Expanding Air Express Networks Fueling
Growth
Air Transport Services Group, Inc. (Nasdaq:ATSG), the leading
provider of medium wide-body freighter aircraft leasing, air cargo
transportation, and related services, today reported consolidated
financial results for the quarter ended June 30, 2016.
For the second quarter of 2016, compared with the second quarter
of 2015:
- Revenues increased 19 percent to $176.5
million. Excluding revenues from reimbursed expenses, revenues
increased 13 percent. This increase included contributions from
thirty-five Boeing 767 cargo aircraft leased to external customers
at June 30, six more than a year earlier. Eight of those
thirty-five leased 767s were operating for Amazon Fulfillment
Services Inc. (AFS), a subsidiary of Amazon.com, which ATSG began
serving in September 2015.
- Pre-tax Earnings from Continuing
Operations were $18.8 million, compared with $17.2 million in the
prior-year period. Adjusted Pre-Tax Earnings from Continuing
Operations, as defined in our Earnings Summary later in this
release, declined slightly to $16.3 million from $16.7 million,
reflecting $2.6 million in ramp-up costs stemming primarily from
flight crew compensation and training for the expanding Amazon and
DHL CMI operations. Adjusted Pre-Tax Earnings from Continuing
Operations exclude non-cash charges associated with pension costs,
lease incentive amortization, and the effects of financial
instrument transactions, including a non-cash mark-to-market
adjustment in the value of stock warrants granted to Amazon in
March.
- Adjusted EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) from Continuing
Operations, as adjusted for the same items excluded from Adjusted
Pre-Tax Earnings, increased 2 percent to $52.1 million.
- Net Earnings from Continuing Operations
on a GAAP basis were $11.5 million, or $0.12 per common share
diluted in the second quarter, versus $10.6 million, or $0.16 per
share a year ago. The 2016 Net Earnings from Continuing Operations
include non-cash, after-tax effects of lease incentive amortization
and the mark-to-market adjustment for stock warrants. Diluted
Earnings per Share exclude the mark-to-market gain, net of tax,
associated with the stock warrants.
- Adjusted Earnings per Share from
Continuing Operations for the second quarter of 2016 were $0.13 per
share diluted and excludes the lease incentive amortization as well
as the mark-to-market adjustment for the stock warrants, net of
tax. Adjusted Earnings per Share from Continuing Operations were
reduced by approximately $0.02 per share for the incremental
ramp-up costs of the expanded customer CMI operations referenced
above.
Adjusted Pre-Tax Earnings, Adjusted EBITDA, and Adjusted
Earnings per Share from Continuing Operations are non-GAAP
financial measures. Each is defined and reconciled to comparable
GAAP results in tables later in this release.
Joe Hete, President and Chief Executive Officer of ATSG, said,
“Our operating performance across the board in the second quarter
was strong, and yielded financial results that met or exceeded our
targets. Last week, we leased and began operating the tenth of
twenty 767 freighters we will fly for Amazon. We expect margins to
improve substantially in the second half as we approach our
year-end 2016 target of forty-three dry-leased 767 freighters, and
increase from twenty-two to thirty the number of those we operate
for customers under multi-year CMI agreements. We have increased
acquisitions of 767-300 airframes, and have secured the conversion
slots to satisfy strong customer demand.”
Revenue diversification continued to increase in the second
quarter. DHL accounted for 37 percent, Amazon 22 percent, and the
U.S. Military 13 percent of ATSG's second quarter 2016 revenues.
That compares with 48 percent of revenues for DHL and 18 percent
for the U.S. Military in the second quarter of 2015. Amazon became
an ATSG customer in September 2015.
First-half capital expenditures were $125 million, versus $76
million in the first half of 2015. That included purchases of seven
Boeing 767-300 aircraft, three in the second quarter, plus
freighter modification costs for those and other aircraft,
capitalized maintenance costs, and payments for other ground and
maintenance equipment. Due to an acceleration in the rate of
aircraft purchases to meet 2017 freighter demand, ATSG's 2016
capital spending is now projected to total $315 million, of which
$235 million is budgeted for fleet expansion.
In May, ATSG again increased its access to growth-related credit
by amending the credit facility agreement with its bank consortium.
The amendment increases by $100 million, to $425 million, the
revolver portion of the facility and provides greater flexibility
for the company to execute share repurchases. The interest rate
structure is unchanged. Outstanding debt against the revolver was
$240 million at June 30, 2016. Leverage against EBITDA was
approximately 1.8 times at quarter-end, and the variable interest
rate on the revolver balance was 2.2 percent.
ATSG spent $7.7 million to repurchase 0.55 million shares of its
common stock in the open market during the second quarter. That
does not include a negotiated $50 million direct purchase in July
of 3.8 million shares from a fund affiliate of Red Mountain Capital
Partners, ATSG's largest shareholder. Accordingly, those 3.8
million shares were removed from the company's diluted share count
beginning in July.
Segment Results
Cargo Aircraft Management (CAM)
CAM Second Quarter Six Months ($
in thousands)
2016 2015 2016
2015 Aircraft leasing and related revenues $ 48,373 $ 45,632
$ 100,099 $ 88,846 Lease incentive amortization (934 ) —
(934 ) — Total CAM Revenues $ 47,439 $ 45,632 $
99,165 $ 88,486 Pre-Tax Earnings $ 16,229
$ 14,441 $ 35,739 $
28,879
Significant Developments:
- CAM’s aircraft leasing and related
revenues increased 6 percent to $48.4 million for the second
quarter of 2016. Revenues from externally leased freighters and
aircraft engines increased 23 percent, driven by six more external
Boeing 767 dry leases than a year earlier.
- Pre-tax earnings for the quarter
increased 12 percent from the prior-year period. Depreciation
expenses on CAM's expanded fleet were higher than a year ago.
- CAM owned fifty-six Boeing cargo
aircraft in serviceable condition as of June 30, the same number as
in the first quarter but two more than last year. Eight CAM-owned
767-300s were awaiting, or in passenger-to-freighter modification.
In June, one 767-200 was being prepared for deployment in the third
quarter.
- The twenty 767s CAM will lease and
operate for Amazon include twelve Boeing 767-200s and eight
767-300s. Ten of the twelve 767-200s are now in operation for
Amazon; the two others will be delivered in the fourth quarter.
Three of the 767-300s will be leased to Amazon and placed into
service by year-end, and the remaining five by the end of the first
half of 2017. CAM began an eight-year lease of a 767-300 freighter
to Amerijet in July. Additionally, CAM expects to lease a 767-300
to DHL under an eight year term starting in September, bringing to
17 the total portfolio of 767 aircraft leased to DHL.
- More information about CAM's current
and projected in-service fleet is provided in a table at the end of
this release.
ACMI Services
ACMI Services Second Quarter Six
Months ($ in thousands)
2016 2015
2016 2015 Revenues Airline services $ 98,187 $
97,897 $ 199,840 $ 195,592 Reimbursables 15,958 5,995
29,261 13,768 Total ACMI Services Revenues $ 114,145
$ 103,892 $ 229,101 $ 209,360 Pre-Tax Earnings (Loss)
$ (7,130 ) $ 1,126 $ (17,486 ) $ (1,445
)
Significant Developments:
- Revenues increased ten percent to
$114.1 million. Airline services revenues were essentially flat at
$98.2 million as the airlines operated fewer aircraft on an ACMI
basis and more aircraft on a CMI basis. Block-hour utilization
increased 12 percent, primarily from expanded CMI operations.
- Lower pre-tax margins are attributable
to $3.0 million in higher expenses for scheduled heavy maintenance
events than in the second quarter a year ago, $2.4 million in
higher non-cash pension expense, and $2.6 million in increased
personnel costs to ramp up for expanding CMI operations for Amazon.
The 2015 period included a $2.0 million benefit from an insurance
settlement.
Other Activities
Other Activities Second Quarter Six
Months ($ in thousands)
2016 2015
2016 2015 Revenues $ 57,253 $ 32,179 $ 112,264
$ 67,785 Pre-Tax Earnings $ 4,130 $ 1,840
$ 7,998 $ 4,916
Significant Developments:
- Inter-company revenues increased $11.9
million during the second quarter of 2016 to $24.2 million, driven
by aircraft fuel and maintenance services for the company's
airlines to support the Amazon network.
- Results from all other activities in
the second quarter benefited from expanded aircraft maintenance for
Delta Air Lines and other customers, and increased package handling
services for Amazon and the United States Postal Service.
Impact of Warrants
The investment agreement ATSG completed with Amazon in March
granted warrants for them to acquire up to 19.9 percent of ATSG's
common shares over five years. ATSG's earnings in the second
quarter reflect the amortization of the lease incentive, which is
based on the value of the warrants, as a reduction to revenue. This
non-cash amortization is excluded from ATSG's calculation of
Adjusted Pre-tax Earnings, Adjusted EBITDA, Adjusted Earnings and
Adjusted Earnings per Share from Continuing Operations.
ATSG accounted for the majority of the initial tranche of 7.7
million warrants that vested in March under the equity method,
which led to a $35.8 million increase in equity at March 31,
reflecting the fair market value of then-issued warrants. However,
after shareholder approval of the Amazon investment agreement in
May 2016, warrant features were enabled that required the Company
to treat them as a mark-to-market financial instrument liability on
the balance sheet. Accordingly, changes in the market price of ATSG
common shares each quarter will affect the fair value of the
warrants and result in a change in the value of that liability.
This effect for the second quarter was a $5.8 million pre-tax gain,
which was recorded as a gain on financial instruments on the
Company's statement of earnings. Going forward, management expects
these items to continue to significantly impact GAAP net earnings
until all of the warrants are exercised or expire.
For purposes of calculating diluted earnings per share in
accordance with GAAP, the warrants were treated as an equity
instrument during the second quarter. Accordingly, the
mark-to-market gain on the stock warrants, net of tax, was
disregarded in calculating Diluted Earnings per Share from
Continuing Operations.
Outlook
This year's second quarter was the first full quarter of
operations under the five-year air transportation services
agreement with Amazon and the start of the second full year under
ATSG's four-year commercial arrangements with DHL. Those agreements
and others mean that forty-three 767s, or more than 80 percent of
ATSG's serviceable 767 freighter fleet, will be covered by
long-term dry lease agreements by the end of 2016.
"We are confident about the cash-generating power of ATSG's
businesses for many years to come," Hete said. "We continue to
estimate that Adjusted EBITDA from Continuing Operations will be
$218 million in 2016, after excluding our non-cash items as
described above. We are also confident about continued growth in
2017 and beyond, as we deliver on the opportunities that growing
e-commerce markets are creating."
Hete said that ATSG has the relationships and growth
opportunities in place to generate strong cash returns over several
years from its accelerated fleet investments and other initiatives.
"We will continue to invest and operate our businesses for maximum
performance. Having already repurchased 5.8 million of our shares
since May 2015, ATSG will continue to buy back shares at a moderate
pace, while having the flexibility to acquire blocks of shares on
an opportunistic basis. Allocating capital where it can provide the
best returns for shareholders remains our fundamental goal."
Conference Call
ATSG will host a conference call on Tuesday, August 9, 2016, at
10 a.m. Eastern Daylight Time to review its financial results for
the second quarter of 2016. Participants should dial (888) 771-4371
and international participants should dial (847) 585-4405 ten
minutes before the scheduled start of the call and ask for
conference pass code 43085407. The call will also be webcast
live (listen-only mode) via www.atsginc.com.
A replay of the conference call will be available by phone on
August 9, 2016, beginning at 2 p.m. and continuing through August
16, 2016, at (888) 843-7419 (international callers (630) 652-3042);
use pass code 43085407#. The webcast replay will remain
available via www.atsginc.com for 30
days.
About ATSG
ATSG is a leading provider of aircraft leasing and air cargo
transportation and related services to domestic and foreign air
carriers and other companies that outsource their air cargo lift
requirements. ATSG, through its leasing and airline subsidiaries,
is the world's largest owner and operator of converted Boeing 767
freighter aircraft. Through its principal subsidiaries, including
two airlines with separate and distinct U.S. FAA Part 121 Air
Carrier certificates, ATSG provides aircraft leasing, air cargo
lift, aircraft maintenance services and airport ground services.
ATSG's subsidiaries include ABX Air, Inc.; Airborne Global
Solutions, Inc.; Air Transport International, Inc.; Cargo Aircraft
Management, Inc.; and Airborne Maintenance and Engineering
Services, Inc. For more information, please see
www.atsginc.com.
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, our operating airlines' ability to maintain on-time
service and control costs; the number and timing of deployments and
redeployments of our aircraft to customers; the cost and timing
with respect to which we are able to purchase and modify aircraft
to a cargo configuration; the successful implementation and
operation of the new air network for Amazon; changes in market
demand for our assets and services; 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.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS
(In thousands, except per share data)
Three Months Ended Six Months Ended June
30, June 30, 2016 2015 2016
2015 REVENUES $ 176,549 $ 148,353 $ 353,934 $ 295,378
OPERATING EXPENSES Salaries, wages and benefits 53,647
42,036 106,066 85,715 Depreciation and amortization 33,132 31,400
65,666 60,393 Maintenance, materials and repairs 26,390 23,993
53,733 46,686 Fuel 17,168 12,275 33,799 23,053 Contracted ground
and aviation services 8,931 3,599 19,799 6,537 Travel 4,678 4,342
9,486 8,765 Rent 2,579 2,447 5,206 6,654 Landing and ramp 2,652
2,166 6,303 4,874 Insurance 1,087 546 2,236 1,804 Other operating
expenses 10,484 5,755 20,488 13,574
160,748 128,559 322,782 258,055
OPERATING INCOME 15,801 19,794 31,152 37,323 OTHER INCOME (EXPENSE)
Interest income 37 24 61 46 Interest expense (2,633 ) (2,839 )
(5,332 ) (5,904 ) Net gain on financial instruments 5,558
264 5,030 251 2,962 (2,551 ) (241 ) (5,607 )
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 18,763 17,243 30,911 31,716 INCOME TAX EXPENSE
(7,235 ) (6,673 ) (11,212 ) (12,251 )
EARNINGS FROM CONTINUING OPERATIONS 11,528 10,570 19,699 19,465
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX 47
214 94 428 NET EARNINGS $ 11,575 $
10,784 $ 19,793 $ 19,893 EARNINGS PER
SHARE - Basic Continuing operations $ 0.18 $ 0.16 $ 0.31 $ 0.30
Discontinued operations — 0.01 — 0.01
NET EARNINGS PER SHARE $ 0.18 $ 0.17 $ 0.31 $
0.31 EARNINGS PER SHARE - Diluted Continuing
operations $ 0.12 $ 0.16 $ 0.25 $ 0.30 Discontinued operations —
— — — NET EARNINGS PER SHARE $ 0.12
$ 0.16 $ 0.25 $ 0.30 WEIGHTED
AVERAGE SHARES Basic 63,267 64,541 63,452
64,498 Diluted 66,763 65,471 65,910
65,404
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30, December 31, 2016 2015
ASSETS CURRENT ASSETS: Cash and cash equivalents $ 25,242 $
17,697 Accounts receivable, net of allowance of $293 in 2016 and
$415 in 2015 51,510 57,986 Inventory 14,713 12,963 Prepaid supplies
and other 12,167 12,660 TOTAL CURRENT ASSETS 103,632
101,306 Property and equipment, net 934,219 875,401 Other
assets 75,240 26,285 Goodwill and intangibles 38,589 38,729
TOTAL ASSETS $ 1,151,680
$ 1,041,721 LIABILITIES AND
STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $
40,755 $ 44,417 Accrued salaries, wages and benefits 24,254 27,454
Accrued expenses 8,858 8,107 Current portion of debt obligations
41,637 33,740 Unearned revenue 12,081 12,963 TOTAL
CURRENT LIABILITIES 127,585 126,681 Long term debt 323,461 283,918
Post-retirement obligations 104,316 108,194 Other liabilities
61,777 61,913 Stock warrants 57,128 — Deferred income taxes 109,358
96,858 STOCKHOLDERS’ EQUITY: Preferred stock, 20,000,000
shares authorized, including 75,000 Series A Junior Participating
Preferred Stock — — Common stock, par value $0.01 per share;
85,000,000 shares authorized; 63,513,853 and 64,077,140 shares
issued and outstanding in 2016 and 2015, respectively 635 641
Additional paid-in capital 497,750 518,259 Accumulated deficit
(35,938 ) (55,731 ) Accumulated other comprehensive loss (94,392 )
(99,012 ) TOTAL STOCKHOLDERS’ EQUITY 368,055 364,157
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $
1,151,680 $ 1,041,721
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIES
PRE-TAX EARNINGS AND ADJUSTED PRE-TAX
EARNINGS SUMMARY
FROM CONTINUING OPERATIONS
NON-GAAP RECONCILIATION
(In thousands)
Three Months Ended Six Months Ended June
30, June 30, 2016 2015 2016
2015 Revenues CAM Aircraft leasing $
48,373 $ 45,632 $ 100,099 $ 88,486 Lease incentive amortization
(934 ) — (934 ) —
Total CAM 47,439 45,632
99,165 88,486
ACMI Services Airline services 98,187 97,897
199,840 195,592 Reimbursables 15,958 5,995 29,261
13,768
Total ACMI Services 114,145 103,892
229,101 209,360
Other Activities 57,253 32,179
112,264 67,785
Total Revenues 218,837 181,703
440,530 365,631 Eliminate internal revenues (42,288 ) (33,350 )
(86,596 ) (70,253 )
Customer Revenues $
176,549 $ 148,353 $
353,934 $ 295,378
Pre-tax Earnings from Continuing Operations CAM,
inclusive of interest expense 16,229 14,441 35,739 28,879
ACMI Services (7,130 ) 1,126 (17,486 ) (1,445 )
Other
Activities 4,130 1,840 7,998 4,916
Net, unallocated interest
expense (24 ) (428 ) (370 ) (885 )
Net gain on financial
instruments 5,558 264 5,030 251
Total Pre-tax Earnings from Continuing Operations $
18,763 $ 17,243 $ 30,911
$ 31,716 Adjustments to Pre-tax Earnings
from Continuing Operations Add non-service components of
retiree benefit costs, net 2,203 (260 ) 4,406 (520 ) Add debt
issuance charge from non-consolidating affiliate — — 1,229 — Add
lease incentive amortization 934 — 934 — Less net gain on financial
instruments (5,558 ) (264 ) (5,030 ) (251 )
Adjusted Pre-tax
Earnings from Continuing Operations $ 16,342
$ 16,719 $ 32,450
$ 30,945
Adjusted Pre-tax Earnings from Continuing Operations is defined
as Earnings from Continuing Operations Before Income Taxes less
financial instrument gains or losses, non-service components of
retiree benefit costs, lease incentive amortization and the
write-off of debt issuance costs from a non-consolidating
affiliate. Management uses Adjusted Pre-tax Earnings from
Continuing Operations to assess the performance of its operating
results among periods. Adjusted Pre-tax Earnings from Continuing
Operations is a non-GAAP financial measure and should not be
considered an alternative to Earnings from Continuing Operations
Before Income Taxes or any other performance measure derived in
accordance with GAAP.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIES
ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION
NON-GAAP RECONCILIATION
(In thousands)
Three Months Ended Six Months Ended June
30, June 30, 2016 2015 2016
2015 Earnings from Continuing Operations
Before Income Taxes $ 18,763 $ 17,243 $ 30,911 $ 31,716
Interest Income (37 ) (24 ) (61 ) (46 ) Interest Expense 2,633
2,839 5,332 5,904 Depreciation and Amortization 33,132
31,400 65,666 60,393
EBITDA from Continuing
Operations $ 54,491 $ 51,458 $ 101,848 $ 97,967 Add non-service
components of retiree benefit costs, net 2,203 (260 ) 4,406 (520 )
Add debt issuance costs from non-consolidating affiliate — — 1,229
— Add lease incentive amortization 934 — 934 — Less net gain on
financial instruments (5,558 ) (264 ) (5,030 ) (251 )
Adjusted EBITDA from Continuing Operations $
52,070 $ 50,934 $ 103,387 $ 97,196
EBITDA and Adjusted EBITDA from Continuing Operations are
non-GAAP financial measures and should not be considered as
alternatives to Earnings from Continuing Operations Before Income
Taxes or any other performance measure derived in accordance with
GAAP.
EBITDA from Continuing Operations is defined as Earnings from
Continuing Operations Before Income Taxes plus net interest
expense, depreciation, and amortization expense. Adjusted EBITDA
from Continuing Operations is defined as EBITDA from Continuing
Operations less financial instrument gains or losses, non-service
components of retiree benefit costs, amortization of lease
incentive costs recorded in revenue and the write-off of debt
issuance costs from a non-consolidating affiliate.
Management uses EBITDA from Continuing Operations as an
indicator of the cash-generating performance of the operations of
the Company. Management uses Adjusted EBITDA from Continuing
Operations to assess the performance of its operating results among
periods. EBITDA and Adjusted EBITDA from Continuing Operations
should not be considered in isolation or as a substitute for
analysis of the Company's results as reported under GAAP, or as an
alternative measure of liquidity.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIESADJUSTED EARNINGS PER SHARE FROM CONTINUING
OPERATIONSNON-GAAP RECONCILIATION(In thousands)
The Company's financial results as reported under GAAP, include
the effects of stock warrants granted to a customer as a lease
incentive. The value of the stock warrants was recorded as a
customer lease incentive and is amortized over the term of the
related aircraft leases. The stock warrants were revalued as of
June 30, 2016, with the gain in fair value recorded to earnings.
Diluted earnings per share from continuing operations, as
calculated under GAAP, excludes the after tax effects of the gain
from revaluing the stock warrants at the end of the period.
Adjusted Earnings from Continuing Operations and Adjusted Earnings
per Share from Continuing Operations, non-GAAP measures presented
below, reflect the Company's results after removing the lease
incentive amortization and the warrant revaluation gain during the
period.
Three Months Ended Six Months Ended
June 30, June 30, 2016 2015
2016 2015 Earnings from Continuing
Operations - basic (GAAP) $ 11,528 $ 10,570 $ 19,699 $ 19,465
Gain from stock warrants, net of tax (3,664 ) — (3,405 ) —
Earnings from Continuing Operations - diluted (GAAP) 7,864
10,570 16,294 19,465 Lease incentive amortization, net of tax 595
— 595 —
Adjusted earnings from Continuing
Operations (non-GAAP) $ 8,459 $ 10,570 $ 16,889
$ 19,465
Weighted Average Shares - diluted
(GAAP) 66,763 65,471 65,910 65,404
Earnings per Share
from Continuing Operations - diluted (GAAP) $ 0.12 $ 0.16 $
0.25 $ 0.30 Effect of lease incentive amortization, net of tax 0.01
— 0.01 —
Adjusted earnings per Share from
Continuing Operations (non-GAAP) $ 0.13 $ 0.16 $
0.26 $ 0.30
Adjusted Earnings per Share from Continuing Operations equals
Adjusted Earnings from Continuing Operations divided by Weighted
Average Shares diluted.
Adjusted Earnings from Continuing Operations and Adjusted
Earnings per Share from Continuing Operations are non-GAAP
financial measures and should not be considered as alternatives to
Earnings from Continuing Operations or Earnings per Share from
Continuing Operations or any other performance measure derived in
accordance with GAAP.
Adjusted Earnings from Continuing Operations is
defined as Earnings from Continuing Operations less the
amortization of the lease incentive, net of taxes and less the
warrant revaluation gain, net of taxes. The amortization of the
lease incentive is recorded as a non-cash reduction to revenues
recognized during a period. Management uses Adjusted Earnings from
Continuing Operations and Adjusted Earnings per Share from
Continuing Operations to compare the performance of its operating
results among periods. Adjusted Earnings and Adjusted Earnings per
Share from Continuing Operations should not be considered in
isolation or as a substitute for analysis of the company's results
as reported under GAAP.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIESCARGO AIRCRAFT FLEET
Serviceable Aircraft By Type December
31, June 30, December 31,
2015 2016 2016 Projected
Operating Operating Operating Total
Owned Lease Total Owned Lease Total Owned Lease B767-200 36 36 — 36
36 — 36 36 — B767-300 11 11 — 12 12 — 17 17 — B757-200 5 4 1 5 4 1
4 4 — B757 Combi 4 4 — 4 4 — 4 4 —
Total Aircraft 56
55 1 57 56 1 61 61
— Serviceable Owned Aircraft By Contracted
Deployment December 31, June 30, December
31, 2015 2016 2016 Projected Dry leased
without CMI 15 13 13 Dry leased with CMI 15 22 30 ACMI/Charter 25
20 18 Staging/Unassigned — 1 —
55 56 61
Owned Aircraft In or Awaiting Cargo
Conversion December 31, June 30, December
31, 2015 2016 2016 Projected B767-300 2 8
7
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160808006242/en/
ATSG Inc.Quint O. Turner, 937-382-5591Chief Financial
Officer
Air Transport Services (NASDAQ:ATSG)
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