AAWW
#Sure, <UNK>, great question.
We've talked about this before we have an engine acquisition program.
It's part of our overall continuous implement program.
We've been able to purchase engines for less than it would cost us to perform overhauls in some cases.
In this case we were able to trade in run out engines for engines that were fresh from overhaul.
And so by trading in these old engines it allowed us to reduce the cost of these other engines.
In this case we pool all of our engines together and so therefore even though these engines were run out, the book value of the engines was on a pooled basis.
And so it creates a very big loss and so for adjusted purposes, we back that large loss out.
It's a non-cash item and so that's the nature of the item.
Overall we trade in the engines, we get to select any engines that we want to trade in.
And so in this case we chose these run out engines.
They happened to have a higher book value which creates this loss.
Military level is fine.
Both cargo and passenger is slightly higher than 2015 and consistent with our expectations as we came into the year.
No, I don't have that, sorry, <UNK>, I don't have that at my fingertips.
But if you're asking how the Amazon warrants will impact that, is that what you're asking.
Sure, sure.
It really depends on what happens to our stock price.
Because the warrants will be accounted for under the treasury stock method and so I don't know how much detail you want to know about that but it's an interesting accounting method but it really depends on where the stock is versus where the exercise price is.
It's a funny accounting method and any amount of the warrants that are in the money will impact the dilution.
So it really depends where our stock is.
We have made certain estimates in trying to provide our framework outlook for today but it really will depend on how our stock performs versus the exercise price.
It's not something ---+ we really don't want to tell you where we think we project our stock price will be.
We obviously don't know but of course we had to make certain projections.
But it really depends on where our stock price will be at the end of the year and how that compares to the exercise price.
And I will point out, <UNK>, that the other part of being down a few percentage points are the costs that we're going to incur as we ramp up our pilot, a number of our pilots and some of the other expenses that someone else asked about earlier on the call.
Because we will be starting at the end of the year flying in 2017 but we really do need to begin to hire and train and take on other expenses, necessary expenses in anticipation of the startup.
So it's coming.
Sure.
We will be hiring additional pilots.
We will be hiring some additional maintenance and other staff and we'll be incurring crew training as we ramp up.
No, so we had previously provided our framework for the year and then we've given you a revised guidance.
So you can see what that difference is and you can determine how you want to allocate that between the various items.
But we've given you a before and after.
Yes, <UNK>, I think <UNK> just commented on that.
I think we expect that our military business, both cargo and passenger for the military should be consistent with or slightly better than the prior year.
So as one of our customers in the charter business is military I don't believe it's front-end loaded.
It tends to be kind of smoother than that through the year, <UNK>.
I think, though, that it's worth commenting a bit about the charter market.
The charter market has changed.
A number of passenger carriers in intercontinental operations have reduced their freighter fleets over the last several years.
And so from our perspective it's a bigger commercial charter market than it used to be.
It's not just fourth-quarter seasonal peak with consumer goods and [EGITS] coming into Transpac or Asia Europe, it's global.
We've just completing a great fresh-cut flowers out of Latin America into the US into Europe for Mother's Day and spring generally as well.
So we're operating over 1,000 charter flights a year.
That's multiple charter flights a day.
I think we've got a great charter salesforce and sales team that understands the market well.
And I think what we'll see are smoother charter-type contributions or good charter contributions through the year.
The market has changed over the last couple of years and of course first quarter last year was exceptional because of all the work stoppages, etc.
, that happened out on the West Coast.
But I think it's a different charter market than it's been.
Thanks, Steve.
Well we haven't got a specific schedule from Amazon but we anticipate that the operations or the vast majority of the operations will be within North America.
We'll get that schedule from Amazon as we're moving closer to operation startup.
As <UNK> said we've already secured some of the aircraft with good line of sight on the balance of the aircraft that we need to acquire.
We'll be working with several shops to convert the aircraft from passenger to freighter.
And I think as <UNK> might've said earlier, we feel very confident about our ability to deliver the converted aircraft to Amazon based on the schedule we've agreed with them.
Okay, I think, Amy, you said there weren't any other questions.
So with that, <UNK> and I would like to thank everyone for your interest in Atlas Air Worldwide and for taking time to join us on the call here today.
We look forward to speaking with you again soon and hopefully seeing many of you at our Investor Day which we're going to hold on June 15 in New York at the NASDAQ market site.
So thank you once again.
Thank you.
