Atlas Air Worldwide Becomes Privately Held Company
PURCHASE, N.Y., March 17, 2023 – Atlas Air Worldwide (“Atlas,” “AAWW” or the “Company”), a leading global provider of outsourced aircraft and aviation operating services, today announced that the investor group led by funds managed by affiliates of Apollo (NYSE: APO), together with investment affiliates of J.F. Lehman & Company (“J.F. Lehman”) and Hill City Capital (“Hill City”), has completed its previously announced acquisition of the Company.
The Company will continue to maintain its global presence, continue to operate under the Atlas Air Worldwide name and be led by President and Chief Executive Officer John Dietrich and the Company’s current executive leadership team.
“Today marks the start of an exciting new chapter for Atlas, and we are eager to begin our partnership with Apollo, J.F. Lehman and Hill City,” Mr. Dietrich said. “With the support and resources of our investor partners, we are well-positioned to achieve our growth objectives while continuing to serve the increasingly complex global supply chain. I want to thank the entire Atlas team, whose customer focus and dedication made this milestone possible. I look forward to the opportunities this next phase provides for our Company and our employees.”
On behalf of the investor group, Apollo Partners Antoine Munfakh and Jason Scheir, J.F. Lehman Partner Alex Harman and Hill City Capital Chief Investment Officer Chip Frazier said: “We are thrilled to partner with the talented Atlas team and build on the Company’s strong foundation as a leader in the airfreight industry. We have long admired Atlas’ reputation of providing high-quality service to its customers, as well as the financial and operational excellence the team has established. Atlas is poised for continued growth and expansion as it capitalizes on the long-term demand for global air cargo services.”
Pursuant to the terms of the transaction announced on August 4, 2022, the investor group acquired all of the outstanding shares of Atlas Air Worldwide stock. Atlas Air Worldwide shareholders are entitled to receive $102.50 in cash for each share of Atlas Air Worldwide (AAWW) common stock owned. As a result of the transaction completion, Atlas Air Worldwide’s common stock no longer trades on the NASDAQ stock exchange.
Morgan Stanley & Co. LLC served as exclusive financial advisor to Atlas. Cravath, Swaine & Moore LLP served as Atlas’ legal advisor. Evercore acted as lead financial advisor to the investor group. Barclays, Goldman Sachs, and Mizuho Bank served as financial advisors to the investor group, and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor to Apollo and the investor group entity, and Jones Day provided legal advice to J.F. Lehman & Company and Hill City Capital.
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. 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 the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.
About Apollo
Apollo is a high-growth, global alternative asset manager. In the asset management business, Apollo seeks to provide its clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three business strategies: yield, hybrid, and equity. For more than three decades, Apollo’s investing expertise across its fully integrated platform has served the financial return needs of its clients and provided businesses with innovative capital solutions for growth. Through Athene, Apollo’s retirement services business, it specializes in helping clients achieve financial security by providing a suite of retirement savings products and acting as a solutions provider to institutions. Apollo’s patient, creative, and knowledgeable approach to investing aligns its clients, businesses it invests in, its team members, and the communities it impacts, to expand opportunity and achieve positive outcomes. As of December 31, 2022, Apollo had approximately $548 billion of assets under management. To learn more, please visit www.apollo.com.
About J.F. Lehman & Company
J.F. Lehman & Company is a private equity investment firm focused on the aerospace, defense, maritime and environmental sectors. This investment strategy reflects the firm’s deep experience in and commitment to these sectors since the firm’s founding three decades ago. Headquartered in New York, NY, the firm currently has approximately $4 billion of assets under management as of December 31, 2022. To learn more, please visit www.jflpartners.com.
About Hill City Capital
Hill City Capital is an investment firm led by Chief Investment Officer Chip Frazier. With investment research focused primarily in Industrial, Aerospace and Transportation, Hill City’s investment strategy is characterized by a long-duration investment horizon, a rigorous fundamental investment process and active engagement with management. Hill City Capital was founded in 2019, with its principal place of business is Boston, MA.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. AAWW intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. 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,” “could,” “would,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this communication 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 communication. 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 AAWW and its subsidiaries that may cause the actual results of AAWW or its subsidiaries 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, (i) the risks discussed in AAWW’s annual report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”) filed by AAWW with the U.S. Securities and Exchange Commission (the “SEC”), and, in particular, the risk factors set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report and (ii) other risk factors identified from time to time in other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
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.
AAWW assumes no obligation to update such statements contained in this communication 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 publicly any forward-looking statement to reflect future events or circumstances.
Contacts
Atlas Air Worldwide
Eric Camadeco
Director, Investor Relations
InvestorRelations@atlasair.com
Meghan Glynn
Senior Director, Corporate Communications
CorpCommunications@atlasair.com
Apollo on behalf of the investor group
Joanna Rose
Global Head of Corporate Communications
Apollo Global Management, Inc.
(212) 822-0491
Communications@apollo.com
Noah Gunn
Global Head of Investor Relations
Apollo Global Management, Inc.
(212) 822-0540
IR@apollo.com
J.F. Lehman & Company, LLC
Karina Perelmuter
Head of Marketing & Investor Relations
(212) 634-1197
IR@jflpartners.com
* * *
Continues to Expect Closing of Pending Sale of the Company to Investor Group in 1Q23
Full-Year 2022 Results
Fourth-Quarter 2022 Results
PURCHASE, N.Y., February 23, 2023 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced full-year 2022 results, including net income of $355.9 million, or $10.53 per diluted share, compared with net income of $493.3 million, or $16.16 per diluted share, in 2021.
On an adjusted basis, EBITDA totaled $899.2 million in 2022 compared with $1.1 billion in 2021. Adjusted net income in 2022 totaled $418.0 million, or $14.23 per diluted share, compared with $551.0 million, or $18.51 per diluted share, in 2021.
“2022 was one of the best years in Atlas’ history, and we are pleased that we placed all eight of our new and incoming aircraft under long-term contracts. All four new 747-8Fs and the first of four 777Fs have been delivered and are operating for strategic customers under attractive long-term agreements,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich.
Mr. Dietrich added: “In January, we took delivery of the final 747 ever to be produced by Boeing during an historic ceremony. Although the celebration marked the end of the 54-year production run for the ‘Queen of the Skies,’ it is only the beginning for this aircraft, which will serve the airfreight market for decades to come.
“Atlas began over 30 years ago with a single 747-200 freighter and since then, we became, and still are, the world’s largest operator of 747 freighters. Our company’s history and success are directly linked to the 747 platform, and it is fitting that we took delivery of the final four of these iconic aircraft.”
He concluded: “I also want to thank the Atlas team for their continued efforts to deliver safe and reliable service to our customers throughout 2022.”
Transaction Update
As previously announced, on August 4, 2022, Atlas Air Worldwide entered into a definitive agreement to be acquired by an investor group led by funds managed by affiliates of Apollo Global Management, Inc., together with investment affiliates of J.F. Lehman & Company, LLC and Hill City Capital LP. In light of this pending acquisition, Atlas Air Worldwide will not hold an earnings conference call or provide forward-looking guidance.
The Company is working to complete the transaction in the first quarter of 2023, and continues to make progress toward obtaining necessary approvals. At this time, we are awaiting final approval from the U.S. Department of Transportation and have received all other required shareholder and regulatory approvals.
Fourth-Quarter Results
Revenue grew to $1.21 billion in the fourth quarter of 2022 compared with $1.16 billion in the prior-year quarter. Volumes in the fourth quarter of 2022 totaled 84,916 block hours compared with 91,985 in the fourth quarter of 2021.
For the three months ended December 31, 2022, our reported net income totaled $126.0 million, or $3.70 per diluted share, compared with $176.7 million, or $5.55 per diluted share, in the fourth quarter of 2021.
On an adjusted basis, EBITDA was $286.8 million in the fourth quarter of 2022 compared with $361.8 million in the fourth quarter of 2021. Adjusted net income in the fourth quarter of 2022 totaled $153.1 million, or $5.17 per diluted share, compared with $211.6 million, or $7.05 per diluted share, in the prior-year period.
Reported earnings in the fourth quarter of 2022 also included an effective income tax rate of 22.6%. On an adjusted basis, our results reflected an effective income tax rate of 21.1%.
Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour, partially offset by a reduction in block hours flown. The higher average rate per block hour was primarily due to higher fuel prices and yields (net of fuel), including the impact of new and extended long-term contracts and increased cargo flying for the AMC. Block hours decreased primarily due to the impact of severe winter storms and a reduction in less profitable smaller gauge CMI flying. The abnormal increase in severe weather events also adversely impacted our crew availability and our ability to position them due to the widespread and well-publicized cancellations of commercial passenger flights.
Airline Operations segment contribution decreased during the quarter primarily due to increased pilot costs related to higher overtime pay driven by operational disruptions, including an abnormal increase in severe weather events, as well as higher crew travel costs related to higher commercial passenger airfare rates. Segment contribution was also adversely impacted by lower aircraft utilization and yields (net of fuel), primarily driven by lower market demand, the severe weather events noted above, and decreased passenger flying for the AMC. These items were partially offset by the contribution from our new 747-8F and 777-200LRF aircraft delivered in 2022, as well as lower heavy maintenance expense.
In Dry Leasing, segment revenue in the fourth quarter of 2022 was relatively unchanged compared with the prior-year period. Higher segment contribution was primarily due to lower interest expense related to the scheduled repayment of debt.
Unallocated income and expenses, net, decreased during the quarter primarily due to a $14.1 million adjustment to paid time-off benefits recorded in 2021 related to our new CBA, lower interest expense related to our adoption of the amended accounting guidance for convertible notes and higher interest income.
Full-Year Results
Revenue increased to $4.5 billion in 2022 from $4.0 billion in 2021. Volumes in 2022 totaled 330,738 block hours compared with 364,061 in 2021.
For the twelve months ended December 31, 2022, our reported net income was $355.9 million, or $10.53 per diluted share, compared with $493.3 million, or $16.16 per diluted share, in 2021.
On an adjusted basis, EBITDA was $899.2 million in 2022 compared with $1.1 billion in 2021. For the twelve months ended December 31, 2022, adjusted net income was $418.0 million, or $14.23 per diluted share, compared with $551.0 million, or $18.51 per diluted share, in 2021.
Reported results in 2022 included an effective income tax rate of 22.9%. On an adjusted basis, our results reflected an effective income tax rate of 22.0%.
Fleet
All four new 747-8Fs have been delivered, including the final 747 in January 2023. All four of these aircraft are placed with strategic customers under long-term agreements.
All four of our new and incoming 777-200LRFs have been placed under a long-term ACMI contract with MSC Mediterranean Shipping Company SA. The first aircraft was delivered in late November 2022, with three more expected to be delivered throughout 2023.
As previously disclosed, we purchased five of our existing 747-400Fs at the end of their leases during 2022, all of which were acquired between March and December. In November 2022, we reached an agreement with one of our lessors to purchase a 747-400F at the end of its existing lease term. We expect to complete the acquisition of the aircraft by April 2023.
Cash
At December 31, 2022, our cash, including cash equivalents and restricted cash, totaled $773.9 million compared with $921.0 million at December 31, 2021.
The change in position resulted from cash used for investing and financing activities, including $185.6 million for pre-delivery payments for our new aircraft, $216.6 million related to the settlement of our 2015 Convertible Notes and $100.0 million for our accelerated share repurchase program (which we have suspended in connection with the proposed merger), partially offset by cash provided by operating activities.
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 net income; Adjusted Diluted EPS; 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 Net income; Diluted EPS; 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, respectively.
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:
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. 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
Forward-Looking Statements
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,” “could,” “would,” “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; 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 wide-body aircraft to us; demand for cargo services in the markets in which the companies operate; changes in U.S. and non-U.S. government trade and tax policies; general economic conditions, including inflation; the impact of geographical events or health epidemics such as the COVID-19 pandemic; the impact of COVID-19 vaccine mandates; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; geopolitical events; weather conditions; natural disasters; government legislation and regulation; border restrictions; consumer perceptions of the companies’ products and services; anticipated and future litigation; the risk that the proposed transaction may not be completed in a timely manner or at all; the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances which would require Atlas Air Worldwide to pay a termination fee; incurring substantial costs related to the proposed transaction, such as legal, financial advisory, integration and accounting costs; the effect of the announcement, pendency of the proposed transaction, or any failure to successfully complete the proposed transaction on Atlas Air Worldwide’s ability to attract, motivate or retain key executives, pilots and associates, its ability to maintain relationships with its customers, vendors, service providers and others with whom it does business, or its operating results and business generally; risks related to the proposed transaction diverting management’s attention from Atlas Air Worldwide’s ongoing business operations; the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (i) any other risks discussed in Atlas Air Worldwide’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”) and Atlas Air Worldwide’s subsequent quarterly reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission (the “SEC”), and, in particular, the risk factors set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report and the quarterly reports and (ii) other risk factors identified from time to time in other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2023 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 publicly any forward-looking statement to reflect future events or circumstances.
No Offer or Solicitation
This release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
* * *
Purchase, N.Y., February 17, 2023 – Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced an Atlas Air 747-8F departed from Washington Dulles International Airport carrying tons of humanitarian and relief supplies for earthquake victims in Turkey and Syria.
The two companies, along with the Turkish Embassy, are working together to expedite this relief mission to support the critical needs of thousands of people impacted by this natural disaster. Atlas Air is providing the aircraft and crew and Turkish Airlines is collecting clothes, shoes, medical supplies and other essentials.
“Through our partnership with Turkish Airlines, we are honored to contribute air freight capacity to deliver critical supplies to this region where they are needed the most,” said John Dietrich, President and Chief Executive Officer, Atlas Air Worldwide. “We are moved by the heroic work of first responders and humanitarian organizations to provide relief to the communities impacted by this natural disaster. On behalf of our 5,000 Atlas employees around the world, we are grateful for this opportunity to show our support.”
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., 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
* * *
Atlas Air and Turkish Airlines, along with the Turkish Embassy, partner to carry tons of relief supplies to earthquake victims in Turkey and Syria on an Atlas Air 747-8F that departed Washington Dulles International Airport.
747-8F Aircraft Placed Under a Long-Term Agreement
Operating for Apex Logistics, a Kuehne+Nagel Company
Unique Livery Celebrates Queen of the Skies’ Iconic Legacy
Purchase, N.Y., January 31, 2023 – Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced it has taken delivery of the final 747 ever to be produced by Boeing. The delivery of this aircraft is the last of four new Boeing 747-8 Freighters Atlas ordered in January 2021. Atlas Air will operate this aircraft for Apex Logistics, a Kuehne+Nagel company, under a long-term agreement.
“Our company’s history and success are directly linked to the 747 platform, and we are honored to continue our long history of flying this iconic aircraft for our customers around the world,” said John Dietrich, President and Chief Executive Officer, Atlas Air Worldwide. “Atlas Air was founded over 30 years ago with a single 747-200 converted freighter. Since then, we have spanned the globe operating the 747 into well over 800 airports in over 170 countries with nearly every series of the aircraft, including Boeing’s 747 Large Cargo Freighter for the transport of 787 Dreamliner parts.”
John Dietrich, President and Chief Executive Officer, Atlas Air Worldwide, represents Atlas Air’s 5,000 employees at the ceremony Boeing hosted to celebrate production of the final Boeing 747. To honor the legacy of the “Queen of the Skies,” a special decal is included to the right of the nose featuring Joe Sutter, considered by Boeing to be the “Father of the 747.”
Mr. Dietrich added: “We’ve carried everything on the 747 from race cars to racehorses, from rocket parts to satellites, electronics, overnight express shipments – and various forms of perishables like fresh flowers, vegetables and fish. The 747 has also been critical to carrying life-saving goods like medicine, vaccines and personal protective equipment during the pandemic and other times of need. And we are proud to serve the U.S. military as the largest provider of their airlift – carrying both troops and cargo – and the 747 is the backbone of this critical work.
“We are pleased to operate this aircraft on behalf of Apex Logistics, a Kuehne+Nagel company. This is the second 747-8F delivery as part of our long-term strategic partnership with Kuehne+Nagel, which is reflective of our deep commitment to provide additional capacity for the expansion of their air cargo network.”
Mr. Dietrich concluded: “As the world’s largest operator of 747 freighters, Atlas is especially proud to take the last 747 ever to be built. We are grateful to Boeing for their shared commitment to safety, quality, innovation and the environment, and for their partnership to ensure the continued success of the 747 program as we operate the aircraft for decades to come.”
Atlas’ investment in these new aircraft supports the Company’s longstanding commitment to environmental stewardship. The 747-8 platform features an advanced design and engines, offering a 16% improvement in fuel use and CO2 emissions per tonne and a 30% smaller noise footprint compared to the previous generation of aircraft. The 747-8 is well renowned for its tremendous payload capacity and range, as well as its unique nose-loading capability.
As the world’s largest operator of 747 freighters, Atlas Air is proud to take delivery of the last Boeing 747 ever to be built. Atlas Air will operate this aircraft for Apex Logistics, a Kuehne+Nagel company, under a long-term agreement.
Atlas designed a custom split livery for this special aircraft, with the Atlas Air logo on the right side and tail of the aircraft, and the Apex Logistics logo on the left side. To honor the legacy of the “Queen of the Skies,” a special decal is included to the right of the nose featuring Joe Sutter, considered by Boeing to be the “Father of the 747.”
“The names we chose for the last two iconic aircraft fit their legacy – ‘Inspire.’ and ‘Empower.’,” said Yngve Ruud, Member of the Management Board of Kuehne+Nagel, responsible for Air Logistics. “We are looking forward to see the last 747-8F aircraft taking off to fulfill the versatile needs of our customers around the world with unmatched capability.”
“In 2001 when Apex was founded, our guiding principle was to empower employees with the common goal of offering customers flexible and reliable solutions to their logistics needs,” said Tony Song, Group Chief Executive Officer. “Twenty years later, as part of Kuehne+Nagel Group, we are proud to introduce ‘Empower.’, the newest and most exciting addition to Apex Logistics. This aircraft will reinforce our ability to provide strategic solutions and unique alternatives, with passion. Together with our Apex Logistics colleagues, we are delighted to celebrate this very special occasion with Kuehne+Nagel, Atlas Air and Boeing.”
“This monumental day is a testament to the generations of Boeing employees who brought to life the airplane that ‘shrank the world,’ and revolutionized travel and air cargo as the first widebody,” said Stan Deal, President and Chief Executive Officer of Boeing Commercial Airplanes. “It is fitting to deliver this final 747-8 Freighter to the largest operator of the 747, Atlas Air, where the ‘Queen’ will continue to inspire and empower innovation in air cargo.”
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., 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
* * *
ATLAS AIR, INC. 30th Anniversary Photo Sweepstakes
OFFICIAL RULES
No purchase required to enter or win. A purchase will not increase your chances of winning.
The Atlas Air, Inc. 30th Anniversary Photo Sweepstakes (the “Sweepstakes”) is sponsored by Atlas Air, Inc., 2000 West Chester Avenue, Purchase, NY 10577 (“Sponsor”) and administered by Atlas Air, Inc. (“Administrator”).
One Entry per person. There will be no credit for multiple, bot, automated, or spam Entries, each as determined by Sponsor or Administrator in its sole discretion. Sponsor and Administrator are not responsible for lost, late, incomplete, invalid, illegible, or misdirected Entries, which will be disqualified, or for any error, whether human, technical, or otherwise. Sponsor and Administrator each reserve the right in their sole discretion to disqualify any Participant found to be tampering with the operation of the Sweepstakes or to be acting in violation of these Official Rules. In the event of a dispute as to the identity of a Participant, the authorized account holder of the Instagram account used to submit the Entry will be deemed to be the Participant. The “authorized account holder” is the natural person who is assigned to an email address by an Internet access provider, online service provider, or other organization responsible for assigning email addresses for the domain associated with the submitted email address.
By entering the Sweepstakes, you represent and warrant that you are the owner or licensee of any and all materials and information, including photos, videos, and personal information, submitted by you to the Sweepstakes and you automatically grant, and you represent and warrant that you have the right to grant to Sponsor and Administrator an irrevocable, perpetual, non-exclusive, transferable, fully-paid-up, royalty-free, worldwide license (with the right to sublicense at multiple levels) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part), transfer, distribute any such materials for any purpose and in any format on or in connection with the www.atlasair.com website or its affiliated or partner sites, the Administrator’s or Sponsor’s respective businesses, or the promotion thereof, prepare derivative works, incorporate into other works, and/or grant and authorize sublicenses of the foregoing. Submissions must not, in the sole and unfettered discretion of the Sponsor and/or Administrator, contain obscene, provocative, defamatory, sexually explicit, or otherwise objectionable or inappropriate content, and Submissions must not infringe any intellectual property rights of third parties. You furthermore represent and warrant that all persons and entities connected with the materials and information submitted in connection with the Sweepstakes, and all other persons and entities whose names, voices, photographs, likenesses, works, services and materials have been used in such materials/information or its/their exploitation, have authorized the use of their names, voices, photographs, likenesses, performances, and biographical data in connection with the advertising, promotion, trade and other exploitation of the materials and information and the rights granted herein.
By entering this Sweepstakes, each Participant (1) agrees to release Sponsor, Administrator, and each of the Released Parties from any and all liability for any loss, harm, damages, costs, and/or expenses, including without limitation property damages, personal injury and/or death, arising out of participating in this Sweepstakes or the acceptance, possession, use, or misuse of any prize, (2) waives any and all claims against Sponsor, Administrator, and each of the Released Parties based on publicity rights, defamation, invasion of privacy, or any other intellectual property or privacy right, and (3) acknowledges that neither the Sponsor nor Administrator have made or are responsible or liable for any warranty, representation, or guarantee, express or implied, in fact or in law, relative to any prize, including but not limited to its quality, mechanical condition, or fitness for a particular purpose.
Neither Sponsor nor Administrator shall be liable for any damages whatsoever related to or arising from (a) any technical errors that may prevent any Participant from participating in any way; (b) unauthorized human intervention in the Sweepstakes; and/or (c) errors in the administration of the Sweepstakes.
Participant waives the right to claim any damages whatsoever, including, but not limited to, punitive, consequential, direct, or indirect damages. Participant further agrees that in any cause of action, the Released Parties’ aggregate liability for all claims will be limited to the cost of entering and participating in the Sweepstakes, and in no event shall the Released Parties be liable for attorneys’ fees.
This Sweepstakes is in no way sponsored, endorsed or administered by Instagram or similar social media sites.
Continues to Expect Closing of Pending Sale of the Company to
Investor Group in 4Q22 or 1Q23
PURCHASE, N.Y., November 3, 2022 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced third-quarter 2022 net income of $60.1 million, or $1.79 per diluted share, compared with net income of $119.5 million, or $3.91 per diluted share, in the third quarter of 2021.
On an adjusted basis, EBITDA totaled $194.0 million in the third quarter this year compared with $280.5 million in the third quarter of 2021. Adjusted net income in the third quarter of 2022 totaled $78.8 million, or $2.69 per diluted share, compared with $145.4 million, or $4.88 per diluted share, in the third quarter of 2021.
“We continued to see strong demand for our services during the third quarter,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “We were also pleased to announce a long-term ACMI (aircraft, crew, maintenance and insurance) agreement under which all four of our new and incoming 777-200 freighters are placed with MSC Mediterranean Shipping Company SA.”
Mr. Dietrich continued: “Notwithstanding this strong demand, our third-quarter performance was impacted by operational disruptions related to an increase in COVID-19 cases, particularly in July and August, as well as the effects of Hurricane Ian at the end of the quarter. I would like to thank our Atlas team for working together through these challenges on behalf of our customers.”
Transaction Update
As previously announced, on August 4, 2022, Atlas Air Worldwide entered into a definitive agreement to be acquired by an investor group led by funds managed by affiliates of Apollo Global Management, Inc., together with investment affiliates of J.F. Lehman & Company, LLC and Hill City Capital LP. In light of this pending acquisition, Atlas Air Worldwide will not hold an earnings conference call or provide forward-looking guidance. In connection with the proposed transaction, the Company filed a definitive proxy statement with the Securities and Exchange Commission and will hold a related special meeting of shareholders on November 29, 2022.
The Company continues to expect to complete this transaction in the fourth quarter 2022 or the first quarter 2023.
Third-Quarter Results
Revenue grew to $1.1 billion in the third quarter of 2022 compared with $1.0 billion in the prior-year quarter. Volumes in the third quarter of 2022 totaled 79,274 block hours compared with 90,363 in the third quarter of 2021.
Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour, partially offset by a reduction in block hours flown. The higher average rate per block hour was primarily due to higher fuel prices and higher yields (net of fuel), including the impact of new and extended long-term contracts and increased cargo flying for the AMC. Block hours decreased primarily due to operational disruptions related to an increase in COVID-19 cases (which were significantly higher in July and August), our operation of fewer passenger flights and the effects of Hurricane Ian. The increase in cases and effects of the hurricane adversely impacted our crew availability and our ability to position them due to the widespread and well-publicized cancellations of commercial passenger flights.
Airline Operations segment contribution decreased during the quarter primarily due to increased pilot costs related to our new collective bargaining agreement (CBA), higher overtime pay related to an increase in COVID-19 cases (which were significantly higher in July and August), as well as higher premium pay for pilots operating in certain areas significantly impacted by COVID-19. Segment contribution was also adversely impacted by lower aircraft utilization and higher crew travel costs related to the operational disruptions described in the segment revenue discussion above, as well as higher commercial passenger airfares. In addition, segment contribution was negatively impacted by higher heavy maintenance expense and a decrease in AMC passenger flying. These items were partially offset by higher yields (net of fuel), primarily driven by increased cargo flying for the AMC and the impact of new and extended long-term contracts.
In Dry Leasing, segment revenue in the third quarter of 2022 was relatively unchanged compared with the prior-year period. Higher segment contribution was primarily due to lower interest expense related to the scheduled repayment of debt.
Unallocated income and expenses, net, decreased during the quarter primarily due to a $15.2 million adjustment to paid time-off benefits recorded in 2021 related to our new CBA, lower interest expense related to our adoption of the amended accounting guidance for convertible notes and lower professional fees.
Reported earnings in the third quarter of 2022 included an effective income tax rate of 23.2%. On an adjusted basis, our results reflected an effective income tax rate of 22.6%.
Nine-Month Results
For the nine months ended September 30, 2022, our reported net income totaled $229.9 million, or $6.82 per diluted share, compared with net income of $316.6 million, or $10.52 per diluted share, in the prior-year period (which included $40.9 million, $31.9 million after tax, of CARES Act grant income).
On an adjusted basis, EBITDA totaled $612.4 million in the first nine months of 2022 compared with $705.6 million in the first nine months of 2021. For the nine months ended September 30, 2022, adjusted net income totaled $264.9 million, or $9.04 per diluted share, compared with $339.4 million, or $11.44 per diluted share, in the first nine months of 2021.
Fleet
We took delivery of the first two of our four new 747-8Fs in May and October 2022. Based on the updated timeline provided by Boeing, the remaining two aircraft are anticipated to be delivered during the fourth quarter of 2022 and the first quarter of 2023. As announced in February 2022, all four of these aircraft are placed with customers under long-term agreements.
As announced in September 2022, all four of our new and incoming 777-200LRFs have been placed with MSC under a long-term ACMI contract. Reflecting Boeing’s current expectations, we anticipate the first aircraft to be delivered late in the fourth quarter of this year and three more throughout 2023.
As previously disclosed, we are purchasing five of our existing 747-400Fs at the end of their leases during the course of this year, three of which were acquired between March and August 2022. We expect to complete the remaining two aircraft acquisitions in the fourth quarter of 2022.
Cash
At September 30, 2022, our cash, including cash equivalents and restricted cash, totaled $476.0 million compared with $921.0 million at December 31, 2021.
The change in position resulted from cash used for investing and financing activities, including $290.1 million for pre-delivery payments for our new aircraft (of which $120.1 million related to a final payment for a 747-8F, and in early October, we completed the acquisition of that aircraft and received financing proceeds of $140.0 million), $216.6 million related to the settlement of our 2015 Convertible Notes and $100.0 million for our accelerated share repurchase program, partially offset by cash provided by operating activities.
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 net income; Adjusted Diluted EPS; 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 Net income; Diluted EPS; 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, respectively.
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:
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. 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
Forward-Looking Statements
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,” “could,” “would,” “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; 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; changes in U.S. and non-U.S. government trade and tax policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; the impact of COVID-19 vaccine mandates; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; geopolitical events; weather conditions; natural disasters; government legislation and regulation; border restrictions; consumer perceptions of the companies’ products and services; anticipated and future litigation; the risk that the proposed transaction may not be completed in a timely manner or at all; the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by Atlas Air Worldwide’s stockholders; the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the possibility that competing offers or acquisition proposals for Atlas Air Worldwide will be made; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances which would require Atlas Air Worldwide to pay a termination fee; incurring substantial costs related to the proposed transaction, such as legal, accounting, financial advisory and integration costs; the effect of the announcement, pendency of the proposed transaction, or any failure to successfully complete the proposed transaction on Atlas Air Worldwide’s ability to attract, motivate or retain key executives, pilots and associates, its ability to maintain relationships with its customers, including Amazon.com, Inc., vendors, service providers and others with whom it does business, or its operating results and business generally; risks related to the proposed transaction diverting management’s attention from Atlas Air Worldwide’s ongoing business operations; the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (i) any other risks discussed in Atlas Air Worldwide’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”) and Atlas Air Worldwide’s subsequent quarterly reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission (the “SEC”), and, in particular, the risk factors set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report and the quarterly reports and (ii) other risk factors identified from time to time in other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2022 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 publicly any forward-looking statement to reflect future events or circumstances.
Participants in the Solicitation
Atlas Air Worldwide and its directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of Atlas Air Worldwide in favor of the proposed transaction. Information about Atlas Air Worldwide’s directors and executive officers is set forth in Atlas Air Worldwide’s Proxy Statement on Schedule 14A for its 2022 Annual Meeting of Shareholders, which was filed with the SEC on April 15, 2022. To the extent holdings of Atlas Air Worldwide’s securities by its directors or executive officers have changed since the amounts set forth in such 2022 proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information concerning the interests of Atlas Air Worldwide’s participants in the solicitation, which may, in some cases, be different than those of Atlas Air Worldwide’s stockholders generally, is included in Atlas Air Worldwide’s definitive proxy statement relating to the proposed transaction, which was filed with the SEC on October 19, 2022.
Additional Information and Where to Find It
This release may be deemed to be solicitation material in respect of the proposed acquisition of Atlas Air Worldwide by Rand Parent, LLC. In connection with the proposed transaction, on October 19, 2022, AAWW filed a definitive proxy statement with the SEC. INVESTORS AND STOCKHOLDERS OF ATLAS AIR WORLDWIDE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ATLAS AIR WORLDWIDE’S PROXY STATEMENT (IF AND WHEN AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders are or will be able to obtain the documents (if and when available) free of charge at the SEC’s website at www.sec.gov, or free of charge from Atlas Air Worldwide by directing a request to Atlas Air Worldwide Investor Relations, 2000 Westchester Avenue, Purchase, NY or at tel: +1 914 701 8200 or email: InvestorRelations@atlasair.com.
No Offer or Solicitation
This release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
* * *
Purchase, N.Y., October 17, 2022 – Titan Aircraft Investments, the joint venture between Titan Aviation Holdings, Inc. and Bain Capital Credit, today announced the placement of a Boeing 737-800SF converted freighter on long-term dry lease with ASL Aviation Holdings. Titan Aviation Holdings, a subsidiary of Atlas Air Worldwide Holdings, Inc. (NASDAQ: AAWW), will manage the aircraft.
“We are honored that ASL has placed its trust in Titan and we look forward to growing our new partnership in the future,” said Michael Steen, President and Chief Executive Officer of Titan Aviation Holdings and Chief Commercial Officer of Atlas Air Worldwide.
Fergus Wilson, ASL Aviation Holding’s Group Fleet and Leasing Director, said: “We are looking forward to this B737-800SF entering service with ASL in the coming weeks and to a successful business relationship with Titan. The aircraft’s arrival will mark another step forward in ASL’s fleet renewal program which has already seen our 737-800NG fleet outgrow our 737 classic fleet.”
About Titan Aviation Holdings and Titan Aircraft Investments Ltd.:
Titan Aviation Holdings, a subsidiary of Atlas Air Worldwide, is a freighter-centric leasing company that provides dry leasing solutions to airlines worldwide. Titan’s fleet of cargo aircraft support customers, including international flag carriers, express operators, e-commerce providers, and regional and domestic carriers. Titan’s deep airfreight domain expertise and innovative asset management solutions help customers quickly ramp up their aviation operations while minimizing capital investment. Since its inception in 2009, Titan has grown to become the third largest freighter lessor globally by fleet value, owning and/or managing 38 aircraft on lease to customers worldwide with a net book value of over $1.5 billion.
Titan Aircraft Investments Ltd. is a long-term joint venture Titan Aviation Holdings entered into with Bain Capital Credit, LP to develop a diversified freighter aircraft Dry Leasing portfolio that aims to capitalize on demand for cargo aircraft, underpinned by robust e-commerce and express market growth. Under the joint venture, Bain Capital and Titan have committed to provide $360.0 million and $40.0 million of equity capital, respectively, which may be supplemented with additional commitments over time, to acquire aircraft over the next several years with an anticipated portfolio value of approximately $1.0 billion. Titan Aviation Holdings provides management services to the joint venture, including aircraft acquisitions, lease-management, passenger-to-freighter aircraft conversion oversight, technical expertise and disposal of aircraft.
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., 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
ASL Aviation Holdings:
ASL Aviation Holdings, a global aviation services company with airlines based in Europe, South Africa and Asia, is a world leader in ACMI airline operations serving major cargo and passenger airlines.
Headquartered in Dublin, Ireland, ASL’s six airlines include ASL Airlines Ireland, ASL Airlines Belgium, ASL Airlines France and ASL Airlines United Kingdom in Europe and associate and joint venture airlines FlySafair in South Africa and K-Mile Asia in Thailand. The group also includes MRO X-airservices, airlines services companies and several leasing entities.
ASL Aviation Holdings operates cargo services for the world’s leading express parcel integrators and online retailers. Group airlines also operate scheduled and charter passenger services under its own airline brands on domestic, international, and intercontinental routes in Europe, Asia, the Middle East, North America and Africa.
ASL has a global team of 3,000 people of 51 nationalities. The Group has a fleet of 130 aircraft that includes 7 aircraft types ranging from the turbo prop ATR 72 to the Boeing 747. ASL’s agreement with Boeing for 30 firm slots and 10 options for Boeing 737-800BCF ‘Boeing Converted Freighters’, will see the entry into service of the twentieth aircraft from that programme later this year.
* * *
In celebration of Hispanic Heritage Month, observed every year from September 15 – October 15, Atlas will highlight Hispanic colleagues who play an important role here at Atlas and share how their culture has shaped them. Today we introduce you to Erik Alba.
What is your current title and how long have you been at Atlas?
I am the Senior Manager of Ground Operations, Standards and Procedures. I started with Atlas on August 8, 1999.
What are your primary responsibilities in your role at Atlas and what is your favorite part about the job?
My primary responsibility is to oversee all of the Company’s ground operations manuals from a regulatory standpoint. I’m one of the primary points of contact to the Federal Aviation Administration (FAA) when it comes to manuals, approvals or new procedures for the Company. Additionally, I’m the primary point of contact for external and internal customer audits like the International Air Transport Association (IATA) Operational Safety Audit (IOSA). A big part of my role also involves inspecting cargo loading systems of new aircraft at the factory before they roll out.
My favorite part of the job is the dynamic environment. I enjoy that there’s always a new challenge every day.
How did you find Atlas?
A colleague of mine, Bernie Comino, Ground Operations Procedures Specialist, Standards and Training, recommended Atlas to me. We used to work together at a different airline before he moved to Atlas and encouraged me to apply.
What do you like best about working here?
The best thing about working at Atlas is my colleagues. I’m lucky to work with a great team of people. There is so much knowledge that I can tap into amongst everyone on my team.
How did you find your way into aviation? What prompted you to consider aviation as a career?
In 1990, I started working for a Colombian airline out of Miami. They sent me to school and I became flight dispatcher for them. I was fresh out of high school and looking for something to do, and they were hiring. Since it was a Colombian airline, the fact that I was bilingual was perfect because I could communicate with Spanish-speaking parties if there were any issues. It was a great introduction into the world of aviation and I’ve been working in the industry ever since.
What is the best part about working in aviation?
The best part about working in aviation for me is the opportunity to travel. My experiences have been fantastic. I’ve been to more countries than most people could ever dream of visiting. It’s been so eye-opening for me to go and see all of these different places.
Please tell us about your Hispanic heritage and how your culture inspires you.
My whole family is of Cuban descent. We left Cuba in 1982, spent a year in Ecuador, and then came to the U.S. in 1983. I’m grateful to my parents for taking that leap of faith and bringing me over. My parents left everything behind to give me and my sister a better life. So, their sacrifice is something that inspires me and something that I will always thank them for.
Tell us a little bit about your upbringing and the values instilled in you.
Growing up in Cuba, my mom was a professor and my dad was an accountant so we lived in a very well-established home. My parents are still together, and seeing their relationship has been a great example for me as I’ve been married to my wife for 32 years now. Both of my parents did an incredible job of instilling positive beliefs and values in both me and my sister growing up. In moving to the U.S., they taught me the value of sacrifice and that it’s important to respect everyone. Also, their commitment to providing for us showed me the importance of never giving up and that when you see a challenge, you face it. Those are values that I carry with me to this day, and will continue to pass on to my children and grandchildren.
What does Hispanic Heritage Month mean to you / How are you Celebrating Hispanic Heritage Month this Year?
Hispanic Heritage Month is a way to honor those of Hispanic descent and the sacrifices they made. It’s a way to say thank you to our heritage and how it’s shaped us into who we are today.
I see the celebration of Hispanic Heritage Month as a melting pot of cultures. When I celebrate, it involves my family getting together to watch football while eating Spanish food and listening to Spanish music.
What would your colleagues be most surprised to learn about you?
I started cycling back in the early 2000s when a friend of mine with multiple sclerosis (MS) asked me if I would join a cycling fundraising event to raise money for MS. Since then, I’ve participated in many races and charity rides throughout the years. I also enjoy riding recreationally. Cycling is my biggest passion and something I dedicate a lot of time and energy to.
New 777-200 Freighter Agreement Enables MSC to Expand Service for its Customers
Purchase, N.Y., September 26, 2022 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that its Atlas Air, Inc. subsidiary and MSC Mediterranean Shipping Company SA have entered into an agreement that enables MSC to expand its reach and capacity for its customers.
Under the terms of the long-term ACMI (aircraft, crew, maintenance and insurance) agreement, Atlas Air will operate all four of its new and incoming Boeing 777-200 freighters on a global basis for MSC, with the first delivery being taken in Q4 2022. Atlas’ order of these four aircraft was announced in January 2022.
The 777-200Fs will provide dedicated airfreight capacity to meet customer demand and will serve as a complementary service to MSC’s container shipping solutions. The 777-200F supports environmental stewardship with a twin-engine design that delivers excellent fuel efficiency and noise reduction.
“We are pleased to welcome MSC as a new customer, and look forward to supporting MSC as it develops its airfreight business and further enhances its position as a global leader in transportation and logistics,” said John Dietrich, President and Chief Executive Officer, Atlas Air Worldwide. “This new agreement will allow MSC to capitalize on the state-of-the-art service solutions provided by our aircraft and crews, as well as the unparalleled air cargo expertise brought by our Atlas team.”
Soren Toft, Chief Executive Officer, MSC, said, “We are delighted to announce the development of MSC Air Cargo, an exciting new offering for MSC clients. This strategic partnership with Atlas Air is the first step into this market and we plan to continue exploring various avenues to develop air cargo in a way that complements our core business of container shipping. Atlas Air’s fleet of 777 freighter aircraft is well-suited to support our entry into air cargo and this strategic initiative will ensure we meet the cargo requirements of our customers.”
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., 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
About MSC:
MSC Mediterranean Shipping Company, headquartered in Geneva, Switzerland, is a global leader in transportation and logistics, privately owned and founded in 1970 by Gianluigi Aponte. As one of the world’s leading container shipping lines, MSC has 675 offices across 155 countries worldwide with the MSC Group employing over 150,000 people. With access to an integrated network of road, rail and sea transport resources which stretches across the globe, the company prides itself on delivering global service with local knowledge. MSC’s shipping line sails on more than 260 trade routes, calling at over 500 ports.
For more information visit www.msc.com.
Purchase, N.Y., August 11, 2022 – Atlas Air, Inc., a subsidiary of Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), today announced an agreement to extend its long-standing partnership with Qantas Freight, the leading air freight carrier in Australia. The successful partnership between Atlas Air and Qantas Freight began in 2004.
Under the extended agreement with Qantas Freight, Atlas Air will provide long-haul, widebody main deck capacity with two Boeing 747-400Fs operating its existing network linking Australia, Asia and the U.S. An additional 747-400F has also been extended to service the one-way U.S.-Australia-Hong Kong routing, boosting capacity to meet customer demand.
“We are pleased to extend our long-standing partnership with Qantas Freight and support its customers and network,” said John W. Dietrich, Atlas Air Worldwide President and Chief Executive Officer. “This important extension with Qantas Freight comes at a time of significant growth in the air freight industry. We look forward to supporting Qantas Freight as it continues to expand its global freighter network.”
Catriona Larritt, Executive Manager, Qantas Freight, added: “Air freight remains in high demand for efficient deliveries for urgent, time-sensitive movements. Continuing our relationship with Atlas Air will ensure we can maintain these important air freight connections between Australia and several of the largest global trading hubs in Asia and the U.S, supporting long-standing relationships with our key customers.”
Both Atlas Air and Qantas are participating in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which aims to stabilize aircraft emissions at 2020 levels.
“In addition to our voluntary participation in CORSIA, we have set goals to lower our aircraft emissions and improve our fuel efficiency as part of our commitment to promote a cleaner environment,” Mr. Dietrich said. “Atlas is proud to work with Qantas Freight in the Qantas Future Planet initiative that will enable us to offset a majority of the emissions from the flights we operate on behalf of the airline.”
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., 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
About Qantas Freight:
Qantas Freight is the air freight business of the Qantas Group, managing the belly space of Qantas and Jetstar domestic and international passenger services as well as operating a fleet of freighter aircraft both in Australia and overseas. Qantas Freight has been helping to keep our nation connected by moving air freight across the country and around the world for more than 100 years.
* * *
PURCHASE, N.Y., August 4, 2022 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced second-quarter 2022 net income of $88.3 million, or $2.65 per diluted share, compared with net income of $107.1 million, or $3.53 per diluted share, in the second quarter of 2021.
On an adjusted basis, EBITDA totaled $215.6 million in the second quarter this year compared with $243.7 million in the second quarter of 2021. Adjusted net income in the second quarter of 2022 totaled $97.3 million, or $3.36 per diluted share, compared with $121.8 million, or $4.10 per diluted share, in the second quarter of 2021.
Announced Transaction With Investor Group Led by Funds Managed by Affiliates of Apollo Global Management, Inc., Together With J.F. Lehman & Company, LLC and Hill City Capital LP
In a separate press release, Atlas Air Worldwide today announced that it has entered into a definitive agreement to be acquired by an investor group led by funds managed by affiliates of Apollo Global Management, Inc., together with investment affiliates of J.F. Lehman & Company, LLC and Hill City Capital LP. The transaction consideration of $102.50 per share in cash represents a 57% premium to the 30-day volume-weighted average trading price per share of Atlas Air Worldwide common stock as of July 29, 2022,1 and values Atlas Air Worldwide at an enterprise value of approximately $5.2 billion. Upon completion of the transaction, AAWW will become a privately held company and shares of Atlas Air Worldwide common stock will no longer be listed or publicly traded on the Nasdaq stock market. A copy of that press release is accessible by visiting Atlas Air Worldwide’s Investor site.
In light of the announced transaction with the investor group, Atlas Air Worldwide has cancelled the second quarter 2022 earnings call previously scheduled for Friday, August 5, 2022. The Company is not providing financial guidance for the third quarter and full year 2022.
1 July 29, 2022 represents the last full trading day prior to market speculation regarding a potential sale of the Company.
Second-Quarter Results
“We delivered second-quarter results in line with our expectations,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “Through the first half of the year, global airfreight volumes exceeded pre-pandemic levels, while capacity remains constrained, particularly on key long-haul cargo trade lanes.”
Revenue grew to $1.2 billion in the second quarter of 2022 compared with $990.4 million in the prior-year quarter. Volumes in the second quarter of 2022 totaled 83,922 block hours compared with 93,190 in the second quarter of 2021.
For the three months ended June 30, 2022, our reported net income totaled $88.3 million, or $2.65 per diluted share, compared with net income of $107.1 million, or $3.53 per diluted share, in the second quarter of 2021.
On an adjusted basis, EBITDA totaled $215.6 million in the second quarter this year compared with $243.7 million in the second quarter of 2021. Adjusted net income in the second quarter of 2022 totaled $97.3 million, or $3.36 per diluted share, compared with $121.8 million, or $4.10 per diluted share, in the second quarter of 2021.
Reported earnings in the second quarter of 2022 also included an effective income tax rate of 23.2%. On an adjusted basis, our results reflected an effective income tax rate of 22.5%.
Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour, partially offset by a reduction in block hours flown. The higher average rate per block hour was primarily due to higher fuel prices and higher yields (net of fuel), including the impact of new and extended long-term contracts. Block hours decreased primarily due to a reduction in less profitable smaller gauge CMI service flying and our operation of fewer passenger flights, as well as operational disruptions related to an increase in COVID-19 cases late in the second quarter. The increase in cases adversely impacted our crew availability and our ability to position them due to the widespread and well-publicized cancellations of commercial passenger flights.
Airline Operations segment contribution decreased during the quarter primarily due to increased pilot costs related to our new collective bargaining agreement (CBA), higher premium pay for pilots operating in certain areas significantly impacted by COVID-19, as well as higher overtime pay related to an increase in COVID-19 cases late in the second quarter. In addition, segment contribution was negatively impacted by the operational disruptions related to the increase in cases as described in the segment revenue discussion above. These items were partially offset by higher yields (net of fuel), including the impact of new and extended long-term contracts, as well as lower heavy maintenance expense.
In Dry Leasing, segment revenue in the second quarter of 2022 was relatively unchanged compared with the prior-year period. Higher segment contribution was primarily due to lower interest expense related to the scheduled repayment of debt.
Unallocated income and expenses, net, decreased during the quarter primarily due to lower professional fees and lower interest expense related to our adoption of the amended accounting guidance for convertible notes, partially offset by a reduction in refunds of aircraft rent paid in previous years.
Half-Year Results
For the six months ended June 30, 2022, our reported net income totaled $169.8 million, or $5.03 per diluted share, compared with net income of $197.0 million, or $6.59 per diluted share, in the first half of 2021 (which included $40.9 million, $31.9 million after tax, of CARES Act grant income).
On an adjusted basis, EBITDA totaled $418.4 million in the first half of 2022 compared with $425.0 million in the first half of 2021. First-half 2022 adjusted net income totaled $186.0 million, or $6.35 per diluted share, compared with $194.0 million, or $6.55 per diluted share, in the first half of 2021.
Share Repurchases
As previously announced in February 2022, our Board of Directors approved a share repurchase program authorizing the repurchase of up to $200.0 million of our common stock.
In February 2022, we paid $100.0 million and received an initial delivery of 1,061,257 shares of our common stock pursuant to an accelerated share repurchase program (ASR). In April 2022, the ASR was settled and we received an additional 172,887 shares. In total, we repurchased 1,234,144 shares for $100.0 million at an average cost of $81.03 per share under this ASR.
In connection with the announced transaction, we have suspended our share repurchase program.
Fleet
During the second quarter, we took delivery of the first of our four new 747-8Fs. The remaining three aircraft are expected to be delivered throughout the balance of this year. As announced in February 2022, all four of these aircraft are placed with customers under attractive long-term agreements.
In addition, we look forward to the deliveries and placements of the four new 777-200LRFs, for which we are in advanced negotiations. We expect the first aircraft to be delivered late in the fourth quarter of this year and three more throughout 2023.
As previously disclosed, we are purchasing five of our existing 747-400Fs at the end of their leases during the course of this year, the first of which was acquired in March and the second in May. We expect to complete the remaining three aircraft acquisitions between August and December 2022.
Acquiring these widebody freighters underscores our confidence in the demand for international airfreight capacity, particularly in express, e-Commerce and fast-growing global markets, and will drive strong returns for Atlas in the years ahead.
Settlement of 2015 Convertible Notes
On June 1, 2022, the Company’s Convertible Notes issued in 2015 reached maturity.
To settle the Notes, Atlas delivered to holders $216.6 million in cash and 138,509 shares of our common stock. For the value above par, Atlas received 25,957 shares from the bank hedge counterparties, resulting in a net issuance of 112,552 shares.
Cash
At June 30, 2022, our cash, including cash equivalents and restricted cash, totaled $616.9 million compared with $921.0 million at December 31, 2021.
The change in position resulted from cash used for investing and financing activities, including $216.6 million related to the settlement of our 2015 Convertible Notes, $146.3 million for pre-delivery payments for our new aircraft and $100.0 million for our ASR, partially offset by cash provided by operating activities.
Net cash used for investing activities during the first six months of 2022 primarily related to payments for flight equipment and modifications, including aircraft delivery and pre-delivery payments, as well as capital expenditures and spare engines.
Net cash used for financing activities during the period primarily related to payments on debt obligations and the ASR, partially offset by proceeds from debt issuance.
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 net income; Adjusted Diluted EPS; 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 Net income; Diluted EPS; 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, respectively.
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:
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. 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
Forward-Looking Statements
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,” “could,” “would,” “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; 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; changes in U.S. and non-U.S. government trade and tax policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; the impact of COVID-19 vaccine mandates; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; geopolitical events; weather conditions; natural disasters; government legislation and regulation; border restrictions; consumer perceptions of the companies’ products and services; anticipated and future litigation; the risk that the proposed transaction may not be completed in a timely manner or at all; the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by Atlas Air Worldwide’s stockholders; the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the possibility that competing offers or acquisition proposals for Atlas Air Worldwide will be made; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances which would require Atlas Air Worldwide to pay a termination fee; incurring substantial costs related to the proposed transaction, such as legal, accounting, financial advisory and integration costs; the effect of the announcement, pendency of the proposed transaction, or any failure to successfully complete the proposed transaction on Atlas Air Worldwide’s ability to attract, motivate or retain key executives, pilots and associates, its ability to maintain relationships with its customers, including Amazon.com, Inc., vendors, service providers and others with whom it does business, or its operating results and business generally; risks related to the proposed transaction diverting management’s attention from Atlas Air Worldwide’s ongoing business operations; the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (i) any other risks discussed in Atlas Air Worldwide’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”) and Atlas Air Worldwide’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed by Atlas Air Worldwide with the Securities and Exchange Commission (the “SEC”), and, in particular, the risk factors set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report and the Quarterly Report and (ii) other risk factors identified from time to time in other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2022 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 publicly any forward-looking statement to reflect future events or circumstances.
Participants in the Solicitation
Atlas Air Worldwide and its directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of Atlas Air Worldwide in favor of the proposed transaction. Information about Atlas Air Worldwide’s directors and executive officers is set forth in Atlas Air Worldwide’s Proxy Statement on Schedule 14A for its 2022 Annual Meeting of Shareholders, which was filed with the SEC on April 15, 2022. To the extent holdings of Atlas Air Worldwide’s securities by its directors or executive officers have changed since the amounts set forth in such 2022 proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information concerning the interests of Atlas Air Worldwide’s participants in the solicitation, which may, in some cases, be different than those of Atlas Air Worldwide’s stockholders generally, will be set forth in Atlas Air Worldwide’s proxy statement relating to the proposed transaction when it becomes available.
Additional Information and Where to Find It
This release may be deemed to be solicitation material in respect of the proposed acquisition of Atlas Air Worldwide by Rand Parent, LLC. In connection with the proposed transaction, Atlas Air Worldwide intends to file relevant materials with the SEC, including Atlas Air Worldwide’s proxy statement in preliminary and definitive form. INVESTORS AND STOCKHOLDERS OF ATLAS AIR WORLDWIDE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ATLAS AIR WORLDWIDE’S PROXY STATEMENT (IF AND WHEN AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders are or will be able to obtain the documents (if and when available) free of charge at the SEC’s website at www.sec.gov, or free of charge from Atlas Air Worldwide by directing a request to Atlas Air Worldwide Investor Relations, 2000 Westchester Avenue, Purchase, NY or at tel: +1 914 701 8200 or email: InvestorRelations@atlasair.com.
No Offer or Solicitation
This release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
* * *
Atlas Air Worldwide Shareholders to Receive $102.50 Per Share in Cash, Representing 57% Premium to 30-day Volume-Weighted Average Trading Price
PURCHASE, N.Y., August 4, 2022 – Atlas Air Worldwide (Nasdaq: AAWW) (“Atlas” or the “Company”), a leading global provider of outsourced aircraft and aviation operating services, today announced that it has entered into a definitive agreement to be acquired by an investor group (“the Consortium”) led by funds managed by affiliates of Apollo (NYSE: APO) together with investment affiliates of J.F. Lehman & Company and Hill City Capital in an all-cash transaction with an enterprise valuation of approximately $5.2 billion.
Under the terms of the agreement, Atlas Air Worldwide shareholders will receive $102.50 per share in cash, representing a 57% premium to the 30-day volume-weighted average trading price per share of Atlas Air Worldwide common stock as of July 29, 20221. Upon completion of the transaction, Atlas Air Worldwide will become a privately held company and shares of Atlas Air Worldwide common stock will no longer be listed on the Nasdaq stock exchange. Atlas Air Worldwide will continue operating under the Atlas Air Worldwide name, be led by John Dietrich and the current executive team and maintain its global presence.
“We believe this transaction will deliver immediate and certain value to Atlas Air Worldwide shareholders at a substantial premium, and we are pleased to reach this agreement with the Consortium,” said Duncan McNabb, Chairman of the Atlas Air Worldwide Board of Directors. “The Board’s decision to unanimously approve this transaction follows a careful evaluation and thoughtful review of value creation opportunities for shareholders. We believe this transaction is the right next step to maximize value for our shareholders and the best path forward to accelerate the Company’s ability to execute its strategic plan and achieve its long-term growth objectives.”
“Over our 30-year history, Atlas Air Worldwide has grown to become a global leader in airfreight, delivering high-quality services to our diverse roster of customers around the world,” said John Dietrich, President and Chief Executive Officer of Atlas Air Worldwide. “Following the closing of the sale to the Consortium, we will seek to leverage their resources, relationships and industry expertise to build on our strong financial and operational performance. Their investment in our company demonstrates their confidence in our people and our culture as we serve the growing needs of the global supply chain.”
“Atlas Air Worldwide is a market leader that continues to set higher standards for excellence within the airfreight industry,” said Apollo Partners Antoine Munfakh and Jason Scheir and J.F. Lehman & Company Partner Alex Harman on behalf of the Consortium. “With the strong market demand and long-term secular tailwinds for global air cargo services, Atlas is poised to capitalize on many opportunities for continued growth as a fund portfolio company of Apollo, J.F. Lehman and Hill City. We look forward to leveraging our resources, capital and experience in the sector to support the talented Atlas team, alongside our partners in this exciting next phase.”
1July 29, 2022 represents the last full trading day prior to market speculation regarding a potential sale of the Company.
Approvals and Timing
The transaction is expected to close in the fourth quarter 2022 or first quarter 2023, subject to customary closing conditions, including approval by Atlas Air Worldwide shareholders and receipt of regulatory approvals.
Atlas Air Worldwide Second Quarter 2022 Results
In a separate press release, Atlas Air Worldwide today announced its financial results for the second quarter ended June 30, 2022, which is accessible by visiting the Investor Relations section of the Company’s corporate website at www.atlasairworldwide.com. In light of the announced transaction, Atlas has cancelled the earnings conference call previously scheduled on Friday, August 5, 2022.
Advisors
Morgan Stanley & Co. LLC is serving as exclusive financial advisor to Atlas Air Worldwide. Cravath, Swaine & Moore LLP is serving as Atlas Air Worldwide’s legal advisor.
Evercore is acting as lead financial advisor to the Consortium. Barclays, Goldman Sachs, and Mizuho Bank are serving as financial advisors to the Consortium, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to Apollo and the Consortium entity, and Jones Day is providing legal advice to J.F. Lehman & Company and Hill City Capital.
Financing
Committed financing in support of the transaction was provided by Goldman Sachs, Barclays, Apollo Capital Management, Mizuho, and Credit Agricole.
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. 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
About Apollo
Apollo is a global, high-growth alternative asset manager. In the asset management business, Apollo seeks to provide its clients excess return at every point along the risk-reward spectrum from investment grade to private equity with a focus on three business strategies: yield, hybrid, and equity. For more than three decades, Apollo’s investing expertise across its fully integrated platform has served the financial return needs of its clients and provided businesses with innovative capital solutions for growth. Through Athene, Apollo’s retirement services business, it specializes in helping clients achieve financial security by providing a suite of retirement savings products and acting as a solutions provider to institutions. Apollo’s patient, creative, and knowledgeable approach to investing aligns its clients, businesses it invests in, its team members, and the communities it impacts, to expand opportunity and achieve positive outcomes. As of March 31, 2022, Apollo had approximately $513 billion of assets under management. To learn more, please visit www.apollo.com.
About J.F. Lehman & Company
J.F. Lehman & Company is a private equity investment firm focused on the aerospace, defense, maritime and environmental sectors. This investment strategy reflects the firm’s deep experience in and commitment to these sectors since the firm’s founding three decades ago. Headquartered in New York, NY, the firm currently has approximately $3 billion of assets under management. To learn more, please visit www.jflpartners.com.
About Hill City Capital
Hill City Capital is an investment firm led by Chief Investment Officer Chip Frazier. With investment research focused primarily in Industrial, Aerospace and Transportation, Hill City’s investment strategy is characterized by a long-duration investment horizon, a rigorous fundamental investment process and active engagement with management. Hill City Capital was founded in 2019, with its principal place of business is Boston, MA.
Forward-Looking Statements
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,” “could,” “would,” “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; 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; changes in U.S. and non-U.S. government trade and tax policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; the impact of COVID-19 vaccine mandates; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; geopolitical events; weather conditions; natural disasters; government legislation and regulation; border restrictions; consumer perceptions of the companies’ products and services; anticipated and future litigation; the risk that the proposed transaction may not be completed in a timely manner or at all; the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by Atlas Air Worldwide’s stockholders; the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); the possibility that competing offers or acquisition proposals for Atlas Air Worldwide will be made; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances which would require Atlas Air Worldwide to pay a termination fee; the effect of the announcement or pendency of the proposed transaction on Atlas Air Worldwide’s ability to attract, motivate or retain key executives, pilots and associates, its ability to maintain relationships with its customers, including Amazon.com, Inc., vendors, service providers and others with whom it does business, or its operating results and business generally; risks related to the proposed transaction diverting management’s attention from Atlas Air Worldwide’s ongoing business operations; the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (i) any other risks discussed in Atlas Air Worldwide’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”) and Atlas Air Worldwide’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed by Atlas Air Worldwide with the Securities and Exchange Commission (the “SEC”), and, in particular, the risk factors set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report and the Quarterly Report and (ii) other risk factors identified from time to time in other filings with the SEC. Filings with the SEC are available on the SEC’s website at http://www.sec.gov.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2022 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 publicly any forward-looking statement to reflect future events or circumstances.
Participants in the Solicitation
Atlas Air Worldwide and its directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of Atlas Air Worldwide in favor of the proposed transaction. Information about Atlas Air Worldwide’s directors and executive officers is set forth in Atlas Air Worldwide’s Proxy Statement on Schedule 14A for its 2022 Annual Meeting of Shareholders, which was filed with the SEC on April 15, 2022. To the extent holdings of Atlas Air Worldwide’s securities by its directors or executive officers have changed since the amounts set forth in such 2022 proxy statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information concerning the interests of Atlas Air Worldwide’s participants in the solicitation, which may, in some cases, be different than those of Atlas Air Worldwide’s stockholders generally, will be set forth in Atlas Air Worldwide’s proxy statement relating to the proposed transaction when it becomes available.
Additional Information and Where to Find It
This release may be deemed to be solicitation material in respect of the proposed acquisition of Atlas Air Worldwide by Rand Parent, LLC. In connection with the proposed transaction, Atlas Air Worldwide intends to file relevant materials with the SEC, including Atlas Air Worldwide’s proxy statement in preliminary and definitive form. INVESTORS AND STOCKHOLDERS OF ATLAS AIR WORLDWIDE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ATLAS AIR WORLDWIDE’S PROXY STATEMENT (IF AND WHEN AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders are or will be able to obtain the documents (if and when available) free of charge at the SEC’s website at www.sec.gov, or free of charge from Atlas Air Worldwide by directing a request to Atlas Air Worldwide Investor Relations, 2000 Westchester Avenue, Purchase, NY or at tel: +1 914 701 8200 or email: InvestorRelations@atlasair.com.
No Offer or Solicitation
This release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the United States absent registration under the U.S. Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
Contacts
Atlas Air Worldwide
Eric Camadeco
Director, Investor Relations
InvestorRelations@atlasair.com
Dan Scorpio
Abernathy MacGregor for Atlas Air Worldwide
(646) 899-8118
dps@abmac.com
Apollo on behalf of the Consortium
For investor inquiries regarding Apollo, please contact:
Noah Gunn
Global Head of Investor Relations
Apollo Global Management, Inc.
(212) 822-0540
IR@apollo.com
Joanna Rose
Global Head of Corporate Communications
Apollo Global Management, Inc.
(212) 822-0491
Communications@apollo.com
* * *
Purchase, N.Y., July 18, 2022 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) congratulates Lillian Dukes, Senior Vice President, Technical Operations, on being named one of Savoy Magazine’s Most Influential Black Executives in Corporate America for 2022.
“Lillian is an outstanding leader whose focus on data-driven process improvements and predictive analytics has strengthened our team and our company overall,” said John W. Dietrich, President and Chief Executive Officer of Atlas Air Worldwide. “She inspires others with her thoughtful, insightful approach and commitment to safety and efficiency. Lillian’s leadership extends beyond her role at Atlas Air as she is a dedicated mentor, helping others to achieve success and encouraging the next generation of aviation professionals. We congratulate Lillian on her well-deserved honor.”
Prior to joining Atlas Air, Ms. Dukes held leadership positions at companies including Spirit AeroSystems, Beechcraft Corporation, American Airlines, American Eagle Airlines and GE.
Ms. Dukes is an Advisory Board member for AWESOME, an organization that focuses on advancing women leaders in supply chain leadership. AWESOME honored Ms. Dukes with the Legendary Leadership Award in 2021. She is an Adjunct Professor and Advisory Board member of the Graduate and Executive Education Aerospace & Defense program in the Haslam College of Business at the University of Tennessee, and also serves on the board of FEJ-USA, a U.S. non-profit supporting community and social development in Haiti.
Ms. Dukes is a Lean Six Sigma Green Belt and holds a bachelor’s degree in Engineering and Mathematics from Carnegie Mellon University and a master’s degree in Electrical Engineering from Villanova University.
Her recognition as one of the Most Influential Black Executives in Corporate America for 2022 is featured in the July issue of Savoy Magazine.
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., 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
* * *
Atlas Air Worldwide launched 30 years ago with a single 747. Today, the company is the largest operator of 747s in the world, with 53 of the iconic aircraft known as the “Queen of the Skies.”
Atlas marks its significant growth over thirty years and into the future with the expansion of its fleet with four new Boeing 747s-8 Freighters.
The plane’s 53-year history has been an illustrious one, filled with high-profile missions and assignments:
There’s good reason the 747 has been called upon for these important tasks and many more. As the first airplane ever to be described as a “jumbo jet,” it has a cargo capacity of more than 300,000 lbs. and a take-off weight of close to 1 million lbs., making it the largest commercially built cargo plane in the world.
It’s also the only aircraft equipped with a nose door, which lifts the front nose cone to allow for quick loading and off-loading of oversized cargo. This feature, along with its loaded long-haul capability of around 4,900 miles, is one of its most valuable features for Atlas’s cargo customers.
The unique nose door accounts for the 747’s signature hump, which houses the upper-deck cockpit and premium cabin seats.
The first of four set to be delivered to Atlas Air.
At Atlas Air Worldwide, today and every tomorrow is our moment to rise, as we believe building a strong business today is good for our people, communities and the planet tomorrow.
Every day, our employees around the globe carry the world forward by living our values, working together and delivering on our promises. Our shared sense of purpose advances our commitment to “Caring for the World We Carry,” and accelerates our progress on our environmental, social and governance (ESG) journey.
As part of this commitment, we are pleased to share the release of our 2021 Environmental, Social and Governance (ESG) Report. Our third ESG report outlines our sustainability and corporate responsibility achievements in 2021 under our four ESG pillars: Environmental Stewardship; Career, Culture & Equity for Our People; Social Impact & Community Engagement; and Responsible Business Growth.
Key highlights from the 2021 ESG Report include the following:
Environmental Stewardship: We announced our support for the International Air Transport Association (IATA) and Airlines for America’s (A4A) goal to achieve net-zero carbon emissions by 2050, as well as our own goal to reduce absolute Scope 1 emissions by 20% by 2035. In addition, we published our Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB) disclosures in concert with our new carbon emissions reduction target. Today, more than ever, stakeholders are interested in all aspects of our business, and these disclosures provide a unique view into the culture, practices and policies that make Atlas who we are.
Career, Culture & Equity for Our People: During a challenging 2021 year, we supported employees’ quality of life through enhanced benefits and wellness programs, hybrid working policies, as well as a growing focus on diversity, equity and inclusion as a driver of innovation. We promoted ongoing safety protocols, which focused on the health and well-being of our employees and the stability of our operations.
Social Impact & Philanthropy: We are proud to support our local communities through company donations and employee giving. We contributed to COVID-19 pandemic and disaster relief efforts and global humanitarian needs. Our industry attracts top talent, and the need for talent will only increase in the future. As such, we invested in initiatives to strengthen the pipeline of diverse, qualified STEM talent needed to ensure the aviation industry remains strong for years to come.
Responsible Business Growth: We evolved our governance policies through revisions to our Employee Handbook and Atlas Values as well as the establishment of new Leadership Principle. We also advocated on behalf of Atlas, the air cargo industry and key stakeholders on priority topics such as attracting the aviation workforce of the next generation and supporting government policies to help the industry reduce its greenhouse gas emissions.
We are proud to release our third ESG report to our employees, investors, customers, suppliers, partners, legislators and industry peers, as it is our commitment to the world in which we work and the people that we serve.
To learn more about Atlas Air Worldwide’s ESG efforts, view the Company’s 2021 ESG Report.
Reinforces its Ongoing Commitment to Sustainability and Corporate Responsibility
Report Announces Company’s Carbon Emissions Reduction Target
Purchase, N.Y., May 9, 2022 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), a leading global provider of outsourced aircraft and aviation operating services, announced the release of its 2021 Environmental, Social and Governance (ESG) Report today.
Featuring the theme “Caring for the World We Carry,” Atlas’ third ESG report outlines the Company’s sustainability and corporate responsibility achievements in 2021 under its four ESG pillars: Environmental Stewardship; Career, Culture & Equity for Our People; Social Impact & Community Engagement; and Responsible Business Growth.
“We believe building a strong and responsible business today is good for our people, communities and the planet tomorrow,” said John W. Dietrich, President and Chief Executive Officer of Atlas Air Worldwide. “Our 2021 ESG Report reflects the next step in Atlas’ ESG journey, including announcing our carbon emissions reduction target, as well as our strategies to achieve this target.”
Key highlights from the 2021 ESG Report include the following:
Environmental Stewardship
Career, Culture & Equity for Our People
Social Impact & Philanthropy
Responsible Business Growth
To learn more about Atlas Air Worldwide’s ESG efforts, view the Company’s 2021 ESG Report.
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.com.
* * *
PURCHASE, N.Y., May 5, 2022 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced first-quarter 2022 net income of $81.5 million, or $2.38 per diluted share, compared with $89.9 million, or $3.05 per diluted share, in 2021 (which included $40.9 million, $31.9 million after tax, of CARES Act grant income).
On an adjusted basis, EBITDA totaled $202.8 million in the first quarter of 2022 compared with $181.3 million in the prior-year period. For the three months ended March 31, 2022, adjusted net income totaled $88.8 million, or $2.99 per diluted share, compared with $72.2 million, or $2.45 per diluted share, in 2021.
“We are off to an excellent start in 2022. We delivered strong earnings, despite the pandemic-related operational challenges we continue to navigate,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “I would like to thank the entire Atlas team for their ongoing commitment to deliver this great performance.”
He added: “Atlas continues to demonstrate the value of airfreight as a vital component of the global supply chain. We are seeing a sustaining shift in long-term customer demand for Atlas’ dedicated aircraft, and the speed and reliability airfreight provides. During the first quarter, our customers continued to enter and enhance long-term contracts with Atlas for dedicated freighter capacity.
“We are expanding and diversifying our customer base, and increasing flying under long-term contracts with attractive rates and guaranteed levels of flying. To meet customer demand, we are also investing in our world-class fleet by adding four new 747-8F and four new 777 freighter aircraft. All four of our new 747-8Fs have been placed with customers under long-term contracts, and we have strong interest for the new 777Fs as well.”
Mr. Dietrich concluded: “We are very well positioned for the years ahead. We have significantly strengthened our balance sheet and have a healthy cash balance. This provides us the financial flexibility to opportunistically deploy capital, including investing in our business and returning capital to shareholders.”
First-Quarter Results
Revenue grew to $1.0 billion in the first quarter of 2022 compared with $861.3 million in the prior-year quarter. Volumes in the first quarter of 2022 totaled 82,626 block hours compared with 88,523 in the first quarter of 2021.
For the three months ended March 31, 2022, our reported net income totaled $81.5 million, or $2.38 per diluted share, compared with net income of $89.9 million, or $3.05 per diluted share, in the first quarter of 2021 (which included $40.9 million, $31.9 million after tax, of CARES Act grant income).
On an adjusted basis, EBITDA was $202.8 million in the first quarter this year compared with $181.3 million in the first quarter of 2021. Adjusted net income in the first quarter of 2022 totaled $88.8 million, or $2.99 per diluted share, compared with $72.2 million, or $2.45 per diluted share, in the prior-year period.
Reported earnings also included an effective income tax rate of 22.8%. On an adjusted basis, our results reflected an effective income tax rate of 22.3%.
Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour, partially offset by a reduction in block hours. The higher average rate per block hour was primarily due to higher yields (net of fuel), including the impact of new and extended long-term contracts, as well as higher fuel prices. Block-hour volumes reflected a reduction in less profitable smaller gauge CMI service flying as well as operational disruptions due to the spike in Omicron cases globally.
Higher Airline Operations segment contribution in the first quarter of 2022 was primarily driven by higher yields (net of fuel), including the impact of new and extended long-term contracts. These improvements were partially offset by increased pilot costs related to our new collective bargaining agreement (CBA) and higher premium pay for pilots operating in certain areas significantly impacted by COVID-19.
In Dry Leasing, segment revenue and contribution increased from the prior-year period primarily due to $5.0 million of revenue received from maintenance payments related to the scheduled return of an aircraft, which was subsequently sold during the quarter. Dry Leasing contribution also benefited from lower interest expense related to the scheduled repayment of debt.
Unallocated income and expenses, net, increased during the quarter, primarily due to $40.9 million in CARES Act grant income recognized in 2021 (which was excluded from our adjusted results).
Share Repurchases
As previously announced in February 2022, our Board of Directors approved a share repurchase program authorizing up to $200.0 million of our common stock, which we began by entering into a $100.0 million accelerated share repurchase program (ASR). In total, we repurchased 1,234,144 shares under the ASR, which was completed in April.
Additional purchases may be made at our discretion in the form of open market repurchase programs, ASRs, privately negotiated transactions, or a combination of these methods.
Fleet
As previously disclosed, we are purchasing five of our existing 747-400Fs at the end of their leases during the course of this year, one of which was acquired in March. We expect to complete the remaining four aircraft acquisitions between May and December 2022.
Acquiring these widebody freighters underscores our confidence in the demand for international airfreight capacity, particularly in express, e-Commerce and fast-growing global markets. Keeping these aircraft in our fleet ensures continuity of capacity for our customers, which will drive strong returns for Atlas in the years ahead.
Cash
At March 31, 2022, our cash, including cash equivalents and restricted cash, totaled $740.9 million compared with $921.0 million at December 31, 2021.
The change in position resulted from cash used for investing and financing activities, including $115.0 million for pre-delivery payments for our new aircraft and $100.0 million for our ASR, partially offset by cash provided by operating activities.
Net cash used for investing activities during the first quarter of 2022 primarily related to payments for flight equipment and modifications, including aircraft pre-delivery payments, as well as capital expenditures and spare engines.
Net cash used for financing activities during the period primarily related to payments on debt obligations and the ASR.
2022 Outlook*
For the second quarter of 2022, we expect revenue to exceed $1.1 billion from flying more than 85,000 block hours. We also anticipate adjusted EBITDA of approximately $215.0 million, and adjusted net income to grow by a high-single-digit percentage compared with adjusted net income of $88.8 million in the first quarter of 2022.
For the full year, we expect to fly more than 350,000 block hours, with revenue of approximately $4.6 billion, and adjusted EBITDA of about $1.0 billion. In addition, we anticipate adjusted net income in the second half of 2022 to improve approximately 60% compared with adjusted net income in the first half of this year.
We expect aircraft maintenance expense in 2022 to be similar to 2021, and depreciation and amortization to total about $300 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $135 to $145 million, mainly for parts and components for our fleet.
We also expect our full-year 2022 adjusted effective tax rate will be approximately 23.0%.
This outlook includes the contribution from numerous new or enhanced long-term customer contracts, as well as higher pilot costs from our new CBA. We also expect second-quarter results to continue to be impacted by premium pay for pilots operating in certain locations significantly impacted by COVID-19.
Other than with regard to revenue, we provide guidance on an adjusted basis because we are unable to predict with reasonable certainty and without unreasonable effort the effects on future gains and losses on asset sales, special charges and other unanticipated items that could be material to our reported results.*
Conference Call
As previously announced, management will host a conference call to discuss Atlas Air Worldwide’s first-quarter 2022 financial and operating results at 11:00 a.m. Eastern Time on Thursday, May 5, 2022.
Interested parties may listen to the call live at Atlas Air Worldwide’s Investor site or at https://edge.media-server.com/mmc/p/w2te9jpb.
For those unable to listen to the live call, a replay will be archived on the Investor site following the call. A replay will also be available through May 12 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 3594535#.
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 net income; Adjusted Diluted EPS; 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 Net income; Diluted EPS; 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, respectively.
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:
*Other than with regard to revenue, we provide guidance only on an adjusted basis and are unable to provide forward-looking guidance on a U.S. GAAP basis or a reconciliation to the most directly comparable U.S. GAAP measures because we are unable to predict with reasonable certainty and without unreasonable effort, the ultimate outcome of certain significant items, including future gains and losses on asset sales, special charges and other unanticipated items. These items are uncertain, depend on various factors, and could have a material impact on our U.S. GAAP results.
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. 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 the broadest array of Boeing 747, 777, 767 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.atlasairworldwide.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,” “could,” “would,” “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; 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; changes in U.S. and non-U.S. government trade and tax policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; the impact of COVID-19 vaccine mandates; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; financing costs; the cost and availability of war risk insurance; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; geopolitical events; weather conditions; natural disasters; government legislation and regulation; border restrictions; 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 2022 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 publicly any forward-looking statement to reflect future events or circumstances.
* * *
In celebration of World Pilots’ Day on April 26, let’s go behind the scenes of how we prepare our pilots to travel the world! As pilots get their Atlas career off the ground, their first stop is Miami, home to Atlas Air’s world-class Training Center. Pilots will typically spend their first three months in the training center. “Safety is our top priority in all aspects of training,” said John Schumacher, Senior Director, Flight Procedures, Training and Standards. “We also emphasize professionalism, personal responsibility and the importance of interaction in every component of training.”
Trainee pilots first attend several weeks of Basic Indoctrination, Security/Emergency Training, Aircraft Systems, and System Integration Training (SITs) prior to completing their oral exam. New pilots will then step into one of the company’s eight simulators housed in both the training center and local training partner facilities. The company proudly owns four 747 Sims, two 767 Sims, one 737 Sim, and one 777 Sim.
After successfully passing their oral exam, pilots work with their instructors and Sim partner to complete Fixed Base Simulator Training (FBS), Full Flight Simulators (FFS), the FAA Type Rating/PC, Line Qualification Training (LQT), and other fleet specific required training. “After months of hard work, successfully completing their training is a very proud moment for the students and instructors. Their safety and success is top of mind for everyone in the Training Center,” said Teressa Mastrosimone, Director of Training Center Operations.
Once they have received their type rating and completed training in Miami, new pilots are next scheduled for Operating Experience (OE) —an extension of their training – on an actual aircraft.
Atlas Air’s professionals also train the crews that fly Air Force One, a contract Atlas Air has held since 2007. Those crews are trained on the Air Force’s VC-25, a modified version of the Boeing 747-200, and receive ground and flight-simulator training at Atlas Air’s Training Center.
Verne Yoder has been a pilot at Atlas Air for five years and runs Pilot Professional Development and initial Crew Resource Management for new hires at the training center. “I like to be one of the very first people they see because on the very first day I am going to tell them how much I like working for Atlas Air,” he said.
Yoder usually has up to 25 students per day. In the Human Factors class he teaches, trainees are taught how to manage challenges that are presented operationally. The goal is to foster an environment in which the crew can work together to solve any problems that arise. Trainees learn from both instructors and each other.
“Our instructors have a lot of tenure and knowledge,” Mastrosimone said. Many of our instructors are pilots who spent the majority of their careers at Atlas Air. “Going through training as a new hire, you are able to hear from someone who flew the line for 20 years. They’re not just telling you about flying the airplane, but their experiences and life at Atlas,” she added.
Many instructors split time between flying the line and teaching new trainees in the Training Center, but Atlas also leverages retired pilots as instructors. Retirement age for pilots is 65. “Some pilots have reached retirement age, but instead of hanging up their hat, they stay on board working in the Training Center where they can share their wisdom with the next generation of aviators.”
From the minute new pilots are hired by Atlas Air, they are supported by the entire Atlas family. From training schedulers to fleet captains, from classmates to instructors, pilots at Atlas Air always know someone has their back.
“Through the entire training journey, beginning to end, you have an extensive support channel of people and resources,” Mastrosimone said.
Are you interested in becoming a pilot? Click here to see our open positions https://careers.atlasairworldwide.com/careers/?departments=Other
