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 $41.8 million, or $1.66 per diluted share, for the three months ended December 31, 2013, compared with $48.7 million, or $1.83 per diluted share, for the three months ended December 31, 2012.

On a reported basis, fourth-quarter 2013 net income attributable to common stockholders totaled $30.0 million, or $1.19 per diluted share, compared with $52.4 million, or $1.97 per diluted share, in the fourth quarter of 2012.

Free cash flow of $92.3 million in the fourth quarter of 2013 compared with $53.3 million in the fourth quarter of 2012.

"Earnings in the fourth quarter of 2013 were led by our ACMI operations, a strong contribution by our Commercial Charter segment, which reported a profit for the full year, and growth in our Dry Leasing business," said William J. Flynn, President and Chief Executive Officer. "Results were also affected by a substantial reduction in AMC Charter volumes and segment contribution, reflecting lower demand levels than previously forecast by the military.

"Earnings in Commercial Charter were driven by a sharp increase in block hours flown by our aircraft as global-market peak-season volumes picked up in late October through December.

"Operating results during the quarter were supported by the investments we've made to strengthen and diversify our business mix, including our 747-8 freighters in ACMI; 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; VIP and other passenger charters; and ongoing continuous improvement initiatives."

Reported results for the period reflected our decision to reduce our operating fleet by two aircraft. In December, we permanently parked two 747-400BCFs that we had leased following delays in the delivery of our 747-8 freighters. As a consequence, our reported earnings included a special charge related to the termination of the operating leases for these BCFs.

Fourth-Quarter Results

Increased revenues, higher volumes and profitability in our ACMI business during the fourth quarter were driven by our new 747-8Fs, with an average of 1.7 additional -8F aircraft in service compared with the fourth quarter of 2012; higher rates per block hour for our -8Fs; and the continued ramp up and expansion of CMI service. ACMI customers also continued to fly above minimum contract levels. These results were offset by a lower average utilization for all aircraft in the segment and an increase in maintenance expense due to the timing of required initial airframe checks on our first three -8F aircraft.

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 place.

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. Lower average cargo and passenger revenue per block hour during the period stemmed from a reduction in the average pegged fuel price set by the U.S. military.

Profitability in Commercial Charter primarily reflected an increase in volumes and an improvement in aircraft utilization compared with the fourth quarter of 2012. Charter operations during the quarter benefited from the redeployment of 747-400 and 747-8F aircraft during ACMI marketing periods, higher rates on 747-8F aircraft, and passenger charters for sporting events, concert tours, VIP and other private charters. Market airfreight yields improved on a seasonal basis during the period, but remained under pressure overall.

Reported fourth-quarter results included a special charge of $18.6 million, primarily related to a lease termination charge for the two 747-400BCFs parked in December.

Reported earnings for the fourth quarter of 2013 also included an effective income tax rate of 30.7%, reflecting the ongoing beneficial impact of lower taxes for certain foreign subsidiaries in our Dry Leasing business.

Full-Year Results

For the twelve months ended December 31, 2013, adjusted net income attributable to common stockholders totaled $96.8 million, or $3.78 per diluted share, compared with $127.0 million, or $4.78 per diluted share, for the twelve months ended December 31, 2012.

On a reported basis, full-year 2013 net income attributable to common stockholders totaled $93.8 million, or $3.66 per diluted share, compared with $129.9 million, or $4.89 per diluted share, in 2012.

Reported earnings in 2013 included an effective income tax rate of 20.2%, mostly due to the tax treatment of extraterritorial income from the offshore leasing of certain of our aircraft. In addition, the effective rate reflected the net impact of the resolution of certain income tax liabilities.

Free cash flow in 2013 increased to $273.1 million from $208.5 million in 2012.

Cash and Short-Term Investments

At December 31, 2013, our cash, cash equivalents, short-term investments and restricted cash totaled $339.2 million, compared with $419.9 million at December 31, 2012.

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

Net cash used for investing activities during 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

During the year ended December 31, 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 remaining $60 million authority may be made at our discretion, with the actual timing, form and amount dependent on company and market conditions.

Outlook

We enter 2014 confident about the resilience of our business model and our ability to leverage the scale and efficiencies in our operations. Reflecting the business initiatives we have undertaken and the investments we have made, we have transformed the company to deliver meaningful earnings in any environment.

Our current outlook reflects two primary considerations.

One, as U.S. military activities overseas are scaled down, the military's demand for outsourced airlift, particularly cargo airfreight, also declines. Our most recent indication is that the decline will be steeper and faster than previously forecasted by the military. For 2014, we estimate that this decline will reduce earnings by approximately $0.70 per share from 2013 levels.

Two, global airfreight volumes have been essentially flat for the last three years. Atlas has remained healthy and profitable throughout this period by capitalizing on strategic initiatives to strengthen and diversify our business mix; generate operating efficiencies and continuous improvement gains; and enhance our portfolio of assets and services.

Should 2014 be the inflection point when growth returns to commercial airfreight, our business initiatives and the investments we have made have positioned Atlas to be one of the prime beneficiaries. If 2014 remains flat, we expect results to approximate 2013, excluding the $0.70 per share decline in AMC Charter.

At this point of the year, there is limited visibility into second-half airfreight market demand. We expect to be profitable in the first quarter, which is usually the lowest volume-generating and highest maintenance expense quarter of the year. Typically, the majority of our earnings are generated in the second half, and we will update our expectations as the year progresses.

For the full year, we expect total block hours to be several percentage points lower than 2013 block hours, with more than 70% in ACMI, less than 10% in AMC Charter, and the balance in Commercial Charter. Our Dry Leasing segment should show dramatic growth. Depreciation and heavy maintenance expense should each increase by about $10 million over 2013. As always, line maintenance will depend on block hours operated. In addition, we anticipate an effective book income tax rate of approximately 30%.

Mr. Flynn added: "As we have noted previously, airfreight remains a long-term growth industry despite current market challenges. We have transformed our business and expect to be profitable in any environment. We are well-positioned to capitalize on market improvements and to continue to focus on the long-term growth of our business. With a resilient business model, 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 fourth-quarter and full-year 2013 financial and operating results at 11:00 a.m. Eastern Time on Wednesday, February 12, 2014.

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 fourth-quarter call) or at the following Web address: http://www.media-server.com/m/p/kkdeegog

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 February 19 by dialing (855) 859-2056 (domestic) and (404) 537-3406 (international) and using Access Code 50793956#.

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 Income Attributable 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 2014 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 Twelve Months Ended
December 31, 2013   December 31, 2012 December 31, 2013   December 31, 2012
 
Operating Revenue
ACMI $ 202,297 $ 189,343 $ 755,008 $ 682,189
AMC Charter 68,501 111,378 356,340 488,063
Commercial Charter 182,624 144,425 496,112 450,277
Dry Leasing 13,324 2,979 35,168 11,843
Other   3,855     4,647     14,272     13,660  
Total Operating Revenue $ 470,601   $ 452,772   $ 1,656,900   $ 1,646,032  
Operating Expenses
Aircraft fuel 120,818 125,204 410,353 436,618
Salaries, wages and benefits 79,920 78,241 299,136 293,881
Maintenance, materials and repairs 29,820 28,194 162,972 165,069
Aircraft rent 41,662 38,452 160,415 154,968
Navigation fees, landing fees, and other rent 31,882 17,815 90,733 71,698
Depreciation and amortization 24,549 17,683 86,389 62,475
Passenger and ground handling services 20,394 19,786 72,503 69,886
Travel 17,935 14,272 61,420 56,461
Loss (gain) on disposal of aircraft 272 - 351 (2,417 )
Special charge 18,642 - 18,642 -
Other   26,680     25,596     107,196     110,902  
Total Operating Expenses   412,574     365,243     1,470,110     1,419,541  
Operating Income   58,027     87,529     186,790     226,491  
Non-operating Expenses (Income)
Interest income (4,810 ) (5,007 ) (19,813 ) (19,636 )
Interest expense 21,948 17,934 83,659 64,532
Capitalized interest (365 ) (2,371 ) (2,350 ) (18,727 )
Loss on early extinguishment of debt - 291 5,518 576
Other expense (income), net   539     (5,983 )   1,954     (5,529 )
Total Non-operating Expenses 17,312 4,864 68,968 21,216
Income before income taxes 40,715 82,665 117,822 205,275
Income tax expense   12,513     29,662     23,833     75,561  
Net Income 28,202 53,003 93,989 129,714

Less: Net income (loss) attributable to noncontrolling interests

  (1,756 )   621     152     (213 )

Net Income Attributable to Common Stockholders

 $ 29,958   $ 52,382   $ 93,837   $ 129,927  
Earnings per share:
Basic $ 1.20   $ 1.98   $ 3.67   $ 4.92  
Diluted $ 1.19   $ 1.97   $ 3.66   $ 4.89  
Weighted average shares:
Basic   25,039     26,444     25,541     26,419  
Diluted   25,159     26,615     25,627     26,549  
 
       

Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(Unaudited)

 

December 31, 2013

December 31, 2012
Assets
Current Assets
Cash and cash equivalents $ 321,816 $ 409,763
Short-term investments 10,904 10,119
Restricted cash 6,491 ?
Accounts receivable, net of allowance of $1,402 and $3,172, respectively 132,159 127,704
Prepaid maintenance 31,620 22,293
Deferred taxes 54,001 26,390
Prepaid expenses and other current assets   36,962     36,726  
Total current assets 593,953 632,995
Property and Equipment
Flight equipment 2,969,379 2,209,782
Ground equipment 46,951 39,230
Less: accumulated depreciation (256,685 ) (185,419 )
Purchase deposits for flight equipment   69,320     147,946  
Property and equipment, net 2,828,965 2,211,539
Other Assets
Long-term investments and accrued interest 130,267 140,498
Deposits and other assets 131,216 132,120
Intangible assets, net   33,858     35,533  
Total Assets $ 3,718,259   $ 3,152,685  
Liabilities and Equity
Current Liabilities
Accounts payable $ 65,367 $ 20,789
Accrued liabilities 194,292 152,467
Current portion of long-term debt1,2   157,486     154,760  
Total current liabilities 417,145 328,016
Other Liabilities
Long-term debt1,2 1,539,139 1,149,282
Deferred taxes 373,735 315,949
Other liabilities   66,115     71,334  
Total other liabilities 1,978,989 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; 28,200,213 and 27,672,924 shares issued, 25,038,629 and 26,443,441, shares outstanding (net of treasury stock), as of December 31, 2013 and December 31, 2012, respectively

282 277
Additional paid-in-capital 561,481 544,421
Treasury stock, at cost; 3,161,584 and 1,229,483 shares, respectively (125,826 ) (44,850 )
Accumulated other comprehensive loss (10,677 ) (14,263 )
Retained earnings   892,513     798,676  
Total stockholders' equity 1,317,773 1,284,261
Noncontrolling interest   4,352     3,843  
Total equity   1,322,125     1,288,104  
Total Liabilities and Equity $ 3,718,259   $ 3,152,685  
 
   

1

  

Balance sheet debt at December 31, 2013 totaled $1,696.6 million, including the impact of $41.4 million of unamortized discount.

 

2

The face value of our debt at December 31, 2013 totaled $1,738.0 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 Twelve Months Ended
December 31, 2013     December 31, 2012
 
Operating Activities:
Net Income Attributable to Common Stockholders $ 93,837 $ 129,927
Net income (loss) attributable to noncontrolling interests   152     (213 )
Net Income 93,989 129,714

Adjustments to reconcile Net Income to net cash provided by operating activities:

Depreciation and amortization 101,671 72,194
Accretion of debt securities discount (8,889 ) (8,560 )
Provision for allowance for doubtful accounts 178 837
Special charge 18,642 -
Loss on early extinguishment of debt 5,518 576
Loss (gain) on disposal of aircraft 351 (2,417 )
Deferred taxes 22,856 75,365
Stock-based compensation expense 16,690 18,202
Changes in:
Accounts receivable (6,029 ) (25,217 )
Prepaid expenses and other current assets (4,298 ) 48,213
Deposits and other assets 4,106 (26,027 )
Accounts payable and accrued liabilities   60,215     (24,383 )
Net cash provided by operating activities 305,000 258,497
Investing Activities:
Capital expenditures (29,531 ) (31,266 )
Purchase deposits and delivery payments for flight equipment (573,416 ) (520,770 )
Changes in restricted cash (6,491 ) -
Investment in debt securities - (6,658 )
Proceeds from short-term investments 5,569 4,342
Proceeds from insurance 9,109 3,300
Proceeds from disposal of aircraft   4,780     3,215  
Net cash used for investing activities (589,980 ) (547,837 )
Financing Activities:
Proceeds from debt issuance 709,484 1,211,560
Refund of accelerated share repurchase 21,886 -
Prepayment of accelerated share repurchase (21,886 ) -
Purchase of treasury stock (80,976 ) (3,351 )
Excess tax benefit from stock-based compensation expense 465 551
Payment of debt issuance costs (19,769 ) (34,141 )
Payments of debt   (412,171 )   (662,627 )
Net cash provided by financing activities 197,033 511,992
Net (decrease) increase in cash and cash equivalents (87,947 ) 222,652
Cash and cash equivalents at the beginning of period   409,763     187,111  
Cash and cash equivalents at the end of period $ 321,816   $ 409,763  
Non-cash Investing and Financing Activities:
Acquisition of flight equipment and assumed debt $ 90,498   $ -  
Acquisition of flight equipment included in Accounts payable and accrued liabilities $ 21,823   $ -  
 
       

Atlas Air Worldwide Holdings, Inc.

Direct Contribution

(in thousands)

(Unaudited)

 
For the Three Months Ended For the Twelve Months Ended
December 31, 2013   December 31, 2012 December 31, 2013     December 31, 2012
Operating Revenue:
ACMI $ 202,297 $ 189,343 $ 755,008 $ 682,189
AMC Charter 68,501 111,378 356,340 488,063
Commercial Charter 182,624 144,425 496,112 450,277
Dry Leasing 13,324 2,979 35,168 11,843
Other   3,855     4,647     14,272     13,660  
Total Operating Revenue $ 470,601   $ 452,772   $ 1,656,900   $ 1,646,032  
Direct Contribution:
ACMI $ 70,235 $ 74,924 $ 227,829 $ 191,497
AMC Charter 12,346 23,589 52,489 99,591
Commercial Charter 15,080 16,520 57 32,079
Dry Leasing   5,723     631     14,017     4,598  
Total Direct Contribution for Reportable Segments $ 103,384   $ 115,664   $ 294,392   $ 327,765  
 
Unallocated income and expenses, net (43,755 ) (32,708 ) (152,059 ) (124,331 )
Special charge (18,642 ) - (18,642 ) -
Loss on early extinguishment of debt - (291 ) (5,518 ) (576 )
Loss (gain) on disposal of aircraft   (272 )   -     (351 )   2,417  
Income before Income Taxes   40,715     82,665     117,822     205,275  
 
Interest income (4,810 ) (5,007 ) (19,813 ) (19,636 )
Interest expense 21,948 17,934 83,659 64,532
Capitalized interest (365 ) (2,371 ) (2,350 ) (18,727 )
Loss on early extinguishment of debt - 291 5,518 576
Other expense (income), net   539     (5,983 )   1,954     (5,529 )
Operating Income $ 58,027   $ 87,529   $ 186,790   $ 226,491  
 

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
  December 31, 2013       December 31, 2012     Percent Change
 
Net Income Attributable to Common Stockholders $ 29,958 $ 52,382 (42.8 %)
After-tax impact from:
Special charge1 11,714 -
Loss on early extinguishment of debt2 - 185
Fleet retirement costs3 - 159
Insurance gain4 - (4,032 )
Loss (gain) on disposal of aircraft   174     -    
Adjusted Net Income Attributable to Common Stockholders $ 41,846   $ 48,694   (14.1 %)
 
Diluted EPS $ 1.19 $ 1.97 (39.6 %)
After-tax impact from:
Special charge1 0.47 -
Loss on early extinguishment of debt2 - 0.01
Fleet retirement costs3 - 0.01
Insurance gain4 - (0.15 )
Loss (gain) on disposal of aircraft   0.01     -    
Adjusted Diluted EPS $

1.66

5

 $

1.83

5

 (9.3 %)
 
For the Twelve Months Ended
  December 31, 2013   December 31, 2012 Percent Change
 
Net Income Attributable to Common Stockholders $ 93,837 $ 129,927 (27.8 %)
After-tax impact from:
Special charge1 11,714
Loss on early extinguishment of debt2 5,160 367
Fleet retirement costs3 - 2,252
ETI tax benefit (14,160 ) -
Insurance gain4 - (4,032 )
Loss (gain) on disposal of aircraft   224     (1,540 )  
Adjusted Net Income Attributable to Common Stockholders $ 96,775   $ 126,974   (23.8 %)
 
Diluted EPS $ 3.66 $ 4.89 (25.2 %)
After-tax impact from:
Special charge1 0.46 -
Loss on early extinguishment of debt2 0.20 0.01
Fleet retirement costs3 - 0.08
ETI tax benefit (0.55 ) -
Insurance gain4 - (0.15 )
Loss (gain) on disposal of aircraft   0.01     (0.06 )  
Adjusted Diluted EPS $ 3.78   $

4.78

5

 (20.9 %)
 

1

  

Included in Special charge in 2013 are lease termination charges related to two 747-400BCFs and an impairment charge for a customer intangible.

 

2

Loss on early extinguishment of debt was related to the financing of 747-8F and 777-200LRF aircraft.

 

3

Fleet retirement costs in 2012 included incremental employee costs related to the retirement of our 747-200 fleet.

 

4

Insurance gain in 2012 related to flood damage at a warehouse.

 

5

Items may not sum due to rounding.

 
   

Atlas Air Worldwide Holdings, Inc.

Reconciliation to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

 

For the Three Months Ended

December 31, 2013     December 31, 2012
 
Net Cash Provided by Operating Activities $ 97,334 $ 60,191
Less:
Capital expenditures 4,671 4,534
Capitalized interest   365 2,371
Free Cash Flow1 $ 92,298 $53,286
 
   

For the Twelve Months Ended

December 31, 2013     December 31, 2012
 
Net Cash Provided by Operating Activities $ 305,000 $ 258,497
Less:
Capital expenditures 29,531 31,266
Capitalized interest   2,350 18,727
Free Cash Flow1 $ 273,119 $ 208,504
 
   

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 Twelve Months Ended
December 31, 2013   December 31, 2012 December 31, 2013     December 31, 2012
 
Income before income taxes $ 40,715 $ 82,665 $ 117,822 $ 205,275
Special Charge1 18,642 - 18,642 -
Fleet retirement costs2 - 249 - 3,535
Loss on early extinguishment of debt - 291 5,518 576
Insurance gain3 - (6,329 ) - (6,329 )
Loss (gain) on disposal of aircraft   272   -     351   (2,417 )
 
Adjusted pretax income 59,629 76,876 142,333 200,640
 
Interest (income) expense, net 16,773 10,556 61,496 26,169
Other non-operating expenses (income)   539   346     1,954   800  
 
Adjusted operating income 76,941 87,778 205,783 227,609
 
Depreciation and amortization   24,549   17,683     86,389   62,475  
 
EBITDA, as adjusted4 101,490 105,461 292,172 290,084
 
Aircraft rent   41,662   38,452     160,415   154,968  
 
EBITDAR, as adjusted5

$

143,152

$

143,913  

$

452,587

$

445,052  
 

1

  

Included in Special charge in 2013 are lease termination charges related to two 747-400BCFs and an impairment charge for a customer intangible.

 

2

Fleet retirement costs included incremental employee costs related to the retirement of our 747-200 fleet.

 

3

Insurance gain in 2012 related to flood damage at a warehouse.

 

4

Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, special charge, fleet retirement costs, loss on early extinguishment of debt, insurance gain and loss (gain) on disposal of aircraft, as applicable.

 

5

Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, aircraft rent expense, special charge, fleet retirement costs, loss on early extinguishment of debt, insurance gain and loss (gain) on disposal of aircraft, as applicable.

 
         

Atlas Air Worldwide Holdings, Inc.

Operating Statistics and Traffic Results

(Unaudited)

 

 

For the Three Months Ended

 

For the Twelve Months Ended

December 31, Increase/

December 31,

Increase/
2013   2012 (Decrease) 2013   2012 (Decrease)
 
Block Hours
ACMI 30,084 28,432 1,652 115,358 107,130 8,228
AMC Charter
Cargo 1,036 2,271 (1,235 ) 6,331 10,423 (4,092 )
Passenger 2,454 2,902 (448 ) 10,718 12,024 (1,306 )
Commercial Charter 9,120 7,204 1,916 25,480 21,965 3,515
Nonrevenue 395 257 138   1,050 1,165 (115 )
Total Block Hours 43,089 41,066 2,023   158,937 152,707 6,230  
 
Revenue Per Block Hour
ACMI $ 6,724 $ 6,660 $ 64 $ 6,545 $ 6,368 $ 177
AMC Charter 19,628 21,531 (1,903 ) 20,901 21,743 (842 )
Cargo 20,328 23,339 (3,011 ) 22,299 23,677 (1,378 )
Passenger 19,332 20,115 (783 ) 20,075 20,066 9
Commercial Charter 20,025 20,048 (23 ) 19,471 20,500 (1,029 )
 
Average Utilization (block hours per day)
ACMI1 9.6 11.2 (1.6 ) 10.2 12.0 (1.8 )
AMC Charter
Cargo 10.2 9.9 0.3 6.9 9.2 (2.3 )
Passenger 6.8 7.5 (0.7 ) 7.2 8.2 (1.0 )
Commercial Charter 11.0 9.9 1.1   7.9 9.4 (1.5 )
All Operating Aircraft1,2 9.7 10.6 (0.9 ) 9.4 11.0 (1.6 )
 
Fuel
AMC
Average fuel cost per gallon $ 3.35 $ 3.63 $ (0.28 ) $ 3.57 $ 3.35 $ 0.22
Fuel gallons consumed (000s) 8,317 13,270 (4,953 ) 42,164 58,178 (16,014 )
Commercial Charter
Average fuel cost per gallon $ 3.14 $ 3.27 $ (0.13 ) $ 3.14 $ 3.32 $ (0.18 )
Fuel gallons consumed (000s) 29,575 23,576 5,999 82,785 72,834 9,951
 
   

1

  

ACMI and All Operating Aircraft averages in the fourth quarter and full-year 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 Twelve Months Ended

December 31,

Increase/

December 31,

Increase/

2013

2012

(Decrease)

2013

2012

(Decrease)

 
 
Segment Operating Fleet (average aircraft equivalents during the period)
ACMI1
747-8F Cargo 8.0 6.3 1.7 7.8 4.3 3.5
747-400 Cargo2 16.4 15.3 1.1 14.4 16.4 (2.0 )
767-300 Cargo 2.0 - 2.0 1.8 - 1.8
767-200 Cargo 5.0 4.5 0.5 5.0 2.5 2.5
747-400 Passenger 1.7 1.1 0.6 1.3 1.1 0.2
767-300 Passenger - 0.4 (0.4 ) 0.2 0.1 0.1
767-200 Passenger 1.0 - 1.0   0.5 - 0.5  
Total 34.1 27.6 6.5 31.0 24.4 6.6
AMC Charter
747-400 Cargo 1.1 2.5 (1.4 ) 2.5 2.9 (0.4 )
747-200 Cargo - - - - 0.2 (0.2 )
747-400 Passenger 1.2 1.8 (0.6 ) 1.5 1.7 (0.2 )
767-300 Passenger 2.7 2.4 0.3   2.6 2.3 0.3  
Total 5.0 6.7 (1.7 ) 6.6 7.1 (0.5 )
Commercial Charter
747-8F Cargo 0.9 - 0.9 0.6 - 0.6
747-400 Cargo 7.7 7.6 0.1 7.8 5.8 2.0
747-200 Cargo - - - - 0.2 (0.2 )
747-400 Passenger 0.1 0.1 - 0.2 0.2 -
767-300 Passenger 0.3 0.2 0.1   0.2 0.2 -  
Total 9.0 7.9 1.1 8.8 6.4 2.4
Dry Leasing
777-200 Cargo 3.0 - 3.0 1.7 - 1.7
757-200 Cargo 1.0 1.0 - 1.0 1.0 -
737-300 Cargo 1.0 1.0 - 1.0 0.4 0.6
737-800 Passenger 2.0 2.0 -   2.0 2.0 -  
Total 7.0 4.0 3.0   5.7 3.4 2.3  
Total Operating Aircraft 55.1 46.2 8.9   52.1 41.3 10.8  
 
Out of Service3 1.1 - 1.1 0.9 - 0.9
 

1

  

ACMI average fleet excludes spare aircraft provided by CMI customers.

 

2

Includes 2.6 and 1.5 Large Cargo Freighters in the three-month periods ended December 31, 2013 and 2012, respectively. Includes 1.8 and 1.2 Large Cargo Freighters in the twelve-month periods ended December 31, 2013 and 2012, respectively.

 

3

Out-of-service aircraft were temporarily parked during the period and are completely unencumbered.

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