(State of Incorporation) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | Smaller reporting company | ||||||||||||||
Non-accelerated filer | ☐ | Emerging growth company |
Page | |||||||||||
PART I. FINANCIAL INFORMATION | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II. OTHER INFORMATION | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 6. | |||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
Inventory | |||||||||||
Prepaid supplies and other | |||||||||||
TOTAL CURRENT ASSETS | |||||||||||
Property and equipment, net | |||||||||||
Customer incentive | |||||||||||
Goodwill and acquired intangibles | |||||||||||
Operating lease assets | |||||||||||
Other assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued salaries, wages and benefits | |||||||||||
Accrued expenses | |||||||||||
Current portion of debt obligations | |||||||||||
Current portion of lease obligations | |||||||||||
Unearned revenue and grants | |||||||||||
TOTAL CURRENT LIABILITIES | |||||||||||
Long term debt | |||||||||||
Stock obligations | |||||||||||
Post-retirement obligations | |||||||||||
Long term lease obligations | |||||||||||
Other liabilities | |||||||||||
Deferred income taxes | |||||||||||
TOTAL LIABILITIES | |||||||||||
Commitments and contingencies (Note H) | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock, | |||||||||||
Common stock, par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | |||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
REVENUES | $ | $ | |||||||||
OPERATING EXPENSES | |||||||||||
Salaries, wages and benefits | |||||||||||
Depreciation and amortization | |||||||||||
Maintenance, materials and repairs | |||||||||||
Fuel | |||||||||||
Contracted ground and aviation services | |||||||||||
Travel | |||||||||||
Landing and ramp | |||||||||||
Rent | |||||||||||
Insurance | |||||||||||
Other operating expenses | |||||||||||
OPERATING INCOME | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest income | |||||||||||
Non-service component of retiree benefit (loss) gains | ( | ||||||||||
Net (loss) gain on financial instruments | ( | ||||||||||
Loss from non-consolidated affiliate | ( | ( | |||||||||
Interest expense | ( | ( | |||||||||
( | ( | ||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | |||||||||||
INCOME TAX EXPENSE | ( | ( | |||||||||
EARNINGS FROM CONTINUING OPERATIONS | |||||||||||
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAXES | |||||||||||
NET EARNINGS | $ | $ | |||||||||
BASIC EARNINGS PER SHARE | |||||||||||
Continuing operations | $ | $ | |||||||||
Discontinued operations | |||||||||||
TOTAL BASIC EARNINGS PER SHARE | $ | $ | |||||||||
DILUTED EARNINGS PER SHARE | |||||||||||
Continuing operations | $ | ||||||||||
Discontinued operations | |||||||||||
TOTAL DILUTED EARNINGS PER SHARE | $ | ||||||||||
WEIGHTED AVERAGE SHARES | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
NET EARNINGS | $ | $ | |||||||||
OTHER COMPREHENSIVE INCOME: | |||||||||||
Defined Benefit Pension | |||||||||||
Defined Benefit Post-Retirement | |||||||||||
TOTAL COMPREHENSIVE INCOME, net of tax | $ | $ |
Common Stock | Additional Paid-in Capital | Accumulated Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||||||||||
Number | Amount | ||||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation plans | |||||||||||||||||||||||||||||||||||
Grant of restricted stock | ( | — | — | ||||||||||||||||||||||||||||||||
Issuance of common shares, net of withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||
Forfeited restricted stock | ( | — | — | — | — | — | |||||||||||||||||||||||||||||
Cumulative effect in change in accounting principle | ( | ( | |||||||||||||||||||||||||||||||||
Amortization of stock awards and restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2022 | 74,337,226 | $ | 743 | $ | 1,035,029 | $ | 380,097 | $ | (61,829) | $ | 1,354,040 | ||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2022 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation plans | |||||||||||||||||||||||||||||||||||
Issuance of common shares, net of withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||
Forfeited restricted stock | ( | — | — | — | — | — | |||||||||||||||||||||||||||||
Purchase of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
Amortization of stock awards and restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2023 | $ | $ | ( | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net earnings from continuing operations | $ | $ | |||||||||
Net earnings from discontinued operations | |||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Pension and post-retirement | |||||||||||
Deferred income taxes | |||||||||||
Amortization of stock-based compensation | |||||||||||
Loss from non-consolidated affiliates | |||||||||||
Net (gain) loss on financial instruments | ( | ||||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventory and prepaid supplies | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Unearned revenue | ( | ||||||||||
Accrued expenses, salaries, wages, benefits and other liabilities | ( | ( | |||||||||
Pension and post-retirement balances | ( | ( | |||||||||
Other | ( | ( | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||
INVESTING ACTIVITIES: | |||||||||||
Expenditures for property and equipment | ( | ( | |||||||||
Proceeds from property and equipment | |||||||||||
Acquisitions and investments in businesses | ( | ||||||||||
NET CASH (USED IN) INVESTING ACTIVITIES | ( | ( | |||||||||
FINANCING ACTIVITIES: | |||||||||||
Principal payments on long term obligations | ( | ( | |||||||||
Proceeds from revolving credit facilities | |||||||||||
Payments for financing costs | ( | ||||||||||
Purchase of common stock | ( | ||||||||||
Withholding taxes paid for conversion of employee stock awards | ( | ( | |||||||||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | ( | ||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | |||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | $ | |||||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||
Interest paid, net of amount capitalized | $ | $ | |||||||||
Federal and state income taxes paid | $ | $ | |||||||||
SUPPLEMENTAL NON-CASH INFORMATION: | |||||||||||
Accrued expenditures for property and equipment | $ | $ | |||||||||
Page | |||||
(in thousands) | December 31, 2021 | Adoption of ASU 2020-06 | January 1, 2022 | |||||||||||||||||
Balance Sheet line item: | ||||||||||||||||||||
Principal value | $ | ( | $ | $ | ( | |||||||||||||||
Unamortized issuance cost | $ | $ | $ | |||||||||||||||||
Unamortized discount | $ | $ | ( | $ | ||||||||||||||||
Convertible Debt | $ | ( | $ | ( | $ | ( | ||||||||||||||
Net deferred tax liability | $ | ( | $ | $ | ( | |||||||||||||||
Additional paid-in capital | $ | ( | $ | $ | ( | |||||||||||||||
Retained earnings | $ | ( | $ | ( | $ | ( |
CAM | ACMI Services | All Other | Total | |||||||||||||||||||||||
Carrying value as of December 31, 2022 | $ | $ | $ | $ | ||||||||||||||||||||||
Carrying value as of March 31, 2023 | $ | $ | $ | $ |
Airline | Amortizing | |||||||||||||||||||
Certificates | Intangibles | Total | ||||||||||||||||||
Carrying value as of December 31, 2022 | $ | $ | $ | |||||||||||||||||
Amortization | — | ( | ( | |||||||||||||||||
Carrying value as of March 31, 2023 | $ | $ | $ |
Lease | ||||||||
Incentive | ||||||||
Carrying value as of December 31, 2022 | $ | |||||||
Amortization | ( | |||||||
Carrying value as of March 31, 2023 | $ |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Customer | Percentage of Revenue | |||||||||||||
U.S. Department of Defense ("DoD") | ||||||||||||||
Amazon | ||||||||||||||
DHL |
March 31, 2023 | December 31, 2022 | |||||||||||||
Customer | Accounts Receivable | |||||||||||||
DoD | $ | $ | ||||||||||||
Amazon | ||||||||||||||
DHL |
Common Shares in millions | ||||||||||||||||||||||||||
Exercise price | Vested | Non-Vested | Expiration | |||||||||||||||||||||||
2018 Investment Agreement | $ | December 20, 2025 | ||||||||||||||||||||||||
2018 Investment Agreement | $ | December 20, 2025 | ||||||||||||||||||||||||
As of March 31, 2023 | Fair Value Measurement Using | Total | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents—money market | $ | $ | $ | $ | |||||||||||||||||||
Total Assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Interest rate swap | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Sale option | — | — | ( | $ | ( | ||||||||||||||||||
Stock warrant obligations | ( | ( | |||||||||||||||||||||
Total Liabilities | $ | $ | ( | $ | ( | $ | ( |
As of December 31, 2022 | Fair Value Measurement Using | Total | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents—money market | $ | $ | $ | $ | |||||||||||||||||||
Interest rate swap | |||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Stock warrant obligations | ( | ( | |||||||||||||||||||||
Total Liabilities | $ | $ | $ | ( | $ | ( |
March 31, 2023 | December 31, 2022 | ||||||||||
Flight equipment | $ | $ | |||||||||
Ground equipment | |||||||||||
Leasehold improvements, facilities and office equipment | |||||||||||
Aircraft modifications and projects in progress | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Revolving credit facility | |||||||||||
Senior notes | |||||||||||
Convertible notes | |||||||||||
Other financing arrangements | |||||||||||
Total debt obligations | |||||||||||
Less: current portion | ( | ( | |||||||||
Total long term obligations, net | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Principal value, Convertible Senior Notes, due 2024 | $ | $ | ||||||||||||
Unamortized issuance costs | ( | ( | ||||||||||||
Convertible debt | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||
Expiration Date | Stated Interest Rate | Notional Amount | Market Value (Liability) | Notional Amount | Market Value (Liability) | ||||||||||||||||||||||||
March 31, 2023 | % | ||||||||||||||||||||||||||||
March 31, 2026 | % | ( | — | — | |||||||||||||||||||||||||
March 31, 2026 | % | ( | — | — |
Operating Leases | ||||||||
2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 and beyond | ||||||||
Total undiscounted cash payments | ||||||||
Less: amount representing interest | ( | |||||||
Present value of future minimum lease payments | ||||||||
Less: current obligations under leases | ||||||||
Long-term lease obligation | $ |
Airline | Labor Agreement Unit | Percentage of the Company’s Employees | ||||||
ABX | International Brotherhood of Teamsters | |||||||
ATI | Air Line Pilots Association | |||||||
OAI | International Brotherhood of Teamsters | |||||||
ATI | Association of Flight Attendants | |||||||
OAI | Association of Flight Attendants |
Three Months Ended March 31, | |||||||||||||||||||||||
Pension Plans | Post-Retirement Healthcare Plan | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | |||||||||||||||||||||
Curtailments and settlements | |||||||||||||||||||||||
Amortization of prior service cost | |||||||||||||||||||||||
Amortization of net loss | |||||||||||||||||||||||
Net periodic benefit cost (income) | $ | $ | ( | $ | $ |
Defined Benefit Pension | Defined Benefit Post-Retirement | Foreign Currency Translation | Total | |||||||||||||||||||||||
Balance as of January 1, 2022 | ( | ( | ( | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income: | ||||||||||||||||||||||||||
Actuarial costs (reclassified to salaries, wages and benefits) | — | |||||||||||||||||||||||||
Income Tax (Expense) or Benefit | ( | ( | — | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||
Balance as of March 31, 2022 | ( | ( | ( | ( | ||||||||||||||||||||||
Balance as of January 1, 2023 | ( | ( | ( | |||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income: | ||||||||||||||||||||||||||
Actuarial costs (reclassified to salaries, wages and benefits) | — | |||||||||||||||||||||||||
Income Tax (Expense) or Benefit | ( | — | ( | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||
Balance as of March 31, 2023 | ( | ( | ( |
Three Months Ended | |||||||||||||||||||||||
March 31, 2023 | March 31, 2022 | ||||||||||||||||||||||
Number of Awards | Weighted average grant-date fair value | Number of Awards | Weighted average grant-date fair value | ||||||||||||||||||||
Outstanding at beginning of period | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Converted | ( | ( | |||||||||||||||||||||
Expired | |||||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||
Outstanding at end of period | $ | $ | |||||||||||||||||||||
Vested | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Numerator: | |||||||||||
Earnings from continuing operations - basic | $ | $ | |||||||||
Gain from stock warrants revaluation, net of tax | $ | ( | $ | ||||||||
Convertible debt interest charge, net of tax | $ | $ | |||||||||
Earnings from continuing operations - diluted | $ | $ | |||||||||
Denominator: | |||||||||||
Weighted-average shares outstanding for basic earnings per share | |||||||||||
Common equivalent shares: | |||||||||||
Effect of stock-based compensation awards and warrants | |||||||||||
Effect of convertible debt | |||||||||||
Weighted-average shares outstanding assuming dilution | |||||||||||
Basic earnings per share from continuing operations | $ | $ | |||||||||
Diluted earnings per share from continuing operations | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Total revenues: | |||||||||||
CAM | $ | $ | |||||||||
ACMI Services | |||||||||||
All other | |||||||||||
Eliminate inter-segment revenues | ( | ( | |||||||||
Total | $ | $ | |||||||||
Customer revenues: | |||||||||||
CAM | $ | $ | |||||||||
ACMI Services | |||||||||||
All other | |||||||||||
Total | $ | $ |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Aircraft maintenance, modifications and part sales | $ | $ | ||||||||||||
Ground services | ||||||||||||||
Other, including aviation fuel sales | ||||||||||||||
Total customer revenues | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Depreciation and amortization expense: | |||||||||||
CAM | $ | $ | |||||||||
ACMI Services | |||||||||||
All other | |||||||||||
Total | $ | $ | |||||||||
Interest expense | |||||||||||
CAM | |||||||||||
ACMI Services | |||||||||||
Segment earnings (loss): | |||||||||||
CAM | $ | $ | |||||||||
ACMI Services | ( | ||||||||||
All other | |||||||||||
Net unallocated interest expense | ( | ( | |||||||||
Net gain (loss) on financial instruments | ( | ||||||||||
Other non-service components of retiree benefit costs, net | ( | ||||||||||
Loss from non-consolidated affiliate | ( | ( | |||||||||
Pre-tax earnings from continuing operations | $ | $ |
March 31, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
Assets: | |||||||||||
CAM | $ | $ | |||||||||
ACMI Services | |||||||||||
All other | |||||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues from Continuing Operations: | |||||||||||
CAM | |||||||||||
Aircraft leasing and related services | $ | 117,074 | $ | 111,935 | |||||||
Lease incentive amortization | (5,030) | (5,030) | |||||||||
Total CAM | 112,044 | 106,905 | |||||||||
ACMI Services | 334,127 | 330,090 | |||||||||
Other Activities | 110,588 | 102,535 | |||||||||
Total Revenues | 556,759 | 539,530 | |||||||||
Eliminate internal revenues | (55,664) | (53,670) | |||||||||
Customer Revenues | $ | 501,095 | $ | 485,860 | |||||||
Pre-Tax Earnings from Continuing Operations: | |||||||||||
CAM, inclusive of interest expense | $ | 34,200 | $ | 34,995 | |||||||
ACMI Services, interest expense | (2,411) | 22,165 | |||||||||
Other Activities | 654 | 1,551 | |||||||||
Net unallocated interest expense | (510) | (307) | |||||||||
Net financial instrument re-measurement (loss) gain | (1,740) | 2,696 | |||||||||
Other non-service components of retiree benefits costs, net | (3,218) | 5,388 | |||||||||
Loss from non-consolidated affiliate | (406) | (1,403) | |||||||||
Pre-Tax Earnings from Continuing Operations | 26,569 | 65,085 | |||||||||
Add other non-service components of retiree benefit costs, net | 3,218 | (5,388) | |||||||||
Add charges for non-consolidated affiliates | 406 | 1,403 | |||||||||
Add lease incentive amortization | 5,822 | 5,798 | |||||||||
Add net loss (gain) on financial instruments | 1,740 | (2,696) | |||||||||
Add net charges for hangar foam incident | 41 | — | |||||||||
Adjusted Pre-Tax Earnings from Continuing Operations (non-GAAP) | $ | 37,796 | $ | 64,202 |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
ACMI Services | CAM | Total | ACMI Services | CAM | Total | ||||||||||||||||||
In-service aircraft | |||||||||||||||||||||||
Aircraft owned | |||||||||||||||||||||||
Boeing 767-200 Freighter | 4 | 25 | 29 | 4 | 26 | 30 | |||||||||||||||||
Boeing 767-200 Passenger | 2 | — | 2 | 2 | — | 2 | |||||||||||||||||
Boeing 767-300 Freighter | 2 | 67 | 69 | 2 | 65 | 67 | |||||||||||||||||
Boeing 767-300 Passenger | 5 | — | 5 | 5 | — | 5 | |||||||||||||||||
Boeing 777-200 Passenger | 3 | — | 3 | 3 | — | 3 | |||||||||||||||||
Boeing 757-200 Combi | 4 | — | 4 | 4 | — | 4 | |||||||||||||||||
Total | 20 | 92 | 112 | 20 | 91 | 111 | |||||||||||||||||
Operating lease | |||||||||||||||||||||||
Boeing 767-200 Passenger | 1 | — | 1 | 1 | — | 1 | |||||||||||||||||
Boeing 767-300 Passenger | 3 | — | 3 | 3 | — | 3 | |||||||||||||||||
Boeing 767-200 Freighter | 2 | — | 2 | 2 | — | 2 | |||||||||||||||||
Boeing 767-300 Freighter | 11 | — | 11 | 11 | — | 11 | |||||||||||||||||
Total | 17 | — | 17 | 17 | — | 17 | |||||||||||||||||
Other aircraft | |||||||||||||||||||||||
Owned Boeing 767-300 under modification | — | 18 | 18 | — | 15 | 15 | |||||||||||||||||
Owned Airbus A321-200 under modification | — | 9 | 9 | — | 7 | 7 | |||||||||||||||||
Period | Total Number of Shares Purchased | Average Price paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Program | ||||||||||||||||||||||
January 1, 2023 through January 31, 2023 | — | $ | — | — | $ | 140,381,669 | ||||||||||||||||||||
February 1, 2023 through February 28, 2023 | 446,409 | $ | 21.77 | 446,409 | $ | 130,665,416 | ||||||||||||||||||||
March 1, 2023 through March 31, 2023 | 553,591 | $ | 22.04 | 553,591 | $ | 118,463,910 | ||||||||||||||||||||
Total for the quarter | 1,000,000 | $ | 21.92 | 1,000,000 | $ | 118,463,910 |
Exhibit No. | Description of Exhibit | ||||
10.1 | |||||
10.2 | |||||
10.3 | |||||
10.4 | |||||
10.5 | |||||
10.6 |
Certifications | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 |
101.INS | XBRL Instance Document | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101). |
AIR TRANSPORT SERVICES GROUP, INC., | ||||||||||||||
a Delaware Corporation | ||||||||||||||
Registrant | ||||||||||||||
/S/ RICHARD F. CORRADO | ||||||||||||||
Richard F. Corrado | ||||||||||||||
Chief Executive Officer (Principal Executive Officer) | ||||||||||||||
Date: | May 10, 2023 | |||||||||||||
/S/ QUINT O. TURNER | ||||||||||||||
Quint O. Turner | ||||||||||||||
Chief Financial Officer (Principal Financial Officer | ||||||||||||||
Date: | May 10, 2023 | and Principal Accounting Officer) |
/s/ RICHARD F. CORRADO | ||
Richard F. Corrado | ||
Chief Executive Officer |
/s/ QUINT O. TURNER | ||
Quint O. Turner | ||
Chief Financial Officer (Principal Financial and Accounting Officer) |
/S/ RICHARD F. CORRADO | ||
Richard F. Corrado Chief Executive Officer |
/s/ QUINT O. TURNER | ||
Quint O. Turner Chief Financial Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
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Assets, Current [Abstract] | |||
Accounts receivable, net of allowance | $ (1,053) | $ (939) | |
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) | 71,451,610 | 72,327,758 | |
Preferred Stock | |||
Stockholders' Equity Attributable to Parent [Abstract] | |||
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | |
Series A Junior Participating Preferred Stock | |||
Stockholders' Equity Attributable to Parent [Abstract] | |||
Preferred stock, shares authorized (in shares) | 75,000 | 75,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Comprehensive Income [Abstract] | ||
NET EARNINGS | $ 20,141 | $ 49,796 |
Total comprehensive income | 23,846 | 50,047 |
Defined Benefit Post-Retirement | ||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 9 |
Defined Benefit Pension | ||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | $ 3,705 | $ 242 |
Summary of Financial Statement Preparation and Significant Accounting Policies |
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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 ATSG 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. The Company's leasing subsidiary, Cargo Aircraft Management, Inc. (“CAM”), leases aircraft to each of the Company's airlines as well as to non-affiliated airlines and other lessees. The Company's airlines, 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 customer's transportation network 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. The Company's subsidiary, LGSTX Services, Inc. ("LGSTX") provides for the management of aircraft ground services. 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 2022 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 the 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 non-consolidated 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. Accounting Standards Updates In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 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:
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.
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Goodwill, Intangibles and Equity Investments |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Intangibles and Equity Investments | GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS The carrying amounts of goodwill by reportable segment are as follows (in thousands):
The Company's acquired intangible assets are as follows (in thousands):
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.com, Inc. (“Amazon”) (see Note C) as an incentive for a subsidiary of Amazon 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 amortized against revenues over the duration of related aircraft leases. The Company's lease incentive granted to the lessee was as follows (in thousands):
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 $21.1 million and $18.9 million at March 31, 2023 and December 31, 2022, 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.
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Fair Value Measurements |
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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 ATSG's common stock price, the volatility of ATSG'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 granted 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 fair value of the sale option for Amazon to sell back shares to the Company under certain conditions was determined based on future share repurchase scenarios. Judgement was applied to determine the number of shares that would be repurchased by the Company at a certain price and the probability of each scenario. There is uncertainty regarding the future stock price at the time of repurchase which affects the magnitude of the gain or loss recognized (Level 3 inputs). The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands):
As a result of higher 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 $82.0 million less than the carrying value, which was $1,545.1 million at March 31, 2023. As of December 31, 2022, the fair value of the Company’s debt obligations was approximately $48.3 million less than the carrying value, which was $1,464.9 million. The non-financial assets, including goodwill, intangible assets and property and equipment are measured at fair value on a non-recurring basis.
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Property and Equipment |
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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):
CAM owned aircraft with a carrying value of $1,503.7 million and $1,474.6 million that were under lease to external customers as of March 31, 2023 and December 31, 2022, respectively.
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Debt Obligations |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Obligations | DEBT OBLIGATIONS Debt obligations consisted of the following (in thousands):
The Company is a 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. 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. The interest rate is a pricing premium added to SOFR 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 March 31, 2023, the unused revolving credit facility available to the Company at the trailing twelve-month EBITDA level was $387.9 million, and additional permitted indebtedness under the Senior Credit Agreement subject to compliance with other covenants. On March 1, 2023, the Company entered into an additional revolving credit facility domiciled in Ireland (the "Irish Facility"). The terms and conditions of the Irish Facility are similar to the Senior Credit Agreement in the U.S. The Irish Facility has a maximum capacity of $100.0 million, including a $7.5 million letter of credit sub-facility, and has the ability to be upsized using the same accordion feature that is present in the Senior Credit Agreement. The maturity date of the Irish Facility is the same as the Senior Credit Agreement. On January 28, 2020, CAM completed a debt offering of $500.0 million in senior unsecured notes (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 will mature on February 1, 2028. The Senior Notes contain customary events of default and certain covenants which are generally no more restrictive than those set forth in the Senior Credit Agreement. On April 13, 2021, the Company, through a subsidiary, completed its offering of $200.0 million of additional notes ("Additional Notes") under the existing Senior Notes. The Additional Notes are fully fungible with the Senior Notes, treated as a single class for all purposes under the indenture governing the existing notes with the same terms as those of the existing notes (other than issue date and issue price). During 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 $5.1 million and $5.4 million as of March 31, 2023 and December 31, 2022, 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 SOFR or prime rates. At the Company's debt-to-EBITDA ratio as of March 31, 2023, the SOFR-based financing for the revolving credit facility bears a variable interest rate of 5.765%. The Senior Notes do not require principal payments until maturity but prepayments are allowed without penalty beginning February 1, 2025. 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 limits the amount of dividends the Company can pay and the amount of common stock it can repurchase to $100.0 million during any calendar year, provided the Company's total debt to EBITDA ratio is under 3.50 times and the secured debt to EBITDA ratio is under 3.0 times, after giving effect to the dividend or repurchase. The Senior Credit Agreement contains covenants, including a maximum permitted total EBITDA to debt ratio, a fixed charge covenant ratio requirement, and limitations on certain additional indebtedness and on 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 any calendar quarter commencing after December 31, 2017 and thereafter, 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 for a cash repurchase price equal to the principal amount of the notes, plus any accrued and unpaid interest. ATSG has the right to settle the Convertible Notes in cash, ATSG common shares or a combination of cash and ATSG common shares. The initial conversion rate is 31.3475 common shares 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, ATSG will, in certain circumstances, increase the conversion rate for a specified period of time. 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 common shares, 8.1 million shares and same strike price of $31.90, that underlie the Convertible Notes. The convertible note hedges are expected to reduce the potential equity dilution with respect to ATSG's common shares, 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. 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):
In conjunction with the offering of the Convertible Notes, the Company also sold warrants to the convertible note hedge counterparties in separate, privately negotiated warrant transactions at a higher strike price and for the same number of the Company’s common shares, subject to customary anti-dilution adjustments. The amount received for these warrants and recorded in Stockholders' Equity in the Company’s consolidated balance sheets was $38.5 million. These warrants could result in 8.1 million additional shares of ATSG's common stock if the Company's traded market price exceeds the strike price, which is $41.35 per share and is subject to certain adjustments under the terms of the warrant transactions. The warrants could have a dilutive effect on the computation of earnings per share to the extent the average traded market price of the Company's common shares for reporting periods exceeds the strike price.
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Derivative Instruments |
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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 (in thousands):
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Pension and Other Post-Retirement Benefit Plans |
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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 major portion of its 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 follows 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 for the three months ended March 31, 2023 and 2022, are as follows (in thousands):
During the three month period ending March 31, 2023, the Company made contributions to the pension plans of $0.8 million . The Company expects to contribute an additional $0.5 million during the remainder of 2023.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2023 | |
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 March 31, 2023 have been estimated utilizing a rate of 23.9% 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, the issuance of stock warrants and other items, have an impact on the effective rate during a period. As a result of these differences in which expenses and benefits for tax purposes are different than required by GAAP, the Company's effective tax rate for the first three months of 2023 was 24.2%. The final effective tax rate for the year 2023 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, stock warrant valuations, 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 tax assets, including its loss carryforwards, management does not expect to pay federal income taxes until 2025 or later. The Company may, prior to such time, be required to pay some federal tax due to loss carryforward usage limitations and certain state and local income taxes.
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Accumulated Other Comprehensive Income (Loss) |
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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 months ended March 31, 2023 and 2022 (in thousands):
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION ATSG's Board of Directors has granted stock-based incentive awards to certain employees and board members pursuant to a long term incentive plan which was approved by the Company's stockholders in May 2005 and in May 2015. Employees have been awarded non-vested restricted stock, non-vested stock units with performance conditions, and non-vested stock units with market conditions. The restrictions on the non-vested restricted stock awards lapse at the end of a specified service period, which is typically three years from the date of grant. The non-vested stock units will be converted into a number of ATSG common shares depending on performance and market conditions at the end of a specified service period, which is typically three years from the date of grant. The performance condition awards will be converted into a number of ATSG common shares based on the Company's average return on invested capital during the service period. Similarly, the market condition awards will be converted into a number of common shares depending on the appreciation of ATSG common shares compared to the Nasdaq Transportation Index. Board members have been granted time-based awards that vest after a period of twelve months. Under each of the stock-based incentive awards, the restrictions may lapse sooner than the stated settlement period upon (1) the participant's death or disability, (2) an employee participant's qualification for retirement or (3) a change in control, in the case of an employee participant under the 2015 long-term incentive plan, or a business combination, in the case of a director participant under the 2005 or 2015 long-term incentive plan. The Company expects to settle all of the stock unit awards by issuing new ATSG common shares. The table below summarizes award activity for the three months ended March 31, 2023 and 2022:
For the three months ended March 31, 2023 and 2022, the Company recorded expense of $1.4 million and $1.7 million respectively, for stock-based incentive awards. At March 31, 2023, there was $6.7 million of unrecognized expense related to the stock-based incentive awards that is expected to be recognized over a weighted-average period of 1.3 years. As of March 31, 2023, none of the awards were convertible, 298,928 units of the directors' 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 a maximum number of 904,302 additional outstanding shares of ATSG's common stock depending on service, performance and market results through December 31, 2025.
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Common Stock and Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Earnings Per Share | COMMON STOCK AND EARNINGS PER SHARE Earnings per Share The calculation of basic and diluted earnings per common share is as follows (in thousands, except per share amounts):
Basic weighted average shares outstanding for purposes of basic earnings per share are less than the shares outstanding due to 226,149 shares and 392,039 shares of restricted stock for 2023 and 2022, 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. In conjunction with the offering of the Convertible Notes (see note F), the Company also sold warrants for ATSG common stock, subject to customary anti-dilution adjustments. The amount received for these warrants and recorded in Stockholders' Equity in the Company’s consolidated balance sheets was $38.5 million. These warrants may result in 8.1 million additional shares of common stock, if ATSG's traded market price exceeds the strike price which is $41.35 per share and is subject to certain adjustments under the terms of the warrant transactions.
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Segment and Revenue Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Revenue 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 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):
The Company's external customer revenues from other activities for the three months ended March 31, 2023, and 2022 are presented below (in thousands):
During the three month periods ending March 31, 2023 and 2022 the Company recognized $6.5 million and $3.5 million of non-lease revenue that was reported as deferred revenue at the beginning of the respective year. Current deferred revenue of $18.3 million and $17.0 million as of March 31, 2023 and December 31, 2022, respectively, for contracts with customers is derived from other activities as described above. 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 as of March 31, 2023 compared to $0.0 million as of December 31, 2022. Cash will be collected over the term of the multi-year agreement based on number cycles per period while revenue is recognized as parts are provided for engine maintenance services. This may result in a contract asset or liability based on the timing of engine maintenance services. 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 March 31, 2023, minimum future payments from external customers for leased aircraft and equipment were scheduled to be $207.9 million for the remainder of 2023, and $228.5 million, $205.3 million, $179.5 million and $147.3 million, respectively, for each of the next four years ending December 31, 2027 and $278.1 million thereafter. CAM's external customer revenues for non-lease activities were $6.7 million and $9.9 million during the first three months of 2023 and 2022 respectively for engine services and the sale of spare engine parts. The Company's other segment information from continuing operations is presented below (in thousands):
The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other.
During the first three months of 2023, the Company had capital expenditures for property and equipment of $17.1 million and $201.3 million for the ACMI Services and CAM, respectively.
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Summary of Financial Statement Preparation and Significant Accounting Policies (Policies) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2022 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 the 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 non-consolidated 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.
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Accounting Standards Updates | Accounting Standards Updates In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 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:
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.
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Summary of Financial Statement Preparation and Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Depreciable Lives | Property and equipment, to be held and used, is summarized as follows (in thousands):
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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:
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Goodwill, Intangibles and Equity Investments (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill |
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Schedule of Acquired Intangible Assets | The Company's acquired intangible assets are as follows (in thousands):
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Schedule of Lease Incentive | The Company's lease incentive granted to the lessee was as follows (in thousands):
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Significant Customers (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Customers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 month periods ending March 31, 2023 and 2022 are as follows:
The accounts receivable from the Company's three largest customers as of March 31, 2023 and December 31, 2022 are as follows (in thousands):
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Schedule of Stockholders' Equity Note, Warrants or Rights | Issued and outstanding warrants are summarized below as of March 31, 2023:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Property and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment, to be held and used, is summarized as follows (in thousands):
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Debt Obligations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Debt obligations consisted of the following (in thousands):
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Convertible Debt |
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivatives | The table below provides information about the Company’s interest rate swaps (in thousands):
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Commitments and Contingencies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Maturities | As of March 31, 2023, the maturities of operating lease liabilities are as follows (in thousands):
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Schedule of Employees Under Collective Bargaining Agreements | As of March 31, 2023, 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:
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Pension and Other Post-Retirement Benefit Plans (Tables) |
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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 for the three months ended March 31, 2023 and 2022, are as follows (in thousands):
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Accumulated Other Comprehensive Income (Loss) (Tables) |
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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 months ended March 31, 2023 and 2022 (in thousands):
|
Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Equity Instruments Other Than Options, Activity | The table below summarizes award activity for the three months ended March 31, 2023 and 2022:
|
Common Stock and Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted earnings per common share is as follows (in thousands, except per share amounts):
|
Segment and Revenue Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information | The Company's segment information from continuing operations is presented below (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers from Other Activities | The Company's external customer revenues from other activities for the three months ended March 31, 2023, and 2022 are presented below (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Segment Information From Continuing Operations | The Company's other segment information from continuing operations is presented below (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets by Segment | The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other.
|
Summary of Financial Statement Preparation and Significant Accounting Policies - Additional Information (Details) - Convertible Notes - Convertible Debt $ in Millions |
Jan. 01, 2022
USD ($)
|
---|---|
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items] | |
Discount amortization expense | $ 6.4 |
Debt instrument, effective interest rate | 1.50% |
Goodwill, Intangibles and Equity Investments - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill [Line Items] | ||
Carrying value | $ 395,974 | $ 395,974 |
CAM | ||
Goodwill [Line Items] | ||
Carrying value | 153,290 | 153,290 |
ACMI Services | ||
Goodwill [Line Items] | ||
Carrying value | 234,571 | 234,571 |
All Other | ||
Goodwill [Line Items] | ||
Carrying value | $ 8,113 | $ 8,113 |
Goodwill, Intangibles and Equity Investments - Schedule of Acquired Intangible Assets (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |
Carrying value at beginning of period, airline certificates | $ 96,668 |
Carrying value at beginning of period, amortizing intangibles | 87,668 |
Amortization of Intangible Assets | (2,552) |
Carrying value at end of period, airline certificates | 94,116 |
Carrying value at end of period, amortizing intangibles | 85,116 |
Airline Certificates | |
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |
Carrying value at beginning of period, airline certificates | 9,000 |
Carrying value at end of period, airline certificates | $ 9,000 |
Goodwill, Intangibles and Equity Investments - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
Apr. 30, 2022 |
|
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |||
Amortization of intangible assets | $ 2,552 | ||
Carrying value of joint ventures | $ 21,100 | $ 18,900 | |
321 Precision Conversions, LLC | |||
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |||
Equity method investment, ownership percentage | 49.00% | ||
GA Telesis Engine Services, LLC | |||
Finite and Indefinite-lived Intangible Assets [Roll Forward] | |||
Equity method investment, ownership percentage | 40.00% |
Goodwill, Intangibles and Equity Investments - Schedule of Lease Incentive (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying value at beginning of period | $ 79,650 |
Incentive To Lessee, Amortization | (5,822) |
Carrying value at end of period | $ 73,828 |
Significant Customers - Narrative (Details) - aircraft |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
DHL | ||
Concentration Risk [Line Items] | ||
Lessor, number of leased aircraft | 13 | |
Amazon | ||
Concentration Risk [Line Items] | ||
Lessor, number of leased aircraft | 42 | |
B-767-200 | DHL | ||
Concentration Risk [Line Items] | ||
Lessor, number of leased aircraft | 2 | |
B-767-300 | DHL | ||
Concentration Risk [Line Items] | ||
Lessor, number of leased aircraft | 11 | |
B-767 | Maximum | DHL | ||
Concentration Risk [Line Items] | ||
Number of aircraft | 4 |
Significant Customers - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - USD ($) $ / shares in Units, $ in Millions |
Dec. 16, 2022 |
Oct. 07, 2022 |
Mar. 31, 2023 |
Mar. 05, 2021 |
---|---|---|---|---|
Amended 2016 Investment Agreement | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 27.27 | |||
Stock repurchased during period (in shares) | 260,000 | 250,000 | ||
Stock repurchased during period, value | $ 7.0 | $ 5.9 | ||
Class of warrant or right, ownership percentage, maximum | 19.90% | |||
2018 Investment Agreement, Exercise Price $21.53 | Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 21.53 | |||
Common shares, vested (in shares) | 14,800,000 | |||
Common stock, non-vested (in shares) | 0.0 | |||
2018 Investment Agreement, Exercise Price $20.40 | Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Exercise price (in dollars per share) | $ 20.40 | |||
Common shares, vested (in shares) | 7,000,000.0 | |||
Common stock, non-vested (in shares) | 0.0 |
Fair Value Measurements - Narrative (Details) - Fair Value, Recurring - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value, debt | $ 1,545.1 | $ 1,464.9 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Difference between fair value and carrying value, debt | $ (82.0) | $ (48.3) |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 4,286,875 | $ 4,062,042 |
Accumulated depreciation | (1,733,201) | (1,659,634) |
Property and equipment, net | 2,553,674 | 2,402,408 |
Flight equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 3,609,393 | 3,506,134 |
Ground equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 71,018 | 70,092 |
Leasehold improvements, facilities and office equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 40,826 | 40,183 |
Aircraft modifications and projects in progress | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 565,638 | $ 445,633 |
Property and Equipment - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
CAM | Flight equipment | ||
Property, Plant and Equipment [Line Items] | ||
Leased aircraft, carrying value | $ 1,503.7 | $ 1,474.6 |
Debt Obligations - Schedule of Long Term Obligations (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Other financing arrangements | ||
Total debt obligations | $ 1,545,096 | $ 1,464,924 |
Less: current portion | (642) | (639) |
Total long term obligations, net | 1,544,454 | 1,464,285 |
Revolving credit facility | ||
Other financing arrangements | ||
Total debt obligations | 700,000 | 620,000 |
Senior notes | ||
Other financing arrangements | ||
Total debt obligations | 578,214 | 578,094 |
Convertible Debt | ||
Other financing arrangements | ||
Total debt obligations | 257,169 | 256,903 |
Other financing arrangements | ||
Other financing arrangements | ||
Total debt obligations | $ 9,713 | $ 9,927 |
Debt Obligations - Schedule of Convertible Debt (Details) - Convertible Debt - Convertible Senior Notes Due 2024 - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
Sep. 30, 2017 |
---|---|---|---|---|---|
Other financing arrangements | |||||
Principal value | $ 258,750 | $ 258,750 | $ 258,750 | $ 258,800 | |
Unamortized issuance costs | (1,581) | (1,847) | (2,889) | $ (2,889) | |
Unamortized discount | 0 | (24,215) | |||
Convertible Debt | $ 257,169 | $ 256,903 | $ 255,861 | $ 231,646 |
Debt Obligations - Schedule of Long Term Debt Maturities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Long-Term Debt, Fiscal Year Maturity [Abstract] | ||
Total debt obligations | $ 1,545,096 | $ 1,464,924 |
Derivative Instruments - Schedule of Interest Rate Derivatives (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Interest Rate Swap 2.425 Stated Interest | ||
Derivative [Line Items] | ||
Stated Interest Rate | 2.425% | |
Notional Amount | $ 0 | $ 125,625 |
Interest rate swap | 0 | $ 677 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional Amount | $ 50,000 | |
us-gaap_InterestRateSwapMember | ||
Derivative [Line Items] | ||
Stated Interest Rate | 3.793% | |
Interest rate swap | $ 90 | |
us-gaap_InterestRateSwapMember 3.836% | ||
Derivative [Line Items] | ||
Stated Interest Rate | 3.836% | |
Interest rate swap | $ 159 |
Derivative Instruments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Interest Rate Swap | ||
Derivative [Line Items] | ||
Net (gain) loss on financial instruments | $ 0.9 | $ (2.8) |
Commitments and Contingencies - Schedule of Operating Lease Maturities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2023 | $ 18,975 | |
2024 | 19,886 | |
2025 | 12,840 | |
2026 | 8,423 | |
2027 | 4,194 | |
2028 and beyond | 8,650 | |
Total undiscounted cash payments | 72,968 | |
Less: amount representing interest | (5,717) | |
Present value of future minimum lease payments | 67,251 | |
Less: current obligations under leases | 22,524 | $ 23,316 |
Long-term lease obligation | $ 44,727 | $ 51,575 |
Commitments and Contingencies - Schedule of Employees Under Collective Bargaining Employees (Details) - Workforce Subject to Collective Bargaining Arrangements - Unionized Employees Concentration Risk |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
ABX | |
Other Commitments [Line Items] | |
Percentage of the Company’s Employees | 5.80% |
ATI | |
Other Commitments [Line Items] | |
Percentage of the Company’s Employees | 10.10% |
OAI | |
Other Commitments [Line Items] | |
Percentage of the Company’s Employees | 6.90% |
ATI | |
Other Commitments [Line Items] | |
Percentage of the Company’s Employees | 0.70% |
OAI | |
Other Commitments [Line Items] | |
Percentage of the Company’s Employees | 7.70% |
Pension and Other Post-Retirement Benefit Plans - Net Funded Status (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Pension Plan [Member] | ||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 8,631 | 6,011 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | 800 | |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||
Service cost | 13 | 19 |
Interest cost | $ 33 | $ 15 |
Pension and Other Post-Retirement Benefit Plans - Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Pension Plan [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 8,631 | 6,011 |
Expected return on plan assets | (10,192) | (11,738) |
Curtailments and settlements | 0 | 0 |
Amortization of prior service cost | 0 | 0 |
Amortization of net loss | 4,745 | 313 |
Net periodic benefit cost (income) | 3,184 | (5,414) |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | 13 | 19 |
Interest cost | 33 | 15 |
Expected return on plan assets | 0 | 0 |
Curtailments and settlements | 0 | 0 |
Amortization of prior service cost | 0 | 0 |
Amortization of net loss | 0 | 11 |
Net periodic benefit cost (income) | $ 46 | $ 45 |
Pension and Other Post-Retirement Benefit Plans - Cash Flows (Details) - Defined Benefit Pension - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 0.8 | |
Estimated future employer contributions | $ 0.5 |
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Thousands |
Jan. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred Tax Liabilities, Gross [Abstract] | ||
Deferred Tax Liabilities, Net | $ (211,764) | $ (217,291) |
Income Taxes - Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Income Tax Expense (Benefit) | $ 6,428 | $ 15,289 |
Common Stock and Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Numerator: | ||
Earnings from continuing operations - basic | $ 20,141 | $ 49,796 |
Gain from stock warrants revaluation, net of tax | (108) | 0 |
Convertible debt interest charge, net of tax | 776 | 760 |
Earnings from continuing operations - diluted | $ 20,809 | $ 50,556 |
Weighted Average Number of Shares Outstanding, Basic [Abstract] | ||
Weighted-average shares outstanding for basic earnings per share (in shares) | 71,802 | 73,888 |
Common equivalent shares: | ||
Effect of stock-based compensation awards (in shares) | 3,144 | 6,745 |
Effect of convertible debt (in shares) | 8,111 | 8,111 |
Weighted-average shares outstanding assuming dilution (in shares) | 83,057 | 88,744 |
Basic (in dollars per share) | $ 0.28 | $ 0.67 |
Diluted (in dollars per share) | $ 0.25 | $ 0.57 |
Common Stock and Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
May 10, 2018 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Restricted stock (in shares) | 226,149 | 392,039 | |
Convertible Senior Notes Due 2024 | Convertible Debt | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Warrants and rights outstanding | $ 38.5 | ||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 8,100,000 | 8,100,000 | |
Exercise price (in dollars per share) | $ 41.35 | $ 41.35 |
Segment and Revenue Information - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Segment Reporting Information [Line Items] | ||
Revenues | $ 501,095 | $ 485,860 |
Customer revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 501,095 | 485,860 |
CAM | ||
Segment Reporting Information [Line Items] | ||
Revenues | 112,044 | 106,905 |
CAM | Customer revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 83,158 | 76,691 |
ACMI Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 334,127 | 330,090 |
ACMI Services | Customer revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 334,113 | 330,084 |
All Other | ||
Segment Reporting Information [Line Items] | ||
Revenues | 110,588 | 102,535 |
All Other | Customer revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 83,824 | 79,085 |
Eliminate Inter-Segment Revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ (55,664) | $ (53,670) |
Segment and Revenue Information - Revenue from External Customers from Other Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Segment Reporting Information [Line Items] | ||
Total customer revenues | $ 501,095 | $ 485,860 |
External Customer Revenue | ||
Segment Reporting Information [Line Items] | ||
Total customer revenues | 83,824 | 79,085 |
Aircraft maintenance, modifications and part sales | External Customer Revenue | ||
Segment Reporting Information [Line Items] | ||
Total customer revenues | 42,073 | 37,540 |
Ground services | External Customer Revenue | ||
Segment Reporting Information [Line Items] | ||
Total customer revenues | 23,665 | 25,101 |
Other, including aviation fuel sales | External Customer Revenue | ||
Segment Reporting Information [Line Items] | ||
Total customer revenues | $ 18,086 | $ 16,444 |
Segment and Revenue Information - Schedule of Assets by Segment (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 3,702,279 | $ 3,589,893 |
CAM | ||
Segment Reporting Information [Line Items] | ||
Assets | 2,641,972 | 2,510,559 |
ACMI Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 886,055 | 921,522 |
All Other | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 174,252 | $ 157,812 |
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