ABX Air INFOline
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INFOline for May 12, 2016
Good afternoon, everyone. This is John Starkovich with the ABX Air INFOline for May 12, 2016.

Safety
One of the benefits of our Safety Management Team implementation is providing our employees and contractor or vendor employees with an opportunity to confidentially report safety or security issues or concerns. Some employee groups are covered under FAA and Company sponsored Aviation Action Safety Program’s reporting process; however, all employees can submit confidential reports by emailing our safety department at abxairsafety@abxair.com or calling the SMS Safety Hotline at 937-366-3000 and leaving a voice message. A response will be provided to each email report submitter, and voice replies will be made if requested by the submitter. Completely anonymous reports can also be submitted to WeTip, a third party service providing 24-hour, 365-day service at www.wetip.com or calling 800-782-7475.

Compliance
The U.S. Air Force Air Mobility Command Team Chief has verified that the biennial Department of Defense Survey will be conducted for ABX Air on June 7-10. Our compliance managers in Flight, Dispatch, Maintenance and Ground Operations have completed the appropriate checklists and are sending them to the Inspection Team for review prior to the inspection. Thanks to all who have prepared for the survey, and we invite all employees to please welcome the Air Mobility Command team members upon their arrival in less than a month.

Company News
Our on-time service performance for DHL for the month of May, subject to verification, is 97.46%. Tentatively, we ended April with an on-time performance of 98.66%. Similarly, for the second quarter of 2016, we are at 98.34% on time performance to date, all subject to verification.

Congratulations to the following ABX employees that are celebrating milestone anniversaries during the month of May: Safety Supervisor IEP and SMS Administrator Diane Hibbett celebrating 35 years with ABX Air; Manager of Maintenance Planning Walter Pico and 767 Capt. Richard Taylor celebrating 25-year anniversaries; and 767 First Officer Jan Kania with 20 years. Thank you for your service to ABX Air over the years and congratulations.

New Hire Pilots Class
Please join me in welcoming our first class of new hire pilots. Ten new hire pilots started May 9 and will complete approximately eight weeks of classroom and simulator instruction before starting their Initial Operating Experience. Together, this class averages over 8,800 hours of flying time with verified backgrounds including 767, 747, MD-11, DC-10, C-17, and regional jet time. The next class is scheduled to start June 6.

401(k) Beneficiary Update
If you have not done so already, please update your beneficiaries for your 401(k) account online with Fidelity. Our record-keeping is transitioning to all electronic, and you need to enter your beneficiary information directly as the paper records will not transition automatically. It takes only a few minutes to complete the information at www.401k.com. Make sure records are up-to-date.

Pension Funding Notice
Recently the Company mailed the annual pension Funding Notices to all participants in the Retirement Income Plan and the Pilots Minimum Monthly Plan. I am pleased to share with you that the funding levels for both plans exceed 100%. The Retirement Income Plan is at 108%, and the Pilots Minimum Monthly Plan is at 104%. Since the Company became independent in 2003, the Company has contributed over $438 million to these two plans. That does not count contributions to the 401(k) plans. Keeping the retirement plans financially stable and retirement benefits secure is a substantial Company commitment to our employees. If you have any questions about these notices, please contact Vickie Hurt in the Human Resources Dept.

Parent Company News
On May 10, ATSG announced 1st Quarter 2016 results. For the first quarter of 2016, compared with the first quarter of 2015:
• Revenues increased 21 percent to $177.4 million. Excluding revenues from reimbursed expenses, revenues increased 18 percent. This increase included contributions from five more dry leases of Boeing 767 cargo aircraft with external customers, and expanded air network operations for ATSG's newest customer, Amazon Fulfillment Services Inc. (AFS).
• Pre-tax Earnings from Continuing Operations were $12.1 million, versus $14.5 million in the prior year period. Adjusted Pre-Tax Earnings, as defined in the Earnings Summary later in the press release, increased 13 percent to $16.1 million. That metric excludes non-cash charges associated with pension costs, debt issuance costs at a European affiliate, and the effects of financial instrument transactions. Factors affecting our pre-tax results this year included higher expenses for scheduled heavy maintenance checks and costs to prepare flight crews and other personnel for expanding airline operations. Additionally, the prior-year quarter benefited by $1.6 million from the completion of then on-cash amortization of a note payable to DHL.
• Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) from Continuing Operations increased 11 percent to $51.3 million. Adjustments to EBITDA in 2016 are the same items excluded from Adjusted Pre-Tax Earnings.
• Net earnings from Continuing Operations for 1st quarter were $8.2 million, or $0.13 per diluted share, versus $8.9 million, or $0.14 per diluted share for 2015 1st quarter.
Please refer to the entire press release and comments by ATSG CEO Joe Hete at the www.atsginc.com web site.

On May 12, 2016, our parent company ATSG also held its annual shareholders meeting and re-elected six directors to one-year terms, approved four other proposals, and provided an advisory vote as follows:
1. Ratified the selection of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for fiscal year 2016;
2. Held an advisory vote on executive compensation;
3. Approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from 75,000,000 to 85,000,000 (the “Charter Amendment”) ;
4. Approved the issuance by the Company of 20 percent or more of the Company’s currently issued and outstanding common stock in a proposed private placement for purposes of NASDAQ Listing Rule 5635 (the “Stock Issuance”); and
5. Approved the adjournment of the Annual Meeting, if necessary, to solicit additional proxies in favor of the Charter Amendment and Stock Issuance if there were not sufficient votes for such proposals.

A complete report of the results of the meeting will be filed in a Form 8-K with the Securities and Exchange Commission.

That is all for this week’s INFOline. Thank you for all you do to make ABX Air a success. Take care.


Copyright 2016, ABX Air, Inc. All rights reserved. ABX Air, 145 Hunter Drive, Wilmington OH 45177.