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Atlas Air Worldwide Reports First-Quarter 2017 Results

  • Reported Income from Continuing Operations of $0.04 Million
  • Adjusted Income from Continuing Operations of $8.3 Million
  • Anticipate Solid Earnings Growth in 2017
  • Significant New Customer Relationships

PURCHASE, N.Y., May 03, 2017 (GLOBE NEWSWIRE) -- Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW)  today announced income from continuing operations, net of taxes, of $0.04 million, which included an unrealized loss on financial instruments of $5.2 million related to outstanding warrants, for the three months ended March 31, 2017. Results compared with income from continuing operations, net of taxes, of $0.5 million for the three months ended March 31, 2016. 

On an adjusted basis, income from continuing operations, net of taxes, in the first quarter of 2017 totaled $8.3 million compared with $7.7 million in the year-ago quarter.

Diluted earnings per share from continuing operations, net of taxes were $0.00 for the three months ended March 31, 2017 and $0.02 for the three months ended March 31, 2016. Adjusted diluted EPS from continuing operations, net of taxes, totaled $0.31 in both periods.

“We are off to an exciting start in 2017,” said President and Chief Executive Officer William J. Flynn. “We are building on our 2016 achievements and growing our earnings this year.

“We will have a full year of contribution from Southern Air and expect a positive impact on our full-year results from our service for Amazon. We placed our second 767-300 aircraft into service for Amazon in February, and just added our third and fourth aircraft in May.  

“In addition to announcing our first-quarter earnings and reaffirming our full-year earnings framework today, we are very pleased to have announced the placement of two of our 747-8 freighters with Cathay Pacific Cargo on an ACMI basis, with service beginning in May.

“Cathay Pacific is a prominent global airline based in Hong Kong and a standout performer in the airfreight market. We are delighted to work with Cathay Pacific’s cargo division to facilitate the strong growth of its global network.

“In addition to Cathay Pacific, we have recently announced other significant new customer agreements with Asiana Cargo, Nippon Cargo Airlines and FedEx that will all contribute to earnings growth this year.”

Mr. Flynn added: “Earnings in the first quarter were in line with our expectations and our outlook for the year.

“Consistent with our prior outlook, we anticipate that our adjusted income from continuing operations, net of taxes, will grow by a mid-single-digit to low-double-digit percentage compared with our 2016 adjusted income of $114.3 million.

“Our view reflects our expanding business base and the ongoing development of our strategic platform. It also reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.”

First-Quarter Results

Higher ACMI contribution in the first quarter of 2017 was primarily driven by our acquisition of Southern Air and lower costs related to crew training, partially offset by higher heavy maintenance costs and the temporary redeployment of 747-8F aircraft to our Charter segment. Segment revenue growth benefited from an increase in block-hour volumes, partially offset by a lower average rate per block hour. Both our volumes and average rate reflected an increase in 777 and 737 CMI flying following the acquisition of Southern Air, an increase in 767 CMI flying, as well as the temporary redeployment of 747-8F aircraft to our Charter segment.

Lower Charter segment contribution during the period reflected an increase in heavy maintenance costs and lower average rates. These impacts were partially offset by an increase in military passenger and cargo demand, which drove an increase in block-hour volumes, lower costs related to crew training, and the temporary redeployment of 747-8F aircraft from our ACMI segment. Average Charter rates during the quarter primarily reflected a reduction in cost-based rates paid by the military.  

In Dry Leasing, lower revenue and segment contribution resulted from a decrease in revenue from maintenance payments related to the scheduled return of a passenger aircraft in 2016, partially offset by revenue from the placement of two 767-300 converted freighter aircraft with Amazon in August 2016 and February 2017, and one 767-300 converted freighter aircraft with DHL Express in February 2016.

Higher unallocated income and expenses in the first quarter of 2017 primarily reflected the impact of the Southern Air acquisition and fleet-growth initiatives.

Reported earnings in the first quarter of 2017 included an effective income tax rate of 94.0%, due mainly to nondeductible changes in the value of outstanding warrants, partially offset by the impact of adopting amended accounting guidance for share-based compensation, which recognizes excess tax benefits associated with share-based compensation within income tax expense. As a result of adopting the guidance, we recognized $1.5 million of excess tax benefits as a reduction of income tax expense during the quarter. On an adjusted basis, our results reflected an effective income tax rate of 9.5%, primarily due to adopting the amended accounting guidance for share-based compensation.

Cash and Short-Term Investments

At March 31, 2017, our cash, cash equivalents, short-term investments and restricted cash totaled $124.2 million, compared with $142.6 million at December 31, 2016.

The change in position resulted from cash used for investing activities, partially offset by cash provided by operating and financing activities.

Net cash used for investing activities during the first quarter of 2017 primarily related to capital expenditures and payments for flight equipment and modifications, including the acquisition of 767-300 aircraft to be converted to freighter configuration. 

Net cash provided by financing activities primarily reflected proceeds from our revolving credit facility, partially offset by payments on debt obligations. 

Outlook

Consistent with our prior outlook, we continue to expect our adjusted income from continuing operations, net of taxes, to grow by a mid-single-digit to low-double-digit percentage compared with 2016 adjusted income of $114.3 million.

In addition, we expect adjusted income from continuing operations, net of taxes, in the second quarter of 2017 to be approximately 15% to 20% higher than second-quarter 2016 adjusted income of $20.2 million.    

Our view reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.

We believe the current demand, including our new services for Asiana Cargo, Cathay Pacific Cargo, FedEx and Nippon Cargo Airlines, the initial accretion from our Amazon operations, and the first full-year of contribution from Southern Air provide a strong foundation for earnings growth this year.

Given the inherent seasonality of airfreight demand, we anticipate that results in 2017 will reflect historical patterns, with more than 70% of our adjusted income occurring in the second half.

For the full year, we expect total block hours to increase approximately 20% compared with 2016, with more than 75% of our hours in ACMI and the balance in Charter. 

Aircraft maintenance expense in 2017 should total approximately $245 million, and depreciation and amortization is expected to total approximately $170 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $55 to $65 million, mainly for parts and components for our fleet.

We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of outstanding warrants and other items that could be material to our reported results.

Conference Call

Management will host a conference call to discuss Atlas Air Worldwide’s first-quarter 2017 financial and operating results at 11:00 a.m. Eastern Time on Wednesday, May 3, 2017.

/EIN News/ -- 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 first-quarter call) or at the following Web address:

http://edge.media-server.com/m/p/khrc6h4w

For those unable to listen to the live call, a replay will be archived on the above websites following the call. A replay will also be available through May 9 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 8110092#.

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 income from continuing operations, net of taxes; Adjusted Diluted EPS from continuing operations, net of taxes; Adjusted effective tax rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. 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 Income from continuing operations, net of taxes; Diluted EPS from continuing operations, net of taxes; Effective tax rate; and Net Cash Provided by Operating Activities, which are the most directly comparable 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. In addition, management’s incentive compensation will be determined, in part, by using Adjusted Income from continuing operations, net of taxes. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental 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 a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.

Atlas Air Worldwide’s press releases, SEC filings and other information may 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. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.

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: our ability to effectively operate the network service contemplated by our agreements with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreements; the risk that the anticipated benefits of our agreements with Amazon will not be realized when expected, or at all; the possibility that Amazon may terminate its agreements with the companies; the effect of the announcement or pendency of the transactions contemplated by the agreements with Amazon; costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; 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 2017 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  
        March 31, 2017   March 31, 2016  
                   
                   
Operating Revenue   $ 475,394     $ 418,615    
                   
Operating Expenses              
  Salaries, wages and benefits     104,087       93,845    
  Aircraft fuel     82,432       63,220    
  Maintenance, materials and repairs     72,816       57,024    
  Depreciation and amortization     37,894       35,005    
  Aircraft rent     36,073       37,037    
  Travel     32,359       30,323    
  Passenger and ground handling services     25,123       20,879    
  Navigation fees, landing fees and other rent     18,535       21,974    
  Gain on disposal of aircraft       (54 )       -    
  Special charge     -       6,631    
  Transaction-related expenses     915       793    
  Other     41,178       31,827    
  Total Operating Expenses     451,358       398,558    
  Operating Income     24,036       20,057    
                   
Non-operating Expenses (Income)              
  Interest income     (1,256 )     (1,604 )  
  Interest expense     21,524         21,302    
  Capitalized interest     (1,780 )     (357 )  
  Loss on early extinguishment of debt     -       132    
  Unrealized loss on financial instruments     5,213       -    
  Other income       (253 )     (240 )  
  Total Non-operating Expenses (Income)     23,448       19,233    
  Income from continuing operations before income taxes     588       824    
  Income tax expense     553       353    
  Income from continuing operations, net of taxes       35       471    
  Loss from discontinued operations, net of taxes     (787 )     -    
Net Income (Loss)   $   (752 )   $ 471    
                   
Earnings per share from continuing operations:              
  Basic   $   0.00     $ 0.02    
  Diluted   $   0.00     $ 0.02    
                   
Loss per share from discontinued operations:              
  Basic   $ (0.03 )   $ -    
  Diluted   $ (0.03 )   $ -    
                   
Earnings (loss) per share:              
  Basic   $   (0.03 )   $ 0.02    
  Diluted   $   (0.03 )   $ 0.02    
                   
Weighted average shares:              
  Basic     25,162       24,711    
  Diluted     25,744       24,846    

 

Atlas Air Worldwide Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
         
        March 31, 2017   December 31, 2016
Assets          
Current Assets          
  Cash and cash equivalents $  109,100     $  123,890  
  Short-term investments    5,242        4,313  
  Restricted cash    9,836        14,360  
  Accounts receivable, net of allowance of $1,644 and $997, respectively    157,953        166,486  
  Prepaid maintenance    6,284        4,418  
  Prepaid expenses and other current assets    47,796        44,603  
  Total current assets    336,211        358,070  
Property and Equipment          
  Flight equipment    3,993,853        3,886,714  
  Ground equipment    70,567        68,688  
  Less:  accumulated depreciation   (602,420 )     (568,946 )
  Flight equipment modifications in progress    242,013        154,226  
  Property and equipment, net    3,704,013        3,540,682  
Other Assets          
  Long-term investments and accrued interest    26,699        27,951  
  Deferred costs and other assets    229,437        204,647  
  Intangible assets, net and goodwill    113,496        116,029  
Total Assets $  4,409,856     $  4,247,379  
Liabilities and Equity          
Current Liabilities          
  Accounts payable $  54,610     $  59,543  
  Accrued liabilities    394,885        320,887  
  Current portion of long-term debt and capital lease    176,208        184,748  
  Total current liabilities    625,703        565,178  
Other Liabilities          
  Long-term debt and capital lease    1,804,175        1,666,663  
  Deferred taxes    297,675        298,165  
  Financial instruments and other liabilities    170,679        200,035  
  Total other liabilities    2,272,529        2,164,863  
  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; 100,000,000 shares authorized;           
  30,052,095 and 29,633,605 shares issued, 25,258,361 and 25,017,242, shares outstanding          
  (net of treasury stock), as of March 31, 2017 and December 31, 2016, respectively    300        296  
  Additional paid-in-capital    661,290        657,082  
  Treasury stock, at cost: 4,793,734 and 4,616,363 shares, respectively   (192,549 )     (183,119 )
  Accumulated other comprehensive loss   (4,737 )     (4,993 )
  Retained earnings    1,047,320        1,048,072  
  Total stockholders’ equity    1,511,624       1,517,338  
Total Liabilities and Equity $  4,409,856     $  4,247,379  

1   Balance sheet debt at March 31, 2017 totaled $1,980.4 million, including the impact of $41.3 million of unamortized discount and debt issuance costs of $46.4 million.

2   The face value of our debt at March 31, 2017 totaled $2,068.1 million, compared with $1,943.4 million on December 31, 2016.

 

  Atlas Air Worldwide Holdings, Inc.
  Consolidated Statements of Cash Flows
  (in thousands)
  (Unaudited)
   
      For the Three Months Ended
      March 31, 2017   March 31, 2016
               
Operating Activities:            
Income from continuing operations, net of taxes   $ 35     $ 471  
  Less: Loss from discontinued operations, net of taxes     (787 )     -  
  Net Income (Loss)        (752 )     471  
Adjustments to reconcile Net Income (Loss) to net cash provided by operating activities:            
  Depreciation and amortization     43,217       39,817  
  Accretion of debt securities discount     (307 )     (332 )
  Provision for allowance for doubtful accounts     435       221  
  Special charge, net of cash payments     -       6,631  
  Loss on early extinguishment of debt     -       132  
  Unrealized loss on financial instruments       5,213       -  
  Gain on disposal of aircraft       (54 )     -  
  Deferred taxes     418       292  
  Stock-based compensation expense     4,212       5,455  
Changes in:            
  Accounts receivable     8,134       29,871  
  Prepaid expenses, current assets and other assets     (30,336 )     (10,575 )
  Accounts payable and accrued liabilities       (11,526 )     (52,544 )
Net cash provided by operating activities     18,654        19,439  
               
Investing Activities:            
  Capital expenditures     (21,673 )     (10,682 )
  Payments for flight equipment and modifications     (118,897 )     (84,230 )
  Proceeds from investments       631       4,955  
  Proceeds from disposal of aircraft        137         -  
Net cash used for investing activities     (139,802 )     (89,957 )
               
Financing Activities:            
  Proceeds from revolving credit facility     150,000         -  
  Proceeds from debt issuance     -       14,790  
  Customer maintenance reserves received     14,837       3,547  
  Customer maintenance reserves paid     (6,384 )       -  
  Purchase of treasury stock     (9,430 )     (4,112 )
  Excess tax benefit from stock-based compensation expense     -         158  
  Payment of debt issuance costs     (90 )     (217 )
  Payments of debt     (47,099 )     (50,666 )
Net cash (used for) provided by financing activities       101,834       (36,500 )
Net decrease in cash, cash equivalents and restricted cash     (19,314 )     (107,018 )
Cash, cash equivalents and restricted cash at the beginning of period     138,250       438,931  
Cash, cash equivalents and restricted cash at the end of period   $ 118,936     $ 331,913  
               
Noncash Investing and Financing Activities:            
  Acquisition of flight equipment included in Accounts payable and accrued liabilities   $    48,015     $ 12,059  
  Acquisition of flight equipment under capital lease   $   32,380     $   -  
             

 

Atlas Air Worldwide Holdings, Inc.
Direct Contribution
(in thousands)
(Unaudited)
 
  For the Three Months Ended
  March 31, 2017   March 31, 2016
Operating Revenue:            
ACMI $  200,694       $  182,740   
Charter   243,898         202,303  
Dry Leasing   26,757         28,192  
Customer incentive asset amortization   (445 )       -  
Other   4,490         5,380  
Total Operating Revenue $  475,394       $  418,615   
             
Direct Contribution:            
ACMI $ 35,963       $ 24,739  
Charter   17,186         20,776  
Dry Leasing   9,723         10,408  
Total Direct Contribution for Reportable Segments   62,872         55,923  
             
Unallocated income and expenses, net   (56,210 )       (47,543 )
Loss on early extinguishment of debt   -         (132 )
Unrealized loss on financial instruments   (5,213 )       -  
Special charge   -          (6,631 )
Transaction-related expenses    (915 )        (793 )
Gain on disposal of aircraft   54         -  
Income from continuing operations before income taxes   588         824  
             
Add back (subtract):            
Interest income   (1,256 )       (1,604 )
Interest expense   21,524          21,302  
Capitalized interest   (1,780 )       (357 )
Loss on early extinguishment of debt   -         132  
Unrealized loss on financial instruments   5,213         -  
Other expense   (253 )       (240 )
Operating Income $ 24,036       $ 20,057  

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, Charter, and Dry Leasing. Each segment has different commercial and economic characteristics, which are separately reviewed by our chief operating decision maker.

Direct Contribution consists of income (loss) from continuing operations before taxes, excluding special charges, transaction-related expenses, nonrecurring items, gains (losses) on the disposal of aircraft, losses on the early extinguishment of debt, unrealized losses on financial instruments, gains on investments, and unallocated income and expenses, net.

Direct operating and ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense on the portion of debt used for financing aircraft, interest income on debt securities, and aircraft depreciation.

Unallocated income and expenses, net include corporate overhead, nonaircraft depreciation, noncash expenses and income, interest expense on the portion of debt used for general corporate purposes, interest income on nondebt securities, capitalized interest, foreign exchange gains and losses, other revenue and other nonoperating costs.  

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
 
  For the Three Months Ended
    March 31, 2017     March 31, 2016   Percent Change
               
Income from continuing operations, net of taxes $ 35     $ 471     (92.6 )%
Impact from:              
  Gain on disposal of aircraft   (54 )     -      
  Special charge   -       6,631      
  Transaction-related expenses   915       793      
  Accrual for legal matters and professional fees   74       290      
  Noncash expenses and income, net1   2,412       1,844      
  Charges associated with refinancing debt   -       132      
  Unrealized loss on financial instruments2      5,213       -      
  Income tax effect of reconciling items   (320 )     (2,418 )    
Adjusted Income from continuing operations, net of taxes $ 8,275     $ 7,743     6.9 %
               
Weighted average diluted shares outstanding   25,744       24,846      
  Add: dilutive warrants3   1,111       -      
Adjusted weighted average diluted shares outstanding   26,855       24,846      
               
Adjusted Diluted EPS from continuing operations, net of taxes $ 0.31     $ 0.31     NM  

1   Noncash expenses and income, net in 2017 primarily related to amortization of debt discount on outstanding convertible notes and amortization of customer incentive related to outstanding warrants. Noncash expenses and income, net in 2016 primarily related to amortization of debt discount on outstanding convertible notes.

2   Unrealized loss on financial instruments related to outstanding warrants.

3   Dilutive warrants represent potentially dilutive common shares. These shares were excluded from Diluted EPS from continuing operations, net of taxes, prepared in accordance with GAAP as they would have been antidilutive.

 

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
   
   For the Three Months Ended
      March 31, 2017   March 31, 2016
           
Net Cash Provided by Operating Activities   $  18,654     $  19,439 
Less:          
  Capital expenditures       21,673       10,682
  Capitalized interest       1,780        357 
Free Cash Flow1   $   (4,799  ) $   8,400 
           

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
 
  March 31, 2017 March 31, 2016  
               
Income from continuing operations, net of taxes $ 35     $  471      
Income tax expense   553       353      
Income from continuing operations before income taxes    588       824      
Noncash expenses and income, net1   2,412         1,844      
Gain on disposal of aircraft     (54 )        -      
Special charge2     -       6,631      
Transaction-related expenses   915       793      
Accrual for legal matters and professional fees   74       290      
Charges associated with refinancing debt     -       132      
Unrealized loss on financial instruments     5,213         -      
               
Adjusted pretax income   9,148       10,514      
               
Interest (income) expense, net3   17,117       18,093      
Other non-operating expenses (income)     (253 )     (240 )    
               
Adjusted operating income   26,012       28,367      
               
Depreciation and amortization   37,894       35,005      
               
EBITDA, as adjusted4 $ 63,906     $ 63,372      
               
Aircraft rent3   35,477       36,441      
               
EBITDAR, as adjusted5 $ 99,383     $ 99,813      
               
               
Income tax expense $ 553     $ 353      
Income tax effect of reconciling items6   (320 )     (2,417 )    
Adjusted income tax expense   873         2,770      
Adjusted pretax income $ 9,148     $ 10,514      
Adjusted effective tax rate   9.5 %     26.3 %    

1   Reflects impact of noncash expenses and income related to convertible notes, debt and investments, and amortization of customer incentive related to outstanding warrants.
2  Special charge in 2016 primarily represented a loss on engines held for sale.
3  Reflects impact of noncash expenses and income related to convertible notes, debt, operating leases and investments.
4   Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, noncash interest expenses and income, net, gain on disposal of aircraft, special charge, transaction-related expenses, accrual for legal matters and professional fees, charges associated with refinancing debt, and unrealized loss on financial instruments, as applicable.
5   Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, aircraft rent expense, noncash interest expenses and income, net, gain on disposal of aircraft, special charge, transaction-related expenses, accrual for legal matters and professional fees, charges associated with refinancing debt, and unrealized loss on financial instruments, as applicable.
6   See Non-GAAP reconciliation of Adjusted income from continuing operations, net of taxes.

 

Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
 
      For the Three Months Ended Increase/    
        March 31, 2017   March 31, 2016   (Decrease)    
                     
Block Hours                
  ACMI   38,916   29,529   9,387      
  Charter                
  Cargo   10,939   8,230   2,709      
  Passenger   4,845   3,935   910      
  Other   416   457   (41 )    
  Total Block Hours   55,116   42,151   12,965      
                     
Revenue Per Block Hour                
  ACMI $ 5,157 $ 6,188 $ (1,031 )    
  Charter $ 15,452 $ 16,630 $ (1,178 )    
  Cargo $ 15,289 $ 16,042 $ (753 )    
  Passenger $ 15,820 $ 17,859 $ (2,039 )    
                     
Average Utilization (block hours per day)                
  ACMI1   8.7   8.4   0.3      
  Charter                
  Cargo   8.7   8.1   0.6      
  Passenger   7.8   8.6   (0.8 )    
  All Operating Aircraft1,2   8.7   8.5   0.2      
                     
Fuel                
  Charter                
    Average fuel cost per gallon $ 1.88 $ 1.81 $ 0.07      
    Fuel gallons consumed (000s)   43,927   34,945   8,982      
                     
    ACMI and All Operating Aircraft averages in the first quarter of 2017 reflect the impact of increases in the number
of CMI aircraft and amount of CMI flying compared with the first quarter of 2016.

 
    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 Increase/    
        March 31, 2017   March 31, 2016   (Decrease)    
                     
Segment Operating Fleet (average aircraft equivalents during the period)    
  ACMI1                
  747-8F Cargo   7.0     8.8     (1.8 )    
  747-400 Cargo   12.8     12.6     0.2      
  747-400 Dreamlifter   3.0     2.8     0.2      
  777-200 Cargo   5.0     -     5.0      
  767-300 Cargo   5.8     3.4     2.4      
  767-200 Cargo   9.0     9.0     -      
  737-400 Cargo   5.0     -     5.0      
  747-400 Passenger   1.0     1.0     -      
  767-200 Passenger   1.0     1.0     -      
  Total   49.6     38.6     11.0      
  Charter                
  747-8F Cargo   2.9     1.1     1.8      
  747-400 Cargo   11.0     10.0     1.0      
  747-400 Passenger   2.0     2.0     -      
  767-300 Passenger   4.9     3.0     1.9      
  Total   20.8     16.1     4.7      
  Dry Leasing                
  777-200 Cargo   6.0     6.0     -      
  767-300 Cargo   3.6     1.4     2.2      
  757-200 Cargo   1.0     1.0     -      
  737-300 Cargo   1.0     1.0     -      
  737-800 Passenger   1.0     1.0     -      
  Total   12.6     10.4     2.2      
  Less: Aircraft Dry Leased to CMI customers   (3.6 )   (1.4 )   2.2      
  Total Operating Average Aircraft Equivalents   79.4     63.7     15.7      
                     
                     
  Out of Service2   -     -     -      
                     
                     
  1 ACMI average fleet excludes spare aircraft provided by CMI customers.
  2 Out-of-service aircraft were temporarily parked during the period and are completely unencumbered.
Contacts: 	
Dan Loh (Investors) – (914) 701-8200
Beth Roach (Media) – 914-701-6576

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