- Adjusted Net Income of $27.4
Million, $1.09 per Share
- Reported Net Income of $27.6
Million, $1.10 per Share
- Repurchased 1.8% of Shares
Outstanding in the Third Quarter
- Raising Fourth-Quarter and Full-Year
Earnings Outlooks
Atlas Air Worldwide Holdings, Inc.
(Nasdaq:AAWW), a leading global provider of outsourced aircraft and
aviation operating services, today announced adjusted net income
attributable to common stockholders of $27.4 million, or $1.09 per
diluted share, for the three months ended September 30, 2014,
compared with $28.6 million, or $1.13 per diluted share, for the
three months ended September 30, 2013.
On a reported basis, net income attributable to
common stockholders in the third quarter of 2014 totaled $27.6
million, or $1.10 per diluted share, compared with $23.7 million,
or $0.94 per diluted share, in the year-ago quarter.
“Both our third-quarter results and our
recently announced placements of three additional ACMI aircraft and
four more CMI aircraft illustrate the strength of our business and
the demand for our industry-leading assets and services,” said
William J. Flynn, President and Chief Executive Officer.
“With airfreight volumes continuing to improve
and market yields beginning to pick up, we expect our diversified
mix and new placements to drive sequential EPS growth in the fourth
quarter. We anticipate adjusted fully diluted earnings per share of
approximately $1.33 to $1.43 in the fourth quarter, and we are
raising our full-year 2014 adjusted earnings outlook to
approximately $3.50 to $3.60 per diluted share.”
Mr. Flynn added: “ACMI earnings in the third
quarter were complemented by a profit in Commercial Charter, growth
in our Dry Leasing business, and an improved contribution by our
military charter operations. Earnings in Commercial Charter were
driven by a sharp increase in block hours flown, reflecting the
broad-based uptick in airfreight demand. In Dry Leasing, our
results benefited from our addition of 777 freighters that generate
predictable, long-term revenue and earnings streams. And in AMC
Charter, we benefited from an enhanced share of available military
flying requirements.
“Reflecting our commitment to shareholder
value, we acquired 1.8% of our outstanding common stock through our
share repurchase program during the third quarter. Our capital
allocation strategy is dedicated to creating, enhancing and
returning value to our shareholders, both through business growth
and returns of capital.”
We recently placed three incremental Boeing 747
freighters, a 747-8F and two 747-400Fs, into ACMI service for the
benefit of DHL Express, the world's leading international express
shipping company, and Etihad Cargo, the fast-growing freight
division of Etihad Airways. The placements increase the number of
our aircraft in ACMI to 22 from 19.
In addition, we recently announced the
expansion of our 767 CMI service in North America for DHL Express.
This expansion covers four incremental 767-200 freighter aircraft
owned by DHL that we expect to begin flying during the first
quarter of 2015.
Adjusted earnings in the third quarter of 2014
excluded a tax adjustment of $0.1 million, or $0.01 per diluted
share, related to the company’s Global Supply Systems Limited
subsidiary. Adjusted earnings in the third quarter of 2013 excluded
an after-tax loss of $4.5 million, or $0.18 per diluted share, on
the early extinguishment of debt, and a loss of $0.3 million, or
$0.01 per diluted share, on the disposal of aircraft.
Third-Quarter Results
Profitability in our ACMI business during the
third quarter reflected an increase in 747-8F revenue and an
increase in CMI flying, offset by an increase in maintenance
expense on our -8F aircraft and lower 747-400 flying by certain
ACMI customers.
In Dry Leasing, revenue and profitability grew
following the addition of three 777F aircraft in January 2014 and
two in July 2013, which raised our 777F fleet count to six. Each of
these aircraft are leased to customers on a long-term basis.
Results in AMC Charter benefited from an
increase in block hours and aircraft utilization, partially offset
by a decrease in revenue per block hour due to a reduction of the
average “pegged” fuel price set by the AMC. Stronger than expected
demand for cargo flying and incremental passenger flying as a
result of former competitors exiting the AMC Charter market drove
contribution growth in the third quarter.
Profitability in Commercial Charter primarily
reflected an increase in volumes and improvement in aircraft
utilization compared with the third quarter of 2013. Charter
operations during the quarter benefited from the broad-based uptick
in demand, partially offset by additional travel and ground
handling expenses from flying to high-cost locations.
Reported earnings for the period included an
effective income tax rate of 29.1%, reflecting the ongoing
beneficial impact of lower taxes for certain foreign subsidiaries
in our Dry Leasing business.
Nine-Month Results
For the nine months ended September 30, 2014,
adjusted net income attributable to common stockholders totaled
$54.7 million, or $2.17 per diluted share, compared with $54.9
million, or $2.13 per diluted share, for the nine months ended
September 30, 2013.
On a reported basis, nine-month 2014 net income
attributable to common stockholders totaled $65.1 million, or $2.59
per diluted share, compared with $63.9 million, or $2.48 per
diluted share, in the first nine months of 2013.
Cash and Short-Term Investments
At September 30, 2014, our cash, cash
equivalents, short-term investments and restricted cash totaled
$287.7 million, compared with $339.2 million at December 31,
2013.
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
the first nine months of 2014 primarily related to the purchase of
three 777F 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 third quarter, we repurchased
458,937 shares of our common stock for $15.0 million, or 1.8% of
our outstanding common stock at June 30, 2014.
Future repurchases under our remaining $45.0
million authority may be made at our discretion, and the actual
timing, form and amount will depend on company and market
conditions.
Outlook
We are encouraged by our performance in the
first nine months of 2014 and the positive direction of market
trends so far this year.
Airfreight volumes continue to improve, and
recent industry reports suggest that airfreight demand will grow by
several percentage points in 2014 – outpacing supply and driving
the first real growth since 2010. We are seeing a general increase
in demand across all regions, with the greatest growth in the
transpacific market. An increase in online shopping and several new
high-tech product launches during peak season also continue to
favor airfreight.
As a result, we anticipate adjusted and
reported fully diluted earnings per share of approximately $1.33 to
$1.43 in the fourth quarter. We are also raising our full-year 2014
adjusted earnings outlook to approximately $3.50 to $3.60 per
diluted share, and our reported earnings outlook to approximately
$3.92 to $4.02.
For the full year, we expect to fly
approximately 160,000 block hours, with more than 70% in ACMI,
approximately 10% in AMC Charter, and the balance in Commercial
Charter. Our Dry Leasing segment should show dramatic growth
compared with 2013. While our share of military flying, mainly in
passenger service, has increased due to our ability to capitalize
on additional flying opportunities and a reduction in the number of
carriers serving the market, we expect an overall decline in
military demand in the fourth quarter of 2014 compared with
2013.
We also expect aircraft maintenance expense to
total approximately $190 to $195 million in 2014, primarily due to
performing several conditions-based engine overhauls for our
747-400 fleet during the fourth quarter. Depreciation this year is
anticipated to total approximately $120 million, and core capital
expenditures are expected to total about $30 to $35 million, mainly
for spare parts for our expanded fleet.
We remain confident in the resilience of our
business model, as well as our ability to adapt to the market and
to leverage the scale and efficiencies in our operations. The
business initiatives we have undertaken and the investments we have
made have enabled the company to deliver meaningful earnings in any
environment.
With a resilient business model, a superior
fleet, strong customer relationships, and outstanding employees, we
are well-positioned to capitalize on market improvements and to
continue to focus on the long-term growth of our business.
Conference Call
Management will host a conference call to
discuss Atlas Air Worldwide’s third-quarter 2014 financial and
operating results at 11:00 a.m. Eastern Time on Thursday, November
6, 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
third-quarter call) or at the following Web address:
http://www.media-server.com/m/p/mfukjxmu
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 12 by dialing
(855) 859-2056 (domestic) and (404) 537-3406 (international) and
using Access Code 24791883#.
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 Holdings, Inc. (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 services 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 Nine
Months Ended September 30, 2014 September 30,
2013 September 30, 2014 September 30, 2013
Operating Revenue ACMI $ 184,068 $ 189,583 $ 568,929
$ 552,710 AMC Charter 109,780 95,668 263,935 287,840 Commercial
Charter 143,075 104,605 391,527 313,488 Dry Leasing 25,411 11,874
75,611 21,844 Other 3,467 3,660
10,331 10,417 Total Operating Revenue $
465,801 $ 405,390 $ 1,310,333 $ 1,186,299
Operating Expenses Aircraft fuel 115,690
93,434 301,276 289,535 Salaries, wages and benefits 78,834 74,167
229,637 219,216 Maintenance, materials and repairs 35,084 31,306
144,516 133,152 Aircraft rent 34,183 40,405 104,419 118,753
Navigation fees, landing fees and other rent 35,336 24,481 93,368
58,851 Depreciation and amortization 29,865 23,661 88,401 61,840
Passenger and ground handling services 24,876 18,037 66,106 52,109
Travel 21,642 14,535 57,698 43,485 Loss on disposal of aircraft -
501 14,679 79 Special charge 90 - 9,567 - Other 29,212
27,157 84,890 80,515
Total Operating Expenses 404,812
347,684 1,194,557 1,057,535
Operating Income 60,989 57,706
115,776 128,764
Non-operating
Expenses (Income) Interest income (4,588 ) (4,849 ) (14,034 )
(15,003 ) Interest expense 25,960 22,594 78,777 61,711 Capitalized
interest (44 ) (291 ) (423 ) (1,985 ) Loss on early extinguishment
of debt - 4,524 - 5,518 Other expense (income), net 767
(241 ) 831 1,415 Total
Non-operating Expenses 22,095 21,737
65,151 51,656 Income before
income taxes 38,894 35,969 50,625 77,108 Income tax expense
(benefit) 11,318 11,247 (9,958 )
11,320
Net Income 27,576 24,722 60,583
65,788 Less: Net income (loss) attributable to noncontrolling
interests - 981 (4,530 )
1,909
Net Income Attributable to Common
Stockholders $ 27,576 $ 23,741 $ 65,113 $
63,879
Earnings per share: Basic $ 1.10
$ 0.94 $ 2.59 $ 2.48 Diluted $ 1.10 $
0.94 $ 2.59 $ 2.48
Weighted average
shares: Basic 24,983 25,124
25,106 25,710 Diluted 25,064
25,212 25,164 25,784
Atlas Air Worldwide Holdings,
Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
September 30, 2014 December 31, 2013
Assets Current Assets Cash and cash equivalents $
262,224 $ 321,816 Short-term investments 11,931 10,904 Restricted
cash 13,563 6,491 Accounts receivable, net of allowance of $1,748
and $1,402, respectively 167,845 132,159 Prepaid maintenance 11,389
31,620 Deferred taxes 29,203 54,001 Prepaid expenses and other
current assets 26,835 36,962 Total
current assets 522,990 593,953
Property and Equipment Flight
equipment 3,485,877 2,969,379 Ground equipment 50,305 46,951 Less:
accumulated depreciation (328,953 ) (256,685 ) Purchase deposits
for flight equipment 5,947 69,320
Property and equipment, net 3,213,176 2,828,965
Other Assets
Long-term investments and accrued interest 126,002 130,267 Deposits
and other assets 136,438 131,216 Intangible assets, net
69,676 33,858
Total Assets $ 4,068,282
$ 3,718,259
Liabilities and Equity
Current Liabilities Accounts payable $ 39,234 $ 65,367
Accrued liabilities 229,072 194,292 Current portion of long-term
debt1,2 191,487 157,486 Total current
liabilities 459,793 417,145
Other Liabilities Long-term
debt1,2 1,829,148 1,539,139 Deferred taxes 340,444 371,655 Other
liabilities 66,822 68,195 Total other
liabilities 2,236,414 1,978,989 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; 28,556,909 and
28,200,213 shares issued, 24,804,020 and 25,038,629, shares
outstanding (net of treasury stock), as of September 30, 2014 and
December 31, 2013, respectively 286 282 Additional paid-in-capital
569,230 561,481 Treasury stock, at cost; 3,752,889 and 3,161,584
shares, respectively (145,305 ) (125,826 ) Accumulated other
comprehensive loss (9,762 ) (10,677 ) Retained earnings
957,626 892,513 Total stockholders’ equity
1,372,075 1,317,773 Noncontrolling interest ― 4,352
Total equity 1,372,075 1,322,125
Total Liabilities and Equity $ 4,068,282 $ 3,718,259
1 Balance sheet debt at September 30, 2014
totaled $2,020.6 million, including the impact of $37.4 million of
unamortized discount.
2
The face value of our debt at September 30, 2014 totaled $2,058.0
million, compared with $1,738.0 million on December 31, 2013.
Atlas Air Worldwide Holdings,
Inc.
Consolidated Statements of Cash
Flows
(in thousands)
(Unaudited)
For the Nine Months Ended September 30, 2014
September 30, 2013 Operating
Activities: Net Income Attributable to Common Stockholders $
65,113 $ 63,879 Net Income (loss) attributable to noncontrolling
interests (4,530 ) 1,909 Net Income 60,583
65,788 Adjustments to reconcile Net Income to net cash provided by
operating activities: Depreciation and amortization 101,493 73,324
Accretion of debt securities discount (6,022 ) (6,758 ) Provision
for allowance for doubtful accounts 420 217 Special charge, net of
cash payment 6,484 ― Loss on early extinguishment of debt ― 5,518
Loss (gain) on disposal of aircraft 14,679 79 Deferred taxes
(10,282 ) 10,511 Stock-based compensation expense 9,769 12,176
Changes in: Accounts receivable (27,147 ) 6,818 Prepaid expenses
and other current assets 36,931 12,494 Deposits and other assets
(5,978 ) 2,834 Accounts payable and accrued liabilities
(12,402 ) 22,092 Net cash provided by operating
activities 168,528 205,093
Investing Activities:
Capital expenditures (17,509 ) (24,860 ) Purchase deposits and
delivery payments for flight equipment (502,782 ) (561,979 )
Changes in restricted cash (7,072 ) (5,886 ) Proceeds from
short-term investments 2,886 4,672 Proceeds from insurance ― 9,109
Proceeds from disposal of aircraft ― 4,250 Net
cash used for investing activities (524,477 ) (574,694 )
Financing Activities: Proceeds from debt issuance 572,552
709,484 Maintenance reserves received 12,950 2,195 Refund of
accelerated share repurchase ― 21,886 Prepayment of accelerated
share repurchase ― (21,886 ) Purchase of treasury stock (19,479 )
(80,946 ) Excess tax benefit from stock-based compensation expense
― 850 Payment of debt issuance costs (17,117 ) (19,682 ) Payments
of debt (252,549 ) (371,096 ) Net cash provided by
financing activities 296,357 240,805 Net decrease in cash and cash
equivalents (59,592 ) (128,796 ) Cash and cash equivalents at the
beginning of period 321,816 409,763
Cash and cash equivalents at the end of period $ 262,224 $
280,967
Non-cash Investing and Financing
Activities:
Acquisition of flight equipment and assumed debt $ ― $ 90,498
Acquisition of flight and ground equipment
included in Accounts payableand Accrued liabilities
$ 29,087 $ ― Disposition of aircraft included in Accounts
receivable $ 5,072 $ ―
Atlas Air Worldwide Holdings,
Inc.
Direct Contribution
(in thousands)
(Unaudited)
For the Three Months Ended For the Nine
Months Ended September 30, 2014 September 30,
2013 September 30, 2014 September 30, 2013
Operating Revenue: ACMI $ 184,068 $ 189,583 $ 568,929 $
552,710 AMC Charter 109,780 95,668 263,935 287,840 Commercial
Charter 143,075 104,605 391,527 313,488 Dry Leasing 25,411 11,874
75,611 21,844 Other 3,467 3,660
10,331 10,417
Total Operating Revenue
$ 465,801
$ 405,390
$ 1,310,333
$ 1,186,299
Direct Contribution: ACMI $
54,228 $ 62,587 $ 143,554 $ 157,594 AMC Charter 17,603 14,749
42,691 40,144 Commercial Charter 571 (3,859 ) (17,731 ) (15,023 )
Dry Leasing 8,721 4,681 25,630
8,294
Total Direct Contribution
$ 81,123
$ 78,158 $ 194,144 $
191,009 Add back (subtract): Unallocated income and
expenses, net (42,139 ) (37,164 ) (119,273 ) (108,304 ) Loss on
early extinguishment of debt - (4,524 ) - (5,518 ) Special charge
(90 ) - (9,567 ) - Loss on disposal of aircraft -
(501 ) (14,679 ) (79 )
Income before Income
Taxes 38,894 35,969 50,625
77,108 Add back (subtract): Interest
income (4,588 ) (4,849 ) (14,034 ) (15,003 ) Interest expense
25,960 22,594 78,777 61,711 Capitalized interest (44 ) (291 ) (423
) (1,985 ) Loss on early extinguishment of debt - 4,524 - 5,518
Other expense (income), net 767 (241 )
831 1,415
Operating Income $
60,989
$ 57,706
$ 115,776
$ 128,764
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, 2014
September 30, 2013 Percent Change
Net Income Attributable to Common Stockholders $
27,576 $ 23,741 16.2 % After-tax impact from: Loss on disposal of
aircraft - 319 Special charge1 (135 ) - Loss on early
extinguishment of debt2 - 4,524
Adjusted Net Income Attributable to Common Stockholders $
27,441 $ 28,584 (4.0 %)
Diluted EPS $
1.10 $ 0.94 17.0 % After-tax impact from: Loss on disposal of
aircraft - 0.01 Special charge1 (0.01 ) - Loss on early
extinguishment of debt2 - 0.18
Adjusted Diluted EPS $ 1.09
$ 1.13
(3.5 %)
For the Nine Months Ended September
30, 2014 September 30, 2013 Percent Change
Net Income Attributable to Common Stockholders $ 65,113 $
63,879 1.9 % After-tax impact from: ETI tax benefit (24,013 )
(14,160 ) Loss on disposal of aircraft 9,389 50 Special charge1
3,905 - Accrual for legal matters 300 - Loss on early
extinguishment of debt2 - 5,157
Adjusted Net Income Attributable to Common Stockholders $
54,694 $ 54,926 (0.4 %)
Diluted EPS $
2.59 $ 2.48 4.4 % After-tax impact from: ETI tax benefit (0.95 )
(0.55 ) Loss on disposal of aircraft 0.37 - Special charge1 0.16 -
Accrual for legal matters 0.01 - Loss on early extinguishment of
debt2 - 0.20
Adjusted Diluted
EPS $ 2.17(3 ) $ 2.13 1.9 % 1 Included in
Special charge in 2014 were employee termination benefits, a loan
reserve, professional fees and tax adjustments related to GSS, and
an adjustment to lease termination costs for two 747-400BCFs. 2
Loss on early extinguishment of debt was related to the financing
of 747-8F aircraft. 3 Items do not sum due to rounding.
Atlas Air Worldwide Holdings,
Inc.
Reconciliation to Non-GAAP
Measures
(in thousands, except per share data)
(Unaudited)
4Q14Diluted EPS
Guidance1
Full-Year 2014 Diluted EPS
Guidance1,2
GAAP Measure
$
1.33-1.43
$
3.92-4.02
ETI tax benefit - (0.95 ) Loss on disposal of aircraft - 0.37
Special charge - 0.16 Accrual for legal matters -
0.01
Non-GAAP Measure $ 1.33-1.43 $ 3.50-3.60
1 Approximate $/share. 2 Items do not sum due to rounding.
For the Three Months Ended
September 30,2014
September 30,2013
Net Cash Provided by Operating Activities $ 61,402 $
78,462 Less: Capital expenditures 6,856 5,369 Capitalized interest
44 291
Free Cash Flow1 $ 54,502
$ 72,802
For the Nine Months Ended
September 30,2014
September 30,2013
Net Cash Provided by Operating Activities $ 168,528 $
205,093 Less: Capital expenditures 17,509 24,860 Capitalized
interest 423 1,985
Free Cash
Flow1 $ 150,596 $ 178,248 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, 2014 September 30,
2013 September 30, 2014 September 30, 2013
Income before income taxes $ 38,894 $ 35,969 $ 50,625
$ 77,108 Loss on disposal of aircraft - 501 14,679 79 Special
charge1 90 - 9,567 - Accrual for legal matters - - 469 - Loss on
early extinguishment of
debt2
- 4,524 - 5,518
Adjusted pretax income 38,984 40,994 75,340 82,705
Interest (income) expense, net 21,328 17,454 64,320 44,723 Other
non-operating expenses
(income)
767 (241 ) 831 1,415
Adjusted
operating income 61,079 58,207 140,491 128,843
Depreciation and amortization 29,865 23,661
88,401 61,840
EBITDA, as
adjusted3 90,944 81,868 228,892 190,683 Aircraft
rent 34,183 40,405 104,419
118,753
EBITDAR, as adjusted4 $ 125,127
$ 122,273
$ 333,311
$ 309,436 1
Included in Special charge in 2014 were GSS employee
termination benefits, a loan reserve, professional fees and tax
adjustments related to GSS, and an adjustment to lease termination
costs for two 747-400BCFs. 2
Loss on early extinguishment of debt was
related to the financing of 747-8F aircraft.
3 Adjusted EBITDA: Earnings before interest, taxes,
depreciation, amortization, loss on disposal of aircraft, special
charge, accrual for legal matters, and loss on early extinguishment
of debt, as applicable. 4 Adjusted EBITDAR: Earnings before
interest, taxes, depreciation, amortization, aircraft rent expense,
loss on disposal of aircraft, special charge, accrual for legal
matters, and loss on early extinguishment of debt, 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/ 2014 2013 (Decrease)
2014 2013 (Decrease) Block
Hours ACMI 28,096 28,813 (717 ) 83,770 85,274 (1,504 ) AMC
Charter Cargo 1,892 1,531 361 3,493 5,296 (1,803 ) Passenger 3,679
3,029 650 9,378 8,264 1,114 Commercial Charter 7,111 5,310 1,801
19,484 16,360 3,124 Nonrevenue 261 220 41 796 655 141
Total Block Hours 41,039 38,903 2,136 116,921 115,849 1,072
Revenue Per Block Hour ACMI $ 6,551 $ 6,580 $
(29 ) $ 6,792 $ 6,482 $ 310 AMC Charter Cargo 19,710 21,962 (2,252
) 21,039 22,681 (1,642 ) Passenger 19,703 20,483 (780 ) 20,308
20,296 12 Commercial Charter 20,120 19,700 420 20,095 19,162 933
Average Utilization (block hours per day) ACMI1 9.6
10.1 (0.5 ) 9.4 10.4 (1.0 ) AMC Charter Cargo 9.3 5.4 3.9 8.5 6.7
1.8 Passenger 9.5 8.0 1.5 7.8 7.0 0.8 Commercial Charter 9.1 6.3
2.8 8.4 7.0 1.4 All Operating Aircraft1,2 9.5 8.9 0.6
9.1 9.3 (0.2 )
Fuel AMC Average fuel cost per
gallon $ 3.36 $ 3.62 $ (0.26 ) $ 3.35 $ 3.63 $ (0.28 ) Fuel gallons
consumed (000s) 13,341 11,324 2,017 30,644 33,847 (3,203 )
Commercial Charter Average fuel cost per gallon $ 3.06 $
3.09 $ (0.03 ) $ 3.12 $ 3.13 $ (0.01 ) Fuel gallons consumed (000s)
23,142 16,956 6,186 63,698 53,210 10,488
1 ACMI and All Operating Aircraft averages in the third
quarter and first nine months of 2014 reflect the impact of
increases in the number of CMI aircraft and amount of CMI flying
compared with the same periods of 2013.
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/ 2014
2013 (Decrease) 2014 2013
(Decrease)
Segment Operating Fleet(average
aircraft equivalentsduring the period)
ACMI1 747-8F Cargo 8.4 8.0 0.4 8.5 7.7 0.8 747-400
Cargo 11.1 12.0 (0.9 ) 11.8 12.2 (0.4 ) 747-400 Dreamlifter 3.0 1.6
1.4 3.1 1.6 1.5 767-300 Cargo 2.0 2.0 - 2.0 1.8 0.2 767-200 Cargo
5.0 5.0 - 5.0 5.0 - 747-400 Passenger 1.3 1.4 (0.1 ) 1.1 1.1 -
767-300 Passenger 0.1 - 0.1 - 0.3 (0.3 ) 767-200 Passenger 1.0 1.0
- 1.0 0.3 0.7 Total 31.9 31.0 0.9 32.5 30.0 2.5
AMC Charter 747-400 Cargo 2.2 3.1 (0.9 ) 1.5 2.9 (1.4 )
747-400 Passenger 1.5 1.4 0.1 1.7 1.7 - 767-300 Passenger 2.7 2.7 -
2.7 2.6 0.1 Total 6.4 7.2 (0.8 ) 5.9 7.2 (1.3 )
Commercial Charter 747-8F Cargo 0.5 1.0 (0.5 ) 0.5 0.4 0.1
747-400 Cargo 7.6 7.7 (0.1 ) 7.7 7.8 (0.1 ) 747-400 Passenger 0.1
0.2 (0.1 ) 0.1 0.2 (0.1 ) 767-300 Passenger 0.3 0.2 0.1 0.2
0.2 - Total 8.5 9.1 (0.6 ) 8.5 8.6 (0.1 )
Dry Leasing
777-200 Cargo 6.0 2.6 3.4 5.9 1.3 4.6 757-200 Cargo 1.0 1.0 - 1.0
1.0 - 737-300 Cargo 1.0 1.0 - 1.0 1.0 - 737-800 Passenger 2.0 2.0 -
2.0 2.0 - Total 10.0 6.6 3.4 9.9 5.3 4.6
Total Operating Aircraft 56.8 53.9 2.9 56.8
51.1 5.7 Out of Service2 1.0 1.0 - 1.0 0.8 0.2
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.
Atlas Air Worldwide Holdings, Inc.InvestorsDan
Loh, 914-701-8200orMediaBonnie Rodney, 914-701-8580
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