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Delaware
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26-1631624
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I. FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 5.
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Item 6.
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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2013
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2012
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2013
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2012
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||||||||
REVENUES
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$
|
140,877
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$
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153,826
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$
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423,060
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$
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452,886
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OPERATING EXPENSES
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Salaries, wages and benefits
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41,498
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44,153
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126,771
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135,827
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Fuel
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11,356
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12,038
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38,157
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39,962
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Maintenance, materials and repairs
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24,644
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26,751
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71,783
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75,135
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Depreciation and amortization
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23,392
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21,057
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66,077
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62,871
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Travel
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4,409
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5,618
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13,908
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17,162
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Rent
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6,958
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6,745
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20,528
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18,719
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Landing and ramp
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2,227
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3,877
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8,264
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11,823
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Insurance
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1,559
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1,944
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4,466
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5,780
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Other operating expenses
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8,224
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9,348
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25,914
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27,908
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||||
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124,267
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131,531
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375,868
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395,187
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OPERATING INCOME
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16,610
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22,295
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47,192
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57,699
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OTHER INCOME (EXPENSE)
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Interest income
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17
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38
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56
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104
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Interest expense
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(3,814
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)
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(3,668
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)
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(10,500
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)
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(10,886
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)
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Net gain (loss) on derivative instruments
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(317
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)
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294
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425
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956
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(4,114
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)
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(3,336
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)
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(10,019
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(9,826
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)
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EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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12,496
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18,959
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37,173
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47,873
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INCOME TAX EXPENSE
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(4,697
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)
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(7,403
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)
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(13,958
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)
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(18,436
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)
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EARNINGS FROM CONTINUING OPERATIONS
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7,799
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11,556
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23,215
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29,437
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES
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—
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(186
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)
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(2
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(576
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)
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NET EARNINGS
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$
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7,799
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$
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11,370
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$
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23,213
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$
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28,861
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BASIC EARNINGS PER SHARE
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Continuing operations
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$
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0.12
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$
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0.18
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$
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0.36
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$
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0.46
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Discontinued operations
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—
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—
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—
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(0.01
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)
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TOTAL BASIC EARNINGS PER SHARE
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$
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0.12
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$
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0.18
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$
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0.36
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$
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0.45
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DILUTED EARNINGS PER SHARE
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Continuing operations
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$
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0.12
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$
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0.18
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$
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0.36
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$
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0.46
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Discontinued operations
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—
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—
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—
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(0.01
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)
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TOTAL DILUTED EARNINGS PER SHARE
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$
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0.12
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$
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0.18
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$
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0.36
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$
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0.45
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||||||||
WEIGHTED AVERAGE SHARES
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||||||||
Basic
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64,052
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63,456
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63,972
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63,439
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Diluted
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65,036
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64,667
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64,807
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64,478
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
|
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September 30,
|
||||||||||||
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2013
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2012
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2013
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2012
|
||||||||
NET EARNINGS
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$
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7,799
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$
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11,370
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$
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23,213
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$
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28,861
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OTHER COMPREHENSIVE INCOME (LOSS):
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||||||||
Defined Benefit Pension
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1,958
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1,682
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5,874
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|
5,047
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|
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Defined Benefit Post-Retirement
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(834
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)
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(806
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)
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(2,502
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)
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(2,419
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)
|
||||
Gains and Losses on Derivatives
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(7
|
)
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(9
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)
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(23
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)
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(27
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)
|
||||
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||||||||
TOTAL OTHER COMPREHENSIVE INCOME
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1,117
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|
867
|
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$
|
3,349
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$
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2,601
|
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||
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|
|
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||||||||
TOTAL COMPREHENSIVE INCOME
|
$
|
8,916
|
|
|
$
|
12,237
|
|
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$
|
26,562
|
|
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$
|
31,462
|
|
|
September 30,
|
|
December 31,
|
||||
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2013
|
|
2012
|
||||
ASSETS
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|
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CURRENT ASSETS:
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|
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Cash and cash equivalents
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$
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16,864
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$
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15,442
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Accounts receivable, net of allowance of $543 in 2013 and $749 in 2012
|
45,680
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47,858
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|
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Inventory
|
8,952
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|
|
9,430
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|
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Prepaid supplies and other
|
11,075
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|
|
8,855
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|
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Deferred income taxes
|
19,154
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|
|
19,154
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|
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Aircraft and engines held for sale
|
2,491
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|
3,360
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TOTAL CURRENT ASSETS
|
104,216
|
|
|
104,099
|
|
||
Property and equipment, net
|
848,550
|
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|
818,924
|
|
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Other assets
|
21,427
|
|
|
20,462
|
|
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Intangibles
|
4,958
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|
|
5,146
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|
||
Goodwill
|
86,980
|
|
|
86,980
|
|
||
TOTAL ASSETS
|
$
|
1,066,131
|
|
|
$
|
1,035,611
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
32,988
|
|
|
$
|
36,521
|
|
Accrued salaries, wages and benefits
|
22,936
|
|
|
22,917
|
|
||
Accrued expenses
|
8,258
|
|
|
8,502
|
|
||
Current portion of debt obligations
|
23,572
|
|
|
21,265
|
|
||
Unearned revenue
|
9,771
|
|
|
10,311
|
|
||
TOTAL CURRENT LIABILITIES
|
97,525
|
|
|
99,516
|
|
||
Long term debt obligations
|
368,331
|
|
|
343,216
|
|
||
Post-retirement liabilities
|
149,326
|
|
|
185,097
|
|
||
Other liabilities
|
61,592
|
|
|
62,104
|
|
||
Deferred income taxes
|
62,066
|
|
|
46,422
|
|
||
TOTAL LIABILITIES
|
738,840
|
|
|
736,355
|
|
||
Commitments and contingencies (Note G)
|
|
|
|
||||
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; 75,000,000 shares authorized; 64,672,632 and 64,130,056 shares issued and outstanding in 2013 and 2012, respectively
|
647
|
|
|
641
|
|
||
Additional paid-in capital
|
524,554
|
|
|
523,087
|
|
||
Accumulated deficit
|
(83,972
|
)
|
|
(107,185
|
)
|
||
Accumulated other comprehensive loss
|
(113,938
|
)
|
|
(117,287
|
)
|
||
TOTAL STOCKHOLDERS’ EQUITY
|
327,291
|
|
|
299,256
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
1,066,131
|
|
|
$
|
1,035,611
|
|
|
|
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2013
|
|
2012
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net earnings from continuing operations
|
$
|
23,215
|
|
|
$
|
29,437
|
|
Net loss from discontinued operations
|
(2
|
)
|
|
(576
|
)
|
||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
66,077
|
|
|
62,871
|
|
||
Pension and post-retirement
|
5,295
|
|
|
4,172
|
|
||
Deferred income taxes
|
13,736
|
|
|
17,682
|
|
||
Amortization of stock-based compensation
|
2,123
|
|
|
2,668
|
|
||
Amortization of DHL promissory note
|
(4,650
|
)
|
|
(4,650
|
)
|
||
Net gain on derivative instruments
|
(425
|
)
|
|
(956
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
2,183
|
|
|
2,618
|
|
||
Inventory and prepaid supplies
|
(2,516
|
)
|
|
(2,509
|
)
|
||
Accounts payable
|
(157
|
)
|
|
(4,811
|
)
|
||
Unearned revenue
|
(5,676
|
)
|
|
4,002
|
|
||
Accrued expenses, salaries, wages, benefits and other liabilities
|
1,520
|
|
|
3,811
|
|
||
Pension and post-retirement liabilities
|
(35,771
|
)
|
|
(24,689
|
)
|
||
Other
|
(3,439
|
)
|
|
(2,106
|
)
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
61,513
|
|
|
86,964
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(96,766
|
)
|
|
(108,339
|
)
|
||
Proceeds from property and equipment
|
1,337
|
|
|
3,484
|
|
||
NET CASH (USED IN) INVESTING ACTIVITIES
|
(95,429
|
)
|
|
(104,855
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Principal payments on long term obligations
|
(47,928
|
)
|
|
(9,399
|
)
|
||
Proceeds from bank borrowings
|
80,000
|
|
|
25,000
|
|
||
Reimbursement of hangar construction costs
|
3,266
|
|
|
—
|
|
||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
35,338
|
|
|
15,601
|
|
||
|
|
|
|
||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
1,422
|
|
|
(2,290
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
15,442
|
|
|
30,503
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
16,864
|
|
|
$
|
28,213
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
||||
Interest paid, net of amount capitalized
|
$
|
9,976
|
|
|
$
|
9,240
|
|
Federal alternative minimum and state income taxes paid
|
$
|
1,014
|
|
|
$
|
272
|
|
SUPPLEMENTAL NON-CASH INFORMATION:
|
|
|
|
||||
Debt extinguished
|
$
|
4,650
|
|
|
$
|
4,650
|
|
Accrued capital expenditures
|
$
|
1,394
|
|
|
$
|
15,390
|
|
DC-8 combi aircraft and flight equipment
|
Less than 1 year
|
Boeing 767 and 757 aircraft and flight equipment
|
10 to 20 years
|
Support equipment
|
5 to 10 years
|
Vehicles and other equipment
|
3 to 8 years
|
•
|
Level 1:
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Level 2:
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3:
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include items where the determination of fair value requires significant management judgment or estimation.
|
|
ACMI Services
|
|
CAM
|
|
Total
|
||||||
Carrying value as of December 31, 2012
|
$
|
52,585
|
|
|
$
|
34,395
|
|
|
$
|
86,980
|
|
Carrying value as of September 30, 2013
|
$
|
52,585
|
|
|
$
|
34,395
|
|
|
$
|
86,980
|
|
|
|
Customer
|
|
Airline
|
|
|
||||||
|
|
Relationships
|
|
Certificates
|
|
Total
|
||||||
Carrying value as of December 31, 2012
|
|
$
|
2,146
|
|
|
$
|
3,000
|
|
|
$
|
5,146
|
|
Amortization
|
|
(188
|
)
|
|
—
|
|
|
(188
|
)
|
|||
Carrying value as of September 30, 2013
|
|
$
|
1,958
|
|
|
$
|
3,000
|
|
|
$
|
4,958
|
|
As of September 30, 2013
|
Fair Value Measurement Using
|
|
Total
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents—money market
|
$
|
20
|
|
|
$
|
3,797
|
|
|
$
|
—
|
|
|
$
|
3,817
|
|
Total Assets
|
$
|
20
|
|
|
$
|
3,797
|
|
|
$
|
—
|
|
|
$
|
3,817
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
(2,721
|
)
|
|
$
|
—
|
|
|
$
|
(2,721
|
)
|
Total Liabilities
|
$
|
—
|
|
|
$
|
(2,721
|
)
|
|
$
|
—
|
|
|
$
|
(2,721
|
)
|
As of December 31, 2012
|
Fair Value Measurement Using
|
|
Total
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents—money market
|
$
|
18
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
357
|
|
Total Assets
|
$
|
18
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
357
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
(3,146
|
)
|
|
$
|
—
|
|
|
$
|
(3,146
|
)
|
Total Liabilities
|
$
|
—
|
|
|
$
|
(3,146
|
)
|
|
$
|
—
|
|
|
$
|
(3,146
|
)
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
Aircraft and flight equipment
|
$
|
1,232,284
|
|
|
$
|
1,148,781
|
|
Support equipment
|
51,179
|
|
|
52,209
|
|
||
Vehicles and other equipment
|
1,706
|
|
|
1,597
|
|
||
Leasehold improvements
|
1,091
|
|
|
814
|
|
||
|
1,286,260
|
|
|
1,203,401
|
|
||
Accumulated depreciation
|
(437,710
|
)
|
|
(384,477
|
)
|
||
Property and equipment, net
|
$
|
848,550
|
|
|
$
|
818,924
|
|
|
September 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Unsubordinated term loan
|
$
|
135,000
|
|
|
$
|
144,375
|
|
Revolving credit facility
|
190,500
|
|
|
143,000
|
|
||
Aircraft loans
|
57,103
|
|
|
63,156
|
|
||
Promissory note due to DHL, unsecured
|
9,300
|
|
|
13,950
|
|
||
Total long term obligations
|
391,903
|
|
|
364,481
|
|
||
Less: current portion
|
(23,572
|
)
|
|
(21,265
|
)
|
||
Total long term obligations, net
|
$
|
368,331
|
|
|
$
|
343,216
|
|
Airline
|
Labor Agreement Unit
|
Percentage of
the Company’s
Employees
|
ABX
|
International Brotherhood of Teamsters
|
14.6%
|
ATI
|
Airline Pilots Association
|
8.9%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
Pension Plans
|
|
Post-Retirement Healthcare Plan
|
|
Pension Plans
|
|
Post-Retirement Healthcare Plan
|
||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
207
|
|
|
$
|
201
|
|
Interest cost
|
8,989
|
|
|
9,272
|
|
|
66
|
|
|
95
|
|
|
26,967
|
|
|
27,816
|
|
|
198
|
|
|
285
|
|
||||||||
Expected return on plan assets
|
(11,498
|
)
|
|
(9,970
|
)
|
|
—
|
|
|
—
|
|
|
(34,494
|
)
|
|
(29,910
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
(1,413
|
)
|
|
(1,388
|
)
|
|
—
|
|
|
—
|
|
|
(4,239
|
)
|
|
(4,164
|
)
|
||||||||
Amortization of net (gain) loss
|
3,074
|
|
|
2,670
|
|
|
104
|
|
|
108
|
|
|
9,222
|
|
|
8,010
|
|
|
312
|
|
|
324
|
|
||||||||
Net periodic benefit cost (benefit)
|
$
|
565
|
|
|
$
|
1,972
|
|
|
$
|
(1,174
|
)
|
|
$
|
(1,118
|
)
|
|
$
|
1,695
|
|
|
$
|
5,916
|
|
|
$
|
(3,522
|
)
|
|
$
|
(3,354
|
)
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
Expiration Date
|
Stated
Interest
Rate
|
|
Notional
Amount
|
|
Market
Value
(Liability)
|
|
Notional
Amount
|
|
Market
Value
(Liability)
|
||||||||
May 9, 2016
|
2.0200%
|
|
$
|
67,500
|
|
|
$
|
(2,203
|
)
|
|
$
|
72,188
|
|
|
$
|
(3,146
|
)
|
June 30, 2017
|
1.1825%
|
|
65,625
|
|
|
(518
|
)
|
|
—
|
|
|
—
|
|
|
|
Defined Benefit Pension
|
|
Defined Benefit Post-Retirement
|
|
Gains and Losses on Derivative
|
|
Total
|
||||||||
Balance as of June 30, 2012
|
|
$
|
(107,262
|
)
|
|
$
|
5,892
|
|
|
$
|
57
|
|
|
$
|
(101,313
|
)
|
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
2,670
|
|
|
108
|
|
|
—
|
|
|
2,778
|
|
||||
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(1,387
|
)
|
|
—
|
|
|
(1,387
|
)
|
||||
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(14
|
)
|
||||
Income tax (expense) or benefit
|
|
(988
|
)
|
|
473
|
|
|
5
|
|
|
(510
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
1,682
|
|
|
(806
|
)
|
|
(9
|
)
|
|
867
|
|
||||
Balance as of September 30, 2012
|
|
$
|
(105,580
|
)
|
|
$
|
5,086
|
|
|
$
|
48
|
|
|
$
|
(100,446
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2011
|
|
$
|
(110,626
|
)
|
|
$
|
7,504
|
|
|
$
|
75
|
|
|
$
|
(103,047
|
)
|
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
8,011
|
|
|
324
|
|
|
—
|
|
|
8,335
|
|
||||
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(4,162
|
)
|
|
—
|
|
|
(4,162
|
)
|
||||
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
(42
|
)
|
||||
Income tax (expense) or benefit
|
|
(2,964
|
)
|
|
1,419
|
|
|
15
|
|
|
(1,530
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
5,047
|
|
|
(2,419
|
)
|
|
(27
|
)
|
|
2,601
|
|
||||
Balance as of September 30, 2012
|
|
$
|
(105,579
|
)
|
|
$
|
5,085
|
|
|
$
|
48
|
|
|
$
|
(100,446
|
)
|
|
|
Defined Benefit Pension
|
|
Defined Benefit Post-Retirement
|
|
Gains and Losses on Derivative
|
|
Total
|
||||||||
Balance as of June 30, 2013
|
|
$
|
(117,686
|
)
|
|
$
|
2,609
|
|
|
$
|
22
|
|
|
$
|
(115,055
|
)
|
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
3,074
|
|
|
104
|
|
|
—
|
|
|
3,178
|
|
||||
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(1,413
|
)
|
|
—
|
|
|
(1,413
|
)
|
||||
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
||||
Income tax (expense) or benefit
|
|
(1,116
|
)
|
|
475
|
|
|
5
|
|
|
(636
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
1,958
|
|
|
(834
|
)
|
|
(7
|
)
|
|
1,117
|
|
||||
Balance as of September 30, 2013
|
|
$
|
(115,728
|
)
|
|
$
|
1,775
|
|
|
$
|
15
|
|
|
$
|
(113,938
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2012
|
|
$
|
(121,602
|
)
|
|
$
|
4,277
|
|
|
$
|
38
|
|
|
$
|
(117,287
|
)
|
Amounts reclassified from accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Actuarial costs (reclassified to salaries, wages and benefits)
|
|
9,222
|
|
|
312
|
|
|
—
|
|
|
9,534
|
|
||||
Negative prior service cost (reclassified to salaries, wages and benefits)
|
|
—
|
|
|
(4,239
|
)
|
|
—
|
|
|
(4,239
|
)
|
||||
Hedging gain (reclassified to interest expense)
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
(38
|
)
|
||||
Income tax (expense) or benefit
|
|
(3,348
|
)
|
|
1,425
|
|
|
15
|
|
|
(1,908
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
5,874
|
|
|
(2,502
|
)
|
|
(23
|
)
|
|
3,349
|
|
||||
Balance as of September 30, 2013
|
|
$
|
(115,728
|
)
|
|
$
|
1,775
|
|
|
$
|
15
|
|
|
$
|
(113,938
|
)
|
|
Nine Months Ended
|
||||||||||||
|
September 30, 2013
|
|
September 30, 2012
|
||||||||||
|
Number of
Awards
|
|
Weighted
average
grant-date
fair value
|
|
Number of
Awards
|
|
Weighted
average
grant-date
fair value
|
||||||
Outstanding at beginning of period
|
1,463,272
|
|
|
$
|
5.97
|
|
|
1,458,037
|
|
|
$
|
5.77
|
|
Granted
|
627,488
|
|
|
5.73
|
|
|
601,647
|
|
|
5.93
|
|
||
Converted
|
(392,748
|
)
|
|
4.87
|
|
|
(142,200
|
)
|
|
8.11
|
|
||
Expired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(7,200
|
)
|
|
6.82
|
|
|
(88,800
|
)
|
|
5.93
|
|
||
Outstanding at end of period
|
1,690,812
|
|
|
$
|
6.13
|
|
|
1,828,684
|
|
|
$
|
5.63
|
|
Vested
|
441,812
|
|
|
$
|
4.90
|
|
|
483,284
|
|
|
$
|
4.68
|
|
|
Three Months Ending
|
|
Nine Months Ending
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Earnings from continuing operations
|
$
|
7,799
|
|
|
$
|
11,556
|
|
|
$
|
23,215
|
|
|
$
|
29,437
|
|
Weighted-average shares outstanding for basic earnings per share
|
64,052
|
|
|
63,456
|
|
|
63,972
|
|
|
63,439
|
|
||||
Common equivalent shares:
|
|
|
|
|
|
|
|
||||||||
Effect of stock-based compensation awards
|
984
|
|
|
1,211
|
|
|
835
|
|
|
1,039
|
|
||||
Weighted-average shares outstanding assuming dilution
|
65,036
|
|
|
64,667
|
|
|
64,807
|
|
|
64,478
|
|
||||
Basic earnings per share from continuing operations
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.36
|
|
|
$
|
0.46
|
|
Diluted earnings per share from continuing operations
|
$
|
0.12
|
|
|
$
|
0.18
|
|
|
$
|
0.36
|
|
|
$
|
0.46
|
|
|
Three Months Ending
|
|
Nine Months Ending
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Total revenues:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
40,089
|
|
|
$
|
39,155
|
|
|
$
|
118,420
|
|
|
$
|
115,073
|
|
ACMI Services
|
109,429
|
|
|
122,526
|
|
|
327,349
|
|
|
357,110
|
|
||||
All other
|
30,037
|
|
|
26,773
|
|
|
83,242
|
|
|
81,876
|
|
||||
Eliminate inter-segment revenues
|
(38,678
|
)
|
|
(34,628
|
)
|
|
(105,951
|
)
|
|
(101,173
|
)
|
||||
Total
|
$
|
140,877
|
|
|
$
|
153,826
|
|
|
$
|
423,060
|
|
|
$
|
452,886
|
|
Customer revenues:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
17,373
|
|
|
$
|
18,638
|
|
|
$
|
53,553
|
|
|
$
|
56,663
|
|
ACMI Services
|
109,429
|
|
|
122,526
|
|
|
327,349
|
|
|
357,110
|
|
||||
All other
|
14,075
|
|
|
12,662
|
|
|
42,158
|
|
|
39,113
|
|
||||
Total
|
$
|
140,877
|
|
|
$
|
153,826
|
|
|
$
|
423,060
|
|
|
$
|
452,886
|
|
Depreciation and amortization expense:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
16,697
|
|
|
$
|
15,187
|
|
|
$
|
46,016
|
|
|
$
|
44,288
|
|
ACMI Services
|
6,821
|
|
|
5,685
|
|
|
19,651
|
|
|
18,244
|
|
||||
All other
|
(126
|
)
|
|
185
|
|
|
410
|
|
|
339
|
|
||||
Total
|
$
|
23,392
|
|
|
$
|
21,057
|
|
|
$
|
66,077
|
|
|
$
|
62,871
|
|
Segment earnings (loss):
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
15,893
|
|
|
$
|
17,334
|
|
|
$
|
49,980
|
|
|
$
|
50,819
|
|
ACMI Services
|
(7,113
|
)
|
|
(1,746
|
)
|
|
(21,610
|
)
|
|
(11,543
|
)
|
||||
All other
|
4,400
|
|
|
3,373
|
|
|
9,188
|
|
|
8,602
|
|
||||
Net unallocated interest expense
|
(367
|
)
|
|
(296
|
)
|
|
(810
|
)
|
|
(961
|
)
|
||||
Net gain on derivative instruments
|
(317
|
)
|
|
294
|
|
|
425
|
|
|
956
|
|
||||
Pre-tax earnings from continuing operations
|
$
|
12,496
|
|
|
$
|
18,959
|
|
|
$
|
37,173
|
|
|
$
|
47,873
|
|
|
September 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Assets:
|
|
|
|
||||
CAM
|
$
|
807,571
|
|
|
$
|
810,664
|
|
ACMI Services
|
177,603
|
|
|
161,650
|
|
||
All other
|
80,957
|
|
|
63,297
|
|
||
Total
|
$
|
1,066,131
|
|
|
$
|
1,035,611
|
|
|
Three Months Ending
|
|
Nine Months Ending
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues from Continuing Operations:
|
|
|
|
|
|
|
|
||||||||
CAM
|
$
|
40,089
|
|
|
$
|
39,155
|
|
|
$
|
118,420
|
|
|
$
|
115,073
|
|
ACMI Services
|
|
|
|
|
|
|
|
||||||||
Airline services
|
93,116
|
|
|
102,072
|
|
|
276,193
|
|
|
299,434
|
|
||||
Reimbursables
|
16,313
|
|
|
20,454
|
|
|
51,156
|
|
|
57,676
|
|
||||
Total ACMI Services
|
109,429
|
|
|
122,526
|
|
|
327,349
|
|
|
357,110
|
|
||||
Other Activities
|
30,037
|
|
|
26,773
|
|
|
83,242
|
|
|
81,876
|
|
||||
Total Revenues
|
179,555
|
|
|
188,454
|
|
|
529,011
|
|
|
554,059
|
|
||||
Eliminate internal revenues
|
(38,678
|
)
|
|
(34,628
|
)
|
|
(105,951
|
)
|
|
(101,173
|
)
|
||||
Customer Revenues
|
$
|
140,877
|
|
|
$
|
153,826
|
|
|
$
|
423,060
|
|
|
$
|
452,886
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Pre-Tax Earnings from Continuing Operations:
|
|
|
|
|
|
|
|
||||||||
CAM, inclusive of interest expense
|
$
|
15,893
|
|
|
$
|
17,334
|
|
|
$
|
49,980
|
|
|
$
|
50,819
|
|
ACMI Services
|
(7,113
|
)
|
|
(1,746
|
)
|
|
(21,610
|
)
|
|
(11,543
|
)
|
||||
Other Activities
|
4,400
|
|
|
3,373
|
|
|
9,188
|
|
|
8,602
|
|
||||
Net unallocated interest expense
|
(367
|
)
|
|
(296
|
)
|
|
(810
|
)
|
|
(961
|
)
|
||||
Net gain (loss) on derivative instruments
|
(317
|
)
|
|
294
|
|
|
425
|
|
|
956
|
|
||||
Pre-Tax Earnings from Continuing Operations
|
12,496
|
|
|
18,959
|
|
|
37,173
|
|
|
47,873
|
|
||||
Less net gain (loss) on derivative instruments
|
317
|
|
|
(294
|
)
|
|
(425
|
)
|
|
(956
|
)
|
||||
Adjusted Pre-Tax Earnings
|
$
|
12,813
|
|
|
$
|
18,665
|
|
|
$
|
36,748
|
|
|
$
|
46,917
|
|
|
ACMI
Services
|
|
CAM
|
|
Total
|
||||
In-service aircraft
|
|
|
|
|
|
||||
Aircraft owned
|
|
|
|
|
|
||||
Boeing 767-200
|
16
|
|
|
20
|
|
|
36
|
|
|
Boeing 767-300
|
5
|
|
|
—
|
|
|
5
|
|
|
Boeing 757
|
4
|
|
|
—
|
|
|
4
|
|
|
Boeing 757 Combi
|
3
|
|
|
—
|
|
|
3
|
|
|
DC-8 combi
|
2
|
|
|
—
|
|
|
2
|
|
|
Total
|
30
|
|
|
20
|
|
|
50
|
|
|
Carrying value
|
|
|
|
|
$
|
694,899
|
|
||
Operating lease
|
|
|
|
|
|
||||
Boeing 767-200
|
4
|
|
|
—
|
|
|
4
|
|
|
Boeing 767-300
|
2
|
|
|
—
|
|
|
2
|
|
|
Total
|
6
|
|
|
—
|
|
|
6
|
|
|
Carrying value
|
|
|
|
|
$
|
975
|
|
||
Aircraft for freighter and combi modification
|
|
|
|
|
|
||||
Boeing 767-300
|
—
|
|
|
2
|
|
|
2
|
|
|
Boeing 757 Combi
|
—
|
|
|
1
|
|
|
1
|
|
|
Total
|
—
|
|
|
3
|
|
|
3
|
|
|
Carrying value
|
|
|
|
|
$
|
87,231
|
|
3.1
|
Amended and Restated Certificate of Incorporation of Air Transport Services Group, Inc. reflecting corrections and amendments through May 17, 2013. [This document represents the Amended and Restated Certificate of Incorporation of Air Transport Services Group, Inc. in compiled form, incorporating all corrections and amendments. This compiled document has not been filed with the Delaware Secretary of State.] (2)
|
|
|
3.2
|
Amended and Restated Bylaws of Air Transport Services Group, Inc., reflecting amendments through May 10, 2013. (2)
|
|
|
3.3
|
Amended and Restated Certificate of Incorporation of Air Transport Services Group, Inc. reflecting corrections and amendments through August 16, 2013, filed herewith. [This document represents the Amended and Restated Certificate of Incorporation of Air Transport Services Group, Inc. in compiled form, incorporating all corrections and amendments. This compiled document has been filed with the Delaware Secretary of State.]
|
|
|
10.1
|
Air Transport Services Group, Inc. Executive Incentive Compensation Plan, last modified March 18, 2013. (1)
|
|
|
10.2
|
Air Transport Services Group, Inc. Nonqualified Deferred Compensation Plan, dated October 31, 2013, filed herewith.
|
|
|
10.3
|
Second Amendment to the Credit Agreement, dated October 22, 2013, among Cargo Aircraft Management, Inc., as Borrower, Air Transport Services Group, Inc., the Lenders from time to time party thereto, SunTrust Bank, as Administrative Agent, Regions Bank and JPMorgan Chase Bank, N.A., as Syndication Agents, and Bank of America, N.A., as Documentation Agent, filed herewith.
|
|
|
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
|
(1)
|
Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 18, 2013.
|
(2)
|
Incorporated by reference to the Company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 8, 2013.
|
|
|
|
|
AIR TRANSPORT SERVICES GROUP, INC.,
|
|
|
|
|
a Delaware Corporation
|
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
|
|
/S/ JOSEPH C. HETE
|
|
|
|
|
Joseph C. Hete
|
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
Date:
|
November 6, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ QUINT O. TURNER
|
|
|
|
|
Quint O. Turner
|
|
|
|
|
Chief Financial Officer (Principal Financial Officer
|
Date:
|
November 6, 2013
|
|
|
and Principal Accounting Officer)
|
2.01
|
Account:
The bookkeeping account established for each Participant under Section 6.01 of this Plan.
|
2.02
|
Affiliate:
Any entity that, along with the Company, would be considered a single employer under Code §§414(b) and 414(c).
|
2.03
|
Beneficiary:
The person or persons designated by a Participant on a form prescribed by the Committee to receive any portion of such Participant’s benefit that is unpaid at the Participant’s death. If a Participant has not made an effective designation of a Beneficiary or Beneficiaries, the Participant’s Beneficiary will be his or her surviving spouse or, if there is no surviving spouse, the Participant’s estate.
|
2.04
|
Board:
The Board of Directors of the Company.
|
2.05
|
Cause:
With respect to any Participant, “cause” as defined in any employment (or similar) agreement then in effect between the Participant and the Company or an Affiliate or, if not defined therein, the occurrence of any of the following: (a) the Participant’s continued failure substantially to perform the Participant’s assigned duties (other than as a result of total or partial incapacity due to physical or mental illness) for a period of ten (10) days following written notice by the Company or any of its Affiliates to the Participant of such failure; (b) the Participant’s engagement in conduct detrimental to the interests of the Company or any of its Affiliates; (c) the Participant’s charged with, indictment for, conviction of, or plea of guilty or nolo contendere to, (i) a felony or (ii) a crime other than a felony, which involves moral turpitude or a breach of trust or fiduciary duty owed to the Company or any of its Affiliates; (d) the Participant's disclosure of trade secrets or confidential information of the Company or any of its Affiliates; or (e) the Participant's breach of any policy of the Company or any of its Affiliates that applies to the Participant or any agreement with the Company
|
2.06
|
Change in Control:
Provided that such definition shall be interpreted in a manner that is consistent with the definition of “change in control event” under Code §409A and Treasury Regulation §1.409A-3(i)(5), a “Change in Control” of the Company shall mean the first to occur of any of the following:
|
(a)
|
the date that any person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company;
|
(b)
|
the date that any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing thirty percent (30%) or more of the total voting power of the stock of the Company;
|
(c)
|
the date that a majority of members of the Board is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or
|
(d)
|
the date that any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions.
|
2.08
|
Committee:
The Compensation Committee of the Board.
|
2.10
|
Compensation:
A Participant’s “Compensation” as defined in the Qualified Plan calculated without regard to the compensation limit under Code §401(a)(17).
|
(a)
|
the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or
|
(b)
|
the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Participant’s employer; or
|
(c)
|
the Participant is determined to be totally disabled by the Social Security Administration or the Railroad Retirement Board.
|
2.12
|
Distribution Election Form:
The form each Eligible Employee and Participant, as the case may be, must complete to designate the form of distribution of his or her Plan Benefit or may complete to change a prior designation as to the form of distribution of his or her Plan Benefit.
|
2.13
|
Effective Date:
October 31, 2013.
|
2.14
|
Eligible Employee:
Each Employee who meets the eligibility criteria listed in Section 3.01.
|
2.15
|
Employee:
Each person employed by the Company or any of its Affiliates, except for any person so employed under the terms of a collective bargaining agreement.
|
2.16
|
Employer Contribution:
A contribution made by the Company or any of its Affiliates that is credited to a Participant’s Account in accordance with the terms of Section 4.01 of this Plan.
|
2.17
|
ERISA:
The Employee Retirement Income Security Act of 1974, as amended.
|
2.18
|
Participant:
An Eligible Employee who becomes a participant in this Plan as described in Article 3.00.
|
2.19
|
Plan:
The Air Transport Services Group, Inc. Nonqualified Deferred Compensation Plan, as amended from time to time.
|
2.20
|
Plan Benefit:
The vested portion of a Participant’s Account as of any Valuation Date.
|
2.21
|
Plan Year:
Each calendar year or portion thereof during which this Plan is in effect.
|
2.22
|
Qualified Plan:
The qualified defined contribution retirement plan in which the Eligible Employee participates through his or her employer. As of the Effective Date, such qualified defined contribution retirement plans include (a) the Amended and Restated ABX Air Capital Accumulation Plan, as may be amended from time to time; and (b) the Air Transport International LLC 401(k) Plan, as may be amended from time to time.
|
2.23
|
Retirement Contribution:
The applicable employer contribution to be made on behalf of a Participant during a Plan Year pursuant to the terms of the Qualified Plan.
|
2.24
|
Termination:
A “separation from service” within the meaning of Code §409A and Treasury Regulation §1.409A-1(h).
|
2.25
|
Unforeseeable Emergency:
A severe financial hardship to a Participant within the meaning of Code §409A resulting from: (a) an illness or accident of the Participant or the Participant’s spouse, Beneficiary or dependent (as defined in Code §152, without regard to Code §§152(b)(1), (b)(2) and (d)(1)(B)); (b) loss of the Participant’s property due to casualty; or (c) other similar or extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
|
2.26
|
Valuation Date:
The last day of each calendar month or any other date or dates fixed by the Committee for the valuation and adjustment of an Account.
|
3.01
|
Eligibility.
Subject to Section 3.02 of this Plan, an Employee shall be an Eligible Employee upon designation by the Committee following satisfaction of the following requirements:
|
(a)
|
is a highly compensated employee or a member of a select group of management (both within the meaning of Title I of ERISA) of the Company or any of its Affiliates, as determined by the Committee in its sole discretion;
|
(b)
|
is eligible for a Retirement Contribution pursuant to the terms of the Qualified Plan;
|
(c)
|
is credited with at least 1,000 “Hours of Service” as defined by the Qualified Plan during the Plan Year; and
|
(d)
|
receives Compensation in excess of the compensation limit under Code §401(a)(17).
|
3.02
|
Loss of Eligible Employee Status.
A Participant who is no longer an Eligible Employee shall no longer be eligible to participate in the Plan. Amounts credited to the Account of a Participant who is no longer an Eligible Employee shall continue to be administered in accordance with the terms and conditions of this Plan and shall be distributed as provided in Article 7.00.
|
4.01
|
Employer Contributions.
Each Plan Year, the Company or one of its Affiliates, as applicable, shall make an Employer Contribution to the Account of a Participant in such amount that would have been made as a Retirement Contribution pursuant to the Qualified Plan if the compensation limit under Code §401(a)(17) did not exist, minus the amount of the Retirement Contribution actually made on behalf of the Participant under the Qualified Plan for the applicable Plan Year. Such Employer Contributions shall be credited to the Accounts of Participants during the first calendar quarter following the last day of the Plan Year.
|
5.01
|
Employer Contributions.
Except as otherwise provided in Section 5.02 of this Plan, a Participant shall have a vested right to the portion of his or her Account attributable to any Employer Contribution and any deemed earnings and losses on the investment of such Employer Contribution upon three “Years of Service” as defined by the Qualified Plan.
|
5.02
|
Accelerated Vesting Upon Occurrence of Certain Events.
Notwithstanding the foregoing, a Participant shall become fully vested in all amounts credited to his or her Account upon the earliest to occur of: (a) the Participant’s Disability; (b) the Participant’s death; or (c) a Change in Control.
|
5.03
|
Amounts Not Vested.
Any amounts credited to a Participant’s Account that are not vested upon his or her Termination shall be forfeited.
|
6.01
|
Establishment of Accounts.
The Committee shall establish and maintain an Account for each Participant. Each Participant’s Account shall be credited with, to the extent applicable, any Employer Contributions, and the Participant’s allocable share of any deemed earnings or losses on the foregoing. Each Participant’s Account shall be reduced by any distributions made from such Account plus, subject to Article 8.00 of this Plan and to the extent permitted by applicable law, any federal, state and local tax withholding as may be required by law.
|
6.02
|
Establishment of Subaccounts.
Within each Participant’s Account, separate subaccounts shall be maintained to the extent necessary for the administration of the Plan.
|
(a)
|
The Company shall invest the Account on behalf of the Participant or credit the Account with earnings or interest as though such Account were invested in such investments and under such criteria as the Committee may determine in its sole discretion. The Company may also permit the Participant to direct the investment or deemed investment of the Account in such investments as the Company may make available for this purpose from time to time or as the Participant may select. The Company assumes no responsibility or liability with respect to any loss or expense that may arise, result or be incurred from any investment or deemed investment of the Account. Any costs or expenses incurred by the Company in the investment of the Account shall be debited against the Account. The Account shall be credited with earnings or debited for losses, as the case may be, based on its investment or deemed investment pursuant to Section 6.03(b).
|
(b)
|
As of each Valuation Date, each Participant’s Account will be credited with earnings and charged with losses equal to the amount by which the Account would have been credited or charged since the prior Valuation Date had the Participant’s Account been invested as described in Section 6.03(a) of this Plan.
|
(c)
|
Notwithstanding the foregoing, neither the Company nor any of its Affiliates shall have any obligation to invest any funds in accordance with the investment described in this Section 6.03. Participants’ Accounts shall merely be bookkeeping entries on the books of the Company and its Affiliates, as applicable, and no Participant or Beneficiary shall obtain any property right or interest in any investment or any other particular assets of the Company or any of its Affiliates.
|
7.01
|
Distributions Upon Termination (Other than Death).
|
(a)
|
Except as provided in Sections 7.02 and 7.03, upon a Participant’s Termination, the Participant’s Plan Benefit shall be distributed to the Participant in a lump sum cash payment within ninety (90) days after the Participant’s Termination
|
(b)
|
An election to receive annual installments under this Section 7.01 must be made on a signed Distribution Election Form that is
submitted to the Committee no later than thirty (30) days after the date on which the Participant first becomes eligible to participate in this Plan, with respect to any Employer Contribution made or credited for services performed after such election is made. For purposes of the preceding sentence, an Eligible Employee shall be first eligible to participate in this Plan only if the Eligible Employee
is not eligible to participate in any other arrangement that, along with this Plan, is treated as a single nonqualified deferred compensation plan under Code §409A and the Treasury Regulations promulgated thereunder.
|
(i)
|
The election described in this Section 7.01(b) shall be subject to the terms and conditions specified in this Plan and in the Distribution Election Form and, except as provided in Section 7.01(b)(ii) of this Plan, shall be irrevocable once made.
|
(ii)
|
A Participant may elect to change the form of distribution (based on the alternatives described in Section 7.01(a) of this Plan) by submitting a new Distribution Election Form to the Committee; provided, however, that: (A) such change may not take effect until at least twelve (12) months after the date on which such election is made; (B) the payment with respect to which such change is made must be deferred (other than a distribution upon death) for a period of not less than five (5) years from the date such payment would otherwise have been paid (or, in the case of installment payments treated as a single payment, from the date the first amount was scheduled to be paid); and (C) such change must be made not less than twelve (12) months before
|
(iii)
|
Once a Participant’s Plan Benefit is or begins to be distributed, no further changes to the distribution of such Plan Benefit shall be permitted. For purposes of this Section 7.01, if the right to any payments would constitute the right to a “series of installment payments” within the meaning of Code §409A, then such payments shall be treated as a single payment within the meaning of Code §409A.
|
(c)
|
If a Participant elects to receive annual installments under this Section 7.01, the amount of each installment shall be determined by multiplying the Participant’s Plan Benefit by a fraction, the denominator of which in the first year of distribution equals the number of years over which the Participant has elected benefits to be paid and the numerator is one (1). The amount of the installments for each succeeding year shall be determined by multiplying the Participant’s Plan Benefit as of the applicable date of distribution by a fraction, the denominator of which equals the number of remaining years over which benefits are to be distributed, and the numerator of which is one (1).
|
(d)
|
Notwithstanding any provision in the Plan to the contrary, the Committee, in its sole discretion, may require a lump sum distribution of a Participant’s Plan Benefit if: (i) the distribution results in the termination and liquidation of the entirety of the Participant’s interest under this Plan and all agreements, methods, programs or other arrangements with respect to which deferrals of compensation are treated as having been deferred under a single nonqualified deferred compensation plan under Code §409A; and (ii) the aggregate distribution under the arrangements is not greater than the limitation on elective deferrals under Code §402(g).
|
(e)
|
Notwithstanding any provision in this Plan to the contrary, any Plan Benefit payable to a Participant who is a “specified employee” (as defined in Code §409A) of the Company or any of its Affiliates upon the Participant’s Termination shall not be (or begin to be) distributed until six months after the date on which the Participant Terminates (or, if earlier, the date on which the Participant dies). The first payment to be made shall include the cumulative amount, if any, of any amounts that would otherwise have been paid in accordance with the Participant’s Distribution Election Form but for the fact that such amounts could not be paid during such postponement period.
|
(a)
|
Notwithstanding anything in this Plan to the contrary, if a Participant dies before his or her Plan Benefit has begun to be distributed or has been fully distributed, the Plan
|
(b)
|
If a Participant dies after the Participant’s Termination and after his or her Plan Benefit has been fully distributed, no additional benefit will be due to such Participant or his or her Beneficiary under this Plan.
|
7.03
|
Termination for Cause.
Notwithstanding anything in this Plan to the contrary, if a Participant is Terminated by the Company for Cause or, if following a Participant’s Termination, the Company determines that Cause existed to Terminate the Participant, all Employer Contributions and any deemed earnings on the foregoing in the Participant’s Account (whether or not vested) shall be forfeited as of the date of such Termination.
|
7.04
|
Distributions Upon Disability.
Notwithstanding anything in this Plan to the contrary, if a Participant incurs a Disability before his or her Termination and before his or her Plan Benefit has begun to be distributed, the Plan Benefit will be distributed to the Participant in a lump sum within ninety (90) days after the date on which the Participant incurs the Disability.
|
7.05
|
Unforeseeable Emergency.
A Participant may request a distribution of his or her Plan Benefit upon the occurrence of an Unforeseeable Emergency. As a condition of receiving a distribution under this Section 7.05, the Participant must file a written application with the Committee specifying the nature of the Unforeseeable Emergency, the amount needed to address the Unforeseeable Emergency and supplying any other information that the Committee, in its discretion, may need to ensure the conditions specified in this Section 7.05 are satisfied. The Committee shall, in its sole discretion, determine whether an Unforeseeable Emergency exists. If the Committee determines that an Unforeseeable Emergency exists, the Company or one of its Affiliates, as applicable, shall distribute an amount to the Participant that shall not be greater than the amount reasonably necessary, in the Committee’s determination, to satisfy the emergency need (which may include the amount necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated to result from the distribution) or, if less, the value of the Participant’s Plan Benefit as of the Valuation Date immediately preceding the distribution date. A distribution on account of an Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, or by liquidation of the Participant’s assets, to the extent that the liquidation of such assets would not cause a severe financial hardship.
|
7.06
|
Full Discharge.
Once the Participant’s Plan Benefit has been fully distributed, none of the Company, its Affiliates, the Board, the Committee, their delegates or this Plan will have any further liability under this Plan to the Participant or the Participant’s Beneficiary.
|
9.01
|
Filing Claims
. Any Participant or Beneficiary (a “claimant”) who believes that he or she is entitled to an unpaid Plan Benefit may file a written notification of his or her claim with the Committee.
|
9.02
|
Notification to Claimant
. If the claim is wholly or partially denied, the Committee will, within a reasonable period of time, and within ninety (90) days of the receipt of such claim, or if the claim is a claim on account of Disability, within forty-five (45) days of the receipt of such claim, provide the claimant with written notice of the denial setting forth in a manner calculated to be understood by the claimant:
|
(b)
|
Specific reference to pertinent Plan provisions, rules, procedures or protocols upon which the Committee relied to deny the claim;
|
(c)
|
A description of any additional material or information that the claimant may file to perfect the claim and an explanation of why this material or information is necessary;
|
(d)
|
An explanation of this Plan’s claims review procedure and the time limits applicable to such procedure and a statement of the claimant’s right to bring a civil action under ERISA §502(a) following an adverse determination upon review; and
|
(e)
|
In the case of an adverse determination of a claim on account of Disability, the information to the claimant shall include, to the extent necessary, the information set forth in Department of Labor Regulation §2560.503-1(g)(1)(v).
|
9.03
|
Review Procedure
. If a claim has been wholly or partially denied, the affected claimant, or his or her authorized representative may:
|
(a)
|
Request that the Committee reconsider its initial denial by filing a written appeal within sixty (60) days after receiving written notice that all or part of the initial claim was denied (one hundred eighty (180) days in the case of a denial of a claim on account of Disability);
|
(b)
|
Review pertinent documents and other material upon which the Committee relied when denying the initial claim; and
|
(c)
|
Submit a written description of the reasons for which the claimant disagrees with the Committee’s initial adverse decision.
|
(i)
|
Specific reason or reasons for the decision;
|
(ii)
|
Specific references to pertinent Plan provisions upon which the decision was based;
|
(iii)
|
The claimant’s ability to review and receive copies of all documents relating to the claimant’s claim for benefits, free of charge;
|
(iv)
|
An explanation of any voluntary review procedures describing the steps to be taken by a claimant who wishes to submit the claimant’s claims for review and the time limits applicable to such procedures; and
|
(v)
|
A statement of the claimant’s right to bring a civil action under ERISA §502(a).
|
(a)
|
The Committee is expressly empowered to interpret this Plan, determine all questions arising in the administration, interpretation and application of this Plan; employ actuaries, accountants, counsel and other persons it deems necessary in connection with the administration of this Plan, request any information from the Company or any of its Affiliates it deems necessary to determine whether the Company or any Affiliate would be considered insolvent or subject to a proceeding in bankruptcy, and take all other necessary and proper actions to fulfill its duties under this Plan.
|
(b)
|
The Committee shall not be liable for any actions by it hereunder, unless due to its own negligence, willful misconduct or lack of good faith.
|
(c)
|
The Committee (and any delegate under Section 10.01(d) of this Plan) shall be indemnified and saved harmless by the Company from and against all personal liability to which the Committee (and such delegate) may be subject by reason of any act done or omitted to be done in its official capacity as administrator in good faith in the administration of this Plan, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense upon the request of the Committee (or such delegate).
|
(d)
|
In exercising its authority under this Plan, the Committee may allocate all or any part of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by the Committee. Any such allocation or delegation may be revoked at any time.
|
(a)
|
The Committee and any delegate under Section 10.01(d) of this Plan will serve without compensation for services provided to this Plan. The Company and, if applicable, its Affiliates, will furnish the Committee and any delegate under Section 10.01(d) of this Plan with all clerical or other assistance necessary to perform their respective duties.
|
(b)
|
The Company and its Affiliates will pay all expenses of administering this Plan.
|
(a)
|
All actions taken and all determinations made by the Committee in good faith will be final and binding upon all Participants, Beneficiaries, the Company and its Affiliates and any other person interested in this Plan. To the extent the Committee has been granted discretionary authority under this Plan, its prior exercise of this authority will not obligate the Committee to exercise its authority in a like fashion thereafter.
|
(b)
|
This Plan will be interpreted by the Committee in accordance with its terms and their intended meaning. The construction and interpretation of the Plan provisions are vested with the Committee, in its absolute discretion, including, without limitation, the determination of benefits and eligibility. All decisions, determinations and interpretations will be final, conclusive and binding upon all persons having an interest in this Plan.
|
13.00
|
Miscellaneous
|
13.01
|
No Contract.
The adoption and maintenance of this Plan shall not be deemed to constitute a contract of employment or otherwise between the Company or any of its Affiliates and any Employee or Participant or other person, or to be consideration for, or an inducement or condition of, any employment. Nothing contained herein shall be deemed to give any Employee or Participant or other person the right to be retained in the service of the Company or any of its Affiliates or to interfere with the right of the Company or any of its Affiliates (which right is expressly reserved) to discharge, with or without Cause, any Employee or Participant or other person at any time without any liability for any claim either against this Plan (except to the extent provided herein) or against the Company or any of its Affiliates.
|
13.02
|
No Alienation.
The right of a Participant or any other person to receive Plan Benefits may not be assigned, transferred, pledged or encumbered except as provided in the Participant’s designation of a Beneficiary, by will or by applicable laws of descent and distribution. Any attempt to assign, transfer, pledge or encumber a Plan Benefit will be null and void and of no legal effect. Any action taken (or attempted to be taken) contrary to the provisions of this Section 13.02 will be null and void and of no effect whatsoever; the Company, its Affiliates and the Committee may disregard such action (or attempted action) and will not in any manner be bound by it; and they, and each of them, will suffer no liability by doing so. If any Participant or other person acts (or attempts to take any action) contrary to this Section 13.02, the Company, its Affiliates and the Committee will be reimbursed and indemnified on demand out of the interest of such Participant in this Plan for any loss, cost or expense incurred as a result of disregarding or acting in disregard of that action (or attempted action).
|
13.03
|
Governing Law.
This Plan, and applicable forms associated with this Plan, will be governed by and construed in accordance with the laws of the United States and, to the extent applicable, the laws of the State of Ohio, excluding any conflicts of laws principles.
|
13.04
|
Headings.
Headings and subheadings in this Plan document are inserted for convenience of reference only. They constitute no part of this Plan.
|
13.05
|
Illegal or Invalid Provision.
If any provision of this Plan is held to be illegal or invalid for any reason, this Plan will be construed and enforced as if the offending provision had not been included in this Plan. However, that determination will not affect the legality or validity of the remaining parts of this Plan.
|
13.06
|
Coordination with Other Plans.
A Participant’s or his or her Beneficiary’s rights to any Plan Benefits will be determined solely by reference to the terms of this Plan document and will be unaffected by any other document or agreement between the Participant or the Beneficiary and the Company or any of its Affiliates.
|
13.07
|
Code §409A.
Although the Company makes no guarantee with respect to the treatment of payment or benefits under this Plan, t
his Plan is intended to comply with the requirements of Code §409A and the Treasury Regulations promulgated thereunder, and the Company will interpret, apply and administer this Plan in accordance with this intent. The Company may accelerate the time or schedule of a distribution to a Participant or the Participant’s
|
|
REGIONS BANK, as a Lender
|
|
|
|
|
|
|
|
By:____
__/s/ Christ Hurst__________________
|
|
Name: Chris Hurst
|
|
Title: Senior Vice President
|
|
|
|
|
|
JPMORGAN CHASE BANK, N.A., as a Lender
|
|
|
|
|
|
|
|
By:_____
_/s/ John B. Middelberg____________
|
|
Name: John B. Middelberg
|
|
Title: SVP
|
|
|
|
|
|
BANK OF AMERICA, N.A., as a Lender
|
|
|
|
|
|
|
|
By
:______/s/ Joseph R. Jackson_____________
|
|
Name: Joseph R. Jackson
|
|
Title: Vice President
|
|
|
|
|
|
PNC BANK, N.A., as a Lender
|
|
|
|
|
|
|
|
By:___
/s/ C J Richardson
_________________
|
|
Name: C. Joseph Richardson
|
|
Title: Senior Vice President
|
|
|
|
|
|
THE PRIVATE BANK AND TRUST COMPANY, as a Lender
|
|
|
|
|
|
|
|
By:____
/s/ Nick Fadel____________________
|
|
Name: Nick Fadel
|
|
Title: Associate Managing Director
|
|
|
|
|
|
BRANCH BANKING AND TRUST COMPANY,
as a Lender
|
|
|
|
|
|
|
|
By:____
/s/ Brian R. Jones__________________
|
|
Name: Brian R. Jones
|
|
Title: Vice President
|
|
|
|
|
|
THE NORTHERN TRUST COMPANY,
as a Lender
|
|
|
|
|
|
|
|
By:_____
/s/ Peter J. Hallan_________________
|
|
Name: Peter J. Hallan
|
|
Title: Vice President
|
|
|
|
|
|
STELLARONE BANK, as a Lender
|
|
|
|
|
|
|
|
By:____
_/s/ Judson Foster__________________
|
|
Name: Judson Foster
|
|
Title: SVP
|
|
|
|
|
|
ATLANTIC CAPITAL BANK, as a Lender
|
|
|
|
|
|
|
|
By:____
/s/ J. Christopher Deisley
____________
|
|
Name: J. Christopher Deisley
|
|
Title: Senior Vice President
|
|
|
|
|
|
TRISTATE CAPITAL BANK, as a Lender
|
|
|
|
|
|
|
|
By:____________________________________
|
|
Name:
|
|
Title:
|
|
|
|
|
|
COMPASS BANK, as a Lender
|
|
|
|
|
|
|
|
By:______
/s/ Adrayll Askew_______________
|
|
Name: Adrayll Askew
|
|
Title: Senior Vice President
|
|
|
|
|
Institution
|
Revolving Commitment
|
Term
Commitment
|
Address
|
SunTrust Bank
|
$45,817,195.00
|
$24,793,900.72
|
3333 Peachtree Road N.E.,
8th Floor
Mail Code: GA-Atlanta-2020
Atlanta, GA 30326
Attn: Christopher Hursey
Fax: (404) 439-7409
|
Regions Bank
|
$43,880,220.00
|
$23,561,422.68
|
201 Milan Parkway
Birmingham, Alabama 35211
Attn: Stephanie Reid
Fax: (205) 801-5250
|
JPMorgan Chase Bank, N.A.
|
$42,539,455.00
|
$22,813,765.04
|
10 S Dearborn
Floor 07
Chicago, Illinois 60603
Attn: Non Agented Servicing Team
Fax: (312) 256-2608
|
Bank of America, N.A.
|
$29,741,890.00
|
$15,787,705.62
|
901 Main Street
Dallas, Texas 75202
Attn: Susheel Jaiswal
Fax: (972) 728-9506
|
PNC Bank, N.A.
|
$28,053,625.00
|
$14,416,650.26
|
6750 Miller Road
Brecksville, Ohio 44141
Attn: Mary Ann Cruz
Fax: (866) 932-2125
|
The PrivateBank and Trust Company
|
$14,607,260.00
|
$8,001,265.04
|
120 South LaSalle Street
Chicago, Illinois 60602
Attn: Daniel Arehart
Fax: (312) 564-1794
|
Branch Banking and Trust Company
|
$15,291,435.00
|
$7,716,957.18
|
200 W Second Street
16th Floor
Winston Salem, NC 27101
Attn: Wendy Gerringer
Fax: (336) 733-2740
|
Compass Bank
|
$15,655,090.00
|
$7,293,070.28
|
8080 N Central Expressway
Suite 320
Dallas, Texas 75206
Attn: Kathy Kirk
Fax: (866) 984-8668
|
Institution
|
Revolving Commitment
|
Term
Commitment
|
Address
|
The Northern Trust Company
|
$15,233,655.00
|
$7,688,920.02
|
50 South LaSalle Street
Chicago, Illinois 60603
Attn: Mary Green
Fax: (312) 630-1566
|
StellarOne Bank
|
$12,280,175.00
|
$6,077,593.16
|
105 Arbor Drive
Christiansburg, Virginia 24073
Attn: Jim Rice
cc: Sofie Rodriguez
Fax: (540) 394-6884
cc: (804) 290-4328
|
Atlantic Capital Bank
|
$6,500,000.00
|
$5,431,250.00
|
3525 Piedmont Road, NE
Building 7, Suite 510
Atlanta, Georgia 30305
Attn: Trudy Robinson
Fax: (404) 995-5804
|
TriState Capital Bank
|
$5,400,000.00
|
$4,542,500.00
|
301 Grant Street
Suite 2700
Pittsburgh, Pennsylvania 15219
Attn: John Kyle
Fax: (412) 304-0391
|
Total
|
$275,000,000.00
|
$148,125,000.00
|
|
Institution
|
Term
Loans Outstanding
|
SunTrust Bank
|
$23,224,666.51
|
Regions Bank
|
$22,070,193.39
|
JPMorgan Chase Bank, N.A.
|
$21,369,855.85
|
Bank of America, N.A.
|
$14,788,483.75
|
PNC Bank, N.A.
|
$13,504,204.05
|
The PrivateBank and Trust Company
|
$7,494,855.85
|
Branch Banking and Trust Company
|
$7,228,542.18
|
Compass Bank
|
$6,831,483.54
|
The Northern Trust Company
|
$7,202,279.52
|
StellarOne Bank
|
$5,692,935.36
|
Atlantic Capital Bank
|
$5,087,500.00
|
TriState Capital Bank
|
$4,255,000.00
|
Total
|
$138,750,000.00
|
Name
|
Office
|
Signature
|
______________________
|
______________________
|
______________________
|
______________________
|
______________________
|
______________________
|
|
|
|
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.
|
/s/ JOSEPH C. HETE
|
Joseph C. Hete
|
Chief Executive Officer
|
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.
|
/s/ QUINT O. TURNER
|
Quint O. Turner
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
(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.
|
/
S
/ JOSEPH C. HETE
|
Joseph C. Hete
Chief Executive Officer
|
(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.
|
/s/ QUINT O. TURNER
|
Quint O. Turner
Chief Financial Officer
|