CAM to deploy 20th B767 freighter for Amazon;
Northern Aviation Services commits to three B767 leases
Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading
provider of medium wide-body aircraft leasing, air cargo
transportation and related services, today reported consolidated
financial results for the quarter ended June 30, 2017.
Compared with amounts for the second quarter of 2016 (except as
noted):
- Revenues increased $77 million,
or 43 percent, to $253.2 million. Excluding revenues from
reimbursable airline expenses, revenues increased $60 million, or
37 percent. ATSG's airline services operations, and maintenance and
logistics businesses, recorded double-digit revenue increases.
- GAAP Earnings from Continuing
Operations were a loss of $53.9 million or $0.91 per share
diluted and included charges totaling $67.8 million for the
warrants granted last year in connection with operating and lease
agreements with Amazon Fulfillment Services, Inc. The value of the
warrants increased sharply during the quarter in conjunction with a
36 percent increase in the traded price of ATSG stock since March
31, 2017, resulting in a significant mark-to-market loss for the
quarter. Earnings from Continuing Operations were a positive $11.5
million, or $0.12 per share diluted a year earlier.
- Adjusted Earnings from Continuing
Operations, which exclude non-cash warrant-related items, were
$13.9 million, up 64 percent. Adjusted Earnings Per Share from
Continuing Operations were $0.21, up eight cents per share. These
Adjusted Earnings and other adjusted amounts referenced below are
non-GAAP financial measures, and are reconciled to comparable GAAP
results in tables in this release. Adjustments include both
dollar-amount and share count items.
- GAAP Pre-tax Earnings from
Continuing Operations were a negative $48.4 million, versus a
positive $18.8 million a year ago. Adjusted Pre-tax Earnings, which
exclude warrant effects along with additional non-cash items,
increased 39 percent to $22.7 million.
- Adjusted EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization, as defined and
adjusted in a table later in this release) increased 23 percent to
$64.2 million.
- Capital expenditures in the
first half of 2017 were $144.3 million, versus $125.1 million in
the first half of 2016.
- Share repurchases were $11.2
million for the first half. This includes 380,637 shares ATSG
repurchased in June as part of an underwritten secondary offering
by an affiliate of Red Mountain Capital Partners.
Joe Hete, President and Chief Executive Officer of ATSG, said,
“In addition to the outstanding financial results we are reporting
today, I’m pleased to say that we are scheduled to deliver the
twentieth leased Boeing 767 freighter to Amazon later this week, 17
months after we formalized our relationship in March 2016. Our
total leased-aircraft portfolio has grown by eight 767s as of June
30, compared to the same date a year ago. Excluding the two
767-300s required to complete Amazon's twenty-aircraft order,
our current purchase and conversion commitments
will yield twelve additional 767-300s extending through
the first half of next year. We currently have signed leases
or are finalizing others for nine of the twelve
aircraft. The remaining three aircraft are under
discussion with multiple parties."
ATSG's results for the first half of 2017 included a revenue
increase of 39 percent to $491.1 million, and GAAP Earnings from
Continuing Operations of negative $44.1 million, or a $0.75 loss
per share. First-half Adjusted Earnings From Continuing Operations
were $25.1 million, up 48 percent from a year ago. On a per-share
adjusted basis, ATSG earned $0.38 per share, up from $0.26 in the
first half of 2016.
Segment Results
Cargo Aircraft Management (CAM)
CAM Second Quarter Six Months ($
in thousands)
2017 2016 2017
2016 Aircraft leasing and related revenues $ 52,813 $ 48,373
$ 103,382 $ 100,099 Lease incentive amortization (3,283 ) (934 )
(5,874 ) (934 ) Total CAM revenues $ 49,530 $ 47,439
$ 97,508 $ 99,165 Pre-Tax Earnings $ 12,795
$ 16,229 $ 26,125 $
35,739
Significant Developments:
- CAM's revenues increased $2.1 million
to $49.5 million from the second quarter last year, and included
$3.3 million of non-cash amortization associated with the
warrant-related Amazon lease incentive. Excluding this lease
incentive, CAM’s revenues increased nine percent. CAM was leasing
forty-five 767s to external customers as of June 30, 2017, ten more
than a year earlier.
- Pre-tax earnings were $12.8 million for
the quarter, down $3.4 million. Principal effects were the
warrant-related lease incentive, increased depreciation, and higher
pre-deployment expenses.
- At June 30, 2017, CAM owned 64 Boeing
cargo aircraft, all of which were in service, including fifty-six
767s. Eight other aircraft were awaiting or undergoing modification
from passenger to freighter configuration at the end of the
quarter, including six 767s and two 737s. In addition to the six
767s in mod, CAM expects to close on purchases of seven additional
767s in the last half of 2017. CAM currently has no 767 purchase
commitments in 2018.
- In July, CAM announced long-term dry
lease commitments for three 767-300 freighters with Northern
Aviation Services, for deployments beginning with the first in
October and two during the first quarter of 2018. Some may
replace 767 freighters that ATSG's airlines operate for Northern on
an ACMI basis.
- Production delays at CAM's freighter
modification contractor this year will defer two 767s expected to
be deployed in the second half of 2017 into 2018.
ACMI Services
ACMI Services Second Quarter Six
Months ($ in thousands)
2017 2016
2017 2016 Revenues Airline services $ 111,851
$ 98,187 $ 219,917 $ 199,840 Reimbursables 32,648 15,958
69,531 29,261 Total ACMI Services Revenues
144,499 114,145 289,448 229,101 Pre-Tax Earnings (Loss)
87 (7,130 ) (3,618 ) (17,486 )
Significant Developments:
- Airline services revenues increased 14
percent to $111.9 million and the segment recorded a pre-tax profit
of $0.1 million in the second quarter. The improvement reflects
continued growth of CMI operations for Amazon, and reduced pension
expense compared with the second quarter last year.
- Costs for pilot training and premium
pay for pilots who accept additional flying assignments declined
from the first quarter, and heavy maintenance expense was lower
than projected for the second quarter.
- Second-quarter block hours increased 29
percent from the year-earlier period. ACMI Services revenues are
dependent in part on hours flown as determined by customer network
designs, which can change as additional aircraft come on line and
networks evolve. Average per-aircraft utilization rates began to
decline in late May this year as CMI customers reconfigured their
air networks.
Other Activities
Other Activities Second Quarter Six
Months ($ in thousands)
2017 2016
2017 2016 Revenues $ 116,508 $ 57,253 $
205,714 $ 112,264 Pre-Tax Earnings 6,539 4,130
11,322 7,998
Significant Developments:
- Total revenues from all other
activities in the second quarter more than doubled from a year ago
to $116.5 million. External customer revenues increased $43.3
million, to $76.3 million. External maintenance revenues and those
from parcel handling and logistical support services increased
substantially during the quarter. PEMCO, acquired in December 2016,
accounted for $21.1 million of external revenues during
quarter.
- Second-quarter pre-tax earnings of $6.5
million increased 58 percent, reflecting improved results from
heavy maintenance and logistics services.
- As announced this morning, ATSG
completed a joint-venture agreement with Precision Aircraft
Solutions, LLC, to develop a passenger-to-freighter conversion
program for Airbus A321-200 aircraft. The venture anticipates
approval of a supplemental type certificate in 2019.
Outlook
ATSG expects that its Adjusted EBITDA from Continuing Operations
for 2017 will be approximately $260 million, including a projected
28 percent increase in the second half compared with the prior-year
period.
Principal factors affecting our 2017 second-half guidance
include:
- Seven additional freighters will be dry
leased in the second half, including five 767s and two 737s.
Production delays to complete aircraft cargo modifications have
deferred delivery of two 767s from the second half to 2018,
reducing Adjusted EBITDA from continuing operations by $2.0 to $2.5
million in the second half.
- A new contract for engine overhauls on
General Electric-powered 767-300 aircraft with Delta TechOps will
result in $3.0 to $4.0 million in additional maintenance expense
for the second half of 2017, with a corresponding decrease in
Adjusted EBITDA. The payments to Delta are now recorded as
maintenance expense as engine cycles occur, and will yield cash
flow savings compared with the prior arrangement. Previously,
overhaul events for these engines were capitalized and
depreciated.
- Recent changes by CMI customers to
their air networks, which have reduced average utilization and
associated variable revenue compared with previous run-rates.
ATSG projects 2017 capital expenditures of approximately $335
million, mostly for purchase and freighter modification of
passenger aircraft. The reduction in guidance for capex of $20
million compared to the $355 million projection provided in May is
due to production delays in the passenger-to-freighter conversion
lines for Boeing 767 aircraft, and lower maintenance capex
associated with the new Delta engine contract.
"Following a great first half, our outlook for the last six
months of 2017 remains positive as we complete the Amazon
deployments and lease more freighters to other customers," Hete
said. "Our operational flexibility and broad service offerings keep
us well positioned to support customers' long-term and peak
shipping season requirements."
Conference Call
ATSG will host a conference call on August 8, 2017, at 10 a.m.
Eastern time to review its financial results for the second quarter
of 2017. 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
45367629. 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 8, 2017, beginning at 2 p.m. and continuing through August
15, 2017, at (888) 843-7419 (international callers (630) 652-3042);
use pass code 45367629#. 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. including its division, PEMCO World Air 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, changes in market demand for our assets and services;
our operating airlines' ability to maintain on-time service and
control costs; the cost and timing with respect to which we are
able to purchase and modify aircraft to a cargo configuration; the
number, timing and scheduled routes of our aircraft deployments to
customers; 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
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF EARNINGS(In
thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, 2017 2016
2017 2016 REVENUES $ 253,211 $ 176,549 $
491,128 $ 353,934 OPERATING EXPENSES Salaries, wages and
benefits 66,010 53,647 138,673 106,066 Depreciation and
amortization 37,781 33,132 74,223 65,666 Maintenance, materials and
repairs 37,588 30,345 67,870 60,772 Fuel 32,258 17,168 67,099
33,799 Contracted ground and aviation services 32,151 8,931 52,838
19,799 Travel 6,820 4,678 14,186 9,486 Landing and ramp 4,357 2,652
9,656 6,303 Rent 3,753 2,579 7,039 5,206 Insurance 955 1,087 2,217
2,236 Other operating expenses 8,590 6,529 16,626
13,449 230,263 160,748 450,427 322,782
OPERATING INCOME 22,948 15,801 40,701 31,152 OTHER
INCOME (EXPENSE) Interest income 16 37 48 61 Interest expense
(3,759 ) (2,633 ) (7,307 ) (5,332 ) Net gain (loss) on financial
instruments (67,649 ) 5,558 (65,780 ) 5,030 (71,392 )
2,962 (73,039 ) (241 ) EARNINGS (LOSS)
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (48,444 ) 18,763
(32,338 ) 30,911 INCOME TAX EXPENSE (5,474 ) (7,235 ) (11,784 )
(11,212 ) EARNINGS (LOSS) FROM
CONTINUING OPERATIONS (53,918 ) 11,528 (44,122 ) 19,699
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX 192 47
384 94 NET EARNINGS (LOSS) $ (53,726 ) $
11,575 $ (43,738 ) $ 19,793 EARNINGS (LOSS)
PER SHARE - CONTINUING OPERATIONS Basic $ (0.91 ) $ 0.18 $ (0.75 )
$ 0.31 Diluted* $ (0.91 ) $ 0.12 $ (0.75 ) $ 0.25 WEIGHTED
AVERAGE SHARES - CONTINUING OPERATIONS Basic 59,035 63,267
59,084 63,452 Diluted 59,035 66,763
59,084 65,910
Revenues and operating expenses include the activities of PEMCO
World Air Services, Inc., a wholly owned subsidiary, for periods
since its acquisition by ATSG on December 30, 2016. Certain
historical expenses have been reclassified to conform to the
presentation above.
* For additional information about the calculation of diluted
earnings per share, see accompanying schedule.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands,
except share data)
June 30, December 31, 2017
2016 ASSETS CURRENT ASSETS: Cash and cash equivalents
$ 63,020 $ 16,358 Accounts receivable, net of allowance of $1,380
in 2017 and $1,264 in 2016 75,303 77,247 Inventory 16,412 19,925
Prepaid supplies and other 23,918 19,123 TOTAL
CURRENT ASSETS 178,653 132,653 Property and equipment, net
1,074,239 1,000,992 Other assets 86,526 80,099 Goodwill and
acquired intangibles 45,455 45,586
TOTAL
ASSETS $ 1,384,873 $
1,259,330 LIABILITIES AND STOCKHOLDERS’
EQUITY CURRENT LIABILITIES: Accounts payable $ 77,945 $ 60,704
Accrued salaries, wages and benefits 30,963 37,044 Accrued expenses
9,902 10,324 Current portion of debt obligations 20,133 29,306
Unearned revenue 22,480 18,407 TOTAL CURRENT
LIABILITIES 161,423 155,785 Long term debt 508,152 429,415
Post-retirement obligations 71,866 77,713 Other liabilities 50,143
52,542 Stock warrants 177,850 89,441 Deferred income taxes 135,506
122,532 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; 59,123,112 and 59,461,291 shares
issued and outstanding in 2017 and 2016, respectively 591 595
Additional paid-in capital 432,510 443,416 Accumulated deficit
(75,981 ) (32,243 ) Accumulated other comprehensive loss (77,187 )
(79,866 ) TOTAL STOCKHOLDERS’ EQUITY 279,933 331,902
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $
1,384,873 $ 1,259,330
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIESPRE-TAX EARNINGS AND ADJUSTED PRE-TAX EARNINGS
SUMMARYFROM CONTINUING OPERATIONSNON-GAAP RECONCILIATION(In
thousands)
Three Months Ended Six Months Ended
June 30, June 30, 2017 2016
2017 2016 Revenues CAM Aircraft
leasing and related revenues $ 52,813 $ 48,373 $ 103,382 $ 100,099
Lease incentive amortization (3,283 ) (934 ) (5,874 ) (934 )
Total CAM 49,530 47,439 97,508 99,165
ACMI Services
Airline services 111,851 98,187 219,917 199,840 Reimbursables
32,648 15,958 69,531 29,261
Total
ACMI Services 144,499 114,145 289,448 229,101
Other
Activities 116,508 57,253 205,714 112,264
Total Revenues 310,537 218,837 592,670 440,530
Eliminate internal revenues (57,326 ) (42,288 ) (101,542 ) (86,596
)
Customer Revenues $ 253,211 $
176,549 $ 491,128 $
353,934 Pre-tax Earnings (Loss) from
Continuing Operations CAM, inclusive of interest expense
12,795 16,229 26,125 35,739
ACMI Services 87 (7,130 ) (3,618
) (17,486 )
Other Activities 6,539 4,130 11,322 7,998
Net, unallocated interest expense (216 ) (24 ) (387 ) (370 )
Net gain (loss) on financial instruments (67,649 ) 5,558
(65,780 ) 5,030
Total Earnings (Loss) from
Continuing Operations before Income Taxes $
(48,444 ) $ 18,763 $
(32,338 ) $ 30,911
Adjustments to Pre-tax Earnings Add non-service components
of retiree benefit costs, net 177 2,203 354 4,406 Add debt issuance
charge from non-consolidating affiliate — — — 1,229 Add lease
incentive amortization 3,283 934 5,874 934 Add (subtract) net loss
(gain) on financial instruments 67,649 (5,558 ) 65,780
(5,030 )
Adjusted Pre-tax Earnings $
22,665 $ 16,342 $
39,670 $ 32,450
Non-GAAP financial measures: This report contains
non-GAAP financial measures that management uses to evaluate the
Company’s historical results. Management believes that these
non-GAAP measures assist in highlighting operational trends,
facilitate period-over-period comparisons and provide additional
clarity about events and trends impacting core operating
performance. Disclosing these non-GAAP measures provides insight to
investors about additional metrics that the Company’s management
uses to evaluate past performance and prospects for future
performance
Adjusted Pre-tax Earnings excludes certain items included in
GAAP based pre-tax earnings (loss) from continuing operations
because they are distinctly different in their predictability among
periods or not closely related to our operations. Presenting this
measure provides investors with a comparative metric of fundamental
operations while highlighting changes to certain items among
periods. Adjusted Pre-tax Earnings is defined as Earnings (Loss)
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.
Adjusted Pre-tax Earnings 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
SUBSIDIARIESADJUSTED EARNINGS FROM CONTINUING OPERATIONSBEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATIONNON-GAAP
RECONCILIATION(In thousands)
Three Months Ended Six Months Ended
June 30, June 30, 2017
2016 2017 2016 Earnings
(Loss) from Continuing Operations Before Income Taxes $ (48,444
) $ 18,763 $ (32,338 ) $ 30,911 Interest Income (16 ) (37 ) (48 )
(61 ) Interest Expense 3,759 2,633 7,307 5,332 Depreciation and
Amortization 37,781 33,132 74,223 65,666
EBITDA from Continuing Operations $ (6,920 ) $ 54,491
$ 49,144 $ 101,848 Add non-service components of retiree benefit
costs, net 177 2,203 354 4,406 Add debt issuance charge from
non-consolidating affiliate — — — 1,229 Add lease incentive
amortization 3,283 934 5,874 934 Add (subtract) net loss (gain) on
financial instruments 67,649 (5,558 ) 65,780 (5,030 )
Adjusted EBITDA $ 64,189 $ 52,070
$ 121,152 $ 103,387
Management uses Adjusted EBITDA to assess the performance of its
operating results among periods. It is a metric that facilitates
the comparison of financial results of underlying operations.
Additionally, these non-GAAP adjustments are similar to the
adjustments used by lenders in the Company’s Senior Credit
Agreement to assess financial performance and determine cost of
borrowed funds. The adjustments also exclude the non-service cost
components of retiree benefit plans because they are not closely
related to on-going operating activities. Management presents
EBITDA from Continuing Operations, a commonly referenced metric, as
a subtotal toward computing Adjusted EBITDA.
EBITDA from Continuing Operations is defined as Earnings (Loss)
from Continuing Operations Before Income Taxes plus net interest
expense, depreciation, and amortization expense. Adjusted EBITDA 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.
Adjusted EBITDA and 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. Adjusted EBITDA and 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 is recorded as a
customer lease incentive asset and is amortized against revenue
over the term of the related aircraft leases. The stock warrant
obligation is reflected as a liability and revalued to fair value
at the end of each reporting period. The stock warrant liability
was revalued as of June 30, 2017, with the change in fair value
recorded to earnings. 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 effects during the periods presented.
Three Months Ended Six Months Ended
June 30, June 30, 2017 2016
2017 2016 Earnings (loss) from
Continuing Operations - basic (GAAP) $ (53,918 ) $ 11,528 $
(44,122 ) $ 19,699 Gain from warrant revaluation, net of tax —
(3,664 ) — (3,405 )
Earnings (loss) from
Continuing Operations - diluted (GAAP) (53,918 ) 7,864 (44,122
) 16,294 Loss from warrant revaluation, net of tax 63,396 — 61,857
— Lease incentive amortization, net of tax 4,378 595
7,340 595
Adjusted Earnings from Continuing
Operations (non-GAAP) $ 13,856 $ 8,459 $ 25,075
$ 16,889
Weighted Average Shares - diluted
(GAAP) 59,035 66,763 59,084 65,910 Additional weighted average
shares 8,474 — 7,152 —
Adjusted
Shares (non-GAAP) 67,509 66,763 66,236 65,910
Earnings (loss) per Share from Continuing Operations - diluted
(GAAP) $ (0.91 ) $ 0.12 $ (0.75 ) $ 0.25 Effect of warrant
revaluation, net of tax 1.05 — 1.01 — Effect of lease incentive
amortization, net of tax 0.07 0.01 0.12 0.01
Adjusted Earnings per Share from Continuing Operations
(non-GAAP) $ 0.21 $ 0.13 $ 0.38 $ 0.26
Management presents Adjusted Earnings per Share from Continuing
Operations to remove the effects in the income statement of a large
grant of stock warrants, including their related adjustment to fair
value which is recorded at the end of each quarter. Under U.S.
GAAP, these warrants are reflected as a liability and unrealized
warrant gains are typically removed from diluted earnings per share
(“EPS”) calculations while unrealized warrant losses are not
removed because they are dilutive to EPS. As a result, the
Company’s EPS, as calculated under U.S. GAAP, can vary
significantly among periods due to unrealized mark-to-market losses
which are not directly related to the Company's operating
performance. Accordingly, the non-GAAP calculation of EPS provides
additional information to investors regarding the earnings per
share without the volatility otherwise caused by the stock
warrants.
Adjusted Earnings per Share from Continuing Operations equals
Adjusted Earnings from Continuing Operations divided by Adjusted
Shares. Adjusted Shares include warrants which correspond to the
revaluation adjustment that were not already included in weighted
average shares used for GAAP. Adjusted Earnings from Continuing
Operations is defined as Earnings from Continuing Operations
excluding the amortization of the lease incentive asset, net of
taxes, and excluding the warrant revaluation loss or gain, net of
taxes. 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 from Continuing Operations, Adjusted Shares
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, Weighted
Average Shares - diluted or Earnings per Share from Continuing
Operations or any other performance measure derived in accordance
with GAAP. 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
Aircraft Types December 31,
June 30, December 31, 2016 2017
2017 Projected Operating
Operating Operating Total Owned Lease Total Owned
Lease Total Owned Lease B767-200 36 36 — 36 36 — 36 36 — B767-300
16 16 — 20 20 — 25 25 — B757-200 4 4 — 4 4 — 4 4 — B757 Combi 4 4 —
4 4 — 4 4 — B737-400 — — — — — — 2 2 —
Total Aircraft
60 60 — 64 64 — 71
71 — Owned Aircraft In Serviceable
Condition December 31, June 30, December
31, 2016 2017 2017 Projected Dry
leased without CMI 13 15 20 Dry leased with CMI 28 30 32
ACMI/Charter 18 19 19 Staging/Unassigned 1 — —
60 64
71 Owned Aircraft In or Awaiting Cargo
Conversion December 31, June 30, December
31, 2016 2017 2017 Projected B767-300 7 6
8 B737-400 — 2 —
Total Aircraft 7 8 8
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170807005989/en/
ATSG Inc.Quint O. Turner, 937-382-5591Chief Financial
Officer
Air Transport Services (NASDAQ:ATSG)
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