Air Transport Services (ATSG) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining the company's accounting policies, financial instruments, debt, commitments, and segment information Unaudited Condensed Consolidated Balance Sheets Presents the company's financial position (assets, liabilities, and equity) as of March 31, 2022, and December 31, 2021 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :-------------------------- | :------------- | :---------------- | | Total Assets | $3,286,929 | $3,267,335 | | Total Liabilities | $1,932,889 | $1,944,958 | | Total Stockholders' Equity | $1,354,040 | $1,322,377 | | Cash, cash equivalents and restricted cash | $35,538 | $69,496 | | Property and equipment, net | $2,182,076 | $2,129,934 | Unaudited Condensed Consolidated Statements of Operations Details the company's revenues, operating expenses, and net earnings for the three months ended March 31, 2022, and 2021 Condensed Consolidated Statements of Operations Highlights (Three Months Ended March 31, in thousands, except EPS) | Metric | 2022 | 2021 | YoY Change | | :-------------------------------------- | :-------- | :-------- | :--------- | | Revenues | $485,860 | $376,088 | +29.2% | | Operating Income | $69,794 | $56,859 | +22.7% | | Earnings from Continuing Operations | $49,796 | $42,290 | +17.7% | | Net Earnings | $49,796 | $42,290 | +17.7% | | Total Diluted Earnings Per Share | $0.57 | $0.49 | +16.3% | | Government grants | $— | $(28,030) | N/A | Unaudited Condensed Consolidated Statements of Comprehensive Income Presents the net earnings and other comprehensive income (loss) components, leading to total comprehensive income for the three months ended March 31, 2022, and 2021 Condensed Consolidated Statements of Comprehensive Income Highlights (Three Months Ended March 31, in thousands) | Metric | 2022 | 2021 | | :----------------------------------- | :------- | :------- | | Net Earnings | $49,796 | $42,290 | | Defined Benefit Pension | $242 | $1,362 | | Defined Benefit Post-Retirement | $9 | $36 | | Total Comprehensive Income, net of tax | $50,047 | $43,688 | Unaudited Condensed Consolidated Statements of Stockholders' Equity Outlines the changes in stockholders' equity components, including common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive loss, for the periods presented - Total Stockholders' Equity increased from $1,322,377 thousand at December 31, 2021, to $1,354,040 thousand at March 31, 2022, primarily driven by net earnings and stock-based compensation activities[16] - Retained earnings increased by $70,667 thousand from December 31, 2021, to March 31, 2022, reflecting the period's net earnings[16] Unaudited Condensed Consolidated Statements of Cash Flows Provides a breakdown of cash flows from operating, investing, and financing activities for the three months ended March 31, 2022, and 2021 Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, in thousands) | Metric | 2022 | 2021 | | :-------------------------------------- | :--------- | :--------- | | Net Cash Provided by Operating Activities | $125,668 | $124,447 | | Net Cash (Used in) Investing Activities | $(108,176) | $(127,094) | | Net Cash (Used in) Provided by Financing Activities | $(51,450) | $14,587 | | Net Increase (Decrease) in Cash and Cash Equivalents | $(33,958) | $11,940 | | Cash and Cash Equivalents at End of Year | $35,538 | $51,659 | Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed disclosures and explanations for the figures presented in the unaudited condensed consolidated financial statements, covering significant accounting policies, financial instruments, debt, commitments, and segment information Note A - Summary of Financial Statement Preparation and Significant Accounting Policies Describes the company's business operations, the basis of financial statement presentation, the impact of global uncertainties, and recent accounting standard updates - ATSG is a holding company whose subsidiaries lease aircraft and provide contracted airline operations and support services mainly to the air transportation, e-commerce, and package delivery industries[23] - The COVID-19 pandemic and the war in Ukraine pose ongoing uncertainties, potentially leading to disruptions such as personnel and parts shortages, maintenance delays, and inflationary pressures on operations and financial results[26] - The company adopted ASU 2020-06 on January 1, 2022, using a modified retrospective approach, which resulted in convertible debt being reflected entirely as a liability, eliminating the non-cash discount and its amortization expense[27][28] Note B - Goodwill, Intangibles and Equity Investments Details the carrying amounts of goodwill, acquired intangible assets, lease incentives, and equity investments, along with their amortization and valuation Goodwill by Reportable Segment (in thousands) | Segment | Carrying Value as of March 31, 2022 | | :------------ | :---------------------------------- | | CAM | $153,290 | | ACMI Services | $234,571 | | All Other | $8,113 | | Total | $395,974 | Acquired Intangible Assets (in thousands) | Asset Type | Carrying Value as of March 31, 2022 | | :--------------------- | :---------------------------------- | | Airline Certificates | $9,000 | | Amortizing Intangibles | $96,625 | | Total | $105,625 | - The carrying value of the lease incentive granted to Amazon (stock warrants) decreased from $102,913 thousand at December 31, 2021, to $97,115 thousand at March 31, 2022, due to $5,798 thousand in amortization[33] Note C - Significant Customers Identifies the company's largest customers (DoD, Amazon, DHL) and provides details on revenue concentration, accounts receivable, and contractual agreements with each Revenue Concentration from Largest Customers (Three Months Ended March 31) | Customer | 2022 Revenue Percentage | 2021 Revenue Percentage | | :------- | :---------------------- | :---------------------- | | Amazon | 34% | 35% | | DoD | 28% | 22% | | DHL | 11% | 14% | - As of March 31, 2022, the company leased 42 Boeing 767 freighter aircraft to Amazon (ASI) with lease expirations between 2023 and 2031, and issued warrants for 14.8 million and 7.0 million common shares under the 2018 Investment Agreement, expiring December 2025[39][43] - In February 2022, the company and DHL agreed to a six-year extension of dry leases for five Boeing 767 freighters and an extension of CMI agreements to operate aircraft through April 2028, expanding to include two additional 767 freighters[38] Note D - Fair Value Measurements Explains the methodologies and inputs used for fair value measurements of financial instruments, including money market funds, interest rate swaps, and stock warrant obligations Fair Value Measurement Using Level 2 and Level 3 Inputs (As of March 31, 2022, in thousands) | Item | Level 2 | Level 3 | Total | | :------------------------ | :------ | :------ | :------ | | Cash equivalents | $22,048 | $— | $22,048 | | Interest rate swap | $(833) | $— | $(833) | | Stock warrant obligations | $— | $(989) | $(989) | - The fair value of stock warrant obligations to Amazon is determined using a Black-Scholes pricing model (Level 2 inputs), with unvested warrants including additional assumptions (Level 3 inputs) such as expected exercise prices and probabilities of future leases[44] Note E - Property and Equipment Provides a summary of the company's property and equipment, primarily cargo aircraft, aircraft engines, and other flight equipment, and their net carrying values Property and Equipment, Net (in thousands) | Category | March 31, 2022 | December 31, 2021 | | :---------------------------------------- | :------------- | :---------------- | | Flight equipment | $3,364,376 | $3,301,113 | | Aircraft modifications and projects in progress | $262,380 | $206,917 | | Accumulated depreciation | $(1,550,529) | $(1,481,506) | | Property and equipment, net | $2,182,076 | $2,129,934 | Note F - Debt Obligations Details the company's debt structure, including revolving credit facilities, senior notes, and convertible notes, along with their terms, covenants, and carrying values Debt Obligations (in thousands) | Debt Type | March 31, 2022 | December 31, 2021 | | :---------------------------- | :------------- | :---------------- | | Revolving credit facility | $310,000 | $360,000 | | Senior Notes | $697,213 | $697,162 | | Convertible Notes | $256,118 | $231,646 | | Other financing arrangements | $10,456 | $10,555 | | Total debt obligations | $1,273,787 | $1,299,363 | - The Senior Credit Agreement was amended on April 6, 2021, temporarily increasing the revolving credit facility to $1 billion (then $800 million), extending the maturity date to April 6, 2026, and modifying financial covenants[51] - The $258.8 million aggregate principal amount of 1.125% convertible senior notes due 2024 are now reflected entirely as a liability following the adoption of ASU 2020-06, eliminating the previously bifurcated conversion feature and non-cash discount[53][54] Note G - Derivative Instruments Provides information on the company's interest rate swaps, which are used for protection from fluctuating interest rates and are not designated as hedges for accounting purposes Interest Rate Swaps (As of March 31, 2022, in thousands) | Expiration Date | Stated Interest Rate | Notional Amount | Market Value (Liability) | | :-------------- | :------------------- | :-------------- | :----------------------- | | March 31, 2023 | 2.425% | $131,250 | $(833) | - The company recorded net gains on derivatives of $2.8 million for the three months ended March 31, 2022[58] Note H - Commitments and Contingencies Outlines the company's commitments related to payroll support programs, operating leases, aircraft purchase and conversion, and legal proceedings - The company received government funds under the CARES Act, PSP Extension Law, and American Rescue Plan, which included restrictions on involuntary furloughs, pay reductions, executive compensation, dividends, and share repurchases until September 30, 2022[59][60] Maturities of Operating Lease Liabilities (As of March 31, 2022, in thousands) | Year | Undiscounted Cash Payments | | :----------------- | :------------------------- | | Remaining 2022 | $15,330 | | 2023 | $18,036 | | 2024 | $14,453 | | 2025 | $10,618 | | 2026 | $4,954 | | 2027 and beyond | $173 | | Total | $63,564 | - As of March 31, 2022, commitments to acquire and convert aircraft totaled $364.7 million, including twelve Boeing 767-300 and three Airbus A321-200 aircraft in or awaiting modification, and agreements to purchase eleven more Boeing 767-300 passenger aircraft through 2024[63][65] Note I - Pension and Other Post-Retirement Benefit Plans Describes the company's defined benefit pension and post-retirement healthcare plans, including net periodic benefit costs and contributions Net Periodic Benefit Cost (Three Months Ended March 31, in thousands) | Plan Type | 2022 Cost (Income) | | :---------------------------- | :----------------- | | Pension Plans | $(5,414) | | Post-Retirement Healthcare Plan | $45 | - The company contributed $0.8 million to pension plans during Q1 2022 and expects to contribute an additional $0.5 million during the remainder of 2022[73] Note J - Income Taxes Discusses the provision for income taxes, the effective tax rate, and the utilization of operating loss carryforwards - The estimated effective income tax rate for the current year is 23.4%, with the effective rate for the first three months of 2022 being 23.5%[74] - Management expects to utilize U.S. federal operating loss carryforwards to offset future tax liabilities and does not anticipate paying federal income taxes until 2025 or later[74] Note K - Accumulated Other Comprehensive Income (Loss) Details the components of accumulated other comprehensive income (loss) and changes during the reporting periods - The balance of accumulated other comprehensive loss was $(61,829) thousand as of March 31, 2022[78] - Other comprehensive income (loss), net of tax, for the three months ended March 31, 2022, was $251 thousand[78] Note L - Stock-Based Compensation Describes the company's stock incentive awards, including non-vested stock units and restricted stock, and summarizes activity and related expenses Stock-Based Award Activity (Three Months Ended March 31, 2022) | Metric | Number of Awards | Weighted Average Grant-Date Fair Value | | :----------------------------------- | :--------------- | :------------------------------------- | | Outstanding at beginning of period | 978,188 | $17.49 | | Granted | 285,867 | $35.45 | | Converted | (118,222) | $24.69 | | Forfeited | (1,400) | $22.22 | | Outstanding at end of period | 1,144,433 | $21.23 | - The company recorded $1.7 million in stock incentive award expense for the three months ended March 31, 2022, with $15.2 million of unrecognized expense expected to be recognized over a weighted-average period of 1.8 years[82] Note M - Common Stock and Earnings Per Share Explains the calculation of basic and diluted earnings per share, including the impact of ASU 2020-06 and stock warrants Earnings Per Share (Three Months Ended March 31, in thousands, except per share amounts) | Metric | 2022 | 2021 | | :---------------------------------------------- | :------ | :------ | | Earnings from continuing operations - basic | $49,796 | $42,290 | | Earnings from continuing operations - diluted | $50,556 | $36,935 | | Basic earnings per share from continuing operations | $0.67 | $0.71 | | Diluted earnings per share from continuing operations | $0.57 | $0.49 | | Weighted-average shares outstanding for basic earnings per share | 73,888 | 59,447 | | Weighted-average shares outstanding assuming dilution | 88,744 | 74,744 | - The adoption of ASU 2020-06 on January 1, 2022, resulted in diluted earnings per share for 2022 periods excluding interest charges related to convertible debt and including shares converted under the 'if-convert' method[83] Note N - Segment and Revenue Information Provides detailed financial information for the company's two reportable segments (CAM and ACMI Services) and other activities, including revenues, depreciation, interest expense, and assets Total Revenues by Segment (Three Months Ended March 31, in thousands) | Segment | 2022 | 2021 | YoY Change | | :---------------- | :-------- | :-------- | :--------- | | CAM | $106,905 | $83,277 | +28.4% | | ACMI Services | $330,090 | $247,131 | +33.6% | | All other | $102,535 | $93,698 | +9.4% | | Total Revenues| $485,860| $376,088| +29.2% | Segment Earnings (Loss) (Three Months Ended March 31, in thousands) | Segment | 2022 | 2021 | YoY Change | | :---------------- | :------ | :------ | :--------- | | CAM | $34,995 | $21,462 | +63.0% | | ACMI Services | $22,165 | $21,259 | +4.3% | | All other | $1,551 | $389 | +298.7% | Assets by Segment (in thousands) | Segment | March 31, 2022 | December 31, 2021 | | :---------------- | :------------- | :---------------- | | CAM | $2,260,674 | $2,218,012 | | ACMI Services | $849,478 | $872,311 | | All other | $176,777 | $177,012 | | Total Assets | $3,286,929 | $3,267,335 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, cash flows, liquidity, and capital resources for the three months ended March 31, 2022, compared to the same period in 2021, along with discussions of key business segments, customer relationships, and critical accounting estimates BACKGROUND Provides an overview of ATSG's business model, which involves aircraft leasing, airline operations, and support services, highlighting its two reportable segments: CAM and ACMI Services - ATSG's core business involves aircraft leasing (CAM) and airline operations (ACMI Services) for air transportation and logistics industries, supported by aircraft modification, maintenance, and ground services[96] - As of March 31, 2022, the company owned 108 Boeing aircraft in revenue service and had 15 aircraft (12 Boeing 767-300 and 3 Airbus A321-200) undergoing or awaiting freighter conversion[96] Customers Details the company's relationships with its largest customers—Amazon, the U.S. Department of Defense (DoD), and DHL—including revenue contributions and key contractual terms - Amazon (ASI) accounted for 34% of consolidated revenues in Q1 2022; ATSG leases 42 Boeing 767 freighter aircraft to ASI and operates them, also providing ground and aircraft maintenance services[97] - The U.S. Department of Defense (DoD) comprised 28% of consolidated revenues in Q1 2022, primarily from operating passenger and combi charter flights using a fleet of fifteen passenger and four combi aircraft[99] - DHL comprised 11% of consolidated revenues in Q1 2022; ATSG leases 13 Boeing 767 freighter aircraft to DHL and operates eight of them, with dry leases and CMI agreements extended through April 2028[99] RESULTS OF OPERATIONS Analyzes the company's financial performance for the first quarter of 2022, detailing revenue and earnings growth, fleet changes, segment-specific results, and a breakdown of operating and non-operating expenses Revenue and Earnings Summary Provides an overview of the company's financial performance for the first quarter of 2022, highlighting significant revenue growth and net earnings increase, along with adjustments for non-operating items - External customer revenues from continuing operations increased by $109.8 million, or 29%, to $485.9 million in Q1 2022, driven by growth in contracted airline services, charter flights, aircraft leasing, and aviation fuel sales[100] - Consolidated net earnings from continuing operations rose to $49.8 million in Q1 2022, up from $42.3 million in Q1 2021[100] Adjusted Pre-Tax Earnings from Continuing Operations (Three Months Ended March 31, in thousands) | Metric | 2022 | 2021 | | :------------------------------------------- | :------ | :------ | | Pre-Tax Earnings from Continuing Operations | $65,085 | $55,102 | | Adjusted Pre-Tax Earnings from Continuing Operations | $64,202 | $20,025 | Aircraft Fleet Summary Details the composition and recent changes in the company's aircraft fleet, including owned and leased aircraft, and those undergoing freighter conversion In-Service Aircraft Fleet (As of March 31, 2022) | Aircraft Type | Owned | Operating Lease | Total | | :------------------------ | :---- | :-------------- | :---- | | Boeing 767-200 Freighter | 31 | 2 | 33 | | Boeing 767-300 Freighter | 62 | 5 | 67 | | Boeing 767-200 Passenger | 2 | 1 | 3 | | Boeing 767-300 Passenger | 6 | 3 | 9 | | Boeing 777-200 Passenger | 3 | — | 3 | | Boeing 757-200 Combi | 4 | — | 4 | | Total In-Service | 108 | 11 | 119 | - As of March 31, 2022, the company had 12 Boeing 767-300 aircraft and 3 Airbus A321-200 aircraft undergoing or awaiting freighter conversion[108] - During Q1 2022, CAM completed the modification of one Boeing 767-300 freighter and purchased one Boeing 767-300 and two Airbus A321-200 passenger aircraft for conversion[107] CAM Segment Discusses the performance of the Cargo Aircraft Management (CAM) segment, highlighting revenue growth from new aircraft leases and engine power coverage services, and factors influencing future operating results - CAM revenues increased by $23.6 million in Q1 2022 compared to Q1 2021, driven by nine additional Boeing 767-300 freighter aircraft placed on customer leases since April 1, 2021[110] - Revenues from external customers increased by $6.3 million in Q1 2022 due to CAM's new engine power coverage service for its General Electric powered Boeing 767-200 aircraft[110] - CAM's pre-tax earnings increased to $35.0 million in Q1 2022 from $21.5 million in Q1 2021, reflecting new aircraft and lower allocated interest expense, partially offset by a $9.3 million increase in depreciation[110] ACMI Services Reviews the performance of the ACMI Services segment, noting significant revenue growth due to increased block hours for DoD and additional freighter aircraft in operation, despite rising operating costs - Total revenues from ACMI Services increased by $83.0 million to $330.1 million in Q1 2022, primarily due to a 42% increase in block hours flown for DoD troop movements and ten additional freighter aircraft in operations[111] - Overall customer block hours increased 21% in Q1 2022 compared to Q1 2021, with increases for DHL and Amazon[111] - ACMI Services' pre-tax earnings were $22.2 million in Q1 2022, an improvement of $28.9 million compared to Q1 2021 (excluding $28.0 million in government grants recognized in 2021)[111] Other Activities Discusses the performance of the company's "All other" segment, which includes aircraft maintenance, ground services, and fuel sales, noting revenue and earnings growth - External customer revenues from other activities increased by $10.9 million in Q1 2022, driven by a $5.8 million increase in fuel sales and broad increases across maintenance and ground services[114] - Pre-tax earnings from other activities increased by $1.2 million for the first three months of 2022 compared to the same period last year[114] Expenses from Continuing Operations Analyzes the changes in key operating expenses for the first quarter of 2022, including salaries, depreciation, maintenance, fuel, and contracted services, explaining the drivers behind these changes - Salaries, wages, and benefits expense increased by $19.7 million (14%) in Q1 2022 due to higher wage rates, benefit costs, and employee termination rates[115] - Fuel expense increased by $29.9 million in Q1 2022, driven by additional block hours for the DoD and a 40% increase in the price per gallon of aviation fuel[115] - Depreciation and amortization expense increased by $11.0 million in Q1 2022, reflecting incremental depreciation for nine additional aircraft and engines under new power coverage arrangements[115] Non Operating Income, Adjustments and Expenses Reviews non-operating items impacting earnings, such as interest expense, financial instrument re-measurements, retiree benefit components, and income taxes - Interest expense decreased by $3.1 million in Q1 2022 due to lower interest rates on Senior Credit Agreement borrowings and lower average debt balances[117] - The company recorded unrealized pre-tax gains on financial instrument re-measurements of $2.7 million in Q1 2022, primarily due to the impact of higher market interest rates on interest rate derivatives[117] - Non-service components of retiree benefits resulted in a net gain of $5.4 million in Q1 2022, compared to $4.5 million in Q1 2021, influenced by actuarial assumptions and investment results[117] FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Analyzes the company's cash flow activities, future commitments for aircraft, and overall liquidity position, including available cash and credit facilities Cash Flows Analyzes the company's cash flow activities, including operating, investing, and financing, and highlights significant capital expenditures for aircraft acquisition and modification - Net cash generated from operating activities totaled $125.7 million in Q1 2022, compared to $124.4 million in Q1 2021, with no government payroll support funds received in 2022 (vs. $37.4 million in 2021)[118] - Cash payments for capital expenditures were $108.3 million in Q1 2022, primarily for aircraft acquisition ($71.9 million) and freighter modification, and heavy maintenance ($31.9 million)[120] - Net cash used in financing activities was $51.5 million in Q1 2022, including $90.1 million in debt payments and $40.0 million drawn from the revolving credit facility[120] Commitments Details the company's future commitments, particularly for aircraft purchases and freighter conversions, and projected capital expenditures - As of March 31, 2022, the company had 15 aircraft in or awaiting modification to a freighter configuration and agreements to purchase 11 more Boeing 767-300 passenger aircraft through 2023[121] - Total capital expenditures for 2022 are estimated at approximately $590 million, with the majority allocated to aircraft purchases and freighter modifications ($390 million) and heavy maintenance ($200 million)[121][122] Liquidity Assesses the company's liquidity position, including cash balances and available credit, and its ability to fund operations, fleet expansion, and contractual obligations - As of March 31, 2022, the company had $35.5 million in cash balances and $474.9 million available from the unused portion of its revolving credit facility[122] - The company believes its current cash, forecasted cash flows, and Senior Credit Agreement will be sufficient to fund fleet expansion, maintenance, and meet contractual obligations for at least the next twelve months[122] - Potential global disruptions in supply chains and labor shortages could delay aircraft modification projects and impact projected capital expenditures[122] CRITICAL ACCOUNTING ESTIMATES Highlights the critical accounting policies and estimates that require significant judgment and affect the reported financial amounts, noting no material changes from the prior annual report - Key accounting estimates include revenue recognition, post-retirement liabilities, bad debts, self-insurance reserves, valuation of spare parts inventory, useful lives, salvage values and impairment of property and equipment, income taxes, contingencies, and litigation[123] - Critical accounting policies and estimates have not materially changed from those disclosed in the 2021 Form 10-K, except as provided in Note A[125] Item 3. Quantitative and Qualitative Disclosures About Market Risk Discusses the company's exposure to market risks, specifically changes in interest rates and jet fuel prices, and notes that these risks have not materially changed - The company is exposed to market risk for changes in interest rates and jet fuel prices[126] - The risk associated with jet fuel is largely mitigated by reimbursement through agreements with its customers[126] - Market risks have not materially changed from those disclosed in the company's 2021 Form 10-K[126] Item 4. Controls and Procedures Reports on the effectiveness of the company's disclosure controls and procedures and confirms no material changes in internal control over financial reporting during the quarter - As of March 31, 2022, the company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective[127] - There were no changes in the company's internal control over financial reporting during the quarter ended March 31, 2022, that materially affected or are reasonably likely to materially affect it[127] PART II. OTHER INFORMATION Covers legal proceedings, risk factors, equity security sales, and exhibits, providing additional disclosures Item 1. Legal Proceedings States that the company is involved in various legal proceedings but does not expect the ultimate liability to be material to its financial condition or results of operations - The company is a party to legal proceedings in various federal and state jurisdictions arising out of its business operations[129] - The ultimate liability from pending legal proceedings, asserted legal claims, and known potential legal claims is not expected to be material to the company's financial condition or results of operations[129] Item 1A. Risk Factors Highlights new or updated risk factors, specifically related to the war in Ukraine and COVID-19 variants, which could lead to supply chain disruptions and inflationary pressures - New risk factors include the war in Ukraine and the emergence of COVID-19 variants, which may result in further supply chain disruptions and inflationary pressure on costs[130] - Other risks currently unknown or considered immaterial/unlikely could also adversely affect the company[130] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Provides an update on the company's common stock repurchase program, noting its suspension due to government grant restrictions - The Board of Directors authorized a common stock repurchase program up to $150.0 million, with $61.3 million remaining as of March 31, 2022[131] - The share repurchase program has been suspended until the restrictions from the CARES Act, PSP Extension Law, and American Rescue Plan lapse, which is through September 30, 2022[131] Item 6. Exhibits Lists the exhibits filed with or incorporated by reference into the report, including certifications and XBRL documents - Exhibits include various certifications (31.1, 31.2, 32.1, 32.2) and XBRL taxonomy documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[134] SIGNATURES Contains the official signatures of the registrant's authorized officers, confirming the filing of the report - The report was signed by Richard F. Corrado (Executive Officer) and Quint O. Turner (Principal Financial Officer and Principal Accounting Officer) on May 10, 2022[136][137]