Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document period end date | Sep. 30, 2017 | |
Amendment flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Current fiscal year end date | --12-31 | |
Entity central index key | 1,135,185 | |
Entity filer category | Large Accelerated Filer | |
Entity registrant name | ATLAS AIR WORLDWIDE HOLDINGS INC | |
Entity trading symbol | AAWW | |
Entity common stock shares outstanding | 25,283,100 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 165,250 | $ 123,890 |
Short-term investments | 10,676 | 4,313 |
Restricted cash | 11,030 | 14,360 |
Accounts receivable, net of allowance | 172,205 | 166,486 |
Prepaid maintenance | 13,181 | 4,418 |
Prepaid expenses and other current assets | 77,434 | 44,603 |
Total current assets | 449,776 | 358,070 |
Property and Equipment | ||
Flight equipment | 4,267,704 | 3,886,714 |
Ground equipment | 73,653 | 68,688 |
Less: accumulated depreciation | (670,443) | (568,946) |
Flight equipment modifications in progress | 228,040 | 154,226 |
Property and equipment, net | 3,898,954 | 3,540,682 |
Other Assets | ||
Long-term investments and accrued interest | 19,234 | 27,951 |
Deferred costs and other assets | 210,611 | 204,647 |
Intangible assets, net and goodwill | 108,727 | 116,029 |
Total Assets | 4,687,302 | 4,247,379 |
Current Liabilities | ||
Accounts payable | 62,540 | 59,543 |
Accrued liabilities | 421,670 | 320,887 |
Current portion of long-term debt and capital lease | 196,509 | 184,748 |
Total current liabilities | 680,719 | 565,178 |
Other Liabilities | ||
Long-term debt and capital lease | 1,908,835 | 1,666,663 |
Deferred taxes | 318,171 | 298,165 |
Financial instruments and other liabilities | 204,408 | 200,035 |
Total other liabilities | 2,431,414 | 2,164,863 |
Commitments and contingencies | 0 | 0 |
Stockholders’ Equity | ||
Preferred stock | 0 | 0 |
Common stock | 301 | 296 |
Additional paid-in-capital | 710,446 | 657,082 |
Treasury stock, at cost | (193,426) | (183,119) |
Accumulated other comprehensive loss | (4,249) | (4,993) |
Retained earnings | 1,062,097 | 1,048,072 |
Total equity | 1,575,169 | 1,517,338 |
Total Liabilities and Equity | $ 4,687,302 | $ 4,247,379 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1,230 | $ 997 |
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 | 100,000,000 |
Common stock shares issued | 30,090,510 | 29,633,605 |
Common stock shares outstanding | 25,283,100 | 25,017,242 |
Treasury stock shares | 4,807,410 | 4,616,363 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Operating Revenue | $ 535,748 | $ 448,015 | $ 1,528,508 | $ 1,309,902 |
Operating Expenses | ||||
Salaries, wages and benefits | 114,505 | 125,978 | 330,080 | 321,365 |
Aircraft fuel | 74,048 | 65,409 | 239,966 | 189,982 |
Maintenance, materials and repairs | 74,457 | 49,761 | 212,042 | 162,220 |
Depreciation and amortization | 42,033 | 37,509 | 120,913 | 109,722 |
Travel | 38,260 | 31,958 | 105,510 | 94,291 |
Aircraft rent | 33,873 | 35,730 | 103,738 | 109,490 |
Navigation fees, landing fees and other rent | 33,468 | 15,640 | 77,258 | 56,391 |
Passenger and ground handling services | 28,491 | 21,673 | 77,187 | 64,571 |
Loss (gain) on disposal of aircraft | 211 | (11) | 64 | (11) |
Special charge | 0 | 0 | 0 | 6,631 |
Transaction-related expenses | 1,092 | 3,905 | 3,403 | 21,486 |
Other | 42,598 | 34,465 | 123,121 | 106,885 |
Total Operating Expenses | 483,036 | 422,017 | 1,393,282 | 1,243,023 |
Operating Income | 52,712 | 25,998 | 135,226 | 66,879 |
Non-operating Expenses (Income) | ||||
Interest income | (1,688) | (1,316) | (4,286) | (4,325) |
Interest expense | 26,553 | 21,355 | 72,747 | 63,595 |
Capitalized interest | (1,922) | (1,059) | (5,633) | (2,106) |
Loss on early extinguishment of debt | 167 | 0 | 167 | 132 |
Unrealized loss (gain) on financial instruments | 44,775 | 1,462 | 36,225 | (25,013) |
Other income | (1,165) | (180) | (357) | (372) |
Total Non-operating Expenses (Income) | 66,720 | 20,262 | 98,863 | 31,911 |
Income (loss) from continuing operations before income taxes | (14,008) | 5,736 | 36,363 | 34,968 |
Income tax expense | 10,187 | 13,237 | 21,479 | 21,079 |
Income (loss) from continuing operations, net of taxes | (24,195) | (7,501) | 14,884 | 13,889 |
Income (loss) from discontinued operations, net of taxes | 33 | (445) | (859) | (790) |
Net Income (Loss) | $ (24,162) | $ (7,946) | $ 14,025 | $ 13,099 |
Earnings (loss) per share from continuing operations: | ||||
Basic | $ (0.96) | $ (0.30) | $ 0.59 | $ 0.56 |
Diluted | (0.96) | (0.30) | 0.58 | (0.49) |
Earnings (loss) per share from discontinued operations: | ||||
Basic | 0 | (0.02) | (0.03) | (0.03) |
Diluted | 0 | (0.02) | (0.03) | (0.03) |
Earnings (loss) per share: | ||||
Basic | (0.96) | (0.32) | 0.56 | 0.53 |
Diluted | $ (0.96) | $ (0.32) | $ 0.54 | $ (0.52) |
Weighted average shares: | ||||
Basic | 25,262 | 24,840 | 25,229 | 24,788 |
Diluted | 25,262 | 24,840 | 25,822 | 25,116 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ (24,162) | $ (7,946) | $ 14,025 | $ 13,099 |
Interest rate derivatives: | ||||
Reclassification to interest expense | 396 | 439 | 1,216 | 1,334 |
Income tax expense | (154) | (170) | (472) | (517) |
Other comprehensive income | 242 | 269 | 744 | 817 |
Comprehensive Income (Loss) | $ (23,920) | $ (7,677) | $ 14,769 | $ 13,916 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities: | ||
Income (loss) from continuing operations, net of taxes | $ 14,884 | $ 13,889 |
Less: Loss from discontinued operations, net of taxes | (859) | (790) |
Net Income (Loss) | 14,025 | 13,099 |
Adjustments to reconcile Net Income to net cash provided by operating activities: | ||
Depreciation and amortization | 142,042 | 124,198 |
Accretion of debt securities discount | (892) | (968) |
Provision for allowance for doubtful accounts | 304 | 267 |
Special charge, net of cash payments | 0 | 6,631 |
Loss on early extinguishment of debt | 167 | 132 |
Unrealized loss (gain) on financial instruments | 36,225 | (25,013) |
Loss (gain) on disposal of aircraft | 64 | (11) |
Deferred taxes | 21,106 | 20,794 |
Stock-based compensation expense | 17,030 | 27,919 |
Changes in: | ||
Accounts receivable | (12,004) | 32,767 |
Prepaid expenses, current assets and other assets | (53,343) | (19,287) |
Accounts payable and accrued liabilities | 30,382 | (79,684) |
Net cash provided by operating activities | 195,106 | 100,844 |
Investing Activities: | ||
Capital expenditures | (66,395) | (36,872) |
Payments for flight equipment and modifications | (338,524) | (237,093) |
Acquisition of business, net of cash acquired | 0 | (107,498) |
Proceeds from investments | 3,247 | 8,843 |
Net cash used for investing activities | (401,672) | (372,620) |
Financing Activities: | ||
Proceeds from debt issuance | 447,865 | 84,790 |
Proceeds from revolving credit facility | 150,000 | 0 |
Payment of revolving credit facility | (150,000) | 0 |
Customer maintenance reserves and deposits received | 22,006 | 11,172 |
Customer maintenance reserves paid | (18,538) | 0 |
Proceeds from sale of convertible note warrants | 38,148 | 0 |
Payments for convertible note hedges | (70,140) | 0 |
Purchase of treasury stock | (10,307) | (11,071) |
Excess tax benefit from stock-based compensation expense | 0 | 443 |
Payment of debt issuance costs | (11,146) | (1,078) |
Payments of debt | (153,292) | (135,843) |
Net cash provided by (used for) financing activities | 244,596 | (51,587) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 38,030 | (323,363) |
Cash, cash equivalents and restricted cash at the beginning of period | 138,250 | 438,931 |
Cash, cash equivalents and restricted cash at the end of period | 176,280 | 115,568 |
Noncash Investing and Financing Activities: | ||
Acquisition of flight equipment included in Accounts payable and accrued liabilities | 61,734 | 18,510 |
Acquisition of flight equipment under capital lease | $ 32,380 | $ 10,650 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] |
Beginning Balance at Dec. 31, 2015 | $ 1,454,183 | $ 290 | $ (171,844) | $ 625,244 | $ (6,063) | $ 1,006,556 |
Net Income (Loss) | 13,099 | 0 | 0 | 0 | 0 | 13,099 |
Other comprehensive income | 817 | 0 | 0 | 0 | 817 | 0 |
Stock-based compensation | 27,919 | 0 | 0 | 27,919 | 0 | 0 |
Purchase of shares of treasury stock | (11,071) | 0 | (11,071) | 0 | 0 | 0 |
Issuance of shares of restricted stock | 0 | 6 | 0 | (6) | 0 | 0 |
Tax expense on restricted stock and stock options | (994) | 0 | 0 | (994) | 0 | 0 |
Ending Balance at Sep. 30, 2016 | 1,483,953 | 296 | (182,915) | 652,163 | (5,246) | 1,019,655 |
Beginning Balance at Dec. 31, 2016 | 1,517,338 | 296 | (183,119) | 657,082 | (4,993) | 1,048,072 |
Net Income (Loss) | 14,025 | 0 | 0 | 0 | 0 | 14,025 |
Other comprehensive income | 744 | 0 | 0 | 0 | 744 | 0 |
Stock-based compensation | 17,030 | 0 | 0 | 17,030 | 0 | 0 |
Purchase of shares of treasury stock | (10,307) | 0 | (10,307) | 0 | 0 | 0 |
Issuance of shares of restricted stock | 0 | 5 | 0 | (5) | 0 | 0 |
Equity component of convertible note, net of tax | 43,256 | 0 | 0 | 43,256 | 0 | 0 |
Purchase of convertible note hedges, net of tax | (45,065) | 0 | 0 | (45,065) | 0 | 0 |
Issuance of convertible note warrants | 38,148 | 0 | 0 | 38,148 | 0 | 0 |
Ending Balance at Sep. 30, 2017 | $ 1,575,169 | $ 301 | $ (193,426) | $ 710,446 | $ (4,249) | $ 1,062,097 |
Consolidated Statements of Sto8
Consolidated Statements of Stockholders' Equity (Parentheticals) (Unaudited) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement Of Stockholders Equity [Abstract] | ||
Purchase of shares of treasury stock | 191,047 | 293,257 |
Issuance of shares of restricted stock | 456,905 | 665,747 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
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”) and Southern Air Holdings, Inc. (“Southern Air”). AAWW is also the parent 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 under 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 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, 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 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 reports 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”). 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 December 31, 2016, which includes additional disclosures and a summary of our significant accounting policies. The December 31, 2016 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 September 30, 2017, the results of operations for the three and nine months ended September 30, 2017 and 2016, comprehensive income for the three and nine months ended September 30, 2017 and 2016, cash flows for the nine months ended September 30, 2017 and 2016, and shareholders’ equity as of and for the nine months ended September 30, 2017 and 2016. 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 dollar amounts are in thousands unless otherwise noted. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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. Amortization of deferred maintenance expense included in Depreciation and amortization was $1.8 million and zero for the three months ended September 30, 2017 and September 30, 2016, respectively, and was $3.7 million and zero for the nine months ended September 30, 2017 and September 30, 2016, respectively. Deferred maintenance included within Deferred costs and other assets is as follows: Deferred Maintenance Balance as of December 31, 2016 $ 19,100 Deferred maintenance costs 33,910 Amortization of deferred maintenance (3,710 ) Balance as of September 30, 2017 $ 49,300 Supplemental Cash Flow Information The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: September 30, 2017 December 31, 2016 Cash and cash equivalents $ 165,250 $ 123,890 Restricted cash 11,030 14,360 Total Cash, cash equivalents and restricted cash shown in consolidated statements of cash flows $ 176,280 $ 138,250 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 requirements, as well as classification in the statement of cash flows. We adopted this amended guidance on January 1, 2017 on a prospective basis. As a result, we recognized $1.8 million of excess tax benefits during the nine months ended September 30, 2017 as a reduction of income tax expense in our consolidated statements of operations. Excess tax benefits were previously recognized within equity. Additionally, our consolidated statements of cash flows present such excess tax benefits, which were previously presented as a financing activity, as an operating activity. In February 2016, the FASB amended its accounting guidance for leases. The guidance requires a lessee to recognize 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 amended revenue recognition guidance. The new guidance will continue to classify leases as either finance or operating, with classification affecting the presentation and pattern of expense and income recognition, in the statement of operations. It also requires additional 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 financial statements, we expect that recognizing the right-of-use asset and related lease liability will impact our balance sheet materially. We have developed and are implementing a plan for adopting this amended guidance. In May 2014, the FASB amended its accounting guidance for revenue recognition. Subsequently, the FASB has issued several clarifications 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. The two permitted transition methods under the guidance are the full retrospective approach, under which the guidance is applied to all periods presented, or the modified retrospective approach, under which the guidance is applied only to the most current period presented. While we believe the amended guidance will not have a material effect on our financial statements, we expect that revenue currently recognized based on flight departure will be recognized over time as the services are performed. In addition, we expect that revenue under certain ACMI and CMI contracts, such as revenue related to contracted minimum block hour guarantees, will be recognized in later periods and that some revenue adjustments related to meeting or exceeding on-time performance targets will be recognized in earlier periods. The implementation of our plan to adopt this amended guidance is progressing as expected and we plan to adopt the new guidance on its required effective date of January 1, 2018 using the modified retrospective approach. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | 3. Related Parties DHL Investment and Polar AAWW has a 51% equity interest 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, administrative, sales and ground support services to one another. We 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 Nine Months Ended Revenue and Expenses: September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Revenue from Polar $ 105,985 $ 101,432 $ 317,144 $ 302,149 Ground handling and airport fees to Polar 800 424 1,926 1,048 Accounts receivable/payable as of: September 30, 2017 December 31, 2016 Receivables from Polar $ 12,426 $ 8,161 Payables to Polar 2,270 2,019 Aggregate Carrying Value of Polar Investment as of: September 30, 2017 December 31, 2016 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. As of September 30, 2017 and December 31, 2016, our investment in GATS was $22.1 million and $22.2 million, respectively. We had Accounts payable to GATS of $0.3 million as of September 30, 2017 and $2.4 million as of December 31, 2016. |
Southern Air Acquisition
Southern Air Acquisition | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Southern Air Acquisition | 4. Southern Air Acquisition On April 7, 2016, we completed the acquisition of Southern Air and its subsidiaries, including Southern Air Inc. and Florida West International Airways, Inc. (“Florida West”). The acquisition of Southern Air provided us with immediate entry into 777 and 737 aircraft operating platforms, with the potential for developing additional business with existing and new customers. We believe this augments our ability to offer the broadest array of aircraft and services for domestic, regional and international operations. For the three and nine months ended September 30, 2017, we incurred Transaction-related expenses of $1.1 million and $3.4 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. Transaction-related expenses are primarily related to: compensation costs, including employee termination benefits; professional fees; and integration costs associated with the acquisition. The unaudited estimated pro forma operating revenue for AAWW, including Southern Air, for the three and nine months ended September 30, 2016 was $448.0 million and $1,337.0 million, respectively, including adjustments to conform with our accounting policies. The earnings of Southern Air were not material for the three and nine months ended September 30, 2016 and, accordingly, pro forma and actual earnings information have not been presented. As part of integrating Southern Air, management decided and committed to pursue a plan to sell Florida West. As a result, the financial results for Florida West were presented as a discontinued operation and the assets and liabilities of Florida West were classified as held for sale from the date of acquisition through December 31, 2016. In February 2017, management determined that a sale was no longer likely to occur and committed to a plan to wind-down the Florida West operations. The wind-down of operations was completed during the first quarter of 2017. A summary of the employee termination benefit liabilities, which are expected to be paid by the first quarter of 2018, is as follows: Employee Termination Benefits Liability as of December 31, 2016 $ 1,214 Wind-down expenses 766 Cash payments (1,718 ) Liability as of September 30, 2017 $ 262 |
Special Charge
Special Charge | 9 Months Ended |
Sep. 30, 2017 | |
Aircraft And Aircraft Engines Held For Sale [Abstract] | |
Special Charge | 5. Special Charge During the first quarter of 2016, we classified four CF6-80 engines as held for sale, recognized an impairment loss of $6.5 million and ceased depreciation on the engines. All four of those engines were traded in during 2016. During the fourth quarter of 2016, we classified two CF6-80 engines as held for sale, recognized an impairment loss of $3.5 million and ceased depreciation on the engines. One of those engines was traded in during the first quarter of 2017. The carrying value of the remaining CF6-80 engine held for sale at September 30, 2017 was $1.4 million, and of the two CF6-80 engines held for sale at December 31, 2016 was $2.8 million, which was included within Prepaid expenses and other current assets in the consolidated balance sheets. The remaining CF6-80 engine classified as held for sale is expected to be sold during the fourth quarter of 2017. |
Amazon
Amazon | 9 Months Ended |
Sep. 30, 2017 | |
Warrants And Rights Note Disclosure [Abstract] | |
Amazon | 6. Amazon In May 2016, we entered into certain agreements with Amazon.com, Inc. and its subsidiary, Amazon Fulfillment Services, Inc., (collectively “Amazon”), which involves, 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 from the commencement of each lease, while the CMI operations will be for seven years from the commencement of each agreement (with an option for Amazon to extend the term to a total of ten years). We placed the first seven aircraft in service between August 2016 and August 2017. In October 2017, we began flying three additional aircraft and we expect to be operating all 20 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 remainder 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 th 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, after 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 will 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 outstanding 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 share 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. The $92.9 million fair value of the vested portion of the warrant issued to Amazon as of May 4, 2016 was recorded as a warrant liability within Financial instruments and other liabilities (the “Amazon Warrant”). This initial fair value of the warrant was also recognized as a customer incentive asset 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. We amortized $1.5 million and $2.9 million of the customer incentive asset for the three and nine months ended September 30, 2017, respectively. We amortized $0.2 million of the customer incentive asset for the three and nine month periods ended September 30, 2016. The balance of the customer incentive asset, net of amortization, was $89.5 million as of September 30, 2017 and $92.4 million as of December 31, 2016. The Amazon Warrant liability is marked-to-market at the end of each reporting period with changes in fair value recorded in Unrealized loss (gain) on financial instruments. We utilize a Monte Carlo simulation approach to estimate the fair value of the Amazon Warrant which requires inputs such as our common stock price, the warrant strike price, estimated common stock price volatility and risk-free interest rate, among others. We recognized a net unrealized loss of $44.8 million and $36.2 million on the Amazon Warrant during the three and nine months ended September 30, 2017, respectively. We recognized a net unrealized loss of $1.5 million and a net unrealized gain of $25.0 million on the Amazon Warrant during the three and nine months ended September 30, 2016, respectively. The fair value of the Amazon Warrant liability was $132.0 million as of September 30, 2017 and $95.8 million as of December 31, 2016. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities Current And Noncurrent [Abstract] | |
Accrued Liabilities | 7. Accrued Liabilities Accrued liabilities consisted of the following as of: September 30, 2017 December 31, 2016 Maintenance $ 143,941 $ 54,495 Customer maintenance reserves 85,256 81,830 Salaries, wages and benefits 48,879 55,063 U.S. class action settlement 30,000 35,000 Aircraft fuel 22,638 16,149 Deferred revenue 22,565 10,298 Other 68,391 68,052 Accrued liabilities $ 421,670 $ 320,887 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Term Loans and Capital Lease We have entered into various term loans during 2017 to finance the purchase and passenger-to-freighter conversion of 767-300 aircraft, and The following table summarizes the terms and principal balances for each term loan entered into during 2017 (in millions): Issue Face Collateral Original Interest Rate Interest Date Value Type Term Type Rate First 2017 Term Loan April 2017 $ 20.1 767-300 91 months Fixed 3.02% Second 2017 Term Loan April 2017 21.3 767-300 91 months Fixed 3.16% Third 2017 Term Loan May 2017 21.5 767-300 91 months Fixed 3.16% Fourth 2017 Term Loan June 2017 21.3 767-300 91 months Fixed 3.09% Fifth 2017 Term Loan June 2017 21.7 767-300 91 months Fixed 3.11% Sixth 2017 Term Loan June 2017 21.7 767-300 91 months Fixed 3.11% Seventh 2017 Term Loan June 2017 18.7 None 58 months Fixed 2.17% Eighth 2017 Term Loan July 2017 12.5 767-300 60 months Fixed 3.62% Total $ 158.8 In March 2017, we amended and extended a lease for a 747-400 freighter aircraft to June 2032 at a lower monthly lease payment. As a result of the extension, we determined that the lease qualifies as a capital lease. The present value of the future minimum lease payments was $32.4 million. Private Placement Facility In September 2017, we entered into a debt facility for up to $146.5 million through a private placement to finance the purchase and passenger-to-freighter conversion of up to six 767-300 freighter aircraft dry leased to Amazon (the “Private Placement Facility”). The Private Placement Facility consists of six separate loans (the “Private Placement Loans”). Each Private Placement Loan is comprised of an equipment note and an equipment term loan, both secured by the cash flows from a 767-300 freighter aircraft dry lease and the underlying aircraft. The equipment notes require payment of principal and interest at a fixed interest rate. The equipment term loans accrue interest, at a fixed rate, which is added to the principal balance outstanding until each equipment note is paid in full. Subsequently, the equipment term loans require payment of principal and interest over the remaining term of the loans. The Private Placement Loans are cross-collateralized, but not cross-defaulted, with each other and, except for certain specified events, are not cross-defaulted with other debt facilities of the Company. In connection with entry into the Private Placement Facility, we have agreed to pay usual and customary commitment and other fees associated with this type of financing. The Private Placement Facility is guaranteed by us and subject to customary covenants and events of default. In October 2017, we completed the following financings for the first three aircraft under the Private Placement Facility: Issue Face Collateral Original Interest Rate Interest Date Value Type Term Type Rate First 2017 Equipment Note October 2017 $ 21.2 Dry Lease and 767-300 87 months Fixed 2.93% First 2017 Equipment Term Loan October 2017 2.6 Dry Lease and 767-300 103 months Fixed 4.75% Second 2017 Equipment Note October 2017 21.4 Dry Lease and 767-300 88 months Fixed 2.93% Second 2017 Equipment Term Loan October 2017 3.2 Dry Lease and 767-300 107 months Fixed 4.75% Third 2017 Equipment Note October 2017 21.2 Dry Lease and 767-300 87 months Fixed 2.93% Third 2017 Equipment Term Loan October 2017 3.0 Dry Lease and 767-300 105 months Fixed 4.75% Total $ 72.6 Convertible Notes In May 2017, we issued $289.0 million aggregate principal amount of convertible senior notes (the “2017 Convertible Notes”) in an 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 1.875%. The 2017 Convertible Notes will mature on June 1, 2024, unless earlier converted or repurchased pursuant to their terms. We used the majority of the net proceeds in May 2017 to repay $150.0 million then outstanding under our revolving credit facility and to fund the cost of the convertible note hedges described below. Each $1,000 of principal of the 2017 Convertible Notes will initially be convertible into 16.3713 shares of our common stock, which is equal to an initial conversion price of $61.08 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 circumstances. 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 the 2017 Convertible Notes converted in connection with such “make-whole fundamental 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 2017 Convertible Notes for cash at a price equal to 100% of the principal amount of the 2017 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 2017 Convertible Notes, we entered into convertible note hedge transactions whereby we have the option to purchase initially (subject to adjustment for certain specified events) a total of 4,731,306 shares of our common stock at a price of $61.08 per share. The total cost of the convertible note hedge transactions was $70.1 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 4,731,306 shares of our common stock at a price of $92.20. We received $38.1 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 economic dilution from the conversion of the 2017 Convertible Notes when the stock price is below $92.20 per share and to effectively increase the overall conversion price from $61.08 to $92.20 per share. However, for purposes of the computation of diluted earnings per share in accordance with GAAP, dilution typically occurs when the average share price of our common stock for a given period exceeds the conversion price of the 2017 Convertible Notes. The $32.0 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. On or after September 1, 2023 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 2017 Convertible Notes. Upon conversion, the 2017 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 2017 Convertible Notes paid in cash. Holders may only convert their 2017 Convertible Notes at their option at any time prior to September 1, 2023, under the following circumstances: • during any calendar quarter (and only during such calendar quarter) if, for 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 trading 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 rate on such trading day; or • upon the occurrence of specified corporate events. We separately account for the liability and equity components of convertible notes. The carrying amount of the liability component was determined by measuring the fair value of a similar liability that does not have an associated conversion feature, assuming our nonconvertible unsecured debt borrowing rate. The carrying value of the 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 effective interest rate of 6.14% over the term of the 2017 Convertible Notes. The equity component will not be remeasured as long as it continues to meet the conditions for equity classification. The debt issuance costs related to the issuance of the 2017 Convertible Notes were allocated to the liability and equity components based on their relative values, as determined above. Total debt issuance costs were $7.5 million, of which $5.7 million was allocated to the liability component and $1.8 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 the 2017 Convertible Notes. In June 2015, we issued $224.5 million aggregate principal amount of convertible senior notes (the “2015 Convertible Notes”) in an underwritten public offering. The 2015 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 2015 Convertible Notes will mature on June 1, 2022, unless earlier converted or repurchased pursuant to their terms. As of September 30, 2017, t he 2017 Convertible Notes and the 2015 Convertible Notes consisted of the following 2017 Convertible Note 2015 Convertible Note Remaining life in months 80 56 Liability component: Gross proceeds $ 289,000 $ 224,500 Less: debt discount, net of amortization (67,245 ) (37,862 ) Less: debt issuance cost, net of amortization (5,394 ) (3,623 ) Net carrying amount $ 216,361 $ 183,015 Equity component (1) $ 70,140 $ 52,903 (1) Included in Additional paid-in capital on the consolidated balance sheet as of September 30, 2017. The following table presents the amount of interest expense recognized related to the 2017 Convertible Notes and the 2015 Convertible Notes: For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Contractual interest coupon $ 2,618 $ 1,263 $ 5,730 $ 3,788 Amortization of debt discount 3,752 1,618 7,990 4,777 Amortization of debt issuance costs 352 170 776 505 Total interest expense recognized $ 6,722 $ 3,051 $ 14,496 $ 9,070 Revolving Credit Facility In December 2016, we entered into a three-year $150.0 million secured revolving credit facility (the “Revolver”) for general corporate purposes, including financing the acquisition and conversion of 767 aircraft prior to obtaining permanent financing for the converted aircraft. There were no amounts outstanding and we had $142.3 million of unused availability under the Revolver, based on the collateral borrowing base, as of September 30, 2017. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 9. Commitments Equipment Purchase Commitments As of September 30, 2017, our estimated payments remaining for flight equipment purchase commitments are $143.8 million, of which $63.5 million are expected to be made during the remainder of 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes Our effective income tax expense rates were 72.7% and 230.8% for the three months ended September 30, 2017 and 2016, respectively. Our effective income tax expense rates were 59.1% and 60.3% for the nine months ended September 30, 2017 and 2016, respectively. The effective income tax expense rates for the three and nine months ended September 30, 2017 differed from the U.S. statutory rate primarily due to nondeductible changes in the value of the Amazon Warrant liability (see Note 6 to our Financial Statements). In addition, the effective income tax expense rate for the nine months ended September 30, 2017 differed from the U.S. statutory rate due to the impact of the 2017 adoption of the amended accounting guidance for share-based compensation which requires that excess tax benefits associated with share-based compensation be recognized within income tax expense in our consolidated statement of operations. The effective income tax expense rates for the three and nine months ended September 30, 2016 differed from the U.S. federal statutory rate primarily 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 to our Financial Statements). The effective rates for all periods were impacted by our assertion to indefinitely reinvest the net earnings of foreign subsidiaries outside the U.S. For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | 11. 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 information 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, maturing within five years, for which we have both the ability and 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 investments 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 (“EETCs”) issued by Atlas in 1998, 1999 and 2000. Term loans and notes consist of term loans, notes guaranteed by the Export-Import Bank of the United States (“Ex-Im Bank”), the Revolver and EETCs. The fair values of these debt instruments 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, the warrant strike price, estimated common stock price volatility, and risk-free interest rate, among others. The following table summarizes the carrying value, estimated fair value and classification of our financial instruments as of: September 30, 2017 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 165,250 $ 165,250 $ 165,250 $ - $ - Short-term investments 10,676 10,676 - - 10,676 Restricted cash 11,030 11,030 11,030 - - Long-term investments and accrued interest 19,234 22,442 - - 22,442 $ 206,190 $ 209,398 $ 176,280 $ - $ 33,118 Liabilities Term loans and notes $ 1,674,311 $ 1,747,582 $ - $ - $ 1,747,582 Convertible notes 399,377 632,740 632,740 - - Amazon Warrant 132,000 132,000 - 132,000 - $ 2,205,688 $ 2,512,322 $ 632,740 $ 132,000 $ 1,747,582 December 31, 2016 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 123,890 $ 123,890 $ 123,890 $ - $ - Short-term investments 4,313 4,313 - - 4,313 Restricted cash 14,360 14,360 14,360 - - Long-term investments and accrued interest 27,951 33,161 - - 33,161 $ 170,514 $ 175,724 $ 138,250 $ - $ 37,474 Liabilities Term loans and notes $ 1,674,013 $ 1,739,744 $ - $ - $ 1,739,744 Convertible notes 177,398 228,429 228,429 - - Amazon Warrant 95,775 95,775 - 95,775 - $ 1,947,186 $ 2,063,948 $ 228,429 $ 95,775 $ 1,739,744 Gross unrealized gains on our long-term investments and accrued interest were $3.2 million at September 30, 2017 and $5.2 million at December 31, 2016. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | 12. 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 aggregate our operating segments and, therefore, our operating segments 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 (loss) 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 instruments, Gains on investments and Unallocated 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 aircraft, interest income on debt securities and aircraft depreciation. Unallocated income and expenses, net include corporate overhead, nonaircraft depreciation, noncash expenses and income, interest expense on the portion of debt used for general corporate purposes, interest income on nondebt securities, capitalized interest, foreign exchange gains and losses, other revenue and other non-operating costs. The following table sets forth Operating Revenue and Direct Contribution for our reportable segments reconciled to Operating Income and Income from continuing operations before income taxes: For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Operating Revenue: ACMI $ 258,109 $ 206,310 $ 687,982 $ 600,772 Charter 243,583 212,040 743,302 616,794 Dry Leasing 30,804 25,907 86,120 79,165 Customer incentive asset amortization (1,531 ) (174 ) (2,873 ) (174 ) Other 4,783 3,932 13,977 13,345 Total Operating Revenue $ 535,748 $ 448,015 $ 1,528,508 $ 1,309,902 Direct Contribution: ACMI $ 51,647 $ 51,607 $ 141,134 $ 121,837 Charter 34,808 32,948 88,877 78,580 Dry Leasing 10,245 7,413 29,629 24,699 Total Direct Contribution for Reportable Segments 96,700 91,968 259,640 225,116 Unallocated income and expenses, net (64,463 ) (80,876 ) (183,418 ) (186,923 ) Loss on early extinguishment of debt (167 ) - (167 ) (132 ) Unrealized loss (gain) on financial instruments (44,775 ) (1,462 ) (36,225 ) 25,013 Special charge - - - (6,631 ) Transaction-related expenses (1,092 ) (3,905 ) (3,403 ) (21,486 ) Loss (gain) on disposal of aircraft (211 ) 11 (64 ) 11 Income (loss) from continuing operations before income taxes (14,008 ) 5,736 36,363 34,968 Add back (subtract): Interest income (1,688 ) (1,316 ) (4,286 ) (4,325 ) Interest expense 26,553 21,355 72,747 63,595 Capitalized interest (1,922 ) (1,059 ) (5,633 ) (2,106 ) Loss on early extinguishment of debt 167 - 167 132 Unrealized loss (gain) on financial instruments 44,775 1,462 36,225 (25,013 ) Other income (1,165 ) (180 ) (357 ) (372 ) Operating Income $ 52,712 $ 25,998 $ 135,226 $ 66,879 Given the nature of our business and international flying, geographic information for revenue, long-lived assets and total assets is not presented because it is impracticable to do so. We are exposed to a concentration of revenue from the U.S. Military Air Mobility Command (the “AMC”), Polar and DHL (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 $124.9 million for the three months ended September 30, 2017 and $116.2 million for the three months ended September 30, 2016. Revenue from the AMC was $397.5 million for the nine months ended September 30, 2017 and $346.8 million for the nine months ended September 30, 2016. Revenue from DHL was $62.1 million for the three months ended September 30, 2017 and $57.4 million for the three months ended September 30, 2016. Revenue from DHL was $177.6 million for the nine months ended September 30, 2017 and $128.0 million for the nine months ended September 30, 2016. We have not experienced any credit issues with either of these customers. |
Labor and Legal Proceedings
Labor and Legal Proceedings | 9 Months Ended |
Sep. 30, 2017 | |
Labor And Legal Proceedings [Abstract] | |
Labor and Legal Proceedings | 13. 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 became amendable in November 2016. We also have a five-year CBA with our Atlas and Polar dispatchers, which was extended in April 2017 for an additional four years, making the CBA amendable in November 2021. After we completed the acquisition of Southern Air in April 2016, we informed the IBT of our intention to pursue (and we have been pursuing) a complete operational merger of Atlas and Southern Air. Pursuant to the merger provisions in both the Atlas and Southern Air CBAs, joint negotiations for a single CBA for Atlas and Southern Air should commence promptly. Further to this process, 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 unresolved issues submitted to binding arbitration. After the merger process began, the IBT filed an application for mediation with the National Mediation Board (“NMB”) on behalf of the Atlas pilots, and subsequently the IBT filed a similar application on behalf of Southern Air pilots. We have opposed both mediation applications as they are not in accordance with the merger provisions in the parties’ existing CBAs. The Atlas and Southern Air CBAs 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. The NMB conducted a pre-mediation investigation on the IBT’s Atlas application in June 2016, which is currently pending (along with the IBT’s Southern Air application). Due to a lack of meaningful progress in such merger discussions, in February 2017, we filed a lawsuit against the IBT to compel arbitration on the issue of whether the merger provisions in Atlas and Southern Air's CBAs apply to the bargaining process. While this lawsuit is pending in the Southern District Court of New York, the Company and the IBT have reached an interim agreement on a process to proceed with negotiations for a new joint CBA. These negotiations commenced on July 6, 2017 and the parties have continued to meet regularly since then and bargain for a new joint CBA. In September 2017, the Company requested the U.S. District Court for the District of Columbia (the “Court”) to issue a preliminary injunction to require the IBT to meet its obligations under the Railway Labor Act and stop the illegal intentional work slowdowns and service interruptions. In its filing, the Company states that the IBT is engaging in unlawful, concerted work slowdowns to gain leverage in pilot contract negotiations with the Company. The Company seeks to have the Court compel the IBT to stop the illegal work actions and return to normal operations. The hearing was completed in early November and a ruling on the preliminary injunction is expected during the fourth quarter of 2017. We are subject to risks of work interruption or stoppage as permitted by the Railway Labor Act and may incur additional administrative expenses associated with union representation of our employees. Matters Related to Alleged Pricing Practices The Company and Polar Air Cargo, LLC (“Old Polar”), a consolidated subsidiary, 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. The Company, Polar, and Old Polar deny any wrongdoing, and there is no admission 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 in January 2016 and 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 January 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 issue 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 liable 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 was sought to appeal the U.K. Court of Appeal's decisions to the U.K. Supreme Court. Permission was denied. In December 2015, certain claimants settled with British Airways removing a significant portion of the claim against British Airways and therefore reducing the potential contribution 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 Commission did not appeal the General Court decision but has, in early 2017, reissued a revised decision to which Old Polar is, again, not an addressee. On April 13, 2017, Old Polar and claimants represented by Hausfeld & Co. LLP (the “Hausfeld Claimants”) entered into a bilateral settlement agreement in relation to the English proceedings (the “Settlement Agreement”). The Settlement Agreement contains a mechanism by which the Hausfeld Claimants will release Old Polar and remove from the English proceedings all claims for damages alleged by the Hausfeld Claimants to be attributable to air cargo purchases from Old Polar (and each of Old Polar’s parents, subsidiaries, affiliates, predecessors, successors, agents and assignees). The amount of the settlement, which is tax deductible and was previously accrued for, was paid during the second quarter of 2017 and did not have a material adverse impact on the Company’s financial condition, results of operations or cash flows. Old Polar remains a contributory defendant in the proceedings and, as such, is subject to certain continuing evidentiary obligations. 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 revised decision. 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 this proceeding, 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 this matter 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 $9.6 million in aggregate based on September 30, 2017 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 by the Brazil customs authorities. As required to defend such claims, we have made deposits pending resolution of these matters. The balance was $5.3 million as of September 30, 2017 and December 31, 2016, and is included in Deferred costs 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. Accruals As of September 30, 2017, the Company had an accrual of $30.0 million related to the U.S. class action settlement that was recognized in 2015. 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, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. Earnings Per Share Basic earnings per share (“EPS”) represents income (loss) divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents 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. Anti-dilutive shares related to warrants and stock options that were out of the money and excluded were 3.0 million for the three and nine months ended September 30, 2017 and 2016. Anti-dilutive shares related to restricted share units and warrants that were excluded from the calculation of diluted EPS due to losses incurred were 2.2 million for the three months ended September 30, 2017 and were 0.4 million for the three months ended September 30, 2016. The calculations of basic and diluted EPS were as follows: For the Three Months Ended For the Nine Months Ended Numerator: September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Income (loss) from continuing operations, net of taxes $ (24,195 ) $ (7,501 ) $ 14,884 $ 13,889 Less: Unrealized loss (gain) on financial instruments, net of tax - - - (26,109 ) Diluted income (loss) from continuing operations, net of tax $ (24,195 ) $ (7,501 ) $ 14,884 $ (12,220 ) Denominator: Basic EPS weighted average shares outstanding 25,262 24,840 25,229 24,788 Effect of dilutive warrant - - - 141 Effect of dilutive convertible notes - - 36 - Effect of dilutive stock options and restricted stock - - 557 187 Diluted EPS weighted average shares outstanding 25,262 24,840 25,822 25,116 Earnings (loss) per share from continuing operations: Basic $ (0.96 ) $ (0.30 ) $ 0.59 $ 0.56 Diluted $ (0.96 ) $ (0.30 ) $ 0.58 $ (0.49 ) Earnings (loss) per share from discontinued operations: Basic $ 0.00 $ (0.02 ) $ (0.03 ) $ (0.03 ) Diluted $ 0.00 $ (0.02 ) $ (0.03 ) $ (0.03 ) Earnings (loss) per share: Basic $ (0.96 ) $ (0.32 ) $ 0.56 $ 0.53 Diluted $ (0.96 ) $ (0.32 ) $ 0.54 $ (0.52 ) The calculation of EPS does not include restricted share units and warrants in which performance or market conditions were not satisfied of 7.6 million for the three and nine months ended September 30, 2017 and 7.5 million for three and nine months ended September 30, 2016. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 15. Accumulated Other Comprehensive Income (Loss) The following table summarizes the components of Accumulated other comprehensive income (loss): Interest Rate Foreign 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 ) Balance as of December 31, 2016 $ (5,002 ) $ 9 $ (4,993 ) Reclassification to interest expense 1,216 - 1,216 Tax effect (472 ) - (472 ) Balance as of September 30, 2017 $ (4,258 ) $ 9 $ (4,249 ) Interest Rate Derivatives As of September 30, 2017, there was $6.9 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 related debt. Net realized losses reclassified into earnings were $0.4 million for the three months ended September 30, 2017 and 2016, respectively. Net realized losses reclassified into earnings were $1.2 million and $1.3 million for the nine months ended September 30, 2017 and 2016, respectively. Net realized losses expected to be reclassified into earnings within the next 12 months are $1.5 million as of September 30, 2017. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Heavy Maintenance Policy | 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. Amortization of deferred maintenance expense included in Depreciation and amortization was $1.8 million and zero for the three months ended September 30, 2017 and September 30, 2016, respectively, and was $3.7 million and zero for the nine months ended September 30, 2017 and September 30, 2016, respectively. Deferred maintenance included within Deferred costs and other assets is as follows: Deferred Maintenance Balance as of December 31, 2016 $ 19,100 Deferred maintenance costs 33,910 Amortization of deferred maintenance (3,710 ) Balance as of September 30, 2017 $ 49,300 |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: September 30, 2017 December 31, 2016 Cash and cash equivalents $ 165,250 $ 123,890 Restricted cash 11,030 14,360 Total Cash, cash equivalents and restricted cash shown in consolidated statements of cash flows $ 176,280 $ 138,250 |
Recent Accounting Pronouncements | 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 requirements, as well as classification in the statement of cash flows. We adopted this amended guidance on January 1, 2017 on a prospective basis. As a result, we recognized $1.8 million of excess tax benefits during the nine months ended September 30, 2017 as a reduction of income tax expense in our consolidated statements of operations. Excess tax benefits were previously recognized within equity. Additionally, our consolidated statements of cash flows present such excess tax benefits, which were previously presented as a financing activity, as an operating activity. In February 2016, the FASB amended its accounting guidance for leases. The guidance requires a lessee to recognize 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 amended revenue recognition guidance. The new guidance will continue to classify leases as either finance or operating, with classification affecting the presentation and pattern of expense and income recognition, in the statement of operations. It also requires additional 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 financial statements, we expect that recognizing the right-of-use asset and related lease liability will impact our balance sheet materially. We have developed and are implementing a plan for adopting this amended guidance. In May 2014, the FASB amended its accounting guidance for revenue recognition. Subsequently, the FASB has issued several clarifications 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. The two permitted transition methods under the guidance are the full retrospective approach, under which the guidance is applied to all periods presented, or the modified retrospective approach, under which the guidance is applied only to the most current period presented. While we believe the amended guidance will not have a material effect on our financial statements, we expect that revenue currently recognized based on flight departure will be recognized over time as the services are performed. In addition, we expect that revenue under certain ACMI and CMI contracts, such as revenue related to contracted minimum block hour guarantees, will be recognized in later periods and that some revenue adjustments related to meeting or exceeding on-time performance targets will be recognized in earlier periods. The implementation of our plan to adopt this amended guidance is progressing as expected and we plan to adopt the new guidance on its required effective date of January 1, 2018 using the modified retrospective approach. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Policies Tables [Abstract] | |
Schedule of Deferred Maintenance | Deferred maintenance included within Deferred costs and other assets is as follows: Deferred Maintenance Balance as of December 31, 2016 $ 19,100 Deferred maintenance costs 33,910 Amortization of deferred maintenance (3,710 ) Balance as of September 30, 2017 $ 49,300 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: September 30, 2017 December 31, 2016 Cash and cash equivalents $ 165,250 $ 123,890 Restricted cash 11,030 14,360 Total Cash, cash equivalents and restricted cash shown in consolidated statements of cash flows $ 176,280 $ 138,250 |
Related Parties (Tables)
Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Summary of Transactions with Polar | The following table summarizes our transactions with Polar: For the Three Months Ended For the Nine Months Ended Revenue and Expenses: September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Revenue from Polar $ 105,985 $ 101,432 $ 317,144 $ 302,149 Ground handling and airport fees to Polar 800 424 1,926 1,048 Accounts receivable/payable as of: September 30, 2017 December 31, 2016 Receivables from Polar $ 12,426 $ 8,161 Payables to Polar 2,270 2,019 Aggregate Carrying Value of Polar Investment as of: September 30, 2017 December 31, 2016 Aggregate Carrying Value of Polar Investment $ 4,870 $ 4,870 |
Southern Air Acquisition (Table
Southern Air Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of Employee Termination Benefit Liabilities | A summary of the employee termination benefit liabilities, which are expected to be paid by the first quarter of 2018, is as follows: Employee Termination Benefits Liability as of December 31, 2016 $ 1,214 Wind-down expenses 766 Cash payments (1,718 ) Liability as of September 30, 2017 $ 262 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities Current And Noncurrent [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of: September 30, 2017 December 31, 2016 Maintenance $ 143,941 $ 54,495 Customer maintenance reserves 85,256 81,830 Salaries, wages and benefits 48,879 55,063 U.S. class action settlement 30,000 35,000 Aircraft fuel 22,638 16,149 Deferred revenue 22,565 10,298 Other 68,391 68,052 Accrued liabilities $ 421,670 $ 320,887 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Convertible Notes | As of September 30, 2017, t he 2017 Convertible Notes and the 2015 Convertible Notes consisted of the following 2017 Convertible Note 2015 Convertible Note Remaining life in months 80 56 Liability component: Gross proceeds $ 289,000 $ 224,500 Less: debt discount, net of amortization (67,245 ) (37,862 ) Less: debt issuance cost, net of amortization (5,394 ) (3,623 ) Net carrying amount $ 216,361 $ 183,015 Equity component (1) $ 70,140 $ 52,903 (1) Included in Additional paid-in capital on the consolidated balance sheet as of September 30, 2017. |
Summary of Interest Expense Recognized | The following table presents the amount of interest expense recognized related to the 2017 Convertible Notes and the 2015 Convertible Notes: For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Contractual interest coupon $ 2,618 $ 1,263 $ 5,730 $ 3,788 Amortization of debt discount 3,752 1,618 7,990 4,777 Amortization of debt issuance costs 352 170 776 505 Total interest expense recognized $ 6,722 $ 3,051 $ 14,496 $ 9,070 |
Term Loans and Capital Lease [Member] | |
Terms And Balances For Financings | The following table summarizes the terms and principal balances for each term loan entered into during 2017 (in millions): Issue Face Collateral Original Interest Rate Interest Date Value Type Term Type Rate First 2017 Term Loan April 2017 $ 20.1 767-300 91 months Fixed 3.02% Second 2017 Term Loan April 2017 21.3 767-300 91 months Fixed 3.16% Third 2017 Term Loan May 2017 21.5 767-300 91 months Fixed 3.16% Fourth 2017 Term Loan June 2017 21.3 767-300 91 months Fixed 3.09% Fifth 2017 Term Loan June 2017 21.7 767-300 91 months Fixed 3.11% Sixth 2017 Term Loan June 2017 21.7 767-300 91 months Fixed 3.11% Seventh 2017 Term Loan June 2017 18.7 None 58 months Fixed 2.17% Eighth 2017 Term Loan July 2017 12.5 767-300 60 months Fixed 3.62% Total $ 158.8 |
Private Placement Facility [Member] | |
Terms And Balances For Financings | In October 2017, we completed the following financings for the first three aircraft under the Private Placement Facility: Issue Face Collateral Original Interest Rate Interest Date Value Type Term Type Rate First 2017 Equipment Note October 2017 $ 21.2 Dry Lease and 767-300 87 months Fixed 2.93% First 2017 Equipment Term Loan October 2017 2.6 Dry Lease and 767-300 103 months Fixed 4.75% Second 2017 Equipment Note October 2017 21.4 Dry Lease and 767-300 88 months Fixed 2.93% Second 2017 Equipment Term Loan October 2017 3.2 Dry Lease and 767-300 107 months Fixed 4.75% Third 2017 Equipment Note October 2017 21.2 Dry Lease and 767-300 87 months Fixed 2.93% Third 2017 Equipment Term Loan October 2017 3.0 Dry Lease and 767-300 105 months Fixed 4.75% Total $ 72.6 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Value, Estimated Fair Value and Classification of Financial Instruments | The following table summarizes the carrying value, estimated fair value and classification of our financial instruments as of: September 30, 2017 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 165,250 $ 165,250 $ 165,250 $ - $ - Short-term investments 10,676 10,676 - - 10,676 Restricted cash 11,030 11,030 11,030 - - Long-term investments and accrued interest 19,234 22,442 - - 22,442 $ 206,190 $ 209,398 $ 176,280 $ - $ 33,118 Liabilities Term loans and notes $ 1,674,311 $ 1,747,582 $ - $ - $ 1,747,582 Convertible notes 399,377 632,740 632,740 - - Amazon Warrant 132,000 132,000 - 132,000 - $ 2,205,688 $ 2,512,322 $ 632,740 $ 132,000 $ 1,747,582 December 31, 2016 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 123,890 $ 123,890 $ 123,890 $ - $ - Short-term investments 4,313 4,313 - - 4,313 Restricted cash 14,360 14,360 14,360 - - Long-term investments and accrued interest 27,951 33,161 - - 33,161 $ 170,514 $ 175,724 $ 138,250 $ - $ 37,474 Liabilities Term loans and notes $ 1,674,013 $ 1,739,744 $ - $ - $ 1,739,744 Convertible notes 177,398 228,429 228,429 - - Amazon Warrant 95,775 95,775 - 95,775 - $ 1,947,186 $ 2,063,948 $ 228,429 $ 95,775 $ 1,739,744 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting Tables [Abstract] | |
Operating Revenue and Direct Contribution For Our Reportable Business Segments | The following table sets forth Operating Revenue and Direct Contribution for our reportable segments reconciled to Operating Income and Income from continuing operations before income taxes: For the Three Months Ended For the Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Operating Revenue: ACMI $ 258,109 $ 206,310 $ 687,982 $ 600,772 Charter 243,583 212,040 743,302 616,794 Dry Leasing 30,804 25,907 86,120 79,165 Customer incentive asset amortization (1,531 ) (174 ) (2,873 ) (174 ) Other 4,783 3,932 13,977 13,345 Total Operating Revenue $ 535,748 $ 448,015 $ 1,528,508 $ 1,309,902 Direct Contribution: ACMI $ 51,647 $ 51,607 $ 141,134 $ 121,837 Charter 34,808 32,948 88,877 78,580 Dry Leasing 10,245 7,413 29,629 24,699 Total Direct Contribution for Reportable Segments 96,700 91,968 259,640 225,116 Unallocated income and expenses, net (64,463 ) (80,876 ) (183,418 ) (186,923 ) Loss on early extinguishment of debt (167 ) - (167 ) (132 ) Unrealized loss (gain) on financial instruments (44,775 ) (1,462 ) (36,225 ) 25,013 Special charge - - - (6,631 ) Transaction-related expenses (1,092 ) (3,905 ) (3,403 ) (21,486 ) Loss (gain) on disposal of aircraft (211 ) 11 (64 ) 11 Income (loss) from continuing operations before income taxes (14,008 ) 5,736 36,363 34,968 Add back (subtract): Interest income (1,688 ) (1,316 ) (4,286 ) (4,325 ) Interest expense 26,553 21,355 72,747 63,595 Capitalized interest (1,922 ) (1,059 ) (5,633 ) (2,106 ) Loss on early extinguishment of debt 167 - 167 132 Unrealized loss (gain) on financial instruments 44,775 1,462 36,225 (25,013 ) Other income (1,165 ) (180 ) (357 ) (372 ) Operating Income $ 52,712 $ 25,998 $ 135,226 $ 66,879 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Calculations of Basic and Diluted EPS | The calculations of basic and diluted EPS were as follows: For the Three Months Ended For the Nine Months Ended Numerator: September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Income (loss) from continuing operations, net of taxes $ (24,195 ) $ (7,501 ) $ 14,884 $ 13,889 Less: Unrealized loss (gain) on financial instruments, net of tax - - - (26,109 ) Diluted income (loss) from continuing operations, net of tax $ (24,195 ) $ (7,501 ) $ 14,884 $ (12,220 ) Denominator: Basic EPS weighted average shares outstanding 25,262 24,840 25,229 24,788 Effect of dilutive warrant - - - 141 Effect of dilutive convertible notes - - 36 - Effect of dilutive stock options and restricted stock - - 557 187 Diluted EPS weighted average shares outstanding 25,262 24,840 25,822 25,116 Earnings (loss) per share from continuing operations: Basic $ (0.96 ) $ (0.30 ) $ 0.59 $ 0.56 Diluted $ (0.96 ) $ (0.30 ) $ 0.58 $ (0.49 ) Earnings (loss) per share from discontinued operations: Basic $ 0.00 $ (0.02 ) $ (0.03 ) $ (0.03 ) Diluted $ 0.00 $ (0.02 ) $ (0.03 ) $ (0.03 ) Earnings (loss) per share: Basic $ (0.96 ) $ (0.32 ) $ 0.56 $ 0.53 Diluted $ (0.96 ) $ (0.32 ) $ 0.54 $ (0.52 ) |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income Loss [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the components of Accumulated other comprehensive income (loss): Interest Rate Foreign 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 ) Balance as of December 31, 2016 $ (5,002 ) $ 9 $ (4,993 ) Reclassification to interest expense 1,216 - 1,216 Tax effect (472 ) - (472 ) Balance as of September 30, 2017 $ (4,258 ) $ 9 $ (4,249 ) |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - Polar [Member] | 9 Months Ended |
Sep. 30, 2017 | |
Basis Of Presentation [Line Items] | |
Equity interest | 51.00% |
Voting interest | 75.00% |
Summary of Significant Account
Summary of Significant Account Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Deferred maintenance amortization expense | $ 1,800 | $ 0 | $ 3,710 | $ 0 |
Amount of excess tax benefits recognition | $ 1,800 |
Summary of Significant Accoun36
Summary of Significant Account Policies - Schedule of Deferred Maintenance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Heavy Maintenance Abstract | ||||
Beginning Balance | $ 19,100 | |||
Deferred maintenance costs | 33,910 | |||
Amortization of deferred maintenance | $ (1,800) | $ 0 | (3,710) | $ 0 |
Ending Balance | $ 49,300 | $ 49,300 |
Summary of Significant Accoun37
Summary of Significant Account Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 165,250 | $ 123,890 |
Restricted cash | 11,030 | 14,360 |
Total Cash, cash equivalents and restricted cash shown in consolidated statements of cash flows | $ 176,280 | $ 138,250 |
Related Parties - DHL Investmen
Related Parties - DHL Investment and Polar - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Polar [Member] | |
Related Party Transaction [Line Items] | |
Equity interest | 51.00% |
Voting interest | 75.00% |
DHL [Member] | Polar [Member] | |
Related Party Transaction [Line Items] | |
Equity interest | 49.00% |
Voting interest | 25.00% |
Related Parties - Summary of Tr
Related Parties - Summary of Transactions with Polar (Details) - Polar [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Revenue from related party | $ 105,985 | $ 101,432 | $ 317,144 | $ 302,149 | |
Ground handling and airport fees to Polar | 800 | $ 424 | 1,926 | $ 1,048 | |
Receivables from related party | 12,426 | 12,426 | $ 8,161 | ||
Payables to related party | 2,270 | 2,270 | 2,019 | ||
Aggregate Carrying Value of Polar Investment | $ 4,870 | $ 4,870 | $ 4,870 |
Related Parties - GATS - Additi
Related Parties - GATS - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
GATS [Member] | ||
Related Party Transaction [Line Items] | ||
Voting interest | 50.00% | |
Investment in joint venture | $ 22.1 | $ 22.2 |
GATS [Member] | ||
Related Party Transaction [Line Items] | ||
Payables to related party | $ 0.3 | $ 2.4 |
Southern Air Acquisition - Addi
Southern Air Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Transaction-related expenses | $ 1,092 | $ 3,905 | $ 3,403 | $ 21,486 |
Southern Air and Subsidiaries [Member] | ||||
Business Acquisition [Line Items] | ||||
Transaction-related expenses | $ 1,100 | 3,100 | $ 3,400 | 17,200 |
Unaudited estimated pro forma operating revenue | $ 448,000 | $ 1,337,000 |
Southern Air Acquisition - Summ
Southern Air Acquisition - Summary of Employee Termination Benefit Liabilities (Details) - Employee Severance [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Liability as of beginning balance | $ 1,214 |
Wind-down expenses | 766 |
Cash payments | (1,718) |
Liability as of ending balance | $ 262 |
Special Charge - Additional Inf
Special Charge - Additional Information (Details) - CF6-80 Engines [Member] $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017Engine | Dec. 31, 2016USD ($)Engine | Mar. 31, 2016USD ($)Engine | Dec. 31, 2016USD ($)Engine | Sep. 30, 2017USD ($) | |
Impairment Of Aircraft Engines Held For Sale [Line Items] | |||||
Number of assets held for sale | Engine | 2 | 4 | |||
Number of assets traded | Engine | 1 | 4 | |||
Impairment loss recognized for held for sale assets | $ | $ 3.5 | $ 6.5 | |||
Prepaid Expenses and Other Current Assets [Member] | |||||
Impairment Of Aircraft Engines Held For Sale [Line Items] | |||||
Carrying value of asset held for sale | $ | $ 2.8 | $ 2.8 | $ 1.4 |
Amazon - Additional Information
Amazon - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Sep. 20, 2016 | May 04, 2016 | |
Class Of Warrant Or Right [Line Items] | |||||||
Right to acquire outstanding common shares | up to 20% of our outstanding common shares | ||||||
Warrant exercise price | $ 37.50 | ||||||
Warrant for number of shares vested immediately | 3,750,000 | ||||||
Warrant to buy number of shares vesting | 3,750,000 | ||||||
Vesting increments of Amazon warrants | 375,000 | ||||||
Warrant vesting year | 2,021 | ||||||
Warrants exercised | 0 | ||||||
Additional warrant to acquire outstanding shares | up to an additional 10% of our outstanding common shares | ||||||
Additional warrant exercise price | $ 37.50 | ||||||
Additional warrant to buy number of shares vesting | 3,750,000 | ||||||
Additional warrant vesting year | 2,023 | ||||||
Shareholder approval threshold | 99.90% | ||||||
Warrant maximum issuance of stocks | 30.00% | ||||||
Accelerated compensation expense | $ 26.2 | $ 26.2 | |||||
Share-based portion of compensation expense | 11.6 | 11.6 | |||||
Fair value of vested warrants | $ 89.5 | $ 89.5 | $ 92.4 | $ 92.9 | |||
Amortization of customer incentive | 1.5 | 0.2 | 2.9 | 0.2 | |||
Warrant liability unrealized loss (gain) | 44.8 | $ 1.5 | 36.2 | $ (25) | |||
Fair value of warrant liability | $ 132 | $ 132 | $ 95.8 | ||||
Maximum [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Warrant providing right to acquire outstanding common shares percentage | 20.00% | ||||||
Percentage of additional warrant to acquire outstanding common shares | 10.00% | ||||||
Dry Leases [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Lease term period | 10 years | ||||||
CMI Operation [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Lease term period | 7 years |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Liabilities Current And Noncurrent [Abstract] | ||
Maintenance | $ 143,941 | $ 54,495 |
Customer maintenance reserves | 85,256 | 81,830 |
Salaries, wages and benefits | 48,879 | 55,063 |
U.S. class action settlement | 30,000 | 35,000 |
Aircraft fuel | 22,638 | 16,149 |
Deferred revenue | 22,565 | 10,298 |
Other | 68,391 | 68,052 |
Accrued liabilities | $ 421,670 | $ 320,887 |
Debt - Schedule of Term Loans (
Debt - Schedule of Term Loans (Details) - Term Loans and Capital Lease [Member] | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Debt Instrument [Line Items] | |
Face Value | $ 158,800,000 |
First 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-04 |
Face Value | $ 20,100,000 |
Collateral Type | 767-300 |
Original Term | 91 months |
Interest Rate Type | Fixed |
Interest Rate | 3.02% |
Second 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-04 |
Face Value | $ 21,300,000 |
Collateral Type | 767-300 |
Original Term | 91 months |
Interest Rate Type | Fixed |
Interest Rate | 3.16% |
Third 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-05 |
Face Value | $ 21,500,000 |
Collateral Type | 767-300 |
Original Term | 91 months |
Interest Rate Type | Fixed |
Interest Rate | 3.16% |
Fourth 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-06 |
Face Value | $ 21,300,000 |
Collateral Type | 767-300 |
Original Term | 91 months |
Interest Rate Type | Fixed |
Interest Rate | 3.09% |
Fifth 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-06 |
Face Value | $ 21,700,000 |
Collateral Type | 767-300 |
Original Term | 91 months |
Interest Rate Type | Fixed |
Interest Rate | 3.11% |
Sixth 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-06 |
Face Value | $ 21,700,000 |
Collateral Type | 767-300 |
Original Term | 91 months |
Interest Rate Type | Fixed |
Interest Rate | 3.11% |
Seventh 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-06 |
Face Value | $ 18,700,000 |
Collateral Type | None |
Original Term | 58 months |
Interest Rate Type | Fixed |
Interest Rate | 2.17% |
Eighth 2017 Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-07 |
Face Value | $ 12,500,000 |
Collateral Type | 767-300 |
Original Term | 60 months |
Interest Rate Type | Fixed |
Interest Rate | 3.62% |
Debt - Term Loans and Capital L
Debt - Term Loans and Capital Lease - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||
Lease extended expiration date | 2032-06 | |
Capital lease obligation | $ 32.4 | |
Capital Lease [Member] | ||
Debt Instrument [Line Items] | ||
Issue date | 2017-03 | |
Collateral Aircraft Tail Number | 747-400 freighter |
Debt - Private Placement Facili
Debt - Private Placement Facility - Additional Information (Details) - Private Placement Facility [Member] | 1 Months Ended |
Sep. 30, 2017USD ($)FreighterAircraft | |
Debt Instrument [Line Items] | |
Debt facility amount | $ | $ 146,500,000 |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Number of freighter aircraft dry leased | FreighterAircraft | 6 |
Debt - Schedule of Financings u
Debt - Schedule of Financings under Private Placement Facility (Details) - Private Placement Facility [Member] - Subsequent Event [Member] | 1 Months Ended |
Oct. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |
Face Value | $ 72,600,000 |
First 2017 Equipment Note [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-10 |
Face Value | $ 21,200,000 |
Collateral Type | Dry Lease and 767-300 |
Original Term | 87 months |
Interest Rate Type | Fixed |
Interest Rate | 2.93% |
First 2017 Equipment Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-10 |
Face Value | $ 2,600,000 |
Collateral Type | Dry Lease and 767-300 |
Original Term | 103 months |
Interest Rate Type | Fixed |
Interest Rate | 4.75% |
Second 2017 Equipment Note [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-10 |
Face Value | $ 21,400,000 |
Collateral Type | Dry Lease and 767-300 |
Original Term | 88 months |
Interest Rate Type | Fixed |
Interest Rate | 2.93% |
Second 2017 Equipment Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-10 |
Face Value | $ 3,200,000 |
Collateral Type | Dry Lease and 767-300 |
Original Term | 107 months |
Interest Rate Type | Fixed |
Interest Rate | 4.75% |
Third 2017 Equipment Note [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-10 |
Face Value | $ 21,200,000 |
Collateral Type | Dry Lease and 767-300 |
Original Term | 87 months |
Interest Rate Type | Fixed |
Interest Rate | 2.93% |
Third 2017 Equipment Term Loan [Member] | |
Debt Instrument [Line Items] | |
Issue Date | 2017-10 |
Face Value | $ 3,000,000 |
Collateral Type | Dry Lease and 767-300 |
Original Term | 105 months |
Interest Rate Type | Fixed |
Interest Rate | 4.75% |
Debt - Convertible Notes - Addi
Debt - Convertible Notes - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
May 31, 2017USD ($) | Sep. 30, 2017USD ($)Day$ / sharesshares | Sep. 30, 2016USD ($) | Jun. 30, 2015USD ($) | |
Debt Instrument [Line Items] | ||||
Aggregate proceeds from the sale of warrants | $ 38,148 | $ 0 | ||
Long-term Debt and Capital Lease [Member] | Revolver [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayment line of credit outstanding balance | $ 150,000 | |||
2017 Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible notes aggregate principal amount | $ 289,000 | $ 289,000 | ||
Debt instrument interest rate | 1.875% | |||
Debt instrument, maturity date | Jun. 1, 2024 | |||
Number of common shares converted upon debt conversion for each $1000 principal amount | 16.3713 | |||
Common stock price per share | $ / shares | $ 61.08 | |||
Debt Instrument, repurchase percentage | 100.00% | |||
Warrant option holder to purchase common stock | shares | 4,731,306 | |||
Aggregate amount for convertible hedge | $ 70,100 | |||
Aggregate proceeds from the sale of warrants | 38,100 | |||
Net cost incurred as reduction to additional paid-in capital | $ 32,000 | |||
Earliest conversion date | Sep. 1, 2023 | |||
Debt instrument, convertible, threshold trading days | Day | 20 | |||
Debt instrument, convertible, threshold consecutive trading days | Day | 30 | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | |||
Debt instrument, convertible, threshold business days | 5 days | |||
Debt instrument, convertible, threshold consecutive measurement period | 5 days | |||
Debt instrument, convertible, threshold percentage of stock price trigger in measurement period | 98.00% | |||
Effective interest rate of debt | 6.14% | |||
Debt issuance costs | $ 7,500 | |||
Liability issuance costs | 5,700 | |||
Equity issuance costs | $ 1,800 | |||
2017 Convertible Notes [Member] | Warrant [Member] | ||||
Debt Instrument [Line Items] | ||||
Common stock price per share | $ / shares | $ 92.20 | |||
Warrant option holder to purchase common stock | shares | 4,731,306 | |||
2015 Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible notes aggregate principal amount | $ 224,500 | $ 224,500 | ||
Debt instrument interest rate | 2.25% | |||
Debt instrument, maturity date | Jun. 1, 2022 |
Debt - Schedule of Convertible
Debt - Schedule of Convertible Notes (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2017 | May 31, 2017 | Jun. 30, 2015 | ||
2017 Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Remaining life in months | 80 months | |||
Gross proceeds | $ 289,000 | $ 289,000 | ||
Less: debt discount, net of amortization | (67,245) | |||
Less: debt issuance cost, net of amortization | (5,394) | |||
Net carrying amount | 216,361 | |||
Equity component | [1] | $ 70,140 | ||
2015 Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Remaining life in months | 56 months | |||
Gross proceeds | $ 224,500 | $ 224,500 | ||
Less: debt discount, net of amortization | (37,862) | |||
Less: debt issuance cost, net of amortization | (3,623) | |||
Net carrying amount | 183,015 | |||
Equity component | [1] | $ 52,903 | ||
[1] | Included in Additional paid-in capital on the consolidated balance sheet as of September 30, 2017. |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Short Term Debt [Line Items] | ||||
Total interest expense recognized | $ 26,553 | $ 21,355 | $ 72,747 | $ 63,595 |
Convertible Notes [Member] | ||||
Short Term Debt [Line Items] | ||||
Contractual interest coupon | 2,618 | 1,263 | 5,730 | 3,788 |
Amortization of debt discount | 3,752 | 1,618 | 7,990 | 4,777 |
Amortization of debt issuance costs | 352 | 170 | 776 | 505 |
Total interest expense recognized | $ 6,722 | $ 3,051 | $ 14,496 | $ 9,070 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility - Additional Information (Details) - Revolver [Member] - USD ($) | 1 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||
Term of revolving credit facility | 3 years | |
Borrowing capacity | $ 150,000,000 | |
Outstanding balance | $ 0 | |
Unused availability | $ 142,300,000 |
Commitments - Additional Inform
Commitments - Additional Information (Details) $ in Millions | Sep. 30, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Flight equipment purchase commitment | $ 143.8 |
Estimated payments during the remainder of fiscal year | $ 63.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of differences between the U.S. federal statutory income tax rate and the effective income tax rates | ||||
Effective income tax expense rate | 72.70% | 230.80% | 59.10% | 60.30% |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Long Term Investments Details [Abstract] | ||
Long-term investments maturing period | 5 years | |
Gross unrealized gains on long-term investments and accrued interest | $ 3.2 | $ 5.2 |
Financial Instruments - Summary
Financial Instruments - Summary of Carrying Value, Estimated Fair Value and Classification of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | May 04, 2016 |
Assets | |||
Short-term investments | $ 10,676 | $ 4,313 | |
Restricted cash | 11,030 | 14,360 | |
Long-term investments and accrued interest | 19,234 | 27,951 | |
Liabilities | |||
Amazon Warrant | 89,500 | 92,400 | $ 92,900 |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
Assets | |||
Cash and cash equivalents | 165,250 | 123,890 | |
Short-term investments | 10,676 | 4,313 | |
Restricted cash | 11,030 | 14,360 | |
Long-term investments and accrued interest | 19,234 | 27,951 | |
Financial instruments assets | 206,190 | 170,514 | |
Liabilities | |||
Term loans and notes | 1,674,311 | 1,674,013 | |
Convertible notes | 399,377 | 177,398 | |
Amazon Warrant | 132,000 | 95,775 | |
Financial instruments liabilities | 2,205,688 | 1,947,186 | |
Estimate of Fair Value, Fair Value Disclosure [Member] | |||
Assets | |||
Cash and cash equivalents | 165,250 | 123,890 | |
Short-term investments | 10,676 | 4,313 | |
Restricted cash | 11,030 | 14,360 | |
Long-term investments and accrued interest | 22,442 | 33,161 | |
Financial instruments assets | 209,398 | 175,724 | |
Liabilities | |||
Term loans and notes | 1,747,582 | 1,739,744 | |
Convertible notes | 632,740 | 228,429 | |
Amazon Warrant | 132,000 | 95,775 | |
Financial instruments liabilities | 2,512,322 | 2,063,948 | |
Fair Value, Inputs, Level 1 [Member] | |||
Assets | |||
Cash and cash equivalents | 165,250 | 123,890 | |
Short-term investments | 0 | 0 | |
Restricted cash | 11,030 | 14,360 | |
Long-term investments and accrued interest | 0 | 0 | |
Financial instruments assets | 176,280 | 138,250 | |
Liabilities | |||
Term loans and notes | 0 | 0 | |
Convertible notes | 632,740 | 228,429 | |
Amazon Warrant | 0 | 0 | |
Financial instruments liabilities | 632,740 | 228,429 | |
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 notes | 0 | 0 | |
Convertible notes | 0 | 0 | |
Amazon Warrant | 132,000 | 95,775 | |
Financial instruments liabilities | 132,000 | 95,775 | |
Fair Value, Inputs, Level 3 [Member] | |||
Assets | |||
Cash and cash equivalents | 0 | 0 | |
Short-term investments | 10,676 | 4,313 | |
Restricted cash | 0 | 0 | |
Long-term investments and accrued interest | 22,442 | 33,161 | |
Financial instruments assets | 33,118 | 37,474 | |
Liabilities | |||
Term loans and notes | 1,747,582 | 1,739,744 | |
Convertible notes | 0 | 0 | |
Amazon Warrant | 0 | 0 | |
Financial instruments liabilities | $ 1,747,582 | $ 1,739,744 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Segment | Sep. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | Segment | 3 | |||
Operating Revenue | $ 535,748 | $ 448,015 | $ 1,528,508 | $ 1,309,902 |
DHL [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Revenue | 62,100 | 57,400 | 177,600 | 128,000 |
Charter [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Revenue | 243,583 | 212,040 | 743,302 | 616,794 |
Charter [Member] | AMC Charter [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Revenue | $ 124,900 | $ 116,200 | $ 397,500 | $ 346,800 |
Segment Reporting - Operating R
Segment Reporting - Operating Revenue and Direct Contribution For Our Reportable Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Revenue: | ||||
Operating Revenue | $ 535,748 | $ 448,015 | $ 1,528,508 | $ 1,309,902 |
Customer incentive asset amortization | (1,531) | (174) | (2,873) | (174) |
Other | 4,783 | 3,932 | 13,977 | 13,345 |
Direct Contribution: | ||||
Total Direct Contribution for Reportable Segments | 96,700 | 91,968 | 259,640 | 225,116 |
Unallocated income and expenses, net | (64,463) | (80,876) | (183,418) | (186,923) |
Loss on early extinguishment of debt | (167) | 0 | (167) | (132) |
Unrealized loss (gain) on financial instruments | (44,775) | (1,462) | (36,225) | 25,013 |
Special charge | 0 | 0 | 0 | (6,631) |
Transaction-related expenses | (1,092) | (3,905) | (3,403) | (21,486) |
Loss (gain) on disposal of aircraft | (211) | 11 | (64) | 11 |
Income (loss) from continuing operations before income taxes | (14,008) | 5,736 | 36,363 | 34,968 |
Interest income | (1,688) | (1,316) | (4,286) | (4,325) |
Interest expense | 26,553 | 21,355 | 72,747 | 63,595 |
Capitalized interest | (1,922) | (1,059) | (5,633) | (2,106) |
Unrealized loss (gain) on financial instruments | 44,775 | 1,462 | 36,225 | (25,013) |
Other income | (1,165) | (180) | (357) | (372) |
Operating Income | 52,712 | 25,998 | 135,226 | 66,879 |
ACMI [Member] | ||||
Operating Revenue: | ||||
Operating Revenue | 258,109 | 206,310 | 687,982 | 600,772 |
Direct Contribution: | ||||
Total Direct Contribution for Reportable Segments | 51,647 | 51,607 | 141,134 | 121,837 |
Charter [Member] | ||||
Operating Revenue: | ||||
Operating Revenue | 243,583 | 212,040 | 743,302 | 616,794 |
Direct Contribution: | ||||
Total Direct Contribution for Reportable Segments | 34,808 | 32,948 | 88,877 | 78,580 |
Dry Leasing [Member] | ||||
Operating Revenue: | ||||
Operating Revenue | 30,804 | 25,907 | 86,120 | 79,165 |
Direct Contribution: | ||||
Total Direct Contribution for Reportable Segments | $ 10,245 | $ 7,413 | $ 29,629 | $ 24,699 |
Labor and Legal Proceedings - A
Labor and Legal Proceedings - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | ||||
Total legal settlement accrued for the U. S. class action | $ 30 | |||
Matters Related to Alleged Pricing Practices [Member] | ||||
Loss Contingencies [Line Items] | ||||
Payment for legal settlement | $ 35 | $ 35 | ||
Legal settlement to be paid in 2018 | 30 | |||
Brazilian Customs Claim [Member] | ||||
Loss Contingencies [Line Items] | ||||
Brazilian claims in the aggregate | 9.6 | |||
Amounts on deposit for Brazilian claims included in deferred costs and other assets | $ 5.3 | $ 5.3 | ||
Atlas Pilots [Member] | ||||
Loss Contingencies [Line Items] | ||||
Collective bargaining agreement period | 5 years | |||
Southern Air Pilots [Member] | ||||
Loss Contingencies [Line Items] | ||||
Collective bargaining agreement period | 4 years | |||
Atlas and Polar Dispatchers [Member] | ||||
Loss Contingencies [Line Items] | ||||
Collective bargaining agreement period | 5 years |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Restricted shares and units in which performance or market conditions were not satisfied | 7.6 | 7.5 | 7.6 | 7.5 |
Warrants and Stock Options [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation of diluted EPS | 3 | 3 | 3 | 3 |
Restricted Share Units and Warrants [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation of diluted EPS | 2.2 | 0.4 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculations of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Income (loss) from continuing operations, net of taxes | $ (24,195) | $ (7,501) | $ 14,884 | $ 13,889 |
Less: Unrealized loss (gain) on financial instruments, net of tax | (26,109) | |||
Diluted income (loss) from continuing operations, net of tax | $ (24,195) | $ (7,501) | $ 14,884 | $ (12,220) |
Denominator: | ||||
Basic EPS weighted average shares outstanding | 25,262 | 24,840 | 25,229 | 24,788 |
Effect of dilutive warrant | 141 | |||
Effect of dilutive convertible notes | 36 | |||
Effect of dilutive stock options and restricted stock | 557 | 187 | ||
Diluted EPS weighted average shares outstanding | 25,262 | 24,840 | 25,822 | 25,116 |
Earnings (loss) per share from continuing operations: | ||||
Basic | $ (0.96) | $ (0.30) | $ 0.59 | $ 0.56 |
Diluted | (0.96) | (0.30) | 0.58 | (0.49) |
Earnings (loss) per share from discontinued operations: | ||||
Basic | 0 | (0.02) | (0.03) | (0.03) |
Diluted | 0 | (0.02) | (0.03) | (0.03) |
Earnings (loss) per share: | ||||
Basic | (0.96) | (0.32) | 0.56 | 0.53 |
Diluted | $ (0.96) | $ (0.32) | $ 0.54 | $ (0.52) |
Accumulated Other Comprehensi63
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | $ 1,517,338 | $ 1,454,183 | ||
Reclassification to interest expense | $ 396 | $ 439 | 1,216 | 1,334 |
Income tax expense | (154) | (170) | (472) | (517) |
Ending Balance | 1,575,169 | 1,483,953 | 1,575,169 | 1,483,953 |
Interest Rate Derivatives [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (5,002) | (6,072) | ||
Reclassification to interest expense | 1,216 | 1,334 | ||
Income tax expense | (472) | (517) | ||
Ending Balance | (4,258) | (5,255) | (4,258) | (5,255) |
Foreign Currency Translation [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | 9 | 9 | ||
Income tax expense | 0 | 0 | ||
Ending Balance | 9 | 9 | 9 | 9 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning Balance | (4,993) | (6,063) | ||
Ending Balance | $ (4,249) | $ (5,246) | $ (4,249) | $ (5,246) |
Accumulated Other Comprehensi64
Accumulated Other Comprehensive Income (Loss) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Abstract] | ||||
Unamortized realized loss in Accumulated other comprehensive income (loss) related to forward-starting interest rate swaps | $ 6.9 | $ 6.9 | ||
Net realized losses reclassified into earnings | 0.4 | $ 0.4 | 1.2 | $ 1.3 |
Realized losses related to forward-starting interest rate swaps expected to be reclassified into earnings within the next 12 months | $ 1.5 | $ 1.5 |