Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document period end date | Sep. 30, 2016 | |
Amendment flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 | |
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 | 25,009,609 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 100,671 | $ 425,950 |
Short-term investments | 2,133 | 5,098 |
Restricted cash | 14,897 | 12,981 |
Accounts receivable, net of allowance | 157,491 | 164,308 |
Prepaid maintenance | 7,002 | 6,052 |
Prepaid expenses and other current assets | 48,121 | 37,548 |
Total current assets | 330,315 | 651,937 |
Property and Equipment | ||
Flight equipment | 3,818,812 | 3,687,248 |
Ground equipment | 67,018 | 58,487 |
Less: accumulated depreciation | (536,192) | (450,217) |
Purchase deposits for flight equipment | 147,787 | 39,678 |
Property and equipment, net | 3,497,425 | 3,335,196 |
Other Assets | ||
Long-term investments and accrued interest | 32,693 | 37,604 |
Deferred costs and other assets | 191,854 | 81,183 |
Intangible assets, net and goodwill | 114,375 | 58,483 |
Total Assets | 4,166,662 | 4,164,403 |
Current Liabilities | ||
Accounts payable | 49,687 | 93,278 |
Accrued liabilities | 317,115 | 293,138 |
Current portion of long-term debt | 179,482 | 161,811 |
Total current liabilities | 546,284 | 548,227 |
Other Liabilities | ||
Long-term debt | 1,693,163 | 1,739,496 |
Deferred taxes | 273,573 | 286,928 |
Financial instruments and other liabilities | 169,689 | 135,569 |
Total other liabilities | 2,136,425 | 2,161,993 |
Equity | ||
Preferred stock | 0 | 0 |
Common stock | 296 | 290 |
Additional paid-in-capital | 652,163 | 625,244 |
Treasury stock, at cost | (182,915) | (171,844) |
Accumulated other comprehensive loss | (5,246) | (6,063) |
Retained earnings | 1,019,655 | 1,006,556 |
Total stockholders' equity | 1,483,953 | 1,454,183 |
Total Liabilities and Equity | $ 4,166,662 | $ 4,164,403 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Allowance for doubtful accounts receivable | $ 1,192 | $ 1,247 |
Consolidated Balance Sheets Sha
Consolidated Balance Sheets Shares (Parentheticals) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
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 | 100,000,000 | 50,000,000 |
Common stock shares issued | 29,621,192 | 28,955,445 |
Common stock shares outstanding | 25,009,141 | 24,636,651 |
Treasury stock shares | 4,612,051 | 4,318,794 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Revenue | ||||
Total Operating Revenue | $ 448,015 | $ 449,904 | $ 1,309,902 | $ 1,350,582 |
Operating Expenses | ||||
Salaries, wages and benefits | 125,978 | 86,434 | 321,365 | 262,069 |
Aircraft fuel | 65,409 | 87,330 | 189,982 | 262,156 |
Maintenance, materials and repairs | 49,761 | 41,899 | 162,220 | 142,169 |
Depreciation and amortization | 37,509 | 32,787 | 109,722 | 96,753 |
Aircraft rent | 35,730 | 36,811 | 109,490 | 107,883 |
Travel | 31,958 | 27,555 | 94,291 | 72,198 |
Passenger and ground handling services | 21,673 | 20,504 | 64,571 | 61,820 |
Navigation fees, landing fees and other rent | 15,640 | 25,413 | 56,391 | 71,582 |
Loss (gain) on disposal of aircraft | (11) | 208 | (11) | 1,531 |
Special charge | 0 | 7,674 | 6,631 | 7,605 |
Transaction-related expenses | 3,905 | 0 | 21,486 | 0 |
Other | 34,465 | 34,294 | 106,885 | 97,567 |
Total Operating Expenses | 422,017 | 400,909 | 1,243,023 | 1,183,333 |
Operating Income | 25,998 | 48,995 | 66,879 | 167,249 |
Non-operating Expenses (Income) | ||||
Interest income | (1,316) | (2,040) | (4,325) | (10,953) |
Interest expense | 21,355 | 22,110 | 63,595 | 71,691 |
Capitalized interest | (1,059) | (556) | (2,106) | (759) |
Loss on early extinguishment of debt | 0 | 66,729 | 132 | 66,729 |
Gain on investments | 0 | (13,439) | 0 | (13,439) |
Unrealized (loss) gain on financial instruments | (1,462) | 0 | 25,013 | 0 |
Other expense (income), net | (180) | 1,364 | (372) | 1,755 |
Total Non-operating (Expenses) Income | (20,262) | (74,168) | (31,911) | (115,024) |
Income (loss) from continuing operations before income taxes | 5,736 | (25,173) | 34,968 | 52,225 |
Income tax expense (benefit) | 13,237 | (12,419) | 21,079 | 7,357 |
Income (loss) from continuing operations, net of taxes | (7,501) | (12,754) | 13,889 | 44,868 |
Less: Loss from discontinued operations, net of taxes | (445) | 0 | (790) | 0 |
Net Income (Loss) | (7,946) | (12,754) | 13,099 | 44,868 |
Net Income (loss) | $ (7,946) | $ (12,754) | $ 13,099 | $ 44,868 |
Earnings (loss) per share from continuing operations | ||||
Basic | $ (0.3) | $ (0.51) | $ 0.56 | $ 1.81 |
Diluted | (0.3) | (0.51) | (0.49) | 1.8 |
Earnings (loss) per share from discontinued operations | ||||
Basic | (0.02) | 0 | (0.03) | 0 |
Diluted | (0.02) | 0 | (0.03) | 0 |
Earnings (loss) per share: | ||||
Basic | (0.32) | (0.51) | 0.53 | 1.81 |
Diluted | $ (0.32) | $ (0.51) | $ (0.52) | $ 1.8 |
Weighted average shares: | ||||
Basic | 24,840 | 24,798 | 24,788 | 24,771 |
Diluted | 24,840 | 24,798 | 25,116 | 24,947 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Comprehensive Income (Loss) | ||||
Net Income (Loss) | $ (7,946) | $ (12,754) | $ 13,099 | $ 44,868 |
Interest rate derivatives: | ||||
Reclassification to interest expense | 439 | 636 | 1,334 | 1,924 |
Income tax expense | (170) | (243) | (517) | (735) |
Foreign currency translation: | ||||
Translation adjustment | 0 | 0 | 0 | (343) |
Accumulated Postretirement Benefit Obligation: | ||||
Other comprehensive income (loss) | 269 | 393 | 817 | 846 |
Comprehensive Income (Loss) | $ (7,677) | $ (12,361) | $ 13,916 | $ 45,714 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Activities: | ||
Income (loss) from continuing operations, net of taxes | $ 13,889 | $ 44,868 |
Less: Loss from discontinued operations, net of taxes | (790) | 0 |
Net Income (Loss) | 13,099 | 44,868 |
Adjustments to reconcile Net Income to net cash provided by operating activities: | ||
Depreciation and amortization | 124,198 | 110,872 |
Accretion of debt securities discount | (968) | (4,316) |
Provision for allowance for doubtful accounts | 267 | 61 |
Special charge, net of cash payments | 6,631 | 6,589 |
Loss on early extinguishment of debt | 132 | 66,729 |
Unrealized gain on financial instruments | (25,013) | 0 |
Loss (gain) on disposal of aircraft | (11) | 1,531 |
Deferred taxes | 20,794 | 6,417 |
Stock-based compensation expense | 27,919 | 14,481 |
Changes in: | ||
Accounts receivable | 32,767 | (4,920) |
Prepaid expenses, current assets and other assets | (19,287) | 24,977 |
Accounts payable and accrued liabilities | (79,684) | (1,440) |
Net cash provided by operating activities | 100,844 | 265,849 |
Investing Activities: | ||
Capital expenditures | (36,872) | (33,835) |
Purchase deposits and payments for flight equipment | (237,093) | (77,502) |
Acquisition of business, net of cash acquired | (107,498) | 0 |
Changes in restricted cash | (1,916) | 3,196 |
Proceeds from investments | 8,843 | 76,752 |
Proceeds from disposal of aircraft | 0 | 25,166 |
Net cash used for investing activities | (374,536) | (6,223) |
Financing Activities: | ||
Proceeds from debt issuance | 84,790 | 224,500 |
Customer maintenance reserves received | 11,172 | 12,250 |
Customer maintenance reserves paid | 0 | (1,752) |
Proceeds from sale of warrants | 0 | 36,290 |
Payments for convertible note hedges | 0 | 52,903 |
Proceeds from stock option exercises | 0 | 1,193 |
Purchase of treasury stock | (11,071) | (26,393) |
Excess tax benefit from stock-based compensation expense | 443 | 588 |
Payment of debt extinguishment costs | 0 | (34,014) |
Payment of debt issuance costs | (1,078) | (6,804) |
Payments of debt | (135,843) | (334,487) |
Net cash used for financing activities | (51,587) | (181,532) |
Net increase (decrease) in cash and cash equivalents | (325,279) | 78,094 |
Cash and cash equivalents at the beginning of period | 425,950 | 298,601 |
Cash and cash equivalents at the end of period | 100,671 | 376,695 |
Non-cash Investing and Financing Activities: | ||
Acquisition of flight equipment included in Accounts payable and accrued liabilities | 18,510 | 18,321 |
Acquisition of flight equipment under capital lease | $ 10,650 | $ 0 |
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 |
Balance at Dec. 31, 2014 | $ 1,417,795 | $ 286 | $ (145,322) | $ 573,133 | $ (9,572) | $ 999,270 | $ 1,417,795 |
Net Income (Loss) | 44,868 | 0 | 0 | 0 | 0 | 44,868 | 44,868 |
Other comprehensive income | 846 | 0 | 0 | 0 | 846 | 0 | 846 |
Stock option and restricted stock compensation | 14,481 | 0 | 0 | 14,481 | 0 | 0 | 14,481 |
Purchase of shares of treasury stock | (26,393) | 0 | (26,393) | 0 | 0 | 0 | (26,393) |
Exercise of employee stock options | 1,193 | 0 | 0 | 1,193 | 0 | 0 | 1,193 |
Issuance of shares of restricted stock | 0 | 4 | 0 | (4) | 0 | 0 | 0 |
Equity component of convertible notes, net of tax | 32,233 | 0 | 0 | 32,233 | 0 | 0 | 32,233 |
Purchase of convertible note hedges, net of tax | (33,837) | 0 | 0 | (33,837) | 0 | 0 | (33,837) |
Issuance of warrants | 36,290 | 0 | 0 | 36,290 | 0 | 0 | 36,290 |
Tax benefit (expense) on restricted stock and stock options | 65 | 0 | 0 | 65 | 0 | 0 | 65 |
Balance at Sep. 30, 2015 | 1,487,541 | 290 | (171,715) | 623,554 | (8,726) | 1,044,138 | 1,487,541 |
Balance at Dec. 31, 2015 | 1,454,183 | 290 | (171,844) | 625,244 | (6,063) | 1,006,556 | 1,454,183 |
Net Income (Loss) | 13,099 | 0 | 0 | 0 | 0 | 13,099 | 13,099 |
Other comprehensive income | 817 | 0 | 0 | 0 | 817 | 0 | 817 |
Stock option and restricted stock compensation | 27,919 | 0 | 0 | 27,919 | 0 | 0 | 27,919 |
Purchase of shares of treasury stock | (11,071) | 0 | (11,071) | 0 | 0 | 0 | (11,071) |
Issuance of shares of restricted stock | 0 | 6 | 0 | (6) | 0 | 0 | 0 |
Tax benefit (expense) on restricted stock and stock options | (994) | 0 | 0 | (994) | 0 | 0 | (994) |
Balance at Sep. 30, 2016 | $ 1,483,953 | $ 296 | $ (182,915) | $ 652,163 | $ (5,246) | $ 1,019,655 | $ 1,483,953 |
Consolidated Statements of Sto9
Consolidated Statements of Stockholders' Equity (Parentheticals) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Stockholders Equity | ||
Purchase of shares of treasury stock | 293,257 | 562,202 |
Exercise of employee stock options | 0 | 25,373 |
Issuance of shares of restricted stock | 665,747 | 360,112 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
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 Atlas Air, Inc. (“Atlas”), Southern Air Holdings, Inc. (“Southern Air”) and Polar Air Cargo LLC (“Old Polar”). Southern Air was acquired on April 7, 2016 (see Note 4). AAWW is also the pa rent company of several subsidiaries related to our dry leasing services (collectively referred to as “Titan”) . AAWW has a 51% equity interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). We record our share of Polar’s results un der the equity method of accounting. 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 world, serving A frica, 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 insuran ce (“ACMI”), as well as those through which we provide crew, maintenance and insurance, but not the aircraft (“CMI”); (ii) cargo and passenger charter services (“Charter”); and (iii) dry leasing aircraft and engines (“Dry Leasing” or “Dry Lease”). The ac companying 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 reports on Form 10-Q, a nd 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”). Intercompany accounts and transaction s 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 December 31, 2015 , which includes a dditional disclosures and a summary of our significant accounting policies. The December 31, 2015 balance sheet data was derived from that Annual Report. In our opinion, the Financial Statements contain all adjustments, consisting of normal recu rring items, necessary to fairly state the financial position of AAWW and its consolidated subsidiaries as of September 30, 2016 , the results of operations for the three and nine months ended September 30, 2016 and 2015 , comprehensive income (lo ss) for the three and nine months ended September 30, 2016 and 2015 , cash flows for the nine months ended September 30, 2016 and 2015 , and shareholders’ equity as of and for the nine months ended September 30, 2016 an d 2015 . 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 d ata, all dollar amounts are in thousands unless otherwise noted . |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2016 | |
Recently Adopted Accounting Pronouncements [Abstract] | |
Recently Adopted Accounting Pronouncements | 2. Summary of Significant Accounting Policies Heavy Maintenance Except for engines used on our 747-8F aircraft, we account for heavy maintenance costs for airframes and engines used in our ACMI and Charter segments using the direct expense method. Under this method, heavy maintenance costs are charged to expense upon induction, based on our best estimate of the costs. We account for heavy maintenance costs for airframes and engines used in our Dry Leasing segment and engines used on our 747-8F aircraft using the deferral method. Under this method, we defer the expense recognition of scheduled heavy maintenance events, which are amortized over the estimated period until the next scheduled heavy maintenance event is required. As of September 30, 2016 and December 31, 2015 , deferred maintenance was $ 11.1 million and zero, respectively, which was included within Deferred costs and other assets. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) amended its accounting guidance for share-based compensation. The amended guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes , forfeitures, and statutory tax withholding requ irements, as well as classification in the statement of cash flows. This amended guidance is effective as of the beginning of 2017 , with early adoption permitted . We are still assessing the amended guidance but plan to adopt this guidance on its required effective date. Upon adoption of this amended guidance, the excess tax benefit associated with share-based compensation, which is currently recognized within equity , will be reflected within income tax expense (benefit) in our consolidated s tatements of operations . Additionally, our c onsolidated s tatements of c ash f lows will present such excess tax benefit , which is currently presented as a financing activity, as an operating activity. The impact of adopting this amended guidance on our consolidated financial statements will be dependent on the timing and intrinsic value of future share-based compensation award vesting. In February 2016, the FASB amended its accounting guidance for leases. The guidance requires a lessee to recog nize assets and liabilities on the balance sheet arising from leases with terms greater than twelve months. While lessor accounting guidance is relatively unchanged, certain amendments were made to conform with changes made to lessee accounting and recent ly released revenue recognition guidance. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense and income recognition in the statement of operations. It also requires addit ional quantitative and qualitative disclosures about leasing arrangements. The amended guidance is effective as of the beginning of 2019, with early adoption permitted. While we are still assessing the impact the amended guidance will have on our financi al statements, recognizing the right-of-use asset and related lease liability will significantly impact our balance sheet. In May 2014, the FASB amended its accounting guidance for revenue recognition. Subsequently, the FASB has issued several clarificat ions and updates. 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 users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date by one year to the beginning of 2018, with early adoption permitted. We plan to adopt this guidance on its required effective date. While we are still assessing the impact the amended guidance will have on our financial statements, we exp ect that an immaterial amount of revenue currently recognized based on flight departure will likely be recognized over time as the services are performed. |
DHL Investment and Polar
DHL Investment and Polar | 9 Months Ended |
Sep. 30, 2016 | |
DHL Investment And Polar [Abstract] | |
Related Parties | 3. Related Parties DHL Investment and Polar AAWW has a 51% equity intere st and 75% voting interest in 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 . Under a 20-year blocked space agreement (the “BSA”), Polar provides air cargo capacity to DHL. Atlas has several agreements with Polar to provide ACMI, CMI , Dry Leasing, administrat ive, 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 summariz es our tra nsactions with Polar: For the Three Months Ended For the Nine Months Ended Revenue and Expenses: September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Revenue from Polar $ 101,432 $ 102,487 $ 302,149 $ 293,692 Ground handling and airport fees paid to Polar $ 424 $ 414 $ 1,048 $ 1,641 Accounts receivable/payable as of: September 30, 2016 December 31, 2015 Receivables from Polar $ 6,158 $ 6,527 Payables to Polar $ 170 $ 4,660 Aggregate Carrying Value of Polar Investment as of: September 30, 2016 December 31, 2015 Aggregate Carrying Value of Polar Investment $ 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 September 30, 2016 and December 31, 2015 , our investment in GATS was $ 20.4 million and $ 20.7 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 $ 2.2 million as of September 30, 2016 and $ 2.3 million as of December 31, 2015 . |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Southern Air Holdings Acquisition | 4. Southern Air Holdings Acquisition On January 15, 2016, we entered into an Agreement and Plan of Merger to acquire all the outstanding shares of Southern Air (the “ Southern Acquisition ”). Southern Air is the parent company of several subsidiaries, including Southern Air Inc. and Florida West International Airways, Inc. (“Florida West”). The Southern Acquisition provided us with immediate entry into 777 and 737 aircraft operating platforms, with the potential for developing additional business with existing and new customers of both companies. We believe the platforms provided by these aircraft will augment our ability to offer customers the broadest array of aircraft and operating services for domestic, regional and international applications. Sou thern Air currently flies five 777-200 LR F and five 737-400F aircraft unde r CMI agreements for DHL . The Southern Acquisition was completed on April 7, 2016 . Total consideration of $ 105.8 million, net of cash acquired, consisted of the following: Fair value of consideration Cash paid, net of $15,615 cash acquired $ 107,498 Working capital adjustment (2,106) Other adjustments 372 Total consideration $ 105,764 Tangible and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the acquisition date. The current fair values of assets acquired and liabilities assumed are considered preliminary until we obtain final information regarding their fair values. During the three months ended September 30, 2016, we made certain measurement-period adjustments, including the finalization of working capital and other adjustments, that resulted in a net decrease to goodwill of $ 0.2 million. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The following table summarizes the preliminary amounts recognized for fair values of the assets acquired and liabilities assu med: Estimated Fair Value Accounts receivable, net $ 21,515 Prepaid expenses and other current assets 8,831 Property and equipment 6,355 Intangible assets and goodwill 63,140 Deferred income taxes 35,653 Other assets 1,498 Total assets acquired $ 136,992 Accounts payable $ 22,438 Accrued liabilities 8,790 Total liabilities assumed 31,228 Net assets acquired $ 105,764 The fair values and useful lives assigned to all intangible assets and goodwill are as follows: Estimated Useful Lives Estimated Fair Value Customer relationship 16 years $ 26,280 Trade name 1.5 years 700 Goodwill Indefinite 36,160 Total intangible assets and goodwill $ 63,140 Customer relationship represents the underlying relationship and agreements with DHL. The trade name relates to the Southern Air brand. Goodwill is not deductible for tax purposes and is primarily attributable to the expanded market opportunities expected from combining the service offerings of Southern Air with ours, as well as the employee work force acquired. Southern Air’s results of operations and goodwill are reflected in our ACMI segment. Southern Air’s results of operations have been inclu ded in our unaudited consolidated statements of operations from the date of acquisition. For the three and nine months ended September 30, 2016 , our consolidated results include Southern Air’s operating revenue of $ 26.8 million and $ 52.5 million, respectively. For the three and nine months ended September 30, 2016 , we incurred Transaction-related expenses of $ 3.1 million and $ 17.2 million, respectively, primarily related to: certain compensation costs, including employee termin ation benefits; professional fees; and integration costs associated with the acquisition. A summary of the employee termination benefit liability, which is expected to be paid by the first quarter of 2018, is as follows: Employee Termination Benefits Transaction-related expenses $ 4,366 Cash payments (2,002) Liability as of September 30, 2016 $ 2,364 The unaudited pro forma operating revenue for the three months ended September 30, 2016 and September 30, 2015 was $ 448.0 million and $ 474.1 million, respectively. The unaudited pro forma operating revenue for the nine months ended September 30, 2016 and September 30, 2015 was $ 1,337.0 million and $ 1,416.6 million, respectively. This pro forma information has been calculated as if the acquisition had taken place on January 1, 2015 and is not necessarily indicative of the net sales that actually w ould have been achieved. This information includes adjustments to conform with our accounting policies. The earnings of Southern Air were not material and, accordingly, pro forma and actual earnings information have not been presented. As part of integra ting Southern Air, management decided and committed to pursue a plan to sell Florida West. As a result, the financial results for Florida West are presented as a discontinued operation and the assets and liabilities of Florida West are classified as held for sale. The aggregate carrying value of Florida West’s assets held for sale, consisting primarily of goodwill, was $ 5.0 million at September 30, 2016, which was included in Prepaid expenses and other current assets. The sale of Florida West is expecte d to be completed during the fourth quarter of 2016. |
Special Charge
Special Charge | 9 Months Ended |
Sep. 30, 2016 | |
Special Charge [Abstract] | |
Special Charge | 5. Special Charge The carrying value of five CF6-80 engines held for sale at December 31, 2015 was $ 7.7 million . During the first quarter of 201 6 , we classified five additional CF6-80 engines as held for sale, recognized a n impairment loss of $ 6.5 million and ceased depreciation on the engines . S even engines were traded in during the first three quarters of 2016 . The remaining three engines had a carrying value of $ 4.6 million at September 30, 2016 and are expected to be sold during the fourth quarter of 201 6 . |
Amazon Warrant
Amazon Warrant | 9 Months Ended |
Sep. 30, 2016 | |
Warrant abstract | |
Amazon Warrant | 6. Amazon In May 2016, we entered into certain agreements with Amazon.com, Inc. and its subsidiary, Amazon Fulfillment Services, Inc., (collectively “Amazon”), which will involve, among other things, CMI operation of 20 Boeing 767-300 freighter aircraft for Amazon by Atlas, as well as Dry Leasing by Titan . The Dry Leases will have a term of ten years, while the CMI operations will be for seven years (with an option for Amazon to extend the term to a total of ten years). The first aircraft was placed in service during the third quarter of 2016 and the remainder are expected to be placed in service by the end of 2018. In conjunction with these agreements, we granted Amazon a warrant providing the right to acquire up to 20% of our outstanding common shares , after giving effect to the issuance of shares pursuant to the warrants, at an exercise price of $ 37.50 per share. A portion of the warrant, representing the right to purchase 3.75 million shares, vested immediately upon issuance of the warrant and the re mainder of the warrant, representing the right to purchase 3.75 million shares, will vest in increments of 375,000 as the lease and operation of each of the 11 th through 20 th aircraft commences. The warrant will be exercisable in accordance with its terms through 2021 . The agreements also provide incentives for future growth of the relationship as Amazon may increase its business with us. In that regard, we granted Amazon a warrant to acquire up to an additional 10% of our outstanding common shares , aft er giving effect to the issuance of shares pursuant to the warrants, for an exercise price of $ 37.50 per share. This warrant to purchase 3.75 million shares will vest in conjunction with payments by Amazon for additional business with us. The warrant wil l be exercisable in accordance with its terms through 2023 . At a special meeting on September 20, 2016, the Company’s shareholders, by a vote of approximately 99.9% of the votes cast, approved the issuance of warrants to acquire up to 30% of our outstand ing common shares . This approval constituted a change in control, as defined under certain of the Company’s benefit plans. As a result, we recognized $ 26.2 million in expense, including accelerated compensation expense for restricted and performance shar e and cash awards, during the three and nine month periods ended September 30, 2016. The share-based portion of the compensation expense was $ 11.6 million. As of September 30, 2016, no warrants have been exercised. The $ 92.9 million fair value of the ve sted portion of the warrant issued to Amazon as of May 4, 2016 was recorded as a warrant liability within Financial instruments and o ther l iabilities (the “Amazon Warrant”) . The initial fair value of the warrant was recognized as a customer incentive asse t within Deferred costs and other assets, net and is being amortized as a reduction of revenue in proportion to the amount of revenue recognized over the terms of the Dry Leases and CMI agreements . During the three and nine month periods ended September 3 0, 2016, we amortized $ 0.2 million of the customer incentive asset. The balance of the customer incentive asset , net of amortization, was $ 92.7 million as of September 30, 2016 . The Amazon Warrant liability is marked-to-market at the end of each reporting period with changes in fair value recorded in Other non-operating expenses . We utilized a Monte Carlo simulation approach to estimate the f air v alue of the Amazon W arrant which requ ires inputs such as our common stock price, strike price, estimated stock price volatility and risk-free interest rate, among other assumptions. We recognized an unrealized loss of $ 1.5 million and a net unrealized gain of $ 25.0 million on the Amazon Warr ant during the three and nine month periods ended September 30, 2016, respectively. The fair value of the Amazon W arrant liability was $ 67.9 million as of September 30, 2016 . |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities Tables [Abstract] | |
Accrued Liabilities | 7 . Accrued Liabilities Accrued liabilities consisted of the following as of: September 30, 2016 December 31, 2015 Customer maintenance reserves $ 78,310 $ 70,252 Maintenance 52,405 52,070 Salaries, wages and benefits 48,895 51,649 U.S. class action settlement 35,000 35,000 Aircraft fuel 18,398 12,983 Deferred revenue 14,467 12,702 Other 69,640 58,482 Accrued liabilities $ 317,115 $ 293,138 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Debt | 8. Debt Term Loans and Capital Leases In February 2016 , we borrowed $ 14.8 million related to the conversion of a 767-300BDSF aircraft under a n eight -year term loan with a final payment of $ 3.8 million due in February 2024 (the “First 2016 Term Loan”). The First 2016 Term Loan, which is secured by a mortgage against aircraft tail number N 642 GT , contains customary covenants and events of default and accrues interest at a fixed rate of 3. 19 %, with principal and interest payable month ly. In June 2016 , we borrowed $ 70.0 million under a five -year term loan with a final payment of $ 30.2 million due in June 2021 (the “Second 2016 Term Loan”). The Second 2016 Term Loan, which is secured by a mortgage against six spare GEnx engines , contains customary covenants and events of default and accrues interest at a n initial variable rate of 2.93 %, with principal and interest payable month ly. The Second 2016 Term Loan was converted to a fixed rate loan in July 2016 at a rate of 3.12%, with principal and interest payable quarterly. In September 2016, we entered into a capital lease , with an option and the intention to purchase, for a 767-300 passenger aircraft (tail number N661GT), which expires in February 2017. The present value of the future minimum lease payments at September 30, 2016 was $ 10.7 million. 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 semiannually on June 1 and December 1 of each year at a fixed rate of 2.25%. The Convertible Notes will mature on June 1, 2022, unless earlier converted or repurchased pursuant to their terms. Proceeds from the issuance of the Convertible Notes were used to refinance higher-rate debt related to five 747-400 freighter aircraft that had an average cash coupon of 8.1%. As of September 30, 2016 , the remaining lif e of the Convertible Notes is 6.0 years and consisted of the following: Liability component: Gross proceeds $ 224,500 Less: debt discount, net of amortization (44,600) Less: debt issuance cost, net of amortization (4,318) Net carrying amount $ 175,582 Equity component (1) $ 52,903 (1) Included in Additional paid-in capital on the consolidated balance sheet as of September 30, 2016. The following table presents the amount of interest expense recognized related to the Convertible Notes: For the Three Months Ended For the Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Contractual interest coupon $ 1,263 $ 1,263 $ 3,788 $ 1,656 Amortization of debt discount 1,618 1,517 4,777 1,984 Amortization of debt issuance costs 170 166 505 215 Total interest expense recognized $ 3,051 $ 2,946 $ 9,070 $ 3,855 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 9. Income Taxes Our effective income tax rate s were an expense of 230.8% and a benefit of 49.3% for the three months ended September 30, 2016 and September 30, 2015 , respectively. Our effective income tax rate s were 60.3% and 14.1% for the nine months ended September 30, 2016 and September 30, 2015 , respectively. The effective rate for the three and nine month period ended on September 30, 2016 differed from the U.S. federal statutory rate principall y due to nondeductible expenses resulting from a change in control, as defined under certain of the Company’s benefit plans, related to the Amazon transaction (see Note 6). The effective rate for the nine month period ended on September 30, 2015 differed from the U.S. federal statutory rate due to nonrecurring tax benefits related to extraterritorial income ( “ ETI ” ) and the favorable resolution of an income tax examination. In addition, the effective rates for all periods differed from the U.S. federal sta tutory 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, routine nondeductible expenses, adju stments 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 esti mated annual effective tax rate . |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments [Abstract] | |
Financial Instruments | 10 . 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 liabilities, 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 informa tion 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 a nd 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 inv estments 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 (“PTCs”) related to enhanced equipment trust certificates (“EE TCs”) 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 securities. The fair value of the Amazon Warrant is based on a Monte Carlo simulation which requires inputs such as our common stock price, strike price, estimated stock price volatility, and risk-free interest rate, among other assumptions . The following table summarizes the carrying value , estimated fair value and classification of our financial instruments as of: September 30, 2016 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 100,671 $ 100,671 $ 100,671 $ - $ - Short-term investments 2,133 2,133 - - 2,133 Restricted cash 14,897 14,897 14,897 - - Long-term investments and accrued interest 32,693 38,774 - - 38,774 $ 150,394 $ 156,475 $ 115,568 $ - $ 40,907 Liabilities Term loans and capital leases $ 1,039,665 $ 1,106,294 $ - $ - $ 1,106,294 Ex-Im Bank guaranteed notes 635,305 669,239 - - 669,239 EETCs 22,093 24,904 - - 24,904 Convertible Notes 175,582 218,439 218,439 - - Amazon Warrant 67,875 67,875 - 67,875 - $ 1,940,520 $ 2,086,751 $ 218,439 $ 67,875 $ 1,800,437 December 31, 2015 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 425,950 $ 425,950 $ 425,950 $ - $ - Short-term investments 5,098 5,098 - - 5,098 Restricted cash 12,981 12,981 12,981 - - Long-term investments and accrued interest 37,604 45,867 - - 45,867 $ 481,633 $ 489,896 $ 438,931 $ - $ 50,965 Liabilities Term loans $ 1,013,265 $ 1,049,785 $ - $ - $ 1,049,785 Ex-Im Bank guaranteed notes 689,720 715,890 - - 715,890 EETCs 28,022 30,074 - - 30,074 Convertible Notes 170,300 185,325 185,325 - - $ 1,901,307 $ 1,981,074 $ 185,325 $ - $ 1,795,749 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 : September 30, 2016 December 31, 2015 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 32,693 6,081 38,774 37,604 8,263 45,867 Total $ 32,693 $ 6,081 $ 38,774 $ 37,604 $ 8,263 $ 45,867 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | 11 . Segment Reporting Our business is organized into three operating segments based on our service offerings: ACMI, Charter and Dry Leasing. All segments are directly or indirectly engaged in the business of air transportation services but have different commercial and economic characteristics. Each operating segment is separately reviewed by our chief operating decision maker to assess operating results and make resource allocation decisions. We do not ag gregate our operating segments and , therefore , our operating seg ments are our reportable segments. We use an economic performance metric (“Direct Contribution”) that shows the profitability of each segment after allocation of direct operating and ownership costs. Direct Contribution represents Income from continuing operations before income taxes excluding the following: Special charges, Transaction-related expenses, nonrecurring items, Losses (gains) on the disposal of aircraft, Losses on early extinguishment of debt, Unrealized losses (gains) on financial instrumen ts, Gains on investments and U nallocated income and expenses, net . Direct operating and ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense on the portion of debt used for financing aircra ft, interest income on debt securities and aircraft depreciation. Unallocated income and expenses , net include corporate overhead, nonaircraft depreciation, noncash expense s and income , interest expense on the portion of debt used for general corporate pu rposes, interest income on nondebt securities , capitalized interest, foreign exchange gains and losses, other revenue and other non - operating costs. T he following table sets forth Operating Revenue and Direct Contribution for our reportable segments reconciled to Operating Income and Income (loss) from continuing operations before i ncome t axes: For the Three Months Ended For the Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Operating Revenue: ACMI $ 206,310 $ 197,020 $ 600,772 $ 575,322 Charter 212,040 225,068 616,794 680,642 Dry Leasing 25,907 23,915 79,165 83,235 Customer incentive asset amortization (174) - (174) - Other 3,932 3,901 13,345 11,383 Total Operating Revenue $ 448,015 $ 449,904 $ 1,309,902 $ 1,350,582 Direct Contribution: ACMI $ 51,607 $ 46,991 $ 121,837 $ 138,051 Charter 32,948 29,496 78,580 84,974 Dry Leasing 7,413 7,673 24,699 34,092 Total Direct Contribution for Reportable Segments 91,968 84,160 225,116 257,117 Add back (subtract): Unallocated income and expenses, net (80,876) (48,161) (186,923) (142,466) Loss on early extinguishment of debt - (66,729) (132) (66,729) Unrealized loss (gain) on financial instruments (1,462) - 25,013 - Gain on investments - 13,439 - 13,439 Special charge - (7,674) (6,631) (7,605) Transaction-related expenses (3,905) - (21,486) - Loss (gain) on disposal of aircraft 11 (208) 11 (1,531) Income (loss) from continuing operations before income taxes 5,736 (25,173) 34,968 52,225 For the Three Months Ended For the Nine Months Ended September 30, 2016 - September 30, 2015 September 30, 2016 September 30, 2015 Add back (subtract): Interest income (1,316) (2,040) (4,325) (10,953) Interest expense 21,355 22,110 63,595 71,691 Capitalized interest (1,059) (556) (2,106) (759) Loss on early extinguishment of debt - 66,729 132 66,729 Unrealized loss (gain) on financial instruments 1,462 - (25,013) - Gain on investments - (13,439) - (13,439) Other expense (income), net (180) 1,364 (372) 1,755 Operating Income $ 25,998 $ 48,995 $ 66,879 $ 167,249 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 $ 116.2 million for the three months ended September 30, 2016 and $ 122.5 million for the three months ended September 30, 2015 . Revenue from the AMC was $ 346.8 million for the nine months ended September 30, 2016 a nd $ 326.6 million for the nine months ended September 30, 2015 . Accounts receivable from the AMC were $ 21.3 million and $ 26.3 million as of September 30, 2016 and December 31, 2015 , respectively. We have not experien ced any credit issues with either of these customers. |
Labor and Legal Proceedings
Labor and Legal Proceedings | 9 Months Ended |
Sep. 30, 2016 | |
Labor And Legal Proceedings [Abstract] | |
Legal Proceedings | 12. Labor and Legal Proceedings Labor Pilots of Atlas and Southern Air, and flight dispatchers of Atlas and Polar are represented by the International Brotherhood of Teamsters (the “IBT”). We have a five-year collective bargaining agreement (“CBA”) with our Atlas pilots , which became amendable in September 2016 and a four-year CBA with the Southern Air pilots, which will become amendable in the fourth quarter of 2016 . We also have a five-year CBA with our Atlas and Polar dispatchers , which becomes am endable in the fourth quarter of 2017. After we completed the acquisition of Southern Air in April 2016, we informed the IBT of our intention to pursue a complete operational merger of Atlas and Southern Air. Pursuant to the merger provisions in both th e Atlas and Southern Air CBAs, joint negotiations for a single CBA for Atlas and Southern Air can commence immediately. Once a seniority list is presented to us by the unions, it triggers an agreed-upon time frame to negotiate a new joint CBA with any unr esolved issues submitted to binding arbitration. After the process began, an application was filed with the National Mediation Board (“NMB”) by the Atlas pilots to facilitate the negotiation process. We have opposed the mediation application as it is not in accordance with the merger provisions in the parties’ existing CBAs, which have a defined and streamlined process for negotiating a joint CBA when a merger occurs, as in the case with the Atlas and Southern Air merger. We are currently awaiting the NM B’s decision and are in ongoing discussions with the union on how the merger process will proceed . We are subject to risks of work interruption or stoppage as permitted by the Railway Labor Act of 1926 (the “Railway Labor Act”) and may incur additional administrative expenses associated with union representation of our employees. Matters Related to Alle ged Pricing Practices T he Company and Old Polar were named defendants, along with a number of other cargo carriers, in several class actions in the U.S. arising from allegations about the pricing practices of Old Polar and a number of air cargo carriers. These actions were all centralized in the U.S. District Court for the Eastern District of New York. Polar was later joined as an additional defendant. The consolidated complaint alleged, among other things, that 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 U.S., state, and European Union antitrust laws. The suit sought treble damages and attorneys’ fees. On January 7, 2016, the Company, Old Polar, and Polar entered into a settlement agreement to settle all claims by participating class members against the Company, Old Polar and Polar. T he Company, Polar, and Old Polar deny any wrongdoing, and there is no a dmission of any wrongdoing in the settlement agreement. Pursuant to the settlement agreement, the Company, Old Polar and Polar have agreed to make installment payments over three years to settle the plaintiffs’ claims, with payments of $ 35.0 million paid on January 15, 2016, $ 35.0 million due on or before January 15, 2017, and $ 30.0 million due on or before January 15, 2018. The U.S. District Court for the Eastern District of New York issued an order granting preliminary approval of the settlement on Janu ary 12, 2016. On October 6, 2016, the final judgment was issued and the settlement was approved. In the United Kingdom, several groups of named claimants have brought suit against British Airways in connection with the same alleged pricing practices at is sue in the proceedings described above and are seeking damages allegedly arising from that conduct. British Airways has filed claims in the lawsuit against Old Polar and a number of air cargo carriers for contribution should British Airways be found liabl e to claimants. Old Polar’s formal statement of defense was filed on March 2, 2015. On October 14, 2015, the U.K. Court of Appeal released decisions favorable to the defendant and contributory defendants on two matters under appeal. Permission has been sought to appeal the U.K. Court of Appeal's decisions to the U.K. Supreme Court. In December 2015, certain claimants settled with British Airways removing a significant portion of the claim against British Airways and therefore reducing the potential cont ribution required by the other airlines, including Old Polar. On December 16, 2015, the European General Court released decisions annulling decisions that the European Commission made against the majority of the air cargo carriers. The European Commissio n has not appealed the General Court decision, but may still reopen its investigation or reissue a revised decision, either of which would have a significant impact on the proceedings in the U.K. court. Future procedures, including the pretrial disclosure process, are continuing. We are unable to reasonably predict the outcome of the litigation. In the Netherlands, Stichting Cartel Compensation, successor in interest to claims of various shippers, has filed suit in the district court in Amsterdam against British Airways, KLM, Martinair , Air France, Lufthansa and Singapore Airlines seeking recovery for damages purportedly arising from the same pricing practices at issue in the proceedings described above. In response, British Airways, KLM, Martinair , Air France and Lufthansa filed third-party indemnification lawsuits against Old Polar and Polar seeking indemnification in the event the defendants are found to be liable in the main proceedings. Old Polar and Polar entered their initial court appearances on September 30, 2015. Various procedural issues are undergoing court review. Like the U.K. proceedings, the Netherlands proceedings are likely to be affected by the European Commission’s response to the European General Court decisions of December 16, 2015 . We are unable to reasonably predict the outcome of the litigation. If the Company, Old Polar or Polar were to incur an unfavorable outcome in connection with the U.K. or Netherlands proceedings, such outcome may have a material adverse impact on our business, financial condition, results of operations or cash flows. We are unable to reasonably estimate a range of possible loss for such matters at this time . 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. Each 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 duties, taxes and penalties from the date of the alleged infraction, are approximately $ 9.3 million in a ggregate based on September 30, 2016 exchange rates. In both cases, we believe that the amounts claimed are substantially overstated due to a calculation 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 received an administrative decision dismissing the claim in its entirety, which remains subject to a mandatory appeal b y the Brazil customs authorities. As required to defend such claims, we have made deposits pending resolution of these matters. The balances were $ 4.9 million as of September 30, 2016 and $ 3.8 million as of December 31, 2015 , 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 o ur financial condition, results of operations or cash flows. Accruals As of September 30, 2016 , the Company had a remaining accrual of $ 65.0 million related to the U.S. class action settlement. During the nine months ended September 30, 2016, the Company recor ded a net accrual of $ 6.5 million within Other operating expense in the consolidated statement of operations related to pending litigation outside of the U.S. 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 | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 13. Earnings Per Share Basic earnings per share (“EPS”) represent income (loss) divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represent income (loss) 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 treasury stock method. A nti-dilutive sha res related to warrants and stock options that were out of the money and excluded for the three and nine months ended September 30, 2016 and 2015 were 3.0 million. Anti-dilutive sha res related to restricted share units and warrants that were excluded from the calculation of diluted EPS for the three months ended September 30, 2016 were 0. 4 million . The calculations of basic and diluted EPS were as follows: For the Three Months Ended For the Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Numerator: Income (loss) from continuing operations, net of taxes $ (7,501) $ (12,754) $ 13,889 $ 44,868 Less: Unrealized gain on financial instruments, net of tax - - (26,109) - Diluted income (loss) from continuing operations, net of tax $ (7,501) $ (12,754) $ (12,220) $ 44,868 Denominator: Basic EPS weighted average shares outstanding 24,840 24,798 24,788 24,771 Effect of dilutive warrant - - 141 - Effect of dilutive stock options and restricted stock - - 187 176 Diluted EPS weighted average shares outstanding 24,840 24,798 25,116 24,947 Earnings (loss) per share from continuing operations: Basic $ (0.30) $ (0.51) $ 0.56 $ 1.81 Diluted $ (0.30) $ (0.51) $ (0.49) $ 1.80 Earnings (loss) per share from discontinued operations: Basic $ (0.02) $ - $ (0.03) $ - Diluted $ (0.02) $ - $ (0.03) $ - Earnings (loss) per share: Basic $ (0.32) $ (0.51) $ 0.53 $ 1.81 Diluted $ (0.32) $ (0.51) $ (0.52) $ 1.80 The calculation of EPS does not include restricted share units and warrants in which performance or market conditions were not satisfied of 7.5 million for the three and nine months ended September 30, 2016 , respectively, and 0.3 million for the three and nine months ended September 30, 2015 . |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Leases And Aircraft Purchase Commitments [Abstract] | |
Leases and Aircraft Purchase Commitments | 14. Commitments As of September 30, 2016 , our estimated payments remaining for flight equipment purchase commitments range between $ 160.0 to $ 180.0 million , of which $ 30.0 to $ 40.0 million are expected to be made during the remainder of 2016 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 15 . 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, 2014 $ (9,924) $ 352 $ (9,572) Reclassification to interest expense 1,924 - 1,924 Translation adjustment - (343) (343) Tax effect (735) - (735) Balance as of September 30, 2015 $ (8,735) $ 9 $ (8,726) Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2015 $ (6,072) $ 9 $ (6,063) Reclassification to interest expense 1,334 - 1,334 Tax effect (517) - (517) Balance as of September 30, 2016 $ (5,255) $ 9 $ (5,246) Interest Rate Derivatives As of September 30, 2016 , there wa s $ 8.6 million of unamortized net 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 $ 0.4 million and $ 0.6 million for the three months ended September 30, 2016 and 2015 , respectively. Net realized losses reclass ified into earnings were $ 1.3 million and $ 1.9 million for the nine months ended September 30, 2016 and 2015 , respectively. Net realized losses expected to be reclas sified into earnings within the next 12 months are $ 1.7 million as of September 30, 2016 . |
DHL Investment and Polar (Table
DHL Investment and Polar (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
DHL Investment And Polar Tables [Abstract] | |
Summary of Our Transactions with Polar | For the Three Months Ended For the Nine Months Ended Revenue and Expenses: September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Revenue from Polar $ 101,432 $ 102,487 $ 302,149 $ 293,692 Ground handling and airport fees paid to Polar $ 424 $ 414 $ 1,048 $ 1,641 Accounts receivable/payable as of: September 30, 2016 December 31, 2015 Receivables from Polar $ 6,158 $ 6,527 Payables to Polar $ 170 $ 4,660 Aggregate Carrying Value of Polar Investment as of: September 30, 2016 December 31, 2015 Aggregate Carrying Value of Polar Investment $ 4,870 $ 4,870 |
Business combination considerat
Business combination consideration (Table) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Fair value of consideration in a business combination | Fair value of consideration Cash paid, net of $15,615 cash acquired $ 107,498 Working capital adjustment (2,106) Other adjustments 372 Total consideration $ 105,764 |
Business combination acquierd a
Business combination acquierd assets and liabilities (Table) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | Estimated Fair Value Accounts receivable, net $ 21,515 Prepaid expenses and other current assets 8,831 Property and equipment 6,355 Intangible assets and goodwill 63,140 Deferred income taxes 35,653 Other assets 1,498 Total assets acquired $ 136,992 Accounts payable $ 22,438 Accrued liabilities 8,790 Total liabilities assumed 31,228 Net assets acquired $ 105,764 |
Business combination intangible
Business combination intangible assets (Table) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business combination intangible assets acquired | Estimated Useful Lives Estimated Fair Value Customer relationship 16 years $ 26,280 Trade name 1.5 years 700 Goodwill Indefinite 36,160 Total intangible assets and goodwill $ 63,140 |
Business combination terminatio
Business combination termination benefits (Table) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Employee termination benefits | Employee Termination Benefits Transaction-related expenses $ 4,366 Cash payments (2,002) Liability as of September 30, 2016 $ 2,364 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities Tables [Abstract] | |
Accrued Liabilities | September 30, 2016 December 31, 2015 Customer maintenance reserves $ 78,310 $ 70,252 Maintenance 52,405 52,070 Salaries, wages and benefits 48,895 51,649 U.S. class action settlement 35,000 35,000 Aircraft fuel 18,398 12,983 Deferred revenue 14,467 12,702 Other 69,640 58,482 Accrued liabilities $ 317,115 $ 293,138 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Tables [Abstract] | |
Schedule of Notes | Liability component: Gross proceeds $ 224,500 Less: debt discount, net of amortization (44,600) Less: debt issuance cost, net of amortization (4,318) Net carrying amount $ 175,582 Equity component (1) $ 52,903 (1) Included in Additional paid-in capital on the consolidated balance sheet as of September 30, 2016. |
Summary of Interest Expense Recognized | For the Three Months Ended For the Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Contractual interest coupon $ 1,263 $ 1,263 $ 3,788 $ 1,656 Amortization of debt discount 1,618 1,517 4,777 1,984 Amortization of debt issuance costs 170 166 505 215 Total interest expense recognized $ 3,051 $ 2,946 $ 9,070 $ 3,855 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments Tables [Abstract] | |
Carrying Amount, Estimated Fair Value and Classification of Our Financial Instruments | September 30, 2016 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 100,671 $ 100,671 $ 100,671 $ - $ - Short-term investments 2,133 2,133 - - 2,133 Restricted cash 14,897 14,897 14,897 - - Long-term investments and accrued interest 32,693 38,774 - - 38,774 $ 150,394 $ 156,475 $ 115,568 $ - $ 40,907 Liabilities Term loans and capital leases $ 1,039,665 $ 1,106,294 $ - $ - $ 1,106,294 Ex-Im Bank guaranteed notes 635,305 669,239 - - 669,239 EETCs 22,093 24,904 - - 24,904 Convertible Notes 175,582 218,439 218,439 - - Amazon Warrant 67,875 67,875 - 67,875 - $ 1,940,520 $ 2,086,751 $ 218,439 $ 67,875 $ 1,800,437 December 31, 2015 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 425,950 $ 425,950 $ 425,950 $ - $ - Short-term investments 5,098 5,098 - - 5,098 Restricted cash 12,981 12,981 12,981 - - Long-term investments and accrued interest 37,604 45,867 - - 45,867 $ 481,633 $ 489,896 $ 438,931 $ - $ 50,965 Liabilities Term loans $ 1,013,265 $ 1,049,785 $ - $ - $ 1,049,785 Ex-Im Bank guaranteed notes 689,720 715,890 - - 715,890 EETCs 28,022 30,074 - - 30,074 Convertible Notes 170,300 185,325 185,325 - - $ 1,901,307 $ 1,981,074 $ 185,325 $ - $ 1,795,749 |
Carrying Value, Gross Unrealized Gain (Loss) and Fair Value of Our Long-term Investments by Contractual Maturity | September 30, 2016 December 31, 2015 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 32,693 6,081 38,774 37,604 8,263 45,867 Total $ 32,693 $ 6,081 $ 38,774 $ 37,604 $ 8,263 $ 45,867 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting Tables [Abstract] | |
Operating Revenue and Direct Contribution For Our Reportable Business Segments | For the Three Months Ended For the Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Operating Revenue: ACMI $ 206,310 $ 197,020 $ 600,772 $ 575,322 Charter 212,040 225,068 616,794 680,642 Dry Leasing 25,907 23,915 79,165 83,235 Customer incentive asset amortization (174) - (174) - Other 3,932 3,901 13,345 11,383 Total Operating Revenue $ 448,015 $ 449,904 $ 1,309,902 $ 1,350,582 Direct Contribution: ACMI $ 51,607 $ 46,991 $ 121,837 $ 138,051 Charter 32,948 29,496 78,580 84,974 Dry Leasing 7,413 7,673 24,699 34,092 Total Direct Contribution for Reportable Segments 91,968 84,160 225,116 257,117 Add back (subtract): Unallocated income and expenses, net (80,876) (48,161) (186,923) (142,466) Loss on early extinguishment of debt - (66,729) (132) (66,729) Unrealized loss (gain) on financial instruments (1,462) - 25,013 - Gain on investments - 13,439 - 13,439 Special charge - (7,674) (6,631) (7,605) Transaction-related expenses (3,905) - (21,486) - Loss (gain) on disposal of aircraft 11 (208) 11 (1,531) Income (loss) from continuing operations before income taxes 5,736 (25,173) 34,968 52,225 For the Three Months Ended For the Nine Months Ended September 30, 2016 - September 30, 2015 September 30, 2016 September 30, 2015 Add back (subtract): Interest income (1,316) (2,040) (4,325) (10,953) Interest expense 21,355 22,110 63,595 71,691 Capitalized interest (1,059) (556) (2,106) (759) Loss on early extinguishment of debt - 66,729 132 66,729 Unrealized loss (gain) on financial instruments 1,462 - (25,013) - Gain on investments - (13,439) - (13,439) Other expense (income), net (180) 1,364 (372) 1,755 Operating Income $ 25,998 $ 48,995 $ 66,879 $ 167,249 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share Tables [Abstract] | |
Calculations of Basic and Diluted EPS | For the Three Months Ended For the Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Numerator: Income (loss) from continuing operations, net of taxes $ (7,501) $ (12,754) $ 13,889 $ 44,868 Less: Unrealized gain on financial instruments, net of tax - - (26,109) - Diluted income (loss) from continuing operations, net of tax $ (7,501) $ (12,754) $ (12,220) $ 44,868 Denominator: Basic EPS weighted average shares outstanding 24,840 24,798 24,788 24,771 Effect of dilutive warrant - - 141 - Effect of dilutive stock options and restricted stock - - 187 176 Diluted EPS weighted average shares outstanding 24,840 24,798 25,116 24,947 Earnings (loss) per share from continuing operations: Basic $ (0.30) $ (0.51) $ 0.56 $ 1.81 Diluted $ (0.30) $ (0.51) $ (0.49) $ 1.80 Earnings (loss) per share from discontinued operations: Basic $ (0.02) $ - $ (0.03) $ - Diluted $ (0.02) $ - $ (0.03) $ - Earnings (loss) per share: Basic $ (0.32) $ (0.51) $ 0.53 $ 1.81 Diluted $ (0.32) $ (0.51) $ (0.52) $ 1.80 |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2014 $ (9,924) $ 352 $ (9,572) Reclassification to interest expense 1,924 - 1,924 Translation adjustment - (343) (343) Tax effect (735) - (735) Balance as of September 30, 2015 $ (8,735) $ 9 $ (8,726) Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2015 $ (6,072) $ 9 $ (6,063) Reclassification to interest expense 1,334 - 1,334 Tax effect (517) - (517) Balance as of September 30, 2016 $ (5,255) $ 9 $ (5,246) |
Basis of Presentation (Detail)
Basis of Presentation (Detail) | Sep. 30, 2016 |
Basis Of Presentation Details [Abstract] | |
Equity interest in PACW | 51.00% |
Voting interest in PACW | 75.00% |
Summary of Significant Account
Summary of Significant Account Policies (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Variable Interest Entities And Off Balance Sheet Arrangements Details [Abstract] | ||
Ownership interest in GATS | 50.00% | |
Investment in GATS | $ 20.4 | $ 20.7 |
Payable to GATS | 2.2 | $ 2.3 |
Prepaid Maintenance Deposits Details [Abstract] | ||
Deferred maintenance expense | $ 11.1 |
DHL Investment and Polar Percen
DHL Investment and Polar Percentages (Detail) | Sep. 30, 2016 |
Dhl Investment And Polar Percentages [Abstract] | |
DHL equity interest in Polar | 49.00% |
DHL voting interest in Polar | 25.00% |
DHL Investment and Polar Table
DHL Investment and Polar Table (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
DHL Investment and Polar Table Details [Line Items] | |||||
Revenue from Polar | $ 101,432 | $ 102,487 | $ 302,149 | $ 293,692 | |
Ground handling and airport fees paid to Polar | 424 | $ 414 | 1,048 | $ 1,641 | |
Receivables from Polar | 6,158 | 6,158 | $ 6,527 | ||
Payables to Polar | 170 | 170 | 4,660 | ||
Aggregate carrying value of Polar investment | $ 4,870 | $ 4,870 | $ 4,870 |
Southern Air Holdings Acquisiti
Southern Air Holdings Acquisition (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||
Name of entity entered into an Agreement and Plan of Merger | Southern Air | |
Cash consideration, net of cash acquired | $ 105,764 | |
Change in goodwill | $ (200) |
Business combination consider41
Business combination consideration Table (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
BusinessCombinationConsiderationTransferredAbstract | |
Cash paid, net of cash acquired | $ 107,498 |
Estimated working capital adjustment | (2,106) |
Estimated other adjustments | 372 |
Total estimated consideration | 105,764 |
Cash acquired from acquisition | $ 15,615 |
Business Combination Acquired N
Business Combination Acquired Net Assets Table (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedLessNoncontrollingInterestAbstract | |
Accounts receivable, net | $ 21,515 |
Prepaid expenses and other current assets | 8,831 |
Property and equipment | 6,355 |
Intangible assets | 63,140 |
Deferred income taxes | 35,653 |
Other assets | 1,498 |
Total assets acquired | 136,992 |
Accounts payable | 22,438 |
Accrued liabilities | 8,790 |
Total liabilities assumed | 31,228 |
Net assets acquired | $ 105,764 |
Business Combination Intangib43
Business Combination Intangibles Table (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibleAssetsOtherThanGoodwillAbstract | |
Customer relationship | $ 26,280 |
Trade name | 700 |
Goodwill | 36,160 |
Total intangible assets | $ 63,140 |
Customer relationship estimated useful life | 16 years |
Trade name estimated useful life | 1 year 6 months |
Business combination employee t
Business combination employee termination benefits Table (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Business Combinations [Abstract] | |
Transaction-related expenses | $ 4,366 |
Cash payments | (2,002) |
Ending balance | $ 2,364 |
Business combination proforma (
Business combination proforma (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
BusinessAcquisitionProFormaInformationAbstract | ||||
Southern Air's operating revenues | $ 26.8 | $ 52.5 | ||
Transaction-related expenses | 3.1 | 17.2 | ||
Unaudited pro forma operating revenue | $ 448 | $ 474.1 | $ 1,337 | $ 1,416.6 |
Business combination discontinu
Business combination discontinued operation (Detail) $ in Millions | Sep. 30, 2016USD ($) |
DiscontinuedOperationsAndDisposalGroupsAbstract | |
Florida West's assets held for sale | $ 5 |
Special Charge (Detail)
Special Charge (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Special Charge Details [Abstract] | ||
Impairment loss recognized for held for sale assets | $ 6.5 | |
Carrying value of asset held for sale | $ 4.6 | $ 7.7 |
Amazon Narrative (Detail)
Amazon Narrative (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | May 04, 2016 | |
FinancialLiabilitiesFairValueDisclosureAbstract | |||
Right to acquire outstanding common shares | up to 20% of our outstanding common shares | ||
Warrant exercise price | $ 37.5 | ||
Warrant for number of shares vested immediately | 3,750 | ||
Warrant to buy number of shares vesting | 3,750 | ||
Warrant vesting year | 2,021 | ||
Additional warrant to acquire outstanding shares | up to an additional 10% of our outstanding common shares | ||
Additional warrant exercise price | $ 37.5 | ||
Additional warrant to buy number of shares vesting | 3,750 | ||
Additional warrant vesting year | 2,023 | ||
Shareholder approval threshold | 99.90% | 99.90% | |
Warrant maximum issuance of stocks | 30.00% | 30.00% | |
Accelerated compensation expense | $ 26.2 | $ 26.2 | |
Share-based portion of compensation expense | 11.6 | 11.6 | |
Fair value of vested warrants | 92.7 | 92.7 | $ 92.9 |
Amortization of customer incentive | 0.2 | 0.2 | |
Warrant liablity unrealized (gain) loss | 1.5 | (25) | |
Fair value of warrant liability | $ 67.9 | $ 67.9 |
Intangible Assets, net Tables (
Intangible Assets, net Tables (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Intangible Assets Table Details [Abstract] | ||
Intangible assets, net | $ 114,375 | $ 58,483 |
Accrued Liabilities (Detail)
Accrued Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accrued Liabilities Details [Abstract] | ||
Customer maintenance reserves | $ 78,310 | $ 70,252 |
Maintenance | 52,405 | 52,070 |
Salaries, wages and benefits | 48,895 | 51,649 |
Class action settlement | 35,000 | 35,000 |
Aircraft fuel | 18,398 | 12,983 |
Deferred revenue | 14,467 | 12,702 |
Other | 69,640 | 58,482 |
Accrued liabilities | $ 317,115 | $ 293,138 |
Debt Obligations Table (Detail)
Debt Obligations Table (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt [Abstract] | ||
Convertible Notes | $ 175,582 | |
Less current portion of debt | 179,482 | $ 161,811 |
Long-term debt | $ 1,693,163 | $ 1,739,496 |
Debt Term Loan (Detail)
Debt Term Loan (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Term Loans [Line Items] | |
Capital lease obligation | $ 10.7 |
First 2016 Term Loan | |
Term Loans [Line Items] | |
Issue Date | February 2,016 |
Term Loan Face Value | $ 14.8 |
Collateral Aircraft Tail Number | N642GT |
Term Loan final payment | $ 3.8 |
Term loan fixed interest rate | 3.19% |
Second 2016 Term Loan | |
Term Loans [Line Items] | |
Issue Date | June 2,016 |
Term Loan Face Value | $ 70 |
Collateral Aircraft Tail Number | six spare GEnx engines |
Term Loan final payment | $ 30.2 |
Term loan fixed interest rate | 3.12% |
Variable Interest Rate | 2.93% |
Financing Arrangements Addition
Financing Arrangements Additional Information (Detail) $ in Thousands | 3 Months Ended |
Sep. 30, 2016USD ($) | |
Debt Instrument [Line Items] | |
Convertible notes aggregate principal amount | $ 224,500 |
Aggregate amount of EETCs refinanced interest rate | 8.10% |
Financing Arrangements Schedule
Financing Arrangements Schedule of Notes (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Convertible note [Abstract] | |
Proceeds | $ 224,500 |
Less: debt discount, net of amortization | (44,600) |
Less: debt issuance cost, net of amortization | (4,318) |
Net carrying amount | 175,582 |
Equity component | $ 52,903 |
Financial Arrangements Summary
Financial Arrangements Summary of Interest Expense Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of Interest Expense on Convertible Notes [Abstract] | ||||
Contractual interest coupon | $ 1,263 | $ 1,263 | $ 3,788 | $ 1,656 |
Amortization of debt discount | 1,618 | 1,517 | 4,777 | 1,984 |
Amortization of debt issuance costs | 170 | 166 | 505 | 215 |
Total interest expense recognized | $ 3,051 | $ 2,946 | $ 9,070 | $ 3,855 |
Income Taxes Tables (Detail)
Income Taxes Tables (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Deferred | ||||
Total deferred expense (benefit) | $ 20,794 | $ 6,417 | ||
Income tax expense (benefit) | $ 13,237 | $ (12,419) | 21,079 | 7,357 |
Domestic and foreign earnings before income taxes | ||||
Income (loss) from continuing operations before income taxes | $ 5,736 | $ (25,173) | $ 34,968 | $ 52,225 |
Reconciliation of differences between the U.S. federal statutory income tax rate and the effective income tax rates | ||||
Effective income tax rate | 230.80% | 49.30% | 60.30% | 14.10% |
Financial Instruments Narrative
Financial Instruments Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Financial Instruments [Abstract] | ||||
Gain on investments | $ 0 | $ (13,439) | $ 0 | $ (13,439) |
Financial Instruments Fair Valu
Financial Instruments Fair Value Table (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | May 04, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | |||||
Cash and cash equivalents | $ 100,671 | $ 425,950 | $ 376,695 | $ 298,601 | |
Short-term investments | 2,133 | 5,098 | |||
Restricted cash | 14,897 | 12,981 | |||
Long-term investments and accrued interest | 32,693 | 37,604 | |||
Liabilities | |||||
Convertible Notes | 175,582 | ||||
Amazon Warrant | 92,700 | $ 92,900 | |||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||||
Assets | |||||
Cash and cash equivalents | 100,671 | 425,950 | |||
Short-term investments | 2,133 | 5,098 | |||
Restricted cash | 14,897 | 12,981 | |||
Long-term investments and accrued interest | 32,693 | 37,604 | |||
Liabilities | |||||
Term loans and capital leases | 1,039,665 | 1,013,265 | |||
Ex-Im Bank guaranteed notes | 635,305 | 689,720 | |||
EETCs | 22,093 | 28,022 | |||
Convertible Notes | 175,582 | 170,300 | |||
Amazon Warrant | 67,875 | ||||
Estimate of Fair Value, Fair Value Disclosure [Member] | |||||
Assets | |||||
Cash and cash equivalents | 100,671 | 425,950 | |||
Short-term investments | 2,133 | 5,098 | |||
Restricted cash | 14,897 | 12,981 | |||
Long-term investments and accrued interest | 38,774 | 45,867 | |||
Liabilities | |||||
Term loans and capital leases | 1,106,294 | 1,049,785 | |||
Ex-Im Bank guaranteed notes | 669,239 | 715,890 | |||
EETCs | 24,904 | 30,074 | |||
Convertible Notes | 218,439 | 185,325 | |||
Amazon Warrant | 67,875 | ||||
Fair Value, Inputs, Level 1 [Member] | |||||
Assets | |||||
Cash and cash equivalents | 100,671 | 425,950 | |||
Short-term investments | 0 | 0 | |||
Restricted cash | 14,897 | 12,981 | |||
Long-term investments and accrued interest | 0 | 0 | |||
Financial instruments assets | 115,568 | 438,931 | |||
Liabilities | |||||
Term loans and capital leases | 0 | 0 | |||
Ex-Im Bank guaranteed notes | 0 | 0 | |||
EETCs | 0 | 0 | |||
Convertible Notes | 218,439 | 185,325 | |||
Amazon Warrant | 0 | ||||
Financial instruments liabilities | 218,439 | 185,325 | |||
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 | |||
Financial instruments assets | 0 | 0 | |||
Liabilities | |||||
Term loans and capital leases | 0 | 0 | |||
Ex-Im Bank guaranteed notes | 0 | 0 | |||
EETCs | 0 | 0 | |||
Convertible Notes | 0 | 0 | |||
Amazon Warrant | 67,875 | ||||
Financial instruments liabilities | 67,875 | 0 | |||
Fair Value, Inputs, Level 3 [Member] | |||||
Assets | |||||
Cash and cash equivalents | 0 | 0 | |||
Short-term investments | 2,133 | 5,098 | |||
Restricted cash | 0 | 0 | |||
Long-term investments and accrued interest | 38,774 | 45,867 | |||
Financial instruments assets | 40,907 | 50,965 | |||
Liabilities | |||||
Term loans and capital leases | 1,106,294 | 1,049,785 | |||
Ex-Im Bank guaranteed notes | 669,239 | 715,890 | |||
EETCs | 24,904 | 30,074 | |||
Convertible Notes | 0 | 0 | |||
Amazon Warrant | 0 | ||||
Financial instruments liabilities | $ 1,800,437 | $ 1,795,749 |
Financial Instruments Contractu
Financial Instruments Contractual Maturity Table (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Debt securities | ||
Due after one but within five years, carrying value | $ 32,693 | $ 37,604 |
Due after five but within ten years, carrying value | 0 | 0 |
Total, carrying value | 32,693 | 37,604 |
Due after one but within five years, gross unrealized gain (loss) | 6,081 | 8,263 |
Due after five but within ten years, gross unrealized gain (loss) | 0 | 0 |
Total, gross unrealized gain (loss) | 6,081 | 8,263 |
Due after one but within five years, fair value | 38,774 | 45,867 |
Due after five but within ten years, fair value | 0 | 0 |
Total, fair value | $ 38,774 | $ 45,867 |
Segment Reporting (Detail)
Segment Reporting (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Revenue | ||||
ACMI | $ 206,310 | $ 197,020 | $ 600,772 | $ 575,322 |
Charter | 212,040 | 225,068 | 616,794 | 680,642 |
Dry Leasing | 25,907 | 23,915 | 79,165 | 83,235 |
Customer incentive asset amortization | (174) | 0 | (174) | 0 |
Other | 3,932 | 3,901 | 13,345 | 11,383 |
Total Operating Revenue | 448,015 | 449,904 | 1,309,902 | 1,350,582 |
Direct Contribution | ||||
ACMI | 51,607 | 46,991 | 121,837 | 138,051 |
Charter | 32,948 | 29,496 | 78,580 | 84,974 |
Dry Leasing | 7,413 | 7,673 | 24,699 | 34,092 |
Total Direct Contribution for Reportable Segments | 91,968 | 84,160 | 225,116 | 257,117 |
Unallocated income and expenses, net | (80,876) | (48,161) | (186,923) | (142,466) |
Loss on early extinguishement of debt | 0 | (66,729) | (132) | (66,729) |
Gain on investments | 0 | (13,439) | 0 | (13,439) |
Special charge | 0 | (7,674) | (6,631) | (7,605) |
Unrealized (loss) gain on financial instruments | (1,462) | 0 | 25,013 | 0 |
Transaction-related expenses | 3,905 | 0 | 21,486 | 0 |
Loss (gain) on disposal of aircraft | 11 | (208) | 11 | (1,531) |
Income (loss) from continuing operations before income taxes | 5,736 | (25,173) | 34,968 | 52,225 |
Interest income | (1,316) | (2,040) | (4,325) | (10,953) |
Interest expense | 21,355 | 22,110 | 63,595 | 71,691 |
Capitalized interest | (1,059) | (556) | (2,106) | (759) |
Loss on early extinguishment of debt | 0 | 66,729 | 132 | 66,729 |
Gain on investments | 0 | 13,439 | 0 | 13,439 |
Unrealized gain on financial instruments | 1,462 | 0 | (25,013) | 0 |
Other expense (income), net | (180) | 1,364 | (372) | 1,755 |
Operating Income | $ 25,998 | $ 48,995 | $ 66,879 | $ 167,249 |
Segment Reporting Narrative (De
Segment Reporting Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Narrative Details [Abstract] | |||||
AMC revenue | $ 116.2 | $ 122.5 | $ 346.8 | $ 326.6 | |
Accounts receivable from the AMC | $ 21.3 | $ 21.3 | $ 26.3 |
Legal Proceedings (Detail)
Legal Proceedings (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Labor And Legal Proceedings [Abstract] | ||
Legal settlement to be paid in 2016 | $ 35 | |
Legal settlement to be paid in 2017 | 35 | |
Legal settlement to be paid in 2018 | 30 | |
Brazilian claims in the aggregate | 9.3 | |
Amounts on deposit for Brazilian claims included in Deposits and other assets | 4.9 | $ 3.8 |
Total legal settlement accrued for the U. S. class action | 65 | |
Accrual for pending litigation outside of the U.S. | $ 6.5 |
Earnings Per Share Table (Detai
Earnings Per Share Table (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Income (loss) from continuing operations, net of taxes | $ (7,501) | $ (12,754) | $ 13,889 | $ 44,868 |
Less: Unrealized gain on financial instruments | 0 | 0 | (26,109) | 0 |
Net income (loss) from continuing operations | $ (7,501) | $ (12,754) | $ (12,220) | $ 44,868 |
Denominator: | ||||
Basic EPS weighted average shares outstanding | 24,840 | 24,798 | 24,788 | 24,771 |
Effect of dilutive warrant | 0 | 0 | 141 | 0 |
Effect of dilutive stock options and restricted stock | 0 | 0 | 187 | 176 |
Diluted EPS weighted average shares outstanding | 24,840 | 24,798 | 25,116 | 24,947 |
Earnings (loss) per share from continuing operations | ||||
Basic | $ (0.3) | $ (0.51) | $ 0.56 | $ 1.81 |
Diluted | (0.3) | (0.51) | (0.49) | 1.8 |
IncomeLossFromDiscontinuedOperationsAndDisposalOfDiscontinuedOperationsNetOfTaxPerBasicShareAbstract | ||||
Basic | (0.02) | 0 | (0.03) | 0 |
Diluted | (0.02) | 0 | (0.03) | 0 |
Earnings (loss) per share: | ||||
Basic | (0.32) | (0.51) | 0.53 | 1.81 |
Diluted | $ (0.32) | $ (0.51) | $ (0.52) | $ 1.8 |
Earnings Per Share Narrative (D
Earnings Per Share Narrative (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share Details [Abstract] | ||||
Anti-dilutive shares related to warrants and stock options that were out of the money | 0 | 3 | 0 | 3 |
Restricted shares and units in which performance or market conditions were not satisfied | 7.5 | 0.3 | 7.5 | 0.3 |
Anti-dilutive shares related to restricted shares and warrants | 0.4 |
Commitments and Contingencies M
Commitments and Contingencies Monetary (Detail) $ in Millions | Sep. 30, 2016USD ($) |
Leases And Aircraft Purchase Commitments Details [Abstract] | |
Remaining flight equiment purchase commitments minimum | $ 160 |
Remaining flight equipment purchase commitments maximum | 180 |
Remaining flight equipment purchase commitments minimum during the year | 30 |
Remaining flight equipment purchase commitments maximum during the year | $ 40 |
Accumulated Other Comprehensi66
Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | $ (6,063) | |||
Reclassification to interest expense | $ (439) | $ (636) | (1,334) | $ (1,924) |
Income tax benefit (expense) | 170 | 243 | 517 | 735 |
Balance | (5,246) | (5,246) | ||
Interest Rate Derivatives | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (6,072) | (9,924) | ||
Reclassification to interest expense | 1,334 | 1,924 | ||
Translation adjustment | 0 | 0 | ||
Income tax benefit (expense) | (517) | (735) | ||
Balance | (5,255) | (8,735) | (5,255) | (8,735) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | 9 | 352 | ||
Reclassification to interest expense | 0 | 0 | ||
Translation adjustment | 0 | (343) | ||
Income tax benefit (expense) | 0 | 0 | ||
Balance | 9 | 9 | 9 | 9 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (6,063) | (9,572) | ||
Reclassification to interest expense | 1,334 | 1,924 | ||
Translation adjustment | 0 | (343) | ||
Income tax benefit (expense) | (517) | (735) | ||
Balance | $ (5,246) | $ (8,726) | $ (5,246) | $ (8,726) |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Income (Loss) Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income Loss Narrative Details [Abstract] | ||||
Unamortized realized loss in Accumulated other comprehensive income (loss) related to forward-starting interest rate swaps | $ 8.6 | $ 8.6 | ||
Net realized losses reclassified into earnings | 0.4 | $ 0.6 | 1.3 | $ 1.9 |
Realized losses related to forward-starting interest rate swaps expected to be reclassified into earnings within the next 12 months | $ 1.7 | $ 1.7 |