Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document period end date | Mar. 31, 2022 | |
Amendment flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current fiscal year end date | --12-31 | |
Entity central index key | 0001135185 | |
Entity filer category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity registrant name | Atlas Air Worldwide Holdings, Inc. | |
Entity common stock shares outstanding | 28,190,379 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-16545 | |
Entity Tax Identification Number | 13-4146982 | |
Entity Address, Address Line One | 2000 Westchester Avenue | |
Entity Address, Address Line Two | Purchase | |
Entity Address, State or Province | NY | |
Entity Address, City or Town | New York | |
Entity Address, Postal Zip Code | 10577 | |
City Area Code | 914 | |
Local Phone Number | 701-8000 | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | AAWW | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 730,349 | $ 910,965 |
Restricted cash | 10,554 | 10,052 |
Accounts receivable, net of allowance of $4,178 and $4,003, respectively | 297,264 | 305,905 |
Prepaid expenses, assets held for sale and other current assets | 93,910 | 99,100 |
Total current assets | 1,132,077 | 1,326,022 |
Property and Equipment | ||
Flight equipment | 5,507,628 | 5,449,100 |
Ground equipment | 103,498 | 101,824 |
Less: accumulated depreciation | (1,360,736) | (1,319,636) |
Flight equipment purchase deposits and modifications in progress | 438,308 | 352,422 |
Property and equipment, net | 4,688,698 | 4,583,710 |
Other Assets | ||
Operating lease right-of-use assets | 130,748 | 138,744 |
Deferred costs and other assets | 317,993 | 329,971 |
Intangible assets, net and goodwill | 63,289 | 64,796 |
Total Assets | 6,332,805 | 6,443,243 |
Current Liabilities | ||
Accounts payable | 122,751 | 82,885 |
Accrued liabilities | 615,134 | 641,978 |
Current portion of long-term debt and finance leases | 607,999 | 639,811 |
Current portion of long-term operating leases | 55,587 | 55,383 |
Total current liabilities | 1,401,471 | 1,420,057 |
Other Liabilities | ||
Long-term debt and finance leases | 1,615,305 | 1,655,075 |
Long-term operating leases | 152,150 | 166,022 |
Deferred taxes | 371,518 | 354,798 |
Financial instruments and other liabilities | 31,031 | 37,954 |
Total other liabilities | 2,170,004 | 2,213,849 |
Commitments and contingencies | 0 | 0 |
Stockholders’ Equity | ||
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued | 0 | 0 |
Common stock, $0.01 par value; 100,000,000 shares authorized; 35,071,410 and 34,707,860 shares issued, 28,363,266 and 29,215,702 shares outstanding (net of treasury stock), as of March 31, 2022 and December 31, 2021, respectively | 351 | 347 |
Additional paid-in capital | 828,391 | 934,516 |
Treasury stock, at cost; 6,708,144 and 5,492,158 shares, respectively | (317,480) | (225,461) |
Accumulated other comprehensive loss | (433) | (511) |
Retained earnings | 2,250,501 | 2,100,446 |
Total stockholders’ equity | 2,761,330 | 2,809,337 |
Total Liabilities and Equity | $ 6,332,805 | $ 6,443,243 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 4,178 | $ 4,003 |
Preferred stock par value | $ 1 | $ 1 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 35,071,410 | 34,707,860 |
Common stock shares outstanding | 28,363,266 | 29,215,702 |
Treasury stock shares | 6,708,144 | 5,492,158 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Revenue | $ 1,037,156 | $ 861,300 |
Operating Expenses | ||
Salaries, wages and benefits | 298,019 | 202,614 |
Aircraft fuel | 244,337 | 163,551 |
Maintenance, materials and repairs | 118,899 | 121,133 |
Depreciation and amortization | 72,202 | 67,789 |
Travel | 42,768 | 37,672 |
Navigation fees, landing fees and other rent | 39,354 | 44,887 |
Passenger and ground handling services | 34,936 | 40,065 |
Aircraft rent | 12,995 | 20,756 |
Loss (gain) on disposal of flight equipment | (6,240) | 16 |
Special charge | 2,633 | 0 |
Transaction-related expenses | 0 | 201 |
Other | 55,857 | 58,412 |
Total Operating Expenses | 915,760 | 757,096 |
Operating Income | 121,396 | 104,204 |
Non-operating Expenses (Income) | ||
Interest income | (240) | (211) |
Interest expense | 20,423 | 27,180 |
Capitalized interest | (3,764) | (1,271) |
Unrealized loss on financial instruments | 0 | 113 |
Other (income) expense, net | (618) | (39,456) |
Total Non-operating Expenses (Income) | 15,801 | (13,645) |
Income before income taxes | 105,595 | 117,849 |
Income tax expense | 24,084 | 27,916 |
Net Income | $ 81,511 | $ 89,933 |
Earnings per share: | ||
Basic | $ 2.82 | $ 3.16 |
Diluted | $ 2.38 | $ 3.05 |
Weighted average shares: | ||
Basic | 28,854 | 28,491 |
Diluted | 34,690 | 29,478 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net Income | $ 81,511 | $ 89,933 |
Other comprehensive income: | ||
Reclassification to interest expense | 105 | 268 |
Income tax benefit | (27) | (64) |
Other comprehensive income | 78 | 204 |
Comprehensive Income | $ 81,589 | $ 90,137 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net Income | $ 81,511 | $ 89,933 |
Adjustments to reconcile Net Income to net cash provided by operating activities: | ||
Depreciation and amortization | 85,257 | 86,172 |
Provision for (reversal of) expected credit losses | (15) | (397) |
Special charge | 2,633 | 0 |
Unrealized loss on financial instruments | 0 | 113 |
Loss (gain) on disposal of flight equipment | (6,240) | 16 |
Deferred taxes | 23,682 | 27,839 |
Stock-based compensation | 2,195 | 4,060 |
Changes in: | ||
Accounts receivable | 9,960 | (22,745) |
Prepaid expenses, current assets and other assets | (3,619) | (7,500) |
Accounts payable, accrued liabilities and other liabilities | 12,475 | (89,366) |
Net cash provided by operating activities | 207,839 | 88,125 |
Investing Activities: | ||
Capital expenditures | (29,895) | (26,662) |
Purchase deposits and payments for flight equipment and modifications | (154,420) | (126,807) |
Investment in joint ventures | (783) | (1,608) |
Proceeds from disposal of flight equipment | 13,500 | 1,850 |
Net cash used for investing activities | (171,598) | (153,227) |
Financing Activities: | ||
Proceeds from debt issuance | 0 | 16,161 |
Payment of debt issuance costs | (81) | (900) |
Payments of debt and finance lease obligations | (108,466) | (77,953) |
Prepayment of accelerated share repurchase | (20,034) | 0 |
Purchase of treasury stock | (79,966) | 0 |
Customer maintenance reserves and deposits received | 4,245 | 5,152 |
Customer maintenance reserves paid | 0 | (12,265) |
Treasury shares withheld for payment of taxes | (12,053) | (7,350) |
Net cash used for financing activities | (216,355) | (77,155) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (180,114) | (142,257) |
Cash, cash equivalents and restricted cash at the beginning of period | 921,017 | 856,281 |
Cash, cash equivalents and restricted cash at the end of period | 740,903 | 714,024 |
Noncash Investing and Financing Activities: | ||
Acquisition of property and equipment included in Accounts payable and accrued liabilities | 3,146 | 24,938 |
Acquisition of property and equipment acquired under operating leases | 104 | 4,015 |
Acquisition of flight equipment under finance leases | 3,108 | 20,171 |
Issuance of shares related to settlement of warrant liability | $ 0 | $ 31,582 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock [Member] | Common Stock [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Treasury Stock [Member] | Treasury Stock [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Other Comprehensive Loss [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member] | Retained Earnings [Member]Cumulative Effect, Period of Adoption, Adjustment [Member] |
Beginning Balance at Dec. 31, 2020 | $ 2,261,539 | $ 329 | $ (217,889) | $ 873,874 | $ (1,904) | $ 1,607,129 | ||||||
Net Income | 89,933 | 0 | 0 | 0 | 0 | 89,933 | ||||||
Other comprehensive income | 204 | 0 | 0 | 0 | 204 | 0 | ||||||
Stock-based compensation | 4,060 | 0 | 0 | 4,060 | 0 | 0 | ||||||
Issuance of warrants | 3,228 | 0 | 3,228 | 0 | 0 | |||||||
Treasury shares withheld for payment of taxes | (7,350) | 0 | (7,350) | 0 | 0 | 0 | ||||||
Issuance of shares related to settlement of warrant | 31,582 | 13 | 0 | 31,569 | 0 | 0 | ||||||
Issuance of shares of restricted stock | 0 | 3 | 0 | (3) | 0 | 0 | ||||||
Ending Balance at Mar. 31, 2021 | 2,383,196 | 345 | (225,239) | 912,728 | (1,700) | 1,697,062 | ||||||
Beginning Balance at Dec. 31, 2021 | 2,809,337 | $ (24,042) | 347 | $ 0 | (225,461) | $ 0 | 934,516 | $ (92,586) | (511) | $ 0 | 2,100,446 | $ 68,544 |
Net Income | 81,511 | 0 | 0 | 0 | 0 | 81,511 | ||||||
Other comprehensive income | 78 | 0 | 0 | 0 | 78 | 0 | ||||||
Stock-based compensation | 2,195 | 0 | 0 | 2,195 | 0 | 0 | ||||||
Issuance of warrants | 4,304 | 0 | 0 | 4,304 | 0 | 0 | ||||||
Prepayment of accelerated share repurchase | (20,034) | 0 | 0 | (20,034) | 0 | 0 | ||||||
Purchase of shares of treasury stock | (79,966) | 0 | (79,966) | 0 | 0 | 0 | ||||||
Treasury shares withheld for payment of taxes | (12,053) | 0 | (12,053) | 0 | 0 | 0 | ||||||
Issuance of shares of restricted stock | 0 | 4 | 0 | (4) | 0 | 0 | ||||||
Ending Balance at Mar. 31, 2022 | $ 2,761,330 | $ 351 | $ (317,480) | $ 828,391 | $ (433) | $ 2,250,501 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parentheticals) (Unaudited) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement Of Stockholders Equity [Abstract] | ||
Purchase of shares of treasury stock | 1,061,257 | |
Treasury shares withheld for payment of taxes | 154,729 | 128,867 |
Issuance of shares of restricted stock | 363,550 | 337,755 |
Issuance of shares related to settlement of warrant | 1,280,450 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Basis Of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Our consolidated financial statements include the accounts of the holding company, Atlas Air Worldwide Holdings, Inc. (“AAWW”), and its consolidated subsidiaries. AAWW is the parent company of our principal operating subsidiary, Atlas Air, Inc. (“Atlas”), and several subsidiaries related to our dry leasing services (collectively referred to as “Titan”). AAWW also has a 51 % equity interest and 75 % voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). We record our share of Polar’s results under the equity method of accounting. Polar is a variable interest entity that we do not consolidate because we are not the primary beneficiary and we generally do not have any financial exposure to fund debt obligations or operating losses of Polar (see Note 3 for further discussion). The terms “we,” “us,” “our,” and the “Company” mean AAWW and all entities included in its consolidated financial statements. We provide outsourced aircraft and aviation operating services throughout the world, serving Africa, Asia, Australia, Europe, the Middle East, North America and South America through: (i) contractual service arrangements, including those through which we provide aircraft to customers and value-added services, including crew, maintenance and insurance (“ACMI”), crew, maintenance and insurance, but not the aircraft (“CMI”) and cargo and passenger charter services (“Charter”); and (ii) dry leasing aircraft and engines (“Dry Leasing” or “Dry Lease”). The accompanying unaudited consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany accounts and transactions have been eliminated. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the AAWW Annual Report on Form 10-K for the year ended December 31, 2021, which includes additional disclosures and a summary of our significant accounting policies. The December 31, 2021 balance sheet data was derived from that Annual Report. In our opinion, these Financial Statements include all adjustments, consisting of normal recurring items, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. Our quarterly results are subject to seasonal and other fluctuations, including fluctuations resulting from the global COVID-19 pandemic and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year. Except for per share data, all dollar amounts are in thousands unless otherwise noted. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Heavy Maintenance Except as described in the paragraph below, we account for heavy maintenance costs for airframes and engines using the direct expense method. Under this method, heavy maintenance costs are charged to expense upon induction, based on our best estimate of the costs after considering multiple factors, including historical costs, experience and information provided by third-party maintenance providers. These estimates may be subsequently adjusted for changes and the final determination of actual costs incurred. As of March 31, 2022 and December 31, 2021, Accrued heavy maintenance was $ 90.1 million and $ 79.6 million, respectively. We account for heavy maintenance costs for airframes and engines used in our Dry Leasing segment and engines used on our 747-8F and 777-200 aircraft using the deferral method. Under this method, we defer the expense recognition of scheduled heavy maintenance events, which are amortized over the shorter of the estimated period until the next scheduled heavy maintenance event is required or remaining lease term. Amortization of deferred maintenance expense included in Depreciation and amortization was $ 11.1 million and $ 12.0 million for the three months ended March 31, 2022 and March 31, 2021, respectively. Deferred maintenance included within Deferred costs and other assets is as follows: Balance as of December 31, 2021 $ 180,675 Deferred maintenance costs 5,933 Special charge (1) ( 1,628 ) Amortization of deferred maintenance ( 11,122 ) Balance as of March 31, 2022 $ 173,858 (1) See Note 6 for further discussion. Property and Equipment Committed capital expenditures are expected to be $ 659.9 million in 2022 and $ 359.7 million in 2023. These expenditures include delivery payments for our January 2021 agreement to purchase four 747-8F aircraft from The Boeing Company (“Boeing”), the first of these aircraft is expected to be delivered during the second quarter of 2022 and the remaining three throughout 2022. These amounts also include pre-delivery payments for our December 2021 agreement to purchase four new 777-200LRF aircraft from Boeing, the first of these aircraft is expected to be delivered late in the fourth quarter of 2022 and the remaining three throughout 2023. In addition, the amounts include other agreements to acquire spare engines. Payroll Support Program under the CARES Act In May 2020, two subsidiaries of the Company, Atlas and Southern Air, Inc. (“Southern Air”, and together with Atlas, the “PSP Recipients”) entered into an agreement with the U.S. Treasury (the "PSP Agreement") with respect to payroll support funding available to cargo carriers under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). AAWW also entered into a Warrant Agreement (the “Warrant Agreement”) with the U.S. Treasury, and AAWW issued a senior unsecured promissory note to the U.S. Treasury (the “Promissory Note”), with the PSP Recipients as guarantor. In connection with the payroll support funding received in 2020 under the PSP Agreement, we issued warrants to the U.S. Treasury to acquire up to 625,452 shares of our common stock. The warrants will expire in 2025 on the fifth anniversary of the issue date of each warrant. As of March 31, 2022 , no portion of the warrants have been exercised. We initially recognized deferred grant income within Accrued liabilities for the difference between the payroll support funding received in 2020 under the PSP Agreement and the amounts recorded for the Promissory Note and the Warrant Agreement. All grant income has been subsequently recognized within Other (income) expense, net in the consolidated statement of operations on a pro-rata basis over the periods that the qualifying employee wages, salaries and benefits were paid. During the three months ended March 31, 2021, we recognized the remaining $ 40.9 million of deferred grant income within Other (income) expense, net in the consolidated statement of operations. Recent Accounting Pronouncement Adopted in 2022 In August 2020, the Financial Accounting Standards Board amended its accounting guidance for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments. For convertible debt with a cash conversion feature, the amended guidance removes the accounting model to separately account for the liability and equity components, which resulted in the amortization of a debt discount to interest expense. Under this amended guidance, such convertible debt is accounted for as a single debt instrument with no amortization of a debt discount, unless certain other conditions are met. The amended guidance also requires the use of the if-converted method when calculating the dilutive impact of convertible debt on earnings per share. Effective January 1, 2022, we adopted the amended guidance using the modified retrospective approach, under which the guidance was applied only to the most current period presented. On January 1, 2022, we recorded an increase of $ 31.0 million to the carrying value of our convertible notes, a reduction of $ 6.9 million to deferred tax liabilities, a reduction of $ 92.6 million to Additional paid-in capital and an increase of $ 68.5 million to Retained earnings for the cumulative effect of adoption. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | 3. Related Parties Polar AAWW has a 51 % equity interest and 75 % voting interest in Polar. DHL Network Operations (USA), Inc. (“DHL”), a subsidiary of Deutsche Post AG, holds a 49 % equity interest and a 25 % voting interest in Polar. Polar is a variable interest entity that we do not consolidate because we are not the primary beneficiary as the risks associated with the direct costs of operation are with DHL. Under a 20-year blocked space agreement, which began in 2008, Polar provides air cargo capacity to DHL. Atlas has several agreements with Polar to provide ACMI, CMI, Dry Leasing, administrative, sales and ground support services to one another. We do not have any financial exposure to fund debt obligations or operating losses of Polar, except for any liquidated damages that we could incur under these agreements. The following table summarizes our transactions and balances with Polar: For the Three Months Ended Revenue and Expenses: March 31, 2022 March 31, 2021 Revenue from Polar $ 81,519 $ 77,256 Ground handling and airport fees to Polar 1,087 882 Accounts receivable/payable as of: March 31, 2022 December 31, 2021 Receivables from Polar $ 19,996 $ 22,311 Payables to Polar 610 3,082 Aggregate Carrying Value of Polar Investment as of: March 31, 2022 December 31, 2021 Aggregate Carrying Value of Polar Investment $ 4,870 $ 4,870 In addition to the amounts in the table above, Atlas recognized revenue from flying on behalf of Polar of $ 40.7 million and $ 54.1 million for the three months ended March 31, 2022 and 2021, respectively. Dry Leasing Joint Venture We hold a 10 % interest in a joint venture with an unrelated third party, which we entered into in December 2019, to develop a diversified freighter aircraft dry leasing portfolio. Through Titan, we provide aircraft and lease management services to the joint venture for fees based upon aircraft assets under management, among other things. Our investment in the joint venture is accounted for under the equity method of accounting. Under the joint venture, we have a commitment to provide up to $ 40.0 million of capital contributions before December 2022, of which $ 10.0 million has been contributed as of March 31, 2022. Our maximum exposure to losses from the entity is limited to our investment. The following table summarizes our transactions and balances with our dry leasing joint venture: For the Three Months Ended Revenue and Expenses: March 31, 2022 March 31, 2021 Revenue from dry leasing joint venture $ 338 $ 1,324 Aircraft rent to dry leasing joint venture 2,250 2,250 Aggregate Carrying Value of Joint Venture as of: March 31, 2022 December 31, 2021 Aggregate Carrying Value of Dry Leasing Joint Venture $ 8,814 $ 8,448 Parts Joint Venture We hold a 50 % interest in a joint venture with an unrelated third party to purchase rotable parts and provide repair services for those parts, primarily for 747-8F aircraft. The joint venture is a variable interest entity and we have not consolidated the joint venture because we are not the primary beneficiary as we do not exercise financial control. Our investment in the joint venture is accounted for under the equity method of accounting and was $ 17.7 million as of March 31, 2022 and $ 19.2 million as of December 31, 2021 . Our maximum exposure to losses from the entity is limited to our investment, which is composed primarily of rotable inventory parts. The joint venture does not have any third-party debt obligations. We had Accounts receivable from the joint venture of $ 0.2 million as of March 31, 2022 and $ 0.3 million as of December 31, 2021 . We had Accounts payable to the joint venture of $ 1.1 million as of March 31, 2022 and $ 1.2 million as of December 31, 2021 . |
Amazon
Amazon | 3 Months Ended |
Mar. 31, 2022 | |
Warrants And Rights Note Disclosure [Abstract] | |
Amazon | 4. Amazon In May 2016, we entered into certain agreements with Amazon.com, Inc. and its subsidiary, Amazon Fulfillment Services, Inc., (collectively “Amazon”), which involve, among other things, CMI operation of up to 20 Boeing 767-300 freighter aircraft for Amazon by Atlas, as well as Dry Leasing by Titan. The Dry Leases have a term of ten years from the commencement of each agreement, while the CMI operations are for seven years from the commencement of each agreement (with an option for Amazon to extend the term to ten years ). As of March 31, 2022, 19 767-300 freighters were in Dry Lease service, of which 17 were operating in CMI service. In conjunction with the agreements entered into in May 2016, we granted Amazon a warrant providing the right to acquire up to 20% of our outstanding common shares, as of the date of the agreements , after giving effect to the issuance of shares pursuant to the warrants, at an exercise price of $ 37.34 per share, as adjusted (“Warrant A”). All 7.5 million shares, as adjusted, vested in full and have been exercised. The agreements entered into in May 2016 also provided incentives for future growth of the relationship as Amazon may increase its business with us. In that regard, we granted Amazon a warrant to acquire up to an additional 10 % of our outstanding common shares, as of the date of the agreements , after giving effect to the issuance of shares pursuant to the warrants, for an exercise price of $ 37.34 per share, as adjusted (“Warrant B”). This warrant to purchase 3.77 million shares, as adjusted, will vest in increments of 37,660 shares, as adjusted, each time Amazon has paid $ 4.2 million of revenue to us, up to a total of $ 420.0 million, for incremental business beyond the original 20 767-300 freighters. As of March 31, 2022 , 1,129,800 shares, as adjusted, of Warrant B have vested, of which 564,900 shares remain unexercised. Warrant B will expire if not exercised in accordance with its terms by May 4, 2023 . In March 2019, we amended the agreements entered into in 2016 with Amazon, pursuant to which we began providing CMI services using Boeing 737-800 freighter aircraft provided by Amazon. The 737-800 CMI operations are for a term of seven years from the commencement of each agreement (with an option for Amazon to extend the term to ten years ). As of March 31, 2022, eight 737-800 freighter aircraft were operating in CMI service. In connection with the amended agreements, we granted Amazon a warrant to acquire up to an additional 9.9 % of our outstanding common shares, as of the date of the agreements , after giving effect to the issuance of shares pursuant to the warrant, for an exercise price of $ 52.67 per share, as adjusted (“Warrant C”). Only if Warrant B vests in full, this warrant to purchase 6.66 million shares, as adjusted, would vest in increments of 45,623 shares, as adjusted, each time Amazon has paid $ 6.9 million of revenue to us, up to a total of $ 1.0 billion, for incremental business beyond Warrant A and Warrant B. As of March 31, 2022 , no portion of Warrant C has vested. Warrant C will expire if not exercised in accordance with its terms by March 27, 2026 . Further, in the event that Warrant B does not vest in full on or prior to its May 4, 2023 expiration, then Warrant C will no longer be exercisable by Amazon as of that date. While Amazon would be entitled to vote the shares it owns up to 14.9 % of our outstanding common shares, in its discretion, it would be required to vote any shares it owns in excess of 14.9 % of our outstanding common shares in accordance with the recommendation of our board of directors. We amortized $ 10.1 million and $ 10.5 million of the customer incentive asset as a reduction of Operating Revenue for the three months ended March 31, 2022 and 2021, respectively. Customer incentive asset included within Deferred costs and other assets is as follows: Balance at December 31, 2021 $ 96,177 Initial value for estimate of vested or expected to vest warrants 4,304 Amortization of customer incentive asset ( 10,051 ) Ending balance at March 31, 2022 $ 90,430 |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information | 5. Supplemental Financial Information Accounts Receivable Accounts receivable, net of allowance for expected credit losses related to customer contracts, excluding Dry Leasing contracts, was $ 252.7 million as of March 31, 2022 and $ 248.4 million as of December 31, 2021. Allowance for expected credit losses, included within Accounts receivable, is as follows: Beginning balance at December 31, 2021 $ 4,003 Bad debt recovery ( 15 ) Amounts written off, net of recoveries 190 Ending balance at March 31, 2022 $ 4,178 Accrued Liabilities Accrued liabilities consisted of the following as of: March 31, 2022 December 31, 2021 Salaries, wages and benefits $ 175,389 $ 211,801 Maintenance 140,947 135,133 Customer maintenance reserves 91,826 87,565 Aircraft fuel 59,689 40,855 Deferred revenue 47,577 58,616 Other 99,706 108,008 Accrued liabilities $ 615,134 $ 641,978 Revenue Contract Liability Deferred revenue for customer contracts, excluding Dry Leasing contracts, represents amounts collected from, or invoiced to, customers in advance of revenue recognition. The balance of Deferred revenue will increase or decrease based on the timing of invoices and recognition of revenue. Significant changes in Deferred Revenue liability balances during the three months ended March 31, 2022 were as follows: Balance as of December 31, 2021 $ 52,647 Revenue recognized ( 106,640 ) Amounts collected or invoiced 90,582 Balance as of March 31, 2022 $ 36,589 Supplemental Cash Flow Information The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: March 31, 2022 December 31, 2021 Cash and cash equivalents $ 730,349 $ 910,965 Restricted cash 10,554 10,052 Total Cash, cash equivalents and restricted cash shown in Consolidated Statements of Cash Flows $ 740,903 $ 921,017 |
Special Charge and Assets Held
Special Charge and Assets Held For Sale | 3 Months Ended |
Mar. 31, 2022 | |
Aircraft And Aircraft Engines Held For Sale [Abstract] | |
Special Charge and Assets Held For Sale | 6. Special Charge and Assets Held For Sale Special Charge In March 2022, we recorded a $ 2.6 million charge related to two CF60-80 engines Dry Leased to a customer. Assets Held For Sale As of December 31, 2021, we had six spare CF6-80 engines with a carrying value of $ 5.5 million classified as held for sale within Prepaid expense, assets held for sale and other current assets in the consolidated balance sheets. During the three months ended March 31, 2022 , we received proceeds of $ 11.7 million and recognized a net gain of $ 6.2 million from the completion of the sale of the six spare CF6-80 engines within Loss (gain) on the disposal of flight equipment in the consolidated statement of operations. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt Convertible Notes In June 2015, we issued $ 224.5 million aggregate principal amount of convertible senior notes that mature on June 1, 2022 (the “2015 Convertible Notes”) in an underwritten public offering. In May 2017, we issued $ 289.0 million aggregate principal amount of convertible senior notes that mature on June 1, 2024 (the “2017 Convertible Notes”) in an underwritten public offering. The 2017 Convertible Notes and the 2015 Convertible Notes (collectively, the “Convertible Notes”) are senior unsecured obligations and accrue interest payable semiannually on June 1 and December 1 of each year. The Convertible Notes are due on their respective maturity dates, unless earlier converted or repurchased pursuant to their respective terms. In connection with the offerings of the Convertible Notes, we entered into convertible note hedge transactions whereby we have the option to purchase a certain number of shares of our common stock at a fixed price per share. In addition, we sold warrants to the option counterparties whereby the holders of the warrants have the option to purchase a certain number of shares of our common stock at a fixed price per share. Taken together, the purchases of the convertible note hedges and the sales of the warrants are intended to offset any economic dilution from the conversion of each of the Convertible Notes when the stock price is below the exercise price of the respective warrants and to effectively increase the overall conversion prices from $ 74.05 to $ 95.01 per share for the 2015 Convertible Notes and from $ 61.08 to $ 92.20 per share for the 2017 Convertible Notes. On or after the earliest conversion date until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or a portion of its Convertible Notes. Upon conversion, each of the Convertible Notes will be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. Our current intent and policy is to settle conversions with a combination of cash and shares of common stock with the principal amounts of the Convertible Notes paid in cash. Effective September 1, 2021, the 2015 Convertible Notes became convertible and all conversions are required to be settled in cash for the principal amount. The price of our common stock was greater than or equal to 130 % of the conversion price of the 2017 Convertible Notes for at least 20 trading days during the 30 consecutive trading days ending on the last trading day of the quarter ended March 31, 2022. Therefore, our 2017 Convertible Notes continue to be convertible at the holders’ option through June 30, 2022. The impact of the 2017 Convertible Notes on our liquidity will depend on the settlement method we elect. As discussed above, our intent and policy is to settle conversions with a combination of cash and shares of common stock with the principal amount of the Convertible Notes paid in cash. Through December 31, 2021, we separately accounted for the liability and equity components of the Convertible Notes based on their relative values. Debt issuance costs related to the issuance of the Convertible Notes were also previously allocated to the liability and equity components based on their relative values. With the adoption of the amended accounting guidance for convertible notes on January 1, 2022 (see Note 2 for further discussion), amounts, including debt issuance costs, that were previously classified within equity were reclassified to the liability component, net of any remaining unamortized amounts. Debt issuance costs are amortized to interest expense using the effective interest method over the term of each of the Convertible Notes. The Convertible Notes consisted of the following as of March 31, 2022: 2015 Convertible Notes 2017 Convertible Notes Remaining life in months 2 26 Earliest conversion date September 1, 2021 September 1, 2023 Gross proceeds $ 224,500 $ 289,000 Less: debt issuance cost, net of amortization ( 162 ) ( 2,300 ) Net carrying amount $ 224,338 $ 286,700 The following table presents the amount of interest expense recognized related to the Convertible Notes: For the Three Months Ended March 31, 2022 March 31, 2021 Contractual interest coupon $ 2,618 $ 2,618 Amortization of debt discount - 4,671 Amortization of debt issuance costs 509 402 Total interest expense recognized $ 3,127 $ 7,691 Revolving Credit Facility In December 2021, we amended and extended our previous three-year $ 200.0 million secured revolving credit facility into a new four-year $ 250.0 million secured revolving credit facility (the “Revolver”) for general corporate purposes. As of March 31, 2022 , there were no amounts outstanding and we had $ 250.0 million of unused availability, based on the collateral borrowing base. Other Debt In April 2022, we refinanced a term loan secured by a 747-8F aircraft and received proceeds of $ 90.0 million from a financing with an 84-month term for this aircraft at a blended fixed rate of 3.86 %, with principal and interest payable quarterly. We used $ 45.7 million of the proceeds to repay a term loan in full. In connection with entry into this financing, we paid usual and customary commitment and other fees. While the financing involved a sale and leaseback of the aircraft, it did not qualify as a sale for accounting purposes. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The effective income tax rates were 22.8 % and 23.7 % for the three months ended March 31, 2022 and 2021, respectively. These rates differed from the U.S. statutory rate primarily due to state income taxes and certain expenses that are not deductible for tax purposes. For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | 9. Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Other inputs that are observable directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, or inactive quoted prices for identical assets or liabilities in inactive markets; Level 3 Unobservable inputs reflecting assumptions about the inputs used in pricing the asset or liability. We endeavor to utilize the best available information to measure fair value. The carrying value of Cash and cash equivalents, and Restricted cash is based on cost, which approximates fair value. Term loans and notes consist of term loans, notes guaranteed by the Export-Import Bank of the United States, a promissory note issued to the U.S. Treasury and other financings. The fair values of these debt instruments and the Revolver are based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms. The fair value of our Convertible Notes is based on unadjusted quoted market prices for these securities. The following table summarizes the carrying value, estimated fair value and classification of our financial instruments as of: March 31, 2022 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 730,349 $ 730,349 $ 730,349 $ - $ - Restricted cash 10,554 10,554 10,554 - - $ 740,903 $ 740,903 $ 740,903 $ - $ - Liabilities Term loans and notes $ 1,567,188 $ 1,563,797 $ - $ - $ 1,563,797 Convertible notes (1) 511,038 694,569 694,569 - - $ 2,078,226 $ 2,258,366 $ 694,569 $ - $ 1,563,797 December 31, 2021 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 910,965 $ 910,965 $ 910,965 $ - $ - Restricted cash 10,052 10,052 10,052 - - $ 921,017 $ 921,017 $ 921,017 $ - $ - Liabilities Term loans and notes $ 1,638,311 $ 1,690,675 $ - $ - $ 1,690,675 Convertible notes (2) 479,573 758,424 758,424 - - $ 2,117,884 $ 2,449,099 $ 758,424 $ - $ 1,690,675 (1) Carrying value is net of debt issuance costs (see Note 7). (2) Carrying value is net of debt discounts and debt issuance costs (see Note 7). |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | 10. Segment Reporting We currently have the following two operating and reportable segments: Airline Operations and Dry Leasing, both of which are directly or indirectly engaged in the business of air transportation services but have different commercial and economic characteristics. Each operating segment is separately reviewed by our chief operating decision maker to assess operating results and make resource allocation decisions. We do not aggregate our operating segments and, therefore, our operating segments are our reportable segments. We use an economic performance metric called Direct Contribution, which shows the profitability of each segment. Direct Contribution includes Income before income taxes and excludes the following: Special charges, Transaction-related expenses, nonrecurring items, Loss (gain) on the disposal of flight equipment, Losses on early extinguishment of debt, Unrealized loss on financial instruments and Unallocated income and expenses, net. Direct operating and ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense on the portion of debt used for financing aircraft, interest income on debt securities and aircraft depreciation. Unallocated income and expenses, net include corporate overhead, nonaircraft depreciation, noncash expenses and income, interest expense on the portion of debt used for general corporate purposes, interest income on nondebt securities, capitalized interest, foreign exchange gains and losses, other revenue, other non-operating costs and CARES Act grant income. The following table sets forth Operating Revenue and Direct Contribution for our reportable segments reconciled to Operating Income and Income before income taxes: For the Three Months Ended March 31, 2022 March 31, 2021 Operating Revenue: Airline Operations $ 995,355 $ 826,240 Dry Leasing 46,170 40,364 Customer incentive asset amortization ( 10,051 ) ( 10,481 ) Other 5,682 5,177 Total Operating Revenue $ 1,037,156 $ 861,300 Direct Contribution: Airline Operations $ 185,818 $ 169,150 Dry Leasing 16,909 10,564 Total Direct Contribution for Reportable Segments 202,727 179,714 Unallocated income and (expenses), net ( 100,739 ) ( 61,535 ) Unrealized (loss) on financial instruments - ( 113 ) Special charge ( 2,633 ) - Transaction-related expenses - ( 201 ) Gain (loss) on disposal of flight equipment 6,240 ( 16 ) Income before income taxes 105,595 117,849 Add back (subtract): Interest income ( 240 ) ( 211 ) Interest expense 20,423 27,180 Capitalized interest ( 3,764 ) ( 1,271 ) Unrealized loss on financial instruments - 113 Other (income) expense, net ( 618 ) ( 39,456 ) Operating Income $ 121,396 $ 104,204 The following table disaggregates our Airline Operations segment revenue by customer and service type: For the Three Months Ended March 31, 2022 March 31, 2021 Cargo Passenger Total Cargo Passenger Total Commercial customers $ 903,282 $ 1,625 $ 904,907 $ 713,211 $ 2,879 $ 716,090 AMC 29,289 61,159 90,448 45,312 64,838 110,150 Total Airline Operations Revenue $ 932,571 $ 62,784 $ 995,355 $ 758,523 $ 67,717 $ 826,240 Given the nature of our business and international flying, geographic information for revenue, long-lived assets and total assets is not presented because it is impracticable to do so. We are exposed to a concentration of revenue from the U.S. Military Air Mobility Command (“AMC”), Polar and DHL (see above for the AMC and Note 3 for further discussion regarding Polar). No other customer accounted for more than 10.0% of our Total Operating Revenue. Revenue from DHL was $ 135.6 million and $ 158.7 million for the three months ended March 31, 2022 and 2021, respectively. We have not experienced any credit issues with these customers. |
Labor and Legal Proceedings
Labor and Legal Proceedings | 3 Months Ended |
Mar. 31, 2022 | |
Labor And Legal Proceedings [Abstract] | |
Labor and Legal Proceedings | 11 . Labor and Legal Proceedings Collective Bargaining Agreements Pilots of Atlas and flight dispatchers of Atlas and Polar are represented by the International Brotherhood of Teamsters (the “IBT”). We had a five-year collective bargaining agreement (“CBA”) with our Atlas pilots, which became amendable in September 2016, and a four-year CBA with the Southern Air pilots, which became amendable in November 2016. On November 17, 2021, the Southern Air pilots all transferred to Atlas with the issuance of a single operating certificate for Atlas by the U.S. Federal Aviation Administration. In March 2022, we signed a new five-year CBA with our pilots, effective as of September 2021. This long-term CBA was reached through a binding arbitration process, with the arbitrator’s decision being issued on September 10, 2021. The new pay rates became effective as of September 1, 2021, and we are continuing to work closely together with the union’s new leadership on the final implementation of certain remaining provisions of the CBA. Under this industry competitive agreement, all of our pilots are receiving significantly higher pay, quality of life improvements and enhanced benefits. We also have a five-year CBA with our Atlas and Polar dispatchers, which was extended in April 2017 for an additional four years , making the CBA amendable in November 2021. On September 15, 2021, the IBT, representing the flight dispatchers of Atlas and Polar, provided the Company with the requisite notice of its intent to commence negotiations for a new CBA pursuant to Section 6 of the Railway Labor Act. The Company and the IBT commenced bargaining with good faith discussions and are making progress towards an amended CBA. We are subject to risks of work interruption or stoppage as permitted by the Railway Labor Act and may incur additional administrative expenses associated with union representation of our employees. Matters Related to Alleged Pricing Practices In the Netherlands, Stichting Cartel Compensation, successor in interest to claims of various shippers, has filed suit in the district court in Amsterdam against British Airways, KLM, Martinair, Air France, Lufthansa and Singapore Airlines seeking recovery for damages purportedly arising from allegedly unlawful pricing practices of such defendants. In response, British Airways, KLM, Martinair, Air France and Lufthansa filed third-party indemnification lawsuits against Polar Air Cargo, LLC (“Old Polar”), a consolidated subsidiary of the Company, and Polar, seeking indemnification in the event the defendants are found to be liable in the main proceedings. Another defendant, Thai Airways, filed a similar indemnification claim. Activities in the case have focused on various procedural issues and rulings, some of which are awaiting court decisions on appeal. The ultimate outcome of the lawsuit is likely to be affected by a decision readopted by the European Commission in March 2017, finding EU competition law violations by British Airways, KLM, Martinair, Air France and Lufthansa, among others, but not Old Polar or Polar. If the Company, Old Polar or Polar were to incur an unfavorable outcome, such outcome may have a material adverse impact on our business, financial condition, results of operations or cash flows. We are unable to reasonably estimate a range of possible loss for this matter at this time. Brazilian Customs Claim Old Polar was cited for an alleged customs violation in Sao Paulo, Brazil, relating to shipments of goods dating back to asserting that goods listed on the flight manifest of an Old Polar scheduled service flight were not properly presented to customs upon arrival and therefore were improperly brought into Brazil. The claim, which also seeks unpaid customs duties, taxes and penalties from the date of the alleged infraction, is approximately $ 2.1 million in aggregate based on March 31, 2022 exchange rates. Old Polar has presented evidence that certain of the alleged missing goods were in fact never onboard the aircraft (due to a change in plans by the relevant shipper) and thus no customs duties should be due. Further, we believe that the amounts claimed are substantially overstated due to a calculation error when considering the type and amount of goods allegedly missing, among other things. As required to defend this claim, we have made deposits pending resolution of the matter. The balance was $ 3.8 million as of March 31, 2022 and $ 3.2 million as of December 31, 2021, and is included in Deferred costs and other assets. We are currently defending this and other Brazilian customs claims and the ultimate disposition of these claims, either individually or in the aggregate, is not expected to materially affect our financial condition, results of operations or cash flows. Other In addition to the matters described in this note, we have certain other contingencies incident to the ordinary course of business. Unless disclosed otherwise, management does not expect that the ultimate disposition of such other contingencies or matters will materially affect our financial condition, results of operations or cash flows. |
Stock Repurchases
Stock Repurchases | 3 Months Ended |
Mar. 31, 2022 | |
Treasury Stock [Abstract] | |
Stock Repurchases | 12. Stock Repurchases We record the repurchase of our shares of common stock at cost based on the settlement date of the transaction. These shares are classified as treasury stock, which is a reduction to stockholders’ equity. Treasury shares are included in authorized and issued shares but excluded from outstanding shares. In February 2022, our board of directors approved the establishment of a new stock repurchase program authorizing the repurchase of up to a total of $ 200.0 million of our common stock. Purchases may be made at management's discretion in the form of accelerated share repurchase programs, open market repurchase programs, privately negotiated transactions or a combination of these methods. In February 2022, we paid $ 100.0 million and received an initial delivery of 1,061,257 shares pursuant to an accelerated share repurchase program agreement with a financial institution for the repurchase of our common stock (the “ASR”). We accounted for this ASR as a repurchase of common stock and as a forward contract indexed to our own common stock. We determined that the forward contract met all of the applicable criteria for equity classification and, therefore, this ASR was not accounted for as a derivative instrument. In April 2022, the ASR was settled and we received an additional 172,887 shares of common stock. In the aggregate, we repurchased 1,234,144 shares for $ 100.0 million at an average cost of $ 81.03 per share under this ASR. The total number of shares of common stock repurchased by us was based on the volume-weighted average price of the common stock during the term of the ASR Agreement, less a pre-determined discount. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 13. Earnings Per Share Basic earnings per share (“EPS”) represents income divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents income divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period. The calculations of basic and diluted EPS were as follows: For the Three Months Ended Numerator: March 31, 2022 March 31, 2021 Net Income $ 81,511 $ 89,933 Plus: Interest expense on convertible notes, net of tax 1,046 - Unrealized loss on financial instruments, net of tax - 112 Diluted net income $ 82,557 $ 90,045 Denominator: Basic EPS weighted average shares outstanding 28,854 28,491 Effect of dilutive: Convertible notes 5,031 - Warrants 609 751 Restricted stock 196 236 Diluted EPS weighted average shares outstanding 34,690 29,478 Earnings per share: Basic $ 2.82 $ 3.16 Diluted $ 2.38 $ 3.05 Antidilutive shares related to warrants issued in connection with our Convertible Notes or to customers that were out of the money and excluded from the calculation of diluted EPS were zero for the three months ended March 31, 2022 , and 7.8 million for the three months ended March 31, 2021 . Diluted shares reflect the potential dilution that could occur from restricted shares using the treasury stock method. The calculation of EPS does not include restricted share units and customer warrants in which performance or market conditions were not satisfied of 9.4 million for the three months ended March 31, 2022 and 10.1 million for the three months ended March 31, 2021 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income Loss [Abstract] | |
Accumulated Other Comprehensive Income | 14. Accumulated Other Comprehensive Income The following table summarizes the components of Accumulated other comprehensive income: Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2020 $ ( 1,913 ) $ 9 $ ( 1,904 ) Reclassification to interest expense 268 - 268 Tax effect ( 64 ) - ( 64 ) Balance as of March 31, 2021 $ ( 1,709 ) $ 9 $ ( 1,700 ) Balance as of December 31, 2021 $ ( 520 ) $ 9 $ ( 511 ) Reclassification to interest expense 105 - 105 Tax effect ( 27 ) - ( 27 ) Balance as of March 31, 2022 $ ( 442 ) $ 9 $ ( 433 ) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Heavy Maintenance | Heavy Maintenance Except as described in the paragraph below, we account for heavy maintenance costs for airframes and engines using the direct expense method. Under this method, heavy maintenance costs are charged to expense upon induction, based on our best estimate of the costs after considering multiple factors, including historical costs, experience and information provided by third-party maintenance providers. These estimates may be subsequently adjusted for changes and the final determination of actual costs incurred. As of March 31, 2022 and December 31, 2021, Accrued heavy maintenance was $ 90.1 million and $ 79.6 million, respectively. We account for heavy maintenance costs for airframes and engines used in our Dry Leasing segment and engines used on our 747-8F and 777-200 aircraft using the deferral method. Under this method, we defer the expense recognition of scheduled heavy maintenance events, which are amortized over the shorter of the estimated period until the next scheduled heavy maintenance event is required or remaining lease term. Amortization of deferred maintenance expense included in Depreciation and amortization was $ 11.1 million and $ 12.0 million for the three months ended March 31, 2022 and March 31, 2021, respectively. Deferred maintenance included within Deferred costs and other assets is as follows: Balance as of December 31, 2021 $ 180,675 Deferred maintenance costs 5,933 Special charge (1) ( 1,628 ) Amortization of deferred maintenance ( 11,122 ) Balance as of March 31, 2022 $ 173,858 (1) See Note 6 for further discussion. |
Property and Equipment | Property and Equipment Committed capital expenditures are expected to be $ 659.9 million in 2022 and $ 359.7 million in 2023. These expenditures include delivery payments for our January 2021 agreement to purchase four 747-8F aircraft from The Boeing Company (“Boeing”), the first of these aircraft is expected to be delivered during the second quarter of 2022 and the remaining three throughout 2022. These amounts also include pre-delivery payments for our December 2021 agreement to purchase four new 777-200LRF aircraft from Boeing, the first of these aircraft is expected to be delivered late in the fourth quarter of 2022 and the remaining three throughout 2023. In addition, the amounts include other agreements to acquire spare engines. |
Payroll Support Program under the CARES Act | Payroll Support Program under the CARES Act In May 2020, two subsidiaries of the Company, Atlas and Southern Air, Inc. (“Southern Air”, and together with Atlas, the “PSP Recipients”) entered into an agreement with the U.S. Treasury (the "PSP Agreement") with respect to payroll support funding available to cargo carriers under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). AAWW also entered into a Warrant Agreement (the “Warrant Agreement”) with the U.S. Treasury, and AAWW issued a senior unsecured promissory note to the U.S. Treasury (the “Promissory Note”), with the PSP Recipients as guarantor. In connection with the payroll support funding received in 2020 under the PSP Agreement, we issued warrants to the U.S. Treasury to acquire up to 625,452 shares of our common stock. The warrants will expire in 2025 on the fifth anniversary of the issue date of each warrant. As of March 31, 2022 , no portion of the warrants have been exercised. We initially recognized deferred grant income within Accrued liabilities for the difference between the payroll support funding received in 2020 under the PSP Agreement and the amounts recorded for the Promissory Note and the Warrant Agreement. All grant income has been subsequently recognized within Other (income) expense, net in the consolidated statement of operations on a pro-rata basis over the periods that the qualifying employee wages, salaries and benefits were paid. During the three months ended March 31, 2021, we recognized the remaining $ 40.9 million of deferred grant income within Other (income) expense, net in the consolidated statement of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncement Adopted in 2022 In August 2020, the Financial Accounting Standards Board amended its accounting guidance for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments. For convertible debt with a cash conversion feature, the amended guidance removes the accounting model to separately account for the liability and equity components, which resulted in the amortization of a debt discount to interest expense. Under this amended guidance, such convertible debt is accounted for as a single debt instrument with no amortization of a debt discount, unless certain other conditions are met. The amended guidance also requires the use of the if-converted method when calculating the dilutive impact of convertible debt on earnings per share. Effective January 1, 2022, we adopted the amended guidance using the modified retrospective approach, under which the guidance was applied only to the most current period presented. On January 1, 2022, we recorded an increase of $ 31.0 million to the carrying value of our convertible notes, a reduction of $ 6.9 million to deferred tax liabilities, a reduction of $ 92.6 million to Additional paid-in capital and an increase of $ 68.5 million to Retained earnings for the cumulative effect of adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Deferred Maintenance | Deferred maintenance included within Deferred costs and other assets is as follows: Balance as of December 31, 2021 $ 180,675 Deferred maintenance costs 5,933 Special charge (1) ( 1,628 ) Amortization of deferred maintenance ( 11,122 ) Balance as of March 31, 2022 $ 173,858 (1) See Note 6 for further discussion. |
Related Parties (Tables)
Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Polar [Member] | |
Related Party Transaction [Line Items] | |
Summary of Transactions with Related Party | The following table summarizes our transactions and balances with Polar: For the Three Months Ended Revenue and Expenses: March 31, 2022 March 31, 2021 Revenue from Polar $ 81,519 $ 77,256 Ground handling and airport fees to Polar 1,087 882 Accounts receivable/payable as of: March 31, 2022 December 31, 2021 Receivables from Polar $ 19,996 $ 22,311 Payables to Polar 610 3,082 Aggregate Carrying Value of Polar Investment as of: March 31, 2022 December 31, 2021 Aggregate Carrying Value of Polar Investment $ 4,870 $ 4,870 |
Dry Leasing Joint Venture [Member] | |
Related Party Transaction [Line Items] | |
Summary of Transactions with Related Party | The following table summarizes our transactions and balances with our dry leasing joint venture: For the Three Months Ended Revenue and Expenses: March 31, 2022 March 31, 2021 Revenue from dry leasing joint venture $ 338 $ 1,324 Aircraft rent to dry leasing joint venture 2,250 2,250 Aggregate Carrying Value of Joint Venture as of: March 31, 2022 December 31, 2021 Aggregate Carrying Value of Dry Leasing Joint Venture $ 8,814 $ 8,448 |
Amazon (Tables)
Amazon (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Warrants And Rights Note Disclosure [Abstract] | |
Summary of Customer Incentive Asset within Deferred Costs and Other Assets | Customer incentive asset included within Deferred costs and other assets is as follows: Balance at December 31, 2021 $ 96,177 Initial value for estimate of vested or expected to vest warrants 4,304 Amortization of customer incentive asset ( 10,051 ) Ending balance at March 31, 2022 $ 90,430 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Financial Information [Abstract] | |
Summary of Allowance for Expected Credit Losses | Allowance for expected credit losses, included within Accounts receivable, is as follows: Beginning balance at December 31, 2021 $ 4,003 Bad debt recovery ( 15 ) Amounts written off, net of recoveries 190 Ending balance at March 31, 2022 $ 4,178 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of: March 31, 2022 December 31, 2021 Salaries, wages and benefits $ 175,389 $ 211,801 Maintenance 140,947 135,133 Customer maintenance reserves 91,826 87,565 Aircraft fuel 59,689 40,855 Deferred revenue 47,577 58,616 Other 99,706 108,008 Accrued liabilities $ 615,134 $ 641,978 |
Summary of Changes in Deferred Revenue | Balance as of December 31, 2021 $ 52,647 Revenue recognized ( 106,640 ) Amounts collected or invoiced 90,582 Balance as of March 31, 2022 $ 36,589 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total shown in the consolidated statements of cash flows: March 31, 2022 December 31, 2021 Cash and cash equivalents $ 730,349 $ 910,965 Restricted cash 10,554 10,052 Total Cash, cash equivalents and restricted cash shown in Consolidated Statements of Cash Flows $ 740,903 $ 921,017 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes | The Convertible Notes consisted of the following as of March 31, 2022: 2015 Convertible Notes 2017 Convertible Notes Remaining life in months 2 26 Earliest conversion date September 1, 2021 September 1, 2023 Gross proceeds $ 224,500 $ 289,000 Less: debt issuance cost, net of amortization ( 162 ) ( 2,300 ) Net carrying amount $ 224,338 $ 286,700 |
Summary of Interest Expense Recognized | The following table presents the amount of interest expense recognized related to the Convertible Notes: For the Three Months Ended March 31, 2022 March 31, 2021 Contractual interest coupon $ 2,618 $ 2,618 Amortization of debt discount - 4,671 Amortization of debt issuance costs 509 402 Total interest expense recognized $ 3,127 $ 7,691 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Value, Estimated Fair Value and Classification of Financial Instruments | The following table summarizes the carrying value, estimated fair value and classification of our financial instruments as of: March 31, 2022 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 730,349 $ 730,349 $ 730,349 $ - $ - Restricted cash 10,554 10,554 10,554 - - $ 740,903 $ 740,903 $ 740,903 $ - $ - Liabilities Term loans and notes $ 1,567,188 $ 1,563,797 $ - $ - $ 1,563,797 Convertible notes (1) 511,038 694,569 694,569 - - $ 2,078,226 $ 2,258,366 $ 694,569 $ - $ 1,563,797 December 31, 2021 Carrying Value Fair Value Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 910,965 $ 910,965 $ 910,965 $ - $ - Restricted cash 10,052 10,052 10,052 - - $ 921,017 $ 921,017 $ 921,017 $ - $ - Liabilities Term loans and notes $ 1,638,311 $ 1,690,675 $ - $ - $ 1,690,675 Convertible notes (2) 479,573 758,424 758,424 - - $ 2,117,884 $ 2,449,099 $ 758,424 $ - $ 1,690,675 (1) Carrying value is net of debt issuance costs (see Note 7). (2) Carrying value is net of debt discounts and debt issuance costs (see Note 7). |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting Tables [Abstract] | |
Operating Revenue and Direct Contribution For Our Reportable Business Segments | The following table sets forth Operating Revenue and Direct Contribution for our reportable segments reconciled to Operating Income and Income before income taxes: For the Three Months Ended March 31, 2022 March 31, 2021 Operating Revenue: Airline Operations $ 995,355 $ 826,240 Dry Leasing 46,170 40,364 Customer incentive asset amortization ( 10,051 ) ( 10,481 ) Other 5,682 5,177 Total Operating Revenue $ 1,037,156 $ 861,300 Direct Contribution: Airline Operations $ 185,818 $ 169,150 Dry Leasing 16,909 10,564 Total Direct Contribution for Reportable Segments 202,727 179,714 Unallocated income and (expenses), net ( 100,739 ) ( 61,535 ) Unrealized (loss) on financial instruments - ( 113 ) Special charge ( 2,633 ) - Transaction-related expenses - ( 201 ) Gain (loss) on disposal of flight equipment 6,240 ( 16 ) Income before income taxes 105,595 117,849 Add back (subtract): Interest income ( 240 ) ( 211 ) Interest expense 20,423 27,180 Capitalized interest ( 3,764 ) ( 1,271 ) Unrealized loss on financial instruments - 113 Other (income) expense, net ( 618 ) ( 39,456 ) Operating Income $ 121,396 $ 104,204 |
Schedule of Disaggregated Airline Operations Segment Revenue by Customer and Service Type | The following table disaggregates our Airline Operations segment revenue by customer and service type: For the Three Months Ended March 31, 2022 March 31, 2021 Cargo Passenger Total Cargo Passenger Total Commercial customers $ 903,282 $ 1,625 $ 904,907 $ 713,211 $ 2,879 $ 716,090 AMC 29,289 61,159 90,448 45,312 64,838 110,150 Total Airline Operations Revenue $ 932,571 $ 62,784 $ 995,355 $ 758,523 $ 67,717 $ 826,240 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Calculations of Basic and Diluted EPS | The calculations of basic and diluted EPS were as follows: For the Three Months Ended Numerator: March 31, 2022 March 31, 2021 Net Income $ 81,511 $ 89,933 Plus: Interest expense on convertible notes, net of tax 1,046 - Unrealized loss on financial instruments, net of tax - 112 Diluted net income $ 82,557 $ 90,045 Denominator: Basic EPS weighted average shares outstanding 28,854 28,491 Effect of dilutive: Convertible notes 5,031 - Warrants 609 751 Restricted stock 196 236 Diluted EPS weighted average shares outstanding 34,690 29,478 Earnings per share: Basic $ 2.82 $ 3.16 Diluted $ 2.38 $ 3.05 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income Loss [Abstract] | |
Components of Accumulated Other Comprehensive Income | The following table summarizes the components of Accumulated other comprehensive income: Interest Rate Foreign Currency Derivatives Translation Total Balance as of December 31, 2020 $ ( 1,913 ) $ 9 $ ( 1,904 ) Reclassification to interest expense 268 - 268 Tax effect ( 64 ) - ( 64 ) Balance as of March 31, 2021 $ ( 1,709 ) $ 9 $ ( 1,700 ) Balance as of December 31, 2021 $ ( 520 ) $ 9 $ ( 511 ) Reclassification to interest expense 105 - 105 Tax effect ( 27 ) - ( 27 ) Balance as of March 31, 2022 $ ( 442 ) $ 9 $ ( 433 ) |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - Polar [Member] | 3 Months Ended |
Mar. 31, 2022 | |
Basis Of Presentation [Line Items] | |
Equity interest | 51.00% |
Voting interest | 75.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2021Aircraftss | Jan. 31, 2021Aircraftss | May 31, 2020Subsidiary | Mar. 31, 2022USD ($)shares | Mar. 31, 2021USD ($) | Dec. 31, 2023USD ($) | Dec. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Jan. 01, 2022USD ($) | |
Significant Accounting Policies [Line Items] | |||||||||
Accrued heavy maintenance cost | $ 90,100 | $ 79,600 | |||||||
Deferred maintenance amortization expense | 11,122 | $ 12,000 | |||||||
Operating Revenue | $ 1,037,156 | 861,300 | |||||||
Liabilities and equity, including convertible debt instruments | $ 31,000 | ||||||||
Deferred Tax Liabilities [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Liabilities and equity, including convertible debt instruments | 6,900 | ||||||||
Additional Paid-In Capital [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Liabilities and equity, including convertible debt instruments | 92,600 | ||||||||
Retained Earnings [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Liabilities and equity, including convertible debt instruments | $ 68,500 | ||||||||
Aircraft 747-8F [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of aircraft purchase | Aircraftss | 4 | ||||||||
Aircraft 777-200LRF [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of aircraft purchase | Aircraftss | 4 | ||||||||
Forecast [Member] | Aircraft 747-8F and 777-200LRF [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Committed expenditures to acquire aircraft and spare engines | $ 359,700 | $ 659,900 | |||||||
Payroll Support Program Agreement [Member] | Grant [Member] | Other Income (Expense), Net [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Operating Revenue | $ 40,900 | ||||||||
Payroll Support Program Agreement [Member] | US Treasury [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of subsidiaries | Subsidiary | 2 | ||||||||
Warrant expiration year | 2025 | ||||||||
Number of warrant exercised | shares | 0 | ||||||||
Payroll Support Program Agreement [Member] | US Treasury [Member] | Maximum [Member] | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Number of warrants issued to acquire common stock | shares | 625,452 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Deferred Maintenance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Beginning Balance | $ 180,675 | |
Deferred maintenance costs | 5,933 | |
Special charge | (1,628) | |
Amortization of deferred maintenance | (11,122) | $ (12,000) |
Ending Balance | $ 173,858 |
Related Parties - Polar - Addit
Related Parties - Polar - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Polar [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest | 51.00% | |
Voting interest | 75.00% | |
Polar [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue recognized | $ 40.7 | $ 54.1 |
DHL [Member] | Polar [Member] | ||
Related Party Transaction [Line Items] | ||
Equity interest | 49.00% | |
Voting interest | 25.00% |
Related Parties - Summary of Tr
Related Parties - Summary of Transactions with Related Party (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Aircraft rent | $ 12,995 | $ 20,756 |
Polar [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party | 81,519 | 77,256 |
Ground handling and airport fees to Polar | 1,087 | 882 |
Receivables from related party | 19,996 | 22,311 |
Payables to related party | 610 | 3,082 |
Aggregate Carrying Value of Investment/Joint Venture | 4,870 | 4,870 |
Dry Leasing Joint Venture [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related party | 338 | 1,324 |
Aggregate Carrying Value of Investment/Joint Venture | 8,814 | 8,448 |
Aircraft rent | $ 2,250 | $ 2,250 |
Related Parties - Dry Leasing J
Related Parties - Dry Leasing Joint Venture - Additional Information (Details) - Dry Leasing Joint Venture [Member] - USD ($) $ in Millions | 1 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Voting interest | 10.00% | |
Capital contributions | $ 10 | |
Maximum [Member] | ||
Related Party Transaction [Line Items] | ||
Commitment to capital contributions | $ 40 |
Related Parties - Parts Joint V
Related Parties - Parts Joint Venture - Additional Information (Details) - Parts Joint Venture [Member] - Variable Interest Entity Not Primary Beneficiary [Member] - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Voting interest | 50.00% | 50.00% |
Investment in joint venture | $ 17.7 | $ 19.2 |
Receivables from related party | 0.2 | 0.3 |
Payables to related party | $ 1.1 | $ 1.2 |
Amazon - Additional Information
Amazon - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2019 | May 31, 2016 | Mar. 31, 2022 | Mar. 31, 2021 | |
Class Of Warrant Or Right [Line Items] | ||||
Revenues | $ 1,037,156 | $ 861,300 | ||
Amortization of customer incentive asset | $ 10,051 | $ 10,500 | ||
Warrant A [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Right to acquire outstanding common shares | up to 20% of our outstanding common shares, as of the date of the agreements | |||
Exercise price of warrants exercisable | $ 37.34 | |||
Warrant for number of shares fully vested | 7,500,000 | |||
Warrant B [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Exercise price of warrants exercisable | $ 37.34 | |||
Additional warrant to acquire outstanding shares | up to an additional 10% of our outstanding common shares, as of the date of the agreements | |||
Additional warrant to buy number of shares vesting | 3,770,000 | |||
Vesting increments of Amazon warrants | 37,660 | |||
Revenues | $ 4,200 | |||
Warrant vested | 1,129,800 | |||
Class of warrant or right number of securities remaining unexercised | 564,900 | |||
Warrant vesting year | May 4, 2023 | |||
Warrant C [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Right to acquire outstanding common shares | up to an additional 9.9% of our outstanding common shares, as of the date of the agreements | |||
Exercise price of warrants exercisable | $ 52.67 | |||
Vesting increments of Amazon warrants | 45,623 | |||
Revenues | $ 6,900 | |||
Warrant vested | 0 | |||
Incremental warrant to buy number of shares vesting. | 6,660,000 | |||
Warrant vesting year | Mar. 27, 2026 | |||
Maximum [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrant providing right to acquire outstanding common shares percentage | 14.90% | |||
Maximum [Member] | Warrant B [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Percentage of additional warrant to acquire outstanding common shares | 10.00% | |||
Revenues | $ 420,000 | |||
Maximum [Member] | Warrant C [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrant providing right to acquire outstanding common shares percentage | 9.90% | |||
Revenues | $ 1,000,000 | |||
Dry Leases [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Lease term | 10 years | |||
CMI Operation [Member] | ||||
Class Of Warrant Or Right [Line Items] | ||||
Lease term | 7 years | 7 years | ||
Lease term option to extend | The 737-800 CMI operations are for a term of seven years from the commencement of each agreement (with an option for Amazon to extend the term to ten years). | The Dry Leases have a term of ten years from the commencement of each agreement, while the CMI operations are for seven years from the commencement of each agreement (with an option for Amazon to extend the term to ten years). | ||
Lease term of extension | 10 years | 10 years |
Amazon - Summary of Customer In
Amazon - Summary of Customer Incentive Asset within Deferred Costs and Other Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Warrants And Rights Note Disclosure [Abstract] | ||
Balance at December 31, 2021 | $ 96,177 | |
Initial value for estimate of vested or expected to vest warrants | 4,304 | |
Amortization of customer incentive asset | (10,051) | $ (10,500) |
Balance as of March 31, 2022 | $ 90,430 |
Supplemental Financial Inform_3
Supplemental Financial Information - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Supplemental Financial Information [Abstract] | ||
Accounts receivable related to customer contracts excluding dry leasing contracts | $ 252.7 | $ 248.4 |
Supplemental Financial Inform_4
Supplemental Financial Information - Summary of Allowance for Expected Credit Losses (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Supplemental Financial Information [Abstract] | |
Balance as of December 31, 2021 | $ 4,003 |
Bad debt recovery | (15) |
Amounts written off, net of recoveries | 190 |
Balance as of March 31, 2022 | $ 4,178 |
Supplemental Financial Inform_5
Supplemental Financial Information - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Supplemental Financial Information [Abstract] | ||
Salaries, wages and benefits | $ 175,389 | $ 211,801 |
Maintenance | 140,947 | 135,133 |
Customer maintenance reserves | 91,826 | 87,565 |
Aircraft fuel | 59,689 | 40,855 |
Deferred revenue | 47,577 | 58,616 |
Other | 99,706 | 108,008 |
Accrued liabilities | $ 615,134 | $ 641,978 |
Supplemental Financial Inform_6
Supplemental Financial Information - Summary of Changes in Deferred Revenue (Details) - Non-Dry Lease Revenue Contracts with Customers [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Revenue Recognition [Line Items] | |
Balance as of December 31, 2021 | $ 52,647 |
Revenue recognized | (106,640) |
Amounts collected or invoiced | 90,582 |
Balance as of March 31, 2022 | $ 36,589 |
Supplemental Financial Inform_7
Supplemental Financial Information - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Supplemental Financial Information [Abstract] | ||||
Cash and cash equivalents | $ 730,349 | $ 910,965 | ||
Restricted cash | 10,554 | 10,052 | ||
Total Cash, cash equivalents and restricted cash shown in Consolidated Statements of Cash Flows | $ 740,903 | $ 921,017 | $ 714,024 | $ 856,281 |
Special Charge and Assets Hel_2
Special Charge and Assets Held For Sale - Additional Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)Engine | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)Engine | |
Impairment Of Aircraft Engines Held For Sale [Line Items] | |||
Special charge | $ 2,633 | $ 0 | |
Proceeds from disposal of flight equipment | 13,500 | $ 1,850 | |
Certain Spare CF6-80 Engines [Member] | |||
Impairment Of Aircraft Engines Held For Sale [Line Items] | |||
Proceeds from disposal of flight equipment | 11,700 | ||
Net gain from sale of aircraft | $ 6,200 | ||
Number of aircraft held for sale | Engine | 2 | 6 | |
Certain Spare CF6-80 Engines [Member] | Prepaid Expense, Assets Held for Sale and Other Current Assets [Member] | |||
Impairment Of Aircraft Engines Held For Sale [Line Items] | |||
Carrying value of asset held for sale | $ 5,500 |
Debt - Convertible Notes - Addi
Debt - Convertible Notes - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
May 31, 2017USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2022USD ($)Days$ / shares | |
Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||
Debt instrument, convertible, threshold trading days | Days | 20 | ||
Debt instrument, convertible, threshold consecutive trading days | Days | 30 | ||
2017 Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes aggregate principal amount | $ | $ 289,000 | $ 289,000 | |
Debt instrument, conversion price | share | $ 61.08 | ||
Convertible notes, date of maturity | Jun. 1, 2024 | ||
2017 Convertible Notes [Member] | Warrants [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, conversion price | share | $ 92.20 | ||
2015 Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes aggregate principal amount | $ | $ 224,500 | $ 224,500 | |
Debt instrument, conversion price | share | $ 74.05 | ||
Convertible notes, date of maturity | Jun. 1, 2022 | ||
2015 Convertible Notes [Member] | Warrants [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, conversion price | share | $ 95.01 |
Debt - Schedule of Convertible
Debt - Schedule of Convertible Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | May 31, 2017 | Jun. 30, 2015 | |
2015 Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Remaining life in months | 2 months | ||
Earliest conversion date | Sep. 1, 2021 | ||
Gross proceeds | $ 224,500 | $ 224,500 | |
Less: debt issuance cost, net of amortization | (162) | ||
Net carrying amount | $ 224,338 | ||
2017 Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Remaining life in months | 26 months | ||
Earliest conversion date | Sep. 1, 2023 | ||
Gross proceeds | $ 289,000 | $ 289,000 | |
Less: debt issuance cost, net of amortization | (2,300) | ||
Net carrying amount | $ 286,700 |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Total interest expense recognized | $ 20,423 | $ 27,180 |
Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Contractual interest coupon | 2,618 | 2,618 |
Amortization of debt discount | 0 | 4,671 |
Amortization of debt issuance costs | 509 | 402 |
Total interest expense recognized | $ 3,127 | $ 7,691 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility - Additional Information (Details) - Revolver [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2016 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | |||
Term of revolving credit facility | 4 years | 3 years | |
Borrowing capacity | $ 250,000,000 | $ 200,000,000 | |
Outstanding balance | $ 0 | ||
Unused availability | $ 250,000,000 |
Debt - Other Debt - Additional
Debt - Other Debt - Additional Information (Details) - Subsequent Event [Member] - 747-8F Term Loan [Member] $ in Millions | 1 Months Ended |
Apr. 30, 2022USD ($) | |
Debt Instrument [Line Items] | |
Proceeds from other debt | $ 90 |
Term of debt | 84 months |
Percentage of blended fixed rate | 3.86% |
Repayment of other debt | $ 45.7 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rates | 22.80% | 23.70% |
Financial Instruments - Summary
Financial Instruments - Summary of Carrying Value, Estimated Fair Value and Classification of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | ||
Assets | ||||
Restricted cash | $ 10,554 | $ 10,052 | ||
Reported Value Measurement | ||||
Assets | ||||
Cash and cash equivalents | 730,349 | 910,965 | ||
Restricted cash | 10,554 | 10,052 | ||
Financial instruments assets | 740,903 | 921,017 | ||
Liabilities | ||||
Term loans and notes | 1,567,188 | 1,638,311 | ||
Convertible notes | 511,038 | [1] | 479,573 | [2] |
Financial instruments liabilities | 2,078,226 | 2,117,884 | ||
Estimate of Fair Value Measurement | ||||
Assets | ||||
Cash and cash equivalents | 730,349 | 910,965 | ||
Restricted cash | 10,554 | 10,052 | ||
Financial instruments assets | 740,903 | 921,017 | ||
Liabilities | ||||
Term loans and notes | 1,563,797 | 1,690,675 | ||
Convertible notes | 694,569 | [1] | 758,424 | [2] |
Financial instruments liabilities | 2,258,366 | 2,449,099 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Assets | ||||
Cash and cash equivalents | 730,349 | 910,965 | ||
Restricted cash | 10,554 | 10,052 | ||
Financial instruments assets | 740,903 | 921,017 | ||
Liabilities | ||||
Term loans and notes | 0 | 0 | ||
Convertible notes | 694,569 | [1] | 758,424 | [2] |
Financial instruments liabilities | 694,569 | 758,424 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Financial instruments assets | 0 | 0 | ||
Liabilities | ||||
Term loans and notes | 0 | 0 | ||
Convertible notes | 0 | [1] | 0 | [2] |
Financial instruments liabilities | 0 | 0 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Financial instruments assets | 0 | 0 | ||
Liabilities | ||||
Term loans and notes | 1,563,797 | 1,690,675 | ||
Convertible notes | 0 | [1] | 0 | [2] |
Financial instruments liabilities | $ 1,563,797 | $ 1,690,675 | ||
[1] | Carrying value is net of debt issuance costs (see Note 7). | |||
[2] | Carrying value is net of debt discounts and debt issuance costs (see Note 7). |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | Segment | 2 | |
Number of reportable segments | Segment | 2 | |
Operating Revenue | $ | $ 1,037,156 | $ 861,300 |
DHL [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating Revenue | $ | $ 135,600 | $ 158,700 |
Segment Reporting - Operating R
Segment Reporting - Operating Revenue and Direct Contribution For Our Reportable Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Revenue: | ||
Customer incentive asset amortization | $ (10,051) | $ (10,481) |
Other | 5,682 | 5,177 |
Total Operating Revenue | 1,037,156 | 861,300 |
Direct Contribution: | ||
Total Direct Contribution for Reportable Segments | 202,727 | 179,714 |
Unallocated income and (expenses), net | (100,739) | (61,535) |
Unrealized loss on financial instruments | 0 | (113) |
Special charge | (2,633) | 0 |
Transaction-related expenses | 0 | (201) |
Gain (loss) on disposal of flight equipment | 6,240 | (16) |
Income before income taxes | 105,595 | 117,849 |
Interest income | (240) | (211) |
Interest expense | 20,423 | 27,180 |
Capitalized interest | (3,764) | (1,271) |
Unrealized loss on financial instruments | 0 | 113 |
Other (income) expense, net | (618) | (39,456) |
Operating Income | 121,396 | 104,204 |
Airline Operations [Member] | ||
Operating Revenue: | ||
Operating Revenue | 995,355 | 826,240 |
Direct Contribution: | ||
Total Direct Contribution for Reportable Segments | 185,818 | 169,150 |
Dry Leasing [Member] | ||
Operating Revenue: | ||
Operating Revenue | 46,170 | 40,364 |
Direct Contribution: | ||
Total Direct Contribution for Reportable Segments | $ 16,909 | $ 10,564 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Disaggregated Airline Operations Segment Revenue by Customer and Service Type (Details) - Airline Operations [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | $ 995,355 | $ 826,240 |
Commercial Customers [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 904,907 | 716,090 |
AMC [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 90,448 | 110,150 |
Cargo [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 932,571 | 758,523 |
Cargo [Member] | Commercial Customers [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 903,282 | 713,211 |
Cargo [Member] | AMC [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 29,289 | 45,312 |
Passenger [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 62,784 | 67,717 |
Passenger [Member] | Commercial Customers [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | 1,625 | 2,879 |
Passenger [Member] | AMC [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Airline Operations Revenue | $ 61,159 | $ 64,838 |
Stock Repurchases - Additional
Stock Repurchases - Additional Information - (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Apr. 30, 2022 | Feb. 28, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Treasury stock repurchase remaining authorization | $ 200,000 | |||
Payments for repurchase of stock | $ 79,966 | $ 0 | ||
Accelerated Share Repurchase Program [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Payments for repurchase of stock | $ 100,000 | |||
Number of shares received | 1,061,257 | |||
Accelerated Share Repurchase Program [Member] | Subsequent Event [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Number of additional shares received | 172,887 | |||
Treasury stock, number of shares repurchased | 1,234,144 | |||
Treasury stock, repurchase amount | $ 100,000 | |||
Number of shares repurchased, average cost per share | $ 81.03 |
Labor and Legal Proceedings - A
Labor and Legal Proceedings - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Loss Contingencies [Line Items] | |||
Collective bargaining agreement period | 5 years | ||
Brazilian Customs Claim [Member] | |||
Loss Contingencies [Line Items] | |||
Brazilian claims in the aggregate | $ 2.1 | ||
Amounts on deposit for Brazilian claims included in deferred costs and other assets | $ 3.8 | $ 3.8 | $ 3.2 |
Atlas and Polar Dispatchers [Member] | |||
Loss Contingencies [Line Items] | |||
Collective bargaining agreement period | 4 years | ||
Atlas Pilots [Member] | |||
Loss Contingencies [Line Items] | |||
Collective bargaining agreement period | 5 years | ||
Southern Air [Member] | |||
Loss Contingencies [Line Items] | |||
Collective bargaining agreement period | 4 years |
Earnings Per Share - Calculatio
Earnings Per Share - Calculations of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net Income | $ 81,511 | $ 89,933 |
Plus: Interest expense on convertible notes, net of tax | 1,046 | 0 |
Unrealized loss on financial instruments, net of tax | 0 | 112 |
Diluted net income | $ 82,557 | $ 90,045 |
Denominator: | ||
Basic EPS weighted average shares outstanding | 28,854 | 28,491 |
Effect of dilutive: | ||
Effect of dilutive convertible notes | 5,031 | 0 |
Effect of dilutive warrants | 609 | 751 |
Effect of dilutive restricted stock | 196 | 236 |
Diluted EPS weighted average shares outstanding | 34,690 | 29,478 |
Earnings per share: | ||
Basic | $ 2.82 | $ 3.16 |
Diluted | $ 2.38 | $ 3.05 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Restricted shares and units in which performance or market conditions were not satisfied | 9.4 | 10.1 |
Warrants [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from the calculation of diluted EPS | 0 | 7.8 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Components of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | $ 2,809,337 | $ 2,261,539 |
Reclassification to interest expense | 105 | 268 |
Tax effect | 27 | (64) |
Ending Balance | 2,761,330 | 2,383,196 |
Interest Rate Derivatives [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (520) | (1,913) |
Reclassification to interest expense | 105 | 268 |
Tax effect | (27) | (64) |
Ending Balance | (442) | (1,709) |
Foreign Currency Translation [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | 9 | 9 |
Reclassification to interest expense | 0 | 0 |
Tax effect | 0 | 0 |
Ending Balance | 9 | 9 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning Balance | (511) | (1,904) |
Ending Balance | $ (433) | $ (1,700) |