Document and Entity Information
Document and Entity Information - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | May 10, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Air Transport Services Group, Inc. | ||
Entity Central Index Key | 894,081 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Mar. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 59,080,512 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,260,495,219 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 47,472 | $ 32,699 |
Accounts receivable, net of allowance of $2,495 in 2018 and $2,445 in 2017 | 100,186 | 109,114 |
Inventory | 22,256 | 22,169 |
Prepaid supplies and other | 13,426 | 20,521 |
TOTAL CURRENT ASSETS | 183,340 | 184,503 |
Property and equipment, net | 1,176,520 | 1,159,962 |
Lease incentive | 76,458 | 80,684 |
Other assets | 30,852 | 25,435 |
Goodwill and acquired intangibles | 44,287 | 44,577 |
Convertible note hedges | 56,046 | 53,683 |
Intangibles | 7,008 | 7,298 |
Goodwill | 37,279 | 37,279 |
TOTAL ASSETS | 1,567,503 | 1,548,844 |
CURRENT LIABILITIES: | ||
Accounts payable | 96,041 | 99,728 |
Accrued salaries, wages and benefits | 29,436 | 40,127 |
Accrued expenses | 10,259 | 10,455 |
Current portion of debt obligations | 14,846 | 18,512 |
Unearned revenue | 12,765 | 15,850 |
TOTAL CURRENT LIABILITIES | 163,347 | 184,672 |
Long term debt | 515,595 | 497,246 |
Convertible note obligations | 56,881 | 54,359 |
Post-retirement obligations | 56,771 | 61,355 |
Other liabilities | 44,276 | 45,353 |
Stock Warrants | 214,205 | 211,136 |
Deferred income taxes | 107,930 | 99,444 |
TOTAL LIABILITIES | 1,159,005 | 1,153,565 |
Commitments and contingencies (Note H) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, 20,000,000 shares authorized, including 75,000 Series A Junior Participating Preferred Stock | 0 | 0 |
Common stock, par value $0.01 per share; 85,000,000 shares authorized; 59,080,512 and 59,057,195 shares issued and outstanding in 2018 and 2017, respectively | 591 | 591 |
Additional paid-in capital | 467,570 | 471,456 |
Retained earnings (accumulated deficit) | 2,644 | (13,748) |
Accumulated other comprehensive loss | (62,307) | (63,020) |
TOTAL STOCKHOLDERS’ EQUITY | 408,498 | 395,279 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,567,503 | $ 1,548,844 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets, Current [Abstract] | ||
Allowance for doubtful accounts | $ 2,495 | $ 2,445 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 85,000,000 | 85,000,000 |
Common stock, shares issued (in shares) | 59,080,512 | 59,057,195 |
Common stock, shares outstanding (in shares) | 59,080,512 | 59,057,195 |
Preferred Stock [Member] | ||
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Series A Junior Participating Preferred Stock [Member] | ||
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, shares authorized (in shares) | 75,000 | 75,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
REVENUES | $ 203,040 | $ 237,917 |
OPERATING EXPENSES | ||
Salaries, wages and benefits | 70,783 | 72,486 |
Fuel | 5,788 | 34,841 |
Maintenance, materials and repairs | 36,866 | 30,282 |
Depreciation and amortization | 40,004 | 36,442 |
Travel | 6,632 | 7,366 |
Contracted ground and aviation services | 2,384 | 20,687 |
Rent | 3,230 | 3,286 |
Landing and ramp | 1,148 | 5,299 |
Insurance | 1,357 | 1,262 |
Other operating expenses | 7,205 | 8,036 |
Operating Expenses | 175,397 | 219,987 |
OPERATING INCOME | 27,643 | 17,930 |
OTHER INCOME (EXPENSE) | ||
Interest income | 23 | 32 |
Non-service component of retiree benefit costs | (5,362) | (3,548) |
Net gain (loss) on financial instruments | (885) | 1,869 |
Other Nonoperating Income (Expense) | (6,715) | (1,824) |
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 20,928 | 16,106 |
INCOME TAX EXPENSE | (5,246) | (6,310) |
EARNINGS FROM CONTINUING OPERATIONS | 15,682 | 9,796 |
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAXES | 196 | 192 |
NET EARNINGS | $ 15,878 | $ 9,988 |
BASIC EARNINGS PER SHARE | ||
Basic earnings per share from continuing operations (in dollars per share) | $ 0.27 | $ 0.17 |
Discontinued operations (in dollars per share) | 0 | 0 |
TOTAL BASIC EARNINGS PER SHARE (in dollars per share) | 0.27 | 0.17 |
DILUTED EARNINGS PER SHARE | ||
Diluted earnings per share from continuing operations (in dollars per share) | 0.26 | 0.13 |
Discontinued operations (in dollars per share) | 0.01 | 0 |
TOTAL DILUTED NET EARNINGS PER SHARE (in dollars per share) | $ 0.27 | $ 0.13 |
WEIGHTED AVERAGE SHARES | ||
Basic (in shares) | 58,840 | 59,133 |
Diluted (in shares) | 59,558 | 64,949 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
NET EARNINGS | $ 15,878 | $ 9,988 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (16) | 37 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
TOTAL COMPREHENSIVE INCOME, net of tax | 16,591 | 11,296 |
Pension Plans [Member] | ||
Other comprehensive income (loss), net of tax | 687 | 1,234 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Income tax (expense) or benefit | (200) | (703) |
Post-Retirement Plans [Member] | ||
Other comprehensive income (loss), net of tax | 42 | 37 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Income tax (expense) or benefit | $ (13) | $ (21) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Purchase of common stock | $ (564) | $ (1,463) |
Withholding taxes paid for conversion of employee stock awards | 1,319 | 1,436 |
OPERATING ACTIVITIES: | ||
Net earnings from continuing operations | 15,682 | 9,796 |
Net earnings from discontinued operations | 196 | 192 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 46,320 | 39,033 |
Pension and post-retirement | 942 | 1,995 |
Deferred income taxes | 5,053 | 6,149 |
Amortization of stock-based compensation | 1,014 | 784 |
Net (gain) loss on financial instruments | (2,343) | (209) |
Changes in assets and liabilities: | ||
Accounts receivable | 10,567 | (6,487) |
Inventory and prepaid supplies | 4,871 | (4,413) |
Accounts payable | (608) | 6,932 |
Unearned revenue | (3,752) | 4,765 |
Accrued expenses, salaries, wages, benefits and other liabilities | (10,079) | (9,911) |
Pension and post-retirement assets | (4,584) | (3,039) |
Other | 2,335 | 283 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 68,842 | 44,210 |
INVESTING ACTIVITIES: | ||
Capital expenditures | (79,092) | (83,786) |
Proceeds from property and equipment | 16,763 | 0 |
Investment in nonconsolidated affiliate | (2,450) | (640) |
Redemption of long term deposits | 0 | 4,725 |
NET CASH (USED IN) INVESTING ACTIVITIES | (64,779) | (79,701) |
FINANCING ACTIVITIES: | ||
Principal payments on long term obligations | (17,390) | (10,337) |
Proceeds from borrowings | 30,000 | 60,000 |
Payments for financing costs | (17) | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 10,710 | 46,764 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 14,773 | 11,273 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 32,699 | 16,358 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 47,472 | 27,631 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid, net of amount capitalized | 2,413 | 3,406 |
Federal alternative minimum and state income taxes paid | 526 | 113 |
SUPPLEMENTAL NON-CASH INFORMATION: | ||
Accrued capital expenditures | 24,629 | 18,251 |
Net (gain) loss on financial instruments | $ (885) | $ 1,869 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Total | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at at Dec. 31, 2017 | $ 395,279 | ||
Balance at (in shares) at Dec. 31, 2017 | 59,057,195 | ||
Stock-based compensation plans | |||
Total comprehensive income (loss) | $ 16,591 | $ 15,878 | $ 713 |
Balance at at Mar. 31, 2018 | $ 408,498 | ||
Balance at (in shares) at Mar. 31, 2018 | 59,080,512 |
Summary of Financial Statement
Summary of Financial Statement Preparation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Financial Statement Preparation and Significant Accounting Policies | SUMMARY OF FINANCIAL STATEMENT PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Air Transport Services Group, Inc. is a holding company whose subsidiaries primarily operate within the airfreight and logistics industry. The Company leases aircraft and provides airline operations, ground services, aircraft modification and maintenance services and other support services. The Company's subsidiaries offer a range of complementary services to delivery companies, freight forwarders, airlines and government customers. The Company's leasing subsidiary, Cargo Aircraft Management, Inc. (“CAM”), leases aircraft to each of the Company's airlines as well as to non-affiliated airlines and other lessees. The airlines, ABX Air, Inc. (“ABX”) and Air Transport International, Inc. (“ATI”), each have the authority, through their separate U.S. Department of Transportation ("DOT") and Federal Aviation Administration ("FAA") certificates, to transport cargo worldwide. The Company's airlines provide a combination of aircraft, crews, maintenance and insurance services for a customer's transportation network through "CMI" and "ACMI" agreements and through charter contracts in which aviation fuel is also included. ATI provides passenger transportation, primarily to the U.S. Military, using "combi" aircraft, which are certified to carry passengers as well as cargo on the main deck. In addition to its airline operations and aircraft leasing services, the Company provides aircraft maintenance and modification services, equipment maintenance services, and operates mail and package sorting facilities. Basis of Presentation The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and such principles are applied on a basis consistent with the financial statements reflected in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the accompanying financial statements contain all adjustments, including normal recurring adjustments, necessary for the fair presentation of the Company’s results of operations and financial position for the periods presented. Due to seasonal fluctuations, among other factors common to the air cargo industry, the results of operations for the periods presented are not necessarily indicative of the results of operations to be expected for the entire year or any interim period. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. The accounting estimates reflect the best judgment of management, but actual results could differ materially from those estimates. The accompanying condensed consolidated financial statements include the accounts of Air Transport Services Group, Inc. and its wholly-owned subsidiaries. Investments in affiliates in which the Company has significant influence but does not exercise control are accounted for using the equity method of accounting. Using the equity method, the Company’s share of the nonconsolidated affiliates' income or loss is recognized in the consolidated statement of earnings and cumulative post-acquisition changes in the investment are adjusted against the carrying amount of the investment. Inter-company balances and transactions are eliminated. Accounting Standards Updates Effective January 1, 2018 the Company adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” ("Topic 606”) which superseded previous revenue recognition guidance. Topic 606 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company's lease revenues within the scope of ASC 840, Leases, are specifically excluded from Topic 606. The Company adopted the standard using a modified retrospective approach, under which financial statements are prepared under the revised guidance for the year of adoption, but not for prior years. Under this method, entities recognize a cumulative catch-up adjustment to the opening balance of retained earnings at the effective date for open contract performance at that time. The Company's adoption efforts have included the identification of revenue within the scope of the standard, the evaluation of customer contracts in conjunction with new guidance and an assessment of the qualitative and quantitative impacts of the new standard on its financial statements. The evaluation included the application of each of the five steps identified in the Topic 606 revenue recognition model. The Company determined that under Topic 606, it is an agent for aviation fuel and certain other costs reimbursed by customers under its ACMI and CMI contracts and for certain cargo handling services that it arranges for a customer. Under the new revenue standard, such reimbursed amounts are reported net of the corresponding expenses beginning in 2018. This application of Topic 606 did not have a material impact on the Company's reported earnings in any period. Additionally under Topic 606, the Company is required to record revenue over time, instead of at the time of completion, for certain customer contracts for airframe and modification services that do not have an alternative use and for which the Company has an enforceable right to payment during the service cycle. The Company adopted the provisions of this new standard using the modified retrospective method which requires the Company to record a one time adjustment to retained deficit for the cumulative effect that the standard has on open contracts at the time of adoption. Upon adoption of the new standard the Company accelerated $3.6 million of revenue resulting in an immaterial adjustment to its January 1, 2018 retained deficit for open airframe and modification services contracts. In January 2017, the FASB issued ASU "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" (“ASU 2017-04”). This new standard eliminates Step 2 from the goodwill impairment test and requires an entity to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for any annual or interim goodwill impairment tests in the fiscal years beginning after December 15, 2019 and must be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this new accounting guidance in January of 2018. The adoption did not have an impact on the Company's financial position, results of operations, or cash flows. In March 2017, the FASB issued ASU "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost "(ASU 2017-07"). ASU 2017-07 requires an employer to report the service cost component of retiree benefits in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented separately from the service cost component and outside a subtotal of income from operations. The Company adopted ASU 2017-07 on January 1, 2018, retrospectively to all periods presented. As a result, retiree benefit plan interest expense, investment returns, settlements and other non-service cost components of retiree benefit expenses are excluded from the Company's operating income subtotal as reported in the Company's Consolidated Statement of Operations, but remain included in earnings before income taxes. Information about retiree benefit plans' interest expense, investment returns and other components of retiree benefit expenses can be found in Note I. In February 2016, the FASB issued ASU "Leases (Topic 842)" ("ASU 2016-02"), which will require the recognition of right to-use-assets and lease liabilities for leases previously classified as operating leases by lessees. The standard will take effect for annual reporting periods beginning after December 15, 2018, including interim reporting periods. Early application will be permitted for all entities. In addition, the FASB has decided to require a lessee to apply a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements (the date of initial application). The modified retrospective approach would not require any transition accounting for leases that expired before the date of initial application. The Company is currently evaluating the impact of the standard on its financial statements and disclosures. In February 2018, the FASB issued ASU “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income" ("ASU 2018-02"). ASU 2018-02 amends ASC 220, Income Statement — Reporting Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. federal tax legislation known as the Tax Cuts and Jobs Act. In addition, under the ASU 2018-02, a Company will be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its financial statements and disclosures. |
Significant Customers
Significant Customers | 3 Months Ended |
Mar. 31, 2018 | |
Significant Customers [Abstract] | |
Significant Customers | SIGNIFICANT CUSTOMERS DHL The Company has had long term contracts with DHL Network Operations (USA), Inc. and its affiliates ("DHL") since August 2003. Revenues from aircraft leases and related services performed for DHL were approximately 28% and 26% of the Company's consolidated revenues from continuing operations for the three month periods ending March 31, 2018 and 2017, respectively. Revenues excluding directly reimbursed expenses from continuing operations performed for DHL comprised approximately 30% of the Company's consolidated revenues from continuing operations for the three month period ending March 31, 2017. The Company’s balance sheets include accounts receivable with DHL of $10.8 million and $15.7 million as of March 31, 2018 and December 31, 2017, respectively. The Company leases Boeing 767 aircraft to DHL under both long-term and short-term lease agreements. Under a separate crew, maintenance and insurance (“CMI”) agreement, the Company operates Boeing 767 aircraft that DHL leases from the Company. Pricing for services provided through the CMI agreement is based on pre-defined fees, scaled for the number of aircraft operated and the number of flight crews provided to DHL for its U.S. network. The Company provides DHL with scheduled maintenance services for aircraft that DHL leases. The Company also provides Boeing 767 and Boeing 757 air cargo transportation services for DHL through additional ACMI agreements in which the Company provides the aircraft, crews, maintenance and insurance under a single contract. Revenues generated from the ACMI agreements are typically based on hours flown. The Company also provides ground equipment, such as power units, air starts and related maintenance services to DHL under separate agreements. Amazon The Company has been providing freighter aircraft and services for cargo handling and logistical support for Amazon.com Services, Inc. ("ASI"), successor to Amazon Fulfillment Services, Inc., a subsidiary of Amazon.com, Inc. ("Amazon") since September 2015. On March 8, 2016, the Company entered into an Air Transportation Services Agreement (the “ATSA”) with ASI, pursuant to which CAM leases 20 Boeing 767 freighter aircraft to ASI, including 12 Boeing 767-200 freighter aircraft for a term of five years and eight Boeing 767-300 freighter aircraft for a term of seven years. The ATSA also provides for the operation of those aircraft by the Company’s airline subsidiaries, and the management of ground services by the Company's subsidiary LGSTX Services Inc. ("LGSTX"). The ATSA became effective on April 1, 2016 and has a term of five years. CAM owns all 20 of the Boeing 767 aircraft that are leased and operated under the ATSA. Revenues from continuing operations performed for Amazon comprised approximately 28% and 41% of the Company's consolidated revenues from continuing operations for the three month periods ending March 31, 2018 and 2017, respectively. Revenues excluding directly reimbursed expenses from continuing operations performed for Amazon comprised approximately 27% of the Company's consolidated revenues from continuing operations for the three month period ending March 31, 2017. The Company’s balance sheets include accounts receivable with Amazon of $31.3 million and $44.2 million as of March 31, 2018 and December 31, 2017, respectively. In conjunction with the execution of the ATSA, the Company and Amazon entered into an Investment Agreement and a Stockholders Agreement on March 8, 2016. The Investment Agreement calls for the Company to issue warrants in three tranches which will grant Amazon the right to acquire up to 19.9% of the Company’s outstanding common shares as described below. The first tranche of warrants, issued upon the execution of the Investment Agreement and all of which are now fully vested, granted Amazon the right to purchase approximately 12.81 million ATSG common shares, with the first 7.69 million common shares vesting upon issuance on March 8, 2016, and the remaining 5.12 million common shares vesting as the Company delivered additional aircraft leased under the ATSA. The second tranche of warrants, which were issued and vested on March 8, 2018, grants Amazon the right to purchase approximately 1.59 million ATSG common shares. The third tranche of warrants will be issued and vest on September 8, 2020, and will grant Amazon the right to purchase such additional number of ATSG common shares as is necessary to bring Amazon’s ownership to 19.9% of the Company’s pre-transaction outstanding common shares measured on a GAAP-diluted basis, adjusted for share issuances and repurchases by the Company following the date of the Investment Agreement and after giving effect to the warrants granted. The exercise price of the warrants is $9.73 per share, which represents the closing price of ATSG’s common shares on February 9, 2016. Each of the three tranches of warrants are exercisable in accordance with its terms through March 8, 2021. The Company anticipates making available the common shares required for the underlying warrants through a combination of share repurchases and the issuance of additional shares. The Company’s accounting for the warrants has been determined in accordance with the financial reporting guidance for equity-based payments to non-employees and for financial instruments. The warrants issued to Amazon as of March 8, 2016, were recorded to stockholders equity, having a fair value of $4.89 per share. At that time, the fair value of the 7.69 million vested warrants issued to Amazon was recorded as a lease incentive asset and is being amortized against revenues over the duration of the aircraft leases. On May 12, 2016, the Company’s stockholders approved an amendment to the Certificate of Incorporation of the Company at the annual meeting of stockholders to increase the number of authorized common shares and to approve the warrants in full as required under the rules of the Nasdaq Global Select Market. The stockholders' approval enabled features of the warrants that required the vested warrants of the first tranche and the warrants of the second and third tranches to be classified as financial instruments as of May 12, 2016. Accordingly, the fair value of those warrants was measured and classified in liabilities on that date. Since May 12, 2016, 5.12 million additional warrants in the first tranche vested in conjunction with the execution of eight aircraft leases. As of March 31, 2018, the Company's liabilities reflected 14.83 million warrants having a fair value of $14.45 per share. The re-measurements of the warrants to fair value resulted in a non-operating loss of $3.1 million and a gain of $1.7 million before the effect of income taxes for the three month periods ending March 31, 2018 and 2017, respectively. The Company's earnings in future periods will be impacted by the number of warrants granted, the re-measurements of warrant fair value, amortizations of the lease incentive asset and the related income tax effects. For income tax calculations, the value and timing of related tax deductions will differ from the guidance described above for financial reporting. U.S. Military A substantial portion of the Company's revenues is also derived from the U.S. Military. The U.S. Military awards flights to U.S. certificated airlines through annual contracts and through temporary "expansion" routes. Revenues from services performed for the U.S. Military were approximately 11% and 7% of the Company's total revenues from continuing operations for the three month periods ending March 31, 2018 and 2017, respectively. Revenues excluding directly reimbursed expenses from continuing operations performed for Amazon comprised approximately 10% of the Company's consolidated revenues from continuing operations for the three month period ending March 31, 2017. The Company's balance sheets included accounts receivable with the U.S. Military of 8.0 million and 6.7 million as of March 31, 2018 and December 31, 2017, respectively. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS The Company's assets for CAM and the MRO Services segments each include goodwill. An annual impairment test was performed for each, respectively, at December, 31, 2017 using industry market multiples and discounted cash flows utilizing a market-derived rate of return (level 3 fair value inputs). Goodwill was not impaired. The carrying amounts of goodwill are as follows (in thousands): CAM MRO Services Total Carrying value as of December 31, 2017 $ 34,395 $ 2,884 $ 37,279 Carrying value as of March 31, 2018 $ 34,395 $ 2,884 $ 37,279 The Company's acquired intangible assets are as follows (in thousands): Airline Amortizing Certificates Intangibles Total Carrying value as of December 31, 2017 $ 3,000 $ 4,298 $ 7,298 Amortization — (290 ) (290 ) Carrying value as of March 31, 2018 $ 3,000 $ 4,008 $ 7,008 The airline certificates have an indefinite life and therefore are not amortized. The Company amortizes finite-lived intangibles assets, including customer relationship and STC intangibles, over 4 to 7 years. Stock warrants issued to a lessee (see Note B) as an incentive are recorded as a lease incentive asset using their fair value at the time that the lessee has met its performance obligation and amortized against revenues over the duration of related aircraft leases. The Company's lease incentive granted to the lessee was as follows (in thousands): Lease Incentive Carrying value as of December 31, 2017 $ 80,684 Amortization (4,226 ) Carrying value as of March 31, 2018 $ 76,458 The lease incentive began to amortize in April 2016, with the commencement of certain aircraft leases over the duration of the related leases. In January 2014, the Company acquired a 25 percent equity interest in West Atlantic AB of Gothenburg, Sweden ("West"). West, through its two airlines, Atlantic Airlines Ltd. and West Air Sweden AB, operates a fleet of aircraft on behalf of European regional mail carriers and express logistics providers. The airlines operate a combined fleet of British Aerospace ATPs, Bombardier CRJ-200-PFs, and Boeing 767 and 737 aircraft. West leases three Boeing 767 aircraft and one Boeing 737 from the Company. The Company’s carrying value of West was $7.6 million and $7.1 million at March 31, 2018 and December 31, 2017, respectively, including $5.5 million of excess purchase price over the Company's fair value of West's nets assets in January of 2014. In 2017, the Company paid $2.4 million to West and entered into a preferred equity instrument. The Company's equity interest and the preferred equity instrument are reflected in “Other Assets” in the Company’s consolidated balance sheets as of March 31, 2018 and December 31, 2017. On August 3, 2017 the Company entered into a joint-venture agreement with Precision Aircraft Solutions, LLC, to develop a passenger-to-freighter conversion program for Airbus A321-200 aircraft. The Company anticipates approval of a supplemental type certificate from the FAA in 2019. The Company expects to make contributions equal to its 49% ownership percentage of the program's total costs over the next two years. During the first three months of 2018, the company contributed $2.5 million to the joint venture. The Company accounts for its investment in the joint venture under the equity method of accounting, in which the carrying value of the investment is reduced for the Company's share of the joint ventures operating losses. The carrying value of the joint venture, reflected in “Other Assets” in the Company’s consolidated balance sheets, was $5.5 million and $5.6 million at March 31, 2018 and December 31, 2017. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company’s money market funds and interest rate swaps are reported on the Company’s consolidated balance sheets at fair values based on market values from identical or comparable transactions. The fair value of the Company’s money market funds, stock warrant obligations, convertible note, convertible note hedges and interest rate swaps are based on observable inputs (Level 2) from comparable market transactions. The fair value of the stock warrant obligations were determined using a Black-Scholes pricing model which considers the Company’s common stock price and various assumptions, such as the volatility of the Company’s common stock, the expected dividend yield, and the risk-free interest rate. The fair value of the note conversion obligations and the convertible note hedges were estimated using a Black-Scholes pricing model and incorporate the terms and conditions of the underlying financial instruments. The valuations are, among other things, subject to changes in both the Company's credit worthiness and the counter-parties to the instruments as well as change in general market conditions. While the change in fair value of the note conversion obligations and the convertible note hedges are generally expected to move in opposite directions, the net change in any given period may be material. The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands): As of March 31, 2018 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 35,785 $ — $ 35,785 Interest rate swap — 4,183 — 4,183 Convertible note hedges — 56,046 — 56,046 Total Assets $ — $ 96,014 $ — $ 96,014 Liabilities Note conversion obligations — (56,881 ) — (56,881 ) Stock warrant obligations — (214,205 ) — (214,205 ) Total Liabilities $ — $ (271,086 ) $ — $ (271,086 ) As of December 31, 2017 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 1,326 $ — $ 1,326 Interest rate swap — 1,840 — 1,840 Convertible note hedges — 53,683 — 53,683 Total Assets $ — $ 56,849 $ — $ 56,849 Liabilities Note conversion obligations — (54,359 ) — (54,359 ) Stock warrant obligation — (211,136 ) — (211,136 ) Total Liabilities $ — $ (265,495 ) $ — $ (265,495 ) As a result of lower market interest rates compared to the stated interest rates of the Company’s fixed rate debt obligations, the fair value of the Company’s debt obligations, based on Level 2 observable inputs, was approximately $3.0 million more than the carrying value, which was $530.4 million at March 31, 2018 . As of December 31, 2017, the fair value of the Company’s debt obligations was approximately $9.1 million more than the carrying value, which was $515.8 million . The non-financial assets, including goodwill, intangible assets and property and equipment are measured at fair value on a non-recurring basis. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT The Company's property and equipment consists primarily of cargo aircraft, aircraft engines and other flight equipment. Property and equipment, to be held and used, is summarized as follows (in thousands): March 31, December 31, Flight equipment $ 1,799,301 $ 1,801,808 Ground equipment 53,461 53,523 Leasehold improvements, facilities and office equipment 28,205 26,897 Aircraft modifications and projects in progress 164,414 121,760 2,045,381 2,003,988 Accumulated depreciation (868,861 ) (844,026 ) Property and equipment, net $ 1,176,520 $ 1,159,962 CAM owned aircraft with a carrying value of $705.2 million and $697.4 million that were under leases to external customers as of March 31, 2018 and December 31, 2017, respectively. The Company’s accounting policy for major airframe and engine maintenance varies by subsidiary and aircraft type. The costs of airframe maintenance for Boeing 767-200 operated by ABX are expensed as they are incurred. The costs of major airframe maintenance for the Company's other aircraft are capitalized and amortized over the useful life of the overhaul. Many of the Company's General Electric CF6 engines that power the Boeing 767-200 aircraft are maintained under “power by the hour” and "power by the cycle" agreements with an engine maintenance provider. Further, in May 2017, the Company entered into similar maintenance agreements for certain General Electric CF6 engines that power many of the Company's Boeing 767-300 aircraft. Under these agreements, the engines are maintained by the service provider for a fixed fee per cycle and/or flight hour. As a result, the cost of maintenance for these engines is generally expensed as flights occur. During their term, these maintenance agreements contain provisions for a minimum level of flight activity. Maintenance for the airlines’ other aircraft engines, including those powering Boeing 757 aircraft, are typically contracted to service providers on a time and material basis and the costs of those engine overhauls are capitalized and amortized over the useful life of the overhaul. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands): March 31, December 31, 2018 2017 Unsubordinated term loan $ 66,857 $ 70,568 Revolving credit facility 265,000 245,000 Aircraft loans — 3,640 Convertible debt 198,584 196,550 Total debt obligations 530,441 515,758 Less: current portion (14,846 ) (18,512 ) Total long term obligations, net $ 515,595 $ 497,246 The Company executed a syndicated credit agreement ("Senior Credit Agreement") in May 2011 which includes an unsubordinated term loan and a revolving credit facility. Effective March 31, 2017, the Company executed an amendment to the Senior Credit Agreement that extended the maturity of the term loan and revolving credit facility to May 30, 2022, increased the capacity of the revolving credit facility by $120.0 million to $545.0 million and preserved the accordion feature such that the Company can now draw up to an additional $100.0 million subject to the lenders' consent. Each year, through May 6, 2019, the Company may request a one year extension of the final maturity date, subject to the lenders' consent. In September 2017, the Company executed amendments to the Senior Credit Agreement. These amendments increased the revolving credit facility's permitted additional indebtedness to $300.0 million for convertible notes described below. The amendments also increased the amount of dividends the Company can pay and the amount of common stock it can repurchase to $100.0 million during any calender year, provided the Company's total secured debt to earnings before interest, taxes, depreciation and amortization expenses ("EBITDA") ratio is under 3.00 times, after giving effect to the dividend or repurchase. As of March 31, 2018, the unused revolving credit facility totaled $270.7 million , net of draws of $265.0 million and outstanding letters of credit of $9.3 million . The Senior Credit Agreement is collateralized by certain of the Company's Boeing 767 and 757 aircraft that are not collateralized under aircraft loans. Under the terms of the Senior Credit Agreement, the Company is required to maintain collateral coverage equal to 125% of the outstanding balance of the term loan and the maximum capacity of revolving credit facility or 150% of the outstanding balance of the term loan and the total funded revolving credit facility, whichever is less. The minimum collateral coverage which must be maintained is 50% of the outstanding balance of the term loan plus the revolving credit facility commitment which was $545.0 million . The balance of the unsubordinated term loan is net of debt issuance costs of $0.6 million and $0.7 million for the periods ending March 31, 2018 and December 31, 2017, respectively. Under the terms of the Senior Credit Agreement, interest rates are adjusted quarterly based on the Company's EBITDA, its outstanding debt level and prevailing LIBOR or prime rates. At the Company's current debt-to-EBITDA ratio, the LIBOR based financing for the unsubordinated term loan and revolving credit facility bear a variable interest rate of 3.38% and 3.38% , respectively. The aircraft loan was paid off by the Company in January 2018. The Senior Credit Agreement contains covenants including, among other things, limitations on certain additional indebtedness, guarantees of indebtedness, as well as a total debt to EBITDA ratio and a fixed charge coverage ratio. The Senior Credit Agreement stipulates events of default, including unspecified events that may have material adverse effects on the Company. If an event of default occurs, the Company may be forced to repay, renegotiate or replace the Senior Credit Agreement. In September 2017, the Company issued $258.8 million aggregate principal amount of 1.125% Convertible Senior Notes due 2024 ("Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes bear interest at a rate of 1.125% per year payable semi-annually in arrears on April 15 and October 15 each year, beginning April 15, 2018. The Notes mature on October 15, 2024, unless repurchased or converted in accordance with their terms prior to such date. The Notes are unsecured indebtedness, subordinated to the Company's existing and future secured indebtedness and other liabilities, including trade payables. Conversion of the Notes can only occur upon satisfaction of certain conditions and during certain periods, beginning in any calendar quarter commencing after December 31, 2017 and thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon the occurrence of certain fundamental changes, holders of the Notes can require the Company to repurchase their notes at the cash repurchase price equal to the principal amount of the notes, plus any accrued and unpaid interest. Until the Company's shareholders increase the number of authorized shares of common stock to cover the full number of shares underlying the Notes, the Company is required to settle conversions solely in cash. If the number of authorized shares is increased, the Notes may be settled in cash, the Company’s common shares or a combination of cash and the Company’s common shares, at the Company’s election. The initial conversion rate is 31.3475 common shares per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $31.90 per common share). If a “make-whole fundamental change” (as defined in the offering circular with the Notes) occurs, the Company will, in certain circumstances, increase the conversion rate for a specified period of time. The Company evaluated the conversion features of the Notes under the applicable accounting guidance including ASC 815, "Derivatives and Hedging," and determined that the conversion features require separate accounting as a derivative. At the time of issuance, the fair value of this derivative was recorded on the balance sheet as the note conversion obligations (a long-term liability) and an offsetting discount to the Notes. Until the Company's shareholders increase the number of authorized shares of common stock, the note conversion obligations will be adjusted to reflect its fair value at the end of each quarter. The fair value of the note conversion obligation at issuance was $57.4 million . The fair value of the note conversion obligations was $56.9 million and $54.4 million at March 31, 2018 and December 31, 2017, respectively, and resulted in a non-operating loss of $2.5 million before the effect of income tax during 2018. The net proceeds from the issuance of the Notes were approximately $252.3 million , after deducting initial issuance costs. These unamortized issuance costs and discount are being amortized to interest expense through October 2024, using an effective interest rate of approximately 5.15% . The carrying value of the Company's Convertible debt is shown below: March 31, December 31, 2018 2017 Principal value, Convertible Senior Notes, due 2024 258,750 258,750 Unamortized issuance costs (6,479 ) (6,685 ) Unamortized discount (53,687 ) (55,515 ) Convertible debt 198,584 196,550 In conjunction with the offering of the Notes, the Company also sold warrants to the convertible note hedge counterparties in separate, privately negotiated warrant transactions at a higher strike price and for the same number of the Company’s common shares, subject to customary anti-dilution adjustments. The warrants could have a dilutive effect on the Company’s outstanding common shares and the Company’s earnings per share to the extent that the traded market price of the Company’s common shares exceeds the strike price of the warrants which is $41.35 per share and is subject to certain adjustments under the terms of the warrant transactions. In the event these warrants are exercised, the Company has enough authorized and unissued shares for their issuance. The amount received for these warrants and recorded in Stockholders' Equity in the Company’s consolidated balance sheets was $38.5 million . . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Lease Commitments The Company leases portions of the air park in Wilmington, Ohio, under lease agreements with a regional port authority, the terms of which expire in May of 2019 and June of 2036 with options to extend the leases. The leased facilities include corporate offices, 310,000 square feet of maintenance hangars and a 100,000 square foot component repair shop at the air park. ABX also has the non-exclusive right to use the airport, which includes one active runway, taxi ways and ramp space. The Company also leases and operates a 311,500 square foot, two hangar aircraft maintenance complex in Tampa, Florida. Additionally, the Company leases certain equipment and airport facilities, office space, and maintenance facilities at other locations. As of March 31, 2018 and December 31, 2017, the Company did not lease any aircraft from lessors. Purchase Commitments The Company has agreements with Israel Aerospace Industries Ltd. ("IAI") for the conversion of Boeing 767 passenger aircraft into a standard configured freighter aircraft. The conversions primarily consist of the installation of a standard cargo door and loading system. At March 31, 2018 , the Company was committed to acquire and modify additional Boeing 767-300 passenger aircraft into standard freighter aircraft. In addition to eight aircraft that were in the modification process at March 31, 2018 , the Company is committed to induct three more aircraft into the freighter modification process through 2018, including commitments to purchase three more Boeing 767-300 passenger aircraft during the first half of 2018. As of March 31, 2018 , the Company's commitments to complete the conversions of aircraft it owns or has the contracts to purchase totaled $101.7 million . Additionally, the Company could incur a cancellation fee for part kits for any aircraft that is not inducted into conversion at IAI. Guarantees and Indemnifications Certain leases and agreements of the Company contain guarantees and indemnification obligations to the lessor, or one or more other parties that are considered reasonable and customary (e.g. use, tax and environmental indemnifications), the terms of which range in duration and are often limited. Such indemnification obligations may continue after expiration of the respective lease or agreement. Other In addition to the foregoing matters, the Company is also a party to legal proceedings in various federal and state jurisdictions from time to time arising out of the operation of the Company's business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, the Company believes that its ultimate liability, if any, arising from pending legal proceedings, as well as from asserted legal claims and known potential legal claims which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to our financial condition or results of operations. Employees Under Collective Bargaining Agreements As of March 31, 2018 , the flight crewmember employees of ABX and ATI and flight attendant employees of ATI were represented by the labor unions listed below: Airline Labor Agreement Unit Percentage of the Company’s Employees ABX International Brotherhood of Teamsters 8.2% ATI Air Line Pilots Association 7.6% ATI Association of Flight Attendants 1.2% |
Pension and Other Post-Retireme
Pension and Other Post-Retirement Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Post-Retirement Benefit Plans | PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS Defined Benefit and Post-retirement Healthcare Plans ABX sponsors a qualified defined benefit pension plan for ABX crewmembers and a qualified defined benefit pension plan for a major portion of its other ABX employees that meet minimum eligibility requirements. ABX also sponsors non-qualified defined benefit pension plans for certain employees. These non-qualified plans are unfunded. Employees are no longer accruing benefits under any of the defined benefit pension plans. ABX also sponsors a post-retirement healthcare plan for its ABX employees, which is unfunded. Benefits for covered individuals terminate upon reaching age 65 under the post-retirement healthcare plans. The accounting and valuation for these post-retirement obligations are determined by prescribed accounting and actuarial methods that consider a number of assumptions and estimates. The selection of appropriate assumptions and estimates is significant due to the long time period over which benefits will be accrued and paid. The long term nature of these benefit payouts increases the sensitivity of certain estimates of our post-retirement costs. The assumptions considered most sensitive in actuarially valuing ABX’s pension obligations and determining related expense amounts are discount rates and expected long term investment returns on plan assets. Additionally, other assumptions concerning retirement ages, mortality and employee turnover also affect the valuations. Actual results and future changes in these assumptions could result in future costs significantly higher than those recorded in our results of operations. ABX measures plan assets and benefit obligations as of December 31 of each year. Information regarding ABX’s sponsored defined benefit pension plans and post-retirement healthcare plans follow below. The accumulated benefit obligation reflects pension benefit obligations based on the actual earnings and service to-date of current employees. The Company’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans for both continuing and discontinued operations are as follows (in thousands): Three Months Ended March 31, Pension Plans Post-Retirement Healthcare Plan 2018 2017 2018 2017 Service cost $ — $ — $ 30 $ 39 Interest cost 7,284 8,775 32 36 Expected return on plan assets (10,523 ) (10,930 ) — — Amortization of prior service cost — — — (13 ) Amortization of net (gain) loss 887 1,937 55 71 Net periodic benefit cost (income) $ (2,352 ) $ (218 ) $ 117 $ 133 During the three month period ending March 31, 2018, the Company contributed $1.3 million to the pension plans. The Company expects to contribute an additional $21.1 million during the remainder of 2018. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The provision for income taxes for interim periods is based on management's best estimate of the effective income tax rate expected to be applicable for the current year, plus any adjustments arising from changes in the estimated amount of taxable income related to prior periods. Federal legislation known as the The Tax Cuts and Jobs Acts ("Tax Act") was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from the previous rate of 35% to 21% effective January 1, 2018. The Tax Act also makes broad and complex changes to the U.S. tax code, including, but not limited to a one time tax on earnings of certain foreign subsidiaries, limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017, bonus depreciation for full expensing of qualified property, and limitations on the deductibility of certain executive compensation. The Company will continue to refine the calculations as additional analysis is completed and the Company gains a more thorough understanding of the Tax Act, including the tax law related to the deductibility of purchased assets, state tax treatment, and amounts related to employee compensation. Income tax expense recorded through March 31, 2018 utilized a projected annualized 23.9% rate applied to year-to-date income. Additionally, the Company recorded discrete tax items for the conversion of employee stock awards during the first quarter of 2018, resulting in an effective tax rate of 25.1% . The final effective tax rate applied to 2018 will depend on the actual amount of pre-tax book results by the Company for the full year, the additional conversions of employee stock awards, issuance of stock warrants and other items. The Company has operating loss carryforwards for U.S. federal income tax purposes. Management expects to utilize the loss carryforwards to offset federal income tax liabilities in the future. Due to the Company's deferred tax assets, including its loss carryforwards, management does not expect to pay federal income taxes until 2023 or later. The Company may, however, be required to pay some federal tax due to loss carryforward usage limitations and certain state and local income taxes before then. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS During September 2017, the Company issued convertible debt in the form of the Notes and recorded a long-term liability representing the Note conversion liability. In conjunction with the Notes, the Company purchased convertible note hedges having the same number of the Company’s common shares, 8.1 million shares, and same strike price of $31.90, that underlie the Notes. The convertible note hedges are expected to reduce the potential equity dilution with respect to the Company's common stock, and/or offset any cash payments in excess of the principal amount due, as the case may be, upon conversion of the Notes. The Company evaluated the convertible note hedges under the applicable accounting guidance, including ASC 815, "Derivatives and Hedging," and determined that the convertible note hedges should be accounted for as derivatives. These derivatives were capitalized on the balance sheet as long-term assets and are adjusted to reflect their fair value at the end of the quarter. The fair value of the convertible note hedges was $56.0 million and $53.7 million at March 31, 2018 and December 31, 2017, respectively. The Company recorded a net loss before the effects of income taxes of $0.2 million during the three month period ending March 31, 2018 for the revaluation of the convertible note hedges and the note conversion obligations to fair value. The Company's Senior Credit Agreement requires the Company to maintain derivative instruments for protection from fluctuating interest rates, for at least fifty percent of the outstanding balance of the term loan. Accordingly, the Company entered into interest rate swaps. The table below provides information about the Company’s interest rate swaps (in thousands): March 31, 2018 December 31, 2017 Expiration Date Stated Interest Rate Notional Amount Market Value (Liability) Notional Amount Market Value (Liability) May 5, 2021 1.090 % 33,750 914 35,625 719 May 30, 2021 1.703 % 33,750 491 35,625 240 March 31, 2022 1.900 % 50,000 1,166 50,000 416 March 31, 2022 1.950 % 75,000 1,612 75,000 465 The outstanding interest rate swaps are not designated as hedges for accounting purposes. The effects of future fluctuations in LIBOR interest rates on derivatives held by the Company will result in the recording of unrealized gains and losses into the statement of operations. The Company recorded pre-tax gains on derivatives of $2.3 million and $0.2 million for the three month periods ending March 31, 2018 and 2017, respectively. The liability for outstanding derivatives is recorded in other liabilities and in accrued expenses. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) includes the following items by components for the three month periods ending March 31, 2018 and 2017 (in thousands): Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of December 31, 2016 (77,088 ) (1,301 ) (1,477 ) (79,866 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment — — 58 58 Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to non-service costs) 1,937 71 — 2,008 Negative prior service cost — (13 ) — (13 ) Income Tax (Expense) or Benefit (703 ) (21 ) (21 ) (745 ) Other comprehensive income (loss), net of tax 1,234 37 37 1,308 Balance as of March 31, 2017 (75,854 ) (1,264 ) (1,440 ) (78,558 ) Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of December 31, 2017 (60,575 ) (1,097 ) (1,348 ) (63,020 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment — — (25 ) (25 ) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to non-service costs) 887 55 — 942 Income Tax (Expense) or Benefit (200 ) (13 ) 9 (204 ) Other comprehensive income (loss), net of tax 687 42 (16 ) 713 Balance as of March 31, 2018 (59,888 ) (1,055 ) (1,364 ) (62,307 ) |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company's Board of Directors has granted stock incentive awards to certain employees and board members pursuant to a long term incentive plan which was approved by the Company's stockholders in May 2005 and in May 2015. Employees have been awarded non-vested stock units with performance conditions, non-vested stock units with market conditions and non-vested restricted stock. The restrictions on the non-vested restricted stock awards lapse at the end of a specified service period, which is typically three years from the date of grant. Restrictions could lapse sooner upon a business combination, death, disability or after an employee qualifies for retirement. The non-vested stock units will be converted into a number of shares of Company stock depending on performance and market conditions at the end of a specified service period, lasting approximately three years. The performance condition awards will be converted into a number of shares of Company stock based on the Company's average return on invested capital during the service period. Similarly, the market condition awards will be converted into a number of shares depending on the appreciation of the Company's stock compared to the NASDAQ Transportation Index. Board members were granted time-based awards with vesting periods of approximately six or twelve months. The Company expects to settle all of the stock unit awards by issuing new shares of stock. The table below summarizes award activity. Three Months Ended March 31, 2018 March 31, 2017 Number of Awards Weighted average grant-date fair value Number of Awards Weighted average grant-date fair value Outstanding at beginning of period 873,849 $ 12.30 1,040,569 $ 9.97 Granted 206,695 26.53 243,940 17.52 Converted (96,616 ) 10.89 (173,210 ) 9.69 Expired — — — — Forfeited — — (3,800 ) 13.66 Outstanding at end of period 983,928 $ 15.43 1,107,499 $ 11.66 Vested 326,928 $ 7.18 324,599 $ 6.39 The average grant-date fair value of each performance condition award, non-vested restricted stock award and time-based award granted by the Company in 2018 was $25.15 , the fair value of the Company’s stock on the date of grant. The average grant-date fair value of each market condition award granted in 2018 was $31.60 . The market condition awards were valued using a Monte Carlo simulation technique, a risk-free interest rate of 2.4% and a volatility of 33.8% based on volatility over three years using daily stock prices. For the month periods ending March 31, 2018 and 2017, the Company recorded expense of $1.0 million and $0.8 million , respectively, for stock incentive awards. At March 31, 2018 , there was $8.5 million of unrecognized expense related to the stock incentive awards that is expected to be recognized over a weighted-average period of 1.8 years. As of March 31, 2018 , none of the awards were convertible, 326,928 units of the Board members time-based awards had vested and none of the outstanding shares of the restricted stock had vested. These awards could result in a maximum number of 1,219,878 additional outstanding shares of the Company’s common stock depending on service, performance and market results through December 31, 2020. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | COMMON STOCK AND EARNINGS PER SHARE Earnings per Share The calculation of basic and diluted earnings per common share are as follows (in thousands, except per share amounts): Three Months Ending March 31, 2018 2017 Numerator: Earnings from continuing operations - basic $ 15,682 $ 9,796 Gain from stock warrants revaluation, net of tax — (1,539 ) Earnings from continuing operations - diluted $ 15,682 $ 8,257 Denominator: Weighted-average shares outstanding for basic earnings per share 58,840 59,133 Common equivalent shares: Effect of stock-based compensation awards and warrants 718 5,816 Weighted-average shares outstanding assuming dilution 59,558 64,949 Basic earnings per share from continuing operations $ 0.27 $ 0.17 Diluted earnings per share from continuing operations $ 0.26 $ 0.13 The determination of diluted earnings per share requires the exclusion of the fair value re-measurement of the stock warrants recorded as a liability (see Note B), if such warrants have a anti-dilutive effect on earnings per share. The dilutive effect of the weighted-average diluted shares outstanding is calculated using the treasury method for periods in which equivalent shares have a dilutive effect on earnings per share. Under this method, the number of diluted shares is determined by dividing the assumed proceeds of the warrants recorded as a liability by the average stock price during the period and comparing that amount with the number of corresponding warrants outstanding. The underlying warrants recorded as a liability as of March 31, 2018 and 2017 would have resulted in 14.8 million and 12.3 million additional shares of the Company's common stock, respectively, if the warrants were settled by tendering cash. The warrants recorded in stockholders' equity as of March 31, 2018, would have resulted in 8.1 million additional shares of the Company's common stock, if the Company's stock price exceeded $41.35 and the warrants were settled in shares. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT AND REVENUE INFORMATION The Company operates in three reportable segments. The CAM segment consists of the Company's aircraft leasing operations and its segment earnings include an allocation of interest expense. The ACMI Services segment consists of the Company's airline operations, including CMI agreements as well as ACMI and charter service agreements that the Company has with its customers. The MRO Services segment provides aircraft parts, component repairs, airframe maintenance services, aircraft modifications and other aircraft maintenance services. The MRO Services became reportable during 2018 due to the size of its revenues. Prior periods presented below have been prepared by separating MRO Services from "All other" for comparative purposes. The Company's ground services and other activities, which include the mail and package sorting services, maintenance services for ground equipment, facilities and material handling equipment, the sales of aviation fuel and other services, are not large enough to constitute reportable segments and are combined in All other. Inter-segment revenues are valued at arms-length market rates. Cash and cash equivalents are reflected in Assets - All other below. The Company's segment information for revenue from continuing operations is presented below (in thousands): Three Months Ending March 31 2018 2017 Total revenues: CAM $ 52,376 $ 47,978 ACMI Services 119,374 144,949 MRO Services 52,723 40,338 All other 19,283 48,868 Eliminate inter-segment revenues (40,716 ) (44,216 ) Total $ 203,040 $ 237,917 Customer revenues: CAM $ 35,887 $ 30,782 ACMI Services 119,374 144,949 MRO Services 30,939 25,417 All other 16,840 36,769 Total $ 203,040 $ 237,917 CAM's aircraft lease revenues are recognized as operating lease revenues on a straight-line basis over the term of the applicable lease agreements. CAM's customer revenues included $0.8 million and $2.7 million for the three month periods ending March 31, 2018 and 2017 respectively, for maintenance related payments from customers that are recognized at a point in time. ACMI Services revenues are generated from airline service agreements and are typically based on hours flown, the amount of aircraft operated and crew resources provided during a month. ACMI Services revenues are recognized over time as flight hours are performed for the customer. Certain agreements include provisions for incentive payments based upon on-time reliability. These incentives are measured on a monthly basis and recorded to revenue in the corresponding month earned. Under CMI and ACMI agreements, customers are generally responsible for aviation fuel, landing fees, navigation fees and certain other flight expenses. When functioning as the customers agent for arranging such services, the Company records amounts reimbursable from the customer as revenues net of the related expenses as the costs are incurred. Under charter agreements in which the Company is responsible for fuel and full services, the related costs are recorded in operating expenses. During the three month period ended March 31, 2018 , the Company netted $49.2 million of ACMI Services customer reimbursable revenues against the related expenses as an agent of customers. ACMI Services are invoiced monthly or more frequently. MRO Services revenues for customer contracts for airframe and modification services that do not have an alternative use and for which the Company has an enforceable right to payment are generally recognized over time based on the percentage of costs completed. MRO Services revenues for part sales, component repairs and line service are recognized at a point in time typically when the parts are delivered to the customer and the the services are completed. For airframe maintenance, aircraft modifications, and aircraft component repairs, contracts include assurance warranties that are not sold separately. Effective January 1, 2018 the Company records revenues and estimated earnings for its airframe maintenance and modification contracts using the percentage-of-completion cost-to-cost method. For such services, the Company estimates the earnings on a contract as the difference between the expected revenue and estimated costs to complete a contract and recognizes revenues and earnings based on the proportion of costs incurred compared to the total estimated costs. The Company's estimates consider the timing and extent of the services, including the amount and rates of labor, materials and other resources required to perform the services. The Company recognizes adjustments in estimated earnings on a contract under the cumulative catch-up method in which the impact of the adjustment on estimated earnings of a contract is recognized in the period the adjustment is identified. The Company's external customer revenues for providing sorting services and related equipment maintenance for the three month periods ending March 31, 2018 and 2017 were $16.2 million and $36.3 million , respectively, and are reported in All other. The Company's external customer revenues from providing sorting services are recognized as the services are performed for the customer over time. Revenues from related equipment maintenance services are primarily recognized at a point in time. During the three month period ended March 31, 2018 , the Company netted $51.3 million of customer reimbursable revenues against the related expenses when functioning as the customers agent for arranging ground services. Revenue is not recognized until collectibility of customer payment is probable. For customers that are not a governmental agency or department, the Company generally receives partial payment in advance of services, otherwise customer balances are typically paid within 30 to 60 days of service. During the three month periods ending March 31, 2018 the Company recognized $5.9 million of non lease revenue that was reported in deferred revenue at the beginning of the period. The effects of the adoption of Topic 606 on the Company's customer revenues are summarized below: For the three months ending March 31, 2018 Revenue As Reported Without Topic 606 Increase (decrease) ACMI Services $ 119,374 $ 168,549 $ (49,175 ) MRO Services 30,939 25,479 5,460 Other (ground services) 16,840 68,187 (51,347 ) The Company's other segment information from continuing operations is presented below (in thousands): Three Months Ending March 31 2018 2017 Depreciation and amortization expense: CAM $ 28,925 $ 24,301 ACMI Services 10,225 11,072 MRO Services 850 674 All other 4 395 Total $ 40,004 $ 36,442 Segment earnings (loss): CAM $ 15,464 $ 13,330 ACMI Services 3,941 (3,534 ) MRO Services 4,462 3,188 All other 2,581 2,463 Inter-segment earnings eliminated (3,325 ) (862 ) Net unallocated interest expense (819 ) (171 ) Net gain (loss) on financial instruments (885 ) 1,869 Other non-service components of retiree benefit costs, net 2,045 (177 ) Loss from non-consolidated affiliate (2,536 ) — Pre-tax earnings from continuing operations $ 20,928 $ 16,106 The Company's assets are presented below by segment (in thousands): March 31 December 31 2018 2017 Assets: CAM $ 1,201,208 $ 1,192,890 ACMI Services 195,790 189,379 MRO Services 96,451 87,177 All other 74,054 79,398 Total $ 1,567,503 $ 1,548,844 Interest expense allocated to CAM was $4.5 million and $3.3 million for the three month periods ending March 31, 2018 and 2017, respectively. |
Summary of Financial Statemen22
Summary of Financial Statement Preparation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and such principles are applied on a basis consistent with the financial statements reflected in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the accompanying financial statements contain all adjustments, including normal recurring adjustments, necessary for the fair presentation of the Company’s results of operations and financial position for the periods presented. Due to seasonal fluctuations, among other factors common to the air cargo industry, the results of operations for the periods presented are not necessarily indicative of the results of operations to be expected for the entire year or any interim period. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. The accounting estimates reflect the best judgment of management, but actual results could differ materially from those estimates. The accompanying condensed consolidated financial statements include the accounts of Air Transport Services Group, Inc. and its wholly-owned subsidiaries. Investments in affiliates in which the Company has significant influence but does not exercise control are accounted for using the equity method of accounting. Using the equity method, the Company’s share of the nonconsolidated affiliates' income or loss is recognized in the consolidated statement of earnings and cumulative post-acquisition changes in the investment are adjusted against the carrying amount of the investment. Inter-company balances and transactions are eliminated. |
New Accounting Pronouncements | Accounting Standards Updates Effective January 1, 2018 the Company adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” ("Topic 606”) which superseded previous revenue recognition guidance. Topic 606 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company's lease revenues within the scope of ASC 840, Leases, are specifically excluded from Topic 606. The Company adopted the standard using a modified retrospective approach, under which financial statements are prepared under the revised guidance for the year of adoption, but not for prior years. Under this method, entities recognize a cumulative catch-up adjustment to the opening balance of retained earnings at the effective date for open contract performance at that time. The Company's adoption efforts have included the identification of revenue within the scope of the standard, the evaluation of customer contracts in conjunction with new guidance and an assessment of the qualitative and quantitative impacts of the new standard on its financial statements. The evaluation included the application of each of the five steps identified in the Topic 606 revenue recognition model. The Company determined that under Topic 606, it is an agent for aviation fuel and certain other costs reimbursed by customers under its ACMI and CMI contracts and for certain cargo handling services that it arranges for a customer. Under the new revenue standard, such reimbursed amounts are reported net of the corresponding expenses beginning in 2018. This application of Topic 606 did not have a material impact on the Company's reported earnings in any period. Additionally under Topic 606, the Company is required to record revenue over time, instead of at the time of completion, for certain customer contracts for airframe and modification services that do not have an alternative use and for which the Company has an enforceable right to payment during the service cycle. The Company adopted the provisions of this new standard using the modified retrospective method which requires the Company to record a one time adjustment to retained deficit for the cumulative effect that the standard has on open contracts at the time of adoption. Upon adoption of the new standard the Company accelerated $3.6 million of revenue resulting in an immaterial adjustment to its January 1, 2018 retained deficit for open airframe and modification services contracts. In January 2017, the FASB issued ASU "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" (“ASU 2017-04”). This new standard eliminates Step 2 from the goodwill impairment test and requires an entity to perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for any annual or interim goodwill impairment tests in the fiscal years beginning after December 15, 2019 and must be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this new accounting guidance in January of 2018. The adoption did not have an impact on the Company's financial position, results of operations, or cash flows. In March 2017, the FASB issued ASU "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost "(ASU 2017-07"). ASU 2017-07 requires an employer to report the service cost component of retiree benefits in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented separately from the service cost component and outside a subtotal of income from operations. The Company adopted ASU 2017-07 on January 1, 2018, retrospectively to all periods presented. As a result, retiree benefit plan interest expense, investment returns, settlements and other non-service cost components of retiree benefit expenses are excluded from the Company's operating income subtotal as reported in the Company's Consolidated Statement of Operations, but remain included in earnings before income taxes. Information about retiree benefit plans' interest expense, investment returns and other components of retiree benefit expenses can be found in Note I. In February 2016, the FASB issued ASU "Leases (Topic 842)" ("ASU 2016-02"), which will require the recognition of right to-use-assets and lease liabilities for leases previously classified as operating leases by lessees. The standard will take effect for annual reporting periods beginning after December 15, 2018, including interim reporting periods. Early application will be permitted for all entities. In addition, the FASB has decided to require a lessee to apply a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements (the date of initial application). The modified retrospective approach would not require any transition accounting for leases that expired before the date of initial application. The Company is currently evaluating the impact of the standard on its financial statements and disclosures. In February 2018, the FASB issued ASU “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income" ("ASU 2018-02"). ASU 2018-02 amends ASC 220, Income Statement — Reporting Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. federal tax legislation known as the Tax Cuts and Jobs Act. In addition, under the ASU 2018-02, a Company will be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its financial statements and disclosures. |
Summary of Financial Statemen23
Summary of Financial Statement Preparation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property, Plant and Equipment | Property and equipment, to be held and used, is summarized as follows (in thousands): March 31, December 31, Flight equipment $ 1,799,301 $ 1,801,808 Ground equipment 53,461 53,523 Leasehold improvements, facilities and office equipment 28,205 26,897 Aircraft modifications and projects in progress 164,414 121,760 2,045,381 2,003,988 Accumulated depreciation (868,861 ) (844,026 ) Property and equipment, net $ 1,176,520 $ 1,159,962 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Lease Incentive Intangible [Table Text Block] | The Company's lease incentive granted to the lessee was as follows (in thousands): Lease Incentive Carrying value as of December 31, 2017 $ 80,684 Amortization (4,226 ) Carrying value as of March 31, 2018 $ 76,458 |
Schedule of Goodwill | The carrying amounts of goodwill are as follows (in thousands): CAM MRO Services Total Carrying value as of December 31, 2017 $ 34,395 $ 2,884 $ 37,279 Carrying value as of March 31, 2018 $ 34,395 $ 2,884 $ 37,279 |
Schedule Intangible Assets by Major Class | The Company's acquired intangible assets are as follows (in thousands): Airline Amortizing Certificates Intangibles Total Carrying value as of December 31, 2017 $ 3,000 $ 4,298 $ 7,298 Amortization — (290 ) (290 ) Carrying value as of March 31, 2018 $ 3,000 $ 4,008 $ 7,008 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands): As of March 31, 2018 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 35,785 $ — $ 35,785 Interest rate swap — 4,183 — 4,183 Convertible note hedges — 56,046 — 56,046 Total Assets $ — $ 96,014 $ — $ 96,014 Liabilities Note conversion obligations — (56,881 ) — (56,881 ) Stock warrant obligations — (214,205 ) — (214,205 ) Total Liabilities $ — $ (271,086 ) $ — $ (271,086 ) As of December 31, 2017 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 1,326 $ — $ 1,326 Interest rate swap — 1,840 — 1,840 Convertible note hedges — 53,683 — 53,683 Total Assets $ — $ 56,849 $ — $ 56,849 Liabilities Note conversion obligations — (54,359 ) — (54,359 ) Stock warrant obligation — (211,136 ) — (211,136 ) Total Liabilities $ — $ (265,495 ) $ — $ (265,495 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment, to be held and used, is summarized as follows (in thousands): March 31, December 31, Flight equipment $ 1,799,301 $ 1,801,808 Ground equipment 53,461 53,523 Leasehold improvements, facilities and office equipment 28,205 26,897 Aircraft modifications and projects in progress 164,414 121,760 2,045,381 2,003,988 Accumulated depreciation (868,861 ) (844,026 ) Property and equipment, net $ 1,176,520 $ 1,159,962 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt [Table Text Block] | The carrying value of the Company's Convertible debt is shown below: March 31, December 31, 2018 2017 Principal value, Convertible Senior Notes, due 2024 258,750 258,750 Unamortized issuance costs (6,479 ) (6,685 ) Unamortized discount (53,687 ) (55,515 ) Convertible debt 198,584 196,550 |
Schedule of Long-term Debt Instruments | Debt obligations consisted of the following (in thousands): March 31, December 31, 2018 2017 Unsubordinated term loan $ 66,857 $ 70,568 Revolving credit facility 265,000 245,000 Aircraft loans — 3,640 Convertible debt 198,584 196,550 Total debt obligations 530,441 515,758 Less: current portion (14,846 ) (18,512 ) Total long term obligations, net $ 515,595 $ 497,246 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | As of March 31, 2018 , the flight crewmember employees of ABX and ATI and flight attendant employees of ATI were represented by the labor unions listed below: Airline Labor Agreement Unit Percentage of the Company’s Employees ABX International Brotherhood of Teamsters 8.2% ATI Air Line Pilots Association 7.6% ATI Association of Flight Attendants 1.2% |
Pension and Other Post-Retire29
Pension and Other Post-Retirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The Company’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans for both continuing and discontinued operations are as follows (in thousands): Three Months Ended March 31, Pension Plans Post-Retirement Healthcare Plan 2018 2017 2018 2017 Service cost $ — $ — $ 30 $ 39 Interest cost 7,284 8,775 32 36 Expected return on plan assets (10,523 ) (10,930 ) — — Amortization of prior service cost — — — (13 ) Amortization of net (gain) loss 887 1,937 55 71 Net periodic benefit cost (income) $ (2,352 ) $ (218 ) $ 117 $ 133 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The table below provides information about the Company’s interest rate swaps (in thousands): March 31, 2018 December 31, 2017 Expiration Date Stated Interest Rate Notional Amount Market Value (Liability) Notional Amount Market Value (Liability) May 5, 2021 1.090 % 33,750 914 35,625 719 May 30, 2021 1.703 % 33,750 491 35,625 240 March 31, 2022 1.900 % 50,000 1,166 50,000 416 March 31, 2022 1.950 % 75,000 1,612 75,000 465 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) includes the following items by components for the three month periods ending March 31, 2018 and 2017 (in thousands): Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of December 31, 2016 (77,088 ) (1,301 ) (1,477 ) (79,866 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment — — 58 58 Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to non-service costs) 1,937 71 — 2,008 Negative prior service cost — (13 ) — (13 ) Income Tax (Expense) or Benefit (703 ) (21 ) (21 ) (745 ) Other comprehensive income (loss), net of tax 1,234 37 37 1,308 Balance as of March 31, 2017 (75,854 ) (1,264 ) (1,440 ) (78,558 ) Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of December 31, 2017 (60,575 ) (1,097 ) (1,348 ) (63,020 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment — — (25 ) (25 ) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to non-service costs) 887 55 — 942 Income Tax (Expense) or Benefit (200 ) (13 ) 9 (204 ) Other comprehensive income (loss), net of tax 687 42 (16 ) 713 Balance as of March 31, 2018 (59,888 ) (1,055 ) (1,364 ) (62,307 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Equity Instruments Other Than Options, Activity | The table below summarizes award activity. Three Months Ended March 31, 2018 March 31, 2017 Number of Awards Weighted average grant-date fair value Number of Awards Weighted average grant-date fair value Outstanding at beginning of period 873,849 $ 12.30 1,040,569 $ 9.97 Granted 206,695 26.53 243,940 17.52 Converted (96,616 ) 10.89 (173,210 ) 9.69 Expired — — — — Forfeited — — (3,800 ) 13.66 Outstanding at end of period 983,928 $ 15.43 1,107,499 $ 11.66 Vested 326,928 $ 7.18 324,599 $ 6.39 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted earnings per common share are as follows (in thousands, except per share amounts): Three Months Ending March 31, 2018 2017 Numerator: Earnings from continuing operations - basic $ 15,682 $ 9,796 Gain from stock warrants revaluation, net of tax — (1,539 ) Earnings from continuing operations - diluted $ 15,682 $ 8,257 Denominator: Weighted-average shares outstanding for basic earnings per share 58,840 59,133 Common equivalent shares: Effect of stock-based compensation awards and warrants 718 5,816 Weighted-average shares outstanding assuming dilution 59,558 64,949 Basic earnings per share from continuing operations $ 0.27 $ 0.17 Diluted earnings per share from continuing operations $ 0.26 $ 0.13 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |
Topic 606 Effect on Revenue by Segment [Table Text Block] | The effects of the adoption of Topic 606 on the Company's customer revenues are summarized below: For the three months ending March 31, 2018 Revenue As Reported Without Topic 606 Increase (decrease) ACMI Services $ 119,374 $ 168,549 $ (49,175 ) MRO Services 30,939 25,479 5,460 Other (ground services) 16,840 68,187 (51,347 ) |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | The Company's segment information for revenue from continuing operations is presented below (in thousands): Three Months Ending March 31 2018 2017 Total revenues: CAM $ 52,376 $ 47,978 ACMI Services 119,374 144,949 MRO Services 52,723 40,338 All other 19,283 48,868 Eliminate inter-segment revenues (40,716 ) (44,216 ) Total $ 203,040 $ 237,917 Customer revenues: CAM $ 35,887 $ 30,782 ACMI Services 119,374 144,949 MRO Services 30,939 25,417 All other 16,840 36,769 Total $ 203,040 $ 237,917 |
Schedule of Segment Reporting Information, by Segment | The Company's other segment information from continuing operations is presented below (in thousands): Three Months Ending March 31 2018 2017 Depreciation and amortization expense: CAM $ 28,925 $ 24,301 ACMI Services 10,225 11,072 MRO Services 850 674 All other 4 395 Total $ 40,004 $ 36,442 Segment earnings (loss): CAM $ 15,464 $ 13,330 ACMI Services 3,941 (3,534 ) MRO Services 4,462 3,188 All other 2,581 2,463 Inter-segment earnings eliminated (3,325 ) (862 ) Net unallocated interest expense (819 ) (171 ) Net gain (loss) on financial instruments (885 ) 1,869 Other non-service components of retiree benefit costs, net 2,045 (177 ) Loss from non-consolidated affiliate (2,536 ) — Pre-tax earnings from continuing operations $ 20,928 $ 16,106 |
Reconciliation of Assets from Segment to Consolidated | The Company's assets are presented below by segment (in thousands): March 31 December 31 2018 2017 Assets: CAM $ 1,201,208 $ 1,192,890 ACMI Services 195,790 189,379 MRO Services 96,451 87,177 All other 74,054 79,398 Total $ 1,567,503 $ 1,548,844 |
Significant Customers (Details)
Significant Customers (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Mar. 08, 2016 | |
Concentration Risk [Line Items] | ||||
Accounts receivable | $ 100,186 | $ 109,114 | ||
Fair Value Adjustment of Warrants | $ (3,100) | $ 1,700 | ||
DHL [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated revenues | 28.00% | 26.00% | ||
DHL [Member] | Non reimbursable revenue [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated revenues | 30.00% | |||
DHL [Member] | Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Accounts receivable | $ 10,800 | 15,700 | ||
Amazon [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated revenues | 28.00% | 41.00% | ||
Amazon [Member] | Non reimbursable revenue [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated revenues | 27.00% | |||
Amazon [Member] | Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Accounts receivable | $ 31,300 | $ 44,200 | ||
US Military [Member] | Non reimbursable revenue [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated revenues | 10.00% | |||
US Military [Member] | Revenues from Services Performed [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated revenues | 11.00% | 7.00% | ||
US Military [Member] | Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Accounts receivable | $ 8,000 | $ 6,700 | ||
Amazon Warrant [Member] | ||||
Concentration Risk [Line Items] | ||||
Fair value warrants issued | $ 0 | $ 0 | ||
Class of Warrant or Right, Outstanding | 14,830 | 7,690 | ||
Warrants vested | 5,120 |
Goodwill and Other Intangible36
Goodwill and Other Intangibles (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | $ 37,279 | $ 37,279 |
Carrying value, ending balance | 37,279 | |
CAM [Member] | ||
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | 34,395 | 34,395 |
Carrying value, ending balance | 34,395 | |
Pemco [Member] | ||
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | 2,884 | $ 2,884 |
Carrying value, ending balance | $ 2,884 |
Goodwill and Other Intangible37
Goodwill and Other Intangibles (Schedule Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Finite and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Incentive to Lessee | $ 76,458 | $ 80,684 | |
Amortization of Lease Incentives | $ (4,226) | ||
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |||
Carrying value at beginning of period | 4,298 | ||
Carrying value at beginning of period | 7,298 | ||
Amortization expense | (290) | ||
Carrying value at end of period | 4,298 | $ 4,008 | $ 4,298 |
Carrying value at end of period | 7,008 | ||
ACMI Services [Member] | Airline Certificates [Member] | |||
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |||
Carrying value at beginning of period | 3,000 | ||
Amortization expense | 0 | ||
Carrying value at end of period | $ 3,000 |
Goodwill and Other Intangible38
Goodwill and Other Intangibles Investment in West Atlantic (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investments | $ 7,600 | $ 7,100 |
Goodwill | 37,279 | $ 37,279 |
Investment in West Atlantic [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Goodwill | 5,500 | |
Redeemable Noncontrolling Interest, Equity, Preferred, Carrying Amount | $ 2,400 |
Goodwill and Other Intangible39
Goodwill and Other Intangibles Investment A321 (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Payments to Acquire Interest in Joint Venture | $ 2.5 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | $ 5.5 | $ 5.6 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 25, 2017 |
Assets, Fair Value Disclosure [Abstract] | |||
Convertible note hedge fair value | $ 56,046 | $ 53,683 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Note conversion obligation fair value | 56,881 | 54,359 | |
Warrant liability | 214,205 | 211,136 | |
Fair Value, Measurements, Recurring [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 35,785 | 1,326 | |
Derivative Asset | 4,183 | 1,840 | |
Convertible note hedge fair value | 56,046 | 53,683 | |
Total Assets | 96,014 | 56,849 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Note conversion obligation fair value | (56,881) | (54,359) | |
Warrant liability | (214,205) | (211,136) | |
Total Liabilities | (271,086) | (265,495) | |
Carrying value, debt | 530,400 | 515,800 | |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 0 | 0 | |
Derivative Asset | 0 | 0 | |
Convertible note hedge fair value | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Note conversion obligation fair value | 0 | 0 | |
Warrant liability | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 35,785 | 1,326 | |
Derivative Asset | 4,183 | 1,840 | |
Convertible note hedge fair value | 56,046 | 53,683 | |
Total Assets | 96,014 | 56,849 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Note conversion obligation fair value | (56,881) | (54,359) | $ 57,369 |
Warrant liability | (214,205) | (211,136) | |
Total Liabilities | (271,086) | (265,495) | |
Difference between fair value and carrying value, debt | 3,000 | 9,100 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 0 | 0 | |
Derivative Asset | 0 | 0 | |
Convertible note hedge fair value | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Note conversion obligation fair value | 0 | 0 | |
Warrant liability | 0 | 0 | |
Total Liabilities | $ 0 | $ 0 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 2,045,381 | $ 2,003,988 |
Accumulated depreciation | (868,861) | (844,026) |
Property and equipment, net | 1,176,520 | 1,159,962 |
Flight Equipment [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 1,799,301 | 1,801,808 |
Ground equipment [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 53,461 | 53,523 |
facilities, leasehold improvements and office equipment [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 28,205 | 26,897 |
Construction in Progress [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 164,414 | $ 121,760 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
CAM [Member] | Flight Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leased aircraft, carrying value | $ 705.2 | $ 697.4 |
Debt Obligations (Schedule of L
Debt Obligations (Schedule of Long Term Obligations) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | |||
Total long term obligations | $ 530,441 | $ 515,758 | |
Convertible Debt | 198,584 | 196,550 | |
Less: current portion | (14,846) | (18,512) | |
Total long term obligations, net | $ 515,595 | 497,246 | |
Unsubordinated term loan and Revolving credit facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Collateral, Coverage Percentage | 125.00% | ||
Unsubordinated term loan [Member] | |||
Debt Instrument [Line Items] | |||
Total long term obligations | $ 66,857 | 70,568 | |
Revolving credit facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Accordion Feature Amount | $ 100,000 | ||
Total long term obligations | 265,000 | 245,000 | |
line of credit, increase in maximum borrowing capacity | $ 300,000 | ||
Aircraft loans [Member] | |||
Debt Instrument [Line Items] | |||
Total long term obligations | $ 0 | $ 3,640 |
Debt Obligations (Schedule of44
Debt Obligations (Schedule of Long Term Debt Maturities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Total long term obligations | $ 530,441 | $ 515,758 |
Debt Obligations (Narrative) (D
Debt Obligations (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 25, 2017 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Long term obligations | $ 530,441 | $ 515,758 | ||
Debt Issuance Costs, Line of Credit Arrangements, Net | 600 | 700 | ||
Convertible Debt | 198,584 | 196,550 | ||
Note conversion obligation fair value | (56,881) | (54,359) | ||
Gain/loss on fair value of note conversion obligation | 2,500 | |||
Convertible note hedge fair value | $ 56,046 | 53,683 | ||
Unsubordinated term loan and Revolving credit facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Collateral coverage percentage | 125.00% | |||
Unsubordinated term loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term obligations | $ 66,857 | 70,568 | ||
Variable interest rate | 3.38% | |||
Revolving credit facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term obligations | $ 265,000 | 245,000 | ||
Accordion feature amount | $ 100,000 | |||
Increased borrowing capacity | $ 120,000 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 545,000 | |||
Variable interest rate | 3.38% | |||
Credit facility, revolving credit loan, remaining borrowing capacity | $ 270,700 | |||
Letters of credit outstanding | 9,300 | |||
Aircraft loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Long term obligations | $ 0 | 3,640 | ||
Maximum [Member] | Unsubordinated term loan and Revolving credit facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Collateral coverage percentage | 150.00% | |||
Maximum amount of common stock authorized for repurchase | $ 100,000 | |||
Minimum [Member] | Unsubordinated term loan and Revolving credit facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Collateral coverage percentage | 50.00% | |||
Convertible Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible Debt | $ 258,750 | 258,750 | $ 258,750 | |
Debt Conversion, Converted Instrument, Rate | 0.00% | |||
Debt Instrument, Interest Rate, Effective Percentage | 0.00% | |||
Proceeds from Convertible Debt | $ 252,281 | |||
Warrants and Rights Outstanding | 38,502 | |||
Unamortized Debt Issuance Expense | (6,479) | (6,685) | ||
Debt Instrument, Unamortized Discount | (53,687) | (55,515) | ||
Fair Value, Measurements, Recurring [Member] | ||||
Debt Instrument [Line Items] | ||||
Note conversion obligation fair value | 56,881 | 54,359 | ||
Convertible note hedge fair value | 56,046 | 53,683 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||||
Debt Instrument [Line Items] | ||||
Note conversion obligation fair value | 56,881 | 54,359 | $ (57,369) | |
Convertible note hedge fair value | $ 56,046 | $ 53,683 |
Commitments and Contingencies46
Commitments and Contingencies (Commitments) (Details) $ in Millions | Mar. 31, 2018USD ($) |
Long-term Purchase Commitment [Line Items] | |
costs to complete aircraft modification | $ 101.7 |
Commitments and Contingencies47
Commitments and Contingencies (Labor Unions) (Details) - Workforce Subject to Collective Bargaining Arrangements [Member] - Labor Unions [Member] | 12 Months Ended |
Dec. 31, 2016 | |
ABX [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 8.20% |
ATI [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 7.60% |
Air Transport International, Flight Attendants [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 1.20% |
Pension and Other Post-Retire48
Pension and Other Post-Retirement Benefit Plans (Funded Status) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Plans [Member] | ||
Change in benefit obligation [Roll Forward] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 7,284 | 8,775 |
Change in plan assets [Roll Forward] | ||
Employer contributions | 1,321 | |
Post-Retirement Healthcare Plans [Member] | ||
Change in benefit obligation [Roll Forward] | ||
Service cost | 30 | 39 |
Interest cost | $ 32 | $ 36 |
Pension and Other Post-Retire49
Pension and Other Post-Retirement Benefit Plans (Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Plans [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 7,284 | 8,775 |
Expected return on plan assets | (10,523) | (10,930) |
Amortization of prior service cost | 0 | 0 |
Amortization of net (gain) loss | 887 | 1,937 |
Net periodic benefit cost (income) | (2,352) | (218) |
Post-Retirement Healthcare Plans [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 30 | 39 |
Interest cost | 32 | 36 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service cost | 0 | (13) |
Amortization of net (gain) loss | 55 | 71 |
Net periodic benefit cost (income) | $ 117 | $ 133 |
Pension and Other Post-Retire50
Pension and Other Post-Retirement Benefit Plans (Cash Flows) (Details) - Pension Plans [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contributions | $ 1,321 |
Estimated future employer contributions | $ 21,100 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2018Rate | |
Income Tax Disclosure [Line Items] | |
Effective Income Tax Rate Reconciliation, Deduction, Employee Stock Ownership Plan Dividend, Percent | 23.93% |
Effective Income Tax Rate Reconciliation, Percent | (25.07%) |
Income Taxes (Income Tax Provis
Income Taxes (Income Tax Provision (Benefit)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Deferred taxes: | ||
Total income tax expense from continuing operations | $ 5,246 | $ 6,310 |
Income Taxes (Tax Rate Reconcil
Income Taxes (Tax Rate Reconciliation) (Details) | 3 Months Ended |
Mar. 31, 2018Rate | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |
Effective income tax rate | (25.07%) |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) shares in Thousands, number in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Sep. 25, 2017 | |
Derivative [Line Items] | ||||
Pre-tax (charge) on derivative instruments | $ (885) | $ 1,869 | ||
Net (gain) loss on financial instruments | (2,343) | $ (209) | ||
Convertible note hedge fair value | 56,046 | $ 53,683 | ||
gain/loss convertible debt hedge asset and note obligation valuation | $ (200) | |||
May 30, 2021 [Member] | Swap [Member] | ||||
Derivative [Line Items] | ||||
Stated Interest Rate | 0.00% | |||
Market Value (Liability) | $ (491) | (240) | ||
Derivative Liability, Notional Amount | $ 33,750 | 35,625 | ||
May 5, 2021 [Member] [Member] [Member] | Swap [Member] | ||||
Derivative [Line Items] | ||||
Stated Interest Rate | 0.00% | |||
Market Value (Liability) | $ (914) | (719) | ||
Derivative Liability, Notional Amount | $ 33,750 | 35,625 | ||
March 31, 2022 One [Member] [Member] | Swap [Member] | ||||
Derivative [Line Items] | ||||
Stated Interest Rate | 0.00% | |||
Market Value (Liability) | $ (1,166) | (416) | ||
Derivative Liability, Notional Amount | $ 50,000 | 50,000 | ||
March 31, 2022 Two [Member] [Member] [Member] | Swap [Member] | ||||
Derivative [Line Items] | ||||
Stated Interest Rate | 0.00% | |||
Market Value (Liability) | $ (1,612) | (465) | ||
Derivative Liability, Notional Amount | 75,000 | 75,000 | ||
Convertible Debt [Member] | ||||
Derivative [Line Items] | ||||
Convertible note hedge shares | 8,111 | |||
Fair Value, Measurements, Recurring [Member] | ||||
Derivative [Line Items] | ||||
Convertible note hedge fair value | 56,046 | 53,683 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Derivative [Line Items] | ||||
Convertible note hedge fair value | $ 56,046 | $ 53,683 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $ (1,364) | $ (1,440) | $ (1,348) | $ (1,477) |
Accumulated other comprehensive income (loss), beginning balance | (63,020) | (79,866) | ||
Other comprehensive income (loss) before reclassifications: | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss), before Reclassification and Tax | (25) | 58 | ||
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 9 | (21) | ||
Amounts reclassified from accumulated other comprehensive income: | ||||
Actuarial costs (reclassified to salaries, wages and benefits) | 942 | 2,008 | ||
Negative prior service cost (reclassified to salaries, wages and benefits) | (13) | |||
Income Tax (Expense) or Benefit | (204) | (745) | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (16) | 37 | ||
Other comprehensive income (loss), net of tax | 1,308 | |||
Accumulated other comprehensive income (loss), ending balance | (62,307) | (78,558) | ||
Total comprehensive income (loss) | 16,591 | 11,296 | ||
Pension Plans [Member] | ||||
Schedule of Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning balance | (60,575) | (77,088) | ||
Amounts reclassified from accumulated other comprehensive income: | ||||
Actuarial costs (reclassified to salaries, wages and benefits) | 887 | 1,937 | ||
Income Tax (Expense) or Benefit | (200) | (703) | ||
Other comprehensive income (loss), net of tax | 687 | 1,234 | ||
Accumulated other comprehensive income (loss), ending balance | (59,888) | (75,854) | ||
Post-Retirement Plans [Member] | ||||
Schedule of Accumulated Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive income (loss), beginning balance | (1,097) | (1,301) | ||
Amounts reclassified from accumulated other comprehensive income: | ||||
Actuarial costs (reclassified to salaries, wages and benefits) | 55 | 71 | ||
Negative prior service cost (reclassified to salaries, wages and benefits) | (13) | |||
Income Tax (Expense) or Benefit | (13) | (21) | ||
Other comprehensive income (loss), net of tax | 42 | 37 | ||
Accumulated other comprehensive income (loss), ending balance | $ (1,055) | $ (1,264) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at beginning of period (in shares) | 873,849 | 1,040,569 | ||
Granted (in shares) | 206,695 | 243,940 | ||
Converted (in shares) | (96,616) | (173,210) | ||
Expired (in shares) | 0 | 0 | ||
Forfeited (in shares) | 0 | (3,800) | ||
Outstanding at end of period (in shares) | 983,928 | 1,107,499 | 1,040,569 | |
Vested (in shares) | 326,928 | 324,599 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Outstanding at beginning of period, Weighted average grant-date fair value (in dollars per share) | $ 12.30 | $ 9.97 | ||
Granted, Weighted average grant-date fair value (in dollars per share) | 26.53 | 17.52 | ||
Converted, Weighted average grant-date fair value (in dollars per share) | 10.89 | 9.69 | ||
Expired, Weighted average grant-date fair value (in dollars per share) | 0 | 0 | ||
Forfeited, Weighted average grant-date fair value (in dollars per share) | 0 | 13.66 | ||
Outstanding at end of period, Weighted average grant-date fair value (in dollars per share) | 15.43 | 11.66 | $ 9.97 | |
Vested (in dollars per share) | $ 7.18 | $ 6.39 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Share-based compensation expense | $ 1 | $ 0.8 | ||
Unrecognized share-based compensation expense | $ 8.5 | |||
Unrecognized share-based compensation, weighted average recognition period | 1 year 10 months | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period | 3 years | |||
Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Historical volatility period | 3 years | 3 years | 3 years | |
Risk-free interest rate | 2.40% | |||
Expected volatility rate | 33.80% | |||
Market Condition Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Granted, Weighted average grant-date fair value (in dollars per share) | $ 31.60 | |||
Performance Condition Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Granted, Weighted average grant-date fair value (in dollars per share) | $ 25.15 | |||
Time-Based Awards [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Number of additional outstanding shares issued (in shares) | 1,219,878 | |||
Director [Member] | Time-Based Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Vested (in shares) | 326,928 | |||
Director [Member] | Time-Based Awards [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period | 6 months | |||
Director [Member] | Time-Based Awards [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period | 12 months |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Earnings Per Share Reconciliation [Abstract] | |||
Earnings from continuing operations | $ 15,682 | $ 9,796 | |
Fair Value Adjustment of Warrants, net of tax | (1,539) | ||
Undistributed Continuing Operation Earnings (Loss), Diluted | $ 15,682 | $ 8,257 | |
Weighted-average shares outstanding for basic earnings per share (in shares) | 58,840 | 59,133 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,100 | ||
Common equivalent shares: | |||
Effect of stock-based compensation awards (in shares) | 718 | 5,816 | |
Weighted-average shares outstanding assuming dilution (in shares) | 59,558 | 64,949 | |
Basic earnings per share from continuing operations (in dollars per share) | $ 0.27 | $ 0.17 | |
Diluted earnings per share from continuing operations (in dollars per share) | $ 0.26 | $ 0.13 | |
Amazon Warrant [Member] | |||
Earnings Per Share Reconciliation [Abstract] | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 14,830 | 12,340 |
Segment Information (Segment Re
Segment Information (Segment Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
REVENUES | $ 203,040 | $ 237,917 | |
Customer revenues | 203,040 | 237,917 | |
Depreciation and amortization expense | 40,004 | 36,442 | |
Inter-segment earnings eliminated | (3,325) | (862) | |
Net unallocated interest expense | (5,362) | (3,548) | |
Net gain (loss) on financial instruments | (885) | 1,869 | |
non-service components of retiree costs | 2,045 | (177) | |
Pre-tax earnings from continuing operations | 20,928 | 16,106 | |
Assets | 1,567,503 | $ 1,548,844 | |
Deferred Revenue, Revenue Recognized | 5,900 | ||
Customer Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 203,040 | 237,917 | |
Customer revenues | 203,040 | 237,917 | |
CAM [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 52,376 | 47,978 | |
Customer revenues | 52,376 | 47,978 | |
Depreciation and amortization expense | 28,925 | 24,301 | |
Segment earnings (loss) | 15,464 | 13,330 | |
Net unallocated interest expense | (4,500) | (3,300) | |
Assets | 1,201,208 | 1,192,890 | |
CAM [Member] | Customer Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 35,887 | 30,782 | |
Customer revenues | 35,887 | 30,782 | |
ACMI Services [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 119,374 | 144,949 | |
Customer revenues | 119,374 | 144,949 | |
Depreciation and amortization expense | 10,225 | 11,072 | |
Segment earnings (loss) | 3,941 | (3,534) | |
Assets | 195,790 | 189,379 | |
ACMI Services [Member] | Customer Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 119,374 | 144,949 | |
Customer revenues | 119,374 | 144,949 | |
MRO Services [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 52,723 | 40,338 | |
Customer revenues | 52,723 | 40,338 | |
Depreciation and amortization expense | 850 | 674 | |
Segment earnings (loss) | 4,462 | 3,188 | |
Assets | 96,451 | 87,177 | |
MRO Services [Member] | Customer Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 30,939 | 25,417 | |
Customer revenues | 30,939 | 25,417 | |
All other [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 19,283 | 48,868 | |
Customer revenues | 19,283 | 48,868 | |
Depreciation and amortization expense | 4 | 395 | |
Segment earnings (loss) | 2,581 | 2,463 | |
Assets | 74,054 | $ 79,398 | |
All other [Member] | Customer Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 16,840 | 36,769 | |
Customer revenues | 16,840 | 36,769 | |
Significant Reconciling Items [Member] | |||
Segment Reporting Information [Line Items] | |||
Net unallocated interest expense | (819) | (171) | |
Non-operating charges from a non-consolidating affiliate | (2,536) | 0 | |
Eliminate inter-segment revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | (40,716) | (44,216) | |
Customer revenues | (40,716) | $ (44,216) | |
Customer Revenues [Member] | ACMI Services [Member] | |||
Segment Reporting Information [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | (49,175) | ||
Customer Revenues [Member] | MRO Services [Member] | |||
Segment Reporting Information [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 5,460 | ||
Customer Revenues [Member] | All other [Member] | |||
Segment Reporting Information [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | (51,347) | ||
Customer Revenues [Member] | ACMI Services [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 168,549 | ||
Customer revenues | 168,549 | ||
Customer Revenues [Member] | MRO Services [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 25,479 | ||
Customer revenues | 25,479 | ||
Customer Revenues [Member] | All other [Member] | |||
Segment Reporting Information [Line Items] | |||
REVENUES | 68,187 | ||
Customer revenues | $ 68,187 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segments | Mar. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||
REVENUES | $ 203,040 | $ 237,917 |
Number of reportable segments (in segments) | segments | 3 | |
Interest expense | $ 5,362 | 3,548 |
Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
REVENUES | 203,040 | 237,917 |
ACMI Services [Member] | ||
Segment Reporting Information [Line Items] | ||
REVENUES | 119,374 | 144,949 |
ACMI Services [Member] | Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
REVENUES | 119,374 | 144,949 |
CAM [Member] | ||
Segment Reporting Information [Line Items] | ||
REVENUES | 52,376 | 47,978 |
Interest expense | 4,500 | 3,300 |
CAM [Member] | Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
REVENUES | $ 35,887 | $ 30,782 |
Segment Information (Entity-Wid
Segment Information (Entity-Wide Disclosures) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Customer revenues | $ 203,040 | $ 237,917 |
Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
Customer revenues | 203,040 | 237,917 |
CAM [Member] | ||
Segment Reporting Information [Line Items] | ||
Non-lease external revenue | 800 | 2,700 |
Customer revenues | 52,376 | 47,978 |
CAM [Member] | Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
Customer revenues | 35,887 | 30,782 |
All other [Member] | ||
Segment Reporting Information [Line Items] | ||
Customer revenues | 19,283 | 48,868 |
All other [Member] | Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
Customer revenues | 16,840 | 36,769 |
Ground Services [Member] | All other [Member] | Customer Revenues [Member] | ||
Segment Reporting Information [Line Items] | ||
Customer revenues | $ 16,154 | $ 36,300 |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value Adjustment of Warrants | $ (3,100) | $ 1,700 |
REVENUES | 203,040 | 237,917 |
Net earnings from continuing operations | 15,682 | 9,796 |
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAXES | $ 196 | $ 192 |
Weighted average shares: | ||
Basic (in shares) | 58,840 | 59,133 |
Diluted (in shares) | 59,558 | 64,949 |
Earnings per share from continuing operations | ||
Basic (in dollars per share) | $ 0.27 | $ 0.17 |
Diluted (in dollars per share) | $ 0.26 | $ 0.13 |
ACMI Services [Member] | ||
REVENUES | $ 119,374 | $ 144,949 |