (vi) 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:
Accounts receivable$12,273 
Property, plant, and equipment71,376 
Leasing equipment5,675 
Inventory47,445 
Other assets (1)
12,804 
Total assets149,573 
Fair value of liabilities assumed:
Accounts payable and accrued liabilities9,847 
Other liabilities22,996 
Total liabilities32,843 
Goodwill (2)
26,904 
Net assets acquired (3)
$143,634 
________________________________________________________
(1) Acquired Other assets include a favorable off-market lease component with an estimated fair value of $2,340.
(2) 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.
(3) 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
$40,602 
Machinery and equipment
2 - 21
29,973 
Other N/A801 
Total$71,376 
The results of operations for the acquired business are included in the accompanying Consolidated Statements of Operations from the acquisition date.
The following table presents supplemental pro-forma information as if the acquisitions had occurred at the beginning of fiscal year 2023. The pro-forma information does not necessarily reflect the results of operations that would have occurred had the acquisitions had taken place as of January 1, 2023. Cost savings are also not reflected in the pro-forma amounts presented below.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Total revenue$479,277 $315,666 $1,283,520 $929,297 
Net income (loss) attributable to shareholders$83,727 $34,753 $(122,542)$89,716 
4. ACQUISITION OF QUICKTURN
On December 1, 2023, we completed the acquisition of the remaining equity interest of Quick Turn Engine Center LLC (“QuickTurn”) from Unical Aviation Inc. (“Unical”) for total cash consideration of $30.3 million to obtain full ownership.
We acquired QuickTurn to better position the Company to have tighter integration over the development and delivery of aerospace products. QuickTurn is a hospital maintenance and testing facility dedicated to the CFM56 engine located in Miami, Florida that operates within our Aerospace Products segment. The results of operations at QuickTurn have been included in the Consolidated Statements of Operations beginning on the acquisition date.
The acquisition of QuickTurn was accounted for as a business combination and, as such, the following fair values were assigned to assets acquired and liabilities assumed based on management’s estimates and assumptions and are preliminary. The significant assumptions used to estimate the fair value of the property, plant, and equipment included replacement cost estimates and market data for similar assets where available. The significant assumptions used to estimate the value of the customer relationship intangible assets included the discount rate and future revenues and operating expenses. The 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 adjustment may be materially different and may include changes in fair values of Inventory.
The following table summarizes the preliminary allocation of the net assets acquired:
December 1, 2023
Fair value of assets acquired:
Cash and cash equivalents$518 
Restricted cash150 
Accounts receivable5,133 
Property, plant, and equipment30,559 
Intangible assets2,377 
Inventory9,332 
Other assets4,301 
Total assets52,370 
Fair value of liabilities assumed:
Accounts payable and accrued liabilities3,994 
Other liabilities2,410 
Total liabilities6,404 
Goodwill (1)
4,630 
Net assets acquired $50,596 
________________________________________________________
(1) Goodwill is primarily attributable to the assembled workforce of QuickTurn and the synergies expected to be achieved. This goodwill is assigned to the Aerospace Products segment and is deductible for income tax purposes.

The following table presents the identifiable intangible assets and their estimated useful lives:
Estimated useful life in yearsEstimated Fair value
Above market leases4$470 
Customer relationships5$1,907 
Total$2,377 
The following table presents the property, plant and equipment and their estimated useful lives:
Estimated useful life in yearsEstimated Fair value
Land
N/A
$2,840 
Buildings and improvements2513,790 
Machinery and equipment
6 - 23
13,631 
Other
5 - 7
298 
Total$30,559 
The financial information in the table below summarizes the combined results of operations of FTAI and QuickTurn 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 and intangible assets acquired;
•Associated tax-related impacts of adjustments.
The following 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, 2023.
Three Months Ended Nine Months Ended
September 30, 2023September 30, 2023
Total revenue$296,480 $875,066 
Net income attributable to shareholders$31,350 $97,633