0000894081-14-000160.txt : 20141105 0000894081-14-000160.hdr.sgml : 20141105 20141105164727 ACCESSION NUMBER: 0000894081-14-000160 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20141105 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141105 DATE AS OF CHANGE: 20141105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Air Transport Services Group, Inc. CENTRAL INDEX KEY: 0000894081 STANDARD INDUSTRIAL CLASSIFICATION: AIR COURIER SERVICES [4513] IRS NUMBER: 261631624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50368 FILM NUMBER: 141197521 BUSINESS ADDRESS: STREET 1: 145 HUNTER DR CITY: WILMINGTON STATE: OH ZIP: 45177 BUSINESS PHONE: 937-382-5591 MAIL ADDRESS: STREET 1: 145 HUNTER DR CITY: WILMINGTON STATE: OH ZIP: 45177 FORMER COMPANY: FORMER CONFORMED NAME: ABX Holdings, Inc. DATE OF NAME CHANGE: 20080102 FORMER COMPANY: FORMER CONFORMED NAME: ABX AIR INC DATE OF NAME CHANGE: 19950728 8-K 1 a2014q3form8kcover-earning.htm 8-K 2014 Q3 Form 8K Cover - Earnings Release


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________
Form 8-K
 _____________________
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2014
   _____________________
(Exact name of registrant as specified in its charter)
  _____________________
 
 
 
 
 
 
DE
 
000-50368
 
26-1631624
(State or other jurisdiction
of incorporation)
 
Commission
File Number:
 
(IRS Employer
Identification No.)
145 Hunter Drive, Wilmington, OH 45177
(Address of principal executive offices, including zip code)
(937) 382-5591
(Registrant's telephone number, including area code)
 _____________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 







Item 2.02 Results of Operations and Financial Condition.
On November 5, 2014, Air Transport Services Group, Inc. issued a press release relating to its results for the third quarter ended September 30, 2014. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 2.02 is "furnished" and not "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, or otherwise subject to the liabilities of that section.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No.
Description
99.1
Press release issued by Air Transport Services Group, Inc. on November 5, 2014, relating to its results for the third quarter ended September 30, 2014.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AIR TRANSPORT SERVICES GROUP, INC.
 
 
By:
/S/  W. JOSEPH PAYNE
 
W. Joseph Payne
 
Sr. Vice President
 
Corporate General Counsel & Secretary
 
 
Date:
November 5, 2014



EX-99.1 2 a2014q3earningsreleaseaip.htm EXHIBIT 2014 Q3 Earnings Release AIP


ATSG Reports Strong Third Quarter Results
ATSG, DHL Agree on Framework for New Multi-Year Commercial Agreements
WILMINGTON, OH, November 5, 2014 - 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 September 30, 2014.
For the third quarter of 2014:
Pre-tax earnings from continuing operations increased 25 percent to $15.6 million driven by a $7.0 million improvement in airline profitability compared with a year ago.
Net earnings from continuing operations increased 23 percent to $9.6 million, or 15 cents per share, from $7.8 million, or 12 cents per share in the third quarter of 2013. Operating loss carryforwards for U.S. federal income tax purposes offset much of the company’s federal tax liabilities. ATSG does not expect to pay significant federal income taxes until 2016 or later.
Revenues were $138.4 million, 2 percent lower than a year ago. Excluding revenues from reimbursable expenses, revenues decreased $4.8 million, or 4 percent. Loss of revenues from Mideast operations offset additional revenues from aircraft dry leases.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization, also adjusted for the effect of derivative transactions) increased by 11 percent to $44.6 million. Adjusted EBITDA is a non-GAAP financial measure, defined and reconciled to comparable GAAP results in separate tables at the end of this release.
ATSG also said it has reached an agreement in principle with DHL, setting a framework for multi-year commercial agreements covering 767 freighter leases and operating services that ATSG’s businesses currently provide in support of DHL’s U.S. network.
The framework anticipates that DHL will extend the leases for 13 Boeing 767 freighters, and execute new leases for at least two more freighters that currently support DHL under short-term arrangements. The new leases will commence next year on or before March 31, 2015, and all of the freighter leases with DHL will run through March 2019. Also, ATSG’s businesses will operate and maintain those aircraft through March 2019 under an amendment to the current CMI (Crew, Maintenance and Insurance) Agreement that would otherwise expire in March 2015. Management expects to execute definitive agreements before the end of 2014.
Joe Hete, President and Chief Executive Officer of ATSG, said, “After many months of discussions, I’m pleased to say that both we and DHL have completed the outline for a relationship that preserves our role as DHL’s principal source of airlift in North America for another four years. Overall, our work for DHL will continue much as it does today, with 767 freighters leased from our Cargo Aircraft Management subsidiary, operated by ABX Air crews and maintained by AMES technicians, supporting the majority of the air freight that moves through DHL’s North American network each day. We look forward to providing more details on this important extension of our eleven-year relationship with DHL when final agreements are completed.”
Hete also said that ATSG’s third-quarter results show early returns from deploying more midsize cargo aircraft with dry-lease customers, and continued progress in restoring the profitability of ATSG’s airlines.





“We have entered the fourth quarter with positive momentum, both from deployments under dry lease agreements we completed in May, and contracts for expanded ad-hoc operations during the holiday season in the fourth quarter. We expect all of our available freighter aircraft to be deployed with key customers during the holiday shipping peak. Looking out into 2015, we find our customers and prospects are now more confident about addressing their needs for additional freighter capacity next year, both for multi-year dry leases as well as shorter-term ACMI arrangements."
For the first nine months of 2014, ATSG earned $25.4 million, or $0.39 per share diluted from continuing operations, up 9 percent from the first nine months of 2013. Revenues increased 2 percent to $431.7 million. Adjusted EBITDA for the first nine months of 2014 was $128.7 million, up 14 percent from the same period in 2013.
Capital spending for the first nine months of 2014 was $90.9 million, including $57.8 million to acquire and modify aircraft. ATSG purchased two 767-300 freighters in September that it had previously leased from a third party. Capital spending for the full year of 2014 is projected to be approximately $95 million.
Segment Results
CAM (Aircraft Leasing)
CAM
 
Third Quarter
 
($ in thousands)
 
2014
 
2013
 
Revenues
 
$
40,226

 
$
40,089

 
Pre-Tax Earnings
 
13,574

 
15,893

 
Significant Developments:
CAM’s third-quarter revenues from external customers increased $2.9 million versus a year ago. Pre-tax earnings reflect the benefit of those additional revenues, offset by a $3.0 million increase in depreciation from additional and newer aircraft placed in service since the end of the third quarter last year and by costs to prepare aircraft for redeployment to lessees.
At September 30, 2014, CAM owned 53 Boeing cargo aircraft in serviceable condition, including two 767-300 freighters purchased at the end of the quarter. One CAM-owned 757 combi and one other 767-300 freighter were added in the first quarter. A table reflecting cargo aircraft in service is included at the end of this release.
CAM delivered three 767 freighters to dry-lease customers Amerijet and Cargojet during the third quarter under agreements signed with each company in May. The three are in addition to one 767 freighter delivered to Cargojet in June. One other 767 freighter now operating in Europe is expected to be converted to a dry lease in 2015.
ACMI Services
ACMI Services
 
Third Quarter
 
($ in thousands)
 
2014
 
2013
 
Revenues
 
 
 
 
 
  Airline services
 
$
84,172

 
$
93,116

 
  Reimbursables
 
18,681

 
16,313

 
Total ACMI Services Revenues
 
102,853

 
109,429

 
 
 
 
 
 
 
Pre-Tax Earnings (Loss)
 
(126
)
 
(7,113
)
 






Significant Developments:
2013 revenues from airline services included revenues for operating three 767 aircraft and related crews in DHL’s network in the Mideast. That assignment ended in February 2014. Third-quarter revenues from combi operations for the U.S. Military exceeded year-ago levels.
Pre-tax profitability improved sharply because third-quarter airline operating expenses, excluding reimbursable expense, declined $15.9 million. Principal factors were reductions in employee wages and benefit costs due to workforce reductions and lower pension expense, lower employee travel costs and aircraft landing fees, and lower costs for newer 757 combi aircraft, plus lower unreimbursed maintenance expense.
Since May, DHL has ended short-term lease agreements with ABX Air for three CAM-owned 767s that ABX Air had been operating in DHL’s U.S. market. Two other DHL-owned 767s that ABX Air has leased and operated for DHL in the U.S. will be returned to DHL near the end of the year. An additional two DHL-owned 767s will be returned during the first quarter of 2015.
Third-quarter ACMI block hours were flat with a year ago, excluding those from Mideast operations in the prior-year period.
Two CAM freighters leased to ATSG’s airlines are underutilized, compared with four a year ago and five at the end of the first quarter this year. All available aircraft are expected to be in operation for customers during the fourth-quarter peak holiday season, which is expected to yield a pre-tax profit for the segment for the 2014 fourth quarter and second half.

Other Activities
Other Activities
 
Third Quarter
 
($ in thousands)
 
2014
 
2013
 
Revenues
 
$
42,055

 
$
30,037

 
Pre-Tax Earnings
 
2,010

 
4,400

 
Significant Developments:
Revenues from external customers were $15.4 million, up 9 percent. Pre-tax earnings declined primarily because of higher personnel costs, including more ramp-up costs for the expanded Wilmington hangar facilities and higher post-retirement benefits.
Outlook
ATSG now projects that its Adjusted EBITDA from Continuing Operations for 2014 will be approximately $175 million. Final results for the year will reflect ATSG’s ability to deploy and operate all of its available aircraft efficiently during peak season, and to support customers with additional logistical and technical services.
President and CEO Joe Hete also noted that the agreement in principle with DHL is non-binding, and is subject to the negotiation and execution of definitive agreements. In current form, the framework will slightly reduce monthly lease rates per aircraft to ATSG while expanding the number of 767 freighters that DHL leases from CAM and extending all lease terms through March 2019.
Hete added that the proposed changes to the DHL leases and CMI agreement beginning in April 2015 would negatively impact Adjusted EBITDA from Continuing Operations by $5 million to $10 million on an annualized basis. ATSG's preliminary projections for 2015, however, indicate that its Adjusted EBITDA from Continuing Operations will increase versus 2014.





Hete said, "This new framework with DHL would provide us with a four-year customer commitment for more than a third of our 767 fleet, while providing us with opportunities to improve our ACMI Services margins through greater efficiency and even better performance. It also would preserve and extend our position as DHL’s principal air network provider in the United States, and could open more opportunities to support DHL’s networks elsewhere in the world.”
Conference Call
ATSG will host a conference call on Nov. 6, 2014, at 10:00 a.m. Eastern time to review its financial results for the third quarter of 2014. Participants should dial (888) 895-5479 and international participants should dial (847) 619-6250 ten minutes before the scheduled start of the call and ask for conference pass code 38393602. 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 Nov. 6, 2014, beginning at 2:00 p.m. and continuing through Nov. 13, 2014, at (888) 843-7419 (international callers (630) 652-3042); use pass code 38393602#. 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, the company’s execution of definitive agreements on substantially the terms outlined in the non-binding agreement in principle with DHL, changes in market demand for our assets and services, the number and timing of deployments of our aircraft, our operating airlines' ability to maintain on-time service and control costs, 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.
Contact:
Quint O. Turner, ATSG Inc. Chief Financial Officer
937-382-5591







AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
REVENUES
$
138,443

 
$
140,877

 
$
431,654

 
$
423,060

 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
Salaries, wages and benefits
39,096

 
41,498

 
123,056

 
126,771

Maintenance, materials and repairs
17,082

 
24,644

 
65,129

 
71,783

Depreciation and amortization
26,307

 
23,392

 
78,428

 
66,077

Fuel
14,059

 
11,356

 
40,333

 
38,157

Rent
6,689

 
6,958

 
20,923

 
20,528

Travel
4,189

 
4,409

 
13,181

 
13,908

Landing and ramp
2,450

 
2,227

 
7,764

 
8,264

Insurance
1,109

 
1,559

 
3,887

 
4,466

Other operating expenses
9,175

 
8,224

 
28,713

 
25,914

 
120,156

 
124,267

 
381,414

 
375,868

 
 
 
 
 
 
 
 
OPERATING INCOME
18,287

 
16,610

 
50,240

 
47,192

OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
Interest income
23

 
17

 
66

 
56

Interest expense
(3,309
)
 
(3,814
)
 
(10,613
)
 
(10,500
)
Net gain on derivative instruments
639

 
(317
)
 
969

 
425

 
(2,647
)
 
(4,114
)
 
(9,578
)
 
(10,019
)
 
 
 
 
 
 
 
 
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
15,640

 
12,496

 
40,662

 
37,173

INCOME TAX EXPENSE
(6,045
)
 
(4,697
)
 
(15,247
)
 
(13,958
)
 
 
 
 
 
 
 
 
EARNINGS FROM CONTINUING OPERATIONS
9,595

 
7,799

 
25,415

 
23,215

 
 
 
 
 
 
 
 
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
312

 

 
734

 
(2
)
NET EARNINGS
$
9,907

 
$
7,799

 
$
26,149

 
$
23,213

 
 
 
 
 
 
 
 
EARNINGS PER SHARE - Basic
 
 
 
 
 
 
 
Continuing operations
$
0.15

 
$
0.12

 
$
0.40

 
$
0.36

Discontinued operations

 

 
0.01

 

NET EARNINGS PER SHARE
$
0.15

 
$
0.12

 
$
0.41

 
$
0.36

 
 
 
 
 
 
 
 
EARNINGS PER SHARE - Diluted
 
 
 
 
 
 
 
Continuing operations
$
0.15

 
$
0.12

 
$
0.39

 
$
0.36

Discontinued operations

 

 
0.01

 

NET EARNINGS PER SHARE
$
0.15

 
$
0.12

 
$
0.40

 
$
0.36

 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES
 
 
 
 
 
 
 
Basic
64,286

 
64,052

 
64,240

 
63,972

Diluted
65,271

 
65,036

 
65,207

 
64,807







AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 
September 30,
 
December 31,
 
2014
 
2013
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
33,442

 
$
31,699

Accounts receivable, net of allowance of $843 in 2014 and $717 in 2013
36,392

 
52,247

Inventory
11,936

 
9,050

Prepaid supplies and other
12,023

 
9,730

Deferred income taxes
13,957

 
13,957

Aircraft and engines held for sale
923

 
2,995

TOTAL CURRENT ASSETS
108,673

 
119,678

 
 
 
 
Property and equipment, net
850,715

 
838,172

Other assets
29,288

 
21,143

Pension assets, net of obligations
20,895

 
14,855

Intangibles
4,685

 
4,896

Goodwill
34,395

 
34,395

TOTAL ASSETS
$
1,048,651

 
$
1,033,139

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
Accounts payable
$
29,803

 
$
34,818

Accrued salaries, wages and benefits
26,219

 
23,163

Accrued expenses
9,390

 
9,695

Current portion of debt obligations
24,184

 
23,721

Unearned revenue
11,692

 
8,733

TOTAL CURRENT LIABILITIES
101,288

 
100,130

Long term debt
347,447

 
360,794

Post-retirement obligations
24,833

 
30,638

Other liabilities
56,653

 
62,740

Deferred income taxes
123,890

 
109,869

 
 
 
 
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; 75,000,000 shares authorized; 64,939,895 and 64,618,305 shares issued and outstanding in 2014 and 2013, respectively
649

 
646

Additional paid-in capital
526,845

 
524,953

Accumulated deficit
(100,664
)
 
(126,813
)
Accumulated other comprehensive loss
(32,290
)
 
(29,818
)
TOTAL STOCKHOLDERS’ EQUITY
394,540

 
368,968

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
1,048,651

 
$
1,033,139








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
 
Nine Months Ended
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
Revenues
 
 
 
 
 
 
 
CAM
$
40,226

 
$
40,089

 
$
121,451

 
$
118,420

ACMI Services
 
 
 
 
 
 
 
Airline services
84,172

 
93,116

 
260,336

 
276,193

Reimbursables
18,681

 
16,313

 
62,417

 
51,156

Total ACMI Services
102,853

 
109,429

 
322,753

 
327,349

Other Activities
42,055

 
30,037

 
105,356

 
83,242

Total Revenues
185,134

 
179,555

 
549,560

 
529,011

Eliminate internal revenues
(46,691
)
 
(38,678
)
 
(117,906
)
 
(105,951
)
Customer Revenues
$
138,443

 
$
140,877

 
$
431,654

 
$
423,060

 
 
 
 
 
 
 
 
Pre-tax Earnings from Continuing Operations
 
 
 
 
 
 
CAM, inclusive of interest expense
13,574

 
15,893

 
38,681

 
49,980

ACMI Services
(126
)
 
(7,113
)
 
(6,863
)
 
(21,610
)
Other Activities
2,010

 
4,400

 
9,135

 
9,188

Net, unallocated interest expense
(457
)
 
(367
)
 
(1,260
)
 
(810
)
Net gain (loss) on derivative instruments
639

 
(317
)
 
969

 
425

Total Pre-tax Earnings
$
15,640

 
$
12,496

 
$
40,662

 
$
37,173

 
 
 
 
 
 
 
 
Adjustments to Pre-tax Earnings
 
 
 
 
 
 
Less net (gain) loss on derivative instruments
(639
)
 
317

 
(969
)
 
(425
)
Adjusted Pre-tax Earnings
$
15,001

 
$
12,813

 
$
39,693

 
$
36,748


Adjusted Pre-tax Earnings is defined as Earnings from Continuing Operations Before Income Taxes less derivative gains or losses. 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
UNAUDITED ADJUSTED EARNINGS FROM CONTINUING OPERATIONS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
NON-GAAP RECONCILIATION
(In thousands)
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
Earnings from Continuing Operations Before Income Taxes
$
15,640

 
$
12,496

 
$
40,662

 
$
37,173

Interest Income
(23
)
 
(17
)
 
(66
)
 
(56
)
Interest Expense
3,309

 
3,814

 
10,613

 
10,500

Depreciation and Amortization
26,307

 
23,392

 
78,428

 
66,077

EBITDA from Continuing Operations
$
45,233

 
$
39,685

 
$
129,637

 
$
113,694

Less net (gain) loss on derivative instruments
(639
)
 
317

 
(969
)
 
(425
)
 
 
 
 
 
 
 
 
Adjusted EBITDA from Continuing Operations
$
44,594

 
$
40,002

 
$
128,668

 
$
113,269


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 derivative gains or losses.
 
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 SUBSIDIARIES
IN-SERVICE CARGO AIRCRAFT FLEET

Aircraft Types
 
 
December 31,
 
September 30,
 
December 31,
 
 
2013
 
2014
 
2014 Projected
 
 
 
 
 
 
Operating
 
 
 
 
 
Operating
 
 
 
 
 
Operating
 
 
Total
 
Owned
 
Lease
 
Total
 
Owned
 
Lease
 
Total
 
Owned
 
Lease
B767-200
 
40
 
36
 
4
 
40
 
36
 
4
 
38
 
36
 
2
B767-300
 
8
 
6
 
2
 
9
 
9
 
 
10
 
9
 
1
B757-200
 
4
 
4
 
 
4
 
4
 
 
4
 
4
 
B757 Combi
 
3
 
3
 
 
4
 
4
 
 
4
 
4
 
Total Aircraft In-Service
 
55
 
49
 
6
 
57
 
53
 
4
 
56
 
53
 
3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owned Aircraft In Serviceable Condition
 
 
December 31,
 
September 30,
 
December 31,
 
 
2013
 
2014
 
2014 Projected
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ATSG airlines
 
 
 
29
 
 
 
 
 
28
 
 
 
 
 
27-28
 
 
External customers
 
 
 
20
 
 
 
 
 
24
 
 
 
 
 
24-25
 
 
Staging/Unassigned
 
 
 
 
 
 
 
 
1
 
 
 
 
 
1
 
 
 
 
 
 
49
 
 
 
 
 
53
 
 
 
 
 
53
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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