Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 27, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document period end date | Jun. 30, 2015 | |
Amendment flag | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 | |
Current fiscal year end date | --12-31 | |
Entity central index key | 1,135,185 | |
Entity current reporting status | Yes | |
Entity filer category | Large Accelerated Filer | |
Entity registrant name | ATLAS AIR WORLDWIDE HOLDINGS INC | |
Entity trading symbol | AAWW | |
Entity voluntary filers | No | |
Entity well known seasoned issuer | Yes | |
Entity common stock shares outstanding | 25,052,851 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 514,750 | $ 298,601 |
Short-term investments | 24,373 | 17,802 |
Restricted cash | 15,731 | 14,281 |
Accounts receivable, net of allowance | 152,906 | 162,092 |
Prepaid maintenance | 15,589 | 20,806 |
Deferred taxes | 41,862 | 40,923 |
Prepaid expenses and other current assets | 31,313 | 51,599 |
Total current assets | 796,524 | 606,104 |
Property and Equipment | ||
Flight equipment | 3,489,587 | 3,448,791 |
Ground equipment | 55,227 | 51,418 |
Less: accumulated depreciation | (400,368) | (348,036) |
Purchase deposits for flight equipment | 58,820 | 20,054 |
Property and equipment, net | 3,203,266 | 3,172,227 |
Other Assets | ||
Long-term investments and accrued interest | 106,951 | 120,478 |
Deposits and other assets | 77,337 | 80,258 |
Intangible assets, net | 62,918 | 67,410 |
Total Assets | 4,246,996 | 4,046,477 |
Current Liabilities | ||
Accounts payable | 39,274 | 42,864 |
Accrued liabilities | 261,342 | 251,594 |
Current portion of long-term debt | 180,902 | 181,202 |
Total current liabilities | 481,518 | 475,660 |
Other Liabilities | ||
Long-term debt | 1,812,483 | 1,736,739 |
Deferred taxes | 370,216 | 350,868 |
Other liabilities | 67,442 | 65,415 |
Total other liabilities | 2,250,141 | 2,153,022 |
Commitments and contingencies | 0 | 0 |
Equity | ||
Preferred stock | 0 | 0 |
Common stock | 289 | 286 |
Additional paid-in-capital | 618,911 | 573,133 |
Treasury stock, at cost | (151,636) | (145,322) |
Accumulated other comprehensive loss | (9,119) | (9,572) |
Retained earnings | 1,056,892 | 999,270 |
Total stockholders' equity | 1,515,337 | 1,417,795 |
Total equity | 1,515,337 | 1,417,795 |
Total Liabilities and Equity | $ 4,246,996 | $ 4,046,477 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Allowance for doubtful accounts receivable | $ 1,631 | $ 1,658 |
Consolidated Balance Sheets Sha
Consolidated Balance Sheets Shares (Parentheticals) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Preferred stock par value | $ 1 | $ 1 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 50,000,000 | 50,000,000 |
Common stock shares issued | 28,938,970 | 28,561,160 |
Common stock shares outstanding | 25,050,599 | 24,807,718 |
Treasury stock shares | 3,888,371 | 3,753,442 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Revenue | ||||
ACMI | $ 189,255 | $ 186,720 | $ 378,302 | $ 384,861 |
Charter | 235,436 | 225,234 | 455,574 | 402,607 |
Dry leasing | 27,401 | 25,524 | 59,320 | 50,200 |
Other | 3,741 | 3,691 | 7,482 | 6,864 |
Total Operating Revenue | 455,833 | 441,169 | 900,678 | 844,532 |
Operating Expenses | ||||
Salaries, wages and benefits | 86,862 | 77,948 | 175,635 | 150,803 |
Aircraft fuel | 96,711 | 103,842 | 174,826 | 185,586 |
Maintenance, materials and repairs | 41,438 | 50,386 | 100,270 | 109,432 |
Aircraft rent | 36,811 | 34,826 | 71,072 | 70,236 |
Depreciation and amortization | 31,936 | 30,381 | 63,966 | 58,536 |
Navigation fees, landing fees and other rent | 22,666 | 30,906 | 46,169 | 58,032 |
Travel | 23,830 | 18,774 | 44,643 | 36,056 |
Passenger and ground handling services | 21,353 | 21,859 | 41,316 | 41,230 |
Loss on disposal of aircraft | 114 | 14,679 | 1,323 | 14,679 |
Special charge | 499 | 1,449 | (69) | 9,477 |
Other | 32,329 | 29,462 | 63,273 | 55,678 |
Total Operating Expenses | 394,549 | 414,512 | 782,424 | 789,745 |
Operating Income | 61,284 | 26,657 | 118,254 | 54,787 |
Non-operating Expenses (Income) | ||||
Interest income | (4,425) | (4,719) | (8,913) | (9,446) |
Interest expense | 25,033 | 26,365 | 49,581 | 52,817 |
Capitalized interest | (177) | (67) | (203) | (379) |
Other expense (income), net | (284) | (88) | 391 | 64 |
Total Non-operating Expenses (Income) | 20,147 | 21,491 | 40,856 | 43,056 |
Income before income taxes | 41,137 | 5,166 | 77,398 | 11,731 |
Income tax expense (benefit) | 12,747 | (23,815) | 19,776 | (21,276) |
Net Income | 28,390 | 28,981 | 57,622 | 33,007 |
Less: Net income (loss) attributable to noncontrolling interests | 0 | (612) | 0 | (4,530) |
Net Income Attributable to Common Stockholders | $ 28,390 | $ 29,593 | $ 57,622 | $ 37,537 |
Earnings per share: | ||||
Basic | $ 1.13 | $ 1.17 | $ 2.31 | $ 1.49 |
Diluted | $ 1.13 | $ 1.17 | $ 2.29 | $ 1.49 |
Weighted average shares: | ||||
Basic | 25,029 | 25,241 | 24,953 | 25,169 |
Diluted | 25,198 | 25,279 | 25,135 | 25,215 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other Comprehensive Income (Loss) | ||||
Net Income | $ 28,390 | $ 28,981 | $ 57,622 | $ 33,007 |
Interest rate derivatives: | ||||
Net change in fair value | 0 | 0 | 0 | (251) |
Reclassification to interest expense | 638 | 682 | 1,288 | 1,372 |
Income tax expense | (244) | (261) | (492) | (506) |
Foreign currency translation: | ||||
Translation adjustment | (285) | 191 | (343) | 349 |
Accumulated Postretirement Benefit Obligation: | ||||
Other comprehensive income (loss) | 109 | 612 | 453 | 964 |
Comprehensive Income | 28,499 | 29,593 | 58,075 | 33,971 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0 | (515) | 0 | (4,352) |
Comprehensive Income Attributable to Common Stockholders | $ 28,499 | $ 30,108 | $ 58,075 | $ 38,323 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities: | ||
Net Income | $ 57,622 | $ 33,007 |
Adjustments to reconcile Net Income to net cash provided by operating activities: | ||
Depreciation and amortization | 73,263 | 67,195 |
Accretion of debt securities discount | (3,760) | (4,081) |
Provision for allowance for doubtful accounts | 46 | 232 |
Special charge, net of cash payments | (715) | 7,171 |
Loss on disposal of aircraft | 1,323 | 14,679 |
Deferred taxes | 19,773 | (21,498) |
Stock-based compensation expense | 9,837 | 5,805 |
Changes in: | ||
Accounts receivable | 10,135 | (23,248) |
Prepaid expenses and other current assets | 8,937 | 27,613 |
Deposits and other assets | 1,645 | (4,603) |
Accounts payable and accrued liabilities | (7,009) | 4,854 |
Net cash provided by operating activities | 171,097 | 107,126 |
Investing Activities: | ||
Capital expenditures | (22,117) | (10,653) |
Purchase deposits and delivery payments for flight equipment | (62,841) | (494,072) |
Changes in restricted cash | (1,450) | (6,724) |
Proceeds from short-term investments | 2,394 | 2,060 |
Proceeds from disposal of aircraft | 24,625 | 0 |
Net cash used for investing activities | (59,389) | (509,389) |
Financing Activities: | ||
Proceeds from debt issuance | 224,500 | 572,552 |
Customer maintenance reserves received | 8,701 | 8,757 |
Customer maintenance reserves paid | 1,752 | 0 |
Proceeds from sale of warrants | 36,290 | 0 |
Payments for convertible note hedges | 52,903 | 0 |
Proceeds from stock option exercises | 1,193 | 0 |
Purchase of treasury stock | (6,314) | (4,377) |
Excess tax benefit from stock-based compensation expense | 588 | (1,973) |
Payment of debt issuance costs | (6,812) | (17,087) |
Payments of debt | (99,050) | (201,021) |
Net cash provided by financing activities | 104,441 | 356,851 |
Net increase (decrease) in cash and cash equivalents | 216,149 | (45,412) |
Cash and cash equivalents at the beginning of period | 298,601 | 321,816 |
Cash and cash equivalents at the end of period | 514,750 | 276,404 |
Non-cash Investing and Financing Activities: | ||
Acquisition of flight equipment included in Accounts payable and accrued liabilities | 6,940 | 29,087 |
Disposition of aircraft included in accounts receivable | $ 0 | $ 7,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Stockholders' Equity | Noncontrolling Interest |
Balance at Dec. 31, 2013 | $ 1,322,125 | $ 282 | $ (125,826) | $ 561,481 | $ (10,677) | $ 892,513 | $ 1,317,773 | $ 4,352 |
Net Income (loss) | 33,007 | 0 | 0 | 0 | 0 | 37,537 | 37,537 | (4,530) |
Other comprehensive income (loss) | 964 | 0 | 0 | 0 | 786 | 0 | 786 | 178 |
Stock option and restricted stock compensation | 5,805 | 0 | 0 | 5,805 | 0 | 0 | 5,805 | 0 |
Purchase of shares of treasury stock | (4,377) | 0 | (4,377) | 0 | 0 | 0 | (4,377) | 0 |
Issuance of shares of restricted stock | 0 | 3 | 0 | (3) | 0 | 0 | 0 | 0 |
Tax benefit (expense) on restricted stock and stock options | (1,973) | 0 | 0 | (1,973) | 0 | 0 | (1,973) | 0 |
Balance at Jun. 30, 2014 | 1,355,551 | 285 | (130,203) | 565,310 | (9,891) | 930,050 | 1,355,551 | 0 |
Balance at Dec. 31, 2014 | 1,417,795 | 286 | (145,322) | 573,133 | (9,572) | 999,270 | 1,417,795 | 0 |
Net Income (loss) | 57,622 | 0 | 0 | 0 | 0 | 57,622 | 57,622 | 0 |
Other comprehensive income (loss) | 453 | 0 | 0 | 0 | 453 | 0 | 453 | 0 |
Stock option and restricted stock compensation | 9,837 | 0 | 0 | 9,837 | 0 | 0 | 9,837 | 0 |
Purchase of shares of treasury stock | (6,314) | 0 | (6,314) | 0 | 0 | 0 | (6,314) | 0 |
Exercise of employee stock options | 1,193 | 0 | 0 | 1,193 | 0 | 0 | 1,193 | 0 |
Issuance of shares of restricted stock | 0 | 3 | 0 | (3) | 0 | 0 | 0 | 0 |
Equity component of convertible notes, net of tax | 32,233 | 0 | 0 | 32,233 | 0 | 0 | 32,233 | 0 |
Purchase of convertible note hedges, net of tax | (33,837) | 0 | 0 | (33,837) | 0 | 0 | (33,837) | 0 |
Issuance of warrants | 36,290 | 0 | 0 | 36,290 | 0 | 0 | 36,290 | 0 |
Tax benefit (expense) on restricted stock and stock options | 65 | 0 | 0 | 65 | 0 | 0 | 65 | 0 |
Balance at Jun. 30, 2015 | $ 1,515,337 | $ 289 | $ (151,636) | $ 618,911 | $ (9,119) | $ 1,056,892 | $ 1,515,337 | $ 0 |
Consolidated Statements of Sto9
Consolidated Statements of Stockholders' Equity (Parentheticals) - shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2014 | |
Consolidated Statements of Stockholders Equity | ||
Purchase of shares of treasury stock | 134,929 | 129,430 |
Exercise of employee stock options | 25,373 | |
Issuance of shares of restricted stock | 352,437 | 346,925 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | 1. Basis of Presentation Our consolidated financial statements include the accounts of the holding company, Atlas Air Worldwide Holdings, Inc. (“AAWW”) and its consolidated subsidiaries. AAWW is the parent company of its principal operating subsidiary, Atlas Air, Inc. (“Atlas”), and of Polar Air Cargo LLC (“Old Polar”). AAWW is also the parent company of several subsidiaries related to our dry leasing s ervices (collectively referred to as “Titan”) . The terms “we,” “us,” “our,” and the “Company” mean AAWW and all entities included in its consolidated financial statements. We provide outsourced aircraft and aviation operating services throughout the worl d, serving Africa, Asia, Australia, Europe, the Middle East, North America and South America through: ( i ) contractual service arrangements, including those through which we provide aircraft to customers and value-added services, including crew, maintenance and insurance (“ACMI”), as well as those through which we provide crew, maintenance and insurance, with the customer providing the aircraft (“CMI”); (ii) cargo and passenger charter services (“Charter”); and (iii) dry leasing aircraft and engines (“Dry Le asing” or “Dry Lease”). The accompanying unaudited consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly r eports on Form 10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the AAWW Annual Report on Form 10-K for the year ended Decemb er 31, 2014 , which includes additional disclosures and a summary of our significant accounting policies. The December 31, 2014 balance sheet data was derived from that Annual Report. In our opinion, the Financial Statements contain all adjustments, consisting of normal recurring items, necessary to fairly state the financial position of AAWW and its consolidated subsidiaries as of June 30, 2015 , the results of operations for the three and six months ended June 30, 2015 and 2014 , compreh ensive income for the three and six months ended June 30, 2015 and 2014 , cash flows for the six months ended June 30, 2015 and 2014 , and shareholders’ equity as of and for the six months ended June 30, 2015 and 2014 . Our quarterly results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year. Except for per share data, all do llar amounts are in thousands unless otherwise noted . Certain reclassifications have been made to prior periods’ consolidated financial statement amounts and related note disclosures to conform to the current year’s presentation, including the presentatio n of segments . |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2015 | |
Recently Adopted Accounting Pronouncements [Abstract] | |
Recently Adopted Accounting Pronouncements | 2. Recent Accounting Pronouncement s In May 2014, the Financial Accounting Standards Board (“FASB”) amended its accounting guidance for revenue recognition. The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and consideration that a company expects to receive for the services provided. It also requires additional disclosures necessary for the financial statement us ers to understand the n ature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. I n July 2015, the FASB voted to defer the effective date by one year to the beginning of 2018 and permit early adoption of the standard, but not before the beginning of 2017 . We are c urrently assessing the impact the amended guidance will have on our financial statements. In April 2015, the FASB amended its guidance for presenting debt issuance costs. The new guidance requires debt issuance costs to be presented in the balance sheet as a reduction of the carrying amount of the related debt liability instead of as an asset. We early adopted this guidance retrospectively effective March 31, 2015 and its adoption did not have a material impact on our finan cial condition, results of operations or cash flows. The amount of debt issuance costs classified on our balance sheet as a reduction of debt was $ 55.6 million at June 30, 2015 and $ 55.1 million at December 31, 2014 . |
DHL Investment and Polar
DHL Investment and Polar | 6 Months Ended |
Jun. 30, 2015 | |
DHL Investment And Polar [Abstract] | |
Related Parties | 3. Related Parties DHL Investment and Polar AAWW has a 51% equity interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). DHL Network Operations (USA), Inc. (“DHL”), a subsidiary of Deutsche Post AG (“DP”), holds a 49% equity interest and a 25% voting interest in Polar. Polar is a variable interest entity that we do not consolidate because we are not the primary beneficiary as the risks associated with the direct costs of operation are with DHL . We record our share of Polar’s results under the equity method of accounting. Under a 20-year blocked space agreement (the “BSA”), Polar provides air cargo capacity to DHL. Atlas h as several agreements with Polar to provide ACMI, CMI , administrative, sales and ground support services to one another. W e do not have any financial exposure to fund debt obligations or operating losses of Polar, except for any liquidated damages that we could incur under these agreements. The following table summarizes our transactions with Polar: For the Three Months Ended For the Six Months Ended Revenue and Expenses: June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 ACMI segment revenue from Polar $ 94,105 $ 74,144 $ 185,518 $ 143,839 Other revenue from Polar $ 2,842 $ 2,842 $ 5,687 $ 5,684 Ground handling and airport fees paid to Polar $ 436 $ 448 $ 1,227 $ 772 Accounts receivable/payable as of: June 30, 2015 December 31, 2014 Receivables from Polar $ 6,526 $ 5,702 Payables to Polar $ 641 $ 2,611 Aggregate Carrying Value of Polar Investment as of: June 30, 2015 December 31, 2014 $ 4,870 $ 4,870 GATS We hold a 50% interest in GATS GP (BVI) Ltd. (“GATS”), a joint venture with an unrelated third party. The purpose of the joint venture is to purchase rotable parts and provide repair services for those parts, primarily for our 747-8F aircraft. The joint venture is a variable interest entity that we do not consolidate because we are not the primary beneficiary as we do not exercise financial control. As of June 30, 2015 and December 31, 2014 , our investment in GATS was $ 18.8 million and $ 16.4 million , respectively, and our maximum exposure to losses from the entity is limited to our investment, which is comprised prim arily of rotable inventory parts. GATS does not have any third-party debt obligations . We had Accounts payable to GATS of $ 1.7 million as of June 30, 2015 and $ 1.5 million as of December 31, 2014 . |
Special Charge
Special Charge | 6 Months Ended |
Jun. 30, 2015 | |
Special Charge [Abstract] | |
Special Charge | 4. Special Charge During the three and six months ended June 30, 2014 , we recognized $ 1.6 million and $ 3.9 million, respectively, of employee termination benefits related to British Airways Plc’s (“British Airways”) return of three 747-8F aircraft in 2014. In addition, we recognized a reserve of $ 5.2 million during the six months ended June 30, 2014 related to a loan from Global Supply Systems Limit ed (“GSS”), a consolidated subsidiary, to its then 51% U.K. shareholder. A summary of the Special charge liabilities is as follows: Lease Termination Costs GSS Employee Termination Benefits Other Total Liability as of December 31, 2014 $ 2,437 $ 1,014 $ 100 $ 3,551 Special charge items, net (532) 35 14 (483) Cash payments (1,817) (1,049) (114) (2,980) Liability as of June 30, 2015 $ 88 $ - $ - $ 88 Substantially all remaining cash payments related to Special charge liabilities are expected to be paid in 2015. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Accrued Liabilities Tables [Abstract] | |
Accrued Liabilities | 5 . Accrued Liabilities Accrued liabilities consisted of the following as of: June 30, 2015 December 31, 2014 Customer maintenance reserves $ 65,042 $ 64,756 Maintenance 45,544 50,702 Aircraft fuel 37,262 15,078 Salaries, wages and benefits 37,122 48,548 Deferred revenue 13,406 10,705 Other 62,966 61,805 Accrued liabilities $ 261,342 $ 251,594 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt [Abstract] | |
Debt | 6. Debt Convertible Notes In June 2015, we issued $ 224.5 million aggregate principal amount of convertible senior notes (the “Convertible Notes”) in a n underwritten public offering. The Convertible Notes are senior unsecured obligations and accrue interest payable semi-annually on June 1 and December 1 of each year at an annual rate of 2.25 %. The Convertible Notes will mature on June 1, 2022, unless earlier converted or repurchased pursuant to their terms. We used a portion of the net proceeds in June 2015 to fund the cost of the convertible note hedge transactions , described below , and in July 2015 to refinance higher-rate equipment notes funded by Enhanced Equipment Trust Certificates (“EETCs”) related to three 747-400 freighter aircraft. We ex pect to use a portion of the net proceeds during the third quarter of 2015 to refinance additional higher-rate EETCs for two 747-400 freighter aircraft, for which we issued a notice of redemption in July 2015. In addition, we expect to use a portion of th e net proceeds for working capital and capital expenditures, for repayment or refinancing of debt, and for general corporate purposes. Each $1,000 of principal of the Convertible Notes will initially be convertible into 13.5036 shares of our common stock , which is equal to an initial conversion price of $ 74.05 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest, except in certain limited circums tances. Upon the occurrence of a “make-whole fundamental change , ” we will, in certain circumstances, increase the conversion rate by a number of additional shares of our common stock for Convertible Notes converted in connection with such “ make-whole funda mental change ” . Additionally, if we undergo a “fundamental change ,” a holder will have the option to require us to repurchase all or a portion of its Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus any accrued and unpaid interest through, but excluding, the fundamental change repurchase date . In connection with the offering of the Convertible Notes, we entered into convertible note hedge transactions whereby we have the option to p urchase initially (subject to adjustment for certain specified events) a total of 3,031,558 shares of our common stock at a price of $ 74.05 per share. The total cost of the convertible note hedge transactions was $ 52.9 million. In addition, we sold warrants to the option counterparties whereby the holders of the warrants have the option to purchase initially (subject to adjustment for certain specified events) a total of 3,031,558 shares of our common stock at a price of $ 95.01 . We received $ 36.3 million in cash proceeds from the sale of these warrants. Taken together, the purchase of the convertible note hedges and the sale of warrants are intended to offset any actual dilution from the conversion of the Convertible Notes and to effectively increase the overall conversion price from $74.05 to $95.01 per share. The $ 16.6 million net cost incurred in connection with the convertible note hedges and warrants was recorded as a reduction to additional paid-in capital, net of tax, in the consolidated balance sheet as of June 30, 2015. On or after September 1, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or a portion of its Convertible Notes. Upon conversion, the Convertible Notes will be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. Our current intent and policy is to settle conversions with a combination of cash and shares of common stock with the principal amount of the Convertible Notes paid in c ash. Holders may convert their Convertible Notes at their option at any time prior to September 1, 2021, only under the following circumstances: during any calendar quarter (and only during such calendar quarter) commencing after September 30, 2015 if, f or each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock for such trading day is equal to or greater than 130% of the conversion price on such trading day; during the five consecutive business day period immediately following any five consecutive trading day period (the “measurement period”) in which, for each tra ding day of the measurement period, the trading price per $1,000 principal amount of the Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock for such trading day and the conversion rat e on such trading day; or upon the occurrence of specified corporate events . We separate ly account for the liability and equity components of the Convertible Notes. The carrying amount of the liability component was determined by measuring the fair value of a similar liability that does no t have an associated conversion feature, assuming our non-convertible unsecured debt borrowing rate. The carrying value of t he equity component, the conversion option, which is recognized as additional paid-in-capital, net of tax, creates a debt discount on the Convertible Notes. The debt discount was determined by deducting the relative fair value of the liability component from the proceeds of the Convertible Notes and is amortized to interest expense using an effecti ve interest rate of 6.44 % over the term of the Convertible Notes. As of June 30, 2015, the remaining life of the Convertible Notes is 6.9 years. The equity component will not be remeasured as long as it continues to meet the conditions for equity classifi cation. As of June 30, 2015, the Convertible Notes consisted of the following: Liability component: Proceeds $ 224,500 Less: debt discount, net of amortization (52,436) Less: debt issuance cost, net of amortization (5,156) Net carrying amount $ 166,908 Equity component (1) $ 52,903 (1) Included in Additional paid-in capital on the consolidated balance sheet as of June 30, 2015. The debt issuance costs related to the issuance of the Convertible Notes were allocated to the liability and equity components based on their relative values, as determined above. Tot al debt issuance costs were $ 6.8 mi llion, of which $ 5.2 million was allocated to the liability component and $ 1.6 million was allocated to the equity component . The debt issuance costs allocated to the liability component are amortized to interest expense using the effective interest method over the term of th e Convertible Notes. The following table presents the amount of interest expense recognized related to the Convertible Notes: For the Three and Six Months Ended June 30, 2015 Contractual interest coupon $ 393 Amortization of debt discount 467 Amortization of debt issuance costs 51 Total interest expense recognized $ 911 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 7. Income Taxes Our effective income tax rate s were an expense of 31.0% for the three months ended June 30, 2015 and a benefit of 461.0% for the three months ended June 30, 2014 . Our effective income tax rate s were an expense of 25.6% for the six months ended June 30, 2015 and a benefit of 181.4% for the six months ended June 30, 2014 . The effective rate for the six months ended June 30, 2015 diffe red from the U.S. federal statutory rate primarily due to an income tax benefit of $ 4.0 million , net of reserves, related to extraterritorial income from leasing certain of our aircraft (“ETI”) . The effective rate for the three and six months ended June 30, 2014 differed from the U.S. federal statutory rate primarily due to an income tax benefit of $ 24.0 million, net of reserves, related to ETI, partially offset by losses associated with GSS for which we have recognized a valuation allowance due to the uncertainty that the benefit of the losses will be realized. The effective rates also differed from the U.S. federal statutory rate due to the income tax impact of foreign operations taxed at different rates, our assertion to indefinitely reinvest the net earnings of certain foreign subsidiaries outside the U.S., U.S. state income taxes, the nondeductibility of certain expenses for tax purposes, adjustments to our liability for uncertain tax positions, and the relationship of these items to our projected operating results for the year . For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate. As a result of current and expected future growth in our Dry Leasing business, we determined to indefinitely reinvest the net earnings of certain foreign subsidiaries engaged in this business outside of the U.S. Our effective income tax rate s for the three and six months ended June 30, 2015 and 2014 w ere favorably impacted by this determination. As of June 30, 2015 , our undistributed net earnings of foreign subsidiaries for which deferred taxes have not been provided were $ 63.1 million, and the unrecognized deferred tax liability associa ted with these earnings was $ 22.1 million. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Financial Instruments [Abstract] | |
Financial Instruments | 8. Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Other inputs that are observable directly or indirectly, such as quoted prices in active markets for similar assets or l iabilities, or inactive quoted prices for identical assets or liabilities in inactive markets; Level 3 Unobservable inputs reflecting assumptions about the inputs used in pricing the asset or liability. We endeavor to utilize the best available informat ion to measure fair value. The carrying value of Cash and cash equivalents, Short-term investments and Restricted cash is based on cost, which approximates fair value. Long-term investments consist of debt securities for which we have both the ability an d the intent to hold until maturity. These investments are classified as held-to-maturity and reported at amortized cost. The fair value of our Long-term investments is based on a discounted cash flow analysis using the contractual cash flows of the inve stments and a discount rate derived from unadjusted quoted interest rates for debt securities of comparable risk. Such debt securities represent investments in Pass-Through Trust Certificates related to EETCs issued by Atlas in 1998, 1999 and 2000 . The fair value of our term loans, notes guaranteed by the Export-Import Bank of the United States (“Ex-Im Bank”) and EETCs are based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms. The fair value of our Convertible Notes is based on unadjusted quoted market prices for these securi ties . The following table summarizes the carrying amount, estimated fair value and classification of our financial instruments as of: June 30, 2015 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 514,750 $ 514,750 $ 514,750 $ - $ - Short-term investments 24,373 24,373 - - 24,373 Restricted cash 15,731 15,731 15,731 - - Long-term investments and accrued interest 106,951 142,799 - - 142,799 $ 661,805 $ 697,653 $ 530,481 $ - $ 167,172 Liabilities Term loans $ 910,383 $ 945,633 $ - $ - $ 945,633 Ex-Im Bank guaranteed notes 725,320 752,443 - - 752,443 EETCs 190,774 243,436 - - 243,436 Convertible Notes 166,908 221,454 221,454 - - $ 1,993,385 $ 2,162,966 $ 221,454 $ - $ 1,941,512 December 31, 2014 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 298,601 $ 298,601 $ 298,601 $ - $ - Short-term investments 17,802 17,802 - - 17,802 Restricted cash 14,281 14,281 14,281 - - Long-term investments and accrued interest 120,478 154,743 - - 154,743 $ 451,162 485,427 312,882 - 172,545 Liabilities Term loans $ 945,813 $ 982,036 $ - $ - $ 982,036 Ex-Im Bank guaranteed notes 760,389 789,834 - - 789,834 EETCs 211,739 270,333 - - 270,333 $ 1,917,941 $ 2,042,203 $ - $ - $ 2,042,203 The following table presents the carrying value, gross unrealized gain (loss) and fair value of our long-term investments and accrued interest by contractual maturity as of : June 30, 2015 December 31, 2014 Carrying Value Gross Unrealized Gain (Loss) Fair Value Carrying Value Gross Unrealized Gain (Loss) Fair Value Debt securities Due after one but within five years $ 72,277 $ 1,776 $ 74,053 $ 40,040 $ 9,700 $ 49,740 Due after five but within ten years 34,674 34,072 68,746 80,438 24,565 105,003 Total $ 106,951 $ 35,848 $ 142,799 $ 120,478 $ 34,265 $ 154,743 |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | 9 . Segment Reporting We currently have the following three reportable segments: ACMI, Charter and Dry Leasing. We use an economic performance metric (“Direct Contribution”) that shows the profitability of each segment after allocation of operating and ownership costs. T he following table sets forth Operating Revenue and Direct Contribution for our reportable segments reconciled to Operating Income and Income before Income Taxes: For the Three Months Ended For the Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Operating Revenue: ACMI $ 189,255 $ 186,720 $ 378,302 $ 384,861 Charter 235,436 225,234 455,574 402,607 Dry Leasing 27,401 25,524 59,320 50,200 Other 3,741 3,691 7,482 6,864 Total Operating Revenue $ 455,833 $ 441,169 $ 900,678 $ 844,532 Direct Contribution: ACMI $ 51,157 $ 44,677 $ 91,059 $ 90,133 Charter 25,019 8,196 55,478 4,007 Dry Leasing 10,894 8,738 26,419 16,909 Total Direct Contribution for Reportable Segments 87,070 61,611 172,956 111,049 Add back (subtract): Unallocated income and expenses, net* (45,320) (40,317) (94,304) (75,162) Special charge (499) (1,449) 69 (9,477) Loss on disposal of aircraft (114) (14,679) (1,323) (14,679) Income before Income Taxes 41,137 5,166 77,398 11,731 Add back (subtract): Interest income (4,425) (4,719) (8,913) (9,446) Interest expense 25,033 26,365 49,581 52,817 Capitalized interest (177) (67) (203) (379) Other expense (income), net (284) (88) 391 64 Operating Income $ 61,284 $ 26,657 $ 118,254 $ 54,787 * During the first quarter of 2015, we changed the methodology for allocating certain unallocated expenses to our segments. The prior period information has been adjusted to consistently reflect this change. We are exposed to a concentration of revenue from the U.S. Military Air Mobility Command (the “AMC”) and Polar (see Note 3 for further discussion regarding Polar) . No other customer accounted for more than 10.0% of our Total Operating Revenue. Revenue from the AMC was $ 114.0 mil lion for the three months ended June 30, 2015 and $ 91.3 million for the three months ended June 30, 2014 . Revenue from the AMC was $ 204.1 million for the six months ended June 30, 2015 and $ 154.2 million for the six months ended June 30, 2014 . Accounts receivable from the AMC were $ 19.5 million and $ 15.3 million as of June 30, 2015 and December 31, 2014 , respectively. We have not experienced any credit issues with either of these customers. |
Labor and Legal Proceedings
Labor and Legal Proceedings | 6 Months Ended |
Jun. 30, 2015 | |
Labor And Legal Proceedings [Abstract] | |
Legal Proceedings | 10. Legal Proceedings Matters Related to Alleged Pricing Practices T he Company and Old Polar have been named defendants, along with a number of other cargo carriers, in several class actions in the United States arising from allegations about the pricing practices of Old Polar and a number of air cargo carriers that have now been centralized for pretrial purposes in the United States District Court for the Eastern District of New York. The consolidated complaint alleges, among other things, t hat the defendants, including the Company and Old Polar, manipulated the market price for air cargo services sold domestically and abroad through the use of surcharges, in violation of United States, state, and European Union antitrust laws. The suit seek s treble damages and injunctive relief. In 2007, the Company and Old Polar commenced an adversary proceeding in bankruptcy court against each of the plaintiffs in this class action litigation seeking to enjoin the plaintiffs from prosecuting claims again st the Company and Old Polar that arose prior to July 28, 2004, the date on which the Company and Old Polar emerged from bankruptcy. In 2007, the plaintiffs consented to the injunctive relief requested and the bankruptcy court entered an order enjoining p laintiffs from prosecuting Company claims arising prior to July 28, 2004. The court in the antitrust class actions has heard and decided a number of procedural motions. Among those was the plaintiffs’ motion to join Polar Air Cargo Worldwide, Inc. as an additional defendant, which the court granted for discovery purposes on April 13, 2011. There was substantial pretrial written discovery and document production, and a number of depositions were taken. A court hearing on whether to certify the ca se as a class action was held in October 2013 , and oral arguments and an evidentiary hearing were held in November 2013. On October 15, 2014, the magistrate judge issued a decision recommending that the court enter an order certifying the class for adjudi cating the claims. On July 10, 2015, the court issued an order affirming the magistrate judge’s decision and certifying the class. We and other remaining defendants have petitioned the U.S. Court of Appeals for the Second Circuit for permission to appeal that order and we also intend to vigorously pursue a number of defenses , some of which were made in summary judgment motions and responses in 2015 . We are unable to re asonably predict the court’s ruling on our opposition to class certification and our defenses, or the ultimate outcome of the litigation. In the United Kingdom, several groups of named claimants have brought suit against British Airways in connection with the same alleged antitrust practices at issue in the proceedings described above and are seeking damages allegedly arising from that condu ct. British Airways has filed claims in the lawsuit against Old Polar , the Company and a number of air cargo carriers for contribution should British Airways be found liable to claimants. Old Polar’s formal statement of defense was filed on February 28, 2015. Court-ordered disclosure is continuing. Old Polar intends to mount a vigorous defense. If the Company or Old Polar were to incur an unfavorable outcome in connection with one or more of the matters described above, such outcome is not expected to materially affect our business, financial condition, results of operations or cash flows. Brazilian Customs Claim Old Polar was cited for two alleged customs violations in Sao Paulo, Brazil, relating to shipments of goods dating back to 1999 and 2000. Eac h claim asserts that goods listed on the flight manifest of two separate Old Polar scheduled service flights were not on board the aircraft upon arrival and therefore were improperly brought into Brazil. The two claims, which also seek unpaid customs duti es, taxes and penalties from the date of the alleged infraction, are approximately $ 6.3 million in aggregate based on June 30, 2015 exchange rates. In both cases, we believe that the amounts claimed are substantially overstated due to a cal culation error when considering the type and amount of goods allegedly missing, among other things. Furthermore, we may seek appropriate indemnity from the shipper in each claim as may be feasible. In the pending claim for one of the cases, we have recei ved an administrative decision dismissing the claim in its entirety, which remains subject to a mandatory appeal by the Brazil customs authorities. As required to defend such claims, we have made deposits pending resolution of these matters. The balances were $ 4.7 million as of June 30, 2015 and $ 5.3 million as of December 31, 2014 , and are included in Deposits and other assets. We are currently defending these and other Brazilian customs claims and the ultimate disposition of these claims, either individually or in the aggregate, is not expected to materially affect our financial condition, results of operations or cash flows. Other We have certain other contingencies incident to the ordinary course of business. Management believes that the ultimate disposition of such other contingencies is not expected to materially affect our financial condition, results of operations or cash flows. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. Earnings Per Share Basic earnings per share (“EPS”) represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treas ury stock method. A nti-dilutive shares related to warrants and stock options that were out of the money and excluded for the three and six months ended June 30, 2015 were 3.0 million and for the three and six months ended June 30, 2014 were de minimis . The calculations of basic and diluted EPS were as follows: For the Three Months Ended For the Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Numerator: Net Income Attributable to Common Stockholders $ 28,390 $ 29,593 $ 57,622 $ 37,537 Denominator: Basic EPS weighted average shares outstanding 25,029 25,241 24,953 25,169 Effect of dilutive stock options and restricted stock 169 38 182 46 Diluted EPS weighted average shares outstanding 25,198 25,279 25,135 25,215 EPS: Basic $ 1.13 $ 1.17 $ 2.31 $ 1.49 Diluted $ 1.13 $ 1.17 $ 2.29 $ 1.49 The calculation of EPS does not include restricted share units in which performance or market conditions were not satisfied of 0.3 million for the three and six months ended June 30, 2015 , respectively, and 0.4 million and 0.5 million for the three and six months ended June 30, 2014 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 12 . Accumulated Other Comprehensive Income (Loss) The following table summarizes t he components of Accumulated other comprehensive income (loss): Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2013 $ (11,375) $ 698 $ (10,677) Net change in fair value (251) - (251) Reclassification to interest expense 1,372 - 1,372 Translation adjustment - 171 171 Tax effect (506) - (506) Balance as of June 30, 2014 $ (10,760) $ 869 $ (9,891) Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2014 $ (9,924) $ 352 $ (9,572) Net change in fair value - - - Reclassification to interest expense 1,288 - 1,288 Translation adjustment - (343) (343) Tax effect (492) - (492) Balance as of June 30, 2015 $ (9,128) $ 9 $ (9,119) Interest Rate Derivatives As of June 30, 2015 , there wa s $ 14.7 million of unamortized realized loss before taxes remaining in Accumulated other comprehensive income (loss) related to terminated forward-starting interest rate swaps , which had been designated as cash flow hedges to effectively fix the interest rates on two 747-8F financings in 2011 and three 777-200LRF financings in 2014. The net loss is amortized and reclassified into Interest expense over the remaining life of the r elated debt. Net realized losses reclassified into earnings were $ 0.6 million and $ 0.7 for the three months ended June 30, 2015 and 2014 , respectively . Net realized losses reclass ified into earnings were $ 1.3 million and $ 1.4 million for the six months ended June 30, 2015 and 2014 , respectively . Net realized losses expected to be reclassified into earnings within the next 12 months are $ 2.5 million as of June 30, 2015 . |
DHL Investment and Polar (Table
DHL Investment and Polar (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
DHL Investment And Polar Tables [Abstract] | |
Summary of Our Transactions with Polar | For the Three Months Ended For the Six Months Ended Revenue and Expenses: June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 ACMI segment revenue from Polar $ 94,105 $ 74,144 $ 185,518 $ 143,839 Other revenue from Polar $ 2,842 $ 2,842 $ 5,687 $ 5,684 Ground handling and airport fees paid to Polar $ 436 $ 448 $ 1,227 $ 772 Accounts receivable/payable as of: June 30, 2015 December 31, 2014 Receivables from Polar $ 6,526 $ 5,702 Payables to Polar $ 641 $ 2,611 Aggregate Carrying Value of Polar Investment as of: June 30, 2015 December 31, 2014 $ 4,870 $ 4,870 |
Special Charge (Table)
Special Charge (Table) | 6 Months Ended |
Jun. 30, 2015 | |
Special charge tables [Abstract] | |
Special charge | Lease Termination Costs GSS Employee Termination Benefits Other Total Liability as of December 31, 2014 $ 2,437 $ 1,014 $ 100 $ 3,551 Special charge items, net (532) 35 14 (483) Cash payments (1,817) (1,049) (114) (2,980) Liability as of June 30, 2015 $ 88 $ - $ - $ 88 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accrued Liabilities Tables [Abstract] | |
Accrued Liabilities | June 30, 2015 December 31, 2014 Customer maintenance reserves $ 65,042 $ 64,756 Maintenance 45,544 50,702 Aircraft fuel 37,262 15,078 Salaries, wages and benefits 37,122 48,548 Deferred revenue 13,406 10,705 Other 62,966 61,805 Accrued liabilities $ 261,342 $ 251,594 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Tables [Abstract] | |
Schedule of Notes | Liability component: Proceeds $ 224,500 Less: debt discount, net of amortization (52,436) Less: debt issuance cost, net of amortization (5,156) Net carrying amount $ 166,908 Equity component (1) $ 52,903 (1) Included in Additional paid-in capital on the consolidated balance sheet as of June 30, 2015. |
Summary of Interest Expense Recognized | For the Three and Six Months Ended June 30, 2015 Contractual interest coupon $ 393 Amortization of debt discount 467 Amortization of debt issuance costs 51 Total interest expense recognized $ 911 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Financial Instruments Tables [Abstract] | |
Carrying Amount, Estimated Fair Value and Classification of Our Financial Instruments | June 30, 2015 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 514,750 $ 514,750 $ 514,750 $ - $ - Short-term investments 24,373 24,373 - - 24,373 Restricted cash 15,731 15,731 15,731 - - Long-term investments and accrued interest 106,951 142,799 - - 142,799 $ 661,805 $ 697,653 $ 530,481 $ - $ 167,172 Liabilities Term loans $ 910,383 $ 945,633 $ - $ - $ 945,633 Ex-Im Bank guaranteed notes 725,320 752,443 - - 752,443 EETCs 190,774 243,436 - - 243,436 Convertible Notes 166,908 221,454 221,454 - - $ 1,993,385 $ 2,162,966 $ 221,454 $ - $ 1,941,512 December 31, 2014 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 298,601 $ 298,601 $ 298,601 $ - $ - Short-term investments 17,802 17,802 - - 17,802 Restricted cash 14,281 14,281 14,281 - - Long-term investments and accrued interest 120,478 154,743 - - 154,743 $ 451,162 485,427 312,882 - 172,545 Liabilities Term loans $ 945,813 $ 982,036 $ - $ - $ 982,036 Ex-Im Bank guaranteed notes 760,389 789,834 - - 789,834 EETCs 211,739 270,333 - - 270,333 $ 1,917,941 $ 2,042,203 $ - $ - $ 2,042,203 |
Carrying Value, Gross Unrealized Gain (Loss) and Fair Value of Our Long-term Investments by Contractual Maturity | June 30, 2015 December 31, 2014 Carrying Value Gross Unrealized Gain (Loss) Fair Value Carrying Value Gross Unrealized Gain (Loss) Fair Value Debt securities Due after one but within five years $ 72,277 $ 1,776 $ 74,053 $ 40,040 $ 9,700 $ 49,740 Due after five but within ten years 34,674 34,072 68,746 80,438 24,565 105,003 Total $ 106,951 $ 35,848 $ 142,799 $ 120,478 $ 34,265 $ 154,743 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting Tables [Abstract] | |
Operating Revenue and Direct Contribution For Our Reportable Business Segments | For the Three Months Ended For the Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Operating Revenue: ACMI $ 189,255 $ 186,720 $ 378,302 $ 384,861 Charter 235,436 225,234 455,574 402,607 Dry Leasing 27,401 25,524 59,320 50,200 Other 3,741 3,691 7,482 6,864 Total Operating Revenue $ 455,833 $ 441,169 $ 900,678 $ 844,532 Direct Contribution: ACMI $ 51,157 $ 44,677 $ 91,059 $ 90,133 Charter 25,019 8,196 55,478 4,007 Dry Leasing 10,894 8,738 26,419 16,909 Total Direct Contribution for Reportable Segments 87,070 61,611 172,956 111,049 Add back (subtract): Unallocated income and expenses, net* (45,320) (40,317) (94,304) (75,162) Special charge (499) (1,449) 69 (9,477) Loss on disposal of aircraft (114) (14,679) (1,323) (14,679) Income before Income Taxes 41,137 5,166 77,398 11,731 Add back (subtract): Interest income (4,425) (4,719) (8,913) (9,446) Interest expense 25,033 26,365 49,581 52,817 Capitalized interest (177) (67) (203) (379) Other expense (income), net (284) (88) 391 64 Operating Income $ 61,284 $ 26,657 $ 118,254 $ 54,787 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share Tables [Abstract] | |
Calculations of Basic and Diluted EPS | For the Three Months Ended For the Six Months Ended June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Numerator: Net Income Attributable to Common Stockholders $ 28,390 $ 29,593 $ 57,622 $ 37,537 Denominator: Basic EPS weighted average shares outstanding 25,029 25,241 24,953 25,169 Effect of dilutive stock options and restricted stock 169 38 182 46 Diluted EPS weighted average shares outstanding 25,198 25,279 25,135 25,215 EPS: Basic $ 1.13 $ 1.17 $ 2.31 $ 1.49 Diluted $ 1.13 $ 1.17 $ 2.29 $ 1.49 |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) Tables [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2013 $ (11,375) $ 698 $ (10,677) Net change in fair value (251) - (251) Reclassification to interest expense 1,372 - 1,372 Translation adjustment - 171 171 Tax effect (506) - (506) Balance as of June 30, 2014 $ (10,760) $ 869 $ (9,891) Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2014 $ (9,924) $ 352 $ (9,572) Net change in fair value - - - Reclassification to interest expense 1,288 - 1,288 Translation adjustment - (343) (343) Tax effect (492) - (492) Balance as of June 30, 2015 $ (9,128) $ 9 $ (9,119) |
Basis of Presentation (Detail)
Basis of Presentation (Detail) | Jun. 30, 2015 |
Basis Of Presentation Details [Abstract] | |
Equity interest in PACW | 51.00% |
Voting interest in PACW | 75.00% |
DHL Investment and Polar Percen
DHL Investment and Polar Percentages (Detail) | Jun. 30, 2015 |
Dhl Investment And Polar Percentages [Abstract] | |
DHL equity interest in Polar | 49.00% |
DHL voting interest in Polar | 25.00% |
Summary of Significant Account
Summary of Significant Account Policies (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Amortization Of Debt Issuance Costs Details [Abstract] | ||
Debt issuance costs classified as reduction of debt | $ 55.6 | $ 55.1 |
Variable Interest Entities And Off Balance Sheet Arrangements Details [Abstract] | ||
Ownership interest in GATS | 50.00% | |
Investment in GATS | $ 18.8 | 16.4 |
Payable to GATS | $ 1.7 | $ 1.5 |
DHL Investment and Polar Table
DHL Investment and Polar Table (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
DHL Investment and Polar Table Details [Line Items] | |||||
ACMI revenue from Polar | $ 94,105 | $ 74,144 | $ 185,518 | $ 143,839 | |
Other revenue from Polar | 2,842 | 2,842 | 5,687 | 5,684 | |
Ground handling and airport fees paid to Polar | 436 | $ 448 | 1,227 | $ 772 | |
Receivables from Polar | 6,526 | 6,526 | $ 5,702 | ||
Payables to Polar | 641 | 641 | 2,611 | ||
Aggregate carrying value of Polar investment | $ 4,870 | $ 4,870 | $ 4,870 |
Special Charge (Detail)
Special Charge (Detail) - Jun. 30, 2014 - USD ($) $ in Millions | Total | Total |
Special Charge Details [Abstract] | ||
Impairment charges related to employee termination benefits for the 747-200 fleet | $ 1.6 | $ 3.9 |
GSS loan reserve | $ 5.2 |
Special Charge Table (Detail)
Special Charge Table (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Special Charge [Line Items] | |
Beginning balance | $ 3,551 |
Special charge items, net | (483) |
Cash payments | (2,980) |
Ending balance | 88 |
Lease termination costs [Member] | |
Special Charge [Line Items] | |
Beginning balance | 2,437 |
Special charge items, net | (532) |
Cash payments | (1,817) |
Ending balance | 88 |
GSS employee termination benefits [Member] | |
Special Charge [Line Items] | |
Beginning balance | 1,014 |
Special charge items, net | 35 |
Cash payments | (1,049) |
Ending balance | 0 |
Other [Member] | |
Special Charge [Line Items] | |
Beginning balance | 100 |
Special charge items, net | 14 |
Cash payments | (114) |
Ending balance | $ 0 |
Intangible Assets, net Tables (
Intangible Assets, net Tables (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Intangible Assets Table Details [Abstract] | ||
Intangible assets, net | $ 62,918 | $ 67,410 |
Accrued Liabilities (Detail)
Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Accrued Liabilities Details [Abstract] | ||
Customer maintenance reserves | $ 65,042 | $ 64,756 |
Maintenance | 45,544 | 50,702 |
Aircraft fuel | 37,262 | 15,078 |
Salaries, wages and benefits | 37,122 | 48,548 |
Deferred revenue | 13,406 | 10,705 |
Other | 62,966 | 61,805 |
Accrued liabilities | $ 261,342 | $ 251,594 |
Debt Obligations Table (Detail)
Debt Obligations Table (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt [Abstract] | ||
Less current portion of debt | $ 180,902 | $ 181,202 |
Long-term debt | $ 1,812,483 | $ 1,736,739 |
Future Cash Payments for Debt T
Future Cash Payments for Debt Table (Detail) $ in Thousands | Jun. 30, 2015USD ($) |
Future Cash Payments for Debt [Abstract] | |
Less: debt discount, net of amortization | $ (52,436) |
Financing Arrangements Addition
Financing Arrangements Additional Information (Detail) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | |
Long term debt type [Domain] | ||
Debt Instrument [Line Items] | ||
Convertible notes aggregate principal amount | $ 224,500 | |
Debt instrument interest rate | 2.25% | |
Conversion price of convertible notes | $ / shares | $ 74.05 | |
Effective interest rate of debt | 6.44% | |
Remaining life of notes | 6 years 11 months | |
Net cost incurred as reduction to additional paid-in capital | $ 16,600 | |
Convertible notes aggregate principal amount | $ 224,500 | |
Number of common shares converted upon debt conversion for each $1000 principal amount | 13.5036 | |
Debt issuance costs | $ 6,800 | |
Liability issuance costs | 5,200 | |
Equity issuance costs | $ 1,600 | |
Hedge option to purchase common stock | shares | 3,031,558 | |
Aggregate amount for convertible hedge | $ 52,900 | |
Common stock price per share | $ / shares | $ 74.05 | |
Aggregate proceeds from the sale of warrants | $ 36,290 | $ 0 |
Warrant [Member] | ||
Debt Instrument [Line Items] | ||
Common stock price per share | $ / shares | $ 95.01 | |
Aggregate proceeds from the sale of warrants | $ 36,300 | |
Warrant option holder to purchase common stock | shares | 3,031,558 |
Financing Arrangements Schedule
Financing Arrangements Schedule of Notes (Detail) $ in Thousands | Jun. 30, 2015USD ($) |
Convertible notes [Line Items] | |
Proceeds | $ 224,500 |
Less: debt discount, net of amortization | 52,436 |
Less: debt issuance cost, net of amortization | 5,156 |
Net carrying amount | 166,908 |
Equity component | $ 52,903 |
Financial Arrangements Summary
Financial Arrangements Summary of Interest Expense Recognized (Detail) - Jun. 30, 2015 - USD ($) $ in Thousands | Total | Total |
Schedule of Interest Expense on Convertible Notes [Abstract] | ||
Contractual interest coupon | $ 393 | $ 393 |
Amortization of debt discount | 467 | 467 |
Amortization of debt issuance costs | 51 | 51 |
Total interest expense recognized | $ 911 | $ 911 |
Income Taxes Tables (Detail)
Income Taxes Tables (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Deferred | ||||
Total deferred expense | $ 19,773 | $ (21,498) | ||
Income tax expense (benefit) | $ 12,747 | $ (23,815) | 19,776 | (21,276) |
Domestic and foreign earnings before income taxes | ||||
Income before income taxes | $ 41,137 | $ 5,166 | $ 77,398 | $ 11,731 |
Income Taxes Monetary (Detail)
Income Taxes Monetary (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Jun. 30, 2014 |
Income Tax Disclosure Narrative Details [Abstract] | ||
ETI Benefit | $ 4 | $ 24 |
Undistributed Earnings of Foreign Subsidiaries | 63.1 | |
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability | $ 22.1 |
Financial Instruments Fair Valu
Financial Instruments Fair Value Table (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Assets | ||||
Cash and cash equivalents | $ 514,750 | $ 298,601 | $ 276,404 | $ 321,816 |
Short-term investments | 24,373 | 17,802 | ||
Restricted cash | 15,731 | 14,281 | ||
Long-term investments and accrued interest | 106,951 | 120,478 | ||
Liabilities | ||||
Convertible Notes | 166,908 | |||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ||||
Assets | ||||
Cash and cash equivalents | 514,750 | 298,601 | ||
Short-term investments | 24,373 | 17,802 | ||
Restricted cash | 15,731 | 14,281 | ||
Long-term investments and accrued interest | 106,951 | 120,478 | ||
Liabilities | ||||
Term loans | 910,383 | 945,813 | ||
Ex-Im Bank guaranteed notes | 725,320 | 760,389 | ||
EETCs | 190,774 | 211,739 | ||
Convertible Notes | 166,908 | |||
Financial instruments liabilities | 1,993,385 | 1,917,941 | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | ||||
Assets | ||||
Cash and cash equivalents | 514,750 | 298,601 | ||
Short-term investments | 24,373 | 17,802 | ||
Restricted cash | 15,731 | 14,281 | ||
Long-term investments and accrued interest | 142,799 | 154,743 | ||
Liabilities | ||||
Term loans | 945,633 | 982,036 | ||
Ex-Im Bank guaranteed notes | 752,443 | 789,834 | ||
EETCs | 243,436 | 270,333 | ||
Convertible Notes | 221,454 | |||
Financial instruments liabilities | 2,162,966 | 2,042,203 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Assets | ||||
Cash and cash equivalents | 514,750 | 298,601 | ||
Short-term investments | 0 | 0 | ||
Restricted cash | 15,731 | 14,281 | ||
Long-term investments and accrued interest | 0 | 0 | ||
Liabilities | ||||
Term loans | 0 | 0 | ||
Ex-Im Bank guaranteed notes | 0 | 0 | ||
EETCs | 0 | 0 | ||
Convertible Notes | 221,454 | |||
Financial instruments liabilities | 221,454 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Short-term investments | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Long-term investments and accrued interest | 0 | 0 | ||
Liabilities | ||||
Term loans | 0 | 0 | ||
Ex-Im Bank guaranteed notes | 0 | 0 | ||
EETCs | 0 | 0 | ||
Convertible Notes | 0 | |||
Financial instruments liabilities | 0 | 0 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Short-term investments | 24,373 | 17,802 | ||
Restricted cash | 0 | 0 | ||
Long-term investments and accrued interest | 142,799 | 154,743 | ||
Liabilities | ||||
Term loans | 945,633 | 982,036 | ||
Ex-Im Bank guaranteed notes | 752,443 | 789,834 | ||
EETCs | 243,436 | 270,333 | ||
Convertible Notes | 0 | |||
Financial instruments liabilities | $ 1,941,512 | $ 2,042,203 |
Financial Instruments Contractu
Financial Instruments Contractual Maturity Table (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Debt securities | ||
Due after one but within five years, carrying value | $ 72,277 | $ 40,040 |
Due after five but within ten years, carrying value | 34,674 | 80,438 |
Total, carrying value | 106,951 | 120,478 |
Due after one but within five years, gross unrealized gain (loss) | 1,776 | 9,700 |
Due after five but within ten years, gross unrealized gain (loss) | 34,072 | 24,565 |
Total, gross unrealized gain (loss) | 35,848 | 34,265 |
Due after one but within five years, fair value | 74,053 | 49,740 |
Due after five but within ten years, fair value | 68,746 | 105,003 |
Total, fair value | $ 142,799 | $ 154,743 |
Segment Reporting (Detail)
Segment Reporting (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Revenue | ||||
ACMI | $ 189,255 | $ 186,720 | $ 378,302 | $ 384,861 |
Charter | 235,436 | 225,234 | 455,574 | 402,607 |
Dry Leasing | 27,401 | 25,524 | 59,320 | 50,200 |
Other | 3,741 | 3,691 | 7,482 | 6,864 |
Total Operating Revenue | 455,833 | 441,169 | 900,678 | 844,532 |
Direct Contribution | ||||
ACMI | 51,157 | 44,677 | 91,059 | 90,133 |
Charter | 25,019 | 8,196 | 55,478 | 4,007 |
Dry Leasing | 10,894 | 8,738 | 26,419 | 16,909 |
Total Direct Contribution for Reportable Segments | 87,070 | 61,611 | 172,956 | 111,049 |
Unallocated income and expenses, net | (45,320) | (40,317) | (94,304) | (75,162) |
Special charge | (499) | (1,449) | 69 | (9,477) |
Loss (gain) on disposal of aircraft | (114) | (14,679) | (1,323) | (14,679) |
Income before income taxes | 41,137 | 5,166 | 77,398 | 11,731 |
Interest income | (4,425) | (4,719) | (8,913) | (9,446) |
Interest expense | 25,033 | 26,365 | 49,581 | 52,817 |
Capitalized interest | (177) | (67) | (203) | (379) |
Other expense (income), net | (284) | (88) | 391 | 64 |
Operating Income | $ 61,284 | $ 26,657 | $ 118,254 | $ 54,787 |
Segment Reporting Narrative (De
Segment Reporting Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Narrative Details [Abstract] | |||||
AMC revenue | $ 114 | $ 91.3 | $ 204.1 | $ 154.2 | |
Accounts receivable from the AMC | $ 19.5 | $ 19.5 | $ 15.3 |
Legal Proceedings (Detail)
Legal Proceedings (Detail) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Labor And Legal Proceedings [Abstract] | ||
Brazilian claims in the aggregate | $ 6.3 | |
Amounts on deposit for Brazilian claims included in Deposits and other assets | $ 4.7 | $ 5.3 |
Earnings Per Share Table (Detai
Earnings Per Share Table (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Numerator: | ||||
Net Income Attributable to Common Stockholders | $ 28,390 | $ 29,593 | $ 57,622 | $ 37,537 |
Denominator: | ||||
Basic EPS weighted average shares outstanding | 25,029 | 25,241 | 24,953 | 25,169 |
Effect of dilutive stock options and restricted stock | 169 | 38 | 182 | 46 |
Diluted EPS weighted average shares outstanding | 25,198 | 25,279 | 25,135 | 25,215 |
EPS: | ||||
Basic | $ 1.13 | $ 1.17 | $ 2.31 | $ 1.49 |
Diluted | $ 1.13 | $ 1.17 | $ 2.29 | $ 1.49 |
Earnings Per Share Narrative (D
Earnings Per Share Narrative (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share Details [Abstract] | ||||
Antidilutive options | 3 | 0 | 3 | 0 |
Restricted shares and units in which performance or market conditions were not satisfied | 0.3 | 0.4 | 0.3 | 0.5 |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | $ (9,572) | |||
Net change in fair value | $ 0 | $ 0 | 0 | $ (251) |
Reclassification to interest expense | (638) | (682) | (1,288) | (1,372) |
Income tax benefit (expense) | 244 | 261 | 492 | 506 |
Balance | (9,119) | (9,119) | ||
Interest Rate Derivatives | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (9,924) | (11,375) | ||
Net change in fair value | 0 | (251) | ||
Reclassification to interest expense | 1,288 | 1,372 | ||
Translation adjustment | 0 | 0 | ||
Income tax benefit (expense) | (492) | (506) | ||
Balance | (9,128) | (10,760) | (9,128) | (10,760) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | 352 | 698 | ||
Net change in fair value | 0 | 0 | ||
Reclassification to interest expense | 0 | 0 | ||
Translation adjustment | (343) | 171 | ||
Income tax benefit (expense) | 0 | 0 | ||
Balance | 9 | 869 | 9 | 869 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (9,572) | (10,677) | ||
Net change in fair value | 0 | (251) | ||
Reclassification to interest expense | 1,288 | 1,372 | ||
Translation adjustment | (343) | 171 | ||
Income tax benefit (expense) | (492) | (506) | ||
Balance | $ (9,119) | $ (9,891) | $ (9,119) | $ (9,891) |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Income (Loss) Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income Loss Narrative Details [Abstract] | ||||
Unamortized realized loss in Accumulated other comprehensive income (loss) related to forward-starting interest rate swaps | $ 14.7 | $ 14.7 | ||
Net realized losses reclassified into earnings | 0.6 | $ 0.7 | 1.3 | $ 1.4 |
Realized losses related to forward-starting interest rate swaps expected to be reclassified into earnings within the next 12 months | $ 2.5 | $ 2.5 |