Good afternoon, everyone. This is John Starkovich with the ABX INFOline for May 9, 2013.

Safety
Our FOQA (Flight Operations Quality Assurance) program data vendor, Flight Data Services, has rolled out a change in the software that is used to validate our data. ABX Safety Analyst, Dean Weaver, has been working with them, our Gatekeepers and our Director of Operations to create updated Aircraft Specifications that will take advantage of the new systems capabilities. We also are now using Achieved flight Data which will provide critical information concerning aircraft performance that will increase the reliability of our data and improve our overall FOQA program.

Compliance
Our biennial DOD Audit will be postponed due to on-going federal budget cuts. We are still scheduling an on-board DOD Audit flight audit within the next few weeks. We have also selected GHS as our auditor for the biennial International Airline Transport Association, Operational Safety Audit. The audit is scheduled for August and we will soon begin running the entire IOSA Audit Checklist as part of our Internal Audit and Evaluation Program.

Company News
Our on-time service performance for DHL for the month of May, subject to verification, is at 98.52%. Similarly, for the second quarter of 2013, we are at 98.87 % on time performance to date, all subject to verification.

The ATSG annual share-holders meeting will be held tomorrow May 10, 2013 at 11:00 am and will be held at the Roberts Centre on I-71. ABX employees are invited to attend the event.

On May 8, 2013, Air Transport Services Group, Inc. reported consolidated financial results for the quarter ended March 31, 2013. For the first quarter of 2013, compared with first quarter 2012:

• Revenues were $143.3 million, a decrease of 1.5%.

• Total operating expenses were $126.9 million, down 3.7%, including a $3.8 million reduction in salaries, wages and benefits expense due in large part to the merger of Air Transport International and Capital Cargo International Airlines in March 2013.

• Pre-tax income was $13.6 million, an increase of 26.5%.

• Net earnings from continuing operations increased 27.6% to $8.5 million, or $0.13 per fully diluted share.

• First-quarter Adjusted EBITDA was $37.3 million, a 9.6% increase from $34.1 million in the same period of the prior year.

Another reminder that beginning June 1, 2013, the pharmacy benefit manager will change from Medco to United Health Care’s Optum Rx. While this change does not affect the current coverage levels, it will change certain administrative processes and the manner in which eligibility and claims are processed by your pharmacy. Your new insurance cards will be issued in late May.

Other News & Information
In an April Cargo Facts Update, there was an article on the concern in the air cargo industry about a modal shift of air freight to ocean in the last decade. The article referenced a presentation by Boeing’s Regional Director of Cargo Marketing Jim Edgar saying the concern was unfounded. Using data from the US Dept. of Commerce, he indicated that the percentage being shipped by air of the top 20 items shipped via the trans-Pacific lane, as measured by weight, has remained almost constant. With respect to whether “low to no growth” is the new normal, the article indicated that not much change should be expected for 2013 but there will likely be a turnaround in 2014.

DP-DHL recently released its Corporate Responsibility report which includes an update of its GoGreen initiative. During 2012, DHL improved its carbon efficiency by an additional two index points. In total, they have seen a 16% improvement in their carbon efficiency since 2008. This represents over half of the of the target reduction of 30% CO2-efficiency improvement by 2020 for their own operations and those of its transportation subcontractors, compared to 2007.

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