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.
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 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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