XML 20 R9.htm IDEA: XBRL DOCUMENT

Note B - Goodwill, Intangibles and Equity Investments

6 Months Ended

Jun. 30, 2024

Goodwill, Intangible Assets and Equity Investments [Text Block]

NOTE B—GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS

The carrying amounts of goodwill by reportable segment were as follows (in thousands):

	*CAM*		*ACMI Services*		*All Other*		*Total*
Carrying value as of December 31, 2023	$	153,290	$	234,571	$	8,113	$	395,974
Carrying value as of June 30, 2024	$	153,290	$	234,571	$	8,113	$	395,974

The Company’s acquired intangible assets were as follows (in thousands):

	*Airline*		*Amortizing*
	*Certificates*		*Intangibles*			*Total*
Carrying value as of December 31, 2023	$	9,000	$	77,453		$	86,453
Amortization		—		(5,107	)		(5,107	)
Carrying value as of June 30, 2024	$	9,000	$	72,346		$	81,346

The airline certificates have an indefinite life and therefore are not amortized. The Company amortizes finite-lived intangible assets, including customer relationship and Supplemental Type Certificates (“STC”) intangibles, over 2 to 15 remaining years.

Warrants granted to Amazon.com, Inc. (“Amazon”) as an incentive for its subsidiary to lease aircraft from the Company and other warrants granted to Amazon as an incentive to contract for aircraft operations with the Company are reflected as a customer incentive asset. For additional information see Note C to the accompanying unaudited condensed consolidated financial statements. Customer incentive asset activity is summarized as follows (in thousands):

	*Lease*
	*Incentive*
Carrying value as of December 31, 2023	$	60,961
Amortization		(10,244	)
Warrants modified for operating incentive		66,820
Grants for lease incentive		18,184
Grants for operating incentive		5,043
Carrying value as of June 30, 2024	$	140,764

The amortization of the customer incentive asset is reflected as a reduction to revenues. In addition to the incentive amortization, revenue is also reduced to reflect the value of warrants recorded in paid in capital as they vest. See the statement of equity for more information.

The Company has a 49% ownership in a joint-venture agreement with Precision Aircraft Solutions, LLC, to develop a passenger-to-freighter conversion program for Airbus A321-200 aircraft. In April 2022, the Company acquired a 40% ownership interest in the joint-venture company GA Telesis Engine Services, LLC to provide engine tear-down services to harvest and sell engine parts. The Company accounts for its investment in these joint ventures under the equity method of accounting, in which the carrying value of each investment is reduced for the Company’s share of the non-consolidated affiliates’ operating results.

The carrying value of the joint ventures totaled $31.2 million and $22.7 million at June 30, 2024 and December 31, 2023, respectively, and are reflected in “Other Assets” in the Company’s consolidated balance sheets. The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis in accordance with GAAP. If the Company determines that an other-than-temporary decline in value has occurred, it recognizes an impairment loss, which is measured as the difference between the recorded carrying value and the fair value of the investment. The fair value is generally determined using an income approach based on discounted cash flows or using negotiated transaction values.