10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period March 31, 2022

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 000-50368

________________________________________________________________

Air Transport Services Group, Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________

Delaware	26-1631624
(State of Incorporation)	(I.R.S. Employer Identification No.)

145 Hunter Drive, Wilmington, OH 45177

(Address of principal executive offices)

937-382-5591

(Registrant’s telephone number, including area code)

 ________________________________________________________________

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ATSG	NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐
Non-accelerated filer	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No  ☒

As of May 10, 2022, there were 74,372,038 shares of the registrant’s common stock outstanding.

AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Unaudited Condensed Consolidated Balance Sheets	2
	Unaudited Condensed Consolidated Statements of Operations	3
	Unaudited Condensed Consolidated Statements of Comprehensive Income	4
	Unaudited Condensed Consolidated Statements of Stockholders' Equity	5
	Unaudited Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6.	Exhibits	36
SIGNATURES		37

FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION

The financial information, including the financial statements, included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission ("SEC") on March 1, 2022 ("2021 Form 10-K").

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding Air Transport Services Group, Inc. at www.sec.gov. Additionally, our filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports, are available free of charge from our website at www.atsginc.com as soon as reasonably practicable after filing with the SEC.

FORWARD LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are considered forward-looking statements (as that term is defined in the Private Securities litigation Reform Act of 1995). Words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms and expressions are intended to identify forward-looking statements. These forward-looking statements are based on expectations, estimates and projections as of the date of this filing, and involve risks and uncertainties that are inherently difficult to predict. Actual results may differ materially from those expressed in the forward-looking statements for any number of reasons, including those described in this report and in our 2021 Form 10-K.

1

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	March 31,		December 31,
	2022		2021
ASSETS
CURRENT ASSETS:
Cash, cash equivalents and restricted cash	$	35,538	$	69,496
Accounts receivable, net of allowance of $925 in 2022 and $742 in 2021	216,664		205,399
Inventory	49,716		49,204
Prepaid supplies and other	29,233		28,742
TOTAL CURRENT ASSETS	331,151		352,841
Property and equipment, net	2,182,076		2,129,934
Customer incentive	97,115		102,913
Goodwill and acquired intangibles	501,599		505,125
Operating lease assets	60,488		62,644
Other assets	114,500		113,878
TOTAL ASSETS	$	3,286,929	$	3,267,335
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	187,181	$	174,237
Accrued salaries, wages and benefits	50,953		56,652
Accrued expenses	12,098		14,950
Current portion of debt obligations	631		628
Current portion of lease obligations	18,840		18,783
Unearned revenue and grants	47,798		47,381
TOTAL CURRENT LIABILITIES	317,501		312,631
Long term debt	1,273,156		1,298,735
Stock warrant obligations	989		915
Post-retirement obligations	20,623		21,337
Long term lease obligations	42,238		44,387
Other liabilities	51,254		49,662
Deferred income taxes	227,128		217,291
TOTAL LIABILITIES	1,932,889		1,944,958
Commitments and contingencies (Note H)
STOCKHOLDERS’ EQUITY:
Preferred stock, 20,000,000 shares authorized, including 75,000 Series A Junior Participating Preferred Stock	—		—
Common stock, par value $0.01 per share; 150,000,000 shares authorized; 74,337,226 and 74,142,183 shares issued and outstanding in 2022 and 2021, respectively	743		741
Additional paid-in capital	1,035,029		1,074,286
Retained earnings	380,097		309,430
Accumulated other comprehensive loss	(61,829)		(62,080)
TOTAL STOCKHOLDERS’ EQUITY	1,354,040		1,322,377
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,286,929	$	3,267,335

See notes to the unaudited condensed consolidated financial statements.

2

AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended
	March 31,
	2022		2021
REVENUES	$	485,860	$	376,088
OPERATING EXPENSES
Salaries, wages and benefits	161,762		142,016
Depreciation and amortization	82,071		71,051
Maintenance, materials and repairs	35,709		42,007
Fuel	60,358		30,442
Contracted ground and aviation services	18,331		14,803
Travel	24,199		18,404
Landing and ramp	4,578		3,109
Rent	6,663		5,868
Insurance	2,552		3,136
Other operating expenses	19,843		16,423
Government grants	—		(28,030)
	416,066		319,229
OPERATING INCOME	69,794		56,859
OTHER INCOME (EXPENSE)
Interest income	9		19
Non-service component of retiree benefit (costs) gains	5,388		4,457
Net gain (loss) on financial instruments	2,696		9,472
Loss from non-consolidated affiliate	(1,403)		(1,183)
Interest expense	(11,399)		(14,522)
	(4,709)		(1,757)
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	65,085		55,102
INCOME TAX EXPENSE	(15,289)		(12,812)
EARNINGS FROM CONTINUING OPERATIONS	49,796		42,290
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAXES	—		—
NET EARNINGS	$	49,796	$	42,290
BASIC EARNINGS PER SHARE
Continuing operations	$	0.67	$	0.71
Discontinued operations	—		—
TOTAL BASIC EARNINGS PER SHARE	$	0.67	$	0.71
DILUTED EARNINGS PER SHARE
Continuing operations	$	0.57	0.49
Discontinued operations	—		—
TOTAL DILUTED EARNINGS PER SHARE	$	0.57	0.49
WEIGHTED AVERAGE SHARES
Basic	73,888		59,447
Diluted	88,744		74,744

See notes to the unaudited condensed consolidated financial statements.

3

AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Three Months Ended
	March 31,
	2022		2021
NET EARNINGS	$	49,796	$	42,290
OTHER COMPREHENSIVE INCOME (LOSS):
Defined Benefit Pension	242		1,362
Defined Benefit Post-Retirement	9		36
TOTAL COMPREHENSIVE INCOME, net of tax	$	50,047	$	43,688

See notes to the unaudited condensed consolidated financial statements.

4

AIR TRANSPORT SERVICES GROUP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
	Number	Amount
BALANCE AT DECEMBER 31, 2020	59,560,036	$	596	$	855,547	$	78,010	$	(78,656)	$	855,497
Stock-based compensation plans
Grant of restricted stock	122,100	1		(1)						—
Issuance of common shares, net of withholdings	93,752	—		(1,197)						(1,197)
Conversion of warrants	865,548	9		(9)						—
Amortization of stock awards and restricted stock				1,750						1,750
Total comprehensive income						42,290		1,398		43,688
BALANCE AT MARCH 31, 2021	60,641,436	$	606	$	856,090	$	120,300	$	(77,258)	$	899,738
BALANCE AT DECEMBER 31, 2021	74,142,183	$	741	$	1,074,286	$	309,430	$	(62,080)	$	1,322,377
Stock-based compensation plans
Grant of restricted stock	110,400	1		(1)						—
Issuance of common shares, net of withholdings	85,343	1		(1,351)						(1,350)
Forfeited restricted stock	(700)	—		—						—
Cumulative effect in change in accounting principle				(39,559)		20,871				(18,688)
Amortization of stock awards and restricted stock				1,654						1,654
Total comprehensive income						49,796		251		50,047
BALANCE AT MARCH 31, 2022	74,337,226	$	743	$	1,035,029	$	380,097	$	(61,829)	$	1,354,040

See notes to the unaudited condensed consolidated financial statements.

5

AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended
	March 31,
	2022		2021
OPERATING ACTIVITIES:
Net earnings from continuing operations	$	49,796	$	42,290
Net earnings from discontinued operations	—		—
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	88,245		79,719
Pension and post-retirement	324		1,811
Deferred income taxes	15,289		12,575
Amortization of stock-based compensation	1,654		1,750
Loss from non-consolidated affiliates	1,403		1,183
Net (gain) loss on financial instruments	(2,696)		(9,472)
Changes in assets and liabilities:
Accounts receivable	(11,265)		(1,604)
Inventory and prepaid supplies	(1,163)		751
Accounts payable	(5,037)		18,314
Unearned revenue	(1)		(3,687)
Accrued expenses, salaries, wages, benefits and other liabilities	(3,782)		(11,696)
Pension and post-retirement balances	(6,582)		(7,412)
Other	(517)		(75)
NET CASH PROVIDED BY OPERATING ACTIVITIES	125,668		124,447
INVESTING ACTIVITIES:
Expenditures for property and equipment	(108,252)		(125,441)
Proceeds from property and equipment	76		44
Acquisitions and investments in businesses, net of cash acquired	—		(1,697)
NET CASH (USED IN) INVESTING ACTIVITIES	(108,176)		(127,094)
FINANCING ACTIVITIES:
Principal payments on long term obligations	(90,100)		(124,065)
Proceeds from revolving credit facilities	40,000		140,000
Payments for financing costs	—		(151)
Withholding taxes paid for conversion of employee stock awards	(1,350)		(1,197)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(51,450)		14,587
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(33,958)		11,940
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	69,496		39,719
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	35,538	$	51,659
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net of amount capitalized	$	18,528	$	16,582
Federal and state income taxes paid	$	—	$	123
SUPPLEMENTAL NON-CASH INFORMATION:
Accrued expenditures for property and equipment	$	61,460	$	24,253

See notes to the unaudited condensed consolidated financial statements.

6

AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
Note A - Summary of Financial Statement Preparation and Significant Accounting Policies	8
Note B - Goodwill, Intangibles and Equity Investments	9
Note C - Significant Customers	10
Note D - Fair Value Measurements	13
Note E - Property and Equipment	14
Note F - Debt Obligations	15
Note G - Derivative Instruments	17
Note H - Commitments and Contingencies	17
Note I - Pension and Other Post-Retirement Benefit Plans	19
Note J - Income Taxes	20
Note K - Accumulated Other Comprehensive Income (Loss)	21
Note L - Stock-Based Compensation	22
Note M - Common Stock and Earnings Per Share	22
Note N - Segment and Revenue Information	23

7

NOTE A—SUMMARY OF FINANCIAL STATEMENT PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Air Transport Services Group, Inc. ("ATSG" and, together with its subsidiaries, the "Company," "we," "us," and "our") is a holding company whose subsidiaries lease aircraft and provide contracted airline operations as well as other support services mainly to the air transportation, e-commerce and package delivery industries.

ATSG's leasing subsidiary, Cargo Aircraft Management, Inc. (“CAM”), leases aircraft to each of ATSG's airline subsidiaries as well as to non-affiliated airlines and other lessees. ATSG's airline subsidiaries, ABX Air, Inc. (“ABX”), Air Transport International, Inc. (“ATI”) and Omni Air International, LLC ("OAI") each have the authority, through their separate U.S. Department of Transportation ("DOT") and Federal Aviation Administration ("FAA") certificates, to transport cargo worldwide. The Company provides a combination of aircraft, crews, maintenance and insurance services for its customers' transportation network through crew, maintenance and insurance ("CMI") agreements and aircraft, crew, maintenance and insurance ("ACMI") agreements and through charter contracts in which aircraft fuel is also included.

In addition to its aircraft leasing and airline services, the Company offers a range of complementary services to delivery companies, freight forwarders, airlines and government customers. These include aircraft maintenance and modification services, aircraft parts supply, equipment maintenance services and load transfer and package sorting services.

Basis of Presentation

The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with GAAP and such principles are applied on a basis consistent with the financial statements reflected in our 2021 Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the accompanying financial statements contain all adjustments, including normal recurring adjustments, necessary for the fair presentation of the Company's results of operations and financial position for the periods presented. Due to seasonal fluctuations, among other factors common to the air cargo industry, the results of operations for the periods presented are not necessarily indicative of the results of operations to be expected for the entire year or any interim period. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. The accounting estimates reflect the best judgment of the management, but actual results could differ materially from those estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of ATSG and its wholly-owned subsidiaries. Inter-company balances and transactions are eliminated. Investments in affiliates in which the Company has significant influence but does not exercise control are accounted for using the equity method of accounting. Under the equity method, the Company's share of the nonconsolidated affiliate's income or loss is recognized in the consolidated statement of earnings and cumulative post-acquisition changes in the investment are adjusted against the carrying amount of the investment.

8

Uncertainties

Beginning in late 2019, an outbreak of a coronavirus, COVID-19, was identified and has since spread globally, becoming a pandemic. During February 2020, the Company's revenues were disrupted when customers cancelled scheduled passenger flights and aircraft maintenance services and the Company began to incur additional costs, including expenses to protect employees. Additionally, the Company experienced disruptions to operations, such as shortages of personnel, parts shortages, maintenance delays, shortages of transportation and hotel accommodations for flight crews, facility closures and other supply chain related issues. The extent of the impact that the coronavirus pandemic will have on our future operations and financial results will depend on future developments, including: the duration, spread, severity and recurrence of the COVID-19 variants; vaccination rates, the effectiveness of vaccines, the duration and scope of government orders and local restrictions as well as the extent of the impact of the pandemic on overall economic conditions.

In February 2022, war started in Ukraine, intensifying geopolitical pressures worldwide. While the Company's operations have not been detrimentally impacted, additional supply chain disruptions and inflationary pressures could have an impact on overall economic conditions, as well as the Company's operations and financial results.

Accounting Standards Updates

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). This new standard removes the separation models for convertible debt with cash conversion or beneficial conversion features. It eliminates the "treasury stock" method for convertible instruments and requires application of the “if-converted” method for certain agreements. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments:

(in thousands)	December 31, 2021		Adoption of ASU 2020-06		January 1, 2022
Balance Sheet line item:
Principal value	$	(258,750)	$	—	$	(258,750)
Unamortized issuance cost	$	2,889	$	—	$	2,889
Unamortized discount	$	24,215	$	(24,215)	$	—
Convertible Debt	$	(231,646)	$	(24,215)	$	(255,861)
Net deferred tax liability	$	(217,291)	$	5,527	$	(211,764)
Additional paid-in capital	$	(1,074,286)	$	39,559	$	(1,034,727)
Retained earnings	$	(309,430)	$	(20,871)	$	(330,301)

After adopting ASU 2020-06, the Company's Convertible Notes due 2024 (as defined and discussed in Note F) are reflected entirely as a liability as the embedded conversion feature is no longer separately presented within stockholders' equity, which also eliminated the non-cash discount. Accordingly, earnings no longer reflect the discount amortization expense which was $6.4 million of interest expense, net of income taxes during 2021. After giving effect for the adoption, the effective interest rate on the Convertible Notes is 1.5%.

ASU 2020-06 requires the application of the more dilutive if-converted method when calculating the impact of the Convertible Notes on earnings per diluted share. The adoption of ASU 2020-06 does not change the accounting treatment of shares to be delivered by the convertible note hedges (see Note F) purchased by the Company that are designed to offset the shares issued to settle its Convertible Notes, which are anti-dilutive and not reflected in earnings per diluted share.

9

NOTE B—GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS

The carrying amounts of goodwill by reportable segment are as follows (in thousands):

	CAM		ACMI Services		All Other		Total
Carrying value as of December 31, 2021	153,290		234,571		8,113		395,974
Carrying value as of March 31, 2022	$	153,290	$	234,571	$	8,113	$	395,974

The Company's acquired intangible assets are as follows (in thousands):

	Airline		Amortizing
	Certificates		Intangibles		Total
Carrying value as of December 31, 2021	$	9,000	$	100,151	$	109,151
Amortization	—		(3,526)		(3,526)
Carrying value as of March 31, 2022	$	9,000	$	96,625	$	105,625

The airline certificates have an indefinite life and therefore are not amortized. The Company amortizes finite-lived intangibles assets, including customer relationship and Supplemental Type Certificates ("STC") intangibles, over 4 to 17 remaining years.

Stock warrants issued to Amazon (see Note C) as an incentive for Amazon subsidiary ASI to lease aircraft from the Company are recorded as a lease incentive asset using their fair value at the time that the lessee has met its performance obligations and if probable of vesting at the time of issuance, and amortized against revenues over the duration of related aircraft leases. The Company's lease incentive granted to the lessee was as follows (in thousands):

	Lease
	Incentive
Carrying value as of December 31, 2021	$	102,913
Amortization	(5,798)
Carrying value as of March 31, 2022	$	97,115

The Company has a 49% ownership in a joint-venture agreement with Precision Aircraft Solutions, LLC, to develop a passenger-to-freighter conversion program for Airbus A321-200 aircraft. In April of 2022 the Company acquired a 40% ownership interest in the joint-venture company GA Telesis Engine Services, LLC to provide engine tear-down services to harvest and sell engine parts. The Company accounts for its investment in these joint ventures under the equity method of accounting, in which the carrying value of each investment is reduced for the Company's share of the non-consolidated affiliates' operating results.

The carrying value of the joint ventures totaled $8.2 million and $10.3 million at March 31, 2022 and December 31, 2021, respectively, and are reflected in “Other Assets” in the Company’s consolidated balance sheets. The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis in accordance with GAAP. If the Company determines that an other-than-temporary decline in value has occurred, it recognizes an impairment loss, which is measured as the difference between the recorded carrying value and the fair value of the investment. The fair value is generally determined using an income approach based on discounted cash flows or using negotiated transaction values.

10

NOTE C—SIGNIFICANT CUSTOMERS

Three customers each account for a significant portion of the Company's consolidated revenues. The percentage of the Company's revenues for the Company's three largest customers, for the three month periods ending March 31, 2022 and 2021 are as follows:

	Three Months Ended
	March 31,
	2022	2021
Customer	Percentage of Revenue
DoD	28%	22%
Amazon	34%	35%
DHL	11%	14%

The accounts receivable from the Company's three largest customers as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	March 31,		December 31,
	2022		2021
Customer	Accounts Receivable
DoD	$	59,130	$	57,998
Amazon	82,648		68,429
DHL	11,350		9,111

DoD

The Company is a provider of cargo and passenger airlift services to the U. S. Department of Defense ("DoD"). The DoD awards flights to U.S. certificated airlines through annual contracts and through temporary "expansion" routes.

DHL

The Company has had long-term contracts with DHL Network Operations (USA), Inc. and its affiliates ("DHL") since August 2003. The Company leases Boeing 767 aircraft to DHL under both long-term and short-term lease agreements. Under a separate CMI agreement, the Company operates Boeing 767 aircraft that DHL leases from the Company. Pricing for services provided through the CMI agreement is based on pre-defined fees, scaled for the number of aircraft operated and the number of flight crews provided to DHL for its U.S. network. The Company provides DHL with scheduled maintenance services for aircraft that DHL leases. The Company also provides additional air cargo transportation services for DHL through ACMI agreements in which the Company provides the aircraft, crews, maintenance and insurance under a single contract. As of March 31, 2022, the Company leased 13 Boeing 767 freighter aircraft to DHL comprised of four Boeing 767-200 aircraft and nine Boeing 767-300 aircraft, with expirations between 2023 and 2028. In February 2022, the Company and DHL agreed to a six-year extension of its dry leases for five Boeing 767 freighters as well as an extension of the CMI agreements to operate aircraft through April 2028.

Amazon

The Company has been providing freighter aircraft, airline operations and services for cargo handling and logistical support for Amazon.com Services, LLC ("ASI"), successor to Amazon.com Services, Inc., a subsidiary of Amazon.com, Inc. ("Amazon") since September 2015. On March 8, 2016, the Company entered into an Air Transportation Services Agreement (the “ATSA”) with ASI, pursuant to which CAM leases Boeing 767 freighter aircraft to ASI. The ATSA also provides for the operation of aircraft by the Company’s airline subsidiaries, and the management of ground services by the Company's subsidiary LGSTX Services, Inc. ("LGSTX"). As of March 31, 2022, the Company leased 42 Boeing 767 freighter aircraft to ASI with lease expirations between 2023 and 2031.

11

Amazon Investment Agreement

In conjunction with the execution of the ATSA, the Company and Amazon entered into an Investment Agreement on March 8, 2016 (the "2016 Investment Agreement") and a Stockholders Agreement on March 8, 2016. The 2016 Investment Agreement called for the Company to issue warrants in three tranches granting Amazon the right to acquire up to 19.9% of the Company’s outstanding common shares as described below. The first tranche of warrants, issued upon the execution of the 2016 Investment Agreement and all of which are now fully vested, granted Amazon the right to purchase approximately 12.81 million ATSG common shares, with the first 7.69 million common shares vesting upon issuance on March 8, 2016, and the remaining 5.12 million common shares vesting as the Company delivered additional aircraft leased under the ATSA. The second tranche of warrants, which were issued and vested on March 8, 2018, granted Amazon the right to purchase approximately 1.59 million ATSG common shares. The third tranche of warrants vested on September 8, 2020, and granted Amazon the right to purchase an additional 0.5 million ATSG common shares to bring Amazon’s ownership, after the exercise in full of the three tranches of warrants, to 19.9% of the Company’s pre-transaction outstanding common shares measured on a GAAP-diluted basis, adjusted for share issuances and repurchases by the Company following the date of the 2016 Investment Agreement and after giving effect to the warrants granted. The exercise price of the 14.9 million warrants issued under the 2016 Investment Agreement was $9.73 per share, which represents the closing price of ATSG’s common shares on February 9, 2016. Each of the three tranches of warrants were exercisable in accordance with their terms through March 8, 2021 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date).

On March 5, 2021, Amazon exercised warrants from the 2016 Investment Agreement for 865,548 shares of the Company's common stock through a cashless exercise by forfeiting 480,047 warrants from the 2016 Investment Agreement as payment. For the cashless exchange, ATSG shares were valued at $27.27 per share, its volume-weighted average price for the previous 30 trading days immediately preceding March 5, 2021. Also on March 5, 2021, Amazon notified the Company of its intent to exercise warrants from the 2016 Investment agreement for 13,562,897 shares of the Company's common stock by paying $132.0 million of cash to the Company. This exercise was contingent upon the approval of the DOT, and the expiration or termination of any applicable waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. After receiving all required regulatory approvals and clearances, Amazon remitted the funds to the Company on May 7, 2021, and the Company issued the corresponding shares of common stock, completing the warrant exercise.

On December 22, 2018, the Company announced agreements with ASI to 1) lease and operate ten additional Boeing 767-300 aircraft, 2) extend the term of the 12 Boeing 767-200 aircraft currently leased to ASI by two years to 2023 with an option for three more years, 3) extend the term of the eight Boeing 767-300 aircraft currently leased to ASI by three years to 2026 and 2027 with an option for three more years, and 4) extend the ATSA by five years through March 2026, with an option to extend for an additional three years. The Company leased all ten of the 767-300 aircraft in 2020. In conjunction with the commitment for ten additional 767 aircraft leases, extensions of twenty existing Boeing 767 aircraft leases and the ATSA described above, Amazon and the Company entered into another Investment Agreement on December 20, 2018 (the "2018 Investment Agreement"). Pursuant to the 2018 Investment Agreement, the Company issued Amazon warrants for 14.8 million ATSG common shares. This group of warrants will expire if not exercised within seven years from their issuance date, in December of 2025 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). The warrants have an exercise price of $21.53 per share.

On May 29, 2020, ASI agreed to lease 12 more Boeing 767-300 aircraft from the Company. The first of these leases began in the second quarter of 2020 with the remaining 11 leases commencing in 2021. All 12 of these aircraft leases were for 10-year terms. Pursuant to the 2018 Investment Agreement, as a result of leasing these 12 aircraft, Amazon was issued warrants for 7.0 million common shares, all of which have vested. These warrants will expire if not exercised by December 20, 2025 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). The exercise price of these warrants is $20.40 per share.

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Issued and outstanding warrants are summarized below as of March 31, 2022:

		Common Shares in millions
	Exercise price	Vested	Non-Vested	Expiration
2018 Investment Agreement	$21.53	14.8	0.0	December 20, 2025
2018 Investment Agreement	$20.40	7.0	0.0	December 20, 2025

Additionally, Amazon can earn incremental warrants rights up to 2.9 million common shares under the 2018 Investment Agreement by leasing up to five more cargo aircraft from the Company before January 2026. Incremental warrants granted to Amazon for ASI’s commitment to any such future aircraft leases will have an exercise price based on the volume-weighted average price of the Company's shares during the 30 trading days immediately preceding the contractual commitment for each lease.

For all outstanding warrants vested, Amazon may select a cashless conversion option. Assuming ATSG's stock price at the time of conversion is above the warrant exercise price, Amazon would receive fewer shares in exchange for any warrants exercised under the cashless option by surrendering the number of shares with a market value equal to the exercise price.

The Company’s accounting for the warrants has been determined in accordance with the financial reporting guidance for financial instruments. Warrants classified as liabilities are marked to fair value at the end of each reporting period. The value of warrants is recorded as a customer incentive asset if it is probable of vesting at the time of grant and further changes in the fair value of warrant obligations are recorded to earnings. Upon a warrant vesting event, the customer incentive asset is amortized as a reduction of revenue over the duration of the related revenue contract.

In accordance with the 2016 Investment Agreement, on September 8, 2020, the final number of shares issuable under the third tranche of warrants was determined to be 0.5 million common shares. As a result, under GAAP, the value of the entire warrant grant under the 2016 Investment Agreement was remeasured on September 8, 2020, and its fair value of $221 million was reclassified from balance sheet liabilities to paid-in-capital. In October 2020, upon the execution of the 10th and final aircraft lease of the December 2018 commitment, warrants for 14.8 million shares were remeasured on October 1, 2020, and their fair value of $154 million was reclassified from balance sheet liabilities to paid-in-capital. In December 2021, upon execution of the 12th and final aircraft lease of the May 2020 commitment, warrants for 7.0 million shares were remeasured on December 7, 2021, and their fair value of $82.4 million was reclassified from balance sheet liabilities to paid-in-capital.

As of March 31, 2022 and December 31, 2021, the Company's liabilities reflected warrants from the 2018 Amazon agreements having a fair value of $1.0 million and $0.9 million, respectively. During the three months ended March 31, 2022 and 2021 the re-measurements of warrants to fair value resulted in net non-operating losses of $0.1 million and gains of $6.9 million before the effect of income taxes, respectively.

The Company's earnings in future periods will be impacted by the re-measurements of warrant fair value, amortizations of the lease incentive asset and the related income tax effects. For income tax calculations, the value and timing of related tax deductions will differ from the guidance described above for financial reporting.

NOTE D—FAIR VALUE MEASUREMENTS

The Company’s money market funds and interest rate swaps are reported on the Company’s consolidated balance sheets at fair values based on market values from comparable transactions. The fair value of the Company’s money market funds, Convertible Notes (as defined in Note F), convertible note hedges and interest rate swaps are based on observable inputs (Level 2) from comparable market transactions.

The fair value of the stock warrant obligations to Amazon resulting from aircraft leased to ASI were determined using a Black-Scholes pricing model which considers various assumptions, including the Company’s common stock price, the volatility of the Company’s common stock, the expected dividend yield, exercise price and the risk-free interest rate (Level 2 inputs). The fair value of the stock warrant obligations for unvested stock warrants, conditionally granted to Amazon for the execution of incremental, future aircraft leases, include additional assumptions including the expected exercise prices and the probabilities that future leases will occur (Level 3 inputs).

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The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands):

As of March 31, 2022	Fair Value Measurement Using						Total
	Level 1		Level 2		Level 3
Assets
Cash equivalents—money market	$	—	$	22,048	$	—	$	22,048
Total Assets	$	—	$	22,048	$	—	$	22,048
Liabilities
Interest rate swap	$	—	$	(833)	$	—	$	(833)
Stock warrant obligations	—		—		(989)		(989)
Total Liabilities	$	—	$	(833)	$	(989)	$	(1,822)

As of December 31, 2021	Fair Value Measurement Using						Total
	Level 1		Level 2		Level 3
Assets
Cash equivalents—money market	$	—	$	30,042	$	—	$	30,042
Total Assets	$	—	$	30,042	$	—	$	30,042
Liabilities
Interest rate swap	$	—	$	(3,603)	$	—	$	(3,603)
Stock warrant obligations	—		—		(915)		(915)
Total Liabilities	$	—	$	(3,603)	$	(915)	$	(4,518)

As a result of lower market interest rates compared to the stated interest rates of the Company’s fixed rate debt obligations, the fair value of the Company’s debt obligations, based on Level 2 observable inputs, was approximately $32.5 million more than the carrying value, which was $1,273.8 million at March 31, 2022. As of December 31, 2021, the fair value of the Company’s debt obligations was approximately $37.1 million less than the carrying value, which was $1,299.4 million. The non-financial assets, including goodwill, intangible assets and property and equipment are measured at fair value on a non-recurring basis.

NOTE E—PROPERTY AND EQUIPMENT

The Company's property and equipment consists primarily of cargo aircraft, aircraft engines and other flight equipment. Property and equipment, to be held and used, is summarized as follows (in thousands):

	March 31, 2022		December 31, 2021
Flight equipment	$	3,364,376	$	3,301,113
Ground equipment	66,759		64,641
Leasehold improvements, facilities and office equipment	39,090		38,769
Aircraft modifications and projects in progress	262,380		206,917
	3,732,605		3,611,440
Accumulated depreciation	(1,550,529)		(1,481,506)
Property and equipment, net	$	2,182,076	$	2,129,934

CAM owned aircraft with a carrying value of $1,416.7 million and $1,404.4 million that were under lease to external customers as of March 31, 2022 and 2021, respectively.

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NOTE F—DEBT OBLIGATIONS

Debt obligations consisted of the following (in thousands):

	March 31,		December 31,
	2022		2021
Revolving credit facility	$	310,000	$	360,000
Senior Notes	697,213		697,162
Convertible Notes	256,118		231,646
Other financing arrangements	10,456		10,555
Total debt obligations	1,273,787		1,299,363
Less: current portion	(631)		(628)
Total long term obligations, net	$	1,273,156	$	1,298,735

The Company is party to a syndicated credit agreement (as amended, the "Senior Credit Agreement") which includes the ability to execute term loans and a revolving credit facility. Prior to its amendment on April 6, 2021, the Senior Credit Agreement had a maturity date of November 2024 provided certain liquidity measures are maintained during 2024, an incremental accordion capacity based on debt ratios and a maximum revolver capacity of $600.0 million. The interest rate is a pricing premium added to LIBOR based upon the ratio of the Company's debt to its earnings before interest, taxes, depreciation and amortization expenses ("EBITDA") as defined under the Senior Credit Agreement.

On April 6, 2021, the Company amended the Senior Credit Agreement ("Amended Credit Agreement"). The Amended Credit Agreement: (i) temporarily increased the aggregate amount of the revolving credit facility from $600.0 million to $1 billion, and subsequently decreased the aggregate amount to $800.0 million on April 13, 2021, (ii) permitted increases of the revolving credit facility commitments and/or new tranches of term loans in an aggregate principal amount equal to the sum of $400 million plus the principal amount of indebtedness that could be incurred at the time of the increase that would not cause the Secured Leverage Ratio (as defined in the Amended Credit Agreement) to exceed 3.25 to 1.00 on a pro forma basis, (iii) modified the maturity date of the agreement from November 30, 2024, to April 6, 2026, with such extension of the maturity date being subject to (1) at the election of the lenders, five one-year extensions and (2) an earlier springing maturity date of July 12, 2024, if, on such date, (a) more than $75.0 million in aggregate principal amount of the Convertible Notes (as defined below) remain outstanding and (b) the Company has less than $375.0 million of liquidity at such time, (iv) removed the Collateral to Total Exposure Ratio (as defined in the Senior Credit Agreement) as a financial covenant, and (v) required the Company to repay the balance of all term loans outstanding at the time of the amendment.

On January 28, 2020, CAM completed a debt offering of $500.0 million in senior unsecured notes (together with the "Additional Notes" referred to below, the “Senior Notes”) that were guaranteed by ATSG and certain of its other subsidiaries. The Senior Notes were sold only to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), and certain investors pursuant to Regulation S under the Securities Act. The Senior Notes are senior unsecured obligations that bear interest at a fixed rate of 4.75% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2020. The Senior Notes mature on February 1, 2028. The Senior Notes contain customary events of default and certain covenants which are generally no more restrictive than those set forth in the Senior Credit Agreement. The net proceeds of $495.0 million from the Senior Notes were used to pay down the revolving credit facility. The Senior Notes do not require principal payments until maturity but prepayments are allowed without penalty beginning February 1, 2025.

As of March 31, 2022, the unused revolving credit facility available to the Company at the trailing twelve-month EBITDA level was $474.9 million with additional permitted indebtedness under the Senior Credit Agreement subject to compliance with other covenants.

On April 13, 2021, CAM completed its offering of $200.0 million of additional notes ("Additional Notes") that were guaranteed by ATSG and certain of its subsidiaries. The Additional Notes are fully fungible with the Senior Notes, treated as a single class for all purposes under the indenture governing the Senior Notes with the same terms as those of the Senior Notes (other than issue date and issue price). The proceeds of $205.5 million, net of

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scheduled interest payable, were used, in conjunction with draws from the revolving credit facility to repay the unsubordinated term loans. Upon retirement of the unsubordinated term loans, the Company expensed debt issuance costs of $6.5 million related to the unsubordinated term loans.

The balance of the Senior Notes is net of debt issuance costs of $7.5 million and $7.8 million as of March 31, 2022 and December 31, 2021, respectively. Under the terms of the Senior Credit Agreement, interest rates are adjusted at least quarterly based on the Company's EBITDA, its outstanding debt level and prevailing LIBOR or prime rates. At the Company's debt-to-EBITDA ratio as March 31, 2022, the LIBOR based financing for the revolving credit facility bear variable interest rates of 1.47%.

The Senior Credit Agreement is collateralized by certain of the Company's Boeing 777, 767 and 757 aircraft. Under the terms of the Senior Credit Agreement, the Company is required to maintain certain collateral coverage ratios set forth in the Senior Credit Agreement. The Senior Credit Agreement limits the amount of dividends the Company can pay and the amount of common stock it can repurchase to $100.0 million during any calendar year, provided the Company's total debt to EBITDA ratio is under 3.50 to 1.0 and the secured debt to EBITDA ratio is under 3.0 to 1.0, after giving effect to the dividend or repurchase. The Senior Credit Agreement contains covenants, including a maximum permitted total EBITDA to debt ratio, a fixed charge covenant ratio requirement, and limitations on certain additional indebtedness and guarantees of indebtedness. The Senior Credit Agreement stipulates events of default, including unspecified events that may have material adverse effects on the Company. If an event of default occurs, the Company may be forced to repay, renegotiate or replace the Senior Credit Agreement.

In September 2017, ATSG issued $258.8 million aggregate principal amount of 1.125% convertible senior notes due 2024 ("Convertible Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Convertible Notes bear interest at a rate of 1.125% per year payable semi-annually in arrears on April 15 and October 15 each year, beginning April 15, 2018. The Convertible Notes mature on October 15, 2024, unless repurchased or converted in accordance with their terms prior to such date. The Convertible Notes are unsecured indebtedness, subordinated to the Company's existing and future secured indebtedness and other liabilities, including trade payables.

Conversion of the Convertible Notes can only occur upon satisfaction of certain conditions and during certain periods, beginning any calendar quarter commencing after December 31, 2017, until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon the occurrence of certain fundamental changes, holders of the Convertible Notes can require the Company to repurchase their notes at the cash repurchase price equal to the principal amount of the notes, plus any accrued and unpaid interest. The Company has the right to settle the Convertible Notes in cash, the Company’s common shares or a combination of cash and the Company’s common shares, at the Company’s election. The initial conversion rate is 31.3475 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $31.90 per common share). If a “make-whole fundamental change” (as defined in the offering circular with the Convertible Notes) occurs, the Company will, in certain circumstances, increase the conversion rate for a specified period of time.

The conversion feature of the Convertible Notes required bifurcation from the principal amount under the applicable accounting guidance. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective approach as discussed in Note A which recombined the value of the previously bifurcated embedded feature with the convertible note and eliminated the discount. The carrying value of the Company's convertible debt is shown below.

	March 31,		December 31,
	2022		2021
Principal value, Convertible Notes, due 2024	$	258,750	$	258,750
Unamortized issuance costs	(2,632)		(2,889)
Unamortized discount	—		(24,215)
Convertible debt	$	256,118	$	231,646

In conjunction with the Convertible Notes, the Company purchased convertible note hedges under privately negotiated transactions for $56.1 million, having the same number of the Company's shares of common stock (8.1

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million shares) and same strike price ($31.90) that underlie the Convertible Notes. The convertible note hedges are expected to reduce the potential equity dilution with respect to the Company's common stock, and/or offset any cash payments in excess of the principal amount due, as the case may be, upon conversion of the Convertible Notes. The Company's current intent and policy is to settle all Note conversions through a combination settlement which satisfies the principal amount of the Convertible Notes outstanding with cash.

NOTE G—DERIVATIVE INSTRUMENTS

The Company maintains derivative instruments for protection from fluctuating interest rates. The table below provides information about the Company’s interest rate swaps (dollars in thousands):

			March 31, 2022				December 31, 2021
Expiration Date	Stated Interest Rate		Notional Amount		Market Value (Liability)		Notional Amount		Market Value (Liability)
March 31, 2022	1.900	%	$	—	$	—	$	50,000	$	(221)
March 31, 2022	1.950	%	—		—		75,000		(341)
March 31, 2023	2.425	%	131,250		(833)		133,125		(3,041)

The outstanding interest rate swaps are not designated as hedges for accounting purposes. The effects of future fluctuations in LIBOR interest rates on derivatives held by the Company will result in the recording of unrealized gains and losses into the statement of operations. The Company recorded net gains on derivatives of $2.8 million and $2.5 million for the three month periods ending March 31, 2022 and 2021, respectively. The liability for outstanding derivatives is recorded in other liabilities and in accrued expenses.

NOTE H—COMMITMENTS AND CONTINGENCIES

Payroll Support Programs

During 2020, two of the Company's airline subsidiaries, OAI and ATI, received government funds totaling $75.8 million pursuant to payroll support program agreements under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In February 2021, OAI was approved for $37.4 million of additional non-repayable government funds pursuant to a payroll support program agreement under the Consolidated Appropriations Act, 2021 (the “PSP Extension Law”). This grant was subsequently increased by $5.6 million. Further, in April 2021, OAI was approved for $40.0 million of additional non-repayable government funds pursuant to a payroll support program agreement under the American Rescue Plan Act of 2021 (the "American Rescue Plan").

The three programs are structured in a substantially similar manner. These grants are not required to be repaid if the Company complies with the provisions of the payroll support program agreements under the CARES Act, the PSP Extension Law and the American Rescue Plan. The grants are recognized over the periods in which the Company recognizes the related expenses for which the grants are intended to compensate. The Company recognized the grants as contra-expense during the periods in which passenger flight operations and combi flight operations levels were expected to be negatively impacted by the pandemic. During the three month period ended March 31, 2021, the Company recognized $28.0 million of the grants. The Company recognized all of the CARES Act funds by the end of 2021.

In conjunction with the payroll support program agreements under the CARES Act, OAI and ATI agreed on behalf of themselves and ABX to refrain from conducting involuntary furloughs or reducing employee rates of pay or benefits through September 30, 2020. Thereafter, OAI agreed as a condition of receiving grants under the PSP Extension Law and the American Rescue Plan to refrain from conducting involuntary furloughs or reducing employee rates of pay or benefits through March 31, 2021, and September 30, 2021, respectively. Under the CARES Act, OAI and ATI agreed to limit, on behalf of themselves and certain affiliates, executive compensation through March 24, 2022; maintain certain air transportation service through March 1, 2022 as may be required by the DOT pursuant to its authority under the CARES Act; and maintain certain internal controls and records relating to the funds and comply with certain reporting requirements. OAI further agreed as a condition of receiving grants

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under the PSP Extension Law and thereafter the American Rescue Plan, to limit executive compensation through October 1, 2022 and April 1, 2023, respectively. In addition, the Company may not pay dividends or repurchase its shares through September 30, 2022.

Lease Commitments

The Company leases property, aircraft, aircraft engines and other types of equipment under operating leases. The Company's airlines operate seven freighter aircraft provided by customers and four passenger aircraft leased from external companies. Property leases include hangars, warehouses, offices and other space at certain airports with fixed rent payments and lease terms ranging from one month to six years. The Company is obligated to pay the lessor for maintenance, real estate taxes, insurance and other operating expenses on certain property leases. These expenses are variable and are not included in the measurement of the lease asset or lease liability. These expenses are recognized as variable lease expense when incurred and are not material. Equipment leases include ground support and industrial equipment as well as computer hardware with fixed rent payments and terms of one month to five years.

The Company records the initial right-to-use asset and lease liability at the present value of lease payments scheduled during the lease term. For the three month period ending March 31, 2022 and 2021, non-cash transactions to recognize right-to-use assets and corresponding liabilities for new leases were $2.9 million and $0.9 million, respectively. Unless the rate implicit in the lease is readily determinable, the Company discounts the lease payments using an estimated incremental borrowing rate at the time of lease commencement. The Company estimates the incremental borrowing rate based on the information available at the lease commencement date, including the rate the Company could borrow for a similar amount, over a similar lease term with similar collateral. The Company's weighted-average discount rate for operating leases at March 31, 2022 was 2.3% compared to 2.4% at December 31, 2021. Leases often include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Although not material, the amount of such options is reflected below in the maturity of operating lease liabilities table. Lease expense is recognized on a straight-line basis over the lease term. The weighted-average remaining lease term is 3.6 years and 3.8 years as of March 31, 2022 and December 31, 2021, respectively.

For the three month periods ending March 31, 2022 and 2021, cash payments against operating lease liabilities were $5.2 million and $5.3 million, respectively. As of March 31, 2022, the maturities of operating lease liabilities are as follows (in thousands):

	Operating Leases
Remaining 2022	$	15,330
2023	18,036
2024	14,453
2025	10,618
2026	4,954
2027 and beyond	173
Total undiscounted cash payments	63,564
Less: amount representing interest	(2,486)
Present value of future minimum lease payments	61,078
Less: current obligations under leases	18,840
Long-term lease obligation	$	42,238

Purchase Commitments

The Company has agreements with vendors for the conversion of Boeing 767-300, Airbus A321 and Airbus A330 passenger aircraft into a standard configured freighter aircraft. The conversions primarily consist of the installation of a standard cargo door and loading system. As of March 31, 2022, the Company owned twelve Boeing 767-300 aircraft and three Airbus A321-200 aircraft that were in or awaiting the modification process. As of March

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31, 2022, the Company has agreements to purchase eleven more Boeing 767-300 passenger aircraft through 2024. As of March 31, 2022, the Company's commitments to acquire and convert aircraft totaled $364.7 million.

Guarantees and Indemnifications

Certain leases and agreements of the Company contain guarantees and indemnification obligations to the lessor, or one or more other parties, that are considered reasonable and customary (e.g. use, tax and environmental indemnifications), the terms of which range in duration and are often limited. Such indemnification obligations may continue after expiration of the respective lease or agreement.

Other

In addition to the foregoing matters, the Company is also a party to legal proceedings in various federal and state jurisdictions from time to time arising out of the operation of the Company's business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, the Company believes that its ultimate liability, if any, arising from pending legal proceedings, as well as from asserted legal claims and known potential legal claims which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to our financial condition or results of operations.

Employees Under Collective Bargaining Agreements

As of March 31, 2022, the flight crewmember employees of ABX, ATI and OAI and flight attendant employees of ATI and OAI were represented by the labor unions listed below:

Airline	Labor Agreement Unit	Percentage of the Company’s Employees
ABX	International Brotherhood of Teamsters	5.6%
ATI	Air Line Pilots Association	9.2%
OAI	International Brotherhood of Teamsters	6.1%
ATI	Association of Flight Attendants	0.6%
OAI	Association of Flight Attendants	6.2%

The labor agreements with ATI 's flight crew members and Omni's flight crew members are amendable at this time. Under the Railway Labor Act, as amended, airline labor agreements do not expire, so the existing contract remains in effect throughout the negotiation process.

NOTE I—PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

Defined Benefit and Post-retirement Healthcare Plans

ABX sponsors a qualified defined benefit pension plan for ABX crewmembers and a qualified defined benefit pension plan for a major portion of its other ABX employees that meet minimum eligibility requirements. ABX also sponsors non-qualified defined benefit pension plans for certain employees. These non-qualified plans are unfunded. Employees are no longer accruing benefits under any of the defined benefit pension plans. ABX also sponsors a post-retirement healthcare plan for its ABX crewmembers, which is unfunded. Benefits for covered individuals terminate upon reaching age 65 under the post-retirement healthcare plans.

The accounting and valuation for these post-retirement obligations are determined by prescribed accounting and actuarial methods that consider a number of assumptions and estimates. The selection of appropriate assumptions and estimates is significant due to the long time period over which benefits will be accrued and paid. The long term nature of these benefit payouts increases the sensitivity of certain estimates of our post-retirement obligations. The assumptions considered most sensitive in actuarially valuing ABX’s pension obligations and determining related expense amounts are discount rates and expected long term investment returns on plan assets. Additionally, other assumptions concerning retirement ages, mortality and employee turnover also affect the valuations. Actual results

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and future changes in these assumptions could result in future costs significantly higher than those recorded in our results of operations.

ABX measures plan assets and benefit obligations as of December 31 of each year. Information regarding ABX’s sponsored defined benefit pension plans and post-retirement healthcare plans follow below. The accumulated benefit obligation reflects pension benefit obligations based on the actual earnings and service to-date of current employees.

ABX’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans are as follows (in thousands):

	Three Months Ended March 31,
	Pension Plans				Post-Retirement Healthcare Plan
	2022		2021		2022		2021
Service cost	$	—	$	—	$	19	$	24
Interest cost	6,011		5,597		15		10
Expected return on plan assets	(11,738)		(11,875)		—		—
Amortization of net (gain) loss	313		1,764		11		47
Net periodic benefit cost (income)	$	(5,414)	$	(4,514)	$	45	$	81

During the three month period ending March 31, 2022, the Company contributed $0.8 million to the pension plans. The Company expects to contribute an additional $0.5 million during the remainder of 2022.

NOTE J—INCOME TAXES

The provision for income taxes for interim periods is based on management's best estimate of the effective income tax rate expected to be applicable for the current year, plus any adjustments arising from changes in the estimated amount of taxable income related to prior periods. Income taxes recorded through March 31, 2022 have been estimated utilizing a rate of 23.4% based upon year-to-date income and projected results for the full year. The recognition of discrete tax items, such as the conversion of employee stock awards, the issuance of stock warrants and other items, have an impact on the effective rate during a period.

As a result of these differences in which expenses and benefits for tax purposes are different than required by GAAP, the Company's effective tax rate for the first three months of 2022 was 23.5%. The final effective tax rate for the year 2022 will depend on the actual amount of pre-tax book results by the Company for the full year, the additional conversions of employee stock awards, stock warrant valuations, executive compensation and other items.

The Company has operating loss carryforwards for U.S. federal income tax purposes. Management expects to utilize the loss carryforwards to offset federal income tax liabilities in the future. Due to the Company's deferred tax assets, including its loss carryforwards, management does not expect to pay federal income taxes until 2025 or later. The Company may, prior to such time, be required to pay some federal tax due to loss carryforward usage limitations and certain state and local income taxes.

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NOTE K—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) includes the following items by components for the three month periods ending March 31, 2022 and 2021 (in thousands):

	Defined Benefit Pension		Defined Benefit Post-Retirement		Foreign Currency Translation		Total
Balance as of January 1, 2021	$	(78,093)	$	(549)	$	(14)	$	(78,656)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	1,764		47		—		1,811
Income Tax (Expense) or Benefit	(402)		(11)		—		(413)
Other comprehensive income (loss), net of tax	1,362		36		—		1,398
Balance as of March 31, 2021	$	(76,731)	$	(513)	$	(14)	$	(77,258)
	Defined Benefit Pension		Defined Benefit Post-Retirement		Foreign Currency Translation		Total
Balance as of January 1, 2022	$	(61,831)	$	(229)	$	(20)	$	(62,080)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	313		11		—		324
Income Tax (Expense) or Benefit	(71)		(2)		—		(73)
Other comprehensive income (loss), net of tax	242		9		—		251
Balance as of March 31, 2022	$	(61,589)	$	(220)	$	(20)	$	(61,829)

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NOTE L—STOCK-BASED COMPENSATION

ATSG's Board of Directors has granted stock incentive awards to certain employees and board members pursuant to a long term incentive plan which was approved by its stockholders in May 2005 and in May 2015. Employees have been awarded non-vested stock units with performance conditions, non-vested stock units with market conditions and non-vested time-based restricted stock. The restrictions on the non-vested restricted stock awards lapse at the end of a specified service period, which is typically three years from the date of grant. Restrictions may lapse sooner upon a business combination, death, disability or after an employee qualifies for retirement. The non-vested stock units will be converted into ATSG common stock depending on performance and market conditions at the end of a specified service period, lasting approximately three years. The performance condition awards will be converted into ATSG common stock based on the Company's average return on invested capital during the service period. Similarly, the market condition awards will be converted into ATSG common stock based on the appreciation of the common stock price compared to the NASDAQ Transportation Index. Board members have been granted time-based restricted stock unit awards that vest after a period of twelve months. The Company expects to settle all of the stock unit awards by issuing new shares of ATSG common stock. The table below summarizes stock-based award activity.

	Three Months Ended
	March 31, 2022			March 31, 2021
	Number of Awards	Weighted average grant-date fair value		Number of Awards	Weighted average grant-date fair value
Outstanding at beginning of period	978,188	$	17.49	1,085,023	$	17.14
Granted	285,867	35.45		274,606	26.65
Converted	(118,222)	24.69		(115,930)	25.55
Forfeited	(1,400)	22.22		—	—
Outstanding at end of period	1,144,433	$	21.23	1,243,699	$	18.46
Vested	362,594	$	10.20	357,499	$	9.26

The average grant-date fair value of each performance condition award, non-vested restricted stock award and time-based award granted by the Company in 2022 was $33.84, the fair value of the Company’s stock on the date of grant. The average grant-date fair value of each market condition award granted in 2022 was $46.20. The market condition awards granted in 2022 were valued using a Monte Carlo simulation technique based on daily stock prices over three years and using the following variables:

	2022
Risk-free interest rate	2.5%
Volatility	38.3%

For the three months ended March 31, 2022 and 2021, the Company recorded expense of $1.7 million and $1.8 million, respectively, for stock incentive awards. At March 31, 2022, there was $15.2 million of unrecognized expense related to the stock incentive awards that is expected to be recognized over a weighted-average period of 1.8 years. As of March 31, 2022, none of the awards were convertible, 362,594 units of the Board members' time-based awards had vested and none of the outstanding shares of the restricted stock had vested. These awards could result in the issuance of up to 1,436,783 shares of ATSG common stock depending on service, performance and market results through December 31, 2024.

NOTE M—COMMON STOCK AND EARNINGS PER SHARE

Earnings per Share

On January 1, 2022 the Company adopted ASU 2020-06 as discussed in Note A. As a result, diluted earnings per share of common stock for the 2022 periods excludes interest charges related to the convertible debt and

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includes the number of shares that would have been converted at the beginning of the period under the "if-convert" method. The calculation of basic and diluted earnings per share of common stock are as follows (in thousands, except per share amounts):

	Three Months Ending
	March 31,
	2022		2021
Numerator:
Earnings from continuing operations - basic	$	49,796	$	42,290
Loss (gain) from stock warrants revaluation, net of tax	—		(5,355)
Convertible debt interest charge net of tax	760		—
Earnings from continuing operations - diluted	$	50,556	$	36,935
Denominator:
Weighted-average shares outstanding for basic earnings per share	73,888		59,447
Common equivalent shares:
Effect of stock-based compensation awards and warrants	6,745		15,297
Effect of convertible debt	8,111		—
Weighted-average shares outstanding assuming dilution	88,744		74,744
Basic earnings per share from continuing operations	$	0.67	$	0.71
Diluted earnings per share from continuing operations	$	0.57	0.49

Basic weighted average shares outstanding for purposes of basic earnings per share are less than the shares outstanding due to 392,039 shares and 487,200 shares of restricted stock for 2022 and 2021, respectively, which are accounted for as part of diluted weighted average shares outstanding in diluted earnings per share.

The determination of diluted earnings per share requires the exclusion of the fair value re-measurement of the stock warrants recorded as a liability (see Note C), if such warrants have an anti-dilutive effect on earnings per share. The dilutive effect of the weighted-average diluted shares outstanding is calculated using the treasury method for periods in which equivalent shares have a dilutive effect on earnings per share. Under this method, the number of diluted shares is determined by dividing the assumed proceeds of the warrants recorded as a liability by the average stock price during the period and comparing that amount with the number of corresponding warrants outstanding.

In conjunction with the offering of the Convertible Notes (see note F), the Company also sold warrants for ATSG common stock, subject to customary anti-dilution adjustments. The amount received for these warrants and recorded in Stockholders' Equity in the Company’s consolidated balance sheets was $38.5 million. These warrants may result in 8.1 million additional shares of common stock, if ATSG's traded market price exceeds the strike price which is $41.35 per share and is subject to certain adjustments under the terms of the warrant transactions.

NOTE N—SEGMENT AND REVENUE INFORMATION

The Company operates in two reportable segments - CAM and ACMI Services. The CAM segment consists of the Company's aircraft and engine leasing operations. The ACMI Services segment consists of the Company's airline operations, including CMI agreements as well as ACMI, charter service and passenger service agreements that the Company has with its customers. The Company's aircraft maintenance services, aircraft modification services, ground services and other support services, are not large enough to constitute separate reportable segments and are combined in All other. Intersegment revenues are valued at arms-length market rates.

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The Company's segment information from continuing operations is presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Total revenues:
CAM	$	106,905	$	83,277
ACMI Services	330,090		247,131
All other	102,535		93,698
Eliminate inter-segment revenues	(53,670)		(48,018)
Total	$	485,860	$	376,088
Customer revenues:
CAM	$	76,691	$	60,800
ACMI Services	330,084		247,126
All other	79,085		68,162
Total	$	485,860	$	376,088

The Company's external customer revenues from other activities for the three month periods ending March 31, 2022 and 2021 are presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Aircraft maintenance, modifications and part sales	$	37,540	$	34,048
Ground services	25,101		23,460
Other, including aviation fuel sales	16,444		10,654
Total customer revenues	$	79,085	$	68,162

During the three month periods ending March 31, 2022 and 2021, the Company recognized $3.5 million and $2.7 million of non lease revenue that was reported as deferred revenue at the beginning of the respective year. Current deferred revenue of $10.0 million and $8.3 million as of March 31, 2022 and December 31, 2021, respectively, for contracts with customers is derived from other activities as described above. Revenue related to deferred revenue will be recognized based on percentage of completion. Customers are required to pay deposits and may be required to make milestone payments for these services resulting in deferred revenue. Long-term contract assets were $0.0 million and $0.8 million as of March 31, 2022 and December 31, 2021, respectively.

CAM's leases do not contain residual guarantees. Approximately 13% of CAM's leases to external customers contain purchase options at projected market values. As of March 31, 2022, minimum future payments from external customers for leased aircraft and equipment were scheduled to be $200.8 million for the remainder of 2022, $229.6 million, $179.6 million, $167.7 million and $149.6 million for the next 4 years ending December 31, 2026, respectively, and $343.3 million thereafter. CAM's external customer revenues for non-lease activities were $9.9 million and $2.4 million during the first three months of 2022 and 2021 respectively for engine services and the sale of spare engine parts.

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The Company's other segment information from continuing operations is presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Depreciation and amortization expense:
CAM	$	56,291	$	46,995
ACMI Services	25,190		22,981
All other	590		1,075
Total	$	82,071	$	71,051
Interest expense
CAM	7,705		9,226
ACMI Services	3,378		4,523
Segment earnings (loss):
CAM	$	34,995	$	21,462
ACMI Services	22,165		21,259
All other	1,551		389
Net unallocated interest expense	(307)		(754)
Net gain (loss) on financial instruments	2,696		9,472
Other non-service components of retiree benefit costs, net	5,388		4,457
Loss from non-consolidated affiliate	(1,403)		(1,183)
Pre-tax earnings from continuing operations	$	65,085	$	55,102

The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other.

	March 31,		December 31,
	2022		2021
Assets:
CAM	$	2,260,674	$	2,218,012
ACMI Services	849,478		872,311
All other	176,777		177,012
Total	$	3,286,929	$	3,267,335

During the first three months of 2022, the Company had capital expenditures for property and equipment of $22.4 million and $85.0 million for the ACMI Services and CAM, respectively.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") has been prepared with reference to the historical financial condition and results of operations of Air Transport Services Group, Inc., and its subsidiaries. Air Transport Services Group, Inc. and its subsidiaries may hereinafter individually and collectively be referred to as "the Company", "we", "our", or "us" from time to time. The MD&A describes the principal factors affecting our results of operations, financial condition, cash flow, liquidity and capital resources. The MD&A should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") contained in this report and the audited consolidated financial statements and related notes prepared in accordance with GAAP contained in our 2021 Form 10-K.

BACKGROUND

We lease aircraft and provide airline operations, aircraft modification and maintenance services, ground services, and other support services to the air transportation and logistics industries. Through ATSG's subsidiaries, we offer a range of complementary services to delivery companies, freight forwarders, e-commerce operators, airlines and government customers. Our principal subsidiaries include our aircraft leasing company (CAM) and three independently certificated airlines (ABX, ATI and OAI).

We have two reportable operating segments:

CAM offers aircraft leasing and related services to external customers and also leases aircraft internally to the Company's airlines. CAM acquires passenger aircraft and manages the modification of the aircraft into freighters. The follow-on aircraft leases normally cover a term of five to ten years. CAM currently leases Boeing 767, 757 and 777 aircraft and aircraft engines.

ACMI Services includes the cargo and passenger transportation operations of our three airlines. Our airlines operate under contracts to provide a combination of aircraft, crews, maintenance, insurance and aviation fuel. Our customers are typically responsible for supplying the necessary aviation fuel and cargo handling services and reimbursing our airline for other operating expenses such as landing fees, ramp expenses, certain aircraft maintenance expenses and fuel procured directly by the airline. Aircraft charter agreements, including those for the DoD, usually require the airline to provide full service, including fuel and other operating expenses for a fixed, all-inclusive price.

Our other business operations, which primarily provide support services to the transportation industry, include providing aircraft maintenance and modification services to customers, cargo load transfer and sorting services as well as related equipment maintenance services. These operations do not constitute separate reportable segments.

At March 31, 2022, we owned 108 Boeing aircraft that were in revenue service. We also owned twelve Boeing 767-300 aircraft and three Airbus 321-200 aircraft either already undergoing or awaiting induction into the freighter conversion process at March 31, 2022. In addition to these aircraft, we leased four passenger aircraft from third parties and operated seven freighter aircraft provided by customers for whom we provide services under CMI agreements.

Due to the strong demand for medium widebody and narrow body freighters and as part of our continued growth strategy to expand and diversify our fleet, during 2021 we secured additional aircraft conversion slots over the next few years. We continue to work closely with Israel Aerospace Industries and forged new conversion relationships with Boeing and Elbe Flugzeugwerke (“EFW”). Further, we perform our own conversions of the Airbus A321 aircraft through a joint venture arrangement.

Customers

Our largest customers are ASI, which is a subsidiary of Amazon, the DoD and DHL.

Revenues from our commercial arrangements with ASI comprised approximately 34% and 35% of our consolidated revenues during the three month periods ended March 31, 2022 and 2021 respectively. As of March 31, 2022, we leased 42 Boeing 767 freighter aircraft to ASI with lease expirations between 2023 and 2031 and we operate those aircraft for ASI. The aircraft lease terms typically range from 5 to 10 years. We operate five other Boeing 767 aircraft provided by ASI. We also provide ground services and aircraft maintenance services to ASI.

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DHL comprised 11% and 14% of our consolidated revenues during the three month periods ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we leased 13 Boeing 767 freighter aircraft to DHL comprised of four Boeing 767-200 aircraft and nine Boeing 767-300 aircraft, with expirations between 2023 and 2028. Eight of the 13 Boeing 767 aircraft were being operated by the Company's airlines for DHL. Additionally we operated two Boeing 767 aircraft that were provided by DHL. In February 2022, the Company and DHL agreed to a six-year extension of its dry leases for five Boeing 767 freighters as well as an extension of the CMI agreement with DHL for ABX to operate aircraft through April 2028. The CMI agreement was expanded to include two additional 767 freighters.

The DoD comprised 28% and 22% of our consolidated revenues during the three month periods ended March 31, 2022 and 2021 respectively, derived primarily from operating passenger and combi charter flights. We utilize our fleet of fifteen passenger aircraft to operate troop movement flights for the DoD. We also operate our four combi aircraft for the DoD, which are capable of simultaneously carrying cargo and passengers on the main deck. We have been providing services to the DoD since the 1990’s, typically under one year agreements.

RESULTS OF OPERATIONS

Revenue and Earnings Summary

External customer revenues from continuing operations increased by $109.8 million, or 29%, to $485.9 million during the first three months of 2022 compared to the same period in 2021. Customer revenues increased in 2022 across all lines of business but particularly for contracted airline services, charter flights, aircraft leasing and aviation fuel sales, compared to the previous year's period. Nine additional aircraft have been placed on customer leases since April 1, 2021. An increase in block hours for DoD troop movements resulted in a significant increase in ACMI Services revenue compared to the prior year's period.

Consolidated net earnings from continuing operations were $49.8 million for the three month period ended March 31, 2022 compared to $42.3 million for the corresponding period of 2021. The pre-tax earnings from continuing operations were $65.1 million for the three month period ended March 31, 2022 compared to $55.1 million for the corresponding period of 2021. Earnings were affected by the following specific events and certain adjustments that do not directly reflect our underlying operations among the periods presented.

•Pre-tax earnings from continuing operations included net gains of $2.7 million and net losses of $9.5 million for the three month periods ended March 31, 2022 and 2021, respectively, for the re-measurement of financial instruments, including warrant obligations granted to Amazon.

•Pre-tax earnings from continuing operations were also reduced by $5.8 million and $5.7 million for the three month periods ended March 31, 2022 and 2021, respectively, for the amortization of customer incentives given to Amazon in the form of warrants.

•Pre-tax earnings from continuing operations included gains of $5.4 million and $4.5 million for the three month periods ended March 31, 2022 and 2021 , respectively, for non-service components of retiree benefit plans.

•Pre-tax earnings from continuing operations included losses of $1.4 million and $1.2 million for the three month periods ended March 31, 2022 and 2021, respectively, for the Company's share of development costs and expense for a joint venture.

•During the three month period ended March 31, 2021, the Company recognized $28.0 million of government grants from the CARES Act, PSP Extension Law and the American Rescue Plan.

After removing the effects of these items, adjusted pre-tax earnings from continuing operations, a non-GAAP measure (a definition and reconciliation of adjusted pre-tax earnings from continuing operations follows), were $64.2 million for the three month period ended March 31, 2022 compared to $20.0 million for the corresponding period of 2021. Improved results of $44.2 million were driven by additional aircraft leases to external customers, an increase in the number of freighter aircraft we operate and more passenger block hours for the DoD compared to the previous year's quarter.

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A summary of our revenues and pre-tax earnings from continuing operations as well as a reconciliation of adjusted pre-tax earnings from continuing operations to pre-tax earnings from continuing operations is shown below (in thousands):

	Three Months Ended
	March 31,
	2022		2021
Revenues from Continuing Operations:
CAM
Aircraft leasing and related services	$	111,935	$	88,229
Lease incentive amortization	(5,030)		(4,952)
Total CAM	106,905		83,277
ACMI Services	330,090		247,131
Other Activities	102,535		93,698
Total Revenues	539,530		424,106
Eliminate internal revenues	(53,670)		(48,018)
Customer Revenues	$	485,860	$	376,088
Pre-Tax Earnings from Continuing Operations:
CAM, inclusive of interest expense	$	34,995	$	21,462
ACMI Services, inclusive of government grants and interest expense	22,165		21,259
Other Activities	1,551		389
Net unallocated interest expense	(307)		(754)
Net financial instrument re-measurement gain	2,696		9,472
Other non-service components of retiree benefits costs, net	5,388		4,457
Loss from non-consolidated affiliate	(1,403)		(1,183)
Pre-Tax Earnings from Continuing Operations	65,085		55,102
Add other non-service components of retiree benefit costs, net	(5,388)		(4,457)
Less government grants	—		(28,030)
Add charges for non-consolidated affiliates	1,403		1,183
Add lease incentive amortization	5,798		5,699
Add net gain on financial instruments	(2,696)		(9,472)
Adjusted Pre-Tax Earnings from Continuing Operations	$	64,202	$	20,025

Adjusted pre-tax earnings from continuing operations, a non-GAAP measure, is pre-tax earnings from continuing operations excluding the following: (i) settlement charges and other non-service components of retiree benefit costs; (ii) gains and losses for the fair value re-measurement of financial instruments including warrants issued to Amazon; (iii) customer incentive amortization; and (iv) the start-up costs and expenses of a non-consolidated joint venture. We exclude these items from adjusted pre-tax earnings because they are distinctly different in their predictability or not closely related to our on-going operating activities. We also excluded the recognition of government grants from adjusted earnings to improve comparability between periods. Management uses adjusted pre-tax earnings from continuing operations to compare the performance of core operating results between periods. Presenting this measure provides management and investors with a comparative metric of fundamental operations while highlighting changes to certain items among periods. Adjusted pre-tax earnings from continuing operations should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

The Company's earnings were impacted by the fair value re-measurement of the Amazon warrants classified in liabilities at the end of each reporting period, customer incentive amortization and the related income tax effects. The fair value of the warrants issued or issuable to Amazon were recorded as a customer incentive asset and are

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amortized against revenues over the duration of the aircraft leases. Our accounting for the warrants issued to Amazon has been determined in accordance with the financial reporting guidance for financial instruments. For additional information about the warrants issued to Amazon, see the accompanying notes to the financial statements included in this report.

Aircraft Fleet Summary

Our fleet of cargo and passenger aircraft is summarized in the following table as of March 31, 2022 and December 31, 2021. Our freighters, converted from passenger aircraft, utilize standard shipping containers and can be deployed into regional cargo markets more economically than larger capacity aircraft, newly built freighters or other competing alternatives. At March 31, 2022, we owned twelve Boeing 767-300 aircraft and three Airbus A321-200 aircraft that were either already undergoing or awaiting induction into the freighter conversion process.

Aircraft fleet activity during the first three months of 2022 is summarized below:

•CAM completed the modification of one Boeing 767-300 freighter aircraft purchased in the previous year. The aircraft is leased to an external customer under a multi-year lease.

•CAM purchased one Boeing 767-300 passenger aircraft for the purpose of converting the passenger aircraft into a standard freighter configuration. This aircraft is expected to be leased to an external customer during 2023.

•CAM purchased two Airbus A321-200 passenger aircraft for the purpose of converting the passenger aircraft into a standard freighter configuration. These aircraft are expected to be leased to external customers during 2022.

•ATI began to operate one customer-provided Boeing 767-300 freighter aircraft.

	March 31, 2022			December 31, 2021
	ACMI Services	CAM	Total	ACMI Services	CAM	Total
In-service aircraft
Aircraft owned
Boeing 767-200 Freighter	5	26	31	5	26	31
Boeing 767-200 Passenger	2	—	2	2	—	2
Boeing 767-300 Freighter	2	60	62	2	59	61
Boeing 767-300 Passenger	6	—	6	6	—	6
Boeing 777-200 Passenger	3	—	3	3	—	3
Boeing 757-200 Combi	4	—	4	4	—	4
Total	22	86	108	22	85	107
Operating lease
Boeing 767-200 Passenger	1	—	1	1	—	1
Boeing 767-300 Passenger	3	—	3	3	—	3
Boeing 767-200 Freighter	2	—	2	2	—	2
Boeing 767-300 Freighter	5	—	5	4	—	4
Total	11	—	11	10	—	10
Other aircraft
Owned Boeing 767-300 under modification	—	12	12	—	12	12
Owned Airbus A321-200 under modification	—	3	3	—	1	1
Owned Boeing 767 available or staging for lease	—	1	1	—	1	1

As of March 31, 2022, ABX, ATI and OAI were leasing 22 in-service aircraft internally from CAM for use in ACMI Services. Of CAM's 26 externally leased Boeing 767-200 freighter aircraft, 12 were leased to ASI and operated by ABX or ATI, one was leased to DHL and operated by ABX, three were leased to DHL and were being

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operated by a DHL-affiliated airline and ten were leased to other external customers. Of the 60 externally leased Boeing 767-300 freighter aircraft, 30 were leased to ASI and operated by ATI, seven were leased to DHL and operated by ABX, two were leased to DHL and are being operated by a DHL-affiliated airline and 21 were leased to other external customers. The carrying values of the total in-service fleet as of March 31, 2022 and December 31, 2021 were $1,698.3 million and $1,693.0 million, respectively.

CAM Segment

CAM added nine Boeing 767-300 freighter aircraft to its portfolio since April 1, 2021 and grew its revenues by $23.6 million during the first quarter of 2022 compared to the first quarter of 2021.

As of March 31, 2022 and 2021, CAM had 86 and 75 aircraft under lease to external customers, respectively. Revenues from external customers totaled $76.7 million and $60.8 million for the first quarter of 2022 and 2021, respectively. Since April 1, 2021, CAM placed eleven Boeing 767-300 aircraft with external customers under long-term leases. Additionally, in October of 2021, CAM began to offer engine power coverage to lessees of CAM's General Electric powered Boeing 767-200 aircraft. Under this service, CAM is responsible for providing and maintaining engines for its lease customers as needed through a pool of engines. Revenues from external customers increased $6.3 million during the first quarter of 2022 for this service. CAM's revenues from the Company's airlines totaled $30.2 million during the first quarter of 2022, compared to $22.5 million for 2021.

CAM's pre-tax earnings from continuing operations, inclusive of internally allocated interest expense, were $35.0 million and $21.5 million during the first quarter of 2022 and 2021, respectively. Increased pre-tax earnings reflect the nine aircraft placed into service since April 1, 2021 and a $1.5 million decrease in internally allocated interest expense due to lower company-wide interest expense, offset by a $9.3 million increase in depreciation expense driven by the addition of aircraft.

In addition to the 12 Boeing 767-300 aircraft and three Airbus A321-200 aircraft which were in the modification process at March 31, 2022, CAM has agreements to purchase eleven more Boeing 767-300 aircraft during 2022 and 2023. CAM's operating results will depend on its continuing ability to convert passenger aircraft into freighters within planned costs and within the timeframes required by customers. During 2022, we expect to lease to external customers at least eight more newly modified Boeing 767-300 freighters, two newly modified Airbus A321-200 freighters and re-deploy one Boeing 767-200 freighter. CAM's future operating results will also depend on the timing and lease rates under which aircraft are redeployed when leases expire. Additionally, CAM's future operating results from engine power services will depend upon engine cycles operated, the number of engine overhauls and the severity of unscheduled maintenance events.

ACMI Services

Total revenues from ACMI Services increased $83.0 million during the first quarter of 2022 compared with corresponding period of 2021 to $330.1 million. Improved revenues for 2022 were driven by a 42% increase in block hours flown for DoD troop movements particularly to Europe, as well as ten additional freighter aircraft added to operations compared to the first quarter of 2021, including five more customer-provided aircraft that are not owned by CAM. Overall customer block hours increased 21% for the three month period ended March 31, 2022 compared to the corresponding period in 2021, with increases in block hours flown for DHL and Amazon. As of March 31, 2022 and 2021, ACMI Services included 83 and 73 in-service aircraft, respectively.

ACMI Services had pre-tax earnings of $22.2 million for the three month period ended March 31, 2022, compared to $21.3 million for 2021 inclusive of internally allocated interest expense and the recognition of pandemic-related government grants of $28.0 million. Pre-tax earnings, excluding the recognition of government grants, improved $28.9 million compared to the first quarter of 2021. Improved earnings were a result of the increased number of aircraft in operations and more block hours flown during the first quarter of 2022 compared to 2021. While employee salaries and wages, contract labor, and travel expenses all increased relative to the prior year period, the additional operating volumes drove earnings higher. Internally allocated interest expense decreased to $3.4 million for the first quarter of 2022 compared to $4.5 million for 2021.

Maintaining profitability in ACMI Services will depend on a number of factors, including the impact of COVID-19 outbreaks, customer flight schedules, crew member productivity and pay, rising employee wages and benefits, aircraft maintenance schedules and the number of aircraft we operate. Recruiting, training and retaining

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employees and contractors are important factors to our success. Severe disruptions or shortages of qualified employees could have a detrimental impact on our financial results.

Other Activities

We provide other support services to our ACMI Services customers and other airlines by leveraging our knowledge and capabilities developed for our own operations over the years. Through our FAA certificated maintenance and repair subsidiaries, we sell aircraft parts and provide aircraft maintenance and modification services. We also provide mail sorting, parcel handling and logistical support to USPS facilities and similar services to certain ASI hub and gateway locations in the U.S. We provide maintenance for ground equipment, facilities and material handling equipment and we resell aviation fuel in Wilmington, Ohio. Additionally, we provide flight training services.

External customer revenues from all other activities increased $10.9 million in the first quarter of 2022 compared to the corresponding period of 2021, due to fuel sales, up $5.8 million, and broad increases across most maintenance and ground services offerings. As a result, pre-tax earnings from other activities increased by $1.2 million for the first three months of 2022 compared to the same period last year.

Expenses from Continuing Operations

Salaries, wages and benefits expense increased $19.7 million or 14% during the first quarter of 2022 compared to 2021. While the number of total employees is similar for the periods, salaries and wages have been impacted by higher wage rates, benefit costs and employee termination rates.

Depreciation and amortization expense increased $11.0 million during the quarter ended March 31, 2022 compared to 2021. The increase reflects incremental depreciation for nine additional aircraft as well as additional depreciation expense for engines that are now being serviced and maintained by CAM under engine power coverage arrangements. We expect depreciation expense to increase during future periods in conjunction with our fleet expansion, engine programs and capital spending plans.

Maintenance, materials and repairs expense decreased by $6.3 million during the quarter ended March 31, 2022, compared to the corresponding period of 2021. Maintenance expense for the first quarter of 2021 included $9.5 million for an engine power-by-the-cycle agreement that expired in September 2021. We are now maintaining these engines through time and material agreements with engine maintenance providers to replace the expired power-by-the-cycle agreement. The remaining increase in expense was driven by increased flight operations for the DoD and our customers' express cargo networks and by additional scheduled airframe checks. The aircraft maintenance and material expenses can vary among periods due to the number of maintenance events and the scope of airframe checks that are performed.

Fuel expense increased by $29.9 million during the quarter ended March 31, 2022, compared to the corresponding period of 2021. Fuel expense includes the cost of fuel to operate DoD charters, fuel used to position aircraft for service and for maintenance purposes, as well as the cost of fuel sales. Fuel expense increased due to the additional block hours for the DoD and due to increases in the price per gallon of aviation fuel compared to the previous year. Aviation fuel rates increased approximately 40% per gallon for the comparative period.

Contracted ground and aviation services expense includes navigational services, aircraft and cargo handling services, baggage handling services and other airport services. Contracted ground and aviation services increased $3.5 million for the first quarter of 2022 compared to the corresponding period for 2021. The increases were driven primarily by the increased flying volume.

Travel expense increased by $5.8 million for the first quarter 2022 compared to the corresponding period of 2021. In addition to increased flying volumes, travel expense increased due to higher airfares and hotels rates compared to a year ago.

Landing and ramp expense, which includes the cost of deicing chemicals, increased by $1.5 million for the first quarter of 2022 compared to 2021, driven by increased flying volumes for our customers' express cargo networks.

31

Other operating expenses increased by $3.4 million for the first quarter of 2022 compared to 2021. Other operating expenses include professional fees, employee training, utilities, commission expense to our CRAF team for DoD revenues and other expenses.

Operating results included a pre-tax expense credit of $28.0 million for the first quarter of 2021 to recognize grants received from the U.S. government under the CARES Act, PSP Extension Law and the American Rescue Plan. For additional information about these grants, see Note H of the unaudited condensed consolidated financial statements included in this report.

Non Operating Income, Adjustments and Expenses

Interest expense decreased by $3.1 million for the the first quarter of 2022 compared to the corresponding period for 2021. Interest expense decreased due to lower interest rates on our borrowings under the Senior Credit Agreement and lower average debt balances outstanding during the period.

The Company recorded unrealized pre-tax gains on financial instrument re-measurements of $2.7 million during the three month period ended March 31, 2022, compared to a pre-tax gain of $9.5 million for 2021. The gains include the results of re-valuing, as of March 31, 2022 and 2021, the fair value of the stock warrants granted to Amazon as well as interest rate derivatives that we hold. The warrant values generally increase or decrease with corresponding increases or decreases in the ATSG share price during the measurement period. Additionally, the value of certain warrants depends partially on the probability that warrants will vest upon the execution of aircraft leases. Increases in the probability of warrants vesting results in higher liabilities and losses. (See Note C for additional information about the Amazon warrants.) The pre-tax gain for the first quarter of 2022 was primarily a result of the impact of higher market interest rates on the interest rate derivatives that we held. (See Note G for additional information about the interest rate derivatives.)

Non service components of retiree benefits were a net gain of $5.4 million for the first quarter of 2022 compared to $4.5 million for 2021. The non service component gain and losses of retiree benefits are determined by actuaries and include the amortization of unrecognized gains and loss stemming from changes in assumptions regarding discount rates, expected investment returns and other retirement plan assumptions. Non service components of retiree benefits can vary significantly from one year to the next based on investment results and changes in discount rates used to account for defined benefit retirement plans.

The provision for income taxes for interim periods is based on management's best estimate of the effective income tax rate expected to be applicable for the current year, plus any adjustments arising from changes in the estimated amount of taxable income related to prior periods. Income taxes recorded through March 31, 2022 have been estimated utilizing a 23% rate based upon year-to-date income projected results for the full year. The recognition of discrete tax items such as the conversion of employee stock awards, officer's compensation, the issuance of stock warrants and other items have an impact on the effective rate during a period.

The effective rate from continuing operations for the three month period ended March 31, 2022 was 23.5%. The effective tax rate is affected by the discrete tax items in which expense and benefits for tax purposes are different than required by generally accepted accounting principles. The effective tax rate before including the effects of the warrant re-measurement, incentive amortizations and the other adjustments for adjusted pre-tax earnings from continuing operations (see items in the table above) was 23.5% for the three month period ended March 31, 2022. The effective tax rate before including the effects of the warrants was 24% for the three month period ended March 31, 2021.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Net cash generated from operating activities totaled $125.7 million and $124.4 million for the three month periods ended March 31, 2022 and 2021, respectively. Cash flows from operating activities included $0 and $37.4 million from government payroll support programs during 2022 and 2021, respectively. Improved cash flows generated from operating activities for the first quarter of 2022 included additional aircraft leases to customers and increased operating levels under the ACMI Services segment. Cash outlays for pension contributions were $0.8 million and $1.1 million for the first three months of 2022 and 2021, respectively.

32

Capital spending levels were primarily the result of aircraft modification costs and the acquisition of aircraft for freighter modification. Cash payments for capital expenditures were $108.3 million and $125.4 million in the first three months of 2022 and 2021, respectively. Capital expenditures in 2022 included $71.9 million for the acquisition of one Boeing 767-300 aircraft, two Airbus A321-200 aircraft and freighter modification costs; $31.9 million for required heavy maintenance; and $4.5 million for other equipment. Capital expenditures in the first quarter of 2021 included $84.7 million for the acquisition of four Boeing 767-300 aircraft and freighter modification costs; $37.3 million for required heavy maintenance; and $3.4 million for other equipment.

During the first three months of 2021, we contributed $1.7 million for entry and subsequent contributions into a joint-venture to develop a passenger-to-freighter conversion program for Airbus A321-200 aircraft.

Net cash used in financing activities was $51.5 million for the three months ended March 31, 2022 and net cash provided by financing activities was $14.6 million for the corresponding period in 2021. During the first three months of 2022, we made debt payments of $90.1 million and we drew $40.0 million from the revolving credit facility. During the first three months of 2021, we made debt principal payments of $124.1 million and we drew $140.0 million from the revolving credit facility.

Commitments

As of March 31, 2022, the Company had 15 aircraft that were in or awaiting modification to a freighter configuration. Additionally, we placed non-refundable deposits and have agreements to purchase 11 more Boeing 767-300 passenger aircraft through 2023. We expect to purchase additional aircraft for modification in 2022 and 2023. The Company outsources a significant portion of the aircraft freighter modification process to non-affiliated third parties. The modification primarily consists of the installation of a standard cargo door and loading system. We estimate that total capital expenditures for 2022 will total approximately $590 million, of which the majority will be related to aircraft purchases and freighter modifications. Actual capital spending for any future period will be impacted by aircraft acquisitions, maintenance and modification processes.

Liquidity

At March 31, 2022, the Company had $35.5 million of cash balances and $474.9 million available from the unused portion of the revolving credit facility under its Senior Credit Agreement as described in Note F of the accompanying financial statements. We expect our operations to continue to generate significant net cash in-flows after deducting required spending of approximately $200 million for heavy maintenance and other sustaining capital expenditures during the year 2022. To expand our fleet we estimate that capital expenditures for aircraft purchases and freighter modifications will total $390 million for 2022. We believe that the Company's current cash balance, forecasted cash flows provided from its customer leases and operating agreements, combined with its Senior Credit Agreement, will be sufficient to fund the expansion and maintenance of our fleet while meeting our contractual obligations, other commitments and working capital requirements for at least the next twelve months.

Continued global disruptions in the supply chains and labor shortages may delay aircraft modification projects, pushing contractual obligations into later periods and could have an impact on the projected amount of capital expenditures.

CRITICAL ACCOUNTING ESTIMATES

The MD&A and certain other disclosures included elsewhere in this report, are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of the financial statements requires us to select appropriate accounting policies and make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. In certain cases, there are alternative policies or estimation techniques which could be applied. On an ongoing basis, we evaluate our selection of policies and the estimation techniques we use, including those related to revenue recognition, post-retirement liabilities, bad debts, self-insurance reserves, valuation of spare parts inventory, useful lives, salvage values and impairment of property and equipment, income taxes, contingencies and litigation. We base our estimates on historical experience, current conditions and on various other assumptions that are believed by management to be reasonable under the circumstances. Those factors form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources, as well as for identifying and assessing our accounting treatment with respect to commitments and contingencies. By their nature, these

33

judgments are subject to uncertainty. Actual results may differ from these estimates under different assumptions or conditions.

For information regarding recently issued accounting pronouncements and the expected impact on our annual statements, see Note A "SUMMARY OF FINANCIAL STATEMENT PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES" in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q. Except as provided in Note A, our critical accounting policies and estimates have not changed materially from those disclosed in our 2021 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk for changes in interest rates and changes in the price of jet fuel. The risk associated with jet fuel, however, is largely mitigated by reimbursement through the agreements with its customers.

Market risks have not materially changed from those disclosed in Item 7A of the Company's 2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

As of March 31, 2022, the Company carried out an evaluation, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based upon the evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission rules and forms and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls

There were no changes in the Company's "internal control over financial reporting" (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during its most recently completed fiscal quarter ended March 31, 2022 that has materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

34

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently a party to legal proceedings in various federal and state jurisdictions arising out of the operation of the Company's business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, we believe that the Company's ultimate liability, if any, arising from the pending legal proceedings, as well as from asserted legal claims and known potential legal claims which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to our financial condition or results of operations.

ITEM 1A. RISK FACTORS

The Company faces risks that could adversely affects its condition or results of operations. Many of these risks are disclosed in Item 1A of the Company's 2021 Form 10-K. In addition to the risks previously disclosed, the recent outbreak of war in Ukraine and the emergence of COVID-19 variants in China and other countries may result in further supply chain disruptions and inflationary pressure on our costs beyond the levels we have recently experienced.

Other risks that are currently unknown to management or are currently considered immaterial or unlikely, could also adversely affect the Company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On August 5, 2014, the Board of Directors of ATSG authorized the repurchase of up to $50.0 million of ATSG's outstanding common stock. In May 2016, the Board of Directors amended the Company's common stock repurchase program to increase the maximum repurchase amount from $50.0 million to $100.0 million. In February 2018, the Board of Directors increased the repurchase authorization from $100.0 million to $150.0 million (less amounts previously repurchased). The authorization does not require the repurchase of a specific number of shares or establish a time frame for any repurchase and the Board of Directors may terminate the repurchase program at any time. Repurchases may be made from time to time in the open market or in privately negotiated transactions. There is no expiration date for the repurchase program. There were no repurchases made during the first quarter of 2022. As of March 31, 2022, the Company had repurchased 6,592,349 shares and the maximum dollar value of shares that could then be purchased under the program was $61.3 million.

The share repurchase program has been suspended until the CARES Act, PSP Extension Law and American Rescue Plan restrictions on the repurchase of shares have lapsed. For more information, see Note H of the accompanying consolidated financial statements in this report.

35

ITEM 6. EXHIBITS

The following exhibits are filed with or incorporated by reference into this report.

Exhibit No.	Description of Exhibit
	Certifications
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

____________________

36

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		AIR TRANSPORT SERVICES GROUP, INC.,
		a Delaware Corporation
		Registrant
		/S/  RICHARD F. CORRADO
		Richard F. Corrado
		Chief Executive Officer (Principal Executive Officer)
Date:	May 10, 2022
		/S/  QUINT O. TURNER
		Quint O. Turner
		Chief Financial Officer (Principal Financial Officer
Date:	May 10, 2022	and Principal Accounting Officer)

37

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard F. Corrado, certify that:

1.I have reviewed this report on Form 10-Q of Air Transport Services Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 10, 2022

/s/ RICHARD F. CORRADO

Richard F. Corrado

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Quint O. Turner, certify that:

1.I have reviewed this report on Form 10-Q of Air Transport Services Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 10, 2022

/s/ QUINT O. TURNER

Quint O. Turner

Chief Financial Officer
(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Air Transport Services Group, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard F. Corrado, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as enacted by § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Air Transport Services Group, Inc. and will be retained by Air Transport Services Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

/S/ RICHARD F. CORRADO

Richard F. Corrado
Chief Executive Officer

Date: May 10, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Air Transport Services Group, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Quint O. Turner, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as enacted by § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Air Transport Services Group, Inc. and will be retained by Air Transport Services Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ QUINT O. TURNER

Quint O. Turner
Chief Financial Officer

Date: May 10, 2022

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 10, 2022
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	000-50368
Entity Registrant Name	Air Transport Services Group, Inc.
Entity Central Index Key	0000894081
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1631624
Entity Address, Address Line One	145 Hunter Drive
Entity Address, City or Town	Wilmington
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45177
City Area Code	937
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Local Phone Number	382-5591
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	ATSG
Entity Common Stock, Shares Outstanding		74,372,038
Document Information [Line Items]
Document Quarterly Report	true

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash, cash equivalents and restricted cash	$ 35,538	$ 69,496
Accounts receivable, net of allowance of $925 in 2022 and $742 in 2021	216,664	205,399
Inventory	49,716	49,204
Prepaid supplies and other	29,233	28,742
TOTAL CURRENT ASSETS	331,151	352,841
Property and equipment, net	2,182,076	2,129,934
Lease incentive	97,115	102,913
Other assets	114,500	113,878
Goodwill and acquired intangibles	501,599	505,125
Operating lease assets	60,488	62,644
Intangibles	105,625	109,151
Goodwill	395,974	395,974
TOTAL ASSETS	3,286,929	3,267,335
CURRENT LIABILITIES:
Accounts payable	187,181	174,237
Accrued salaries, wages and benefits	50,953	56,652
Accrued expenses	12,098	14,950
Current portion of debt obligations	631	628
Current portion of lease obligations	18,840	18,783
Unearned revenue and grants	47,798	47,381
TOTAL CURRENT LIABILITIES	317,501	312,631
Long term debt	1,273,156	1,298,735
Post-retirement obligations	20,623	21,337
Long term lease obligations	42,238	44,387
Other liabilities	51,254	49,662
Stock Warrants	989	915
Deferred income taxes	227,128	217,291
TOTAL LIABILITIES	1,932,889	1,944,958
Commitments and contingencies (Note H)
STOCKHOLDERS’ EQUITY:
Preferred stock, 20,000,000 shares authorized, including 75,000 Series A Junior Participating Preferred Stock	0	0
Common stock, par value $0.01 per share; 150,000,000 shares authorized; 74,337,226 and 74,142,183 shares issued and outstanding in 2022 and 2021, respectively	743	741
Additional paid-in capital	1,035,029	1,074,286
Retained earnings	380,097	309,430
Accumulated other comprehensive loss	(61,829)	(62,080)
TOTAL STOCKHOLDERS’ EQUITY	1,354,040	1,322,377
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 3,286,929	$ 3,267,335

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets, Current [Abstract]
Allowance for doubtful accounts	$ 925	$ 742
Stockholders' Equity Attributable to Parent [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	74,337,226	74,142,183
Common stock, shares outstanding (in shares)	74,337,226	74,142,183
Preferred Stock [Member]
Stockholders' Equity Attributable to Parent [Abstract]
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Series A Junior Participating Preferred Stock [Member]
Stockholders' Equity Attributable to Parent [Abstract]
Preferred stock, shares authorized (in shares)	75,000	75,000

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
REVENUES	$ 485,860	$ 376,088
OPERATING EXPENSES
Salaries, wages and benefits	161,762	142,016
Fuel	60,358	30,442
Maintenance, materials and repairs	35,709	42,007
Depreciation and amortization	82,071	71,051
Travel	24,199	18,404
Contracted ground and aviation services	18,331	14,803
Rent	6,663	5,868
Landing and ramp	4,578	3,109
Insurance	2,552	3,136
Other operating expenses	19,843	16,423
government grants continuing operations	0	(28,030)
Operating Expenses	416,066	319,229
OPERATING INCOME	69,794	56,859
OTHER INCOME (EXPENSE)
Interest income	9	19
Non-service component of retiree benefit costs	5,388	4,457
Non-service component of retiree benefit (costs) gains	(11,399)	(14,522)
Net gain (loss) on financial instruments	2,696	9,472
Other Nonoperating Income (Expense)	(4,709)	(1,757)
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	65,085	55,102
INCOME TAX EXPENSE		(12,812)
EARNINGS FROM CONTINUING OPERATIONS	49,796	42,290
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES	0	0
NET EARNINGS	$ 49,796	$ 42,290
BASIC EARNINGS PER SHARE
Basic earnings per share from continuing operations (in dollars per share)	$ 0.67	$ 0.71
Discontinued operations (in dollars per share)	0	0
TOTAL BASIC EARNINGS PER SHARE (in dollars per share)	0.67	0.71
DILUTED EARNINGS PER SHARE
Diluted earnings per share from continuing operations (in dollars per share)	0.57	0.49
Discontinued operations (in dollars per share)	0	0
TOTAL DILUTED NET EARNINGS PER SHARE (in dollars per share)	$ 0.57	$ 0.49
WEIGHTED AVERAGE SHARES
Basic (in shares)	73,888	59,447
Diluted (in shares)	88,744	74,744

XML

Consolidated Statements of Comprehensive Income $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
NET EARNINGS	$ 49,796
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	0
OTHER COMPREHENSIVE INCOME (LOSS):
TOTAL COMPREHENSIVE INCOME, net of tax	50,047
Accumulated Deficit [Member]
NET EARNINGS	49,796
Pension Plans [Member]
Other comprehensive income (loss), net of tax	242
OTHER COMPREHENSIVE INCOME (LOSS):
Income tax (expense) or benefit	(71)
Post-Retirement Plans [Member]
Other comprehensive income (loss), net of tax	9
OTHER COMPREHENSIVE INCOME (LOSS):
Income tax (expense) or benefit	$ (2)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Withholding taxes paid for conversion of employee stock awards	$ 1,350	$ 1,197
OPERATING ACTIVITIES:
Net earnings from continuing operations	49,796	42,290
Net earnings from discontinued operations	0	0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	88,245	79,719
Pension and post-retirement	324	1,811
Deferred income taxes	15,289	12,575
Amortization of stock-based compensation	1,654	1,750
Proceeds from Contributions from Affiliates	1,403	1,183
Net (gain) loss on financial instruments	(2,800)	(2,500)
Changes in assets and liabilities:
Accounts receivable	(11,265)	(1,604)
Inventory and prepaid supplies	(1,163)	751
Accounts payable	(5,037)	18,314
Unearned revenue	(1)	(3,687)
Accrued expenses, salaries, wages, benefits and other liabilities	(3,782)	(11,696)
Pension and post-retirement balances	(6,582)	(7,412)
Other	(517)	(75)
NET CASH PROVIDED BY OPERATING ACTIVITIES	125,668	124,447
INVESTING ACTIVITIES:
Expenditures for property and equipment	(108,252)	(125,441)
Proceeds from property and equipment	76	44
Investment in nonconsolidated affiliate	0	(1,697)
NET CASH (USED IN) INVESTING ACTIVITIES	(108,176)	(127,094)
FINANCING ACTIVITIES:
Principal payments on long term obligations	(90,100)	(124,065)
Proceeds from revolving credit facilities	40,000	140,000
Payments for financing costs	0	(151)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(51,450)	14,587
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(33,958)	11,940
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	69,496	39,719
CASH AND CASH EQUIVALENTS AT END OF YEAR	35,538	51,659
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net of amount capitalized	18,528	16,582
Federal and state income taxes paid	0	123
SUPPLEMENTAL NON-CASH INFORMATION:
Accrued expenditures for property and equipment	61,460	24,253
Net (gain) loss on financial instruments	$ 2,696	$ 9,472

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance at at Dec. 31, 2020	$ 855,497	$ 596	$ 855,547	$ 78,010	$ (78,656)
Balance at (in shares) at Dec. 31, 2020		59,560,036
Stock-based compensation plans
Grant of restricted stock	0	$ 1	(1)
Grant of restricted stock (in shares)		122,100
Issuance of common shares, net of withholdings	(1,197)	$ 0	(1,197)
Withholdings of common shares, net of issuances (in shares)		93,752
Stock Issued During Period, Value, Conversion of Convertible Securities	0	$ 9	(9)
Stock Issued During Period, Shares, Conversion of Convertible Securities		865,548
Amortization of stock awards and restricted stock	1,750		1,750
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	43,688			42,290	1,398
Balance at at Mar. 31, 2021	899,738	$ 606	856,090	120,300	(77,258)
Balance at (in shares) at Mar. 31, 2021		60,641,436
Balance at at Dec. 31, 2021	$ 1,322,377	$ 741	1,074,286	309,430	(62,080)
Balance at (in shares) at Dec. 31, 2021	74,142,183	74,142,183
Stock-based compensation plans
Grant of restricted stock	$ 0	$ 1	(1)
Grant of restricted stock (in shares)		110,400
Issuance of common shares, net of withholdings	(1,350)	$ 1	(1,351)
Withholdings of common shares, net of issuances (in shares)		85,343
Conversion of warrants	0	$ 0	0
Forfeited restricted stock (in shares)		(700)
Amortization of stock awards and restricted stock	1,654		1,654
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	50,047				251
Balance at at Mar. 31, 2022	$ 1,354,040	$ 743	1,035,029	380,097	$ (61,829)
Balance at (in shares) at Mar. 31, 2022	74,337,226	74,337,226
Stock-based compensation plans
Retained earnings | Accounting Standards Update 2020-06	$ (18,688)		$ (39,559)	$ 20,871

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2022

Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) includes the following items by components for the three month periods ending March 31, 2022 and 2021 (in thousands):

	Defined Benefit Pension		Defined Benefit Post-Retirement		Foreign Currency Translation		Total
Balance as of January 1, 2021	$	(78,093)	$	(549)	$	(14)	$	(78,656)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	1,764		47		—		1,811
Income Tax (Expense) or Benefit	(402)		(11)		—		(413)
Other comprehensive income (loss), net of tax	1,362		36		—		1,398
Balance as of March 31, 2021	$	(76,731)	$	(513)	$	(14)	$	(77,258)
	Defined Benefit Pension		Defined Benefit Post-Retirement		Foreign Currency Translation		Total
Balance as of January 1, 2022	$	(61,831)	$	(229)	$	(20)	$	(62,080)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	313		11		—		324
Income Tax (Expense) or Benefit	(71)		(2)		—		(73)
Other comprehensive income (loss), net of tax	242		9		—		251
Balance as of March 31, 2022	$	(61,589)	$	(220)	$	(20)	$	(61,829)

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2022

Other Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes the following items by components for the three month periods ending March 31, 2022 and 2021 (in thousands):

	Defined Benefit Pension		Defined Benefit Post-Retirement		Foreign Currency Translation		Total
Balance as of January 1, 2021	$	(78,093)	$	(549)	$	(14)	$	(78,656)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	1,764		47		—		1,811
Income Tax (Expense) or Benefit	(402)		(11)		—		(413)
Other comprehensive income (loss), net of tax	1,362		36		—		1,398
Balance as of March 31, 2021	$	(76,731)	$	(513)	$	(14)	$	(77,258)
	Defined Benefit Pension		Defined Benefit Post-Retirement		Foreign Currency Translation		Total
Balance as of January 1, 2022	$	(61,831)	$	(229)	$	(20)	$	(62,080)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	313		11		—		324
Income Tax (Expense) or Benefit	(71)		(2)		—		(73)
Other comprehensive income (loss), net of tax	242		9		—		251
Balance as of March 31, 2022	$	(61,589)	$	(220)	$	(20)	$	(61,829)

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Schedule of Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (20)	$ (14)	$ (20)	$ (14)
Accumulated other comprehensive income (loss), beginning balance	(62,080)	(78,656)
Other comprehensive income (loss) before reclassifications:
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax	0	0
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax	0	0
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	324	1,811
Income Tax (Expense) or Benefit	(73)	(413)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	0	0
Other comprehensive income (loss), net of tax	251	1,398
Accumulated other comprehensive income (loss), ending balance	(61,829)	(77,258)
Pension Plans [Member]
Schedule of Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income (loss), beginning balance	(61,831)	(78,093)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	313	1,764
Income Tax (Expense) or Benefit	(71)	(402)
Other comprehensive income (loss), net of tax	242	1,362
Accumulated other comprehensive income (loss), ending balance	(61,589)	(76,731)
Post-Retirement Plans [Member]
Schedule of Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income (loss), beginning balance	(229)	(549)
Amounts reclassified from accumulated other comprehensive income:
Actuarial costs (reclassified to salaries, wages and benefits)	11	47
Income Tax (Expense) or Benefit	(2)	(11)
Other comprehensive income (loss), net of tax	9	36
Accumulated other comprehensive income (loss), ending balance	$ (220)	$ (513)

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Summary of Financial Statement Preparation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Financial Statement Preparation and Significant Accounting Policies

SUMMARY OF FINANCIAL STATEMENT PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Air Transport Services Group, Inc. ("ATSG" and, together with its subsidiaries, the "Company," "we," "us," and "our") is a holding company whose subsidiaries lease aircraft and provide contracted airline operations as well as other support services mainly to the air transportation, e-commerce and package delivery industries.

ATSG's leasing subsidiary, Cargo Aircraft Management, Inc. (“CAM”), leases aircraft to each of ATSG's airline subsidiaries as well as to non-affiliated airlines and other lessees. ATSG's airline subsidiaries, ABX Air, Inc. (“ABX”), Air Transport International, Inc. (“ATI”) and Omni Air International, LLC ("OAI") each have the authority, through their separate U.S. Department of Transportation ("DOT") and Federal Aviation Administration ("FAA") certificates, to transport cargo worldwide. The Company provides a combination of aircraft, crews, maintenance and insurance services for its customers' transportation network through crew, maintenance and insurance ("CMI") agreements and aircraft, crew, maintenance and insurance ("ACMI") agreements and through charter contracts in which aircraft fuel is also included.

In addition to its aircraft leasing and airline services, the Company offers a range of complementary services to delivery companies, freight forwarders, airlines and government customers. These include aircraft maintenance and modification services, aircraft parts supply, equipment maintenance services and load transfer and package sorting services.

Basis of Presentation

The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with GAAP and such principles are applied on a basis consistent with the financial statements reflected in our 2021 Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the accompanying financial statements contain all adjustments, including normal recurring adjustments, necessary for the fair presentation of the Company's results of operations and financial position for the periods presented. Due to seasonal fluctuations, among other factors common to the air cargo industry, the results of operations for the periods presented are not necessarily indicative of the results of operations to be expected for the entire year or any interim period. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. The accounting estimates reflect the best judgment of the management, but actual results could differ materially from those estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of ATSG and its wholly-owned subsidiaries. Inter-company balances and transactions are eliminated. Investments in affiliates in which the Company has significant influence but does not exercise control are accounted for using the equity method of accounting. Under the equity method, the Company's share of the nonconsolidated affiliate's income or loss is recognized in the consolidated statement of earnings and cumulative post-acquisition changes in the investment are adjusted against the carrying amount of the investment.

Uncertainties

Beginning in late 2019, an outbreak of a coronavirus, COVID-19, was identified and has since spread globally, becoming a pandemic. During February 2020, the Company's revenues were disrupted when customers cancelled scheduled passenger flights and aircraft maintenance services and the Company began to incur additional costs, including expenses to protect employees. Additionally, the Company experienced disruptions to operations, such as shortages of personnel, parts shortages, maintenance delays, shortages of transportation and hotel accommodations for flight crews, facility closures and other supply chain related issues. The extent of the impact that the coronavirus pandemic will have on our future operations and financial results will depend on future developments, including: the duration, spread, severity and recurrence of the COVID-19 variants; vaccination rates, the effectiveness of vaccines, the duration and scope of government orders and local restrictions as well as the extent of the impact of the pandemic on overall economic conditions.

In February 2022, war started in Ukraine, intensifying geopolitical pressures worldwide. While the Company's operations have not been detrimentally impacted, additional supply chain disruptions and inflationary pressures could have an impact on overall economic conditions, as well as the Company's operations and financial results.

Accounting Standards Updates

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). This new standard removes the separation models for convertible debt with cash conversion or beneficial conversion features. It eliminates the "treasury stock" method for convertible instruments and requires application of the “if-converted” method for certain agreements. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments:

(in thousands)	December 31, 2021		Adoption of ASU 2020-06		January 1, 2022
Balance Sheet line item:
Principal value	$	(258,750)	$	—	$	(258,750)
Unamortized issuance cost	$	2,889	$	—	$	2,889
Unamortized discount	$	24,215	$	(24,215)	$	—
Convertible Debt	$	(231,646)	$	(24,215)	$	(255,861)
Net deferred tax liability	$	(217,291)	$	5,527	$	(211,764)
Additional paid-in capital	$	(1,074,286)	$	39,559	$	(1,034,727)
Retained earnings	$	(309,430)	$	(20,871)	$	(330,301)

After adopting ASU 2020-06, the Company's Convertible Notes due 2024 (as defined and discussed in Note F) are reflected entirely as a liability as the embedded conversion feature is no longer separately presented within stockholders' equity, which also eliminated the non-cash discount. Accordingly, earnings no longer reflect the discount amortization expense which was $6.4 million of interest expense, net of income taxes during 2021. After giving effect for the adoption, the effective interest rate on the Convertible Notes is 1.5%.

ASU 2020-06 requires the application of the more dilutive if-converted method when calculating the impact of the Convertible Notes on earnings per diluted share. The adoption of ASU 2020-06 does not change the accounting treatment of shares to be delivered by the convertible note hedges (see Note F) purchased by the Company that are designed to offset the shares issued to settle its Convertible Notes, which are anti-dilutive and not reflected in earnings per diluted share.

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Significant Customers

3 Months Ended

Mar. 31, 2022

Significant Customers [Abstract]

Significant Customers

SIGNIFICANT CUSTOMERS

Three customers each account for a significant portion of the Company's consolidated revenues. The percentage of the Company's revenues for the Company's three largest customers, for the three month periods ending March 31, 2022 and 2021 are as follows:

	Three Months Ended
	March 31,
	2022	2021
Customer	Percentage of Revenue
DoD	28%	22%
Amazon	34%	35%
DHL	11%	14%

The accounts receivable from the Company's three largest customers as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	March 31,		December 31,
	2022		2021
Customer	Accounts Receivable
DoD	$	59,130	$	57,998
Amazon	82,648		68,429
DHL	11,350		9,111

DoD

The Company is a provider of cargo and passenger airlift services to the U. S. Department of Defense ("DoD"). The DoD awards flights to U.S. certificated airlines through annual contracts and through temporary "expansion" routes.

DHL

The Company has had long-term contracts with DHL Network Operations (USA), Inc. and its affiliates ("DHL") since August 2003. The Company leases Boeing 767 aircraft to DHL under both long-term and short-term lease agreements. Under a separate CMI agreement, the Company operates Boeing 767 aircraft that DHL leases from the Company. Pricing for services provided through the CMI agreement is based on pre-defined fees, scaled for the number of aircraft operated and the number of flight crews provided to DHL for its U.S. network. The Company provides DHL with scheduled maintenance services for aircraft that DHL leases. The Company also provides additional air cargo transportation services for DHL through ACMI agreements in which the Company provides the aircraft, crews, maintenance and insurance under a single contract. As of March 31, 2022, the Company leased 13 Boeing 767 freighter aircraft to DHL comprised of four Boeing 767-200 aircraft and nine Boeing 767-300 aircraft, with expirations between 2023 and 2028. In February 2022, the Company and DHL agreed to a six-year extension of its dry leases for five Boeing 767 freighters as well as an extension of the CMI agreements to operate aircraft through April 2028.

Amazon

The Company has been providing freighter aircraft, airline operations and services for cargo handling and logistical support for Amazon.com Services, LLC ("ASI"), successor to Amazon.com Services, Inc., a subsidiary of Amazon.com, Inc. ("Amazon") since September 2015. On March 8, 2016, the Company entered into an Air Transportation Services Agreement (the “ATSA”) with ASI, pursuant to which CAM leases Boeing 767 freighter aircraft to ASI. The ATSA also provides for the operation of aircraft by the Company’s airline subsidiaries, and the management of ground services by the Company's subsidiary LGSTX Services, Inc. ("LGSTX"). As of March 31, 2022, the Company leased 42 Boeing 767 freighter aircraft to ASI with lease expirations between 2023 and 2031.

Amazon Investment Agreement

In conjunction with the execution of the ATSA, the Company and Amazon entered into an Investment Agreement on March 8, 2016 (the "2016 Investment Agreement") and a Stockholders Agreement on March 8, 2016. The 2016 Investment Agreement called for the Company to issue warrants in three tranches granting Amazon the right to acquire up to 19.9% of the Company’s outstanding common shares as described below. The first tranche of warrants, issued upon the execution of the 2016 Investment Agreement and all of which are now fully vested, granted Amazon the right to purchase approximately 12.81 million ATSG common shares, with the first 7.69 million common shares vesting upon issuance on March 8, 2016, and the remaining 5.12 million common shares vesting as the Company delivered additional aircraft leased under the ATSA. The second tranche of warrants, which were issued and vested on March 8, 2018, granted Amazon the right to purchase approximately 1.59 million ATSG common shares. The third tranche of warrants vested on September 8, 2020, and granted Amazon the right to purchase an additional 0.5 million ATSG common shares to bring Amazon’s ownership, after the exercise in full of the three tranches of warrants, to 19.9% of the Company’s pre-transaction outstanding common shares measured on a GAAP-diluted basis, adjusted for share issuances and repurchases by the Company following the date of the 2016 Investment Agreement and after giving effect to the warrants granted. The exercise price of the 14.9 million warrants issued under the 2016 Investment Agreement was $9.73 per share, which represents the closing price of ATSG’s common shares on February 9, 2016. Each of the three tranches of warrants were exercisable in accordance with their terms through March 8, 2021 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date).

On March 5, 2021, Amazon exercised warrants from the 2016 Investment Agreement for 865,548 shares of the Company's common stock through a cashless exercise by forfeiting 480,047 warrants from the 2016 Investment Agreement as payment. For the cashless exchange, ATSG shares were valued at $27.27 per share, its volume-weighted average price for the previous 30 trading days immediately preceding March 5, 2021. Also on March 5, 2021, Amazon notified the Company of its intent to exercise warrants from the 2016 Investment agreement for 13,562,897 shares of the Company's common stock by paying $132.0 million of cash to the Company. This exercise was contingent upon the approval of the DOT, and the expiration or termination of any applicable waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. After receiving all required regulatory approvals and clearances, Amazon remitted the funds to the Company on May 7, 2021, and the Company issued the corresponding shares of common stock, completing the warrant exercise.

On December 22, 2018, the Company announced agreements with ASI to 1) lease and operate ten additional Boeing 767-300 aircraft, 2) extend the term of the 12 Boeing 767-200 aircraft currently leased to ASI by two years to 2023 with an option for three more years, 3) extend the term of the eight Boeing 767-300 aircraft currently leased to ASI by three years to 2026 and 2027 with an option for three more years, and 4) extend the ATSA by five years through March 2026, with an option to extend for an additional three years. The Company leased all ten of the 767-300 aircraft in 2020. In conjunction with the commitment for ten additional 767 aircraft leases, extensions of twenty existing Boeing 767 aircraft leases and the ATSA described above, Amazon and the Company entered into another Investment Agreement on December 20, 2018 (the "2018 Investment Agreement"). Pursuant to the 2018 Investment Agreement, the Company issued Amazon warrants for 14.8 million ATSG common shares. This group of warrants will expire if not exercised within seven years from their issuance date, in December of 2025 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). The warrants have an exercise price of $21.53 per share.

On May 29, 2020, ASI agreed to lease 12 more Boeing 767-300 aircraft from the Company. The first of these leases began in the second quarter of 2020 with the remaining 11 leases commencing in 2021. All 12 of these aircraft leases were for 10-year terms. Pursuant to the 2018 Investment Agreement, as a result of leasing these 12 aircraft, Amazon was issued warrants for 7.0 million common shares, all of which have vested. These warrants will expire if not exercised by December 20, 2025 (subject to extension if regulatory approvals, exemptions, authorizations, consents or clearances have not been obtained by such date). The exercise price of these warrants is $20.40 per share.

Issued and outstanding warrants are summarized below as of March 31, 2022:

		Common Shares in millions
	Exercise price	Vested	Non-Vested	Expiration
2018 Investment Agreement	$21.53	14.8	0.0	December 20, 2025
2018 Investment Agreement	$20.40	7.0	0.0	December 20, 2025

Additionally, Amazon can earn incremental warrants rights up to 2.9 million common shares under the 2018 Investment Agreement by leasing up to five more cargo aircraft from the Company before January 2026. Incremental warrants granted to Amazon for ASI’s commitment to any such future aircraft leases will have an exercise price based on the volume-weighted average price of the Company's shares during the 30 trading days immediately preceding the contractual commitment for each lease.

For all outstanding warrants vested, Amazon may select a cashless conversion option. Assuming ATSG's stock price at the time of conversion is above the warrant exercise price, Amazon would receive fewer shares in exchange for any warrants exercised under the cashless option by surrendering the number of shares with a market value equal to the exercise price.

The Company’s accounting for the warrants has been determined in accordance with the financial reporting guidance for financial instruments. Warrants classified as liabilities are marked to fair value at the end of each reporting period. The value of warrants is recorded as a customer incentive asset if it is probable of vesting at the time of grant and further changes in the fair value of warrant obligations are recorded to earnings. Upon a warrant vesting event, the customer incentive asset is amortized as a reduction of revenue over the duration of the related revenue contract.

In accordance with the 2016 Investment Agreement, on September 8, 2020, the final number of shares issuable under the third tranche of warrants was determined to be 0.5 million common shares. As a result, under GAAP, the value of the entire warrant grant under the 2016 Investment Agreement was remeasured on September 8, 2020, and its fair value of $221 million was reclassified from balance sheet liabilities to paid-in-capital. In October 2020, upon the execution of the 10th and final aircraft lease of the December 2018 commitment, warrants for 14.8 million shares were remeasured on October 1, 2020, and their fair value of $154 million was reclassified from balance sheet liabilities to paid-in-capital. In December 2021, upon execution of the 12th and final aircraft lease of the May 2020 commitment, warrants for 7.0 million shares were remeasured on December 7, 2021, and their fair value of $82.4 million was reclassified from balance sheet liabilities to paid-in-capital.

As of March 31, 2022 and December 31, 2021, the Company's liabilities reflected warrants from the 2018 Amazon agreements having a fair value of $1.0 million and $0.9 million, respectively. During the three months ended March 31, 2022 and 2021 the re-measurements of warrants to fair value resulted in net non-operating losses of $0.1 million and gains of $6.9 million before the effect of income taxes, respectively.

The Company's earnings in future periods will be impacted by the re-measurements of warrant fair value, amortizations of the lease incentive asset and the related income tax effects. For income tax calculations, the value and timing of related tax deductions will differ from the guidance described above for financial reporting.

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Goodwill and Other Intangibles

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

GOODWILL, INTANGIBLES AND EQUITY INVESTMENTS

The carrying amounts of goodwill by reportable segment are as follows (in thousands):

	CAM		ACMI Services		All Other		Total
Carrying value as of December 31, 2021	153,290		234,571		8,113		395,974
Carrying value as of March 31, 2022	$	153,290	$	234,571	$	8,113	$	395,974

The Company's acquired intangible assets are as follows (in thousands):

	Airline		Amortizing
	Certificates		Intangibles		Total
Carrying value as of December 31, 2021	$	9,000	$	100,151	$	109,151
Amortization	—		(3,526)		(3,526)
Carrying value as of March 31, 2022	$	9,000	$	96,625	$	105,625

The airline certificates have an indefinite life and therefore are not amortized. The Company amortizes finite-lived intangibles assets, including customer relationship and Supplemental Type Certificates ("STC") intangibles, over 4 to 17 remaining years.

Stock warrants issued to Amazon (see Note C) as an incentive for Amazon subsidiary ASI to lease aircraft from the Company are recorded as a lease incentive asset using their fair value at the time that the lessee has met its performance obligations and if probable of vesting at the time of issuance, and amortized against revenues over the duration of related aircraft leases. The Company's lease incentive granted to the lessee was as follows (in thousands):

	Lease
	Incentive
Carrying value as of December 31, 2021	$	102,913
Amortization	(5,798)
Carrying value as of March 31, 2022	$	97,115

The Company has a 49% ownership in a joint-venture agreement with Precision Aircraft Solutions, LLC, to develop a passenger-to-freighter conversion program for Airbus A321-200 aircraft. In April of 2022 the Company acquired a 40% ownership interest in the joint-venture company GA Telesis Engine Services, LLC to provide engine tear-down services to harvest and sell engine parts. The Company accounts for its investment in these joint ventures under the equity method of accounting, in which the carrying value of each investment is reduced for the Company's share of the non-consolidated affiliates' operating results.

The carrying value of the joint ventures totaled $8.2 million and $10.3 million at March 31, 2022 and December 31, 2021, respectively, and are reflected in “Other Assets” in the Company’s consolidated balance sheets. The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis in accordance with GAAP. If the Company determines that an other-than-temporary decline in value has occurred, it recognizes an impairment loss, which is measured as the difference between the recorded carrying value and the fair value of the investment. The fair value is generally determined using an income approach based on discounted cash flows or using negotiated transaction values.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The Company’s money market funds and interest rate swaps are reported on the Company’s consolidated balance sheets at fair values based on market values from comparable transactions. The fair value of the Company’s money market funds, Convertible Notes (as defined in Note F), convertible note hedges and interest rate swaps are based on observable inputs (Level 2) from comparable market transactions.

The fair value of the stock warrant obligations to Amazon resulting from aircraft leased to ASI were determined using a Black-Scholes pricing model which considers various assumptions, including the Company’s common stock price, the volatility of the Company’s common stock, the expected dividend yield, exercise price and the risk-free interest rate (Level 2 inputs). The fair value of the stock warrant obligations for unvested stock warrants, conditionally granted to Amazon for the execution of incremental, future aircraft leases, include additional assumptions including the expected exercise prices and the probabilities that future leases will occur (Level 3 inputs).

The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands):

As of March 31, 2022	Fair Value Measurement Using						Total
	Level 1		Level 2		Level 3
Assets
Cash equivalents—money market	$	—	$	22,048	$	—	$	22,048
Total Assets	$	—	$	22,048	$	—	$	22,048
Liabilities
Interest rate swap	$	—	$	(833)	$	—	$	(833)
Stock warrant obligations	—		—		(989)		(989)
Total Liabilities	$	—	$	(833)	$	(989)	$	(1,822)

As of December 31, 2021	Fair Value Measurement Using						Total
	Level 1		Level 2		Level 3
Assets
Cash equivalents—money market	$	—	$	30,042	$	—	$	30,042
Total Assets	$	—	$	30,042	$	—	$	30,042
Liabilities
Interest rate swap	$	—	$	(3,603)	$	—	$	(3,603)
Stock warrant obligations	—		—		(915)		(915)
Total Liabilities	$	—	$	(3,603)	$	(915)	$	(4,518)

As a result of lower market interest rates compared to the stated interest rates of the Company’s fixed rate debt obligations, the fair value of the Company’s debt obligations, based on Level 2 observable inputs, was approximately $32.5 million more than the carrying value, which was $1,273.8 million at March 31, 2022. As of December 31, 2021, the fair value of the Company’s debt obligations was approximately $37.1 million less than the carrying value, which was $1,299.4 million. The non-financial assets, including goodwill, intangible assets and property and equipment are measured at fair value on a non-recurring basis.

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Property and Equipment

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment

PROPERTY AND EQUIPMENT

The Company's property and equipment consists primarily of cargo aircraft, aircraft engines and other flight equipment. Property and equipment, to be held and used, is summarized as follows (in thousands):

	March 31, 2022		December 31, 2021
Flight equipment	$	3,364,376	$	3,301,113
Ground equipment	66,759		64,641
Leasehold improvements, facilities and office equipment	39,090		38,769
Aircraft modifications and projects in progress	262,380		206,917
	3,732,605		3,611,440
Accumulated depreciation	(1,550,529)		(1,481,506)
Property and equipment, net	$	2,182,076	$	2,129,934

CAM owned aircraft with a carrying value of $1,416.7 million and $1,404.4 million that were under lease to external customers as of March 31, 2022 and 2021, respectively.

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Debt Obligations

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt Obligations

DEBT OBLIGATIONS

Debt obligations consisted of the following (in thousands):

	March 31,		December 31,
	2022		2021
Revolving credit facility	$	310,000	$	360,000
Senior Notes	697,213		697,162
Convertible Notes	256,118		231,646
Other financing arrangements	10,456		10,555
Total debt obligations	1,273,787		1,299,363
Less: current portion	(631)		(628)
Total long term obligations, net	$	1,273,156	$	1,298,735

The Company is party to a syndicated credit agreement (as amended, the "Senior Credit Agreement") which includes the ability to execute term loans and a revolving credit facility. Prior to its amendment on April 6, 2021, the Senior Credit Agreement had a maturity date of November 2024 provided certain liquidity measures are maintained during 2024, an incremental accordion capacity based on debt ratios and a maximum revolver capacity of $600.0 million. The interest rate is a pricing premium added to LIBOR based upon the ratio of the Company's debt to its earnings before interest, taxes, depreciation and amortization expenses ("EBITDA") as defined under the Senior Credit Agreement.

On April 6, 2021, the Company amended the Senior Credit Agreement ("Amended Credit Agreement"). The Amended Credit Agreement: (i) temporarily increased the aggregate amount of the revolving credit facility from $600.0 million to $1 billion, and subsequently decreased the aggregate amount to $800.0 million on April 13, 2021, (ii) permitted increases of the revolving credit facility commitments and/or new tranches of term loans in an aggregate principal amount equal to the sum of $400 million plus the principal amount of indebtedness that could be incurred at the time of the increase that would not cause the Secured Leverage Ratio (as defined in the Amended Credit Agreement) to exceed 3.25 to 1.00 on a pro forma basis, (iii) modified the maturity date of the agreement from November 30, 2024, to April 6, 2026, with such extension of the maturity date being subject to (1) at the election of the lenders, five one-year extensions and (2) an earlier springing maturity date of July 12, 2024, if, on such date, (a) more than $75.0 million in aggregate principal amount of the Convertible Notes (as defined below) remain outstanding and (b) the Company has less than $375.0 million of liquidity at such time, (iv) removed the Collateral to Total Exposure Ratio (as defined in the Senior Credit Agreement) as a financial covenant, and (v) required the Company to repay the balance of all term loans outstanding at the time of the amendment.

On January 28, 2020, CAM completed a debt offering of $500.0 million in senior unsecured notes (together with the "Additional Notes" referred to below, the “Senior Notes”) that were guaranteed by ATSG and certain of its other subsidiaries. The Senior Notes were sold only to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), and certain investors pursuant to Regulation S under the Securities Act. The Senior Notes are senior unsecured obligations that bear interest at a fixed rate of 4.75% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2020. The Senior Notes mature on February 1, 2028. The Senior Notes contain customary events of default and certain covenants which are generally no more restrictive than those set forth in the Senior Credit Agreement. The net proceeds of $495.0 million from the Senior Notes were used to pay down the revolving credit facility. The Senior Notes do not require principal payments until maturity but prepayments are allowed without penalty beginning February 1, 2025.

As of March 31, 2022, the unused revolving credit facility available to the Company at the trailing twelve-month EBITDA level was $474.9 million with additional permitted indebtedness under the Senior Credit Agreement subject to compliance with other covenants.

On April 13, 2021, CAM completed its offering of $200.0 million of additional notes ("Additional Notes") that were guaranteed by ATSG and certain of its subsidiaries. The Additional Notes are fully fungible with the Senior Notes, treated as a single class for all purposes under the indenture governing the Senior Notes with the same terms as those of the Senior Notes (other than issue date and issue price). The proceeds of $205.5 million, net of

scheduled interest payable, were used, in conjunction with draws from the revolving credit facility to repay the unsubordinated term loans. Upon retirement of the unsubordinated term loans, the Company expensed debt issuance costs of $6.5 million related to the unsubordinated term loans.

The balance of the Senior Notes is net of debt issuance costs of $7.5 million and $7.8 million as of March 31, 2022 and December 31, 2021, respectively. Under the terms of the Senior Credit Agreement, interest rates are adjusted at least quarterly based on the Company's EBITDA, its outstanding debt level and prevailing LIBOR or prime rates. At the Company's debt-to-EBITDA ratio as March 31, 2022, the LIBOR based financing for the revolving credit facility bear variable interest rates of 1.47%.

The Senior Credit Agreement is collateralized by certain of the Company's Boeing 777, 767 and 757 aircraft. Under the terms of the Senior Credit Agreement, the Company is required to maintain certain collateral coverage ratios set forth in the Senior Credit Agreement. The Senior Credit Agreement limits the amount of dividends the Company can pay and the amount of common stock it can repurchase to $100.0 million during any calendar year, provided the Company's total debt to EBITDA ratio is under 3.50 to 1.0 and the secured debt to EBITDA ratio is under 3.0 to 1.0, after giving effect to the dividend or repurchase. The Senior Credit Agreement contains covenants, including a maximum permitted total EBITDA to debt ratio, a fixed charge covenant ratio requirement, and limitations on certain additional indebtedness and guarantees of indebtedness. The Senior Credit Agreement stipulates events of default, including unspecified events that may have material adverse effects on the Company. If an event of default occurs, the Company may be forced to repay, renegotiate or replace the Senior Credit Agreement.

In September 2017, ATSG issued $258.8 million aggregate principal amount of 1.125% convertible senior notes due 2024 ("Convertible Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Convertible Notes bear interest at a rate of 1.125% per year payable semi-annually in arrears on April 15 and October 15 each year, beginning April 15, 2018. The Convertible Notes mature on October 15, 2024, unless repurchased or converted in accordance with their terms prior to such date. The Convertible Notes are unsecured indebtedness, subordinated to the Company's existing and future secured indebtedness and other liabilities, including trade payables.

Conversion of the Convertible Notes can only occur upon satisfaction of certain conditions and during certain periods, beginning any calendar quarter commencing after December 31, 2017, until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon the occurrence of certain fundamental changes, holders of the Convertible Notes can require the Company to repurchase their notes at the cash repurchase price equal to the principal amount of the notes, plus any accrued and unpaid interest. The Company has the right to settle the Convertible Notes in cash, the Company’s common shares or a combination of cash and the Company’s common shares, at the Company’s election. The initial conversion rate is 31.3475 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $31.90 per common share). If a “make-whole fundamental change” (as defined in the offering circular with the Convertible Notes) occurs, the Company will, in certain circumstances, increase the conversion rate for a specified period of time.

The conversion feature of the Convertible Notes required bifurcation from the principal amount under the applicable accounting guidance. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective approach as discussed in Note A which recombined the value of the previously bifurcated embedded feature with the convertible note and eliminated the discount. The carrying value of the Company's convertible debt is shown below.

	March 31,		December 31,
	2022		2021
Principal value, Convertible Notes, due 2024	$	258,750	$	258,750
Unamortized issuance costs	(2,632)		(2,889)
Unamortized discount	—		(24,215)
Convertible debt	$	256,118	$	231,646

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Payroll Support Programs

During 2020, two of the Company's airline subsidiaries, OAI and ATI, received government funds totaling $75.8 million pursuant to payroll support program agreements under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In February 2021, OAI was approved for $37.4 million of additional non-repayable government funds pursuant to a payroll support program agreement under the Consolidated Appropriations Act, 2021 (the “PSP Extension Law”). This grant was subsequently increased by $5.6 million. Further, in April 2021, OAI was approved for $40.0 million of additional non-repayable government funds pursuant to a payroll support program agreement under the American Rescue Plan Act of 2021 (the "American Rescue Plan").

The three programs are structured in a substantially similar manner. These grants are not required to be repaid if the Company complies with the provisions of the payroll support program agreements under the CARES Act, the PSP Extension Law and the American Rescue Plan. The grants are recognized over the periods in which the Company recognizes the related expenses for which the grants are intended to compensate. The Company recognized the grants as contra-expense during the periods in which passenger flight operations and combi flight operations levels were expected to be negatively impacted by the pandemic. During the three month period ended March 31, 2021, the Company recognized $28.0 million of the grants. The Company recognized all of the CARES Act funds by the end of 2021.

In conjunction with the payroll support program agreements under the CARES Act, OAI and ATI agreed on behalf of themselves and ABX to refrain from conducting involuntary furloughs or reducing employee rates of pay or benefits through September 30, 2020. Thereafter, OAI agreed as a condition of receiving grants under the PSP Extension Law and the American Rescue Plan to refrain from conducting involuntary furloughs or reducing employee rates of pay or benefits through March 31, 2021, and September 30, 2021, respectively. Under the CARES Act, OAI and ATI agreed to limit, on behalf of themselves and certain affiliates, executive compensation through March 24, 2022; maintain certain air transportation service through March 1, 2022 as may be required by the DOT pursuant to its authority under the CARES Act; and maintain certain internal controls and records relating to the funds and comply with certain reporting requirements. OAI further agreed as a condition of receiving grants

under the PSP Extension Law and thereafter the American Rescue Plan, to limit executive compensation through October 1, 2022 and April 1, 2023, respectively. In addition, the Company may not pay dividends or repurchase its shares through September 30, 2022.

Lease Commitments

The Company leases property, aircraft, aircraft engines and other types of equipment under operating leases. The Company's airlines operate seven freighter aircraft provided by customers and four passenger aircraft leased from external companies. Property leases include hangars, warehouses, offices and other space at certain airports with fixed rent payments and lease terms ranging from one month to six years. The Company is obligated to pay the lessor for maintenance, real estate taxes, insurance and other operating expenses on certain property leases. These expenses are variable and are not included in the measurement of the lease asset or lease liability. These expenses are recognized as variable lease expense when incurred and are not material. Equipment leases include ground support and industrial equipment as well as computer hardware with fixed rent payments and terms of one month to five years.

The Company records the initial right-to-use asset and lease liability at the present value of lease payments scheduled during the lease term. For the three month period ending March 31, 2022 and 2021, non-cash transactions to recognize right-to-use assets and corresponding liabilities for new leases were $2.9 million and $0.9 million, respectively. Unless the rate implicit in the lease is readily determinable, the Company discounts the lease payments using an estimated incremental borrowing rate at the time of lease commencement. The Company estimates the incremental borrowing rate based on the information available at the lease commencement date, including the rate the Company could borrow for a similar amount, over a similar lease term with similar collateral. The Company's weighted-average discount rate for operating leases at March 31, 2022 was 2.3% compared to 2.4% at December 31, 2021. Leases often include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Although not material, the amount of such options is reflected below in the maturity of operating lease liabilities table. Lease expense is recognized on a straight-line basis over the lease term. The weighted-average remaining lease term is 3.6 years and 3.8 years as of March 31, 2022 and December 31, 2021, respectively.

For the three month periods ending March 31, 2022 and 2021, cash payments against operating lease liabilities were $5.2 million and $5.3 million, respectively. As of March 31, 2022, the maturities of operating lease liabilities are as follows (in thousands):

	Operating Leases
Remaining 2022	$	15,330
2023	18,036
2024	14,453
2025	10,618
2026	4,954
2027 and beyond	173
Total undiscounted cash payments	63,564
Less: amount representing interest	(2,486)
Present value of future minimum lease payments	61,078
Less: current obligations under leases	18,840
Long-term lease obligation	$	42,238

Purchase Commitments

The Company has agreements with vendors for the conversion of Boeing 767-300, Airbus A321 and Airbus A330 passenger aircraft into a standard configured freighter aircraft. The conversions primarily consist of the installation of a standard cargo door and loading system. As of March 31, 2022, the Company owned twelve Boeing 767-300 aircraft and three Airbus A321-200 aircraft that were in or awaiting the modification process. As of March

31, 2022, the Company has agreements to purchase eleven more Boeing 767-300 passenger aircraft through 2024. As of March 31, 2022, the Company's commitments to acquire and convert aircraft totaled $364.7 million.

Guarantees and Indemnifications

Certain leases and agreements of the Company contain guarantees and indemnification obligations to the lessor, or one or more other parties, that are considered reasonable and customary (e.g. use, tax and environmental indemnifications), the terms of which range in duration and are often limited. Such indemnification obligations may continue after expiration of the respective lease or agreement.

Other

In addition to the foregoing matters, the Company is also a party to legal proceedings in various federal and state jurisdictions from time to time arising out of the operation of the Company's business. The amount of alleged liability, if any, from these proceedings cannot be determined with certainty; however, the Company believes that its ultimate liability, if any, arising from pending legal proceedings, as well as from asserted legal claims and known potential legal claims which are probable of assertion, taking into account established accruals for estimated liabilities, should not be material to our financial condition or results of operations.

Employees Under Collective Bargaining Agreements

As of March 31, 2022, the flight crewmember employees of ABX, ATI and OAI and flight attendant employees of ATI and OAI were represented by the labor unions listed below:

Airline	Labor Agreement Unit	Percentage of the Company’s Employees
ABX	International Brotherhood of Teamsters	5.6%
ATI	Air Line Pilots Association	9.2%
OAI	International Brotherhood of Teamsters	6.1%
ATI	Association of Flight Attendants	0.6%
OAI	Association of Flight Attendants	6.2%

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Pension and Other Post-Retirement Benefit Plans

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Pension and Other Post-Retirement Benefit Plans

PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

Defined Benefit and Post-retirement Healthcare Plans

ABX sponsors a qualified defined benefit pension plan for ABX crewmembers and a qualified defined benefit pension plan for a major portion of its other ABX employees that meet minimum eligibility requirements. ABX also sponsors non-qualified defined benefit pension plans for certain employees. These non-qualified plans are unfunded. Employees are no longer accruing benefits under any of the defined benefit pension plans. ABX also sponsors a post-retirement healthcare plan for its ABX crewmembers, which is unfunded. Benefits for covered individuals terminate upon reaching age 65 under the post-retirement healthcare plans.

The accounting and valuation for these post-retirement obligations are determined by prescribed accounting and actuarial methods that consider a number of assumptions and estimates. The selection of appropriate assumptions and estimates is significant due to the long time period over which benefits will be accrued and paid. The long term nature of these benefit payouts increases the sensitivity of certain estimates of our post-retirement obligations. The assumptions considered most sensitive in actuarially valuing ABX’s pension obligations and determining related expense amounts are discount rates and expected long term investment returns on plan assets. Additionally, other assumptions concerning retirement ages, mortality and employee turnover also affect the valuations. Actual results

and future changes in these assumptions could result in future costs significantly higher than those recorded in our results of operations.

ABX measures plan assets and benefit obligations as of December 31 of each year. Information regarding ABX’s sponsored defined benefit pension plans and post-retirement healthcare plans follow below. The accumulated benefit obligation reflects pension benefit obligations based on the actual earnings and service to-date of current employees.

ABX’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans are as follows (in thousands):

	Three Months Ended March 31,
	Pension Plans				Post-Retirement Healthcare Plan
	2022		2021		2022		2021
Service cost	$	—	$	—	$	19	$	24
Interest cost	6,011		5,597		15		10
Expected return on plan assets	(11,738)		(11,875)		—		—
Amortization of net (gain) loss	313		1,764		11		47
Net periodic benefit cost (income)	$	(5,414)	$	(4,514)	$	45	$	81

During the three month period ending March 31, 2022, the Company contributed $0.8 million to the pension plans. The Company expects to contribute an additional $0.5 million during the remainder of 2022.

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Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision for income taxes for interim periods is based on management's best estimate of the effective income tax rate expected to be applicable for the current year, plus any adjustments arising from changes in the estimated amount of taxable income related to prior periods. Income taxes recorded through March 31, 2022 have been estimated utilizing a rate of 23.4% based upon year-to-date income and projected results for the full year. The recognition of discrete tax items, such as the conversion of employee stock awards, the issuance of stock warrants and other items, have an impact on the effective rate during a period.

As a result of these differences in which expenses and benefits for tax purposes are different than required by GAAP, the Company's effective tax rate for the first three months of 2022 was 23.5%. The final effective tax rate for the year 2022 will depend on the actual amount of pre-tax book results by the Company for the full year, the additional conversions of employee stock awards, stock warrant valuations, executive compensation and other items.

The Company has operating loss carryforwards for U.S. federal income tax purposes. Management expects to utilize the loss carryforwards to offset federal income tax liabilities in the future. Due to the Company's deferred tax assets, including its loss carryforwards, management does not expect to pay federal income taxes until 2025 or later. The Company may, prior to such time, be required to pay some federal tax due to loss carryforward usage limitations and certain state and local income taxes

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Derivative Instruments

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company maintains derivative instruments for protection from fluctuating interest rates. The table below provides information about the Company’s interest rate swaps (dollars in thousands):

			March 31, 2022				December 31, 2021
Expiration Date	Stated Interest Rate		Notional Amount		Market Value (Liability)		Notional Amount		Market Value (Liability)
March 31, 2022	1.900	%	$	—	$	—	$	50,000	$	(221)
March 31, 2022	1.950	%	—		—		75,000		(341)
March 31, 2023	2.425	%	131,250		(833)		133,125		(3,041)

The outstanding interest rate swaps are not designated as hedges for accounting purposes. The effects of future fluctuations in LIBOR interest rates on derivatives held by the Company will result in the recording of unrealized gains and losses into the statement of operations. The Company recorded net gains on derivatives of $2.8 million and $2.5 million for the three month periods ending March 31, 2022 and 2021, respectively. The liability for outstanding derivatives is recorded in other liabilities and in accrued expenses.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

ATSG's Board of Directors has granted stock incentive awards to certain employees and board members pursuant to a long term incentive plan which was approved by its stockholders in May 2005 and in May 2015. Employees have been awarded non-vested stock units with performance conditions, non-vested stock units with market conditions and non-vested time-based restricted stock. The restrictions on the non-vested restricted stock awards lapse at the end of a specified service period, which is typically three years from the date of grant. Restrictions may lapse sooner upon a business combination, death, disability or after an employee qualifies for retirement. The non-vested stock units will be converted into ATSG common stock depending on performance and market conditions at the end of a specified service period, lasting approximately three years. The performance condition awards will be converted into ATSG common stock based on the Company's average return on invested capital during the service period. Similarly, the market condition awards will be converted into ATSG common stock based on the appreciation of the common stock price compared to the NASDAQ Transportation Index. Board members have been granted time-based restricted stock unit awards that vest after a period of twelve months. The Company expects to settle all of the stock unit awards by issuing new shares of ATSG common stock. The table below summarizes stock-based award activity.

	Three Months Ended
	March 31, 2022			March 31, 2021
	Number of Awards	Weighted average grant-date fair value		Number of Awards	Weighted average grant-date fair value
Outstanding at beginning of period	978,188	$	17.49	1,085,023	$	17.14
Granted	285,867	35.45		274,606	26.65
Converted	(118,222)	24.69		(115,930)	25.55
Forfeited	(1,400)	22.22		—	—
Outstanding at end of period	1,144,433	$	21.23	1,243,699	$	18.46
Vested	362,594	$	10.20	357,499	$	9.26

The average grant-date fair value of each performance condition award, non-vested restricted stock award and time-based award granted by the Company in 2022 was $33.84, the fair value of the Company’s stock on the date of grant. The average grant-date fair value of each market condition award granted in 2022 was $46.20. The market condition awards granted in 2022 were valued using a Monte Carlo simulation technique based on daily stock prices over three years and using the following variables:

	2022
Risk-free interest rate	2.5%
Volatility	38.3%

For the three months ended March 31, 2022 and 2021, the Company recorded expense of $1.7 million and $1.8 million, respectively, for stock incentive awards. At March 31, 2022, there was $15.2 million of unrecognized expense related to the stock incentive awards that is expected to be recognized over a weighted-average period of 1.8 years. As of March 31, 2022, none of the awards were convertible, 362,594 units of the Board members' time-based awards had vested and none of the outstanding shares of the restricted stock had vested. These awards could result in the issuance of up to 1,436,783 shares of ATSG common stock depending on service, performance and market results through December 31, 2024.

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Earnings Per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

COMMON STOCK AND EARNINGS PER SHARE

Earnings per Share

On January 1, 2022 the Company adopted ASU 2020-06 as discussed in Note A. As a result, diluted earnings per share of common stock for the 2022 periods excludes interest charges related to the convertible debt and

includes the number of shares that would have been converted at the beginning of the period under the "if-convert" method. The calculation of basic and diluted earnings per share of common stock are as follows (in thousands, except per share amounts):

	Three Months Ending
	March 31,
	2022		2021
Numerator:
Earnings from continuing operations - basic	$	49,796	$	42,290
Loss (gain) from stock warrants revaluation, net of tax	—		(5,355)
Convertible debt interest charge net of tax	760		—
Earnings from continuing operations - diluted	$	50,556	$	36,935
Denominator:
Weighted-average shares outstanding for basic earnings per share	73,888		59,447
Common equivalent shares:
Effect of stock-based compensation awards and warrants	6,745		15,297
Effect of convertible debt	8,111		—
Weighted-average shares outstanding assuming dilution	88,744		74,744
Basic earnings per share from continuing operations	$	0.67	$	0.71
Diluted earnings per share from continuing operations	$	0.57	0.49

Basic weighted average shares outstanding for purposes of basic earnings per share are less than the shares outstanding due to 392,039 shares and 487,200 shares of restricted stock for 2022 and 2021, respectively, which are accounted for as part of diluted weighted average shares outstanding in diluted earnings per share.

The determination of diluted earnings per share requires the exclusion of the fair value re-measurement of the stock warrants recorded as a liability (see Note C), if such warrants have an anti-dilutive effect on earnings per share. The dilutive effect of the weighted-average diluted shares outstanding is calculated using the treasury method for periods in which equivalent shares have a dilutive effect on earnings per share. Under this method, the number of diluted shares is determined by dividing the assumed proceeds of the warrants recorded as a liability by the average stock price during the period and comparing that amount with the number of corresponding warrants outstanding.

In conjunction with the offering of the Convertible Notes (see note F), the Company also sold warrants for ATSG common stock, subject to customary anti-dilution adjustments. The amount received for these warrants and recorded in Stockholders' Equity in the Company’s consolidated balance sheets was $38.5 million. These warrants may result in 8.1 million additional shares of common stock, if ATSG's traded market price exceeds the strike price which is $41.35 per share and is subject to certain adjustments under the terms of the warrant transactions.

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Segment Information

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Information

SEGMENT AND REVENUE INFORMATIONThe Company operates in two reportable segments - CAM and ACMI Services. The CAM segment consists of the Company's aircraft and engine leasing operations. The ACMI Services segment consists of the Company's airline operations, including CMI agreements as well as ACMI, charter service and passenger service agreements that the Company has with its customers. The Company's aircraft maintenance services, aircraft modification services, ground services and other support services, are not large enough to constitute separate reportable segments and are combined in All other. Intersegment revenues are valued at arms-length market rates.

The Company's segment information from continuing operations is presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Total revenues:
CAM	$	106,905	$	83,277
ACMI Services	330,090		247,131
All other	102,535		93,698
Eliminate inter-segment revenues	(53,670)		(48,018)
Total	$	485,860	$	376,088
Customer revenues:
CAM	$	76,691	$	60,800
ACMI Services	330,084		247,126
All other	79,085		68,162
Total	$	485,860	$	376,088

The Company's external customer revenues from other activities for the three month periods ending March 31, 2022 and 2021 are presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Aircraft maintenance, modifications and part sales	$	37,540	$	34,048
Ground services	25,101		23,460
Other, including aviation fuel sales	16,444		10,654
Total customer revenues	$	79,085	$	68,162

During the three month periods ending March 31, 2022 and 2021, the Company recognized $3.5 million and $2.7 million of non lease revenue that was reported as deferred revenue at the beginning of the respective year. Current deferred revenue of $10.0 million and $8.3 million as of March 31, 2022 and December 31, 2021, respectively, for contracts with customers is derived from other activities as described above. Revenue related to deferred revenue will be recognized based on percentage of completion. Customers are required to pay deposits and may be required to make milestone payments for these services resulting in deferred revenue. Long-term contract assets were $0.0 million and $0.8 million as of March 31, 2022 and December 31, 2021, respectively.

CAM's leases do not contain residual guarantees. Approximately 13% of CAM's leases to external customers contain purchase options at projected market values. As of March 31, 2022, minimum future payments from external customers for leased aircraft and equipment were scheduled to be $200.8 million for the remainder of 2022, $229.6 million, $179.6 million, $167.7 million and $149.6 million for the next 4 years ending December 31, 2026, respectively, and $343.3 million thereafter. CAM's external customer revenues for non-lease activities were $9.9 million and $2.4 million during the first three months of 2022 and 2021 respectively for engine services and the sale of spare engine parts.

The Company's other segment information from continuing operations is presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Depreciation and amortization expense:
CAM	$	56,291	$	46,995
ACMI Services	25,190		22,981
All other	590		1,075
Total	$	82,071	$	71,051
Interest expense
CAM	7,705		9,226
ACMI Services	3,378		4,523
Segment earnings (loss):
CAM	$	34,995	$	21,462
ACMI Services	22,165		21,259
All other	1,551		389
Net unallocated interest expense	(307)		(754)
Net gain (loss) on financial instruments	2,696		9,472
Other non-service components of retiree benefit costs, net	5,388		4,457
Loss from non-consolidated affiliate	(1,403)		(1,183)
Pre-tax earnings from continuing operations	$	65,085	$	55,102

The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other.

	March 31,		December 31,
	2022		2021
Assets:
CAM	$	2,260,674	$	2,218,012
ACMI Services	849,478		872,311
All other	176,777		177,012
Total	$	3,286,929	$	3,267,335

During the first three months of 2022, the Company had capital expenditures for property and equipment of $22.4 million and $85.0 million for the ACMI Services and CAM, respectively.

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Summary of Financial Statement Preparation and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with GAAP and such principles are applied on a basis consistent with the financial statements reflected in our 2021 Form 10-K. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the accompanying financial statements contain all adjustments, including normal recurring adjustments, necessary for the fair presentation of the Company's results of operations and financial position for the periods presented. Due to seasonal fluctuations, among other factors common to the air cargo industry, the results of operations for the periods presented are not necessarily indicative of the results of operations to be expected for the entire year or any interim period. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements. The accounting estimates reflect the best judgment of the management, but actual results could differ materially from those estimates.

The accompanying unaudited condensed consolidated financial statements include the accounts of ATSG and its wholly-owned subsidiaries. Inter-company balances and transactions are eliminated. Investments in affiliates in which the Company has significant influence but does not exercise control are accounted for using the equity method of accounting. Under the equity method, the Company's share of the nonconsolidated affiliate's income or loss is recognized in the consolidated statement of earnings and cumulative post-acquisition changes in the investment are adjusted against the carrying amount of the investment.

Use of Estimates

Uncertainties

Beginning in late 2019, an outbreak of a coronavirus, COVID-19, was identified and has since spread globally, becoming a pandemic. During February 2020, the Company's revenues were disrupted when customers cancelled scheduled passenger flights and aircraft maintenance services and the Company began to incur additional costs, including expenses to protect employees. Additionally, the Company experienced disruptions to operations, such as shortages of personnel, parts shortages, maintenance delays, shortages of transportation and hotel accommodations for flight crews, facility closures and other supply chain related issues. The extent of the impact that the coronavirus pandemic will have on our future operations and financial results will depend on future developments, including: the duration, spread, severity and recurrence of the COVID-19 variants; vaccination rates, the effectiveness of vaccines, the duration and scope of government orders and local restrictions as well as the extent of the impact of the pandemic on overall economic conditions.

In February 2022, war started in Ukraine, intensifying geopolitical pressures worldwide. While the Company's operations have not been detrimentally impacted, additional supply chain disruptions and inflationary pressures could have an impact on overall economic conditions, as well as the Company's operations and financial results.

New Accounting Pronouncements

Accounting Standards Updates

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"). This new standard removes the separation models for convertible debt with cash conversion or beneficial conversion features. It eliminates the "treasury stock" method for convertible instruments and requires application of the “if-converted” method for certain agreements. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments:

(in thousands)	December 31, 2021		Adoption of ASU 2020-06		January 1, 2022
Balance Sheet line item:
Principal value	$	(258,750)	$	—	$	(258,750)
Unamortized issuance cost	$	2,889	$	—	$	2,889
Unamortized discount	$	24,215	$	(24,215)	$	—
Convertible Debt	$	(231,646)	$	(24,215)	$	(255,861)
Net deferred tax liability	$	(217,291)	$	5,527	$	(211,764)
Additional paid-in capital	$	(1,074,286)	$	39,559	$	(1,034,727)
Retained earnings	$	(309,430)	$	(20,871)	$	(330,301)

After adopting ASU 2020-06, the Company's Convertible Notes due 2024 (as defined and discussed in Note F) are reflected entirely as a liability as the embedded conversion feature is no longer separately presented within stockholders' equity, which also eliminated the non-cash discount. Accordingly, earnings no longer reflect the discount amortization expense which was $6.4 million of interest expense, net of income taxes during 2021. After giving effect for the adoption, the effective interest rate on the Convertible Notes is 1.5%.

ASU 2020-06 requires the application of the more dilutive if-converted method when calculating the impact of the Convertible Notes on earnings per diluted share. The adoption of ASU 2020-06 does not change the accounting treatment of shares to be delivered by the convertible note hedges (see Note F) purchased by the Company that are designed to offset the shares issued to settle its Convertible Notes, which are anti-dilutive and not reflected in earnings per diluted share.

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Summary of Financial Statement Preparation and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Property, Plant and Equipment

Property and equipment, to be held and used, is summarized as follows (in thousands):

	March 31, 2022		December 31, 2021
Flight equipment	$	3,364,376	$	3,301,113
Ground equipment	66,759		64,641
Leasehold improvements, facilities and office equipment	39,090		38,769
Aircraft modifications and projects in progress	262,380		206,917
	3,732,605		3,611,440
Accumulated depreciation	(1,550,529)		(1,481,506)
Property and equipment, net	$	2,182,076	$	2,129,934

Accounting Standards Update and Change in Accounting Principle

The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective approach which resulted in the following adjustments:

(in thousands)	December 31, 2021		Adoption of ASU 2020-06		January 1, 2022
Balance Sheet line item:
Principal value	$	(258,750)	$	—	$	(258,750)
Unamortized issuance cost	$	2,889	$	—	$	2,889
Unamortized discount	$	24,215	$	(24,215)	$	—
Convertible Debt	$	(231,646)	$	(24,215)	$	(255,861)
Net deferred tax liability	$	(217,291)	$	5,527	$	(211,764)
Additional paid-in capital	$	(1,074,286)	$	39,559	$	(1,034,727)
Retained earnings	$	(309,430)	$	(20,871)	$	(330,301)

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Significant Customers (Tables)

3 Months Ended

Mar. 31, 2022

Concentration Risk [Line Items]

Schedule of Stockholders' Equity Note, Warrants or Rights

Issued and outstanding warrants are summarized below as of March 31, 2022:

		Common Shares in millions
	Exercise price	Vested	Non-Vested	Expiration
2018 Investment Agreement	$21.53	14.8	0.0	December 20, 2025
2018 Investment Agreement	$20.40	7.0	0.0	December 20, 2025

Accounts Receivable [Member]

Concentration Risk [Line Items]

Schedule of Revenue by Major Customers by Reporting Segments

The accounts receivable from the Company's three largest customers as of March 31, 2022 and December 31, 2021 are as follows (in thousands):

	March 31,		December 31,
	2022		2021
Customer	Accounts Receivable
DoD	$	59,130	$	57,998
Amazon	82,648		68,429
DHL	11,350		9,111

Revenue, Product and Service Benchmark [Member]

Concentration Risk [Line Items]

Schedule of Revenue by Major Customers by Reporting Segments

The percentage of the Company's revenues for the Company's three largest customers, for the three month periods ending March 31, 2022 and 2021 are as follows:

	Three Months Ended
	March 31,
	2022	2021
Customer	Percentage of Revenue
DoD	28%	22%
Amazon	34%	35%
DHL	11%	14%

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Goodwill and Other Intangibles (Tables)

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Lease Incentive Intangible [Table Text Block]

The Company's lease incentive granted to the lessee was as follows (in thousands):

	Lease
	Incentive
Carrying value as of December 31, 2021	$	102,913
Amortization	(5,798)
Carrying value as of March 31, 2022	$	97,115

Schedule of Goodwill

The carrying amounts of goodwill by reportable segment are as follows (in thousands):

	CAM		ACMI Services		All Other		Total
Carrying value as of December 31, 2021	153,290		234,571		8,113		395,974
Carrying value as of March 31, 2022	$	153,290	$	234,571	$	8,113	$	395,974

Schedule Intangible Assets by Major Class

The Company's acquired intangible assets are as follows (in thousands):

	Airline		Amortizing
	Certificates		Intangibles		Total
Carrying value as of December 31, 2021	$	9,000	$	100,151	$	109,151
Amortization	—		(3,526)		(3,526)
Carrying value as of March 31, 2022	$	9,000	$	96,625	$	105,625

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table reflects assets and liabilities that are measured at fair value on a recurring basis (in thousands):

As of March 31, 2022	Fair Value Measurement Using						Total
	Level 1		Level 2		Level 3
Assets
Cash equivalents—money market	$	—	$	22,048	$	—	$	22,048
Total Assets	$	—	$	22,048	$	—	$	22,048
Liabilities
Interest rate swap	$	—	$	(833)	$	—	$	(833)
Stock warrant obligations	—		—		(989)		(989)
Total Liabilities	$	—	$	(833)	$	(989)	$	(1,822)

As of December 31, 2021	Fair Value Measurement Using						Total
	Level 1		Level 2		Level 3
Assets
Cash equivalents—money market	$	—	$	30,042	$	—	$	30,042
Total Assets	$	—	$	30,042	$	—	$	30,042
Liabilities
Interest rate swap	$	—	$	(3,603)	$	—	$	(3,603)
Stock warrant obligations	—		—		(915)		(915)
Total Liabilities	$	—	$	(3,603)	$	(915)	$	(4,518)

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property and equipment, to be held and used, is summarized as follows (in thousands):

	March 31, 2022		December 31, 2021
Flight equipment	$	3,364,376	$	3,301,113
Ground equipment	66,759		64,641
Leasehold improvements, facilities and office equipment	39,090		38,769
Aircraft modifications and projects in progress	262,380		206,917
	3,732,605		3,611,440
Accumulated depreciation	(1,550,529)		(1,481,506)
Property and equipment, net	$	2,182,076	$	2,129,934

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Debt Obligations (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Convertible Debt [Table Text Block]

The conversion feature of the Convertible Notes required bifurcation from the principal amount under the applicable accounting guidance. On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective approach as discussed in Note A which recombined the value of the previously bifurcated embedded feature with the convertible note and eliminated the discount. The carrying value of the Company's convertible debt is shown below.

	March 31,		December 31,
	2022		2021
Principal value, Convertible Notes, due 2024	$	258,750	$	258,750
Unamortized issuance costs	(2,632)		(2,889)
Unamortized discount	—		(24,215)
Convertible debt	$	256,118	$	231,646

Schedule of Long-term Debt Instruments

Debt obligations consisted of the following (in thousands):

	March 31,		December 31,
	2022		2021
Revolving credit facility	$	310,000	$	360,000
Senior Notes	697,213		697,162
Convertible Notes	256,118		231,646
Other financing arrangements	10,456		10,555
Total debt obligations	1,273,787		1,299,363
Less: current portion	(631)		(628)
Total long term obligations, net	$	1,273,156	$	1,298,735

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

As of March 31, 2022, the maturities of operating lease liabilities are as follows (in thousands):

	Operating Leases
Remaining 2022	$	15,330
2023	18,036
2024	14,453
2025	10,618
2026	4,954
2027 and beyond	173
Total undiscounted cash payments	63,564
Less: amount representing interest	(2,486)
Present value of future minimum lease payments	61,078
Less: current obligations under leases	18,840
Long-term lease obligation	$	42,238

Schedules of Concentration of Risk, by Risk Factor

As of March 31, 2022, the flight crewmember employees of ABX, ATI and OAI and flight attendant employees of ATI and OAI were represented by the labor unions listed below:

Airline	Labor Agreement Unit	Percentage of the Company’s Employees
ABX	International Brotherhood of Teamsters	5.6%
ATI	Air Line Pilots Association	9.2%
OAI	International Brotherhood of Teamsters	6.1%
ATI	Association of Flight Attendants	0.6%
OAI	Association of Flight Attendants	6.2%

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Pension and Other Post-Retirement Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

ABX’s net periodic benefit costs for its defined benefit pension plans and post-retirement healthcare plans are as follows (in thousands):

	Three Months Ended March 31,
	Pension Plans				Post-Retirement Healthcare Plan
	2022		2021		2022		2021
Service cost	$	—	$	—	$	19	$	24
Interest cost	6,011		5,597		15		10
Expected return on plan assets	(11,738)		(11,875)		—		—
Amortization of net (gain) loss	313		1,764		11		47
Net periodic benefit cost (income)	$	(5,414)	$	(4,514)	$	45	$	81

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

The table below provides information about the Company’s interest rate swaps (dollars in thousands):

			March 31, 2022				December 31, 2021
Expiration Date	Stated Interest Rate		Notional Amount		Market Value (Liability)		Notional Amount		Market Value (Liability)
March 31, 2022	1.900	%	$	—	$	—	$	50,000	$	(221)
March 31, 2022	1.950	%	—		—		75,000		(341)
March 31, 2023	2.425	%	131,250		(833)		133,125		(3,041)

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation, Equity Instruments Other Than Options, Activity

The table below summarizes stock-based award activity.

	Three Months Ended
	March 31, 2022			March 31, 2021
	Number of Awards	Weighted average grant-date fair value		Number of Awards	Weighted average grant-date fair value
Outstanding at beginning of period	978,188	$	17.49	1,085,023	$	17.14
Granted	285,867	35.45		274,606	26.65
Converted	(118,222)	24.69		(115,930)	25.55
Forfeited	(1,400)	22.22		—	—
Outstanding at end of period	1,144,433	$	21.23	1,243,699	$	18.46
Vested	362,594	$	10.20	357,499	$	9.26

Schedule of Share-based Payment Award, Equity Instruments Other Than Options, Valuation Assumptions

The market condition awards granted in 2022 were valued using a Monte Carlo simulation technique based on daily stock prices over three years and using the following variables:

	2022
Risk-free interest rate	2.5%
Volatility	38.3%

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The calculation of basic and diluted earnings per share of common stock are as follows (in thousands, except per share amounts):

	Three Months Ending
	March 31,
	2022		2021
Numerator:
Earnings from continuing operations - basic	$	49,796	$	42,290
Loss (gain) from stock warrants revaluation, net of tax	—		(5,355)
Convertible debt interest charge net of tax	760		—
Earnings from continuing operations - diluted	$	50,556	$	36,935
Denominator:
Weighted-average shares outstanding for basic earnings per share	73,888		59,447
Common equivalent shares:
Effect of stock-based compensation awards and warrants	6,745		15,297
Effect of convertible debt	8,111		—
Weighted-average shares outstanding assuming dilution	88,744		74,744
Basic earnings per share from continuing operations	$	0.67	$	0.71
Diluted earnings per share from continuing operations	$	0.57	0.49

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting Information [Line Items]

Segment Reporting, Additional Information about Entity's Reportable Segments

The Company's other segment information from continuing operations is presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Depreciation and amortization expense:
CAM	$	56,291	$	46,995
ACMI Services	25,190		22,981
All other	590		1,075
Total	$	82,071	$	71,051
Interest expense
CAM	7,705		9,226
ACMI Services	3,378		4,523
Segment earnings (loss):
CAM	$	34,995	$	21,462
ACMI Services	22,165		21,259
All other	1,551		389
Net unallocated interest expense	(307)		(754)
Net gain (loss) on financial instruments	2,696		9,472
Other non-service components of retiree benefit costs, net	5,388		4,457
Loss from non-consolidated affiliate	(1,403)		(1,183)
Pre-tax earnings from continuing operations	$	65,085	$	55,102

Schedule of Segment Reporting Information, by Segment

The Company's segment information from continuing operations is presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Total revenues:
CAM	$	106,905	$	83,277
ACMI Services	330,090		247,131
All other	102,535		93,698
Eliminate inter-segment revenues	(53,670)		(48,018)
Total	$	485,860	$	376,088
Customer revenues:
CAM	$	76,691	$	60,800
ACMI Services	330,084		247,126
All other	79,085		68,162
Total	$	485,860	$	376,088

Reconciliation of Assets from Segment to Consolidated

The Company's assets are presented below by segment (in thousands). Cash and cash equivalents are reflected in Assets - All other.

	March 31,		December 31,
	2022		2021
Assets:
CAM	$	2,260,674	$	2,218,012
ACMI Services	849,478		872,311
All other	176,777		177,012
Total	$	3,286,929	$	3,267,335

Revenue from External Customers by Products and Services

The Company's external customer revenues from other activities for the three month periods ending March 31, 2022 and 2021 are presented below (in thousands):

	Three Months Ending
	March 31,
	2022		2021
Aircraft maintenance, modifications and part sales	$	37,540	$	34,048
Ground services	25,101		23,460
Other, including aviation fuel sales	16,444		10,654
Total customer revenues	$	79,085	$	68,162

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Summary of Financial Statement Preparation and Significant Accounting Policies (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2022

Jan. 01, 2022

Dec. 31, 2021

Sep. 25, 2017

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Additional paid-in capital

$ (1,035,029)

$ 1,034,727

$ (1,074,286)

Retained earnings

(380,097)

330,301

(309,430)

Convertible Debt

$ (256,118)

255,861

(231,646)

Deferred Tax Liabilities, Net

(211,764)

(217,291)

Unamortized Debt Issuance Expense

2,889

Debt Instrument, Unamortized Discount

0

Property, Plant and Equipment

Property and equipment, to be held and used, is summarized as follows (in thousands):

	March 31, 2022		December 31, 2021
Flight equipment	$	3,364,376	$	3,301,113
Ground equipment	66,759		64,641
Leasehold improvements, facilities and office equipment	39,090		38,769
Aircraft modifications and projects in progress	262,380		206,917
	3,732,605		3,611,440
Accumulated depreciation	(1,550,529)		(1,481,506)
Property and equipment, net	$	2,182,076	$	2,129,934

Convertible Debt [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Convertible Debt

$ (258,750)

258,750

(258,750)

$ (258,800)

Unamortized Debt Issuance Expense

2,632

2,889

Debt Instrument, Unamortized Discount

$ 0

$ 24,215

Accounting Standards Update 2020-06

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Additional paid-in capital

(39,559)

Retained earnings

20,871

Convertible Debt

24,215

Deferred Tax Liabilities, Net

5,527

Unamortized Debt Issuance Expense

0

Debt Instrument, Unamortized Discount

(24,215)

Accounting Standards Update 2020-06 | Convertible Debt [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Convertible Debt

$ 0

Minimum [Member] | Ground equipment [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Property, plant and equipment, useful life

2 years

Minimum [Member] | facilities, leasehold improvements and office equipment [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Property, plant and equipment, useful life

3 years

Maximum [Member] | Ground equipment [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Property, plant and equipment, useful life

10 years

Maximum [Member] | facilities, leasehold improvements and office equipment [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Property, plant and equipment, useful life

25 years

Boeing 767 and 757 aircraft and flight equipment [Member] | Minimum [Member] | Flight Equipment [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Property, plant and equipment, useful life

7 years

Boeing 767 and 757 aircraft and flight equipment [Member] | Maximum [Member] | Flight Equipment [Member]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Line Items]

Property, plant and equipment, useful life

18 years

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Significant Customers (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Concentration Risk [Line Items]
Accounts receivable	$ 216,664		$ 205,399
Fair Value Adjustment of Warrants	(100)	$ 6,900
Warrant liability	$ 989		915
DHL [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Percentage of consolidated revenues	11.00%	14.00%
DHL [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Accounts receivable	$ 11,350		9,111
Amazon [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Percentage of consolidated revenues	34.00%	35.00%
Amazon [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Accounts receivable	$ 82,648		68,429
US Military [Member] | Revenues from Leases and Contracted Services [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Percentage of consolidated revenues	28.00%	22.00%
US Military [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Accounts receivable	$ 59,130		57,998
Amazon Warrant C [Member] [Member]
Concentration Risk [Line Items]
Class of Warrant or Right, Outstanding	14,800
Warrant liability	$ (1,000)		(900)
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 21.53
Class of Warrant or Right, Unissued	0
Amazon Warrant Subsequent [Member]
Concentration Risk [Line Items]
Class of Warrant or Right, Outstanding	7,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 20.40
Class of Warrant or Right, Unissued	0
Amazon C Warrants
Concentration Risk [Line Items]
reclassification of liability to equity			$ 82,400

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Goodwill and Other Intangibles (Schedule of Goodwill) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Goodwill [Roll Forward]
Carrying value, beginning balance	$ 395,974	$ 395,974
Carrying value, ending balance	395,974
ACMI Services [Member]
Goodwill [Roll Forward]
Carrying value, beginning balance	234,571	234,571
Carrying value, ending balance	234,571
CAM [Member]
Goodwill [Roll Forward]
Carrying value, beginning balance	153,290	153,290
Carrying value, ending balance	153,290
MRO Services [Member] [Member]
Goodwill [Roll Forward]
Carrying value, beginning balance	8,113	$ 8,113
Carrying value, ending balance	$ 8,113

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Goodwill and Other Intangibles (Schedule Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Finite and Indefinite-lived Intangible Assets by Major Class [Line Items]
Incentive to Lessee	$ 97,115	$ 102,913
Amortization of Lease Incentives	5,798
Finite and Indefinite-lived Intangible Assets [Roll Forward]
Carrying value at beginning of period	100,151
Carrying value at beginning of period	109,151
Amortization expense	(3,526)
Carrying value at end of period	96,625	$ 100,151
Carrying value at end of period	105,625
ACMI Services [Member] | Airline Certificates [Member]
Finite and Indefinite-lived Intangible Assets [Roll Forward]
Carrying value at beginning of period	9,000
Amortization expense	0
Carrying value at end of period	$ 9,000

XML

Goodwill and Other Intangibles Investment in West Atlantic (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Schedule of Equity Method Investments [Line Items]
Equity Method Investments	$ 8,200	$ 10,300
Goodwill	$ 395,974	$ 395,974

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Sep. 25, 2017
Liabilities, Fair Value Disclosure [Abstract]
Warrant liability	$ 989	$ 915
Fair Value, Recurring [Member]
Assets, Fair Value Disclosure [Abstract]
Cash equivalents - money market	22,048	30,042
Total Assets	22,048	30,042
Liabilities, Fair Value Disclosure [Abstract]
Interest rate swap		(3,603)
Warrant liability	(989)	(915)
Total Liabilities	(1,822)	(4,518)
Carrying value, debt	1,273,800	1,299,400
Fair Value, Recurring [Member] | Level 1 [Member]
Assets, Fair Value Disclosure [Abstract]
Cash equivalents - money market	0	0
Total Assets	0	0
Liabilities, Fair Value Disclosure [Abstract]
Interest rate swap	0	0
Warrant liability	0	0
Total Liabilities	0	0
Fair Value, Recurring [Member] | Level 2 [Member]
Assets, Fair Value Disclosure [Abstract]
Cash equivalents - money market	22,048	30,042
Convertible note hedge fair value			$ 56,100
Total Assets	22,048	30,042
Liabilities, Fair Value Disclosure [Abstract]
Interest rate swap	(833)	(3,603)
Warrant liability	0	0
Total Liabilities	(833)	(3,603)
Difference between fair value and carrying value, debt	32,500	37,100
Fair Value, Recurring [Member] | Level 3 [Member]
Assets, Fair Value Disclosure [Abstract]
Cash equivalents - money market	0	0
Total Assets	0	0
Liabilities, Fair Value Disclosure [Abstract]
Interest rate swap	0	0
Warrant liability	(989)	(915)
Total Liabilities	(989)	(915)
Fair Value, Recurring [Member] | Total [Member]
Liabilities, Fair Value Disclosure [Abstract]
Interest rate swap	(833)
Amazon Warrant C [Member] [Member]
Liabilities, Fair Value Disclosure [Abstract]
Warrant liability	$ (1,000)	$ (900)

XML

Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 3,732,605	$ 3,611,440
Accumulated depreciation	(1,550,529)	(1,481,506)
Property and equipment, net	2,182,076	2,129,934
Flight Equipment [Member]
Property, Plant and Equipment [Line Items]
Operating Leases, Future Minimum Payments Receivable, Current	200,800
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	3,364,376	3,301,113
Operating Leases, Future Minimum Payments Receivable, in Two Years	229,600
Operating Leases, Future Minimum Payments Receivable, in Three Years	179,600
Operating Leases, Future Minimum Payments Receivable, in Four Years	167,700
Operating Leases, Future Minimum Payments Receivable, in Five Years	149,600
Ground equipment [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	66,759	64,641
facilities, leasehold improvements and office equipment [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	39,090	38,769
Construction in Progress [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 262,380	$ 206,917

XML

Property and Equipment (Narrative) (Details) - Flight Equipment [Member] - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Operating Leases, Future Minimum Payments Receivable [Abstract]
Minimum future lease payments, Due within next 12 months	$ 200.8
Minimum future lease payments, Due within next 2 years	229.6
Minimum future lease payments, Due within next 3 years	179.6
Minimum future lease payments, Due within next 4 years	167.7
Minimum future lease payments, Due within next 5 years	149.6
CAM [Member]
Property, Plant and Equipment [Line Items]
Leased aircraft, carrying value	$ 1,416.7	$ 1,404.4

XML

Debt Obligations (Schedule of Long Term Obligations) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Jan. 01, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total long term obligations	$ 1,273,787		$ 1,299,363
Unsecured Debt	697,213		697,162
Convertible Debt	256,118	$ (255,861)	231,646
Other Long-term Debt	10,456		10,555
Less: current portion	(631)		(628)
Total long term obligations, net	1,273,156		1,298,735
Revolving credit facility [Member]
Debt Instrument [Line Items]
Total long term obligations	310,000		360,000
line of credit, increase in maximum borrowing capacity	$ 800,000		$ 600,000

XML

Debt Obligations (Schedule of Long Term Debt Maturities) (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Long-term Debt, Fiscal Year Maturity [Abstract]
Total long term obligations	$ 1,273,787	$ 1,299,363

XML

Debt Obligations (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2020	Jan. 01, 2022	Dec. 31, 2021	Apr. 13, 2021	Jan. 28, 2020	Sep. 25, 2017
Debt Instrument [Line Items]
Long term obligations	$ 1,273,787				$ 1,299,363
Unsecured Debt	697,213				697,162
Convertible Debt	256,118			$ (255,861)	231,646
Unamortized Debt Issuance Expense				(2,889)
Debt Instrument, Unamortized Discount				0
Unsecured Debt [Member]
Debt Instrument [Line Items]
Debt Issuance Costs, Line of Credit Arrangements, Net	7,500				7,800
Unsubordinated term loan and Revolving credit facility [Member]
Debt Instrument [Line Items]
Maximum amount of common stock authorized for repurchase	100,000
Revolving credit facility [Member]
Debt Instrument [Line Items]
Long term obligations	$ 310,000				360,000
Variable interest rate	1.47%
Credit facility, revolving credit loan, remaining borrowing capacity	$ 474,900
line of credit, increase in maximum borrowing capacity	800,000				600,000
Bonds [Member]
Debt Instrument [Line Items]
Unsecured Debt						$ 200,000	$ 500,000
Debt Instrument, Interest Rate, Stated Percentage							4.75%
Proceeds from Issuance of Unsecured Debt		$ 205,500	$ 495,000
Convertible Debt [Member]
Debt Instrument [Line Items]
Convertible Debt	$ 258,750			$ (258,750)	258,750			$ 258,800
Debt Conversion, Converted Instrument, Rate	1.125%
Convertible note hedge shares								8,100
Warrants and Rights Outstanding	$ 38,500
Unamortized Debt Issuance Expense	(2,632)				(2,889)
Debt Instrument, Unamortized Discount	$ 0				$ (24,215)
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Debt Instrument [Line Items]
Convertible note hedge fair value								$ 56,100

XML

Commitments and Contingencies (Operating Lease Payments) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Operating Leased Assets [Line Items]
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 2,900	$ 900
Operating Lease, Weighted Average Discount Rate, Percent	2.30%		2.40%
Operating Lease, Weighted Average Remaining Lease Term	3 years 7 months 6 days		3 years 9 months 18 days
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2017	$ 15,330
Total minimum lease payments	61,078
lessee, operating lease, interest due	(2,486)
Operating Lease, Liability, Current	18,840		$ 18,783
Operating Lease, Liability, Noncurrent	42,238		$ 44,387
Operating Lease, Payments	5,200	$ 5,300
Property Subject to Operating Lease [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2018	18,036
2019	14,453
2020	10,618
2021	4,954
2022 and beyond	173
Lessee, Operating Lease, Liability, Payments, Due	$ 63,564

XML

Commitments and Contingencies (Commitments) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2020
Long-term Purchase Commitment [Line Items]
Long-term Purchase Commitment, Amount	$ 364,700
total government grant awarded			$ 75,800
Income Tax (Expense) Benefit, Continuing Operations, Government Grants		$ 28,000

XML

Commitments and Contingencies (Labor Unions) (Details) - Workforce Subject to Collective Bargaining Arrangements [Member] - Labor Unions [Member]	3 Months Ended
	Mar. 31, 2022
ABX [Member]
Concentration Risk [Line Items]
Percentage of the Company's Employees	5.60%
ATI [Member]
Concentration Risk [Line Items]
Percentage of the Company's Employees	9.20%
Omni Air International [Member]
Concentration Risk [Line Items]
Percentage of the Company's Employees	6.10%
Air Transport International, Flight Attendants [Member]
Concentration Risk [Line Items]
Percentage of the Company's Employees	0.60%
Omni Air International, Flight Attendants [Member] [Member]
Concentration Risk [Line Items]
Percentage of the Company's Employees	6.20%

XML

Pension and Other Post-Retirement Benefit Plans (Funded Status) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Pension Plans [Member]
Change in benefit obligation [Roll Forward]
Service cost	$ 0	$ 0
Interest cost	6,011	5,597
Change in plan assets [Roll Forward]
Employer contributions	800
Post-Retirement Healthcare Plans [Member]
Change in benefit obligation [Roll Forward]
Service cost	19	24
Interest cost	$ 15	$ 10

XML

Pension and Other Post-Retirement Benefit Plans (Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Pension Plans [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	$ 0	$ 0
Interest cost	6,011	5,597
Expected return on plan assets	(11,738)	(11,875)
Amortization of net (gain) loss	313	1,764
Net periodic benefit cost (income)	(5,414)	(4,514)
Post-Retirement Healthcare Plans [Member]
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost	19	24
Interest cost	15	10
Expected return on plan assets	0	0
Amortization of net (gain) loss	11	47
Net periodic benefit cost (income)	$ 45	$ 81

XML

Pension and Other Post-Retirement Benefit Plans (Cash Flows) (Details) - Pension Plans [Member] $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Employer contributions	$ 0.8
Estimated future employer contributions	$ 0.5

XML

Income Taxes (Narrative) (Details)	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Line Items]
Effective Income Tax Rate Reconciliation, Percent	(23.50%)
Forecast
Income Tax Disclosure [Line Items]
Effective Income Tax Rate Reconciliation, Percent	23.40%

XML

Income Taxes (Income Tax Provision (Benefit)) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Deferred taxes:
Total income tax expense from continuing operations	$ 12,812

XML

Income Taxes (Tax Rate Reconciliation) (Details)	3 Months Ended
	Mar. 31, 2022
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
Effective income tax rate	(23.50%)

XML

Derivative Instruments (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Sep. 25, 2017
Derivative [Line Items]
Pre-tax (charge) on derivative instruments	$ 2,696	$ 9,472
Net (gain) loss on financial instruments	$ (2,800)	$ (2,500)
March 31, 2022 One [Member] [Member] | Swap [Member]
Derivative [Line Items]
Stated Interest Rate	1.90%
Market Value (Liability)	$ 0		$ 221
Derivative Liability, Notional Amount	$ 0		50,000
March 31, 2022 Two [Member] [Member] [Member] | Swap [Member]
Derivative [Line Items]
Stated Interest Rate	1.95%
Market Value (Liability)	$ 0		341
Derivative Liability, Notional Amount	$ 0		75,000
March 31, 2023 [Member] | Swap [Member]
Derivative [Line Items]
Stated Interest Rate	2.425%
Market Value (Liability)	$ 833		3,041
Derivative Liability, Notional Amount	$ 131,250		$ 133,125
Convertible Debt [Member]
Derivative [Line Items]
Convertible note hedge shares				8,100

XML

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)	978,188	1,085,023
Granted (in shares)	285,867	274,606
Converted (in shares)	(118,222)	(115,930)
Forfeited (in shares)	(1,400)	0
Outstanding at end of period (in shares)	1,144,433	1,243,699
Vested (in shares)	362,594	357,499
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Outstanding at beginning of period, Weighted average grant-date fair value (in dollars per share)	$ 17.49	$ 17.14
Granted, Weighted average grant-date fair value (in dollars per share)	35.45	26.65
Converted, Weighted average grant-date fair value (in dollars per share)	24.69	25.55
Forfeited, Weighted average grant-date fair value (in dollars per share)	22.22	0
Outstanding at end of period, Weighted average grant-date fair value (in dollars per share)	21.23	18.46
Vested (in dollars per share)	$ 10.20	$ 9.26
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Share-based compensation expense	$ 1.7	$ 1.8
Unrecognized share-based compensation expense	$ 15.2
Unrecognized share-based compensation, weighted average recognition period	1 year 9 months 18 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period	3 years
Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Historical volatility period	3 years	3 years	3 years
Risk-free interest rate	2.50%
Expected volatility rate	38.30%
Market Condition Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Granted, Weighted average grant-date fair value (in dollars per share)	$ 46.20
Performance Condition Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Granted, Weighted average grant-date fair value (in dollars per share)	$ 33.84
Time-Based Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Number of additional outstanding shares issued (in shares)	1,436,783
Director [Member] | Time-Based Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Vested (in shares)	362,594
Director [Member] | Time-Based Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period	12 months

XML

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share Reconciliation [Abstract]
Earnings from continuing operations	$ 49,796	$ 42,290
fair value adjustment to warrants, net of tax	0	(5,355)
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities	760	0
Undistributed Earnings (Loss) from Continuing Operations Available to Common Shareholders, Diluted	$ 50,556	$ 36,935
Weighted-average shares outstanding for basic earnings per share (in shares)	73,888,000	59,447,000
Restricted stock (in shares)	392,039	487,200
Common equivalent shares:
Effect of stock-based compensation awards (in shares)	6,745,000	15,297,000
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities	8,111,000	0
Weighted-average shares outstanding assuming dilution (in shares)	88,744,000	74,744,000
Basic earnings per share from continuing operations (in dollars per share)	$ 0.67	$ 0.71
Diluted earnings per share from continuing operations (in dollars per share)	$ 0.57	$ 0.49

XML

Segment Information (Segment Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Segment Reporting Information [Line Items]
Operating Expenses	$ 416,066	$ 319,229
REVENUES	485,860	376,088
Customer revenues	485,860	376,088
Depreciation and amortization expense	82,071	71,051
Net unallocated interest expense	(11,399)	(14,522)
Net gain (loss) on financial instruments	2,696	9,472
Pre-tax earnings from continuing operations	65,085	55,102
Assets	3,286,929		$ 3,267,335
Income Tax Expense (Benefit)		12,812
Net Periodic Defined Benefits Expense (Reversal of Expense), Excluding Service Cost Component	5,388	4,457
Net earnings from continuing operations	49,796	42,290
Income Tax (Expense) Benefit, Continuing Operations, Government Grants		28,000
Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	485,860	376,088
Customer revenues	485,860	376,088
ACMI Services [Member]
Segment Reporting Information [Line Items]
REVENUES	330,090	247,131
Customer revenues	330,090	247,131
Depreciation and amortization expense	25,190	22,981
Segment earnings (loss)	22,165	21,259
Net unallocated interest expense	(3,378)	(4,523)
Assets	849,478		872,311
ACMI Services [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	330,084	247,126
Customer revenues	330,084	247,126
All other [Member]
Segment Reporting Information [Line Items]
REVENUES	102,535	93,698
Customer revenues	102,535	93,698
Depreciation and amortization expense	590	1,075
Segment earnings (loss)	1,551	389
Assets	176,777		177,012
All other [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	79,085	68,162
Customer revenues	79,085	68,162
CAM [Member]
Segment Reporting Information [Line Items]
REVENUES	106,905	83,277
Customer revenues	106,905	83,277
Depreciation and amortization expense	56,291	46,995
Segment earnings (loss)	34,995	21,462
Net unallocated interest expense	(7,705)	(9,226)
Assets	2,260,674		$ 2,218,012
CAM [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	76,691	60,800
Customer revenues	76,691	60,800
Significant Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net unallocated interest expense	(307)	(754)
Non-operating charges from a non-consolidating affiliate	(1,403)	(1,183)
Eliminate inter-segment revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	(53,670)	(48,018)
Customer revenues	(53,670)	(48,018)
Accounting Standards Update 2014-09 [Member]
Segment Reporting Information [Line Items]
Income Tax Expense (Benefit)	(15,289)
Accounting Standards Update 2014-09 [Member] | Ground Services [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	37,540	34,048
Customer revenues	37,540	34,048
Accounting Standards Update 2014-09 [Member] | All other [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	79,085	68,162
Customer revenues	79,085	68,162
Accounting Standards Update 2014-09 [Member] | Ground Services [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	25,101	23,460
Customer revenues	25,101	23,460
Accounting Standards Update 2014-09 [Member] | All Other non MRO or Ground Services [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	16,444	10,654
Customer revenues	$ 16,444	$ 10,654

XML

Segment Information (Narrative) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) segments	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Segment Reporting Information [Line Items]
REVENUES	$ 485,860	$ 376,088
Deferred Revenue, Revenue Recognized	3,500	2,700
Deferred Revenue	$ 10,000		$ 8,300
Number of reportable segments (in segments) | segments	2
Interest expense	$ 11,399	14,522
Deposit Contracts, Assets	0		$ 800
Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	485,860	376,088
ACMI Services [Member]
Segment Reporting Information [Line Items]
REVENUES	330,090	247,131
Interest expense	3,378	4,523
Property, Plant and Equipment, Additions	22,400
ACMI Services [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	330,084	247,126
CAM [Member]
Segment Reporting Information [Line Items]
REVENUES	106,905	83,277
Interest expense	7,705	9,226
Property, Plant and Equipment, Additions	85,000
non lease revenue	9,900	2,400
CAM [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
REVENUES	76,691	$ 60,800
Flight Equipment [Member]
Segment Reporting Information [Line Items]
Operating Leases, Future Minimum Payments Receivable, Current	200,800
Operating Leases, Future Minimum Payments Receivable, in Two Years	229,600
Operating Leases, Future Minimum Payments Receivable, in Three Years	179,600
Operating Leases, Future Minimum Payments Receivable, in Four Years	167,700
Operating Leases, Future Minimum Payments Receivable, in Five Years	149,600
Operating Leases, Future Minimum Payments Receivable, Thereafter	$ 343,300

XML

Segment Information (Entity-Wide Disclosures) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Customer revenues	$ 485,860	$ 376,088
Customer Revenues [Member]
Segment Reporting Information [Line Items]
Customer revenues	485,860	376,088
CAM [Member]
Segment Reporting Information [Line Items]
Customer revenues	106,905	83,277
CAM [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
Customer revenues	76,691	60,800
All other [Member]
Segment Reporting Information [Line Items]
Customer revenues	102,535	93,698
All other [Member] | Customer Revenues [Member]
Segment Reporting Information [Line Items]
Customer revenues	$ 79,085	$ 68,162

XML

Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fair Value Adjustment of Warrants	$ (100)	$ 6,900
Income Tax (Expense) Benefit, Continuing Operations, Government Grants		28,000
REVENUES	485,860	376,088
Net earnings from continuing operations	49,796	42,290
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES	$ 0	$ 0
WEIGHTED AVERAGE SHARES [Abstract]
Basic (in shares)	73,888	59,447
Diluted (in shares)	88,744	74,744
Earnings Per Share, Basic and Diluted [Abstract]
Basic (in dollars per share)	$ 0.67	$ 0.71
Diluted (in dollars per share)	$ 0.57	$ 0.49
ACMI Services [Member]
REVENUES	$ 330,090	$ 247,131

XML

Acquisition of Business (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Business Acquisition [Line Items]
REVENUES	$ 485,860	$ 376,088
Goodwill	395,974		$ 395,974
Long-term Debt	1,273,787		1,299,363
Revolving Credit Facility [Member]
Business Acquisition [Line Items]
Long-term Debt	$ 310,000		$ 360,000

XML

Investments in Non-Consolidated Affiliates (Unaudited) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Noncontrolling Interest [Line Items]
Assets, Current	$ 331,151		$ 352,841
NET EARNINGS	49,796	$ 42,290
Liabilities, Current	317,501		312,631
Liabilities	1,932,889		$ 1,944,958
REVENUES	$ 485,860	$ 376,088