EX-99.1 2 a2023q2earningsrelease.htm EX-99.1 Document


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ATSG Reports Second Quarter 2023 Results

–Projects Record 2023 Freighter Lease Deployments
With Lower Full Year Capital Expenditure Requirements
–Increases 2023 Adjusted EPS Guidance

WILMINGTON, OH, August 3, 2023 - Air Transport Services Group, Inc. (Nasdaq: ATSG), the leading provider of medium wide-body aircraft leasing, contracted air transportation, and related services, today reported consolidated financial results for the second quarter ended June 30, 2023. Those results, as compared with the same quarter in 2022 were as follows:

Second Quarter 2023 Results
•Revenues of $529 million, up 4%
•GAAP EPS (basic) from Continuing Operations of $0.54, down $0.19
•Adjusted EPS* from Continuing Operations of $0.57, versus $0.59 diluted
•Pretax Earnings of $50 million, down from $69 million.
•Adjusted Pretax* Earnings of $58 million, down from $67 million
•Adjusted EBITDA* of $157 million, comparable to prior year
•3.9 million shares repurchased since October 2022, including 950,000 shares in the second quarter

Rich Corrado, President and CEO of ATSG, said, “Our results in the second quarter reflect a rebound from the first quarter in our passenger airline operations, including both improved revenues and cost efficiencies, and the benefit of 13 more Boeing 767-300 freighters in service at June 30 this year versus a year ago. Adjusted EBITDA was in-line with the prior year period, despite continuing inflationary effects on our operations versus the second quarter of 2022. We remain confident in executing our plan to lease nineteen newly converted freighters in 2023, including nine leased to date. We continue to expect attractive returns on what we now project will be $785 million in 2023 capital spending, down $65 million compared with prior guidance.”

* Adjusted EPS (Earnings per Share), Adjusted Pretax Earnings, Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and Adjusted Free Cash Flow are non-GAAP financial measures and are defined and reconciled to GAAP measures at the end of this release.


Segment Results
Cargo Aircraft Management (CAM)
•Aircraft leasing and related revenues from external customers in the second quarter were up 4% compared with the prior year quarter, driven by higher average lease rates as more 767-300s have been deployed, offset in part by fewer leased 767-200 aircraft.
•Pre-tax earnings decreased 22% to $31 million versus the prior year quarter. Earnings were impacted by the scheduled return of ten 767-200s since June 2022, including seven in the second quarter this year. Interest expense versus the prior year period increased $5 million, and depreciation was up $2 million, also impacting pre-tax earnings.
•CAM deployed one 767-300 leased freighter to an external customer during the quarter. Six more leased freighters have been deployed since June 30, 2023, including four more 767-300s, and two A321-200s.
•Twenty-three aircraft are currently in or awaiting conversion to freighters. That total includes seven A321 aircraft and sixteen 767-300s.

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ACMI Services
•Pre-tax earnings were $24 million in the second quarter, up 10% versus the prior year quarter, driven by improved performance of passenger operations, including both military and commercial flying, and greater operating efficiencies.
•Revenue block hours for ATSG's cargo airlines were up 1% for the second quarter while operating a net three more 767 freighters compared with the prior-year period. Cargo block hours were affected by the loss of certain long-haul ACMI flying between the U.S. and Europe versus 2022.
•Hours flown by the four Boeing 757 combination freighter-passenger aircraft were up significantly due to the resumption of a Pacific route in late 2022.
•Passenger block hours, including combi flying, decreased 2%. The prior-year quarter included passenger hours flown for additional routes to Europe.

2023 Outlook
ATSG continues to expect Adjusted EBITDA for 2023 to be in a range of $610 million to $620 million, and now expects full year Adjusted EPS in a range of $1.65 to $1.80, ten cents higher than prior guidance, based on second-half leased freighter deployment projections and stronger ACMI Services performance.

"A solid July for both freighter leasing and passenger flying has positioned us to achieve our second-half 2023 goals, with sequential improvement each quarter," Corrado said.

ATSG has decreased its capital spending projection for 2023 by $65 million to $785 million, including $240 million in sustaining capex and $545 million for growth. The decrease in growth capex principally reflects two fewer A321 aircraft purchases this year for conversion in 2024. Lower sustaining capex reflects fewer than planned overhauls of engines for Boeing 767-200 freighters.

Corrado noted that the fundamental driver of midsize freighter leasing - rapid fulfillment of e-commerce purchases via air express networks - will persist over the long term.

“Global e-commerce growth projections remain strong, and our owned fleet and conversion pipeline stand ready to meet future demand, further supported by the need to replace aging, less fuel-efficient aircraft over the next decade," he said. "Our freighters, including Boeing 767s, Airbus A321s, and Airbus A330s, remain the most efficient and reliable solutions for these markets.”

Corrado finished by saying, “Capital investments in 2024 are now expected to be lower than 2023 levels. That gives us the option to pursue other capital allocation alternatives that may yield even better returns for shareholders.”

Non-GAAP Financial Measures
This release, including the attached non-GAAP reconciliation tables, contains financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States ("non-GAAP financial measures"). Management uses these non-GAAP financial measures to evaluate historical results and project future results. Management believes that these non-GAAP financial measures assist in highlighting operational trends, facilitating period-over-period comparisons, and providing additional clarity about events and trends affecting core operating performance. Disclosing these non-GAAP financial measures provides insight to investors about additional metrics that management uses to evaluate past performance and prospects for future performance. Non-GAAP measures should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP and may be calculated differently by other companies.

The historical non-GAAP financial measures included in this release are reconciled to the most directly comparable financial measure calculated and presented in accordance with GAAP in the non-GAAP Reconciliation tables included later in this release. The Company does not provide a reconciliation of projected Adjusted EBITDA or Adjusted EPS because it is unable to predict with reasonable accuracy the value of certain adjustments. Certain adjustments can be significantly impacted by the re-measurements of financial instruments including stock warrants issued to a customer. The Company’s earnings on a GAAP basis, including its earnings per share on a GAAP basis, and the non-GAAP adjustments for gains and losses resulting from the re-measurement of stock warrants, will depend on the future prices of ATSG stock, interest rates, and other assumptions which are highly uncertain.

Conference Call

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ATSG will host an investor conference call on Friday, August 4, 2023, at 10 a.m. Eastern Time to review its financial results for the second quarter of 2023, and its outlook for remainder of the year. Live call participants must register via this link that is also available at ATSG’s website, www.atsginc.com under “Investors” and “Presentations.” Once registered, call participants will receive dial-in numbers and a unique Personal Identification Number (PIN) that must be entered to join the live call. Listen-only access to live and replay versions of the call, including slides, will be available via a webcast link at the same ATSG website location. Slides that accompany management’s discussion of its quarterly results also may be downloaded there shortly before the start of the call at 10 a.m.

About ATSG
ATSG is a leading provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and operator of converted Boeing 767 freighter aircraft. Through its principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft leasing, air cargo lift, passenger ACMI and charter services, aircraft maintenance services and airport ground services. ATSG's subsidiaries include ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne Maintenance and Engineering Services, Inc., including its subsidiary, Pemco World Air Services, Inc.; Air Transport International, Inc.; Cargo Aircraft Management, Inc.; and Omni Air International, LLC. For more information, please see www.atsginc.com.

Except for historical information contained herein, the matters discussed in this release contain forward-looking statements that involve risks and uncertainties. A number of important factors could cause Air Transport Services Group, Inc.'s ("ATSG's") actual results to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to: (i) unplanned changes in the market demand for our assets and services, including the loss of customers or a reduction in the level of services we perform for customers; (ii) our operating airlines' ability to maintain on-time service and control costs; (iii) the cost and timing with respect to which we are able to purchase and modify aircraft to a cargo configuration; (iv) fluctuations in ATSG's traded share price and in interest rates, which may result in mark-to-market charges on certain financial instruments; (v) the number, timing, and scheduled routes of our aircraft deployments to customers; (vi) our ability to remain in compliance with key agreements with customers, lenders and government agencies; (vii) the impact of current supply chain constraints both within and outside the United States, which may be more severe or persist longer than we currently expect; (viii) the impact of a competitive labor market, which could restrict our ability to fill key positions; and (ix) changes in general economic and/or industry-specific conditions, including inflation. Other factors that could cause ATSG’s actual results to differ materially from those indicated by such forward-looking statements are contained from time to time in ATSG's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K and quarterly reports on Form 10-Q. Readers should carefully review this release and should not place undue reliance on ATSG's forward-looking statements. These forward-looking statements were based on information, plans and estimates as of the date of this release. Except as may be required by applicable law, ATSG undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Contact:
Quint Turner, ATSG Inc. Chief Financial Officer
937-366-2303


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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(In thousands, except per share data)
Three Months EndedSix Months Ended
 June 30,June 30,
 2023202220232022
REVENUES$529,339 $509,668 $1,030,434 $995,528 
OPERATING EXPENSES
Salaries, wages and benefits170,458 162,797 347,173 324,559 
Depreciation and amortization82,691 81,372 167,419 163,443 
Maintenance, materials and repairs50,436 39,407 94,269 75,116 
Fuel67,271 73,102 134,026 133,460 
Contracted ground and aviation services19,682 20,153 37,470 38,484 
Travel31,222 28,480 60,775 52,679 
Landing and ramp4,744 4,085 8,868 8,663 
Rent8,274 7,068 16,386 13,731 
Insurance2,684 2,326 5,232 4,878 
Other operating expenses22,136 20,361 41,652 40,204 
459,598 439,151 913,270 855,217 
OPERATING INCOME69,741 70,517 117,164 140,311 
OTHER INCOME (EXPENSE)
Interest income180 15 395 24 
Non-service component of retiree benefit credits(3,218)5,388 (6,436)10,776 
Net gain on financial instruments1,818 6,011 78 8,707 
Loss from non-consolidated affiliates(2,107)(3,220)(2,513)(4,623)
Interest expense(16,672)(9,461)(32,377)(20,860)
(19,999)(1,267)(40,853)(5,976)
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES49,742 69,250 76,311 134,335 
INCOME TAX EXPENSE(11,720)(15,040)(18,148)(30,329)
EARNINGS FROM CONTINUING OPERATIONS38,022 54,210 58,163 104,006 
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX— 882 — 882 
NET EARNINGS$38,022 $55,092 $58,163 $104,888 
EARNINGS PER SHARE - CONTINUING OPERATIONS
Basic$0.54 $0.73 $0.82 $1.41 
Diluted$0.49 $0.61 $0.73 $1.18 
WEIGHTED AVERAGE SHARES - CONTINUING OPERATIONS
Basic70,722 73,980 71,259 73,934 
Diluted79,515 89,449 81,276 89,098 





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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
 June 30, 2023December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$43,150 $27,134 
Accounts receivable, net of allowance of $1,186 in 2023 and $939 in 2022218,312 301,622 
Inventory57,648 57,764 
Prepaid supplies and other32,387 31,956 
TOTAL CURRENT ASSETS351,497 418,476 
Property and equipment, net2,678,980 2,402,408 
Customer incentive69,109 79,650 
Goodwill and acquired intangibles487,534 492,642 
Operating lease assets60,808 74,070 
Other assets104,637 122,647 
TOTAL ASSETS$3,752,565 $3,589,893 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$269,805 $192,992 
Accrued salaries, wages and benefits51,509 56,498 
Accrued expenses11,061 12,466 
Current portion of debt obligations645 639 
Current portion of lease obligations21,771 23,316 
Unearned revenue38,654 21,546 
TOTAL CURRENT LIABILITIES393,445 307,457 
Long term debt1,514,737 1,464,285 
Stock obligations1,762 695 
Post-retirement obligations32,612 35,334 
Long term lease obligations40,032 51,575 
Other liabilities54,565 62,861 
Deferred income taxes272,208 255,180 
STOCKHOLDERS’ EQUITY:
Preferred stock, 20,000,000 shares authorized, including 75,000 Series A Junior Participating Preferred Stock— — 
Common stock, par value $0.01 per share; 150,000,000 shares authorized; 70,761,243 and 72,327,758 shares issued and outstanding in 2023 and 2022, respectively708 723 
Additional paid-in capital951,463 986,303 
Retained earnings587,045 528,882 
Accumulated other comprehensive loss(96,012)(103,402)
TOTAL STOCKHOLDERS’ EQUITY1,443,204 1,412,506 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,752,565 $3,589,893 


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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED SUMMARY OF CASH FLOWS (UNAUDITED)
(In thousands)

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
OPERATING CASH FLOWS$192,198 $124,541 $408,576 $250,209 
INVESTING ACTIVITIES:
Aircraft acquisitions and freighter conversions(138,556)(133,378)(303,164)(205,293)
Planned aircraft maintenance, engine overhauls and other non-aircraft additions to property and equipment(55,568)(52,580)(109,761)(88,917)
Proceeds from sales of property and equipment585 78 10,445 154 
Acquisitions and investments in businesses— (16,545)(800)(16,545)
TOTAL INVESTING CASH FLOWS(193,539)(202,425)(403,280)(310,601)
FINANCING ACTIVITIES:
Principal payments on debt(65,103)(205,210)(90,317)(295,310)
Proceeds from borrowings35,000 410,000 140,000 450,000 
Payments for financing costs(27)— (511)— 
Bond Repurchase— (115,204)— (115,204)
Purchase of common stock(14,956)— (36,874)— 
Taxes paid for conversion of employee awards(25)(89)(1,578)(1,439)
TOTAL FINANCING CASH FLOWS(45,111)89,497 10,720 38,047 
NET INCREASE (DECREASE) IN CASH$(46,452)$11,613 $16,016 $(22,345)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD$89,602 $35,538 $27,134 $69,496 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$43,150 $47,151 $43,150 $47,151 

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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
PRETAX EARNINGS FROM CONTINUING OPERATIONS AND ADJUSTED PRETAX EARNINGS SUMMARY
NON-GAAP RECONCILIATION
(In thousands)
Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Revenues
CAM
Aircraft leasing and related revenues$115,281 $114,703 $232,355 $226,638 
Lease incentive amortization(3,903)(5,029)(8,933)(10,059)
Total CAM111,378 109,674 223,422 216,579 
ACMI Services366,187 347,498 700,314 677,588 
Other Activities110,789 107,879 221,377 210,414 
Total Revenues588,354 565,051 1,145,113 1,104,581 
Eliminate internal revenues(59,015)(55,383)(114,679)(109,053)
Customer Revenues$529,339 $509,668 $1,030,434 $995,528 
Pretax Earnings (Loss) from Continuing Operations
CAM, inclusive of interest expense31,020 39,617 65,220 74,612 
ACMI Services, interest expense24,054 21,837 21,643 44,002 
Other Activities(1,299)191 (645)1,742 
Net, unallocated interest expense(526)(574)(1,036)(881)
Non-service components of retiree benefit credit(3,218)5,388 (6,436)10,776 
Net gain on financial instruments1,818 6,011 78 8,707 
Loss from non-consolidated affiliates(2,107)(3,220)(2,513)(4,623)
Earnings from Continuing Operations before Income Taxes (GAAP)
$49,742 $69,250 $76,311 $134,335 
Adjustments to Pretax Earnings from Continuing Operations
Add customer incentive amortization4,719 5,822 10,541 11,620 
Add loss from non-consolidated affiliates2,107 3,220 2,513 4,623 
Less net gain on financial instruments(1,818)(6,011)(78)(8,707)
Less non-service components of retiree benefit credit3,218 (5,388)6,436 (10,776)
Add net charges for hangar foam incident(28)— 13 — 
Adjusted Pretax Earnings (non-GAAP)
$57,940 $66,893 $95,736 $131,095 
Adjusted Pretax Earnings excludes certain items included in GAAP-based pretax Earnings (Loss) from Continuing Operations before Income Taxes because these items are distinctly different in their predictability among periods or not closely related to our operations. Presenting this measure provides investors with a comparative metric of fundamental operations, while highlighting changes to certain items among periods. Adjusted Pretax Earnings should not be considered an alternative to Earnings from Continuing Operations Before Income Taxes or any other performance measure derived in accordance with GAAP.


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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
ADJUSTED EARNINGS FROM CONTINUING OPERATIONS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
NON-GAAP RECONCILIATION
(In thousands)

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Earnings (Loss) from Continuing Operations Before Income Taxes$49,742 $69,250 $76,311 $134,335 
Interest Income(180)(15)(395)(24)
Interest Expense16,672 9,461 32,377 20,860 
Depreciation and Amortization82,691 81,372 167,419 163,443 
EBITDA from Continuing Operations (non-GAAP)$148,925 $160,068 $275,712 $318,614 
Add customer incentive amortization4,719 5,822 10,541 11,620 
Add start-up loss from non-consolidated affiliates2,107 3,220 2,513 4,623 
Less net gain on financial instruments(1,818)(6,011)(78)(8,707)
Add non-service components of retiree benefit credits3,218 (5,388)6,436 (10,776)
       Add net charges for hangar foam incident(28)— 13 — 
Adjusted EBITDA (non-GAAP)$157,123 $157,711 $295,137 $315,374 

Management uses Adjusted EBITDA to assess the performance of its operating results among periods. It is a metric that facilitates the comparison of financial results of underlying operations. Additionally, these non-GAAP adjustments are similar to the adjustments used by lenders in the Company’s senior secured credit facility to assess financial performance and determine the cost of borrowed funds. The adjustments also remove the non-service cost components of retiree benefit plans because they are not closely related to ongoing operating activities. To improve comparability between periods, the adjustments also exclude from EBITDA from Continuing Operations charges related to the discharge of a fire suppression system in the Company's aircraft hangar, net of related insurance recoveries. Management presents EBITDA from Continuing Operations, a commonly referenced metric, as a subtotal toward computing Adjusted EBITDA.
 
EBITDA from Continuing Operations is defined as Earnings (Loss) from Continuing Operations Before Income Taxes plus net interest expense, depreciation, and amortization expense. Adjusted EBITDA is defined as EBITDA from Continuing Operations less financial instrument revaluation gains or losses, non-service components of retiree benefit costs including pension plan settlements, amortization of warrant-based customer incentive costs recorded in revenue, costs from non-consolidated affiliates and charges related to the discharge of a fire suppression system, net of insurance recoveries.
 


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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
ADJUSTED FREE CASH FLOW
NON-GAAP RECONCILIATION
(In thousands)


Three Months EndedSix Months EndedTrailing 12 Months Ended
June 30,June 30,June 30,
20232022202320222023
OPERATING CASH FLOWS (GAAP)
$192,198 $124,541 $408,576 $250,209 $630,487 
Sustaining capital expenditures(55,568)(52,580)(109,761)(88,917)(207,680)
ADJUSTED FREE CASH FLOW (non-GAAP)
$136,630 $71,961 $298,815 $161,292 $422,807 
Sustaining capital expenditures includes cash outflows for planned aircraft maintenance, engine overhauls, information systems and other non-aircraft additions to property and equipment. It does not include expenditures for aircraft acquisitions and related passenger-to-freighter conversion costs.

Adjusted Free Cash Flow (non-GAAP) includes cash flow from operations net of expenditures for planned aircraft maintenance, engine overhauls and other non-aircraft additions to property and equipment. Management believes that adjusting GAAP operating cash flows is useful for investors to evaluate the company's ability to generate adjusted free cash flow for growth initiatives, debt service, cash returns for shareholders or other discretionary allocations of capital.



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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE
NON-GAAP RECONCILIATION
(In thousands)
Management presents Adjusted Earnings and Adjusted Earnings Per Share, both non-GAAP measures, to provide additional information regarding earnings per share without the volatility otherwise caused by the items below among periods.
Three Months EndedSix Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
$$ Per Share$$ Per Share$$ Per Share$$ Per Share
Earnings from Continuing Operations - basic (GAAP)$38,022 $54,210 $58,163 $104,006 
Gain from warrant revaluation, net tax1
— (107)(148)(50)
Convertible notes interest charges, net of tax 2
780 762 1,556 1,522 
Earnings from Continuing Operations - diluted (GAAP)38,802 $0.49 54,865 $0.61 59,571 $0.73 105,478 $1.18 
Adjustments, net of tax
Customer incentive amortization3
3,665 0.05 4,493 0.05 8,211 0.11 8,968 0.10 
Non-service component of retiree benefits4
2,499 0.03 (4,158)(0.05)5,012 0.06 (8,316)(0.09)
Financial instrument revaluations5
(1,411)(0.02)(4,533)(0.05)95 — (6,671)(0.07)
Loss from affiliates6
1,636 0.02 2,485 0.03 1,953 0.02 3,568 0.04 
Hangar foam incident7
(22)— — — 10 — — — 
Adjusted Earnings and Adjusted Earnings Per Share (non-GAAP)$45,169 $0.57 $53,152 $0.59 $74,852 $0.92 $103,027 $1.16 
SharesSharesSharesShares
Weighted Average Shares - diluted79,515 89,449 81,276 89,098 
This presentation does not give effect to convertible note hedges the Company purchased having the same number of the Company's common shares, 8.1 million shares, and the same strike price of $31.90, that underlie the Convertible Notes. The convertible note hedges are expected to reduce the potential equity dilution with respect to the Company's common stock upon conversion of the Convertible Notes.
Adjusted Earnings and Adjusted Earnings Per Share should not be considered as alternatives to Earnings from Continuing Operations, Weighted Average Shares - diluted or Earnings Per Share from Continuing Operations or any other performance measure derived in accordance with GAAP. Adjusted Earnings and Adjusted Earnings Per Share should not be considered in isolation or as a substitute for analysis of the company's results as reported under GAAP.

1.Under U.S. GAAP, certain warrants are reflected as a liability and unrealized warrant gains are typically removed from diluted earnings per share (“EPS”) calculations, while unrealized warrant losses are not removed because they are dilutive to EPS. For all periods presented, additional shares assumes that Amazon net settled its remaining warrants during each period.
2.Application of accounting standard ASU No. 2020-06, "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" requires convertible debt to be treated under the "if-convert method" for EPS.
3.Removes the amortization of the warrant-based customer incentives which are recorded against revenue over the term of the related aircraft leases and customer contracts.
4.Removes the non-service component of post-retirement costs and credits.
5.Removes gains and losses from period end financial instruments revaluations, including derivative interest rate instruments, customer warrant and sale option.
6.Removes losses for the Company's non-consolidated affiliates.
7.Removes charges and gains related to the discharge of a fire suppression system in the Company's aircraft hangar, net of related insurance recoveries.

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AIR TRANSPORT SERVICES GROUP, INC. AND SUBSIDIARIES
AIRCRAFT FLEET

Aircraft Types
June 30, 2022December 31, 2022June 30, 2023December 31, 2023 Projected
FreighterPassengerFreighterPassengerFreighterPassengerFreighterPassenger
B767-200333323243213
B767-300708788838938
B777-200—3—3—3—3
B757 Combi—4—4—4—4
A321-200——————5—
Total Aircraft in Service10318110181071811918
In or awaiting cargo conversion
B767-30014—15—20—12—
A321 5—7—9—4—
A330——————3—
B767 staging for lease1———2—2—
Total Aircraft12318132181381814018
Aircraft in Service Deployments
June 30December 31,June 30December 31,
2022202220232023 Projected
Dry leased without CMI37393849
Dry leased with CMI52524847
Customer provided for CMI7131516
ACMI/Charter1
25242425

1.ACMI/Charter includes four Boeing 767 passenger aircraft leased from external companies.