Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-50368 | |
Entity Registrant Name | Air Transport Services Group, Inc. | |
Entity Central Index Key | 0000894081 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | FY | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1631624 | |
Entity Address, Address Line One | 145 Hunter Drive | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45177 | |
City Area Code | 937 | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Local Phone Number | 382-5591 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | ATSG | |
Entity Common Stock, Shares Outstanding | 72,728,397 | |
Document Information [Line Items] | ||
Document Quarterly Report | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash, cash equivalents and restricted cash | $ 54,486,000 | $ 69,496,000 |
Accounts receivable, net of allowance of $989 in 2022 and $742 in 2021 | 250,548,000 | 205,399,000 |
Inventory | 55,322,000 | 49,204,000 |
Prepaid supplies and other | 28,281,000 | 28,742,000 |
TOTAL CURRENT ASSETS | 388,637,000 | 352,841,000 |
Property and equipment, net | 2,339,278,000 | 2,129,934,000 |
Lease incentive | 85,472,000 | 102,913,000 |
Other assets | 154,841,000 | 113,878,000 |
Goodwill and acquired intangibles | 495,195,000 | 505,125,000 |
Operating lease assets | 61,742,000 | 62,644,000 |
TOTAL ASSETS | 3,525,165,000 | 3,267,335,000 |
CURRENT LIABILITIES: | ||
Accounts payable | 186,460,000 | 174,237,000 |
Accrued salaries, wages and benefits | 60,170,000 | 56,652,000 |
Accrued expenses | 12,910,000 | 14,950,000 |
Current portion of debt obligations | 637,000 | 628,000 |
Current portion of lease obligations | 21,879,000 | 18,783,000 |
Unearned revenue and grants | 37,289,000 | 47,381,000 |
TOTAL CURRENT LIABILITIES | 319,345,000 | 312,631,000 |
Long term debt | 1,369,006,000 | 1,298,735,000 |
Post-retirement obligations | 20,140,000 | 21,337,000 |
Long term lease obligations | 40,581,000 | 44,387,000 |
Other liabilities | 56,810,000 | 49,662,000 |
Deferred Income Tax Liabilities, Net | 253,036,000 | 217,291,000 |
Stock Warrants | 715,000 | 915,000 |
TOTAL LIABILITIES | 2,059,633,000 | 1,944,958,000 |
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; 150,000,000 shares authorized; 74,366,636 and 74,142,183 shares issued and outstanding in 2022 and 2021, respectively | 744,000 | 741,000 |
Additional paid-in capital | 1,039,354,000 | 1,074,286,000 |
Retained earnings | 486,231,000 | 309,430,000 |
Accumulated other comprehensive loss | (60,797,000) | (62,080,000) |
TOTAL STOCKHOLDERS’ EQUITY | 1,465,532,000 | 1,322,377,000 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 3,525,165,000 | $ 3,267,335,000 |
Amazon Warrant C [Member] [Member] | ||
CURRENT LIABILITIES: | ||
Stock Warrants | $ (700,000) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets, Current [Abstract] | ||
Allowance for doubtful accounts | $ 989 | $ 742 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares outstanding (in shares) | 74,366,636 | 74,142,183 |
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 | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUES | $ 516,916,000 | $ 465,955,000 | $ 1,512,444,000 | $ 1,251,915,000 |
OPERATING EXPENSES | ||||
Salaries, wages and benefits | 169,967,000 | 148,074,000 | 494,526,000 | 431,614,000 |
Fuel | 68,620,000 | 50,176,000 | 202,080,000 | 117,210,000 |
Maintenance, materials and repairs | 41,541,000 | 43,751,000 | 116,657,000 | 131,671,000 |
Depreciation and amortization | 83,283,000 | 77,751,000 | 246,726,000 | 224,435,000 |
Travel | 29,865,000 | 24,928,000 | 82,544,000 | 61,833,000 |
Contracted ground and aviation services | 18,278,000 | 21,620,000 | 56,762,000 | 55,217,000 |
Rent | 8,383,000 | 5,807,000 | 22,114,000 | 17,401,000 |
Landing and ramp | 4,210,000 | 4,027,000 | 12,873,000 | 10,162,000 |
Insurance | 2,346,000 | 3,178,000 | 7,224,000 | 9,382,000 |
Other operating expenses | 17,764,000 | 17,205,000 | 57,968,000 | 48,378,000 |
Operating Expenses | 444,257,000 | 366,195,000 | 1,299,474,000 | 1,010,677,000 |
OPERATING INCOME | 72,659,000 | 99,760,000 | 212,970,000 | 241,238,000 |
OTHER INCOME (EXPENSE) | ||||
Interest income | 56,000 | 8,000 | 80,000 | 36,000 |
Non-service component of retiree benefit costs | 4,635,000 | 4,457,000 | 15,411,000 | 13,370,000 |
Write off of Deferred Debt Issuance Cost | 0 | 0 | 0 | (6,505,000) |
Non-service component of retiree benefit (costs) gains | (12,167,000) | (14,459,000) | (33,027,000) | (44,002,000) |
Net gain (loss) on financial instruments | 695,000 | (7,378,000) | 9,402,000 | 37,797,000 |
Other Nonoperating Income (Expense) | (7,735,000) | (18,519,000) | (13,711,000) | (669,000) |
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 64,924,000 | 81,241,000 | 199,259,000 | 240,569,000 |
INCOME TAX EXPENSE | (18,878,000) | (45,065,000) | (56,047,000) | |
EARNINGS FROM CONTINUING OPERATIONS | 50,188,000 | 62,363,000 | 154,194,000 | 184,522,000 |
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | 854,000 | 2,309,000 | 1,736,000 | 2,374,000 |
NET EARNINGS | $ 51,042,000 | $ 64,672,000 | $ 155,930,000 | $ 186,896,000 |
BASIC EARNINGS PER SHARE | ||||
Basic earnings per share from continuing operations (in dollars per share) | $ 0.68 | $ 0.85 | $ 2.08 | $ 2.75 |
Discontinued operations (in dollars per share) | 0.01 | 0.03 | 0.03 | 0.03 |
TOTAL BASIC EARNINGS PER SHARE (in dollars per share) | 0.69 | 0.88 | 2.11 | 2.78 |
DILUTED EARNINGS PER SHARE | ||||
Diluted earnings per share from continuing operations (in dollars per share) | 0.57 | 0.81 | 1.76 | 2.14 |
Discontinued operations (in dollars per share) | 0.01 | 0.03 | 0.02 | 0.03 |
TOTAL DILUTED NET EARNINGS PER SHARE (in dollars per share) | $ 0.58 | $ 0.84 | $ 1.78 | $ 2.17 |
WEIGHTED AVERAGE SHARES | ||||
Basic (in shares) | 73,998 | 73,721 | 73,956 | 67,177 |
Diluted (in shares) | 88,746 | 76,743 | 88,980 | 75,277 |
Income Tax (Expense) Benefit, Continuing Operations, Government Grants | $ 0 | $ (30,322,000) | $ 0 | $ (96,626,000) |
Accounting Standards Update 2014-09 [Member] | ||||
OTHER INCOME (EXPENSE) | ||||
INCOME TAX EXPENSE | 14,736,000 | |||
Significant Reconciling Items [Member] | ||||
OTHER INCOME (EXPENSE) | ||||
Non-service component of retiree benefit (costs) gains | (510,000) | (371,000) | (1,391,000) | (1,995,000) |
Income (Loss) from Equity Method Investments | $ (954,000) | $ (1,147,000) | $ (5,577,000) | $ (1,365,000) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
NET EARNINGS | $ 51,042,000 | $ 64,672,000 | $ 155,930,000 | $ 186,896,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 0 | 0 | 0 | 0 |
OTHER COMPREHENSIVE INCOME: | ||||
TOTAL COMPREHENSIVE INCOME, net of tax | 51,824,000 | 66,070,000 | 157,213,000 | 191,090,000 |
Accumulated Deficit [Member] | ||||
OTHER COMPREHENSIVE INCOME: | ||||
TOTAL COMPREHENSIVE INCOME, net of tax | 51,042,000 | 64,672,000 | 155,930,000 | 186,896,000 |
Pension Plans [Member] | ||||
Other comprehensive income (loss), net of tax | 773,000 | 1,362,000 | 1,256,000 | 4,086,000 |
OTHER COMPREHENSIVE INCOME: | ||||
Income tax (expense) or benefit | (229,000) | (402,000) | (372,000) | (1,206,000) |
Post-Retirement Plans [Member] | ||||
Other comprehensive income (loss), net of tax | 9,000 | 36,000 | 27,000 | 108,000 |
OTHER COMPREHENSIVE INCOME: | ||||
Income tax (expense) or benefit | $ (2,000) | $ (11,000) | $ (7,000) | $ (33,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Write off of Deferred Debt Issuance Cost | $ 0 | $ 6,505,000 |
Withholding taxes paid for conversion of employee stock awards | 1,519,000 | 1,242,000 |
OPERATING ACTIVITIES: | ||
Net earnings from continuing operations | 154,194,000 | 184,522,000 |
Net earnings from discontinued operations | 1,736,000 | 2,374,000 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 265,306,000 | 249,574,000 |
Pension and post-retirement | 1,662,000 | 5,433,000 |
Deferred income taxes | 40,892,000 | 55,023,000 |
Amortization of stock-based compensation | 6,149,000 | 5,524,000 |
Proceeds from Contributions from Affiliates | 5,577,000 | 1,364,000 |
Net (gain) loss on financial instruments | (4,700,000) | (4,800,000) |
Changes in assets and liabilities: | ||
Accounts receivable | (45,149,000) | (38,235,000) |
Inventory and prepaid supplies | (9,200,000) | 4,561,000 |
Accounts payable | 4,863,000 | 18,261,000 |
Unearned revenue | (10,685,000) | (11,545,000) |
Accrued expenses, salaries, wages, benefits and other liabilities | 12,789,000 | 7,181,000 |
Pension and post-retirement balances | (18,737,000) | (20,743,000) |
Other | (1,925,000) | (2,764,000) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 398,070,000 | 429,238,000 |
INVESTING ACTIVITIES: | ||
Expenditures for property and equipment | (448,358,000) | (428,126,000) |
Proceeds from property and equipment | 3,759,000 | 3,524,000 |
Investment in nonconsolidated affiliate | (16,233,000) | (2,155,000) |
NET CASH (USED IN) INVESTING ACTIVITIES | (460,832,000) | (426,757,000) |
FINANCING ACTIVITIES: | ||
Payment for Debt Extinguishment or Debt Prepayment Cost | (115,204,000) | 0 |
Repayment of Long-term Debt, Long-term Lease Obligation, and Capital Security | 345,525,000 | 1,758,018,000 |
Proceeds from revolving credit facilities | 510,000,000 | 1,430,600,000 |
Payments for financing costs | 0 | (3,099,000) |
Proceeds from Issuance of Unsecured Debt | 0 | 207,400,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 47,752,000 | 7,608,000 |
Proceeds from issuance of warrants | 0 | 131,967,000 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (15,010,000) | 10,089,000 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 69,496,000 | 39,719,000 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 54,486,000 | 49,808,000 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid, net of amount capitalized | 39,711,000 | 39,104,000 |
Federal and state income taxes paid | 1,735,000 | 1,859,000 |
SUPPLEMENTAL NON-CASH INFORMATION: | ||
Accrued expenditures for property and equipment | 51,085 | 27,358,000 |
Net (gain) loss on financial instruments | $ 9,402,000 | $ 37,797,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance at at Dec. 31, 2020 | $ 855,497,000 | $ 596,000 | $ 855,547,000 | $ 78,010,000 | $ (78,656,000) |
Balance at (in shares) at Dec. 31, 2020 | 59,560,036 | ||||
Stock-based compensation plans | |||||
Grant of restricted stock | 0 | $ 1,000 | (1,000) | ||
Grant of restricted stock (in shares) | 121,339 | ||||
Withholdings of common shares, net of issuances | (1,241,000) | $ 1,000 | (1,242,000) | ||
Withholdings of common shares, net of issuances (in shares) | 92,234 | ||||
Conversion of warrants | 0 | $ 0 | 0 | ||
Forfeited restricted stock (in shares) | (2,800) | ||||
Stock Issued During Period, Value, Conversion of Convertible Securities | 131,967,000 | $ 144,000 | 131,823,000 | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 14,428,445 | ||||
Amortization of stock awards and restricted stock | 5,523,000 | 5,523,000 | |||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 191,090,000 | 186,896,000 | 4,194,000 | ||
Balance at at Sep. 30, 2021 | 1,182,836,000 | $ 742,000 | 991,650,000 | 264,906,000 | (74,462,000) |
Balance at (in shares) at Sep. 30, 2021 | 74,199,254 | ||||
Balance at at Jun. 30, 2021 | 1,114,727,000 | $ 742,000 | 989,611,000 | 200,234,000 | (75,860,000) |
Balance at (in shares) at Jun. 30, 2021 | 74,202,815 | ||||
Stock-based compensation plans | |||||
Grant of restricted stock | 0 | $ 0 | 0 | ||
Grant of restricted stock (in shares) | (761) | ||||
Withholdings of common shares, net of issuances | (5,000) | $ 0 | (5,000) | ||
Withholdings of common shares, net of issuances (in shares) | 0 | ||||
Conversion of warrants | 0 | $ 0 | 0 | ||
Forfeited restricted stock (in shares) | (2,800) | ||||
Amortization of stock awards and restricted stock | 2,044,000 | 2,044,000 | |||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 66,070,000 | 64,672,000 | 1,398,000 | ||
Balance at at Sep. 30, 2021 | 1,182,836,000 | $ 742,000 | 991,650,000 | 264,906,000 | (74,462,000) |
Balance at (in shares) at Sep. 30, 2021 | 74,199,254 | ||||
Balance at at Dec. 31, 2021 | $ 1,322,377,000 | $ 741,000 | 1,074,286,000 | 309,430,000 | (62,080,000) |
Balance at (in shares) at Dec. 31, 2021 | 74,142,183 | 74,142,183 | |||
Stock-based compensation plans | |||||
Grant of restricted stock | $ 0 | $ 1,000 | (1,000) | ||
Grant of restricted stock (in shares) | 109,200 | ||||
Withholdings of common shares, net of issuances | (1,519,000) | $ 2,000 | (1,521,000) | ||
Withholdings of common shares, net of issuances (in shares) | 120,053 | ||||
Conversion of warrants | 0 | $ 0 | 0 | ||
Forfeited restricted stock (in shares) | (4,800) | ||||
Amortization of stock awards and restricted stock | 6,149,000 | 6,149,000 | |||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 157,213,000 | 155,930,000 | 1,283,000 | ||
Balance at at Sep. 30, 2022 | $ 1,465,532,000 | $ 744,000 | 1,039,354,000 | 486,231,000 | (60,797,000) |
Balance at (in shares) at Sep. 30, 2022 | 74,366,636 | 74,366,636 | |||
Stock-based compensation plans | |||||
Retained earnings | Accounting Standards Update 2020-06 | $ (18,688,000) | (39,559,000) | 20,871,000 | ||
Balance at at Jun. 30, 2022 | 1,411,493,000 | $ 744,000 | 1,037,139,000 | 435,189,000 | (61,579,000) |
Balance at (in shares) at Jun. 30, 2022 | 74,369,138 | ||||
Stock-based compensation plans | |||||
Withholdings of common shares, net of issuances | (80,000) | $ 0 | (80,000) | ||
Withholdings of common shares, net of issuances (in shares) | (2,202) | ||||
Conversion of warrants | 0 | $ 0 | 0 | ||
Forfeited restricted stock (in shares) | (300) | ||||
Amortization of stock awards and restricted stock | 2,295,000 | 2,295,000 | |||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 51,824,000 | 51,042,000 | 782,000 | ||
Balance at at Sep. 30, 2022 | $ 1,465,532,000 | $ 744,000 | $ 1,039,354,000 | $ 486,231,000 | $ (60,797,000) |
Balance at (in shares) at Sep. 30, 2022 | 74,366,636 | 74,366,636 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
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 and nine month periods ending September 30, 2022 and 2021 (in thousands): Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of June 30, 2021 $ (75,369) $ (477) $ (14) $ (75,860) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 1,764 47 — 1,811 Income Tax (Expense) or Benefit (402) (11) — (413) Other comprehensive income (loss), net of tax 1,362 36 — 1,398 Balance as of September 30, 2021 $ (74,007) $ (441) $ (14) $ (74,462) Balance as of January 1, 2021 (78,093) (549) (14) (78,656) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 5,292 141 — 5,433 Income Tax (Expense) or Benefit (1,206) (33) — (1,239) Other comprehensive income (loss), net of tax 4,086 108 — 4,194 Balance as of September 30, 2021 (74,007) (441) (14) (74,462) Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of June 30, 2022 $ (61,348) $ (211) $ (20) $ (61,579) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 1,002 11 — 1,013 Income Tax (Expense) or Benefit (229) (2) — (231) Other comprehensive income (loss), net of tax 773 9 — 782 Balance as of September 30, 2022 $ (60,575) $ (202) $ (20) $ (60,797) Balance as of January 1, 2022 (61,831) $ (229) (20) (62,080) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 1,628 $ 34 — 1,662 Income Tax (Expense) or Benefit (372) $ (7) — (379) Other comprehensive income (loss), net of tax 1,256 $ 27 — 1,283 Balance as of September 30, 2022 (60,575) $ (202) (20) (60,797) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 and nine month periods ending September 30, 2022 and 2021 (in thousands): Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of June 30, 2021 $ (75,369) $ (477) $ (14) $ (75,860) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 1,764 47 — 1,811 Income Tax (Expense) or Benefit (402) (11) — (413) Other comprehensive income (loss), net of tax 1,362 36 — 1,398 Balance as of September 30, 2021 $ (74,007) $ (441) $ (14) $ (74,462) Balance as of January 1, 2021 (78,093) (549) (14) (78,656) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 5,292 141 — 5,433 Income Tax (Expense) or Benefit (1,206) (33) — (1,239) Other comprehensive income (loss), net of tax 4,086 108 — 4,194 Balance as of September 30, 2021 (74,007) (441) (14) (74,462) Defined Benefit Pension Defined Benefit Post-Retirement Foreign Currency Translation Total Balance as of June 30, 2022 $ (61,348) $ (211) $ (20) $ (61,579) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 1,002 11 — 1,013 Income Tax (Expense) or Benefit (229) (2) — (231) Other comprehensive income (loss), net of tax 773 9 — 782 Balance as of September 30, 2022 $ (60,575) $ (202) $ (20) $ (60,797) Balance as of January 1, 2022 (61,831) $ (229) (20) (62,080) Amounts reclassified from accumulated other comprehensive income: Actuarial costs (reclassified to salaries, wages and benefits) 1,628 $ 34 — 1,662 Income Tax (Expense) or Benefit (372) $ (7) — (379) Other comprehensive income (loss), net of tax 1,256 $ 27 — 1,283 Balance as of September 30, 2022 (60,575) $ (202) (20) (60,797) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Schedule of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | $ (20) | $ (14) | $ (20) | $ (14) | $ (20) | $ (20) | $ (14) | $ (14) |
Accumulated other comprehensive income (loss), beginning balance | (61,579) | (75,860) | (62,080) | (78,656) | ||||
Other comprehensive income (loss) before reclassifications: | ||||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | 0 | 0 | 0 | 0 | ||||
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 0 | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive income: | ||||||||
Actuarial costs (reclassified to salaries, wages and benefits) | 1,013 | 1,811 | 1,662 | 5,433 | ||||
Income Tax (Expense) or Benefit | (231) | (413) | (379) | (1,239) | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 0 | 0 | 0 | 0 | ||||
Other comprehensive income (loss), net of tax | 782 | 1,398 | 1,283 | 4,194 | ||||
Accumulated other comprehensive income (loss), ending balance | (60,797) | (74,462) | (60,797) | (74,462) | ||||
Pension Plans [Member] | ||||||||
Schedule of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Accumulated other comprehensive income (loss), beginning balance | (61,348) | (75,369) | (61,831) | (78,093) | ||||
Amounts reclassified from accumulated other comprehensive income: | ||||||||
Actuarial costs (reclassified to salaries, wages and benefits) | 1,002 | 1,764 | 1,628 | 5,292 | ||||
Income Tax (Expense) or Benefit | (229) | (402) | (372) | (1,206) | ||||
Other comprehensive income (loss), net of tax | 773 | 1,362 | 1,256 | 4,086 | ||||
Accumulated other comprehensive income (loss), ending balance | (60,575) | (74,007) | (60,575) | (74,007) | ||||
Post-Retirement Plans [Member] | ||||||||
Schedule of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Accumulated other comprehensive income (loss), beginning balance | (211) | (477) | (229) | (549) | ||||
Amounts reclassified from accumulated other comprehensive income: | ||||||||
Actuarial costs (reclassified to salaries, wages and benefits) | 11 | 47 | 34 | 141 | ||||
Income Tax (Expense) or Benefit | (2) | (11) | (7) | (33) | ||||
Other comprehensive income (loss), net of tax | 9 | 36 | 27 | 108 | ||||
Accumulated other comprehensive income (loss), ending balance | $ (202) | $ (441) | $ (202) | $ (441) |
Summary of Financial Statement
Summary of Financial Statement Preparation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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. ("ATSG" and, together with its subsidiaries, the "Company," "we," "us," and "our") is a holding company whose subsidiaries lease aircraft and provide contracted airline operations as well as other support services mainly to the air transportation, e-commerce and package delivery industries. ATSG's leasing subsidiary, Cargo Aircraft Management, Inc. (“CAM”), leases aircraft to each of ATSG's airline subsidiaries as well as to non-affiliated airlines and other lessees. ATSG's airline subsidiaries, ABX Air, Inc. (“ABX”), Air Transport International, Inc. (“ATI”) and Omni Air International, LLC ("OAI") 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 provides a combination of aircraft, crews, maintenance and insurance services for its customers' transportation networks through crew, maintenance and insurance ("CMI") agreements and aircraft, crew, maintenance and insurance ("ACMI") agreements and through charter contracts in which aircraft fuel is also included. In addition to its aircraft leasing and airline services, the Company offers a range of complementary services to delivery companies, freight forwarders, airlines and government customers. These include aircraft maintenance and modification services, aircraft parts supply, equipment maintenance services and load transfer and package sorting services. Basis of Presentation The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with GAAP and such principles are applied on a basis consistent with the financial statements reflected in our 2021 Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP 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 unaudited condensed consolidated financial statements include the accounts of ATSG and its wholly-owned subsidiaries. Inter-company balances and transactions are eliminated. Investments in affiliates in which the Company has significant influence but does not exercise control are accounted for using the equity method of accounting. Under the equity method, the Company's share of the nonconsolidated affiliate's 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. Uncertainties The Company has experienced disruptions to its operations, such as shortages of personnel, parts shortages, maintenance delays, shortages of transportation and hotel accommodations for flight crews, facility closures and other supply chain related issues as a result of the COVID-19 pandemic. The emergence of COVID-19 variants could result in reduced revenues, additional costs and supply chain delays for the Company. The extent of the impact that the coronavirus pandemic will have on our future operations and financial results will depend on future developments, including: the duration, spread, severity and recurrence of the COVID-19 variants; vaccination rates, the effectiveness of vaccines, the duration and scope of government orders and local restrictions as well as the extent of the impact of the pandemic on overall economic conditions. In February 2022, war started in Ukraine, intensifying geopolitical pressures worldwide. While the Company's operations have not been detrimentally impacted directly, additional supply chain disruptions and inflationary pressures could have an impact on overall economic conditions, as well as the Company's operations and financial results. Accounting Standards Updates In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). This new standard removes the separation models for convertible debt with cash conversion or beneficial conversion features. It eliminates the "treasury stock" method for convertible instruments and requires application of the “if-converted” method for certain agreements. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments: (in thousands) December 31, 2021 Adoption of ASU 2020-06 January 1, 2022 Balance Sheet line item: Principal value $ (258,750) $ — $ (258,750) Unamortized issuance cost $ 2,889 $ — $ 2,889 Unamortized discount $ 24,215 $ (24,215) $ — Convertible Debt $ (231,646) $ (24,215) $ (255,861) Net deferred tax liability $ (217,291) $ 5,527 $ (211,764) Additional paid-in capital $ (1,074,286) $ 39,559 $ (1,034,727) Retained earnings $ (309,430) $ (20,871) $ (330,301) After adopting ASU 2020-06, the Company's Convertible Notes due 2024 (as defined and discussed in Note F) are reflected entirely as a liability as the embedded conversion feature is no longer separately presented within stockholders' equity, which also eliminated the non-cash discount. Accordingly, earnings no longer reflect the discount amortization expense which was $6.4 million of interest expense, net of income taxes during 2021. After giving effect for the adoption, the effective interest rate on the Convertible Notes is 1.5%. ASU 2020-06 requires the application of the more dilutive if-converted method when calculating the impact of the Convertible Notes on earnings per diluted share. The adoption of ASU 2020-06 does not change the accounting treatment of shares to be delivered by the convertible note hedges (see Note F) purchased by the Company that are designed to offset the shares issued to settle its Convertible Notes, which are anti-dilutive and not reflected in earnings per diluted share. |
Significant Customers
Significant Customers | 9 Months Ended |
Sep. 30, 2022 | |
Significant Customers [Abstract] | |
Significant Customers | SIGNIFICANT CUSTOMERS Three customers each account for a significant portion of the Company's consolidated revenues. The percentage of the Company's revenues for the Company's three largest customers, for the three and nine month periods ending September 30, 2022 and 2021 are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Customer Percentage of Revenue Percentage of Revenue DoD 31% 31% 29% 26% Amazon 34% 33% 34% 35% DHL 13% 12% 12% 13% The accounts receivable from the Company's three largest customers as of September 30, 2022 and December 31, 2021 are as follows (in thousands): September 30, December 31, 2022 2021 Customer Accounts Receivable DoD $ 101,108 $ 57,998 Amazon 76,966 68,429 DHL 17,037 9,111 DoD The Company is a provider of cargo and passenger airlift services to the U.S. Department of Defense ("DoD"). The DoD awards flights to U.S. certificated airlines through annual contracts and through temporary "expansion" routes. DHL The Company has had long-term contracts with DHL Network Operations (USA), Inc. and its affiliates ("DHL") since August 2003. As of September 30, 2022, the Company leased 14 Boeing 767 freighter aircraft to DHL comprised of three Boeing 767-200 aircraft and eleven Boeing 767-300 aircraft, with expirations between 2023 and 2029. Under a separate CMI agreement, the Company operates ten of the Boeing 767 aircraft that DHL leases from the Company and two Boeing 767 aircraft that DHL provides. The Company provides DHL with scheduled maintenance services under the agreement which is subject to renewal in May of 2028. 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 network. The Company also provides additional air cargo transportation services for DHL through ACMI agreements in which the Company provides the aircraft, crews, maintenance and insurance under a single contract. Further, beginning in third quarter of 2022, the Company began to operate the first two of four Boeing 767 aircraft provided by DHL under an additional CMI agreement which currently runs through August of 2027. Amazon The Company has been providing freighter aircraft, airline operations and services for cargo handling and logistical support for Amazon.com Services, LLC ("ASI"), successor to Amazon.com 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 Boeing 767 freighter aircraft to ASI. The ATSA also provides for the operation of aircraft by the Company’s airline subsidiaries, and the management of ground services by the Company's subsidiary LGSTX Services, Inc. ("LGSTX"). As of September 30, 2022, the Company leased 30 Boeing 767-300 and 12 Boeing 767-200 freighter aircraft to ASI with lease expirations between 2023 and 2031. Amazon Investment Agreement In conjunction with the execution of the ATSA, the Company and Amazon entered into an Investment Agreement on March 8, 2016 (the "2016 Investment Agreement") and a Stockholders Agreement on March 8, 2016. The 2016 Investment Agreement called for the Company to issue warrants in three tranches granting 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 2016 Investment Agreement 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, granted Amazon the right to purchase approximately 1.59 million ATSG common shares. The third tranche of warrants vested on September 8, 2020, and granted Amazon the right to purchase an additional 0.5 million ATSG common shares to bring Amazon’s ownership, after the exercise in full of the three tranches of warrants, to 19.9% of the Company’s pre-transaction outstanding common shares measured on a GAAP-diluted basis, subject to certain adjustments. The exercise price of the 14.9 million warrants issued under the 2016 Investment Agreement was $9.73 per share, which represented the closing price of ATSG’s common shares on February 9, 2016. Each of the three tranches of warrants were exercisable in accordance with their terms through March 8, 2021 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). On March 5, 2021, Amazon exercised warrants from the 2016 Investment Agreement for 865,548 shares of the Company's common stock through a cashless exercise by forfeiting 480,047 warrants from the 2016 Investment Agreement as payment. For the cashless exchange, ATSG shares were valued at $27.27 per share, its volume-weighted average price for the previous 30 trading days immediately preceding March 5, 2021. Also on March 5, 2021, Amazon notified the Company of its intent to exercise warrants from the 2016 Investment agreement for 13,562,897 shares of the Company's common stock by paying $132.0 million of cash to the Company. This exercise was contingent upon the approval of the DOT, and the expiration or termination of any applicable waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. After receiving all required regulatory approvals and clearances, Amazon remitted the funds to the Company on May 7, 2021, and the Company issued the corresponding shares of common stock, completing the warrant exercise. The Company resumed repurchases of its own shares during October 2022 in conjunction with the expiration of certain government restrictions (see Note H) on September 30, 2022. On October 7, 2022, Amazon sold 250,000 shares of the Company's common stock back to the Company for cash of $5.9 million, pursuant to the terms of the 2016 Investment Agreement, as amended on March 5, 2021. This resulted in Amazon maintaining its ownership percentage of less than 19.9% of the Company's outstanding shares at the time. On December 22, 2018, the Company announced agreements with ASI to 1) lease and operate ten additional Boeing 767-300 aircraft, 2) extend the term of the 12 Boeing 767-200 aircraft currently leased to ASI by two years to 2023 with an option for three more years, 3) extend the term of the eight Boeing 767-300 aircraft currently leased to ASI by three years to 2026 and 2027 with an option for three more years, and 4) extend the ATSA by five years through March 2026, with an option to extend for an additional three years. The Company leased all ten of the 767-300 aircraft in 2020. In conjunction with the commitment for ten additional 767 aircraft leases, extensions of twenty existing Boeing 767 aircraft leases and the ATSA described above, Amazon and the Company entered into another Investment Agreement on December 20, 2018 (the "2018 Investment Agreement"). Pursuant to the 2018 Investment Agreement, the Company issued Amazon warrants for 14.8 million ATSG common shares. This group of warrants will expire if not exercised within seven years from their issuance date, in December of 2025 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). The warrants have an exercise price of $21.53 per share. On May 29, 2020, ASI agreed to lease 12 more Boeing 767-300 aircraft from the Company. The first of these leases began in the second quarter of 2020 with the remaining 11 leases commencing in 2021. All 12 of these aircraft leases were for 10-year terms. Pursuant to the 2018 Investment Agreement, as a result of leasing these 12 aircraft, Amazon was issued warrants for 7.0 million common shares, all of which have vested. These warrants will expire if not exercised by December 20, 2025 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). The exercise price of these warrants is $20.40 per share. Issued and outstanding warrants are summarized below as of September 30, 2022: Common Shares in millions Exercise price Vested Non-Vested Expiration 2018 Investment Agreement $21.53 14.8 0.0 December 20, 2025 2018 Investment Agreement $20.40 7.0 0.0 December 20, 2025 Additionally, Amazon can earn incremental warrants rights of up to 2.9 million common shares under the 2018 Investment Agreement by leasing up to five more cargo aircraft from the Company before January 2026. Incremental warrants granted to Amazon for ASI’s commitment to any such future aircraft leases will have an exercise price based on the volume-weighted average price of the Company's shares during the 30 trading days immediately preceding the contractual commitment for each lease. For all outstanding warrants vested, Amazon may select a cashless conversion option. Assuming ATSG's stock price at the time of conversion is above the warrant exercise price, Amazon would receive fewer shares in exchange for any warrants exercised under the cashless option by surrendering the number of shares with a market value equal to the exercise price. The Company’s accounting for the warrants has been determined in accordance with the financial reporting guidance for financial instruments. Warrants classified as liabilities are marked to fair value at the end of each reporting period. The value of warrants is recorded as a customer incentive asset if it is probable of vesting at the time of grant and further changes in the fair value of warrant obligations are recorded to earnings. Upon a warrant vesting event, the customer incentive asset is amortized as a reduction of revenue over the duration of the related revenue contract. In accordance with the 2016 Investment Agreement, on September 8, 2020, the final number of shares issuable under the third tranche of warrants was determined to be 0.5 million common shares. As a result, under GAAP, the value of the entire warrant grant under the 2016 Investment Agreement was remeasured on September 8, 2020, and its fair value of $221 million was reclassified from balance sheet liabilities to paid-in-capital. In October 2020, upon the execution of the 10th and final aircraft lease of the December 2018 commitment, warrants for 14.8 million shares were remeasured on October 1, 2020, and their fair value of $154 million was reclassified from balance sheet liabilities to paid-in-capital. In December 2021, upon execution of the 12th and final aircraft lease of the May 2020 commitment, warrants for 7.0 million shares were remeasured on December 7, 2021, and their fair value of $82.4 million was reclassified from balance sheet liabilities to paid-in-capital. As of September 30, 2022 and December 31, 2021, the Company's liabilities reflected warrants from the 2018 Amazon agreements having a fair value of $0.7 million and $0.9 million, respectively. During the three and nine months ended September 30 , 2022 the re-measurements of warrants to fair value resulted in a gain of $0.1 million and $0.2 million before the effect of income taxes, respectively, compared to net non-operating losses of $9.6 million and gain of $30.8 million before the effect of income taxes, respectively, for the corresponding periods of 2021. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS The carrying amounts of goodwill by reportable segment are as follows (in thousands): CAM ACMI Services All Other Total Carrying value as of December 31, 2021 153,290 234,571 8,113 395,974 Carrying value as of September 30, 2022 $ 153,290 $ 234,571 $ 8,113 $ 395,974 The Company's acquired intangible assets are as follows (in thousands): Airline Amortizing Certificates Intangibles Total Carrying value as of December 31, 2021 $ 9,000 $ 100,151 $ 109,151 Amortization — (9,930) (9,930) Carrying value as of September 30, 2022 9,000 90,221 99,221 The airline certificates have an indefinite life and therefore are not amortized. The Company amortizes finite-lived intangibles assets, including customer relationship and Supplemental Type Certificates ("STC") intangibles, over 4 to 17 remaining years. Stock warrants issued to Amazon (see Note C) as an incentive for Amazon subsidiary ASI to lease aircraft from the Company are recorded as a lease incentive asset using their fair value at the time that the lessee has met its performance obligations and if probable of vesting at the time of issuance, 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, 2021 102,913 Amortization (17,442) Carrying value as of September 30, 2022 85,472 The Company has a 49% ownership in a joint-venture agreement with Precision Aircraft Solutions, LLC, to develop a passenger-to-freighter conversion program for Airbus A321-200 aircraft. In April of 2022, the Company acquired a 40% ownership interest in the joint-venture company GA Telesis Engine Services, LLC to provide engine tear-down services to harvest and sell engine parts. The Company accounts for its investment in these joint ventures under the equity method of accounting, in which the carrying value of each investment is reduced for the Company's share of the non-consolidated affiliates' operating results. The carrying value of the joint ventures totaled $20.6 million and $10.3 million at September 30, 2022 and December 31, 2021, respectively, and are reflected in “Other Assets” in the Company’s consolidated balance sheets. The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis in accordance with GAAP. If the Company determines that an other-than-temporary decline in value has occurred, it recognizes an impairment loss, which is measured as the difference between the recorded carrying value and the fair value of the investment. The fair value is generally determined using an income approach based on discounted cash flows or using negotiated transaction values. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
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 comparable transactions. The fair value of the Company’s money market funds, Convertible Notes (as defined in Note F), 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 to Amazon resulting from aircraft leased to ASI were determined using a Black-Scholes pricing model which considers various assumptions, including the Company’s common stock price, the volatility of the Company’s common stock, the expected dividend yield, exercise price and the risk-free interest rate (Level 2 inputs). The fair value of the stock warrant obligations for unvested stock warrants, conditionally promised to Amazon for the execution of incremental, future aircraft leases, include additional assumptions including the expected exercise prices and the probabilities that future leases will occur (Level 3 inputs). The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands): As of September 30, 2022 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 5,294 $ — $ 5,294 Interest rate swap — 1,077 — 1,077 Total Assets $ — $ 6,371 $ — $ 6,371 Liabilities Stock warrant obligations — — (715) (715) Total Liabilities $ — $ — $ (715) $ (715) As of December 31, 2021 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 30,042 $ — $ 30,042 Total Assets $ — $ 30,042 $ — $ 30,042 Liabilities Interest rate swap $ — $ (3,603) $ — $ (3,603) Stock warrant obligations — — (915) (915) Total Liabilities $ — $ (3,603) $ (915) $ (4,518) 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 $70.7 million less than the carrying value, which was $1,369.6 million at September 30, 2022. As of December 31, 2021, the fair value of the Company’s debt obligations was approximately $37.1 million less than the carrying value, which was $1,299.4 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 | 9 Months Ended |
Sep. 30, 2022 | |
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): September 30, December 31, Flight equipment $ 3,440,294 $ 3,301,113 Ground equipment $ 68,762 64,641 Leasehold improvements, facilities and office equipment $ 39,714 38,769 Aircraft modifications and projects in progress $ 383,590 206,917 $ 3,932,360 3,611,440 Accumulated depreciation $ (1,593,082) (1,481,506) Property and equipment, net $ 2,339,278 $ 2,129,934 CAM owned aircraft with a carrying value of $1,457.2 million and $1,404.4 million that were under lease to external customers as of September 30, 2022 and December 31, 2021, respectively. |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt Obligations | DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands): September 30, December 31, 2022 2021 Revolving credit facility 525,000 360,000 Senior Notes 577,974 697,162 Convertible Notes 256,639 231,646 Other financing arrangements 10,030 10,555 Total debt obligations 1,369,643 1,299,363 Less: current portion (637) (628) Total long term obligations, net 1,369,006 1,298,735 The Company is party to a syndicated credit agreement (as amended, the "Senior Credit Agreement") which includes the ability to execute term loans and a revolving credit facility. Prior to its amendment on April 6, 2021, the Senior Credit Agreement had a maturity date of November 2024 provided certain liquidity measures are maintained during 2024, an incremental accordion capacity based on debt ratios and a maximum revolver capacity of $600 million. The interest rate is a pricing premium added to LIBOR based upon the ratio of the Company's debt to its earnings before interest, taxes, depreciation and amortization expenses ("EBITDA") as defined under the Senior Credit Agreement. As of September 30, 2022, the unused revolving credit facility available to the Company at the trailing twelve-month EBITDA level was $259.7 million with additional permitted indebtedness under the Senior Credit Agreement subject to compliance with other covenants. On April 6, 2021, the Company ame nded the Senior Credit Agreement ("Amended Credit Agreement"). The amendment (i) temporarily increased the aggregate amount of the revolving credit facility from $600 million to $1 billion, and subsequently decreased the aggregate amount to $800 million on April 13, 2021, (ii) permitted increases of the revolving credit facility commitments and/or new tranches of term loans in an aggregate principal amount equal to the sum of $400 million plus the principal amount of indebtedness that could be incurred at the time of the increase that would not cause the Secured Leverage Ratio (as defined in the Senior Credit Agreement) to exceed 3.25 to 1.00 on a pro forma basis, (iii) modified the maturity date of the agreement from November 30, 2024, to April 6, 2026, with such extension of the maturity date being subject to (1) at the election of the lenders, five one-year extensions and (2) an earlier springing maturity date of July 12, 2024, if, on such date, (a) more than $75.0 million in aggregate principal amount of the Convertible Notes (as defined below) remain outstanding and (b) the Company has less than $375.0 million of liquidity at such time, (iv) removed the Collateral to Total Exposure Ratio (as defined in the Senior Credit Agreement) as a financial covenant, and (v) required the Company to repay the balance of all term loans outstanding at the time of the amendment. On October 19, 2022, the Company amended the Senior Credit Agreement. This amendment i) increased the aggregate amount of the revolving credit facility from $800 million to $1 billion, ii) extended the maturity date of the agreement from April 6, 2026 to October 19, 2027, iii) replaced LIBOR with SOFR as an interest rate benchmark, iv) reduced the collateral to outstanding loan ratio to 1.15:1.00 from 1.25:1:00, v) permits cash dividends and share repurchases provided the secured leverage ratio is less than 3.00 to 1.00 and the total leverage ratio is less than 3.50 to 1.00, and removed the annual limitation on cash dividends and share repurchases which was $100 million. On January 28, 2020, CAM completed a debt offering of $500 million in senior unsecured notes (together with the "Additional Notes" referred to below, the “Senior Notes”) that were guaranteed by ATSG and certain of its other subsidiaries. The Senior Notes were sold only to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), and certain investors pursuant to Regulation S under the Securities Act. The Senior Notes are senior unsecured obligations that bear interest at a fixed rate of 4.75% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2020. The Senior Notes mature on February 1, 2028. The indenture for the Senior Notes contains customary events of default and certain covenants which are generally no more restrictive than those set forth in the Senior Credit Agreement. The net proceeds of $495 million from the Senior Notes were used to pay down the revolving credit facility. The Senior Notes do not require principal payments until maturity but prepayments are allowed without penalty beginning February 1, 2025. On April 13, 2021, CAM completed its offering of $200 million of additional Senior Notes that were guaranteed by ATSG and certain of its subsidiaries. The additional Senior Notes are fully fungible with the original Senior Notes, treated as a single class for all purposes under the indenture governing all the Senior Notes with the same terms (other than issue date and issue price). The proceeds of $205.5 million, net of scheduled interest payable, were used, in conjunction with draws from the revolving credit facility to repay the unsubordinated term loans. Upon retirement of the unsubordinated term loans, the Company expensed debt issuance costs of $6.5 million related to the unsubordinated term loans. During the nine month period ended September 30, 2022, the Company repurchased Senior Notes having a principal value of $120.0 million in the open market at a 5.5% reducing the Senior Notes carrying value to $578.0 million. The Company recognized a net pre-tax gain of $4.5 million, net of fees, which was recorded under net gain of financial instruments on the income statement during the corresponding period. The balance of the Senior Notes is net of debt issuance costs of $5.7 million and $7.8 million as of September 30, 2022 and December 31, 2021, respectively. Under the terms of the Senior Credit Agreement, interest rates are adjusted at least quarterly based on the Company's EBITDA, its outstanding debt level and prevailing LIBOR or prime rates. At the Company's debt-to-EBITDA ratio as of September 30, 2022, the LIBOR based financing for the revolving credit facility bear variable interest rates of 4.1%. The Senior Credit Agreement is collateralized by certain of the Company's Boeing 777, 767 and 757 aircraft. Under the terms of the Senior Credit Agreement, the Company is required to maintain certain collateral coverage ratios set forth in the Senior Credit Agreement. The Senior Credit Agreement contains covenants, including a maximum permitted total debt to EBITDA, a fixed charge covenant ratio requirement, and limitations on certain additional indebtedness and guarantees of indebtedness. 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, ATSG issued $258.8 million aggregate principal amount of 1.125% convertible senior notes due 2024 ("Convertible Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Convertible 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 Convertible Notes mature on October 15, 2024, unless repurchased or converted in accordance with their terms prior to such date. The Convertible Notes are unsecured indebtedness, subordinated to the Company's existing and future secured indebtedness and other liabilities, including trade payables. Conversion of the Convertible Notes can only occur upon satisfaction of certain conditions and during certain periods, beginning in any calendar quarter commencing after December 31, 2017, 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 Convertible 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. The Company has the right to settle the Convertible Notes 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 31.35 shares of common stock per $1,000 principal amount of Convertible 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 Convertible Notes) occurs, the Company will, in certain circumstances, increase the conversion rate for a specified period of time. The conversion feature of the Convertible Notes required bifurcation from the principal amount under the applicable accounting guidance. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective approach as discussed in Note A which recombined the value of the previously bifurcated embedded feature with the convertible note and eliminated the discount. The carrying value of the Company's convertible debt is shown below (in thousands): September 30, December 31, 2022 2021 Principal value, Convertible Notes, due 2024 258,750 258,750 Unamortized issuance costs (2,111) (2,889) Unamortized discount — (24,215) Convertible debt 256,639 231,646 In conjunction with the Convertible Notes, the Company purchased convertible note hedges under privately negotiated transactions for $56.1 million, having the same number of the Company's shares of common stock (8.1 million shares) and the same strike price ($31.90) that underlie the Convertible 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 Convertible Notes. The Company's current intent and policy is to settle all Note conversions through a combination settlement which satisfies the principal amount of the Convertible Notes outstanding with cash. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Payroll Support Programs During 2020, two of the Company's airline subsidiaries, OAI and ATI, received government funds totaling $75.8 million pursuant to payroll support program agreements under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In February 2021, OAI was approved for $37.4 million of additional non-repayable government funds pursuant to a payroll support program agreement under the Consolidated Appropriations Act, 2021 (the “PSP Extension Law”). This grant was subsequently increased by $5.6 million. Further, in April 2021, OAI was approved for $40.0 million of additional non-repayable government funds pursuant to a payroll support program agreement under the American Rescue Plan Act of 2021 (the "American Rescue Plan"). The three programs are structured in a substantially similar manner. These grants are not required to be repaid if the Company complies with the provisions of the payroll support program agreements under the CARES Act, the PSP Extension Law and the American Rescue Plan. The grants are recognized over the periods in which the Company recognizes the related expenses for which the grants are intended to compensate. The Company recognized the grants as contra-expense during the periods in which passenger flight operations and combi flight operations levels were expected to be negatively impacted by the pandemic. During the three month and nine month periods ended September 30, 2021, the Company recognized $30.3 million and $96.6 million of the grants, respectively. The Company recognized all of the CARES Act funds by the end of 2021. In conjunction with the payroll support program agreements under the CARES Act, OAI and ATI agreed on behalf of themselves and ABX to refrain from conducting involuntary furloughs or reducing employee rates of pay or benefits through September 30, 2020. Thereafter, OAI agreed as a condition of receiving grants under the PSP Extension Law and the American Rescue Plan to refrain from conducting involuntary furloughs or reducing employee rates of pay or benefits through March 31, 2021, and September 30, 2021, respectively. Under the CARES Act, OAI and ATI agreed to limit, on behalf of themselves and certain affiliates, executive compensation through March 24, 2022; maintain certain air transportation service through March 1, 2022 as may be required by the DOT pursuant to its authority under the CARES Act; and maintain certain internal controls and records relating to the funds and comply with certain reporting requirements. OAI further agreed as a condition of receiving grants under the PSP Extension Law and thereafter the American Rescue Plan, to limit executive compensation through October 1, 2022 and April 1, 2023, respective ly. In addition, the Company agreed to refrain from paying dividends or repurchasing its shares through September 30, 2022. The Company has repurchased approximately 1.6 million shares of its common stock since the restrictions expired on September 30, 2022. Lease Commitments The Company leases property, aircraft, aircraft engines and other types of equipment under operating leases. The Company's airlines operate ten freighter aircraft provided by customers and four passenger aircraft leased from external companies. Property leases include hangars, warehouses, offices and other space at certain airports with fixed rent payments and lease terms ranging from one month to six years. The Company is obligated to pay the lessor for maintenance, real estate taxes, insurance and other operating expenses on certain property leases. These expenses are variable and are not included in the measurement of the lease asset or lease liability. These expenses are recognized as variable lease expense when incurred and are not material. Equipment leases include ground support and industrial equipment as well as computer hardware with fixed rent payments and terms of one month to five years. The Company records the initial right-to-use asset and lease liability at the present value of lease payments scheduled during the lease term. For the nine month period ending September 30, 2022 and 2021, non-cash transactions to recognize right-to-use assets and corresponding liabilities for new leases were $15.9 million and $8.3 million, respectively. Unless the rate implicit in the lease is readily determinable, the Company discounts the lease payments using an estimated incremental borrowing rate at the time of lease commencement. The Company estimates the incremental borrowing rate based on the information available at the lease commencement date, including the rate the Company could borrow for a similar amount, over a similar lease term with similar collateral. The Company's weighted-average discount rate for operating leases at September 30, 2022 was 2.4% compared to 2.4% at December 31, 2021. Leases often include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Although not material, the amount of such options is reflected below in the maturity of operating lease liabilities table. Lease expense is recognized on a straight-line basis over the lease term. The weighted-average remaining lease term is 3.3 years and 3.8 years as of September 30, 2022 and December 31, 2021, respectively. For the nine month periods ending September 30, 2022 and 2021, cash payments against operating lease liabilities were $16.9 million and $15.4 million, respectively. As of September 30, 2022, the maturities of operating lease liabilities are as follows (in thousands): Operating Leases Remaining 2022 $ 6,000 2023 22,216 2024 17,006 2025 12,302 2026 6,734 2027 and beyond 541 Total undiscounted cash payments 64,799 Less: amount representing interest (2,339) Present value of future minimum lease payments 62,460 Less: current obligations under leases 21,879 Long-term lease obligation $ 40,581 Purchase Commitments The Company has agreements with vendors for the conversion of Boeing 767-300, Airbus A321 and Airbus A330 passenger aircraft into a standard configured freighter aircraft. The conversions primarily consist of the installation of a standard cargo door and loading system. As of September 30, 2022, the Company owned fourteen Boeing 767-300 aircraft and seven Airbus A321-200 aircraft that were in or awaiting the modification process. As of September 30, 2022, the Company has agreements to purchase seventeen more Boeing 767-300 aircraft, two more Airbus A321 passenger aircraft and six Airbus A330 passenger aircraft through 2024. As of September 30, 2022, the Company's commitments to acquire and complete the conversion of these aircraft totaled $781.7 million, including estimated payments of $441.1 million through 2023 and the remaining payments through 2026. Actual conversion payments will be based on the achievement of progress milestones. 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. Employees Under Collective Bargaining Agreements As of September 30, 2022, the flight crewmember employees of ABX, ATI and OAI and flight attendant employees of ATI and OAI were represented by the labor unions listed below: Airline Labor Agreement Unit Percentage of ABX International Brotherhood of Teamsters 5.9% ATI Air Line Pilots Association 9.9% OAI International Brotherhood of Teamsters 5.9% ATI Association of Flight Attendants 0.8% OAI Association of Flight Attendants 5.6% The labor agreements with ATI 's flight crew members and Omni's flight crew members are amendable at this time. Under the Railway Labor Act, as amended, airline labor agreements do not expire, so the existing contract remains in effect throughout the negotiation process. Hangar Foam Discharge On August 7, 2022 the fire suppression system at one of the Company's aircraft maintenance hangars in Wilmington, Ohio malfunctioned and discharged a significant amount of expansive foam. The event impacted employees, three aircraft and equipment in and around the hangar at the time of discharge. The hangar resumed operations after approximately three weeks while the cause of the incident was investigated and the hangar was cleaned and restored. While one aircraft was returned to service, the timeframes needed to return two of the aircraft and related engines to operating condition are not known at this time. The Company maintains insurance for employee claims, remediation expenses, property and equipment damage, customer claims and business interruption subject to customary deductibles and policy limits. The anticipated insurance recoveries related to clean-up expenses, remediation, part repairs and property damages are recorded when receipt is probable. Insurance recoveries in excess of the net book value of the damaged operating assets and for business interruption claims are recorded when all contingencies related to the claim have been resolved. Through September 30, 2022 the Company has recognized charges in operating income, net of recorded insurance recoveries, of $1.0 million for employee coverage, property damage, clean-up and repairs. Work to determine the extent of the damages, business disruption losses, other claims and insurance recoveries is ongoing. Other The Company is 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. |
Pension and Other Post-Retireme
Pension and Other Post-Retirement Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
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 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 crewmembers, 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 obligations. 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. ABX’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Pension Plans Post-Retirement Healthcare Plan Pension Plans Post-Retirement Healthcare Plan 2022 2021 2022 2021 2022 2021 2022 2021 Service cost $ — $ — $ 19 $ 24 — — 57 72 Interest cost 6,075 5,597 15 10 18,098 16,791 44 30 Expected return on plan assets (11,738) (11,875) — — (35,215) (35,625) — — Amortization of net (gain) loss 1,002 1,764 11 47 1,628 5,292 34 141 Net periodic benefit cost (income) $ (4,661) $ (4,514) $ 45 $ 81 $ (15,489) $ (13,542) $ 135 $ 243 During the nine month period ending September 30, 2022, the Company contributed $1.5 million to the pension plans. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
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. Income taxes recorded through September 30, 2022 have been estimated utilizing a rate of 23% based upon year-to-date income and projected results for the full year. The recognition of discrete tax items, such as the conversion of employee stock awards and other items, have an impact on the effective rate during a period. As a result, the Company's effective tax rate for the first nine months of 2022 was 23%. The final effective tax rate for the year 2022 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, foreign earnings, executive compensation 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 t ax assets, including its loss carryforwards, management does not expect to pay federal income taxes until 2026 or |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS The Company maintains derivative instruments for protection from fluctuating interest rates. The table below provides information about the Company’s interest rate swaps (dollars in thousands): September 30, 2022 December 31, 2021 Expiration Date Stated Notional Market Notional Market March 31, 2022 1.900 % $ — $ — $ 50,000 $ (222) March 31, 2022 1.900 % — — 75,000 (341) March 31, 2023 2.425 % 127,500 1,077 133,125 (3,041) |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION ATSG's Board of Directors has granted stock incentive awards to certain employees and board members pursuant to long term incentive plans, the first of which was approved by stockholders in May 2005 and expired in May 2015 and the second of which was approved by stockholders in May 2015 and was amended and restated by stockholders in May 2022. Employees have been awarded non-vested stock units with performance conditions, non-vested stock units with market conditions and non-vested time-based 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. Restrictions may lapse sooner upon a business combination, death, disability or after an employee qualifies for retirement. The non-vested stock units will be converted into ATSG common 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 ATSG common stock based on the Company's average return on invested capital during the service period. Similarly, the market condition awards will be converted into ATSG common stock based on the appreciation of the common stock price compared to the NASDAQ Transportation Index. Board members have been granted time-based restricted stock unit awards that vest after a period of twelve months. The Company expects to settle all of the stock unit awards by issuing new shares of ATSG common stock. The table below summarizes stock-based award activity. Nine Months Ended September 30, 2022 September 30, 2021 Number of Weighted Number of Weighted Outstanding at beginning of period 978,188 $ 17.49 1,085,023 $ 17.14 Granted 283,467 35.44 273,845 26.65 Converted (178,060) 22.15 (120,830) 25.40 Expired (3,000) 40.02 (1,200) 26.60 Forfeited (9,600) 26.74 (5,600) 23.31 Outstanding at end of period 1,070,995 $ 21.32 1,231,238 $ 18.41 Vested 322,156 $ 9.76 357,499 $ 9.26 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 2022 was $33.84, 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 2022 was $46.20. The market condition awards granted in 2022 were valued using a Monte Carlo simulation technique based on daily stock prices over three years and using the following variables: 2022 Risk-free interest rate 2.5% Volatility 38.3% For the nine month period ended September 30, 2022 and 2021, the Company recorded expense of $6.1 million and $5.5 million, respectively, for stock incentive awards. At September 30, 2022, there was $10.7 million of unrecognized expense related to the stock incentive awards that is expected to be recognized over a weighted-average period of 1.25 years. As of September 30, 2022, none of the awards were convertible, 322,156 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 the issuance of up to 1,357,120 shares of ATSG common stock depending on service, performance and market results through December 31, 2024. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | COMMON STOCK AND EARNINGS PER SHARE Earnings per Share On January 1, 2022 the Company adopted ASU 2020-06 as discussed in Note A. As a result, diluted earnings per share of common stock for the 2022 periods excludes interest charges related to the convertible debt and includes the number of shares that would have been converted at the beginning of the period under the "if-convert" method. The calculation of basic and diluted earnings per share of common stock are as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Earnings from continuing operations - basic $ 50,188 $ 62,363 $ 154,194 $ 184,522 Loss (gain) from stock warrants revaluation, net of tax (105) — (155) (23,776) Convertible debt interest charge net of tax 763 — 2,285 — Earnings from continuing operations - diluted $ 50,846 $ 62,363 $ 156,324 $ 160,746 Denominator: Weighted-average shares outstanding for basic earnings per share 73,998 73,721 73,956 67,177 Common equivalent shares: Effect of stock-based compensation awards and warrants 6,637 3,022 6,913 8,100 Effect of convertible debt 8,111 — 8,111 — Weighted-average shares outstanding assuming dilution 88,746 76,743 88,980 75,277 Basic earnings per share from continuing operations $ 0.68 $ 0.85 $ 2.08 $ 2.75 Diluted earnings per share from continuing operations $ 0.57 $ 0.81 $ 1.76 $ 2.14 Basic weighted average shares outstanding for purposes of basic earnings per share are less than the shares outstanding due to 367,339 shares and 478,739 shares of restricted stock for 2022 and 2021, respectively, which are accounted for as part of diluted weighted average shares outstanding in diluted earnings per share. 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 C), if such warrants have an 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT AND REVENUE INFORMATION The Company operates in two reportable segments - CAM and ACMI Services. The CAM segment consists of the Company's aircraft and engine leasing operations. The ACMI Services segment consists of the Company's airline operations, including CMI agreements as well as ACMI, charter service and passenger service agreements that the Company has with its customers. The Company's aircraft maintenance services, aircraft modification services, ground services and other support services, are not large enough to constitute separate reportable segments and are combined in "All other." Intersegment revenues are valued at arms-length market rates. The Company's segment information from continuing operations is presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Total revenues: CAM $ 109,496 $ 92,931 $ 326,075 $ 264,802 ACMI Services 357,375 330,906 1,034,963 851,338 All other 108,423 90,292 318,837 281,226 Eliminate inter-segment revenues (58,378) (48,174) (167,431) (145,451) Total $ 516,916 $ 465,955 $ 1,512,444 $ 1,251,915 Customer revenues: CAM $ 79,975 $ 71,070 $ 237,466 $ 198,546 ACMI Services 357,319 330,903 1,034,881 851,325 All other 79,622 63,982 240,097 202,044 Total $ 516,916 $ 465,955 $ 1,512,444 $ 1,251,915 The Company's external customer revenues from other activities for the three and nine month periods ending September 30, 2022 and 2021 are presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Aircraft maintenance, modifications and part sales $ 34,604 $ 28,513 $ 106,766 $ 91,352 Ground services 28,204 22,928 80,275 75,410 Other, including aviation fuel sales 16,814 12,541 53,056 35,282 Total customer revenues $ 79,622 $ 63,982 $ 240,097 $ 202,044 During the three and nine month periods ending September 30, 2022, the Company respectively recognized $5.8 million and $4.8 million of non lease revenue that was reported in deferred revenue at the beginning of the respective period, compared to $1.1 million and $2.9 million in the respective corresponding periods of 2021. Current deferred revenue of $13.0 million and $8.3 million as of September 30, 2022 and December 31, 2021, respectively, for contracts with customers is derived from other activities as described above and CAM non lease revenues. Revenue related to deferred revenue will be recognized based on percentage of completion. Customers are required to pay deposits and may be required to make milestone payments for these services resulting in deferred revenue. Long-term contract assets were $0.0 million and $0.8 million as of September 30, 2022 and December 31, 2021, respectively. CAM's leases do not contain residual guarantees. Approximately 12% of CAM's leases to external customers contain purchase options at projected market values. As of September 30, 2022, minimum future payments from external customers for leased aircraft and equipment were scheduled to be $72.2 million for the remainder of 2022, $247.5 million, $197.3 million, $183.4 million and $157.5 million for the next 4 years ending December 31, 2026, respectively, and $361.9 million thereafter. CAM's external customer revenues for non-lease activities were $9.8 million and $27.1 million for the three and nine month periods ending September 30, 2022, respectively, compared to $2.3 million and $9.2 million during the respective corresponding periods of 2021 for engine services and the sale of spare engine parts. The Company's other segment information from continuing operations is presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Depreciation and amortization expense: CAM $ 59,231 $ 51,383 $ 171,943 $ 148,390 ACMI Services 23,447 25,649 72,885 73,398 All other 605 719 1,898 2,647 Total $ 83,283 $ 77,751 $ 246,726 $ 224,435 Interest expense CAM 7,908 9,408 21,837 28,303 ACMI Services 3,693 4,672 9,719 13,668 Segment earnings (loss): CAM $ 36,975 $ 28,502 $ 111,587 $ 72,518 ACMI Services 25,265 58,225 69,267 124,246 All other (1,182) (1,047) 560 2,503 Net unallocated interest expense (510) (371) (1,391) (1,995) Net gain (loss) on financial instruments 695 (7,378) 9,402 37,797 Debt issuance costs — — — (6,505) Other non-service components of retiree benefit costs, net 4,635 4,457 15,411 13,370 Loss from non-consolidated affiliate (954) (1,147) (5,577) (1,365) Pre-tax earnings from continuing operations $ 64,924 $ 81,241 $ 199,259 $ 240,569 The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other. September 30, December 31, 2022 2021 Assets: CAM $ 2,427,780 $ 2,218,012 ACMI Services 959,801 872,311 All other 137,584 177,012 Total $ 3,525,165 $ 3,267,335 During the first nine months of 2022, the Company had capital expenditures for property and equipment of $69.8 million and $378.3 million for ACMI Services and CAM, respectively. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONSThe Company's results of discontinued operations consist primarily of changes in liabilities related to self-insurance reserves for medical expenses and wage loss for former employees previously associated with ABX's former hub operations. For the nine month ended September 30, 2022 and 2021, pre-tax earnings from discontinued operations were $2.2 million and $3.1 million, respectively. |
Summary of Financial Statemen_2
Summary of Financial Statement Preparation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with GAAP and such principles are applied on a basis consistent with the financial statements reflected in our 2021 Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP 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. |
Use of Estimates | Uncertainties The Company has experienced disruptions to its operations, such as shortages of personnel, parts shortages, maintenance delays, shortages of transportation and hotel accommodations for flight crews, facility closures and other supply chain related issues as a result of the COVID-19 pandemic. The emergence of COVID-19 variants could result in reduced revenues, additional costs and supply chain delays for the Company. The extent of the impact that the coronavirus pandemic will have on our future operations and financial results will depend on future developments, including: the duration, spread, severity and recurrence of the COVID-19 variants; vaccination rates, the effectiveness of vaccines, the duration and scope of government orders and local restrictions as well as the extent of the impact of the pandemic on overall economic conditions. |
New Accounting Pronouncements | Accounting Standards Updates In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). This new standard removes the separation models for convertible debt with cash conversion or beneficial conversion features. It eliminates the "treasury stock" method for convertible instruments and requires application of the “if-converted” method for certain agreements. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments: (in thousands) December 31, 2021 Adoption of ASU 2020-06 January 1, 2022 Balance Sheet line item: Principal value $ (258,750) $ — $ (258,750) Unamortized issuance cost $ 2,889 $ — $ 2,889 Unamortized discount $ 24,215 $ (24,215) $ — Convertible Debt $ (231,646) $ (24,215) $ (255,861) Net deferred tax liability $ (217,291) $ 5,527 $ (211,764) Additional paid-in capital $ (1,074,286) $ 39,559 $ (1,034,727) Retained earnings $ (309,430) $ (20,871) $ (330,301) After adopting ASU 2020-06, the Company's Convertible Notes due 2024 (as defined and discussed in Note F) are reflected entirely as a liability as the embedded conversion feature is no longer separately presented within stockholders' equity, which also eliminated the non-cash discount. Accordingly, earnings no longer reflect the discount amortization expense which was $6.4 million of interest expense, net of income taxes during 2021. After giving effect for the adoption, the effective interest rate on the Convertible Notes is 1.5%. ASU 2020-06 requires the application of the more dilutive if-converted method when calculating the impact of the Convertible Notes on earnings per diluted share. The adoption of ASU 2020-06 does not change the accounting treatment of shares to be delivered by the convertible note hedges (see Note F) purchased by the Company that are designed to offset the shares issued to settle its Convertible Notes, which are anti-dilutive and not reflected in earnings per diluted share. |
Summary of Financial Statemen_3
Summary of Financial Statement Preparation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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): September 30, December 31, Flight equipment $ 3,440,294 $ 3,301,113 Ground equipment $ 68,762 64,641 Leasehold improvements, facilities and office equipment $ 39,714 38,769 Aircraft modifications and projects in progress $ 383,590 206,917 $ 3,932,360 3,611,440 Accumulated depreciation $ (1,593,082) (1,481,506) Property and equipment, net $ 2,339,278 $ 2,129,934 |
Accounting Standards Update and Change in Accounting Principle | The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments: (in thousands) December 31, 2021 Adoption of ASU 2020-06 January 1, 2022 Balance Sheet line item: Principal value $ (258,750) $ — $ (258,750) Unamortized issuance cost $ 2,889 $ — $ 2,889 Unamortized discount $ 24,215 $ (24,215) $ — Convertible Debt $ (231,646) $ (24,215) $ (255,861) Net deferred tax liability $ (217,291) $ 5,527 $ (211,764) Additional paid-in capital $ (1,074,286) $ 39,559 $ (1,034,727) Retained earnings $ (309,430) $ (20,871) $ (330,301) |
Significant Customers (Tables)
Significant Customers (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Concentration Risk [Line Items] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Issued and outstanding warrants are summarized below as of September 30, 2022: Common Shares in millions Exercise price Vested Non-Vested Expiration 2018 Investment Agreement $21.53 14.8 0.0 December 20, 2025 2018 Investment Agreement $20.40 7.0 0.0 December 20, 2025 |
Accounts Receivable [Member] | |
Concentration Risk [Line Items] | |
Schedule of Revenue by Major Customers by Reporting Segments | The accounts receivable from the Company's three largest customers as of September 30, 2022 and December 31, 2021 are as follows (in thousands): September 30, December 31, 2022 2021 Customer Accounts Receivable DoD $ 101,108 $ 57,998 Amazon 76,966 68,429 DHL 17,037 9,111 |
Revenue, Product and Service Benchmark [Member] | |
Concentration Risk [Line Items] | |
Schedule of Revenue by Major Customers by Reporting Segments | The percentage of the Company's revenues for the Company's three largest customers, for the three and nine month periods ending September 30, 2022 and 2021 are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Customer Percentage of Revenue Percentage of Revenue DoD 31% 31% 29% 26% Amazon 34% 33% 34% 35% DHL 13% 12% 12% 13% |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 102,913 Amortization (17,442) Carrying value as of September 30, 2022 85,472 |
Schedule of Goodwill | The carrying amounts of goodwill by reportable segment are as follows (in thousands): CAM ACMI Services All Other Total Carrying value as of December 31, 2021 153,290 234,571 8,113 395,974 Carrying value as of September 30, 2022 $ 153,290 $ 234,571 $ 8,113 $ 395,974 |
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, 2021 $ 9,000 $ 100,151 $ 109,151 Amortization — (9,930) (9,930) Carrying value as of September 30, 2022 9,000 90,221 99,221 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 5,294 $ — $ 5,294 Interest rate swap — 1,077 — 1,077 Total Assets $ — $ 6,371 $ — $ 6,371 Liabilities Stock warrant obligations — — (715) (715) Total Liabilities $ — $ — $ (715) $ (715) As of December 31, 2021 Fair Value Measurement Using Total Level 1 Level 2 Level 3 Assets Cash equivalents—money market $ — $ 30,042 $ — $ 30,042 Total Assets $ — $ 30,042 $ — $ 30,042 Liabilities Interest rate swap $ — $ (3,603) $ — $ (3,603) Stock warrant obligations — — (915) (915) Total Liabilities $ — $ (3,603) $ (915) $ (4,518) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment, to be held and used, is summarized as follows (in thousands): September 30, December 31, Flight equipment $ 3,440,294 $ 3,301,113 Ground equipment $ 68,762 64,641 Leasehold improvements, facilities and office equipment $ 39,714 38,769 Aircraft modifications and projects in progress $ 383,590 206,917 $ 3,932,360 3,611,440 Accumulated depreciation $ (1,593,082) (1,481,506) Property and equipment, net $ 2,339,278 $ 2,129,934 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Debt [Table Text Block] | The conversion feature of the Convertible Notes required bifurcation from the principal amount under the applicable accounting guidance. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective approach as discussed in Note A which recombined the value of the previously bifurcated embedded feature with the convertible note and eliminated the discount. The carrying value of the Company's convertible debt is shown below (in thousands): September 30, December 31, 2022 2021 Principal value, Convertible Notes, due 2024 258,750 258,750 Unamortized issuance costs (2,111) (2,889) Unamortized discount — (24,215) Convertible debt 256,639 231,646 |
Schedule of Long-term Debt Instruments | Debt obligations consisted of the following (in thousands): September 30, December 31, 2022 2021 Revolving credit facility 525,000 360,000 Senior Notes 577,974 697,162 Convertible Notes 256,639 231,646 Other financing arrangements 10,030 10,555 Total debt obligations 1,369,643 1,299,363 Less: current portion (637) (628) Total long term obligations, net 1,369,006 1,298,735 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | As of September 30, 2022, the maturities of operating lease liabilities are as follows (in thousands): Operating Leases Remaining 2022 $ 6,000 2023 22,216 2024 17,006 2025 12,302 2026 6,734 2027 and beyond 541 Total undiscounted cash payments 64,799 Less: amount representing interest (2,339) Present value of future minimum lease payments 62,460 Less: current obligations under leases 21,879 Long-term lease obligation $ 40,581 |
Schedules of Concentration of Risk, by Risk Factor | As of September 30, 2022, the flight crewmember employees of ABX, ATI and OAI and flight attendant employees of ATI and OAI were represented by the labor unions listed below: Airline Labor Agreement Unit Percentage of ABX International Brotherhood of Teamsters 5.9% ATI Air Line Pilots Association 9.9% OAI International Brotherhood of Teamsters 5.9% ATI Association of Flight Attendants 0.8% OAI Association of Flight Attendants 5.6% |
Pension and Other Post-Retire_2
Pension and Other Post-Retirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | ABX’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Pension Plans Post-Retirement Healthcare Plan Pension Plans Post-Retirement Healthcare Plan 2022 2021 2022 2021 2022 2021 2022 2021 Service cost $ — $ — $ 19 $ 24 — — 57 72 Interest cost 6,075 5,597 15 10 18,098 16,791 44 30 Expected return on plan assets (11,738) (11,875) — — (35,215) (35,625) — — Amortization of net (gain) loss 1,002 1,764 11 47 1,628 5,292 34 141 Net periodic benefit cost (income) $ (4,661) $ (4,514) $ 45 $ 81 $ (15,489) $ (13,542) $ 135 $ 243 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The table below provides information about the Company’s interest rate swaps (dollars in thousands): September 30, 2022 December 31, 2021 Expiration Date Stated Notional Market Notional Market March 31, 2022 1.900 % $ — $ — $ 50,000 $ (222) March 31, 2022 1.900 % — — 75,000 (341) March 31, 2023 2.425 % 127,500 1,077 133,125 (3,041) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation, Equity Instruments Other Than Options, Activity | The table below summarizes stock-based award activity. Nine Months Ended September 30, 2022 September 30, 2021 Number of Weighted Number of Weighted Outstanding at beginning of period 978,188 $ 17.49 1,085,023 $ 17.14 Granted 283,467 35.44 273,845 26.65 Converted (178,060) 22.15 (120,830) 25.40 Expired (3,000) 40.02 (1,200) 26.60 Forfeited (9,600) 26.74 (5,600) 23.31 Outstanding at end of period 1,070,995 $ 21.32 1,231,238 $ 18.41 Vested 322,156 $ 9.76 357,499 $ 9.26 |
Schedule of Share-based Payment Award, Equity Instruments Other Than Options, Valuation Assumptions | The market condition awards granted in 2022 were valued using a Monte Carlo simulation technique based on daily stock prices over three years and using the following variables: 2022 Risk-free interest rate 2.5% Volatility 38.3% |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted earnings per share of common stock are as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator: Earnings from continuing operations - basic $ 50,188 $ 62,363 $ 154,194 $ 184,522 Loss (gain) from stock warrants revaluation, net of tax (105) — (155) (23,776) Convertible debt interest charge net of tax 763 — 2,285 — Earnings from continuing operations - diluted $ 50,846 $ 62,363 $ 156,324 $ 160,746 Denominator: Weighted-average shares outstanding for basic earnings per share 73,998 73,721 73,956 67,177 Common equivalent shares: Effect of stock-based compensation awards and warrants 6,637 3,022 6,913 8,100 Effect of convertible debt 8,111 — 8,111 — Weighted-average shares outstanding assuming dilution 88,746 76,743 88,980 75,277 Basic earnings per share from continuing operations $ 0.68 $ 0.85 $ 2.08 $ 2.75 Diluted earnings per share from continuing operations $ 0.57 $ 0.81 $ 1.76 $ 2.14 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | |
Segment Reporting, Additional Information about Entity's Reportable Segments | The Company's other segment information from continuing operations is presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Depreciation and amortization expense: CAM $ 59,231 $ 51,383 $ 171,943 $ 148,390 ACMI Services 23,447 25,649 72,885 73,398 All other 605 719 1,898 2,647 Total $ 83,283 $ 77,751 $ 246,726 $ 224,435 Interest expense CAM 7,908 9,408 21,837 28,303 ACMI Services 3,693 4,672 9,719 13,668 Segment earnings (loss): CAM $ 36,975 $ 28,502 $ 111,587 $ 72,518 ACMI Services 25,265 58,225 69,267 124,246 All other (1,182) (1,047) 560 2,503 Net unallocated interest expense (510) (371) (1,391) (1,995) Net gain (loss) on financial instruments 695 (7,378) 9,402 37,797 Debt issuance costs — — — (6,505) Other non-service components of retiree benefit costs, net 4,635 4,457 15,411 13,370 Loss from non-consolidated affiliate (954) (1,147) (5,577) (1,365) Pre-tax earnings from continuing operations $ 64,924 $ 81,241 $ 199,259 $ 240,569 |
Schedule of Segment Reporting Information, by Segment | The Company's segment information from continuing operations is presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Total revenues: CAM $ 109,496 $ 92,931 $ 326,075 $ 264,802 ACMI Services 357,375 330,906 1,034,963 851,338 All other 108,423 90,292 318,837 281,226 Eliminate inter-segment revenues (58,378) (48,174) (167,431) (145,451) Total $ 516,916 $ 465,955 $ 1,512,444 $ 1,251,915 Customer revenues: CAM $ 79,975 $ 71,070 $ 237,466 $ 198,546 ACMI Services 357,319 330,903 1,034,881 851,325 All other 79,622 63,982 240,097 202,044 Total $ 516,916 $ 465,955 $ 1,512,444 $ 1,251,915 |
Reconciliation of Assets from Segment to Consolidated | The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other. September 30, December 31, 2022 2021 Assets: CAM $ 2,427,780 $ 2,218,012 ACMI Services 959,801 872,311 All other 137,584 177,012 Total $ 3,525,165 $ 3,267,335 |
Revenue from External Customers by Products and Services | The Company's external customer revenues from other activities for the three and nine month periods ending September 30, 2022 and 2021 are presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Aircraft maintenance, modifications and part sales $ 34,604 $ 28,513 $ 106,766 $ 91,352 Ground services 28,204 22,928 80,275 75,410 Other, including aviation fuel sales 16,814 12,541 53,056 35,282 Total customer revenues $ 79,622 $ 63,982 $ 240,097 $ 202,044 |
Summary of Financial Statemen_4
Summary of Financial Statement Preparation and Significant Accounting Policies (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 25, 2017 | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | ||||
Additional paid-in capital | $ (1,039,354,000) | $ 1,034,727,000 | $ (1,074,286,000) | |
Retained earnings | (486,231,000) | 330,301,000 | (309,430,000) | |
Convertible Debt | $ (256,639,000) | 255,861,000 | (231,646,000) | |
Deferred Tax Liabilities, Net | (211,764,000) | (217,291,000) | ||
Unamortized Debt Issuance Expense | 2,889,000 | |||
Debt Instrument, Unamortized Discount | 0 | |||
Property, Plant and Equipment | Property and equipment, to be held and used, is summarized as follows (in thousands): September 30, December 31, Flight equipment $ 3,440,294 $ 3,301,113 Ground equipment $ 68,762 64,641 Leasehold improvements, facilities and office equipment $ 39,714 38,769 Aircraft modifications and projects in progress $ 383,590 206,917 $ 3,932,360 3,611,440 Accumulated depreciation $ (1,593,082) (1,481,506) Property and equipment, net $ 2,339,278 $ 2,129,934 | |||
Convertible Debt [Member] | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | ||||
Convertible Debt | $ (258,750,000) | 258,750,000 | (258,750,000) | $ (258,800,000) |
Unamortized Debt Issuance Expense | 2,111,000 | 2,889,000 | ||
Debt Instrument, Unamortized Discount | $ 0 | $ 24,215,000 | ||
Accounting Standards Update 2020-06 | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | ||||
Additional paid-in capital | (39,559,000) | |||
Retained earnings | 20,871,000 | |||
Convertible Debt | 24,215,000 | |||
Deferred Tax Liabilities, Net | 5,527,000 | |||
Unamortized Debt Issuance Expense | 0 | |||
Debt Instrument, Unamortized Discount | (24,215,000) | |||
Accounting Standards Update 2020-06 | Convertible Debt [Member] | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | ||||
Convertible Debt | $ 0 |
Significant Customers (Details)
Significant Customers (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 250,548 | $ 250,548 | $ 205,399 | ||
Fair Value Adjustment of Warrants | 100 | $ (9,600) | 200 | $ 30,800 | |
Warrant liability | $ 715 | $ 715 | 915 | ||
DHL [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of consolidated revenues | 13% | 12% | 12% | 13% | |
DHL [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 17,037 | $ 17,037 | 9,111 | ||
Amazon [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of consolidated revenues | 34% | 33% | 34% | 35% | |
Amazon [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 76,966 | $ 76,966 | 68,429 | ||
US Military [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of consolidated revenues | 31% | 31% | 29% | 26% | |
US Military [Member] | Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 101,108 | $ 101,108 | 57,998 | ||
Amazon Warrant C [Member] [Member] | |||||
Concentration Risk [Line Items] | |||||
Class of Warrant or Right, Outstanding | 14,800 | 14,800 | |||
Warrant liability | $ (700) | $ (700) | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 21.53 | $ 21.53 | |||
Class of Warrant or Right, Unissued | 0 | 0 | |||
Amazon Warrant Subsequent [Member] | |||||
Concentration Risk [Line Items] | |||||
Class of Warrant or Right, Outstanding | 7,000 | 7,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 20.40 | $ 20.40 | |||
Class of Warrant or Right, Unissued | 0 | 0 | |||
Amazon C Warrants | |||||
Concentration Risk [Line Items] | |||||
reclassification of liability to equity | $ 82,400 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles (Schedule of Goodwill) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | $ 395,974,000 | $ 395,974,000 |
Carrying value, ending balance | 395,974,000 | |
ACMI Services [Member] | ||
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | 234,571,000 | 234,571,000 |
Carrying value, ending balance | 234,571,000 | |
CAM [Member] | ||
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | 153,290,000 | 153,290,000 |
Carrying value, ending balance | 153,290,000 | |
MRO Services [Member] [Member] | ||
Goodwill [Roll Forward] | ||
Carrying value, beginning balance | 8,113,000 | $ 8,113,000 |
Carrying value, ending balance | $ 8,113,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles (Schedule Intangible Assets) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite and Indefinite-lived Intangible Assets by Major Class [Line Items] | ||
Incentive to Lessee | $ 85,472,000 | $ 102,913,000 |
Amortization of Lease Incentives | 17,442,000 | |
Finite and Indefinite-lived Intangible Assets [Roll Forward] | ||
Carrying value at beginning of period | 100,151,000 | |
Carrying value at beginning of period | 109,151,000 | |
Amortization expense | (9,930,000) | |
Carrying value at end of period | 90,221,000 | $ 100,151,000 |
Carrying value at end of period | 99,221,000 | |
ACMI Services [Member] | Airline Certificates [Member] | ||
Finite and Indefinite-lived Intangible Assets [Roll Forward] | ||
Carrying value at beginning of period | 9,000,000 | |
Amortization expense | 0 | |
Carrying value at end of period | $ 9,000,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles Investment in West Atlantic (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investments | $ 20,600,000 | $ 10,300,000 |
Goodwill | $ 395,974,000 | $ 395,974,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 25, 2017 |
Liabilities, Fair Value Disclosure [Abstract] | |||
Warrant liability | $ 715 | $ 915 | |
Fair Value, Recurring [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 5,294 | 30,042 | |
Derivative Asset | 1,077 | ||
Total Assets | 6,371 | 30,042 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Interest rate swap | (3,603) | ||
Warrant liability | (715) | (915) | |
Total Liabilities | (715) | (4,518) | |
Carrying value, debt | 1,369,600 | 1,299,400 | |
Fair Value, Recurring [Member] | Level 1 [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 0 | 0 | |
Derivative Asset | 0 | ||
Total Assets | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Interest rate swap | 0 | ||
Warrant liability | 0 | 0 | |
Total Liabilities | 0 | 0 | |
Fair Value, Recurring [Member] | Level 2 [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 5,294 | 30,042 | |
Derivative Asset | 1,077 | ||
Convertible note hedge fair value | $ 56,100 | ||
Total Assets | 6,371 | 30,042 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Interest rate swap | (3,603) | ||
Warrant liability | 0 | 0 | |
Total Liabilities | 0 | (3,603) | |
Difference between fair value and carrying value, debt | 70,700 | 37,100 | |
Fair Value, Recurring [Member] | Level 3 [Member] | |||
Assets, Fair Value Disclosure [Abstract] | |||
Cash equivalents - money market | 0 | 0 | |
Derivative Asset | 0 | ||
Total Assets | 0 | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | |||
Interest rate swap | 0 | ||
Warrant liability | (715) | (915) | |
Total Liabilities | (715) | $ (915) | |
Amazon Warrant C [Member] [Member] | |||
Liabilities, Fair Value Disclosure [Abstract] | |||
Warrant liability | $ (700) |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 3,932,360 | $ 3,611,440 |
Accumulated depreciation | (1,593,082) | (1,481,506) |
Property and equipment, net | 2,339,278 | 2,129,934 |
Flight Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Operating Leases, Future Minimum Payments Receivable, Current | 72,200 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 3,440,294 | 3,301,113 |
Operating Leases, Future Minimum Payments Receivable, in Two Years | 247,500 | |
Operating Leases, Future Minimum Payments Receivable, in Three Years | 197,300 | |
Operating Leases, Future Minimum Payments Receivable, in Four Years | 183,400 | |
Operating Leases, Future Minimum Payments Receivable, in Five Years | 157,500 | |
Ground equipment [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 68,762 | 64,641 |
facilities, leasehold improvements and office equipment [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 39,714 | 38,769 |
Construction in Progress [Member] | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 383,590 | $ 206,917 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - Flight Equipment [Member] - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Leases, Future Minimum Payments Receivable [Abstract] | ||
Minimum future lease payments, Due within next 12 months | $ 72.2 | |
Minimum future lease payments, Due within next 2 years | 247.5 | |
Minimum future lease payments, Due within next 3 years | 197.3 | |
Minimum future lease payments, Due within next 4 years | 183.4 | |
Minimum future lease payments, Due within next 5 years | 157.5 | |
CAM [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leased aircraft, carrying value | $ 1,457.2 | $ 1,404.4 |
Debt Obligations (Schedule of L
Debt Obligations (Schedule of Long Term Obligations) (Details) - USD ($) | Sep. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Apr. 13, 2021 | Jan. 28, 2020 |
Debt Instrument [Line Items] | |||||
Total long term obligations | $ 1,369,643,000 | $ 1,299,363,000 | |||
Unsecured Debt | 577,974,000 | 697,162,000 | |||
Convertible Debt | 256,639,000 | $ (255,861,000) | 231,646,000 | ||
Other Long-term Debt | 10,030,000 | 10,555,000 | |||
Less: current portion | (637,000) | (628,000) | |||
Total long term obligations, net | 1,369,006,000 | 1,298,735,000 | |||
Revolving credit facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long term obligations | 525,000,000 | 360,000,000 | |||
line of credit, increase in maximum borrowing capacity | 800,000,000 | $ 600,000,000 | |||
Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Unsecured Debt | $ 578,000,000 | $ 200,000,000 | $ 500,000,000 |
Debt Obligations (Schedule of_2
Debt Obligations (Schedule of Long Term Debt Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Total long term obligations | $ 1,369,643 | $ 1,299,363 |
Debt Obligations (Narrative) (D
Debt Obligations (Narrative) (Details) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 01, 2022 | Dec. 31, 2021 | Apr. 13, 2021 | Jan. 28, 2020 | Sep. 25, 2017 | |
Debt Instrument [Line Items] | |||||||||
Long term obligations | $ 1,369,643,000 | $ 1,299,363,000 | |||||||
Unsecured Debt | 577,974,000 | 697,162,000 | |||||||
Proceeds from Issuance of Unsecured Debt | 0 | $ 207,400,000 | |||||||
Convertible Debt | 256,639,000 | $ (255,861,000) | 231,646,000 | ||||||
Unamortized Debt Issuance Expense | (2,889,000) | ||||||||
Debt Instrument, Unamortized Discount | 0 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||||||||
Debt Instrument, Repurchased Face Amount | 120,000,000 | ||||||||
Gain (Loss) on Repurchase of Debt Instrument | 4,500,000 | ||||||||
Unsecured Debt [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Issuance Costs, Line of Credit Arrangements, Net | 5,700,000 | 7,800,000 | |||||||
Revolving credit facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term obligations | $ 525,000,000 | 360,000,000 | |||||||
Variable interest rate | 4.10% | ||||||||
Credit facility, revolving credit loan, remaining borrowing capacity | $ 259,700,000 | ||||||||
line of credit, increase in maximum borrowing capacity | 800,000,000 | 600,000,000 | |||||||
Bonds [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured Debt | $ 578,000,000 | $ 200,000,000 | $ 500,000,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | ||||||||
Proceeds from Issuance of Unsecured Debt | $ 205,500,000 | $ 495,000,000 | |||||||
Convertible Debt [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable interest rate | 1.125% | ||||||||
Convertible Debt | $ 258,750,000 | $ (258,750,000) | 258,750,000 | $ 258,800,000 | |||||
Convertible note hedge shares | 8,100 | ||||||||
Warrants and Rights Outstanding | 38,500,000 | ||||||||
Unamortized Debt Issuance Expense | (2,111,000) | (2,889,000) | |||||||
Debt Instrument, Unamortized Discount | $ 0 | $ (24,215,000) | |||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible note hedge fair value | $ 56,100,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Operating Lease Payments) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Operating Leased Assets [Line Items] | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 15,900 | $ 8,300 | |
Operating Lease, Weighted Average Discount Rate, Percent | 2.40% | 2.40% | |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 3 months 18 days | 3 years 9 months 18 days | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2017 | $ 6,000 | ||
Total minimum lease payments | 62,460 | ||
lessee, operating lease, interest due | (2,339) | ||
Operating Lease, Liability, Current | 21,879 | $ 18,783 | |
Operating Lease, Liability, Noncurrent | 40,581 | $ 44,387 | |
Operating Lease, Payments | 16,900 | $ 15,400 | |
Property Subject to Operating Lease [Member] | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2018 | 22,216 | ||
2019 | 17,006 | ||
2020 | 12,302 | ||
2021 | 6,734 | ||
2022 and beyond | 541 | ||
Lessee, Operating Lease, Liability, Payments, Due | $ 64,799 |
Commitments and Contingencies_3
Commitments and Contingencies (Commitments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | |
Long-term Purchase Commitment [Line Items] | |||||
Long-term Purchase Commitment, Amount | $ 781,700 | ||||
total government grant awarded | $ 75,800 | ||||
Income Tax (Expense) Benefit, Continuing Operations, Government Grants | $ 0 | $ (30,322) | $ 0 | $ (96,626) | |
government grants continuing operations | $ (30,300) | $ (96,600) |
Commitments and Contingencies_4
Commitments and Contingencies (Labor Unions) (Details) - Workforce Subject to Collective Bargaining Arrangements [Member] - Labor Unions [Member] | 9 Months Ended |
Sep. 30, 2022 | |
ABX [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 5.90% |
ATI [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 9.90% |
Omni Air International [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 5.90% |
Air Transport International, Flight Attendants [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 0.80% |
Omni Air International, Flight Attendants [Member] [Member] | |
Concentration Risk [Line Items] | |
Percentage of the Company's Employees | 5.60% |
Pension and Other Post-Retire_3
Pension and Other Post-Retirement Benefit Plans (Funded Status) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Plans [Member] | ||||
Change in benefit obligation [Roll Forward] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 6,075 | 5,597 | 18,098 | 16,791 |
Change in plan assets [Roll Forward] | ||||
Employer contributions | 1,500 | |||
Post-Retirement Healthcare Plans [Member] | ||||
Change in benefit obligation [Roll Forward] | ||||
Service cost | 19 | 24 | 57 | 72 |
Interest cost | $ 15 | $ 10 | $ 44 | $ 30 |
Pension and Other Post-Retire_4
Pension and Other Post-Retirement Benefit Plans (Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Plans [Member] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 6,075 | 5,597 | 18,098 | 16,791 |
Expected return on plan assets | (11,738) | (11,875) | (35,215) | (35,625) |
Net periodic benefit cost (income) | 4,661 | 4,514 | 15,489 | 13,542 |
Post-Retirement Healthcare Plans [Member] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | 19 | 24 | 57 | 72 |
Interest cost | 15 | 10 | 44 | 30 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Net periodic benefit cost (income) | $ (45) | $ (81) | $ (135) | $ (243) |
Pension and Other Post-Retire_5
Pension and Other Post-Retirement Benefit Plans (Cash Flows) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Pension Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contributions | $ 1.5 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Line Items] | |
Effective Income Tax Rate Reconciliation, Percent | (23.00%) |
Forecast | |
Income Tax Disclosure [Line Items] | |
Effective Income Tax Rate Reconciliation, Percent | 23% |
Income Taxes (Income Tax Provis
Income Taxes (Income Tax Provision (Benefit)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Deferred taxes: | |||
Total income tax expense from continuing operations | $ 18,878 | $ 45,065 | $ 56,047 |
Income Taxes (Tax Rate Reconcil
Income Taxes (Tax Rate Reconciliation) (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |
Effective income tax rate | (23.00%) |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Sep. 25, 2017 | |
Derivative [Line Items] | ||||||
Pre-tax (charge) on derivative instruments | $ 695,000 | $ (7,378,000) | $ 9,402,000 | $ 37,797,000 | ||
Net (gain) loss on financial instruments | (600,000) | (2,300,000) | (4,700,000) | (4,800,000) | ||
Income Tax (Expense) Benefit, Continuing Operations, Government Grants | $ 0 | $ (30,322,000) | $ 0 | $ (96,626,000) | ||
March 31, 2022 One [Member] [Member] | Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Stated Interest Rate | 1.90% | 1.90% | ||||
Market Value (Liability) | $ 0 | $ 0 | $ 222,000 | |||
Derivative Liability, Notional Amount | $ 0 | $ 0 | 50,000,000 | |||
March 31, 2022 Two [Member] [Member] [Member] | Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Stated Interest Rate | 1.90% | 1.90% | ||||
Market Value (Liability) | $ 0 | $ 0 | 341,000 | |||
Derivative Liability, Notional Amount | $ 0 | $ 0 | 75,000,000 | |||
March 31, 2023 [Member] | Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Stated Interest Rate | 2.425% | 2.425% | ||||
Market Value (Liability) | $ (1,077,000) | $ (1,077,000) | 3,041,000 | |||
Derivative Liability, Notional Amount | $ 127,500,000 | $ 127,500,000 | $ 133,125,000 | |||
Convertible Debt [Member] | ||||||
Derivative [Line Items] | ||||||
Convertible note hedge shares | 8,100 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
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) | 978,188 | 1,085,023 |
Granted (in shares) | 283,467 | 273,845 |
Converted (in shares) | (178,060) | (120,830) |
Expired (in shares) | (3,000) | (1,200) |
Forfeited (in shares) | (9,600) | (5,600) |
Outstanding at end of period (in shares) | 1,070,995 | 1,231,238 |
Vested (in shares) | 322,156 | 357,499 |
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) | $ 17.49 | $ 17.14 |
Granted, Weighted average grant-date fair value (in dollars per share) | 35.44 | 26.65 |
Converted, Weighted average grant-date fair value (in dollars per share) | 22.15 | 25.40 |
Expired, Weighted average grant-date fair value (in dollars per share) | 40.02 | 26.60 |
Forfeited, Weighted average grant-date fair value (in dollars per share) | 26.74 | 23.31 |
Outstanding at end of period, Weighted average grant-date fair value (in dollars per share) | 21.32 | 18.41 |
Vested (in dollars per share) | $ 9.76 | $ 9.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Share-based compensation expense | $ 6.1 | $ 5.5 |
Unrecognized share-based compensation expense | $ 10.7 | |
Unrecognized share-based compensation, weighted average recognition period | 1 year 3 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 | |
Risk-free interest rate | 2.50% | |
Expected volatility rate | 38.30% | |
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) | $ 46.20 | |
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) | $ 33.84 | |
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) | 1,357,120 | |
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) | 322,156 | |
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 ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Earnings from continuing operations | $ 50,188,000 | $ 62,363,000 | $ 154,194,000 | $ 184,522,000 |
fair value adjustment to warrants, net of tax | (105,000) | 0 | (155,000) | (23,776,000) |
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities | 763,000 | 0 | 2,285,000 | 0 |
Undistributed Earnings (Loss) from Continuing Operations Available to Common Shareholders, Diluted | $ 50,846,000 | $ 62,363,000 | $ 156,324,000 | $ 160,746,000 |
Restricted stock (in shares) | 367,339 | 478,739 | ||
Common equivalent shares: | ||||
Basic earnings per share from continuing operations (in dollars per share) | $ 0.68 | $ 0.85 | $ 2.08 | $ 2.75 |
Diluted earnings per share from continuing operations (in dollars per share) | $ 0.57 | $ 0.81 | $ 1.76 | $ 2.14 |
Basic (in shares) | 73,998,000 | 73,721,000 | 73,956,000 | 67,177,000 |
Effect of stock-based compensation awards (in shares) | 6,637,000 | 3,022,000 | 6,913,000 | 8,100,000 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 8,111,000 | 0 | 8,111,000 | 0 |
Diluted (in shares) | 88,746,000 | 76,743,000 | 88,980,000 | 75,277,000 |
Segment Information (Segment Re
Segment Information (Segment Reconciliation) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Operating Expenses | $ 444,257,000 | $ 366,195,000 | $ 1,299,474,000 | $ 1,010,677,000 | |
REVENUES | 516,916,000 | 465,955,000 | 1,512,444,000 | 1,251,915,000 | |
Customer revenues | 516,916,000 | 465,955,000 | 1,512,444,000 | 1,251,915,000 | |
Depreciation and amortization expense | 83,283,000 | 77,751,000 | 246,726,000 | 224,435,000 | |
Net unallocated interest expense | (12,167,000) | (14,459,000) | (33,027,000) | (44,002,000) | |
Net gain (loss) on financial instruments | 695,000 | (7,378,000) | 9,402,000 | 37,797,000 | |
Pre-tax earnings from continuing operations | 64,924,000 | 81,241,000 | 199,259,000 | 240,569,000 | |
Assets | 3,525,165,000 | 3,525,165,000 | $ 3,267,335,000 | ||
Income Tax Expense (Benefit) | 18,878,000 | 45,065,000 | 56,047,000 | ||
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component | 4,635,000 | 4,457,000 | 15,411,000 | 13,370,000 | |
Net earnings from continuing operations | 50,188,000 | 62,363,000 | 154,194,000 | 184,522,000 | |
Income Tax (Expense) Benefit, Continuing Operations, Government Grants | 0 | (30,322,000) | 0 | (96,626,000) | |
Write off of Deferred Debt Issuance Cost | 0 | 0 | 0 | (6,505,000) | |
Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 516,916,000 | 465,955,000 | 1,512,444,000 | 1,251,915,000 | |
Customer revenues | 516,916,000 | 465,955,000 | 1,512,444,000 | 1,251,915,000 | |
ACMI Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 357,375,000 | 330,906,000 | 1,034,963,000 | 851,338,000 | |
Customer revenues | 357,375,000 | 330,906,000 | 1,034,963,000 | 851,338,000 | |
Depreciation and amortization expense | 23,447,000 | 25,649,000 | 72,885,000 | 73,398,000 | |
Segment earnings (loss) | 25,265,000 | 58,225,000 | 69,267,000 | 124,246,000 | |
Net unallocated interest expense | (3,693,000) | (4,672,000) | (9,719,000) | (13,668,000) | |
Assets | 959,801,000 | 959,801,000 | 872,311,000 | ||
ACMI Services [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 357,319,000 | 330,903,000 | 1,034,881,000 | 851,325,000 | |
Customer revenues | 357,319,000 | 330,903,000 | 1,034,881,000 | 851,325,000 | |
All other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 108,423,000 | 90,292,000 | 318,837,000 | 281,226,000 | |
Customer revenues | 108,423,000 | 90,292,000 | 318,837,000 | 281,226,000 | |
Depreciation and amortization expense | 605,000 | 719,000 | 1,898,000 | 2,647,000 | |
Segment earnings (loss) | (1,182,000) | (1,047,000) | 560,000 | 2,503,000 | |
Assets | 137,584,000 | 137,584,000 | 177,012,000 | ||
All other [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 79,622,000 | 63,982,000 | 240,097,000 | 202,044,000 | |
Customer revenues | 79,622,000 | 63,982,000 | 240,097,000 | 202,044,000 | |
CAM [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 109,496,000 | 92,931,000 | 326,075,000 | 264,802,000 | |
Customer revenues | 109,496,000 | 92,931,000 | 326,075,000 | 264,802,000 | |
Depreciation and amortization expense | 59,231,000 | 51,383,000 | 171,943,000 | 148,390,000 | |
Segment earnings (loss) | 36,975,000 | 28,502,000 | 111,587,000 | 72,518,000 | |
Net unallocated interest expense | (7,908,000) | (9,408,000) | (21,837,000) | (28,303,000) | |
Assets | 2,427,780,000 | 2,427,780,000 | $ 2,218,012,000 | ||
CAM [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 79,975,000 | 71,070,000 | 237,466,000 | 198,546,000 | |
Customer revenues | 79,975,000 | 71,070,000 | 237,466,000 | 198,546,000 | |
Significant Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net unallocated interest expense | (510,000) | (371,000) | (1,391,000) | (1,995,000) | |
Loss from non-consolidated affiliates | (954,000) | (1,147,000) | (5,577,000) | (1,365,000) | |
Eliminate inter-segment revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | (58,378,000) | (48,174,000) | (167,431,000) | (145,451,000) | |
Customer revenues | (58,378,000) | (48,174,000) | (167,431,000) | (145,451,000) | |
Accounting Standards Update 2014-09 [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income Tax Expense (Benefit) | (14,736,000) | ||||
Accounting Standards Update 2014-09 [Member] | Ground Services [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 34,604,000 | 28,513,000 | 106,766,000 | 91,352,000 | |
Customer revenues | 34,604,000 | 28,513,000 | 106,766,000 | 91,352,000 | |
Accounting Standards Update 2014-09 [Member] | All other [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 79,622,000 | 63,982,000 | 240,097,000 | 202,044,000 | |
Customer revenues | 79,622,000 | 63,982,000 | 240,097,000 | 202,044,000 | |
Accounting Standards Update 2014-09 [Member] | Ground Services [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 28,204,000 | 22,928,000 | 80,275,000 | 75,410,000 | |
Customer revenues | 28,204,000 | 22,928,000 | 80,275,000 | 75,410,000 | |
Accounting Standards Update 2014-09 [Member] | All Other non MRO or Ground Services [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 16,814,000 | 12,541,000 | 53,056,000 | 35,282,000 | |
Customer revenues | $ 16,814,000 | $ 12,541,000 | $ 53,056,000 | $ 35,282,000 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segments | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | |||||
REVENUES | $ 516,916 | $ 465,955 | $ 1,512,444 | $ 1,251,915 | |
Deferred Revenue, Revenue Recognized | 5,800 | 1,100 | 4,800 | 2,900 | |
Deferred Revenue | 13,000 | $ 13,000 | $ 8,300 | ||
Number of reportable segments (in segments) | segments | 2 | ||||
Interest expense | 12,167 | 14,459 | $ 33,027 | 44,002 | |
Deposit Contracts, Assets | 0 | 0 | $ 800 | ||
Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 516,916 | 465,955 | 1,512,444 | 1,251,915 | |
ACMI Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 357,375 | 330,906 | 1,034,963 | 851,338 | |
Interest expense | 3,693 | 4,672 | 9,719 | 13,668 | |
Property, Plant and Equipment, Additions | 69,800 | ||||
ACMI Services [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 357,319 | 330,903 | 1,034,881 | 851,325 | |
CAM [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 109,496 | 92,931 | 326,075 | 264,802 | |
Interest expense | 7,908 | 9,408 | 21,837 | 28,303 | |
Property, Plant and Equipment, Additions | 378,300 | ||||
non lease revenue | 9,800 | 2,300 | 27,100 | 9,200 | |
CAM [Member] | Customer Revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
REVENUES | 79,975 | $ 71,070 | 237,466 | $ 198,546 | |
Flight Equipment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Leases, Future Minimum Payments Receivable, Current | 72,200 | 72,200 | |||
Operating Leases, Future Minimum Payments Receivable, in Two Years | 247,500 | 247,500 | |||
Operating Leases, Future Minimum Payments Receivable, in Three Years | 197,300 | 197,300 | |||
Operating Leases, Future Minimum Payments Receivable, in Four Years | 183,400 | 183,400 | |||
Operating Leases, Future Minimum Payments Receivable, in Five Years | 157,500 | 157,500 | |||
Operating Leases, Future Minimum Payments Receivable, Thereafter | $ 361,900 | $ 361,900 |
Segment Information (Entity-Wid
Segment Information (Entity-Wide Disclosures) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Customer revenues | $ 516,916 | $ 465,955 | $ 1,512,444 | $ 1,251,915 |
Customer Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Customer revenues | 516,916 | 465,955 | 1,512,444 | 1,251,915 |
CAM [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Customer revenues | 109,496 | 92,931 | 326,075 | 264,802 |
CAM [Member] | Customer Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Customer revenues | 79,975 | 71,070 | 237,466 | 198,546 |
All other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Customer revenues | 108,423 | 90,292 | 318,837 | 281,226 |
All other [Member] | Customer Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Customer revenues | $ 79,622 | $ 63,982 | $ 240,097 | $ 202,044 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | $ (2,200) | $ (3,100) |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value Adjustment of Warrants | $ 100,000 | $ (9,600,000) | $ 200,000 | $ 30,800,000 |
Income Tax (Expense) Benefit, Continuing Operations, Government Grants | 0 | (30,322,000) | 0 | (96,626,000) |
REVENUES | 516,916,000 | 465,955,000 | 1,512,444,000 | 1,251,915,000 |
Net earnings from continuing operations | 50,188,000 | 62,363,000 | 154,194,000 | 184,522,000 |
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | $ 854,000 | $ 2,309,000 | $ 1,736,000 | $ 2,374,000 |
WEIGHTED AVERAGE SHARES [Abstract] | ||||
Basic (in shares) | 73,998 | 73,721 | 73,956 | 67,177 |
Diluted (in shares) | 88,746 | 76,743 | 88,980 | 75,277 |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Basic (in dollars per share) | $ 0.68 | $ 0.85 | $ 2.08 | $ 2.75 |
Diluted (in dollars per share) | $ 0.57 | $ 0.81 | $ 1.76 | $ 2.14 |
ACMI Services [Member] | ||||
REVENUES | $ 357,375,000 | $ 330,906,000 | $ 1,034,963,000 | $ 851,338,000 |
Acquisition of Business (Detail
Acquisition of Business (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||
REVENUES | $ 516,916,000 | $ 465,955,000 | $ 1,512,444,000 | $ 1,251,915,000 | |
Goodwill | 395,974,000 | 395,974,000 | $ 395,974,000 | ||
Long-term Debt | 1,369,643,000 | 1,369,643,000 | 1,299,363,000 | ||
Revolving Credit Facility [Member] | |||||
Business Acquisition [Line Items] | |||||
Long-term Debt | $ 525,000,000 | $ 525,000,000 | $ 360,000,000 |
Investments in Non-Consolidated
Investments in Non-Consolidated Affiliates (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Noncontrolling Interest [Line Items] | |||||
Assets, Current | $ 388,637 | $ 388,637 | $ 352,841 | ||
NET EARNINGS | 51,042 | $ 64,672 | 155,930 | $ 186,896 | |
Liabilities, Current | 319,345 | 319,345 | 312,631 | ||
Liabilities | 2,059,633 | 2,059,633 | $ 1,944,958 | ||
REVENUES | $ 516,916 | $ 465,955 | $ 1,512,444 | $ 1,251,915 |