![]() 1 1 2009 Fourth Quarter and Year-end Investor Conference Call April 1, 2010, 10:00 am EDT Exhibit 99.1 |
![]() 2 2 Safe Harbor Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve risks and uncertainties. There are a number of important factors that could cause Air Transport Services Group's ("ATSG's") actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, changes in market demand for our assets and services, the timely completion of 767 freighter modifications as anticipated under ABX Air’s new operating agreement with DHL, ABX Air’s ability to maintain on-time service and control costs under its new operating agreement with DHL, and other factors that are contained from time to time in ATSG's filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should carefully review this release and should not place undue reliance on ATSG's forward-looking statements. These forward- looking statements were based on information, plans and estimates as of the date of this release. ATSG undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes. ATSG, Inc. Non-GAAP Reconciliation Earnings from Continuing Operations Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) (Unaudited) EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered alternatives to net income (loss) or any other performance measure derived in accordance with GAAP. EBITDA is defined as income (loss) from operations plus net interest expense, provision for income taxes, depreciation and amortization. The Company’s management uses these adjusted financial measures in conjunction with GAAP finance measures to monitor and evaluate the performance of the Company, including as a measure of liquidity. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP, or as alternative measures of liquidity. 2007 2008 2009 14,823 (62,848) 28,202 Income Tax Expense 10,898 6,229 17,156 Interest Income (4,557) (2,335) (449) Interest Expense 14,067 37,002 26,881 Depreciation and amortization 51,635 93,752 83,964 86,866 71,800 155,754 Impairment of goodwill and intangibles 0 91,241 0 86,866 163,041 155,754 GAAP Earnings (Loss) from Cont. Reconciliation Statement ($ in 000s) Adjusted EBITDA from Cont. Oper. EBITDA from Cont. Oper. |
![]() 3 3 2009 Financial Performance Annual Results $ in millions Pre-tax Earnings From Continuing Operations 2008 $45.4 2009 $34.6* * Excluding goodwill and intangible impairment charges Revenues from Continuing Operations $451.4 2008 $941.7 $823.5 $29.1 2009 Non-DHL -$56.6 DHL ACMI DHL S&R Agreement $419.3 $282.8 $121.4 $461.2 |
![]() 4 4 2009 Financial Performance Fourth Quarter Results $ in millions 2008 $17.6 2009 $25.6* * Excluding goodwill and intangible impairment charges Revenues from Continuing Operations $116.9 2008 $257.0 $250.5 $22.7 2009 Non-DHL -$65.7 DHL ACMI DHL S&R Agreement $120.0 $58.0 $72.5 $117.4 Pre-tax Earnings from Continuing Operations |
![]() 5 5 Debt declines $135.1m, 26.4% Transfer of Aircraft Capital Leases to DHL $46.3 $43.1 Principal payments 2008 Long –term Debt $377.4 $512.5 $45.7 DHL Promissory Note Extinguishment 2009 Long –term Debt $ in millions |
![]() 6 6 Post -retirement obligations decline $144.6m, 48.6% Gains on Assets 2008 Post- Retirement Obligations $152.7 $297.3 Actuarial Costs & Adjustments 2009 Post - Retirement Obligations $83.2 $75.8 $71.7 Employer Contributions Workforce contraction and plan freeze $57.3 $ in millions |
![]() 7 7 2009 Results – DHL Segment* * From continuing operations 2008 2009 2008 2009 Revenues Pre-tax Earnings Block hours down 78% as DHL converted U.S. to international- only service in January 2009 Severance & retention includes gains on pilot S&R, vacation reimbursement. Excludes discontinued operations (Hub Services and fuel) $282.8 $451.4 $121.4 $29.1 $404.2 $480.5 $11.2 $13.6 $16.7 $27.9 $14.4 $0.8 ACMI S&R |
![]() 8 8 2009 Results – ACMI Services* * Earnings include intangible charges totaling $91.2 million pre-tax for goodwill, customer intangibles 2008 2009 Revenues Pre-tax Earnings 11% increase in block hours reflect additional 767s in service Fuel costs down 42%, lowering reimbursement revenues ABX Air ACMI losses, including transatlantic scheduled service $289.5 $292.8 $75.2 $128.2 $0.5 $7.1 $364.7 $421.0 2008 2009 Fuel & other Reimbursable ACMI Impairment charges -$84.1 -$91.2 |
![]() 9 9 2009 Results - CAM 2008 2009 2008 2009 Revenues Pre-tax Earnings Seven 767 aircraft added during 2009 767 conversion program on track with seven of 14 now completed or in mod Amerijet completes leases for first of two 767s in March 2010 including certification, pilot training, maintenance, etc. $47.5 $60.7 $18.1 $22.8 |
![]() 10 10 Adjusted EBITDA from Continuing Operations* 2007 $86.9 *Adjusted EBITDA from Continuing Operations is a non-GAAP financial measure and should not be considered as an alternative to net income (loss) or any other performance measure derived in accordance with GAAP. 2008 amounts exclude impairment charges totaling $91.2 million related to goodwill and customer intangibles. Please refer to Slide 2 for a statement showing a reconciliation of Adjusted EBITDA from Continuing Operations to GAAP Net Income." $163.0 2008 2009 $155.8 |
![]() 11 11 Termination Agreement Settle DC-9 and B767 PC puts at $31.1 million $15 million pre-payment on DHL Promissory note Remaining $31 million note balance amortized over 5 years, with any outstanding balance forgiven if CMI contract terminated DHL pays $14.4 million under S&R agreement $3.2 million previously paid by DHL $11.2 million to be paid per agreement in 2Q |
![]() 12 12 Aircraft Leases Minimum 13 B767SF aircraft for seven years Seven on day one, remainder by April 2011 Interim 767s supplied under similar economic terms Leases guaranteed by Deutsche Post AG, DHL’s parent DHL responsible for routine airframe heavy maintenance |
![]() 13 13 Crew, Maintenance and Insurance (CMI) Agreement Five year agreement through March 2015 Two year extension right at DHL’s option; Five year mutual Fixed price with escalators through 2012; thereafter U.S. CPI-U Exclusive operator first 13 767SFs in DHL network ABX Air provides 767s as backup support Monthly incentives for on-time performance penalty for service below target Heavy maintenance provided by AMES Termination provisions Material fee paid by DHL for termination for convenience Material fee paid by ABX Air if DHL terminates due to ABX Air default |
![]() 14 14 Building Integrated, Flexible Customer Solutions New DHL agreements demonstrate flexibility Lease/CMI approach an option for new customer relationships Unlocks value of aircraft from ACMI Provides long-term platform for crew, maintenance value-adds More focused marketing strategy Unique solutions for customers drawing on strengths of multiple ATSG businesses Amerijet an example of ATSG’s ability to offer aircraft, crew, airframe and engine maintenance, certification, training, and logistics in a single turnkey package Market begins to take note of the new ATSG Uncertainty lifted Asset quality and cash flow capability clearly evident |