COVID-19: A MESSAGE FROM ATLAS AIR WORLDWIDE

Atlas Air Worldwide Reports Second-Quarter 2021 Results

  • Reported Net Income of $107.1 Million
  • Adjusted EBITDA of $243.7 Million
  • Adjusted Net Income of $121.8 Million
  • Robust 3Q21 Outlook

PURCHASE, N.Y., August 5, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced second-quarter 2021 net income of $107.1 million, or $3.53 per diluted share, compared with net income of $78.9 million, or $3.01 per diluted share, in the second quarter of 2020.

On an adjusted basis, EBITDA totaled $243.7 million in the second quarter this year compared with $247.0 million in the second quarter of 2020. Adjusted net income in the second quarter of 2021 totaled $121.8 million, or $4.10 per diluted share, compared with $123.2 million, or $4.71 per diluted share, in the second quarter of 2020.

Second-quarter 2021 Airline Operations segment performance improved significantly compared with the prior year that included exceptionally high commercial cargo Charter yields in April and May 2020.

“Our strong performance continued in the second quarter, with revenue and earnings exceeding our already high expectations,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “These positive results were driven by our team executing our strategy, increasing the utilization of our aircraft and delivering safe, high-quality service for our customers.

“Our performance continued to benefit from operating the four 747 freighters and one 777 freighter we reintroduced to our fleet throughout 2020. This capacity, along with a tremendous team effort, contributed to our ability to enter into and extend long-term agreements with strategic customers, as well as to capitalize on lucrative short-term opportunities in the strong global airfreight market.

“Economic and supply chain conditions remain favorable for air cargo and our dedicated freighters. These include global airfreight volumes exceeding pre-pandemic levels, an acceleration of e-commerce and express growth, low inventory levels, positive Purchasing Managers’ Index readings, as well as congestion, long lead times and elevated pricing for ocean freight. Demand also continues to exceed available supply, particularly on long-haul international routes, as belly capacity on a significant number of widebody passenger aircraft remains out of the market.”

Mr. Dietrich added: “I would like to thank all our employees for safely supporting our customers and the global supply chain during this time of continued need. While the operating environment remains challenging due to the ongoing pandemic, the market dynamics we are seeing in the third quarter remain strong.

“As a result, we expect revenue of nearly $1.0 billion and adjusted EBITDA of about $250 million from flying more than 90,000 block hours in the third quarter of 2021. In addition, we anticipate adjusted net income to grow approximately 50% compared with adjusted net income of $82.7 million in the third quarter of 2020.*

“Given ongoing economic and market-related uncertainties, including COVID-19 and the Delta variant, as well as travel restrictions, low international passenger travel and other factors, we are providing a third-quarter outlook, but not issuing a further outlook at this time.”

Second-Quarter Results

Volumes in the second quarter of 2021 increased to 93,190 block hours compared with 84,966 in the second quarter of 2020, with revenue growing to $990.4 million versus $825.3 million in the prior-year period.

Higher Airline Operations revenue primarily reflected an increase in flying and a higher average rate per block hour. Block-hour volume growth during the period was driven by our ability to increase aircraft utilization as demand for our commercial cargo Charter and CMI services increased. This demand reflected growth in airfreight volumes from pre-pandemic levels, the ongoing reduction of available cargo capacity in the market and the continued disruption of global supply chains due to the pandemic. In addition, segment revenue benefited from the operation of four 747-400 freighters we reactivated throughout 2020 and a 777-200 freighter that was previously in our Dry Leasing business, as well as improved AMC passenger Charter flying compared with the prior-year period. The increase in the average rate per block hour was primarily due to higher fuel costs, partially offset by lower yields (excluding fuel) compared with the higher market yields during the early months of the COVID-19 pandemic, specifically in April and May 2020.

Higher Airline Operations segment contribution in the second quarter of 2021 was primarily driven by the positive factors benefiting segment revenue mentioned above as well as lower heavy maintenance expense. These improvements were partially offset by lower yields (excluding fuel) as described above.

In Dry Leasing, segment revenue in the second quarter of 2021 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.

Higher unallocated income and expenses, net, during the quarter primarily reflected a  $26.9 million reduction in refunds of aircraft rent paid in previous years, a $20.2 million reduction in CARES Act grant income (which was excluded from our adjusted results) and increased professional fees.

Reported earnings in the second quarter of 2021 also included an effective income tax rate of 23.5%. On an adjusted basis, our results reflected an effective income tax rate of 22.4%.

Cash

At June 30, 2021, our cash, including cash equivalents and restricted cash, totaled $760.5 million compared with $856.3 million at December 31, 2020.

The change in position resulted from cash used for investing and financing activities, partially offset by cash provided by operating activities.

Net cash used for investing activities during the first six months of 2021 primarily related to capital expenditures and payments for flight equipment and modifications, including pre-delivery payments for 747-8F aircraft, spare engines, GEnx engine overhauls and performance upgrade kits.

Net cash used for financing activities during the period primarily related to payments on debt obligations, partially offset by proceeds from debt issuance.

Half-Year Results

Reported results for the six months ended June 30, 2021 reflected net income of $197.0 million, or $6.59 per diluted share. Results for the first half of 2021 compared with net income of $102.3 million, or $3.92 per diluted share, which included an unrealized loss on financial instruments of $29.7 million, for the six months ended June 30, 2020.

On an adjusted basis, EBITDA totaled $425.0 million in the first half of 2021 compared with $368.2 million in the first half of 2020. First-half 2021 adjusted net income totaled $194.0 million, or $6.55 per diluted share, compared with $153.1 million, or $5.87 per diluted share, in the first half of 2020.

Fleet Management

We actively manage our fleet to profitably serve our customers with modern, efficient aircraft. Between May and August 2021, we acquired three of our existing 747-400 freighters that were previously on lease to us. In May and June 2021, we also reached agreement with lessors to purchase five of our other 747-400 freighters at the end of their existing lease terms, which range from March to December 2022. Acquiring these eight freighters underscores our confidence in these assets and the global airfreight market. Keeping these aircraft in our fleet ensures committed capacity to our customers and strong returns for Atlas in the years ahead.

Labor

We have moved closer to completing a new Joint Collective Bargaining Agreement (JCBA) with our Atlas Air and Southern Air pilots. The union has provided the company with the integrated seniority list, the scheduled arbitration hearings concluded in April and both parties submitted post-hearing briefs in early June. We now expect to receive the arbitrator’s binding decision late in the third quarter.

Outlook*

We expect market conditions to remain favorable in the third quarter and for our initiatives to continue driving strong performance. We are also closely monitoring developments related to COVID-19 and the Delta variant, and any associated impact on global airfreight, operations, demand and economic activity.

For the third quarter of 2021, we expect revenue of nearly $1.0 billion and adjusted EBITDA of about $250 million from flying more than 90,000 block hours. In addition, we expect third-quarter 2021 adjusted net income to grow approximately 50% compared with adjusted net income of $82.7 million in the third quarter of 2020.*

This outlook reflects the contribution of long-term customer agreements with favorable rates and guaranteed levels of flying; high levels of aircraft utilization driven by strong customer demand; and commercial cargo Charter yields to remain above typical seasonal levels.

We also expect third-quarter results to continue to be impacted by ongoing pandemic-related expenses, including pilot premium pay and operational costs for providing a safe working environment for our employees.

For the full year in 2021, we expect aircraft maintenance expense to be lower than 2020, and depreciation and amortization to total about $275 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $105 to $115 million, mainly for parts and components for our fleet.

Given ongoing economic and market-related uncertainties, including COVID-19 and the Delta variant, as well as travel restrictions, low international passenger travel and other factors, we are providing a third-quarter outlook, but not issuing a further outlook at this time.

Other than with regard to revenue, we provide guidance only on an adjusted basis because we are unable to predict, with reasonable certainty and without unreasonable effort, the effects of 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 second-quarter 2021 financial and operating results at 11:00 a.m. Eastern Time on Thursday, August 5, 2021.

Interested parties may listen to the call live at Atlas Air Worldwide’s Investor site or at https://edge.media-server.com/mmc/p/yb85r7v2.

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 August 12 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 8974504#.

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 (loss); 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:

  • Adjusted EBITDA; Adjusted net income; and Adjusted Diluted EPS provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance. In addition, management’s incentive compensation is determined, in part, by using Adjusted EBITDA and Adjusted net income.
  • Adjusted effective tax rate provides improved insight into the tax effects of our ongoing business operations.
  • Free Cash Flow helps investors assess our ability, over the long term, to create value for our shareholders as it represents cash available to execute our capital allocation strategy.

*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.

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About Atlas Air Worldwide:

Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers 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,” “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; our ability to coordinate with Amazon to accept newly converted aircraft; 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 foreign government trade policies; economic conditions; the impact of geographical events or health epidemics such as the COVID-19 pandemic; our compliance with the requirements and restrictions under the Payroll Support Program; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; significant data breach or disruption of our information technology systems; labor costs and relations, work stoppages and service slowdowns; the outcome of pending negotiations and arbitration with our pilots’ union; 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; weather conditions; 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 2021 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.

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Conference Call/Webcast – 11:00 A.M. Eastern

PURCHASE, N.Y., July 21, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW)  will release results for the second quarter ended June 30, 2021, prior to the opening of stock market trading on Thursday, August 5.

John W. Dietrich, Atlas Air Worldwide’s President and Chief Executive Officer, and Spencer Schwartz, Executive Vice President and Chief Financial Officer, will host a conference call to discuss the company’s results at 11:00 a.m. Eastern Time on August 5.

Interested parties may listen to the call live at Atlas Air Worldwide’s Investor site or at https://edge.media-server.com/mmc/p/yb85r7v2.

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 August 12 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 8974504#.

Slides complementing the company’s presentation will be available for downloading from the Investor site prior to the call.

About Atlas Air Worldwide:

Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers 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.

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Atlas Air supports the bipartisan efforts to build and strengthen America’s infrastructure, including the nation’s aviation system and the surface transportation networks that support and facilitate air transportation.

The government and industry must come together to address aging infrastructure and to invest in new technologies and capabilities such as NextGen, which can improve aviation efficiencies, reduce flight delays, and lower carbon emissions.

We applaud the bipartisan efforts to strengthen our infrastructure, and we remain committed to ensuring that America’s air cargo carriers continue to lead the industry around the world.

 

Duncan J. McNabb Named Chairman, Board of Directors
William J. Flynn, Current Chairman, Retires

New Directors Beverly K. Goulet and Carol J. Zierhoffer Elected to Board
Current Board Member Jane H. Lute Retires

 Purchase, N.Y., May 25, 2021 – Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced changes to its Board of Directors. General Duncan J. McNabb, U.S. Air Force (retired), previously Lead Independent Director of the Board, has been named Chairman. General McNabb succeeds William J. Flynn, who is retiring from the Board. Current Board member, Jane H. Lute, is also retiring. The company confirmed that Beverly K. Goulet and Carol J. Zierhoffer have been elected to the Board of Directors during the Annual Shareholder Meeting today. These changes are effective immediately. The total number of Board members remains consistent at ten.

Chairman Transition

“It has been my honor to serve as Chairman of the Atlas Air Worldwide Holdings Board,” said Mr. Flynn. “Duncan has served as Lead Independent Director and demonstrated exceptional leadership, acumen and insight that make him the clear choice to lead the Board and govern the company on its path forward. In addition, the appointment of Beverly Goulet and Carol Zierhoffer underscores the commitment of the Nominating and Governance Committee and of the full Board to continue to leverage a diversity of skill sets and professional backgrounds. I feel confident in the path ahead for Atlas.”

“I’m honored and really looking forward to expanding my role on the Atlas Board by serving as Chairman,” said Gen. McNabb. “Having served as a Board Member for nearly ten years, I’ve had the privilege to build a deep understanding of Atlas and look forward to leading the company forward. I commend Bill for his strong leadership in his role as Chairman, and previously as Chief Executive Officer. Bill’s leadership and passion for this company and the industry over the last 15 years has been a driving force behind Atlas Air Worldwide’s success.”

Gen. McNabb has been a member of the Atlas Air Worldwide Board since July 2012, and was named Lead Independent Director in September 2019. He served as Chairman of the Board’s Nominating and Governance Committee from May 2017 to December 2019, and as a member of the Nominating and Governance Committee since June 2014 and a member of the Audit and Finance Committee since December 2012.

Gen. McNabb retired from the U.S. Air Force following an exceptional 37-year career. He served as Commander of the Air Mobility Command from 2005 to 2007 and was the 33rd Vice Chief of Staff of the United States Air Force from 2007 to 2008. Gen. McNabb completed his military service as Commanding General of the United States Transportation Command (USTRANSCOM) from 2008 to 2011. USTRANSCOM is the single manager for air, land and sea transportation for the Department of Defense (DOD). He also served as DOD’s Distribution Process Owner, overseeing DOD’s end-to-end supply chain, transportation, and distribution to our armed forces worldwide. He commanded more than $56 billion in strategic transportation assets, over 150,000 service personnel and a worldwide command-and-control network.

Newly-Elected Directors

“Beverly and Carol bring strong skills, background, leadership and industry expertise to the boardroom,” said Gen. McNabb. “Their election underscores Atlas Air Worldwide’s commitment to leverage a diversity of skill sets and professional backgrounds. Beverly has extensive senior executive experience in the airline industry, and Carol is an expert in information technology and cybersecurity. I know their respective experiences and insights will enrich our discussions, analyses and strategic governance.”

Ms. Goulet served in several senior level roles with the American Airlines Group Inc., including Senior Vice President and Chief Integration Officer, Executive Vice President and Chief Integration Officer, and Vice President, Corporate Development and Treasurer. Prior to joining American Airlines, Ms. Goulet practiced corporate and securities law for 13 years. She received a Bachelor’s degree and a Juris Doctor from the University of Michigan. She also serves as Director for Xenia Hotels & Resorts, Inc. and Rolls-Royce Holdings PLC.

Ms. Zierhoffer has more than 30 years of experience in the information technology industry. Most recently, and until her retirement in October 2019, Ms. Zierhoffer served as the Senior Vice President and Global Chief Information Officer at Bechtel Corporation, where she oversaw the company’s business and technology solutions, cybersecurity, infrastructure and operations, big data and analytics innovation, emerging technology and knowledge management globally. Additionally, Ms. Zierhoffer served in CIO roles with Xerox, ITT Corporation and Northrop Grumman. She currently serves as Director for Allscripts Healthcare Solutions, Inc. and Vizient Inc., and is an Executive Advisory Board Member of OpsCruise, Inc. and Founding Board Member of the nonprofit A Little Compassion.

Retirement of Jane Lute

Atlas Air Worldwide Board member since May 2018, Ms. Lute previously served as Deputy Secretary for the U.S. Department of Homeland Security and is a member of several international commissions focused on cybersecurity and the future of the internet.

“We are grateful for Jane’s service. During her time on the Board, Jane brought tremendous leadership experience, and we have benefited greatly from her expertise in cybersecurity and public policy matters,” said Gen. McNabb.

About Atlas Air Worldwide:

Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers 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.

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