-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KM9zL6PjxiLzOB6omVix/BGQueYUq3JKOA3I/bWHdN8xO8Dv7dP+4J1vLOiqIUAj C4dy9Y8z2Tvvb1UUi7igVg== 0001181431-09-027991.txt : 20090601 0001181431-09-027991.hdr.sgml : 20090601 20090601171007 ACCESSION NUMBER: 0001181431-09-027991 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090529 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090601 DATE AS OF CHANGE: 20090601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Air Transport Services Group, Inc. CENTRAL INDEX KEY: 0000894081 STANDARD INDUSTRIAL CLASSIFICATION: AIR COURIER SERVICES [4513] IRS NUMBER: 261631624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50368 FILM NUMBER: 09865722 BUSINESS ADDRESS: STREET 1: 145 HUNTER DR CITY: WILMINGTON STATE: OH ZIP: 45177 BUSINESS PHONE: 937-382-5591 MAIL ADDRESS: STREET 1: 145 HUNTER DR CITY: WILMINGTON STATE: OH ZIP: 45177 FORMER COMPANY: FORMER CONFORMED NAME: ABX Holdings, Inc. DATE OF NAME CHANGE: 20080102 FORMER COMPANY: FORMER CONFORMED NAME: ABX AIR INC DATE OF NAME CHANGE: 19950728 8-K 1 rrd244413.htm Prepared By R.R. Donnelley Financial -- Form 8-K
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  05/29/2009
 
Air Transport Services Group, Inc.
(Exact name of registrant as specified in its charter)
 
Commission File Number:  000-50368
 
DE
  
26-1631624
(State or other jurisdiction of
  
(IRS Employer
incorporation)
  
Identification No.)
 
145 Hunter Drive, Wilmington, OH 45177
(Address of principal executive offices, including zip code)
 
(937) 382-5591
(Registrant’s telephone number, including area code)
 
ABX Holdings, Inc.
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
Item 1.01.    Entry into a Material Definitive Agreement
 
On June 1, 2009, ABX Air, Inc. ("ABX"), a wholly owned subsidiary of Air Transport Services Group, Inc. ("ATSG"), entered into an agreement (the "Agreement") with DHL Network Operations (USA), Inc. pursuant to which DHL has the option to lease up to four (4) Boeing 767-200 freighter aircraft from ABX and has assumed financial responsibility for the capital leases for five (5) other Boeing 767 aircraft that ABX is currently operating on behalf of DHL under the ACMI Service Agreement between the parties.

The Agreement, dated May 29, 2009, which formalizes a memorandum of understanding between DHL and ABX Air, dated March 2009, grants DHL options to lease from ABX Air, or an affiliate, up to four Boeing 767-200SF (freighter configuration) aircraft under favorable rates, and for terms beginning August 15, 2010, and continuing through 2015. The memorandum of understanding is described in a Form 8-K filed with the SEC on March 18, 2009.

In exchange, DHL has agreed to assume financial responsibility, retroac tive to January 31, 2009, for ABX Air's obligations under capital leases on five Boeing 767-200PC (non-standard cargo door configuration) aircraft currently dedicated to DHL's U.S. network. As of March 31, 2009, ATSG's balance sheet reflected $50.2 million of debt and $21.5 million of net book value related to those aircraft capital leases.

The Agreement calls for ABX Air to grant to DHL up to $10 million of credit against future rent obligations for the four 767-200SFs. If DHL elects not to exercise its options for any of the four 767-200SFs, ABX Air would pay DHL $2.5 million for each such option that DHL elects to forego.

A copy of the press release is enclosed herewith as Exhibit 99.1.

ABX Air, Inc., is also a party to several other agreements with DHL, including an ACMI Service Agreement with DHL Network Operations (USA), Inc., and a Hub and Line-Haul Services Agreement with DHL Express (USA), Inc., both of which are dated August 15, 2003. Under the ACMI Service Agreement, ABX Air provides air ca rgo transportation services to DHL on a cost plus basis. Under the Hub and Line-Haul Services Agreement (which will terminate on August 15, 2009), ABX Air provides staff to conduct package handling, package sorting and airport facilities and equipment maintenance services for DHL, also on a cost plus basis. In addition, ABX and DPWN Holdings (USA), Inc. are parties to a Severance and Retention Agreement, dated August 15, 2008, which specifies employee severance, retention and other benefits that DHL reimburses to ABX Air for payment to its employees that are displaced in conjunction with DHL's U.S. restructuring plan. Copies of the ACMI Service Agreement and Hub and Line-Haul Services Agreement, together with amendments, and the Severance and Retention Agreement have been filed with the SEC.

 
 
Item 9.01.    Financial Statements and Exhibits
 
(c) Exhibits
   
Exhibit   
No.          Description
-------       -----------
99.1          Press Release issued by Air Transport Services Group on June 1, 2009.
 

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
      
 
Air Transport Services Group, Inc.
 
 
Date: June 01, 2009
     
By:
 
/s/    W. Joseph Payne
               
W. Joseph Payne
               
Sr. VP, Corporate General Counsel & Secretary
 
 

 

Exhibit Index
 
Exhibit No.
  
Description
EX-99.1
  
ATSG Completes Aircraft Lease Option Agreement with DHL
EX-99.1 2 rrd244413_28536.htm ATSG COMPLETES AIRCRAFT LEASE OPTION AGREEMENT WITH DHL ABX Air, All Nippon Airways Extend ACMI Agreement

ATSG Completes Aircraft Lease Option Agreement with DHL

Will Result in Significant Deleveraging of Balance Sheet

WILMINGTON, Ohio, June 1, 2009 - Air Transport Services Group, Inc. (NASDAQ: ATSG) said today that its subsidiary ABX Air, Inc. has completed an agreement with its principal customer, DHL, concerning leases of certain ABX Air aircraft.

The agreement, which is further to a memorandum of understanding that DHL and ABX Air executed in March 2009, grants DHL options to lease from ABX Air, or an affiliate, up to four Boeing 767-200SF (freighter configuration) aircraft under favorable rates, and for terms beginning August 15, 2010, and continuing through 2015.

In exchange, DHL has agreed to assume financial responsibility, retroactive to January 31, 2009, for ABX Air's obligations under capital leases on five Boeing 767-200PC (non-standard cargo door configuration) aircraft currently dedicated to DHL's U.S. network. As of March 31, 2009, ATSG's balance sheet reflected $50.2 million of debt and $21.5 million of net book value related to those aircraft capital leases.

The agreement calls for ABX Air to grant to DHL up to $10 million of credit against future rent obligations for the four 767-200SFs. If DHL elects not to exercise its options for any of the four 767-200SFs, ABX Air would pay DHL $2.5 million for each such option that DHL elects to forego.

ABX Air is expected to continue to operate some or all of the five leased 767-200PCs as required under the current ACMI Agreement between the companies. The agreement does not stipulate whether ABX Air would continue to operate any of the four 767-200SF aircraft that DHL may opt to lease.

ATSG CEO and President Joe Hete said, "The completion of this agreement with DHL formalizes the deleveraging process that we announced earlier this year, including the restructuring of our promissory note to DHL. The combined effect of the capital lease transaction and note restructuring, including our commitment to pay DHL $15 million to further reduce the principal balance of the note, would be to reduce our outstanding debt principal by approximately $113 million. The note restructuring also removes some of the limitations on our Board's ability to consider dividend payments or buybacks for our shareholders. DHL has worked closely with us in finalizing these agreements, and we continue to jointly explore opportunities to provide DHL with additional 767-200SF aircraft on an ACMI or dry lease basis beyond 2010."

About ATSG

ATSG is a leading provider of air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. Through five principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier Certificates, ATSG also provides aircraft leasing, aircraft maintenance services, airport ground services, fuel management, specialized transportation management, and air charter brokerage services. ATSG's subsidiaries include ABX Air, Inc., Air Transport International, LLC, Capital Cargo International Airlines, Inc., Cargo Aircraft Management, Inc., Airborne Maintenance and Engineering Services, Inc. and LGSTX Services, Inc.

Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve risks and uncertainties. There are a number of important factors that could cause Air Transport Services Group's ("ATSG's") actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, whether DHL exercises its options to lease one or more of the aircraft under the Agreement and other factors that are contained from time to time in ATSG's filings with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 10-K, and its Quarterly Reports on Form 10-Q. Readers should carefully review this release and should not place undue reliance on ATSG's forward-looking statements. These forward-looking statements were based on information, plans and estimates as of the date of this release. ATSG undertakes no obligation to update any forward-looking statements to refle ct changes in underlying assumptions or factors, new information, future events or other changes.

Contact: ATSG, Inc.

Quint O. Turner, 937-382-5591

Chief Financial Officer

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