– Deployed seven newly-converted freighters,
including our first two A321-200s, in the quarter
– 2023 Outlook revised to reflect current
operating environment
Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading
provider of medium wide-body aircraft leasing, contracted air
transportation, and related services, today reported consolidated
financial results for the third quarter ended September 30, 2023.
Those results, as compared with the same quarter in 2022, were as
follows:
Third Quarter 2023
Results
- Revenues of $523 million, up 1%
- GAAP EPS (basic) from Continuing Operations of $0.26, down
$0.42
- Adjusted EPS* from Continuing Operations of $0.32, versus
$0.60
- Pretax Earnings from Continuing Operations of $24 million, down
from $65 million.
- Adjusted Pretax* Earnings of $31 million, down from $67
million
- Adjusted EBITDA* of $137 million, down from $163 million
- 9.4 million shares repurchased since September 2022, including
5.4 million shares in the third quarter
Joe Hete, Chief Executive Officer of ATSG, said, “The third
quarter started out on track with our expectations, carrying solid
second-quarter momentum from our passenger airline operations into
the summer. We leased seven newly converted freighters in July and
early August, including five 767-300s and our first two A321-200s.
However, both macro and operational pressures throughout the latter
part of the quarter materially affected our results. Particularly
in September, our passenger airline operations experienced service
related issues that drove significant unplanned travel and flight
crew costs. In our CAM leasing operations, we realized lower
revenues from 767-200 aircraft sales and associated engine power
than forecasted during the quarter.”
* Adjusted EPS (Earnings per Share), Adjusted Pretax Earnings,
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) and Adjusted Free Cash Flow, each of which is from
Continuing Operations, are non-GAAP financial measures and are
defined and reconciled to GAAP measures at the end of this
release.
Segment Results
Cargo Aircraft Management (CAM)
- Aircraft leasing and related revenues in the third quarter were
down 1% compared with the prior year quarter, due to eleven fewer
leased 767-200 aircraft and lower power-by-cycle ("PBC") engine
revenue associated with 767-200s, partially offset by higher
average lease rates, as nine more 767-300s and two initial
A321-200s have been deployed since September 2022.
- Pre-tax earnings decreased 37% to $23 million versus the prior
year quarter. Earnings were impacted by the scheduled return of
eleven 767-200s since September 2022, including two in the third
quarter this year, as well as reduced PBC revenue from fewer
767-200s in service, and fewer cycles flown by those still in
service. Higher aircraft sales in the prior-year period also
negatively impacted the segment earnings comparison. Interest
expense versus the prior year period increased $5 million, and
depreciation was up $2 million due to new deployments replacing
mostly depreciated assets.
- CAM deployed five Boeing 767-300 and two Airbus A321-200 leased
freighters to external customers during the quarter. Eleven leased
freighters have been deployed since September 2022, including nine
767-300s and two A321-200s. For the full year 2023, CAM now expects
to deploy 16 newly converted leased freighter aircraft, including
12 767-300s and four A321-200s. Six of the 16 are due to be
deployed in the fourth quarter.
- Twenty aircraft are currently in or awaiting conversion to
freighters. That total includes seven A321 aircraft and 13
767-300s. One 767-200 is currently staging for lease. The Company
is scheduled to purchase three Airbus A330 feedstock aircraft in
the fourth quarter for planned freighter conversion and deployment
in 2024.
ACMI Services
- Pre-tax earnings were $12 million in the third quarter, down
51% versus the prior-year quarter. The reduction stemmed from
unfavorable revenue mix impacts in both cargo and passenger
operations, inflation, and service challenges in our passenger
operations, which impacted travel and payroll costs in
September.
- Revenue block hours for ATSG's cargo airlines were down 4% for
the third quarter while operating one fewer Boeing 767 freighter
compared with the prior-year period. Cargo block hours were
affected by fewer longer-haul international routes as compared to
the prior-year period.
- Passenger block hours, including combi flying, increased 14%
versus this quarter last year. Hours flown by the four Boeing 757
combination freighter-passenger aircraft were up significantly due
to the resumption of a Pacific route in late 2022, which had been
temporarily paused due to the COVID-19 pandemic. Excluding combi
hours, passenger block hours increased 9%.
2023 Outlook
In mid-October, certain airlines that lease aircraft from CAM to
serve international routes expressed that they are experiencing
weaker customer demand, impacting their recent financial
performance and outlook. We expect this to disrupt future leasing
revenues from those customers.
ATSG expects the conflict in Israel to affect Omni's customer
requirements in the near-term. In addition, the Company expects
fewer 767-200 aircraft sales and lower engine revenues versus our
plan for this year. ATSG's domestic air express operations, in
support of the e-commerce networks of DHL and Amazon, are on track
with earlier expectations.
ATSG is updating its full-year 2023 guidance as follows:
Current
Prior
Adjusted EBITDA
$560 - $580 million
$610 - $620 million
Adjusted EPS
$1.50 - $1.70
$1.85 - $2.00
For 2023, ATSG is still projecting $785 million in total capex
spend, including $545 for growth and $240 million in sustaining
capex. However, ATSG now expects to further reduce its 2024 capex
plan to $505 million, down $100 million in growth capex from the
plan communicated at the September Investor Day event. This
reduction takes into account fewer conversions and feedstock
purchases due to softening demand. ATSG expects to provide updated
2024 Adjusted EBITDA guidance in February 2024, which we expect
will reflect the aforementioned demand concerns and reduced 2024
capex.
Hete concluded, “We've demonstrated our flexibility to pull back
on growth capital investments when conditions warrant, and
accordingly, we expect meaningful capital expenditure declines in
both 2024 and 2025 as we continue to optimize our capital
allocation strategy. The reduction in our capex requirements for
2024 will accelerate our realization of positive free cash flow
versus the timetable we communicated in September.”
Non-GAAP Financial Measures
This release, including the attached non-GAAP reconciliation
tables, contains financial measures that are not calculated and
presented in accordance with generally accepted accounting
principles in the United States ("non-GAAP financial measures").
Management uses these non-GAAP financial measures to evaluate
historical results and project future results. Management believes
that these non-GAAP financial measures assist in highlighting
operational trends, facilitating period-over-period comparisons,
and providing additional clarity about events and trends affecting
core operating performance. Disclosing these non-GAAP financial
measures provides insight to investors about additional metrics
that management uses to evaluate past performance and prospects for
future performance. Non-GAAP measures should not be considered in
isolation or as a substitute for analysis of the Company's results
as reported under GAAP and may be calculated differently by other
companies.
The historical non-GAAP financial measures included in this
release are reconciled to the most directly comparable financial
measure calculated and presented in accordance with GAAP in the
non-GAAP Reconciliation tables included later in this release. The
Company does not provide a reconciliation of projected Adjusted
EBITDA or Adjusted EPS because it is unable to predict with
reasonable accuracy the value of certain adjustments. Certain
adjustments can be significantly impacted by the re-measurements of
financial instruments including stock warrants issued to a
customer. The Company’s earnings on a GAAP basis, including its
earnings per share on a GAAP basis, and the non-GAAP adjustments
for gains and losses resulting from the re-measurement of stock
warrants, will depend on the future prices of ATSG stock, interest
rates, and other assumptions which are highly uncertain.
Conference Call
ATSG will host an investor conference call on Tuesday, November
7, 2023, at 10 a.m. Eastern Time to review its financial results
for the third quarter of 2023, and its outlook for remainder of the
year. Live call participants must register via this link that is
also available at ATSG’s website, www.atsginc.com under “Investors”
and “Presentations.” Once registered, call participants will
receive dial-in numbers and a unique Personal Identification Number
(PIN) that must be entered to join the live call. Listen-only
access to live and replay versions of the call, including slides,
will be available via a webcast link at the same ATSG website
location. Slides that accompany management’s discussion of its
quarterly results also may be downloaded there shortly before the
start of the call at 10 a.m.
About ATSG
ATSG is a leading provider of aircraft leasing and air cargo
transportation and related services to domestic and foreign air
carriers and other companies that outsource their air cargo lift
requirements. ATSG, through its leasing and airline subsidiaries,
is the world's largest owner and operator of converted Boeing 767
freighter aircraft. Through its principal subsidiaries, including
three airlines with separate and distinct U.S. FAA Part 121 Air
Carrier certificates, ATSG provides aircraft leasing, air cargo
lift, passenger ACMI and charter services, aircraft maintenance
services and airport ground services. ATSG's subsidiaries include
ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne
Maintenance and Engineering Services, Inc., including its
subsidiary, Pemco World Air Services, Inc.; Air Transport
International, Inc.; Cargo Aircraft Management, Inc.; and Omni Air
International, LLC. For more information, please see
www.atsginc.com.
Cautionary Note on Forward-Looking Statements
Except for historical information contained herein, the matters
discussed in this release contain forward-looking statements that
involve risks and uncertainties. A number of important factors
could cause Air Transport Services Group, Inc.'s ("ATSG's") actual
results to differ materially from those indicated by such
forward-looking statements. These factors include, but are not
limited to: (i) unplanned changes in the market demand for our
assets and services, including the loss of customers or a reduction
in the level of services we perform for customers; (ii) our
operating airlines' ability to maintain on-time service and control
costs; (iii) the cost and timing with respect to which we are able
to purchase and modify aircraft to a cargo configuration; (iv)
fluctuations in ATSG's traded share price and in interest rates,
which may result in mark-to-market charges on certain financial
instruments; (v) the number, timing, and scheduled routes of our
aircraft deployments to customers; (vi) our ability to remain in
compliance with key agreements with customers, lenders and
government agencies; (vii) the impact of current supply chain
constraints both within and outside the United States, which may be
more severe or persist longer than we currently expect; (viii) the
impact of a competitive labor market, which could restrict our
ability to fill key positions; and (ix) changes in general economic
and/or industry-specific conditions, including inflation.. Other
factors that could cause ATSG’s actual results to differ materially
from those indicated by such forward-looking statements are
contained from time to time in ATSG's filings with the U.S.
Securities and Exchange Commission, including its annual report on
Form 10-K and quarterly reports on Form 10-Q. Readers should
carefully review this release and should not place undue reliance
on ATSG's forward-looking statements. These forward-looking
statements were based on information, plans and estimates as of the
date of this release. Except as may be required by applicable law,
ATSG undertakes no obligation to update any forward-looking
statements to reflect changes in underlying assumptions or factors,
new information, future events or other changes.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
EARNINGS (UNAUDITED) (In thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
REVENUES
$
523,137
$
516,916
$
1,553,571
$
1,512,444
OPERATING EXPENSES
Salaries, wages and benefits
165,110
169,967
512,283
494,526
Depreciation and amortization
86,252
83,283
253,671
246,726
Maintenance, materials and repairs
54,569
41,541
148,838
116,657
Fuel
79,020
68,620
213,046
202,080
Contracted ground and aviation
services
18,353
18,278
55,823
56,762
Travel
36,223
29,865
96,998
82,544
Landing and ramp
4,271
4,210
13,139
12,873
Rent
7,811
8,383
24,197
22,114
Insurance
3,055
2,346
8,287
7,224
Other operating expenses
22,443
17,764
64,095
57,968
477,107
444,257
1,390,377
1,299,474
OPERATING INCOME
46,030
72,659
163,194
212,970
OTHER INCOME (EXPENSE)
Interest income
190
56
585
80
Non-service component of retiree benefit
credits
(3,218
)
4,635
(9,654
)
15,411
Net gain on financial instruments
1,778
695
1,856
9,402
Loss from non-consolidated affiliates
(1,885
)
(954
)
(4,398
)
(5,577
)
Interest expense
(19,376
)
(12,167
)
(51,753
)
(33,027
)
(22,511
)
(7,735
)
(63,364
)
(13,711
)
EARNINGS FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES
23,519
64,924
99,830
199,259
INCOME TAX EXPENSE
(6,347
)
(14,736
)
(24,495
)
(45,065
)
EARNINGS FROM CONTINUING OPERATIONS
17,172
50,188
75,335
154,194
EARNINGS FROM DISCONTINUED OPERATIONS, NET
OF TAX
—
854
—
1,736
NET EARNINGS
$
17,172
$
51,042
$
75,335
$
155,930
EARNINGS PER SHARE - CONTINUING
OPERATIONS
Basic
$
0.26
$
0.68
$
1.08
$
2.08
Diluted
$
0.24
$
0.57
$
0.98
$
1.76
WEIGHTED AVERAGE SHARES - CONTINUING
OPERATIONS
Basic
67,253
73,998
69,909
73,956
Diluted
72,672
88,746
78,427
88,980
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (In thousands, except share data)
September 30, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
50,585
$
27,134
Accounts receivable, net of allowance of
$1,228 in 2023 and $939 in 2022
226,147
301,622
Inventory
50,680
57,764
Prepaid supplies and other
36,349
31,956
TOTAL CURRENT ASSETS
363,761
418,476
Property and equipment, net
2,749,506
2,402,408
Customer incentive
64,873
79,650
Goodwill and acquired intangibles
484,981
492,642
Operating lease assets
59,224
74,070
Other assets
123,770
122,647
TOTAL ASSETS
$
3,846,115
$
3,589,893
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
272,306
$
192,992
Accrued salaries, wages and benefits
59,346
56,498
Accrued expenses
12,233
12,466
Current portion of debt obligations
648
639
Current portion of lease obligations
21,534
23,316
Unearned revenue
27,555
21,546
TOTAL CURRENT LIABILITIES
393,622
307,457
Long term debt
1,691,141
1,464,285
Stock obligations
1,816
695
Post-retirement obligations
31,488
35,334
Long term lease obligations
38,737
51,575
Other liabilities
61,360
62,861
Deferred income taxes
279,778
255,180
STOCKHOLDERS’ EQUITY:
Preferred stock, 20,000,000 shares
authorized, including 75,000 Series A Junior Participating
Preferred Stock
—
—
Common stock, par value $0.01 per share;
150,000,000 shares authorized; 65,315,066 and 72,327,758 shares
issued and outstanding in 2023 and 2022, respectively
653
723
Additional paid-in capital
835,630
986,303
Retained earnings
604,217
528,882
Accumulated other comprehensive loss
(92,327
)
(103,402
)
TOTAL STOCKHOLDERS’ EQUITY
1,348,173
1,412,506
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,846,115
$
3,589,893
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED SUMMARY OF CASH
FLOWS (UNAUDITED) (In thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
OPERATING CASH FLOWS
$
117,517
$
147,861
$
526,093
$
398,070
INVESTING ACTIVITIES:
Aircraft acquisitions and freighter
conversions
(119,709
)
(97,666
)
(422,873
)
(302,959
)
Planned aircraft maintenance, engine
overhauls and other non-aircraft additions to property and
equipment
(48,706
)
(56,482
)
(158,467
)
(145,399
)
Proceeds from sales of property and
equipment
71
3,605
10,516
3,759
Acquisitions and investments in
businesses
(800
)
312
(1,600
)
(16,233
)
TOTAL INVESTING CASH FLOWS
(169,144
)
(150,231
)
(572,424
)
(460,832
)
FINANCING ACTIVITIES:
Principal payments on secured debt
(90,217
)
(50,215
)
(180,534
)
(345,525
)
Proceeds from revolver borrowings
80,000
60,000
220,000
510,000
Proceeds from convertible note
issuance
400,000
—
400,000
—
Payments for financing costs
(10,268
)
—
(10,779
)
—
Repurchase of convertible notes
(203,247
)
—
(203,247
)
—
Repurchase of senior unsecured notes
—
—
—
(115,204
)
Purchase of common stock
(118,475
)
—
(155,349
)
—
Taxes paid for conversion of employee
awards
—
(80
)
(1,578
)
(1,519
)
Other financing payments
1,269
—
1,269
—
TOTAL FINANCING CASH FLOWS
59,062
9,705
69,782
47,752
NET INCREASE (DECREASE) IN CASH
$
7,435
$
7,335
$
23,451
$
(15,010
)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD
$
43,150
$
47,151
$
27,134
$
69,496
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
50,585
$
54,486
$
50,585
$
54,486
CASH GENERATED FOR DISCRETIONARY
ALLOCATION (Non- GAAP)
$
166,223
$
204,343
$
684,560
$
543,469
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES PRETAX EARNINGS FROM CONTINUING
OPERATIONS AND ADJUSTED PRETAX EARNINGS SUMMARY NON-GAAP
RECONCILIATION (In thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenues
CAM
Aircraft leasing and related revenues
$
113,145
$
114,526
$
345,500
$
341,164
Lease incentive amortization
(3,420
)
(5,030
)
(12,353
)
(15,089
)
Total CAM
109,725
109,496
333,147
326,075
ACMI Services
365,248
357,375
1,065,562
1,034,963
Other Activities
112,841
108,423
334,218
318,837
Total Revenues
587,814
575,294
1,732,927
1,679,875
Eliminate internal revenues
(64,677
)
(58,378
)
(179,356
)
(167,431
)
Customer Revenues
$
523,137
$
516,916
$
1,553,571
$
1,512,444
Pretax Earnings (Loss) from Continuing
Operations
CAM, inclusive of interest
expense
23,306
36,975
88,526
111,587
ACMI Services, inclusive of interest
expense
12,414
25,265
34,057
69,267
Other Activities
(7,968
)
(1,182
)
(8,613
)
560
Net, unallocated interest
expense
(908
)
(510
)
(1,944
)
(1,391
)
Non-service components of retiree
benefit credit
(3,218
)
4,635
(9,654
)
15,411
Net gain on financial
instruments
1,778
695
1,856
9,402
Loss from non-consolidated
affiliates
(1,885
)
(954
)
(4,398
)
(5,577
)
Earnings from Continuing Operations
before Income Taxes (GAAP)
$
23,519
$
64,924
$
99,830
$
199,259
Adjustments to Pretax Earnings from
Continuing Operations
Add customer incentive amortization
4,236
5,822
14,777
17,442
Add loss from non-consolidated
affiliates
1,885
954
4,398
5,577
Less net gain on financial instruments
(1,778
)
(695
)
(1,856
)
(9,402
)
Less non-service components of retiree
benefit credit
3,218
(4,635
)
9,654
(15,411
)
Add net charges for hangar foam
incident
58
960
71
960
Adjusted Pretax Earnings
(non-GAAP)
$
31,138
$
67,330
$
126,874
$
198,425
Adjusted Pretax Earnings excludes certain items included in
GAAP-based pretax Earnings (Loss) from Continuing Operations before
Income Taxes because these items are distinctly different in their
predictability among periods or not closely related to our
operations. Presenting this measure provides investors with a
comparative metric of fundamental operations, while highlighting
changes to certain items among periods. Adjusted Pretax Earnings
should not be considered an alternative to Earnings from Continuing
Operations Before Income Taxes or any other performance measure
derived in accordance with GAAP.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
NON-GAAP RECONCILIATION (In thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Earnings (Loss) from Continuing
Operations Before Income Taxes
$
23,519
$
64,924
$
99,830
$
199,259
Interest Income
(190
)
(56
)
(585
)
(80
)
Interest Expense
19,376
12,167
51,753
33,027
Depreciation and Amortization
86,252
83,283
253,671
246,726
EBITDA from Continuing Operations
(non-GAAP)
$
128,957
$
160,318
$
404,669
$
478,932
Add customer incentive amortization
4,236
5,822
14,777
17,442
Add start-up loss from non-consolidated
affiliates
1,885
954
4,398
5,577
Less net gain on financial instruments
(1,778
)
(695
)
(1,856
)
(9,402
)
Add non-service components of retiree
benefit credits
3,218
(4,635
)
9,654
(15,411
)
Add net charges for hangar foam
incident
58
960
71
960
Adjusted EBITDA (non-GAAP)
$
136,576
$
162,724
$
431,713
$
478,098
Management uses Adjusted EBITDA to assess the performance of its
operating results among periods. It is a metric that facilitates
the comparison of financial results of underlying operations.
Additionally, these non-GAAP adjustments are similar to the
adjustments used by lenders in the Company’s senior secured credit
facility to assess financial performance and determine the cost of
borrowed funds. The adjustments also remove the non-service cost
components of retiree benefit plans because they are not closely
related to ongoing operating activities. To improve comparability
between periods, the adjustments also exclude from EBITDA from
Continuing Operations charges related to the discharge of a fire
suppression system in the Company's aircraft hangar, net of related
insurance recoveries. Management presents EBITDA from Continuing
Operations, a commonly referenced metric, as a subtotal toward
computing Adjusted EBITDA.
EBITDA from Continuing Operations is defined as Earnings (Loss)
from Continuing Operations Before Income Taxes plus net interest
expense, depreciation, and amortization expense. Adjusted EBITDA is
defined as EBITDA from Continuing Operations less financial
instrument revaluation gains or losses, charge offs of debt
issuance costs when the Company modified its debt structure,
non-service components of retiree benefit costs including pension
plan settlements, amortization of warrant-based customer incentive
costs recorded in revenue, costs from non-consolidated affiliates
and charges related to the discharge of a fire suppression system,
net of insurance recoveries.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES ADJUSTED FREE CASH FLOW NON-GAAP
RECONCILIATION (In thousands)
Three Months Ended
Nine Months Ended
Trailing 12 Months
Ended
September 30,
September 30,
September 30,
2023
2022
2023
2022
2023
OPERATING CASH FLOWS (GAAP)
$
117,517
$
147,861
$
526,093
$
398,070
$
600,143
Sustaining capital expenditures
(48,706
)
(56,482
)
(158,467
)
(145,399
)
(199,904
)
ADJUSTED FREE CASH FLOW
(non-GAAP)
$
68,811
$
91,379
$
367,626
$
252,671
$
400,239
Sustaining capital expenditures includes cash outflows for
planned aircraft maintenance, engine overhauls, information systems
and other non-aircraft additions to property and equipment. It does
not include expenditures for aircraft acquisitions and related
passenger-to-freighter conversion costs.
Adjusted Free Cash Flow (non-GAAP) includes cash flow from
operations net of expenditures for planned aircraft maintenance,
engine overhauls and other non-aircraft additions to property and
equipment. Management believes that adjusting GAAP operating cash
flows is useful for investors to evaluate the company's ability to
generate adjusted free cash flow for growth initiatives, debt
service, cash returns for shareholders or other discretionary
allocations of capital.
AIR TRANSPORT SERVICES GROUP, INC. AND
SUBSIDIARIES ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE
NON-GAAP RECONCILIATION (In thousands)
Management presents Adjusted Earnings and Adjusted Earnings Per
Share, both non-GAAP measures, to provide additional information
regarding earnings per share without the volatility otherwise
caused by the items below among periods.
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
$
$ Per Share
$
$ Per Share
$
$ Per Share
$
$ Per Share
Earnings from Continuing Operations -
basic (GAAP)
$
17,172
$
50,188
$
75,335
$
154,194
Gain from warrant revaluation, net
tax1
—
(105
)
(106
)
(155
)
Convertible notes interest charges, net of
tax 2
443
763
1,999
2,285
Earnings from Continuing Operations -
diluted (GAAP)
17,615
$
0.24
50,846
$
0.57
77,228
$
0.98
156,324
$
1.76
Adjustments, net of tax
Customer incentive amortization3
3,290
0.05
4,493
0.05
11,501
0.15
13,461
0.15
Non-service component of retiree
benefits4
2,499
0.03
(3,577
)
(0.04
)
7,511
0.10
(11,893
)
(0.14
)
Financial instrument revaluations5
(1,380
)
(0.02
)
(431
)
—
(1,327
)
(0.02
)
(7,102
)
(0.08
)
Loss from affiliates6
1,464
0.02
736
0.01
3,417
0.04
4,304
0.05
Hangar foam incident7
45
—
741
0.01
55
—
741
0.01
Adjusted Earnings and Adjusted Earnings
Per Share (non-GAAP)
$
23,533
$
0.32
$
52,808
$
0.60
$
98,385
$
1.25
$
155,835
$
1.75
Shares
Shares
Shares
Shares
Weighted Average Shares -
diluted
72,672
88,746
78,427
88,980
Adjusted Earnings and Adjusted Earnings Per Share should not be
considered as alternatives to Earnings from Continuing Operations,
Weighted Average Shares - diluted or Earnings Per Share from
Continuing Operations or any other performance measure derived in
accordance with GAAP. Adjusted Earnings and Adjusted Earnings Per
Share should not be considered in isolation or as a substitute for
analysis of the company's results as reported under GAAP.
- Under U.S. GAAP, certain warrants are reflected as a liability
and unrealized warrant gains are typically removed from diluted
earnings per share (“EPS”) calculations, while unrealized warrant
losses are not removed because they are dilutive to EPS. For all
periods presented, additional shares assumes that Amazon net
settled its remaining warrants during each period.
- Application of accounting standard ASU No. 2020-06, "Accounting
for Convertible Instruments and Contracts in an Entity's Own
Equity" requires convertible debt to be treated under the
"if-convert method" for EPS.
- Removes the amortization of the warrant-based customer
incentives which are recorded against revenue over the term of the
related aircraft leases and customer contracts.
- Removes the non-service component of post-retirement costs and
credits.
- Removes gains and losses from period end financial instruments
revaluations, including derivative interest rate instruments,
customer warrant and sale option and charge offs of debt issuance
costs when the Company modified its debt structure.
- Removes losses for the Company's non-consolidated
affiliates.
- Removes charges and gains related to the discharge of a fire
suppression system in the Company's aircraft hangar, net of related
insurance recoveries.
AIR TRANSPORT SERVICES GROUP,
INC. AND SUBSIDIARIES AIRCRAFT FLEET
Aircraft Types
September 30, 2022
December 31, 2022
September 30, 2023
December 31, 2023
Projected
Freighter
Passenger
Freighter
Passenger
Freighter
Passenger
Freighter
Passenger
B767-200
32
3
32
3
22
3
21
3
B767-300
74
8
78
8
88
8
91
8
B777-200
—
3
—
3
—
3
—
3
B757 Combi
—
4
—
4
—
4
—
4
A321-200
—
—
—
—
2
—
4
—
Total Aircraft in Service
106
18
110
18
112
18
116
18
In or awaiting cargo conversion
B767-300
14
—
15
—
13
—
12
—
A321
7
—
7
—
7
—
5
—
A330
—
—
—
—
—
—
3
—
B767 staging for lease
2
—
—
—
1
—
1
—
Total Aircraft
129
18
132
18
133
18
137
18
Aircraft in Service Deployments
September 30,
December 31,
September 30,
December 31,
2022
2022
2023
2023 Projected
Dry leased without CMI
37
39
44
46
Dry leased with CMI
52
52
47
47
Customer provided for CMI
10
13
15
16
ACMI/Charter1
25
24
24
25
- ACMI/Charter includes four Boeing 767 passenger aircraft leased
from external companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106147008/en/
Quint Turner, ATSG Inc. Chief Financial Officer 937-366-2303
Grafico Azioni Air Transport Services (NASDAQ:ATSG)
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