Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW) today announced
strong increases in revenue, earnings and adjusted EBITDA for the
first quarter of 2018, and an upwardly revised outlook for
full-year 2018 growth in revenue, adjusted earnings and adjusted
EBITDA.
“Our volumes and revenue grew by more than 20%
in the first quarter, and our reported income, adjusted income and
adjusted EBITDA rose even more sharply,” said President and Chief
Executive Officer William J. Flynn.
“The strategic initiatives that we have put in
place over many years have transformed our company. Our focus on
express, e-commerce and fast-growing global markets has broadened
our customer base and fleet. We are growing across all of our fleet
types. We are operating in a strong airfreight environment and
growing global economy.
“Our recent placement of a second 747-400 ACMI
freighter with DHL Global Forwarding (DGF), the world’s largest
airfreight forwarding company, underscores how well-positioned we
are to capitalize on market dynamics to serve our customers. This
second aircraft for DGF adds further controlled capacity on growing
trade lanes where it expects demand volumes to continue to exceed
capacity.
“With the demand we are seeing for our aircraft
and services, we now expect our revenue to exceed $2.5 billion in
2018. We project adjusted EBITDA to increase to more than $500
million. And we anticipate our full-year adjusted net income will
grow by a low- to mid-30% level compared with 2017, up from our
prior outlook of mid-20% growth.”
First-Quarter Results
Volumes in the first quarter of 2018 increased
21% to 66,495 block hours, with revenue growing 24% to $590.0
million.
Reported income from continuing operations, net
of taxes, during the period totaled $9.6 million, or $0.37 per
diluted share, compared with $0.04 million, or $0.00 per diluted
share, in the first quarter of 2017. Reported results for the
latest quarter included an unrealized loss on outstanding warrants
of $7.7 million compared with an unrealized loss on outstanding
warrants of $5.2 million in the year-ago period.
On an adjusted basis, income from continuing
operations, net of taxes, in the first quarter of 2018 increased
$15.5 million to $23.8 million, or $0.86 per diluted share, from
adjusted income of $8.3 million, or $0.31 per diluted share, in the
year-ago quarter. Adjusted EBITDA increased $29.9 million to $93.8
million.
Increased ACMI segment revenue and contribution
in the first quarter of 2018 were primarily driven by significant
growth in block-hour volumes and a higher average rate per block
hour, partially offset by higher heavy maintenance expense and
amortization of deferred maintenance costs. Block hours grew 28%
during the period, reflecting increased 767 flying for Amazon, the
start-up of 747-400 flying for several new customers, and the
redeployment of 747-8F aircraft from the Charter segment to ACMI.
The increase in the average rate during the quarter primarily
reflected the impact of new 747-400F and 747-8F flying.
Higher Charter segment contribution during the
period was primarily driven by an increase in yields and higher
aircraft utilization, partially offset by the redeployment of 747-8
aircraft to the ACMI segment. Higher average rates during the
quarter primarily reflected an increase in yields, higher fuel
prices, and the impact of Charter capacity purchased from ACMI
customers that had no associated Charter block hours.
In Dry Leasing, higher segment contribution
primarily reflected the placement of additional 767-300 converted
freighter aircraft and the placement of a 777-200 freighter in
February 2018.
Reported earnings in the first quarter of 2018
also included an effective income tax rate of 28.3%, due mainly to
nondeductible changes in the value of outstanding warrants. On an
adjusted basis, our results reflected an effective income tax rate
of 16.1%.
Cash and Short-Term
Investments
At March 31, 2018, our cash and cash
equivalents, short-term investments and restricted cash totaled
$147.5 million, compared with $305.5 million at December 31,
2017.
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 2018 primarily related to capital expenditures
and payments for flight equipment and modifications, including the
acquisition of 777-200 aircraft, 767-300 aircraft to be converted
to freighter configuration, spare engines and GEnx engine
performance upgrade kits.
Net cash provided by financing activities during
the period primarily reflected proceeds from our revolving credit
facility, partially offset by payments on debt
obligations.
Increasing 2018 Outlook
We are increasing our outlook for 2018 to
reflect our strong first-quarter results and our expectation for
significant volume, revenue, and earnings growth.
With solid demand from our customers for our
aircraft and services, and with the essential building blocks our
strategic initiatives have set in place, we see opportunities to
grow with existing customers and to add new ones.
Globally, economic activity is expanding. The
airfreight market is strong, and airfreight tonnage continues to
grow from record levels.
As a result, we see volumes rising approximately
19% to around 300,000 block hours in 2018, with about 75% of our
hours in ACMI and the balance in Charter.
For the full year, we expect our revenue to
exceed $2.5 billion, our adjusted EBITDA to increase to more than
$500 million, and our adjusted net income to grow by a low- to
mid-30% level compared with 2017.
We also expect our full-year 2018 adjusted
income tax rate to be approximately 16%.
For the second quarter, we expect adjusted
EBITDA to exceed $100 million, and adjusted net income to increase
30% to 35% compared with first-quarter 2018 adjusted net income of
$23.8 million.
Aircraft maintenance expense in 2018 is expected
to total approximately $320 million, mainly reflecting an increase
in daily line maintenance due to the anticipated growth in block
hours. Depreciation and amortization is expected to total
approximately $220 million. In addition, core capital expenditures,
which exclude aircraft and engine purchases, are expected to total
approximately $100 to $110 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 2018 financial and
operating results at 11:00 a.m. Eastern Time on Thursday, May 3,
2018.
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:
https://edge.media-server.com/m6/p/gf5yfcfi
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 10 by dialing (855)
859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.)
and using Access Code 6773418#.
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 Adjusted EBITDA; 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. 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. For example:
- Adjusted EBITDA; Adjusted income
from continuing operations, net of taxes; and Adjusted Diluted EPS
from continuing operations, net of taxes, provide a more comparable
basis to analyze operating results and earnings and are measures
commonly used by shareholders to measure our performance. In
addition, management’s incentive compensation is determined, in
part, by using Adjusted EBITDA and Adjusted income from continuing
operations, net of taxes.
- Adjusted effective tax rate
provides improved insight into the tax effects of our ongoing
business operations.
- Free Cash Flow helps investors
assess our ability, over the long term, to create value for our
shareholders as it represents cash available to execute our capital
allocation strategy.
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 cargo and passenger
operations.
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 speak only as of
the date of this release. They 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 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,
pilots 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, work stoppages and
service slowdowns; the outcome of pending negotiations with our
pilots’ union; 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; changes
to our provisional estimates of the impact of the U.S. Tax Cuts and
Jobs Act of 2017; 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 2018 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 and
expressly disclaims any obligation to revise or update publically
any forward-looking statement to reflect future events or
circumstances.
|
Atlas Air Worldwide Holdings,
Inc. |
Consolidated Statements of
Operations |
(in thousands, except per share data) |
(Unaudited) |
|
|
For the Three Months Ended |
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
Operating
Revenue |
$ |
590,014 |
|
|
$ |
475,394 |
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
Salaries,
wages and benefits |
|
125,082 |
|
|
|
104,087 |
|
Aircraft
fuel |
|
96,303 |
|
|
|
82,432 |
|
Maintenance, materials and repairs |
|
84,879 |
|
|
|
72,816 |
|
Depreciation and amortization |
|
49,630 |
|
|
|
37,894 |
|
Travel |
|
39,847 |
|
|
|
32,359 |
|
Aircraft
rent |
|
39,524 |
|
|
|
36,073 |
|
Navigation fees, landing fees and other rent |
|
35,597 |
|
|
|
18,535 |
|
Passenger
and ground handling services |
|
28,062 |
|
|
|
25,123 |
|
Gain on
disposal of aircraft |
|
- |
|
|
|
(54 |
) |
Transaction-related expenses |
|
270 |
|
|
|
915 |
|
Other |
|
50,251 |
|
|
|
41,178 |
|
Total
Operating Expenses |
|
549,445 |
|
|
|
451,358 |
|
Operating
Income |
|
40,569 |
|
|
|
24,036 |
|
Non-operating
Expenses (Income) |
|
|
|
|
|
|
|
Interest
income |
|
(1,724 |
) |
|
|
(1,256 |
) |
Interest
expense |
|
27,342 |
|
|
|
21,524 |
|
Capitalized interest |
|
(1,750 |
) |
|
|
(1,780 |
) |
Unrealized loss on financial instruments |
|
7,740 |
|
|
|
5,213 |
|
Other
income |
|
(4,475 |
) |
|
|
(253 |
) |
Total
Non-operating Expenses (Income) |
|
27,133 |
|
|
|
23,448 |
|
Income
from continuing operations before income taxes |
|
13,436 |
|
|
|
588 |
|
Income
tax expense |
|
3,808 |
|
|
|
553 |
|
Income
from continuing operations, net of taxes |
|
9,628 |
|
|
|
35 |
|
Loss from
discontinued operations, net of taxes |
|
(16 |
) |
|
|
(787 |
) |
Net Income
(Loss) |
$ |
9,612 |
|
|
$ |
(752 |
) |
|
|
|
|
|
|
|
|
Earnings per
share from continuing operations: |
|
|
|
|
|
|
|
Basic |
$ |
0.38 |
|
|
$ |
- |
|
Diluted |
$ |
0.37 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
Loss per share
from discontinued operations: |
|
|
|
|
|
|
|
Basic |
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
Diluted |
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
Earnings (loss)
per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.38 |
|
|
$ |
(0.03 |
) |
Diluted |
$ |
0.37 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
Weighted
average shares: |
|
|
|
|
|
|
|
Basic |
|
25,436 |
|
|
|
25,162 |
|
Diluted |
|
25,956 |
|
|
|
25,744 |
|
|
Atlas Air Worldwide Holdings,
Inc. |
Consolidated Balance Sheets |
(in thousands, except share data) |
(Unaudited) |
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
Assets |
|
|
|
|
|
|
|
Current
Assets |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
119,294 |
|
|
$ |
280,809 |
|
Short-term investments |
|
17,127 |
|
|
|
13,604 |
|
Restricted cash |
|
11,110 |
|
|
|
11,055 |
|
Accounts
receivable, net of allowance of $4,542 and $1,494,
respectively |
|
195,117 |
|
|
|
194,478 |
|
Prepaid
maintenance |
|
25,641 |
|
|
|
13,346 |
|
Prepaid
expenses and other current assets |
|
64,904 |
|
|
|
74,294 |
|
Total
current assets |
|
433,193 |
|
|
|
587,586 |
|
Property and
Equipment |
|
|
|
|
|
|
|
Flight
equipment |
|
4,658,870 |
|
|
|
4,447,097 |
|
Ground
equipment |
|
72,909 |
|
|
|
70,951 |
|
Less: accumulated depreciation |
|
(739,778 |
) |
|
|
(701,249 |
) |
Flight
equipment modifications in progress |
|
242,084 |
|
|
|
186,302 |
|
Property
and equipment, net |
|
4,234,085 |
|
|
|
4,003,101 |
|
Other
Assets |
|
|
|
|
|
|
|
Long-term
investments and accrued interest |
|
10,680 |
|
|
|
15,371 |
|
Deferred
costs and other assets |
|
234,615 |
|
|
|
242,919 |
|
Intangible assets, net and goodwill |
|
104,259 |
|
|
|
106,485 |
|
Total
Assets |
$ |
5,016,832 |
|
|
$ |
4,955,462 |
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
Accounts
payable |
$ |
90,333 |
|
|
$ |
65,740 |
|
Accrued
liabilities |
|
430,146 |
|
|
|
454,843 |
|
Current
portion of long-term debt and capital lease |
|
223,308 |
|
|
|
218,013 |
|
Total
current liabilities |
|
743,787 |
|
|
|
738,596 |
|
Other
Liabilities |
|
|
|
|
|
|
|
Long-term
debt and capital lease |
|
2,047,562 |
|
|
|
2,008,986 |
|
Deferred
taxes |
|
217,223 |
|
|
|
214,694 |
|
Financial
instruments and other liabilities |
|
215,961 |
|
|
|
203,330 |
|
Total
other liabilities |
|
2,480,746 |
|
|
|
2,427,010 |
|
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; |
|
|
|
|
|
|
|
30,544,374 and 30,104,648 shares issued, 25,560,678 and
25,292,454 |
|
|
|
|
|
|
|
shares
outstanding (net of treasury stock), as of March 31, 2018 |
|
|
|
|
|
|
|
and
December 31, 2017, respectively |
|
305 |
|
|
|
301 |
|
Additional paid-in-capital |
|
721,577 |
|
|
|
715,735 |
|
Treasury
stock, at cost; 4,983,696 and 4,812,194 shares, respectively |
|
(203,950 |
) |
|
|
(193,732 |
) |
Accumulated other comprehensive loss |
|
(4,635 |
) |
|
|
(3,993 |
) |
Retained
earnings |
|
1,279,002 |
|
|
|
1,271,545 |
|
Total
stockholders’ equity |
|
1,792,299 |
|
|
|
1,789,856 |
|
Total
Liabilities and Equity |
$ |
5,016,832 |
|
|
$ |
4,955,462 |
|
|
|
|
1 |
|
Balance
sheet debt at March 31, 2018 totaled $2,270.9 million,
including the impact of $97.4 million of unamortized discount and
debt issuance costs of $48.3 million. |
2 |
|
The face
value of our debt at March 31, 2018 totaled $2,416.6 million,
compared with $2,378.8 million on December 31, 2017. |
|
|
Atlas Air Worldwide Holdings,
Inc. |
|
Consolidated Statements of Cash
Flows |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
For the Three Months Ended |
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
Operating
Activities: |
|
|
|
|
|
|
|
Income from continuing
operations, net of taxes |
$ |
9,628 |
|
|
$ |
35 |
|
Less: Loss from
discontinued operations, net of taxes |
|
(16 |
) |
|
|
(787 |
) |
Net Income (Loss) |
|
9,612 |
|
|
|
(752 |
) |
|
|
|
|
|
|
|
|
Adjustments to
reconcile Net Income (Loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
59,796 |
|
|
|
43,217 |
|
Accretion
of debt securities discount |
|
(270 |
) |
|
|
(307 |
) |
Provision
for allowance for doubtful accounts |
|
3,064 |
|
|
|
435 |
|
Unrealized loss on financial instruments |
|
7,740 |
|
|
|
5,213 |
|
Gain on
disposal of aircraft |
|
- |
|
|
|
(54 |
) |
Deferred
taxes |
|
3,716 |
|
|
|
418 |
|
Stock-based compensation |
|
5,846 |
|
|
|
4,212 |
|
Changes
in: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(3,414 |
) |
|
|
8,134 |
|
Prepaid
expenses, current assets and other assets |
|
(986 |
) |
|
|
(30,336 |
) |
Accounts
payable and accrued liabilities |
|
(15,979 |
) |
|
|
(11,526 |
) |
Net cash provided by
operating activities |
|
69,125 |
|
|
|
18,654 |
|
Investing
Activities: |
|
|
|
|
|
|
|
Capital
expenditures |
|
(26,091 |
) |
|
|
(21,673 |
) |
Payments
for flight equipment and modifications |
|
(236,536 |
) |
|
|
(118,897 |
) |
Proceeds
from investments |
|
1,438 |
|
|
|
631 |
|
Proceeds
from disposal of aircraft |
|
- |
|
|
|
137 |
|
Net cash used for
investing activities |
|
(261,189 |
) |
|
|
(139,802 |
) |
Financing
Activities: |
|
|
|
|
|
|
|
Proceeds
from debt issuance |
|
19,357 |
|
|
|
- |
|
Payment
of debt issuance costs |
|
(810 |
) |
|
|
(90 |
) |
Payments
of debt |
|
(56,819 |
) |
|
|
(47,099 |
) |
Proceeds
from revolving credit facility |
|
75,000 |
|
|
|
150,000 |
|
Customer
maintenance reserves and deposits received |
|
4,094 |
|
|
|
14,837 |
|
Customer
maintenance reserves paid |
|
- |
|
|
|
(6,384 |
) |
Purchase
of treasury stock |
|
(10,218 |
) |
|
|
(9,430 |
) |
Net cash provided by
financing activities |
|
30,604 |
|
|
|
101,834 |
|
Net decrease in cash,
cash equivalents and restricted cash |
|
(161,460 |
) |
|
|
(19,314 |
) |
Cash, cash equivalents
and restricted cash at the beginning of period |
|
291,864 |
|
|
|
138,250 |
|
Cash, cash equivalents
and restricted cash at the end of period |
$ |
130,404 |
|
|
$ |
118,936 |
|
|
|
|
|
|
|
|
|
Noncash
Investing and Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of flight equipment included in Accounts payable and
accrued liabilities |
$ |
61,846 |
|
|
$ |
48,015 |
|
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, 2018 |
|
March 31, 20171 |
Operating
Revenue: |
|
|
|
|
|
|
ACMI |
$ |
266,380 |
|
|
|
$ |
200,694 |
|
Charter |
|
285,197 |
|
|
|
|
243,898 |
|
Dry Leasing |
|
36,392 |
|
|
|
|
26,757 |
|
Customer incentive
asset amortization |
|
(2,596 |
) |
|
|
|
(445 |
) |
Other |
|
4,641 |
|
|
|
|
4,490 |
|
Total Operating
Revenue |
$ |
590,014 |
|
|
|
$ |
475,394 |
|
|
|
|
|
|
|
|
Direct
Contribution: |
|
|
|
|
|
|
ACMI |
$ |
40,872 |
|
|
|
$ |
35,580 |
|
Charter |
|
34,278 |
|
|
|
|
16,833 |
|
Dry Leasing |
|
11,359 |
|
|
|
|
9,723 |
|
Total Direct
Contribution for Reportable Segments |
|
86,509 |
|
|
|
|
62,136 |
|
|
|
|
|
|
|
|
Unallocated income and
expenses, net |
|
(65,063 |
) |
|
|
|
(55,474 |
) |
Unrealized loss on
financial instruments |
|
(7,740 |
) |
|
|
|
(5,213 |
) |
Transaction-related
expenses |
|
(270 |
) |
|
|
|
(915 |
) |
Gain on disposal of
aircraft |
|
- |
|
|
|
|
54 |
|
Income from
continuing operations before income taxes |
|
13,436 |
|
|
|
|
588 |
|
|
|
|
|
|
|
|
Add back
(subtract): |
|
|
|
|
|
|
Interest income |
|
(1,724 |
) |
|
|
|
(1,256 |
) |
Interest expense |
|
27,342 |
|
|
|
|
21,524 |
|
Capitalized
interest |
|
(1,750 |
) |
|
|
|
(1,780 |
) |
Unrealized loss on
financial instruments |
|
7,740 |
|
|
|
|
5,213 |
|
Other income |
|
(4,475 |
) |
|
|
|
(253 |
) |
Operating
Income |
$ |
40,569 |
|
|
|
$ |
24,036 |
|
|
1 The
direct contribution amounts for the ACMI and Charter segments and
the unallocated income and expenses, net above have been revised to
reflect immaterial adjustments. The company does not believe the
impact to the previously issued consolidated financial statements
was material. |
|
Atlas
Air Worldwide uses an economic performance metric, Direct
Contribution, to show the profitability of each of its segments
after allocation of direct operating and 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, losses (gains) on
the disposal of aircraft, losses on early extinguishment of debt,
unrealized losses (gains) 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, 2018 |
|
|
March 31, 2017 |
|
|
Percent Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations, net of taxes |
$ |
9,628 |
|
|
$ |
35 |
|
|
NM |
|
Impact from: |
|
|
|
|
|
|
|
|
|
|
|
Gain on
disposal of aircraft |
|
- |
|
|
|
(54 |
) |
|
|
|
|
Costs
associated with transactions1 |
|
270 |
|
|
|
915 |
|
|
|
|
|
Accrual
for legal matters and professional fees |
|
218 |
|
|
|
74 |
|
|
|
|
|
Noncash
expenses and income, net2 |
|
6,675 |
|
|
|
2,412 |
|
|
|
|
|
Unrealized loss on financial instruments |
|
7,740 |
|
|
|
5,213 |
|
|
|
|
|
Income
tax effect of reconciling items |
|
(747 |
) |
|
|
(320 |
) |
|
|
|
|
Adjusted income
from continuing operations, net of taxes |
$ |
23,784 |
|
|
$ |
8,275 |
|
|
|
187.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding |
|
25,956 |
|
|
|
25,744 |
|
|
|
|
|
Add:
dilutive warrant3 |
|
1,653 |
|
|
|
1,111 |
|
|
|
|
|
Adjusted weighted
average diluted shares outstanding |
|
27,609 |
|
|
|
26,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Diluted EPS from continuing operations, net of taxes |
$ |
0.86 |
|
|
$ |
0.31 |
|
|
|
177.4 |
% |
|
|
|
1 |
|
Costs
associated with transactions related to integration costs
associated with our acquisition of Southern Air. |
|
|
|
2 |
|
Noncash
expenses and income, net primarily related to amortization of debt
discount on convertible notes and amortization of the customer
incentive asset related to outstanding warrants. |
|
|
|
3 |
|
Dilutive
warrants represent potentially dilutive common shares related to
outstanding warrants. 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, 2018 |
|
March 31, 2017 |
|
|
|
|
|
|
Net Cash
Provided by Operating Activities |
$ |
69,125 |
|
$ |
18,654 |
|
Less: |
|
|
|
|
|
Capital
expenditures |
|
26,091 |
|
|
21,673 |
|
Capitalized interest |
|
1,750 |
|
|
1,780 |
|
Free Cash
Flow1 |
$ |
41,284 |
|
$ |
(4,799 |
) |
|
|
|
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,
2018 |
|
|
March 31,
2017 |
|
|
|
|
|
|
|
|
|
Income from
continuing operations, net of taxes |
$ |
9,628 |
|
|
$ |
35 |
|
Income tax expense |
|
3,808 |
|
|
|
553 |
|
Income from
continuing operations before income taxes |
|
13,436 |
|
|
|
588 |
|
Noncash expenses and
income, net1 |
|
6,675 |
|
|
|
2,412 |
|
Gain on disposal of
aircraft |
|
- |
|
|
|
(54 |
) |
Costs associated with
transactions2 |
|
270 |
|
|
|
915 |
|
Accrual for legal
matters and professional fees |
|
218 |
|
|
|
74 |
|
Unrealized loss on
financial instruments |
|
7,740 |
|
|
|
5,213 |
|
|
|
|
|
|
|
|
|
Adjusted pretax
income |
|
28,339 |
|
|
|
9,148 |
|
|
|
|
|
|
|
|
|
Interest expense
(income), net3 |
|
20,262 |
|
|
|
17,117 |
|
Other non-operating
income |
|
(4,475 |
) |
|
|
(253 |
) |
|
|
|
|
|
|
|
|
Adjusted
operating income |
|
44,126 |
|
|
|
26,012 |
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
49,630 |
|
|
|
37,894 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA4 |
$ |
93,756 |
|
|
$ |
63,906 |
|
|
|
|
|
|
|
|
|
Income tax
expense |
$ |
3,808 |
|
|
$ |
553 |
|
Income tax effect of
reconciling items5 |
|
(747 |
) |
|
|
(320 |
) |
Adjusted income tax
expense |
|
4,555 |
|
|
|
873 |
|
Adjusted pretax
income |
$ |
28,339 |
|
|
$ |
9,148 |
|
Adjusted
effective tax rate |
|
16.1 |
% |
|
|
9.5 |
% |
|
|
|
1 |
|
Noncash
expenses and income, net primarily related to amortization of debt
discount on convertible notes and the amortization of customer
incentive asset related to outstanding warrants. |
2 |
|
Costs
associated with transactions related to integration costs
associated with our acquisition of Southern Air. |
3 |
|
Reflects
impact of noncash expenses and income related to convertible notes,
debt, and investments. |
4 |
|
Adjusted
EBITDA: Earnings before interest, taxes, depreciation,
amortization, noncash interest expenses and income, net, gain on
disposal of aircraft, transaction-related expenses, accrual for
legal matters and professional fees, and unrealized loss on
financial instruments, as applicable. |
5 |
|
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,
2018 |
|
|
March 31,
2017 |
|
|
(Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Block
Hours |
|
|
|
|
|
|
|
|
|
|
|
ACMI |
|
49,862 |
|
|
|
38,916 |
|
|
|
10,946 |
|
Charter |
|
16,060 |
|
|
|
15,784 |
|
|
|
276 |
|
Cargo |
|
11,390 |
|
|
|
10,939 |
|
|
|
451 |
|
Passenger |
|
4,670 |
|
|
|
4,845 |
|
|
|
(175 |
) |
Other |
|
573 |
|
|
|
416 |
|
|
|
157 |
|
Total
Block Hours |
|
66,495 |
|
|
|
55,116 |
|
|
|
11,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Per
Block Hour |
|
|
|
|
|
|
|
|
|
|
|
ACMI |
$ |
5,342 |
|
|
$ |
5,157 |
|
|
$ |
185 |
|
Charter |
$ |
17,758 |
|
|
$ |
15,452 |
|
|
$ |
2,306 |
|
Cargo |
$ |
18,051 |
|
|
$ |
15,289 |
|
|
$ |
2,762 |
|
Passenger |
$ |
17,044 |
|
|
$ |
15,820 |
|
|
$ |
1,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Utilization (block hours per day) |
|
|
|
|
|
|
|
|
|
|
|
ACMI1 |
|
8.4 |
|
|
|
8.7 |
|
|
|
(0.3 |
) |
Charter |
|
|
|
|
|
|
|
|
|
|
|
Cargo |
|
9.7 |
|
|
|
8.7 |
|
|
|
1.0 |
|
Passenger |
|
8.6 |
|
|
|
7.8 |
|
|
|
0.8 |
|
All
Operating Aircraft1,2 |
|
8.7 |
|
|
|
8.7 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel |
|
|
|
|
|
|
|
|
|
|
|
Charter |
|
|
|
|
|
|
|
|
|
|
|
Average
fuel cost per gallon |
$ |
2.14 |
|
|
$ |
1.88 |
|
|
$ |
0.26 |
|
Fuel
gallons consumed (000s) |
|
44,950 |
|
|
|
43,927 |
|
|
|
1,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
ACMI and
All Operating Aircraft averages in the first quarter of 2018
reflect the impact of increases in the number of CMI aircraft and
amount of CMI flying compared with the same period of 2017. |
|
|
|
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, 2018 |
|
|
March 31, 2017 |
|
|
(Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Fleet (average aircraft |
|
|
|
|
|
|
|
|
|
|
|
equivalents during the period) |
|
|
|
|
|
|
|
|
|
|
|
ACMI1 |
|
|
|
|
|
|
|
|
|
|
|
747-8F
Cargo |
|
9.0 |
|
|
|
7.0 |
|
|
|
2.0 |
|
747-400
Cargo |
|
15.8 |
|
|
|
12.8 |
|
|
|
3.0 |
|
747-400
Dreamlifter |
|
3.1 |
|
|
|
3.0 |
|
|
|
0.1 |
|
777-200
Cargo |
|
5.0 |
|
|
|
5.0 |
|
|
|
- |
|
767-300
Cargo |
|
17.2 |
|
|
|
5.8 |
|
|
|
11.4 |
|
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 |
|
66.1 |
|
|
|
49.6 |
|
|
|
16.5 |
|
Charter |
|
|
|
|
|
|
|
|
|
|
|
747-8F
Cargo |
|
1.0 |
|
|
|
2.9 |
|
|
|
(1.9 |
) |
747-400
Cargo |
|
11.7 |
|
|
|
11.0 |
|
|
|
(0.7 |
) |
767-300
Cargo |
|
0.3 |
|
|
|
- |
|
|
|
0.3 |
|
747-400
Passenger |
|
2.0 |
|
|
|
2.0 |
|
|
|
- |
|
767-300
Passenger |
|
4.0 |
|
|
|
4.9 |
|
|
|
(0.9 |
) |
Total |
|
19.0 |
|
|
|
20.8 |
|
|
|
(1.8 |
) |
Dry Leasing |
|
|
|
|
|
|
|
|
|
|
|
777-200
Cargo |
|
6.3 |
|
|
|
6.0 |
|
|
|
0.3 |
|
767-300
Cargo |
|
14.0 |
|
|
|
3.6 |
|
|
|
10.4 |
|
757-200
Cargo |
|
1.0 |
|
|
|
1.0 |
|
|
|
- |
|
737-300
Cargo |
|
1.0 |
|
|
|
1.0 |
|
|
|
- |
|
737-800
Passenger |
|
1.0 |
|
|
|
1.0 |
|
|
|
- |
|
Total |
|
23.3 |
|
|
|
12.6 |
|
|
|
10.7 |
|
Less:
Aircraft Dry Leased to CMI customers |
|
(14.3 |
) |
|
|
(3.6 |
) |
|
|
(10.7 |
) |
Total Operating Average Aircraft Equivalents |
|
94.1 |
|
|
|
79.4 |
|
|
|
14.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Out of
Service2 |
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
ACMI average fleet
excludes spare aircraft provided by CMI customers. |
|
|
|
2 |
|
Out-of-service aircraft
temporarily parked during the period. |
|
|
|
Contacts: |
|
Dan Loh (Investors)
– (914) 701-8200 |
|
|
Elizabeth Roach (Media)
– (914) 701-6576 |
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