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Press release from Business Wire

Atlas Air Worldwide Reports Third-Quarter Earnings

<ul> <li class='bwlistitemmargb'> <b>Adjusted Net Income of $28.6 Million, $1.13 per Share</b> </li> <li class='bwlistitemmargb'> <b>Reported Net Income of $23.7 Million, $0.94 per Share</b> </li> <li class='bwlistitemmargb'> <b>Expect Full-Year Adjusted EPS of $3.40 to $3.80</b> </li> <li class='bwlistitemmargb'> <b>Repurchased 1.724 Million Shares in 2013, 6.5% of Outstanding</b> </li> <li class='bwlistitemmargb'> <b>Board Increases Share Repurchase Authorization </b> </li> </ul> <p> </p>

Thursday, November 07, 2013

Atlas Air Worldwide Reports Third-Quarter Earnings

07:26 EST Thursday, November 07, 2013

PURCHASE, N.Y. (Business Wire) -- Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW), a leading global provider of outsourced aircraft and aviation operating solutions, today announced adjusted net income attributable to common stockholders of $28.6 million, or $1.13 per diluted share, for the three months ended September 30, 2013, compared with $33.4 million, or $1.26 per diluted share, for the three months ended September 30, 2012.

On a reported basis, third-quarter 2013 net income attributable to common stockholders totaled $23.7 million, or $0.94 per diluted share, compared with $33.9 million, or $1.27 per diluted share, in the third quarter of 2012. Free cash flow of $73.8 million in the third quarter of 2013 compared with $98.9 million in the third quarter of 2012.

“Earnings in the third quarter of 2013 were below our expectations, reflecting market factors,” said William J. Flynn, President and Chief Executive Officer. “Demand in the commercial airfreight peak season through September was less than we anticipated. Airfreight yields remained under pressure, impacting our Commercial Charter segment. In addition, a decline in military charter demand led to a reduction in AMC volumes and fewer favorable one-way AMC missions.

“Results during the quarter were supported by strength in our core ACMI operations and growth in our Dry Leasing business. Led by our new 747-8 freighters in ACMI, we saw increasing contributions during the quarter from investments to diversify our business mix, including the addition of 777 freighters with predictable, long-term revenue and earnings streams in Dry Leasing; our expanding 767 service; growing CMI operations within ACMI; and ongoing continuous improvement initiatives.

“Reflecting our commitment to enhance stockholder value, we acquired a further 3.1% of our outstanding common stock through our share repurchase program from May through August. Combined with the shares that we bought through the end of April, we have repurchased approximately 6.5% of our shares for $72 million this year. In addition, our board of directors has increased our existing authority to repurchase shares from $9 million to $60 million."

Third-Quarter Results

Revenue, volume and profitability growth in our core ACMI business during the third quarter were driven by our new 747-8Fs, with an average of 3.3 additional -8F aircraft in service compared with the third quarter of 2012, and the continued ramp up and expansion of CMI service.

Improved ACMI segment earnings during the period benefited from higher rates per block hour and lower maintenance expense for our 747-8Fs, partially offset by the redeployment of 747-400 aircraft to other business segments.

In Dry Leasing, revenue and profitability grew following the acquisition of one 777-200LRF aircraft in March 2013 and two 777-200LRF aircraft in July 2013. Each aircraft was acquired with a long-term customer lease already in effect.

In AMC Charter, a reduction in cargo and passenger block hours, as well as a reduced number of one-way AMC missions and a change in the proportion of those missions from outbound U.S. to inbound U.S., led to a significant decline in segment contribution. Higher average cargo and passenger revenue per block hour during the period stemmed from an increase in the average pegged fuel price set by the U.S. military.

Segment results in Commercial Charter primarily related to a reduction in yields driven by soft third-quarter global charter-market conditions. Results also reflected a reduction in return legs due to the change in the number and direction of one-way AMC missions.

Results in the third quarter were also affected by a reduction in capitalized interest on 747-8F aircraft that entered service.

Income Taxes

Reported earnings for the third quarter of 2013 included an effective income tax rate of 31.3%, reflecting both the ongoing beneficial impact of lower taxes for certain foreign subsidiaries in our Dry Leasing business and the net impact of the resolution of certain income tax liabilities.

Nine-Month Results

For the nine months ended September 30, 2013, adjusted net income attributable to common stockholders totaled $54.9 million, or $2.13 per diluted share, compared with $78.3 million, or $2.95 per diluted share, for the nine months ended September 30, 2012.

On a reported basis, nine-month 2013 net income attributable to common stockholders totaled $63.9 million, or $2.48 per diluted share, compared with $77.5 million, or $2.92 per diluted share, in the first nine months of 2012.

Free cash flow in the first nine months of 2013 increased to $180.8 million from $154.1 million in the first nine months of 2012.

Cash and Short-Term Investments

At September 30, 2013, our cash, cash equivalents, short-term investments and restricted cash totaled $298.4 million, compared with $419.9 million at December 31, 2012.

The change in position at September 30 reflected cash provided by operating and financing activities offset by cash used for investing activities.

Net cash used for investing activities in the first nine months of 2013 primarily related to the purchase of two 747-8F aircraft as well as three 777-200LRF aircraft for our Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the acquisitions of these aircraft. Those proceeds were partially offset by payments on debt obligations and debt issuance costs.

Share Repurchases

Between mid-May and mid-August, we repurchased 820,276 shares of our common stock for $35.6 million. The shares were acquired pursuant to an accelerated share repurchase program with a financial institution that settled in August.

Through the nine months ended September 30, 2013, we repurchased a total of 1,723,577 shares, or 6.5%, of our outstanding common stock at December 31, 2012.

Future repurchases under our new $60 million authority may be made at our discretion, and the actual timing, form and amount will depend on company and market conditions.

Outlook

Looking to full-year 2013, we expect fully diluted earnings per share to total between $3.40 and $3.80 on an adjusted basis and $3.75 and $4.15 on a reported basis.

Our current outlook reflects a much less robust commercial airfreight peak season than previously anticipated. While commercial airfreight volumes are strengthening, airfreight yields remain volatile. In addition, military cargo volumes have declined at a more rapid rate. Together, these factors affected our third-quarter results and have reduced anticipated profitability for the fourth quarter.

Partially offsetting these challenges are increasing contributions from investments to diversify the company's business mix, led by new 747-8 freighters in the company's core ACMI business; the addition of 777 freighters with predictable, long-term revenue and earnings streams in Dry Leasing; an expanding 767 service platform; entry into military and commercial charter passenger operations; and continuing growth in the company's non-asset-intensive CMI operations. Also contributing are ongoing continuous improvement productivity and efficiency initiatives.

Mr. Flynn added: “Airfreight remains a long-term growth industry despite current market challenges. We are focused on the long-term growth of our business, and we are well-positioned to capitalize on market improvements. Our business model is solid and is complemented by substantial operating leverage, strong customer relationships and a superior fleet. We continue to strengthen our competitive position and generate substantial free cash flow, which will enhance stockholder value.”

Conference Call

Management will host a conference call to discuss Atlas Air Worldwide's third-quarter financial and operating results at 11:00 a.m. Eastern Time on Thursday, November 7, 2013.

Interested parties are invited to listen to the call live over the Internet at www.atlasair.com (click on “Investor Information”, click on “Presentations” and on the link to the third-quarter call) or at the following Web address:

http://www.media-server.com/m/p/rq4h455p

For those unable to listen to the live call, a replay will be available on the above Web sites following the call. A replay will also be available through November 14 by dialing (855) 859-2056 (domestic) and (404) 537-3406 (international) and using Access Code 88980639#.

About Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include EBITDAR, as adjusted; EBITDA, as adjusted; Direct Contribution; Adjusted Net IncomeAttributable to Common Stockholders; Adjusted Diluted EPS; and Free Cash Flow, which exclude certain items. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.

Our management uses these non-GAAP financial measures in assessing the performance of the Company's ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.

About Atlas Air Worldwide:

Atlas Air Worldwide is the parent company of Atlas Air, Inc. (Atlas) and Titan Aviation Leasing (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Through Atlas and Polar, Atlas Air Worldwide operates the world's largest fleet of Boeing 747 freighter aircraft.

Atlas, Titan and Polar offer a range of outsourced aircraft and aviation operating solutions that include ACMI service – in which customers receive an aircraft, crew, maintenance and insurance on a long-term basis; CMI service, for customers that provide their own aircraft; express network and scheduled air cargo service; military cargo and passenger charters; commercial cargo and passenger charters; and dry leasing of aircraft and engines.

Atlas Air Worldwide's press releases, SEC filings and other information can be accessed through the Company's home page, www.atlasair.com.

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide's current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies' ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies' products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide's reports to the United States Securities and Exchange Commission.

For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.

Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2013 or thereafter.

Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.

 

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 
        For the Three Months Ended     For the Nine Months Ended
September 30, 2013     September 30, 2012 September 30, 2013     September 30, 2012
 
Operating Revenue
ACMI $ 189,583 $ 177,722 $ 552,710 $ 492,846
AMC Charter 95,668 117,377 287,840 376,685
Commercial Charter 104,605 108,078 313,488 305,852
Dry Leasing 11,874 3,057 21,844 8,864
Other   3,660     3,017     10,417     9,013  
Total Operating Revenue $ 405,390   $ 409,251   $ 1,186,299   $ 1,193,260  
 
Operating Expenses
Aircraft fuel 93,434 99,080 289,535 311,414
Salaries, wages and benefits 74,167 71,386 219,216 215,640
Maintenance, materials and repairs 31,306 40,524 133,152 136,875
Aircraft rent 48,448 44,133 130,703 126,309
Depreciation and amortization 23,661 16,612 61,840 44,792
Passenger and ground handling services 18,037 18,711 52,109 50,100
Navigation fees, landing fees and other rent 16,438 15,153 46,901 44,090
Travel 14,535 14,746 43,485 42,189
Loss (gain) on disposal of aircraft 501 (1,058 ) 79 (2,417 )
Other   27,157     27,699     80,515     85,306  
Total Operating Expenses   347,684     346,986     1,057,535     1,054,298  
Operating Income   57,706     62,265     128,764     138,962  
 
Non-operating Expenses (Income)
Interest income (4,849 ) (4,833 ) (15,003 ) (14,629 )
Interest expense 22,594 17,004 61,711 46,598
Capitalized interest (291 ) (4,052 ) (1,985 ) (16,356 )
Loss on early extinguishment of debt 4,524 143 5,518 285
Other expense (income), net   (241 )   (331 )   1,415     454  
Total Non-operating Expenses (Income) 21,737 7,931 51,656 16,352
Income before income taxes 35,969 54,334 77,108 122,610
Income tax expense   11,247     19,759     11,320     45,899  
Net Income 24,722 34,575 65,788 76,711
Less: Net income (loss) attributable
to noncontrolling interests   981     717     1,909     (834 )
Net Income Attributable
to Common Stockholders $ 23,741   $ 33,858   $ 63,879   $ 77,545  
Earnings per share:
Basic $ 0.94   $ 1.28   $ 2.48   $ 2.94  
Diluted $ 0.94   $ 1.27   $ 2.48   $ 2.92  
 
Weighted average shares:
Basic   25,124     26,443     25,710     26,410  
Diluted   25,212     26,580     25,784     26,527  
 
 

Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(Unaudited)

 
        September 30, 2013     December 31, 2012
Assets
Current Assets
Cash and cash equivalents $ 280,967 $ 409,763
Short-term investments 11,573 10,119
Restricted cash 5,886
Accounts receivable, net of allowance of $1,539 and $3,172, respectively 118,515 127,704
Prepaid maintenance 21,004 22,293
Deferred taxes 53,799 26,390
Prepaid expenses and other current assets   36,628     36,726  
Total current assets 528,372 632,995
Property and Equipment
Flight equipment 2,971,696 2,209,782
Ground equipment 45,049 39,230

Less: accumulated depreciation

(238,992 ) (185,419 )
Purchase deposits for flight equipment   38,978     147,946  
Property and equipment, net 2,816,731 2,211,539
Other Assets
Long-term investments and accrued interest 129,665 140,498
Deposits and other assets 133,238 132,120
Intangible assets, net   35,947     35,533  
Total Assets $ 3,643,953   $ 3,152,685  
Liabilities and Equity
Current Liabilities
Accounts payable $ 42,700 $ 20,789
Accrued liabilities 150,741 152,467
Current portion of long-term debt1,2   262,568     154,760  
Total current liabilities 456,009 328,016
Other Liabilities
Long-term debt1,2 1,473,685 1,149,282
Deferred taxes 302,274 265,384
Other liabilities   124,897     121,899  
Total other liabilities 1,900,856 1,536,565
Commitments and contingencies
Equity
Stockholders' Equity
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued
Common stock, $0.01 par value; 50,000,000 shares authorized; 28,198,464 and
27,672,924 shares issued, 25,037,540 and 26,443,441, shares outstanding
(net of treasury stock), as of September 30, 2013 and December 31, 2012, respectively 282 277
Additional paid-in-capital 557,078 544,421
Treasury stock, at cost; 3,160,924 and 1,229,483 shares, respectively (125,796 ) (44,850 )
Accumulated other comprehensive loss (12,790 ) (14,263 )
Retained earnings   862,555     798,676  
Total stockholders' equity 1,281,329 1,284,261
Noncontrolling interest   5,759     3,843  
Total equity   1,287,088     1,288,104  
Total Liabilities and Equity $ 3,643,953   $ 3,152,685  
 
1   Balance sheet debt at September 30, 2013 totaled $1,736.3 million, including the impact of $42.8 million of unamortized discount.
 
2 The face value of our debt at September 30, 2013 totaled $1,779.1 million, compared with $1,350.8 million on December 31, 2012.
 
 

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 
        For the Nine Months Ended
September 30, 2013     September 30, 2012
 
Operating Activities:
Net Income Attributable to Common Stockholders $ 63,879 $ 77,545
Net income (loss) attributable to noncontrolling interests   1,909     (834 )
Net Income 65,788 76,711
Adjustments to reconcile Net Income
to net cash provided by operating activities:
Depreciation and amortization 73,324 51,509
Accretion of debt securities discount (6,758 ) (6,454 )
Provision for allowance for doubtful accounts 217 897
Loss on early extinguishment of debt 5,518 285
Loss (gain) on disposal of aircraft 79 (2,417 )
Deferred taxes 10,511 45,346
Stock-based compensation expense 12,176 12,243
Changes in:
Accounts receivable 6,818 (334 )
Prepaid expenses and other current assets 12,494 38,991
Deposits and other assets 2,834 (10,315 )
Accounts payable and accrued liabilities   24,665     (9,256 )
Net cash provided by operating activities 207,666 197,206
Investing Activities:
Capital expenditures (24,860 ) (26,732 )
Purchase deposits and delivery payments for flight equipment (561,979 ) (312,494 )
Changes in restricted cash (5,886 )
Investment in debt securities (1,179 )
Proceeds from short-term investments 4,672 4,342
Proceeds from insurance 9,109
Proceeds from disposal of aircraft   4,250     2,715  
Net cash used for investing activities (574,694 ) (333,348 )
Financing Activities:
Proceeds from debt issuance 709,484 639,628
Refund of accelerated share repurchase 21,886
Prepayment of accelerated share repurchase (21,886 )
Purchase of treasury stock (80,946 ) (3,318 )
Excess tax benefit from stock-based compensation expense 472 550
Payment of debt issuance costs (19,682 ) (24,808 )
Payments of debt   (371,096 )   (347,232 )
Net cash provided by financing activities 238,232 264,820
Net (decrease) increase in cash and cash equivalents (128,796 ) 128,678
Cash and cash equivalents at the beginning of period   409,763     187,111  
Cash and cash equivalents at the end of period $ 280,967   $ 315,789  
Non-cash Investing and Financing Activities:
Acquisition of flight equipment and assumed debt $ 90,498   $
 
 

Atlas Air Worldwide Holdings, Inc.

Direct Contribution

(in thousands)

(Unaudited)

 
        For the Three Months Ended     For the Nine Months Ended
September 30, 2013     September 30, 2012 September 30, 2013     September 30, 2012
Operating Revenue:
ACMI $ 189,583 $ 177,722 $ 552,710 $ 492,846
AMC Charter 95,668 117,377 287,840 376,685
Commercial Charter 104,605 108,078 313,488 305,852
Dry Leasing 11,874 3,057 21,844 8,864
Other   3,660     3,017     10,417     9,013  
Total Operating Revenue $ 405,390   $ 409,251   $ 1,186,299   $ 1,193,260  
Direct Contribution:
ACMI $ 62,587 $ 51,625 $ 157,594 $ 116,573
AMC Charter 14,749 25,437 40,144 76,002
Commercial Charter (3,859 ) 3,602 (15,023 ) 15,559
Dry Leasing   4,681     1,378     8,294     3,967  

Total Direct Contribution for

Reportable Segments

$ 78,158   $ 82,042   $ 191,009   $ 212,101  
 
Unallocated income and expenses, net (37,163 ) (28,623 ) (108,304 ) (91,623 )
Loss on early extinguishment of debt (4,524 ) (143 ) (5,518 ) (285 )
Loss (gain) on disposal of aircraft   (501 )   1,058     (79 )   2,417  
Income before Income Taxes   35,970     54,334     77,108     122,610  
 
Interest income (4,849 ) (4,833 ) (15,003 ) (14,629 )
Interest expense 22,594 17,004 61,711 46,598
Capitalized interest (291 ) (4,052 ) (1,985 ) (16,356 )
Loss on early extinguishment of debt 4,524 143 5,518 285
Other expense (income), net   (241 )   (331 )   1,415     454  
Operating Income $ 57,707   $ 62,265   $ 128,764   $ 138,962  
 

Atlas Air Worldwide uses an economic performance metric, Direct Contribution, to show the profitability of each of its segments after allocation of direct ownership costs. Atlas Air Worldwide currently has the following reportable segments: ACMI, AMC Charter, Commercial Charter, and Dry Leasing. Each segment has different operating and economic characteristics, which are separately reviewed by senior management.

Direct Contribution consists of income (loss) before taxes, excluding special charges, nonrecurring items, losses (gains) on the sale of aircraft, and unallocated fixed costs.

Direct costs include crew costs, maintenance costs, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt and aircraft depreciation.

Unallocated income and expenses include corporate overhead, non-aircraft depreciation, interest income, foreign exchange gains and losses, other revenue and other non-operating costs, including one-time items.

 

Atlas Air Worldwide Holdings, Inc.

Reconciliation to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

 
        For the Three Months Ended
September 30, 2013     September 30, 2012     Percent Change
 
Net Income Attributable to Common Stockholders $ 23,741 $ 33,858 (29.9 %)
After-tax impact from:
Fleet retirement costs1 - 125
Loss on early extinguishment of debt2 4,524 91
Loss (gain) on disposal of aircraft   319     (674 )  
Adjusted Net Income Attributable to Common Stockholders $ 28,584   $ 33,400   (14.4 %)
 
Diluted EPS $ 0.94 $ 1.27 (26.0 %)
After-tax impact from:
Fleet retirement costs1 - -
Loss on early extinguishment of debt2 0.18 -
Loss (gain) on disposal of aircraft   0.01     (0.03 )  
Adjusted Diluted EPS $ 1.13   $ 1.26(3 ) (10.3 %)
 
For the Nine Months Ended
  September 30, 2013   September 30, 2012 Percent Change
 
Net Income Attributable to Common Stockholders $ 63,879 $ 77,545 (17.6 %)
After-tax impact from:
Fleet retirement costs1 - 2,093
Loss on early extinguishment of debt2 5,157 182
ETI tax benefit (14,160 ) -
Loss (gain) on disposal of aircraft   50     (1,540 )  
Adjusted Net Income Attributable to Common Stockholders $ 54,926   $ 78,280   (29.8 %)
 
Diluted EPS $ 2.48 $ 2.92 (15.1 %)
After-tax impact from:
Fleet retirement costs1 - 0.08
Loss on early extinguishment of debt2 0.20 0.01
ETI tax benefit (0.55 ) -
Loss (gain) on disposal of aircraft   -     (0.06 )  
Adjusted Diluted EPS $ 2.13   $ 2.95   (27.8 %)
 
1   Fleet retirement costs included incremental employee costs related to the retirement of our 747-200 fleet.
 
2 Loss on early extinguishment of debt was related to the financing of 747-8F and 777-200LRF aircraft.
 
3 Items may not sum due to rounding.
 
 

Atlas Air Worldwide Holdings, Inc.

Reconciliation to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

 
        Full-Year 2013 Diluted EPS Guidance
 
GAAP Measure $ 3.75 to 4.15
Loss on early extinguishment of debt 0.20
ETI tax benefit (0.55)
Loss on disposal of aircraft   -
Non-GAAP Measure $ 3.40 to 3.80
 
 
For the Three Months Ended

September 30,

2013

       

September 30,

2012

 
Net Cash Provided by Operating Activities $ 79,489 $ 111,268
Less:
Capital expenditures 5,369 8,289
Capitalized interest   291 4,052
Free Cash Flow 1 $ 73,829 $ 98,927
 
For the Nine Months Ended

September 30,

2013

September 30,

2012

 
Net Cash Provided by Operating Activities $ 207,666 $ 197,206
Less:
Capital expenditures 24,860 26,732
Capitalized interest   1,985 16,356
Free Cash Flow 1 $ 180,821 $ 154,118
 
1   Free Cash Flow = Cash Flows from Operations minus Base Capital Expenditures and Capitalized Interest.
 
Base Capital Expenditures excludes purchases of aircraft.
 

Atlas Air Worldwide Holdings, Inc.

Reconciliation to Non-GAAP Measures

(in thousands)

(Unaudited)

 
        For the Three Months Ended     For the Nine Months Ended
September 30, 2013     September 30, 2012 September 30, 2013     September 30, 2012
 
Income before income taxes $ 35,969 $ 54,334 $ 77,108 $ 122,610
Fleet retirement costs1 - 196 - 3,286
Loss on early extinguishment of debt 4,524 143 5,518 285
Loss (gain) on disposal of aircraft   501     (1,058 )   79   (2,417 )
 
Adjusted pretax income 40,994 53,615 82,705 123,764
 
Interest (income) expense, net 17,454 8,119 44,723 15,613
Other non-operating expenses (income)   (241 )   (331 )   1,415   454  
 
Adjusted operating income 58,207 61,403 128,843 139,831
 
Depreciation and amortization   23,661     16,612     61,840   44,792  
 
EBITDA, as adjusted 2 81,868 78,015 190,683 184,623
 
Aircraft rent   48,448     44,133     130,703   126,309  
 
EBITDAR, as adjusted 3 $ 130,316   $ 122,148   $ 321,386 $ 310,932  
 
1   Fleet retirement costs included incremental employee costs related to the retirement of our 747-200 fleet.
 
2 Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, fleet retirement costs, and losses (gains) on disposal of aircraft, as applicable.
 
3 Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, aircraft rent expense, fleet retirement costs, and losses (gains) on disposal of aircraft, as applicable.
 
 

Atlas Air Worldwide Holdings, Inc.

Operating Statistics and Traffic Results

(Unaudited)

 
       

 

For the Three Months Ended

   

 

For the Nine Months Ended

September 30,     Increase/ September 30,     Increase/
2013     2012 (Decrease) 2013     2012 (Decrease)
 
Block Hours
ACMI 28,813 28,451 362 85,274 78,698 6,576
AMC Charter
Cargo 1,531 2,283 (752 ) 5,296 8,152 (2,856 )
Passenger 3,029 3,882 (853 ) 8,264 9,121 (857 )
Commercial Charter 5,310 5,331 (21 ) 16,360 14,761 1,599
Nonrevenue 220 277 (57 ) 655 908 (253 )
Total Block Hours 38,903 40,224 (1,321 ) 115,849 111,640 4,209  
 
Revenue Per Block Hour
ACMI $ 6,580 $ 6,247 $ 333 $ 6,482 $ 6,262 $ 220
AMC Charter 20,980 19,039 1,941 21,227 21,808 (581 )
Cargo 21,962 19,853 2,109 22,681 23,771 (1,090 )
Passenger 20,483 18,561 1,922 20,296 20,053 243
Commercial Charter 19,700 20,273 (573 ) 19,162 20,720 (1,558 )
 
Average Utilization (block hours per day)
ACMI1 10.1 11.9 (1.8 ) 10.4 12.3 (1.9 )
AMC Charter
Cargo 5.4 9.2 (3.8 ) 6.7 9.0 (2.3 )
Passenger 8.0 9.0 (1.0 ) 7.0 8.3 (1.3 )
Commercial Charter 6.3 9.3 (3.0 ) 7.0 9.1 (2.1 )
All Operating Aircraft1,2 8.9 11.0 (2.1 ) 9.3 11.2 (1.9 )
 
Fuel
AMC
Average fuel cost per gallon $ 3.62 $ 2.67 $ 0.95 $ 3.63 $ 3.27 $ 0.36
Fuel gallons consumed (000s) 11,324 15,357 (4,033 ) 33,847 44,909 (11,062 )
Commercial Charter
Average fuel cost per gallon $ 3.09 $ 3.29 $ (0.20 ) $ 3.13 $ 3.34 $ (0.21 )
Fuel gallons consumed (000s) 16,956 17,637 (681 ) 53,210 49,256 3,954
 
1   ACMI and All Operating Aircraft averages in the third quarter and first nine months of 2013 reflect the impact of increases in the number of CMI aircraft and amount of CMI flying compared with the same periods of 2012 .
 
2 Average of All Operating Aircraft excludes Dry Leasing aircraft, which do not contribute to block-hour volumes.
 
 

Atlas Air Worldwide Holdings, Inc.

Operating Statistics and Traffic Results

(Unaudited)

 
        For the Three Months Ended       For the Nine Months Ended    
September 30, Increase/ September 30, Increase/
2013   2012 (Decrease) 2013   2012 (Decrease)

Segment Operating Fleet

(average aircraft equivalents

during the period)

ACMI 1
747-8F Cargo 8.0 4.7 3.3 7.7 3.7 4.0
747-400 Cargo2 13.6 16.5 (2.9 ) 13.8 16.7 (2.9 )
767-300 Cargo 2.0 - 2.0 1.8 - 1.8
767-200 Cargo 5.0 3.8 1.2 5.0 1.8 3.2
747-400 Passenger 1.4 1.0 0.4 1.1 1.1 -
767-300 Passenger - - - 0.3 - 0.3
767-200 Passenger 1.0 - 1.0   0.3 - 0.3  
Total 31.0 26.0 5.0 30.0 23.3 6.7
AMC Charter
747-400 Cargo 3.1 2.7 0.4 2.9 3.1 (0.2 )
747-200 Cargo - - - - 0.2 (0.2 )
747-400 Passenger 1.4 1.8 (0.4 ) 1.7 1.7 -
767-300 Passenger 2.7 2.9 (0.2 ) 2.6 2.3 0.3  
Total 7.2 7.4 (0.2 ) 7.2 7.3 (0.1 )
Commercial Charter
747-8F Cargo 1.0 - 1.0 0.4 - 0.4
747-400 Cargo 7.7 5.9 1.8 7.8 5.3 2.5
747-200 Cargo - - - - 0.2 (0.2 )
747-400 Passenger 0.2 0.2 - 0.2 0.2 -
767-300 Passenger 0.2 0.1 0.1   0.2 0.2 -  
Total 9.1 6.2 2.9 8.6 5.9 2.7
Dry Leasing
777-200 Cargo 2.6 - 2.6 1.3 - 1.3
757-200 Cargo 1.0 1.0 - 1.0 1.0 -
737-300 Cargo 1.0 0.8 0.2 1.0 0.3 0.7
737-800 Passenger 2.0 2.0 -   2.0 2.0 -  
Total 6.6 3.8 2.8   5.3 3.3 2.0  
Total Operating Aircraft 53.9 43.4 10.5   51.1 39.8 11.3  
 
Out of Service3 1.0 - 1.0 0.8 - 0.8
 
1   ACMI average fleet excludes spare aircraft provided by CMI customers.
 
2 Includes 1.6 and 1.3 Large Cargo Freighters in the three-month periods ended September 30, 2013 and 2012, respectively. Includes 1.6 and 1.1 Large Cargo Freighters in the nine-month periods ended September 30, 2013 and 2012, respectively.
 
3 Out-of-service aircraft were temporarily parked during the period and are completely unencumbered.
 

Atlas Air Worldwide Holdings, Inc.
Investors:
Dan Loh, 914-701-8200
or
Media:
Bonnie Rodney, 914-701-8580

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