Wednesday, May 3, 2017 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced income from continuing operations, net of taxes, of $0.04 million, which included an unrealized loss on financial instruments of $5.2 million related to outstanding warrants, for the three months ended March 31, 2017. Results compared with income from continuing operations, net of taxes, of $0.5 million for the three months ended March 31, 2016.
On an adjusted basis, income from continuing operations, net of taxes, in the first quarter of 2017 totaled $8.3 million compared with $7.7 million in the year-ago quarter.
Diluted earnings per share from continuing operations, net of taxes were $0.00 for the three months ended March 31, 2017 and $0.02 for the three months ended March 31, 2016. Adjusted diluted EPS from continuing operations, net of taxes, totaled $0.31 in both periods.
“We are off to an exciting start in 2017,” said President and Chief Executive Officer William J. Flynn. “We are building on our 2016 achievements and growing our earnings this year.
“We will have a full year of contribution from Southern Air and expect a positive impact on our full-year results from our service for Amazon. We placed our second 767-300 aircraft into service for Amazon in February, and just added our third and fourth aircraft in May.
“In addition to announcing our first-quarter earnings and reaffirming our full-year earnings framework today, we are very pleased to have announced the placement of two of our 747-8 freighters with Cathay Pacific Cargo on an ACMI basis, with service beginning in May.
“Cathay Pacific is a prominent global airline based in Hong Kong and a standout performer in the airfreight market. We are delighted to work with Cathay Pacific’s cargo division to facilitate the strong growth of its global network.
“In addition to Cathay Pacific, we have recently announced other significant new customer agreements with Asiana Cargo, Nippon Cargo Airlines and FedEx that will all contribute to earnings growth this year.”
Mr. Flynn added: “Earnings in the first quarter were in line with our expectations and our outlook for the year.
“Consistent with our prior outlook, we anticipate that our adjusted income from continuing operations, net of taxes, will grow by a mid-single-digit to low-double-digit percentage compared with our 2016 adjusted income of $114.3 million.
“Our view reflects our expanding business base and the ongoing development of our strategic platform. It also reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.”
First-Quarter Results
Higher ACMI contribution in the first quarter of 2017 was primarily driven by our acquisition of Southern Air and lower costs related to crew training, partially offset by higher heavy maintenance costs and the temporary redeployment of 747-8F aircraft to our Charter segment. Segment revenue growth benefited from an increase in block-hour volumes, partially offset by a lower average rate per block hour. Both our volumes and average rate reflected an increase in 777 and 737 CMI flying following the acquisition of Southern Air, an increase in 767 CMI flying, as well as the temporary redeployment of 747-8F aircraft to our Charter segment.
Lower Charter segment contribution during the period reflected an increase in heavy maintenance costs and lower average rates. These impacts were partially offset by an increase in military passenger and cargo demand, which drove an increase in block-hour volumes, lower costs related to crew training, and the temporary redeployment of 747-8F aircraft from our ACMI segment. Average Charter rates during the quarter primarily reflected a reduction in cost-based rates paid by the military.
In Dry Leasing, lower revenue and segment contribution resulted from a decrease in revenue from maintenance payments related to the scheduled return of a passenger aircraft in 2016, partially offset by revenue from the placement of two 767-300 converted freighter aircraft with Amazon in August 2016 and February 2017, and one 767-300 converted freighter aircraft with DHL Express in February 2016.
Higher unallocated income and expenses in the first quarter of 2017 primarily reflected the impact of the Southern Air acquisition and fleet-growth initiatives.
Reported earnings in the first quarter of 2017 included an effective income tax rate of 94.0%, due mainly to nondeductible changes in the value of outstanding warrants, partially offset by the impact of adopting amended accounting guidance for share-based compensation, which recognizes excess tax benefits associated with share-based compensation within income tax expense. As a result of adopting the guidance, we recognized $1.5 million of excess tax benefits as a reduction of income tax expense during the quarter. On an adjusted basis, our results reflected an effective income tax rate of 9.5%, primarily due to adopting the amended accounting guidance for share-based compensation.
Cash and Short-Term Investments
At March 31, 2017, our cash, cash equivalents, short-term investments and restricted cash totaled $124.2 million, compared with $142.6 million at December 31, 2016.
The change in position resulted from cash used for investing activities, partially offset by cash provided by operating and financing activities.
Net cash used for investing activities during the first quarter of 2017 primarily related to capital expenditures and payments for flight equipment and modifications, including the acquisition of 767-300 aircraft to be converted to freighter configuration.
Net cash provided by financing activities primarily reflected proceeds from our revolving credit facility, partially offset by payments on debt obligations.
Outlook
Consistent with our prior outlook, we continue to expect our adjusted income from continuing operations, net of taxes, to grow by a mid-single-digit to low-double-digit percentage compared with 2016 adjusted income of $114.3 million.
In addition, we expect adjusted income from continuing operations, net of taxes, in the second quarter of 2017 to be approximately 15% to 20% higher than second-quarter 2016 adjusted income of $20.2 million.
Our view reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.
We believe the current demand, including our new services for Asiana Cargo, Cathay Pacific Cargo, FedEx, and Nippon Cargo Airlines, the initial accretion from our Amazon operations, and the first full-year of contribution from Southern Air provide a strong foundation for earnings growth this year.
Given the inherent seasonality of airfreight demand, we anticipate that results in 2017 will reflect historical patterns, with more than 70% of our adjusted income occurring in the second half.
For the full year, we expect total block hours to increase approximately 20% compared with 2016, with more than 75% of our hours in ACMI and the balance in Charter.
Aircraft maintenance expense in 2017 should total approximately $245 million, and depreciation and amortization is expected to total approximately $170 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $55to $65 million, mainly for parts and components for our fleet.
We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of outstanding warrants and other items that could be material to our reported results.
Conference Call
Management will host a conference call to discuss Atlas Air Worldwide’s first-quarter 2017 financial and operating results at 11:00 a.m. Eastern Time on Wednesday, May 3, 2017.
Interested parties are invited to listen to the call live over the Internet at www.atlasair.com (click on “Investor Information,” click on “Presentations” and on the link to the first-quarter call) or at the following Web address:
http://edge.media-server.com/m/p/khrc6h4w
For those unable to listen to the live call, a replay will be archived on the above websites following the call. A replay will also be available through May 9 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 8110092#.
About Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include EBITDAR, as adjusted; EBITDA, as adjusted; Direct Contribution; Adjusted income from continuing operations, net of taxes; Adjusted Diluted EPS from continuing operations, net of taxes; Adjusted effective tax rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Income from continuing operations, net of taxes; Diluted EPS from continuing operations, net of taxes; Effective tax rate; and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the company’s ongoing operations and in planning and forecasting future periods. In addition, management’s incentive compensation will be determined, in part, by using Adjusted Income from continuing operations, net of taxes. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.
About Atlas Air Worldwide:
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.
Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreements with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreements; the risk that the anticipated benefits of our agreements with Amazon will not be realized when expected, or at all; the possibility that Amazon may terminate its agreements with the companies; the effect of the announcement or pendency of the transactions contemplated by the agreements with Amazon; costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2017 or thereafter.
Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.
Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced the placement of two Boeing 747-8 Freighters into ACMI service for Cathay Pacific Cargo, a leading global airline based in Hong Kong.
Both 747-8 Freighters will be operated by Atlas Air, Inc. and will fly on behalf of Cathay Pacific Cargo through aircraft, crew, maintenance and insurance agreements. The new 747-8F service is scheduled to begin in May, and will be deployed to supplement capacity on Cathay Pacific Cargo’s existing network.
“Cathay Pacific is a prominent global airline and a standout performer in the airfreight market,” said William J. Flynn, President and Chief Executive Officer, Atlas Air Worldwide.
“We are delighted to work with Cathay Pacific’s cargo division to facilitate the strong growth of its global network, and we look forward to supporting our customer as it takes advantage of market opportunities.”
Cathay Pacific Director Cargo Simon Large said: “This agreement underscores the strength of our cargo operations and our commitment to enhance the frequency of our services across our expanding global network. We are very pleased to be able to provide our customers with increased options, flexibility and convenience and look forward to developing a long-term partnership with Atlas Air Worldwide.”
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
Cathay Pacific Cargo is one of the leading international air cargo carriers. Using a dedicated fleet of 21 Boeing 747 freighters, including 14 747-8 freighters, to over 47 freighter destinations worldwide, Cathay Pacific Cargo also utilises cargo space on Cathay Pacific’s 124 passenger aircraft and Cathay Dragon’s 43 passenger aircraft, serving a growing global route network from its Hong Kong home. Cathay Pacific’s cargo business currently accounts for around 24% of its annual revenues, and has helped to build Hong Kong into the world’s busiest air cargo hub. For more information, visit www.cathaypacificcargo.com.
* * *
Tuesday, April 18, 2017 — Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW), today announced the ratification of a collective bargaining agreement with the dispatchers of its subsidiaries, Atlas Air, Inc. and Polar Air Cargo Worldwide, Inc. The dispatchers are represented by the International Brotherhood of Teamsters (IBT) Local 210.
The four-year extension agreement follows an initial five-year contract that was ratified in 2012. The agreement includes pay increases, as well as benefits associated with the dispatchers’ relocation to the company’s Northern Kentucky/Cincinnati-area operating hub.
“We are very pleased to have finalized this extension agreement with our outstanding team of experienced dispatchers,” said John Dietrich, Executive Vice President and Chief Operating Officer of Atlas Air Worldwide. “This agreement offers highly competitive pay increases as well as favorable moving allowances for our valued dispatchers. It also extends a solid contract that continues to serve us all very well.”
“This agreement is the result of collaborative and productive discussions with the IBT leadership and the negotiating committee. We are grateful for their hard work and commitment during the entire process. We appreciate our dispatchers’ support of the extended agreement and the excellent service they provide every day.”
The company’s dispatchers are responsible for planning, dispatching, and oversight of all Atlas and Polar aircraft during flight.
About Atlas Air Worldwide:
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
* * *
Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced income from continuing operations, net of taxes, of $28.7 million, or $1.12 per diluted share, which included an unrealized loss on financial instruments of $27.9 million related to outstanding warrants, for the three months ended December 31, 2016. Results compared with a loss from continuing operations, net of taxes, of $37.6 million, or $1.53 per diluted share, for the three months ended December 31, 2015, which was primarily due to charges of $102.8 million associated with a litigation settlement.
On an adjusted basis, income from continuing operations, net of taxes, in the fourth quarter of 2016 totaled $59.0 million, or $2.24 per diluted share, compared with $39.4 million, or $1.59 per diluted share, in the year-ago quarter.
Adjusted earnings per share for the fourth quarter and full year of 2016 were affected by the increase in the market price of the company’s shares, which, as a consequence of warrant accounting, led to an increase in the number of diluted shares.
“2016 was a historic year for Atlas, and we finished it on a strong note,” said William J. Flynn, President and Chief Executive Officer.
“We acquired Southern Air, expanding the array of aircraft and services that we provide, especially to the fast-growing express market. We entered into strategic, long-term agreements with Amazon to serve its rapidly growing e-commerce business. And we generated strong sequential and year-over-year improvements in our block-hour volumes, revenue, profitability and margins in the fourth quarter. In addition to record revenues in the quarter, we delivered a significant increase in reported earnings and record adjusted earnings for the period.
“Our performance in the fourth quarter was driven by the additional seasonal flying we did for express operators, growing e-commerce demand, and a lower level of maintenance expense. It also reflected a solid peak season and a seasonal improvement in commercial airfreight yields.
“In ACMI, we benefited from Southern Air’s 777 and 737 express CMI services and better contributions and synergies than originally anticipated. We also continued ramping up for Amazon, which enabled us to place the second of twenty 767-300 aircraft into service for them this month. In Charter, our results reflected an increase in commercial cargo demand. And our Dry Leasing business maintained its steady, annuity-like performance.”
Mr. Flynn added: “With our expanding business base and the ongoing development of our strategic platform, we are well-positioned to grow earnings this year.
“In addition to the demand we are seeing for our aircraft and services, including our recently announced agreements with Asiana Cargo, Nippon Cargo Airlines and FedEx, we expect to see initial accretion from our operations for Amazon and a full year of contribution from Southern Air in 2017. We expect those positives to be partially offset by an increase in maintenance expense and lower cost-based rates paid by the military.
“As a result, we expect to increase adjusted income from continuing operations, net of taxes, by a mid-single-digit to low-double-digit percentage in 2017.”
Record ACMI segment revenues and contribution in the fourth quarter of 2016 were primarily driven by our acquisition of Southern Air and lower heavy maintenance expense, partially offset by the temporary redeployment of 747-8F aircraft to our Charter segment. Segment revenue growth benefited from an increase in block-hour volumes, partially offset by a lower average rate per block hour. Both our volumes and average rate reflected an increase in 777 and 737 CMI flying following the acquisition of Southern Air, an increase in 767 CMI flying, as well as the temporary redeployment of 747-8F aircraft to our Charter segment.
Higher Charter segment contribution during the period reflected an increase in commercial cargo demand, including the beneficial impact of additional 747-8F flying, and a decrease in heavy maintenance expense. Lower revenue per block hour during the period was primarily due to a reduction in fuel prices in 2016, which was partially offset by the beneficial impact of additional 747-8F aircraft.
Segment contribution in Dry Leasing was slightly better on a year-over-year basis.
Lower unallocated income and expenses in the fourth quarter of 2016 primarily reflected the absence of charges incurred in the fourth quarter of 2015 in connection with the settlement of a U.S. class action litigation and for related legal fees.
Reported earnings for the fourth quarter of 2016 included an effective income tax rate of 47.2%, principally due to a nondeductible customer incentive. On an adjusted basis, our results reflected an effective income tax rate of 31.3%.
For the twelve months ended December 31, 2016, our continuing operations generated income of $42.6 million, or $1.70 per diluted share. For the twelve months ended December 31, 2015, our income from continuing operations totaled $7.3 million, or $0.29 per diluted share.
On an adjusted basis, income from continuing operations in 2016 totaled $114.3 million, or $4.50 per diluted share, compared with $125.3 million, or $5.01 per diluted share, in 2015.
Both reported and adjusted results in 2016 reflected the impact of startup expenses for our new service for Amazon, while reported and adjusted results in 2015 benefited from U.S. West Coast port-congestion-related earnings.
Reported earnings in 2016 included an effective income tax rate of 52.3%, principally due to a nondeductible customer incentive and to nondeductible compensation expenses. On an adjusted basis, our results reflected an effective income tax rate of 29.8%.
At December 31, 2016, our cash, cash equivalents, restricted cash and short-term investments totaled $142.6 million, compared with $444.0 million at December 31, 2015. 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 2016 primarily related to payments for flight equipment and modifications, including the acquisition of 767-300 aircraft to be converted to freighter configuration for our service for Amazon; our acquisition of Southern Air; and capital expenditures. We expect to finance a substantial portion of the acquisition and conversion costs for these aircraft as they are placed into service with Amazon.
Net cash used for financing activities primarily reflected payments on debt obligations, partially offset by new debt financing.
Our guidance framework in 2017 and the foreseeable future will focus primarily on our adjusted income from continuing operations, net of taxes. We view this as the most useful information to provide securities analysts and investors.
Earnings per share remain very important, but, because of the unique characteristics of warrant accounting, our EPS can be substantially influenced by changes in the market price of our shares.
Those analysts and investors who wish to focus on EPS as an analytical metric should use the treasury stock method of accounting to calculate the weighted average shares outstanding.
We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, significant items that could be material to our reported results, including the effects of outstanding warrants.
We are a stronger company today. We begin 2017 with solid demand from our customers for our aircraft and services. We are also capitalizing on the steps we have taken to align our business with the faster-growing express and e-commerce markets.
We believe the current demand, the initial accretion from our Amazon operations, and the first full-year of contribution from Southern Air provide a strong foundation for earnings growth this year.
As a result, we expect our adjusted income from continuing operations, net of taxes, to grow by a mid-single-digit to low-double-digit percentage compared with 2016. Given the inherent seasonality of airfreight demand, we anticipate that results in 2017 will reflect historical patterns, with approximately 70% of our adjusted income occurring in the second half.
In addition, we expect adjusted income in the first quarter of 2017, which is usually the lowest demand and highest maintenance-expense quarter of the year, to be consistent with or slightly better than the first quarter of 2016.
For the full year, we expect total block hours to increase approximately 20% compared with 2016, including Southern Air, our new services for Asiana Cargo and Nippon Cargo Airlines, and our ongoing ramp up for Amazon. More than 75% of our 2017 hours are expected to be in ACMI and the balance in Charter.
Aircraft maintenance expense in 2017 should total approximately $240 million, and depreciation and amortization is expected to total approximately $170 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $55 to $65 million, mainly for parts and components for our fleet.
Management will host a conference call to discuss Atlas Air Worldwide’s fourth-quarter and full-year 2016 financial and operating results at 11:00 a.m. Eastern Time on Thursday, February 23, 2016.
Interested parties are invited to listen to the call live over the Internet at www.atlasair.com (click on “Investor Information,” click on “Presentations” and on the link to the fourth-quarter call) or at the following Web address:
http://edge.media-server.com/m/p/iwp9hht2
For those unable to listen to the live call, a replay will be archived on the above websites following the call. A replay will also be available through March 1 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 54207082#.
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include EBITDAR, as adjusted; EBITDA, as adjusted; Direct Contribution; Adjusted income from continuing operations, net of taxes; Adjusted Diluted EPS from continuing operations; Adjusted effective tax rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Income from continuing operations, net of taxes, Diluted EPS from continuing operations, Effective tax rate and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the Company’s ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.
Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreements with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreements; the risk that the anticipated benefits of our agreements with Amazon will not be realized when expected, or at all; the possibility that Amazon may terminate its agreements with the companies; the effect of the announcement or pendency of the transactions contemplated by the agreements with Amazon; costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2017 or thereafter.
Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.
* * *
Tuesday, February 14, 2017 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that its Atlas Air, Inc. unit has entered into an agreement to operate one of its Boeing 747-400 Freighters for Asiana Cargo.
The contract is initially for one aircraft to be provided and operated by Atlas Air and to be flown on key global routes across the transpacific, connecting Korea with several destinations in the U.S. Service is scheduled to begin this month.
“We are delighted to welcome Asiana Cargo as an important addition to our customer portfolio,” said William J. Flynn, President and Chief Executive Officer, Atlas Air Worldwide. “Asiana takes pride in providing reliable, high-quality service, and we are very pleased to be chosen to manage an important part of its international network. We look forward to providing Asiana and its customers with unmatched service and a platform for future expansion.”
“Asiana Cargo is pleased to announce its partnership with Atlas Air, the most reliable air cargo partner. Asiana appreciates Atlas’ outstanding cooperation and expects to serve Asiana’s clients with enhanced freighter services,” said Kwang Suk Kim, Executive Vice President, Asiana 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., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
Thursday, December 1, 2016 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that its Atlas Air, Inc. unit has entered into an agreement to operate its first Boeing 747-400 Freighter for Nippon Cargo Airlines (NCA), with an opportunity for additional aircraft in the future.
The contract is initially for one aircraft to be flown in key global routes across the transpacific connecting Asia and the U.S. Service is scheduled to begin in January 2017.
“Nippon Cargo Airlines is an important addition to our customer portfolio,” said William J. Flynn, President and Chief Executive Officer, Atlas Air Worldwide. “We are very pleased that NCA has chosen Atlas Air to manage an important part of its international network. NCA is very focused on high service quality, and we look forward to providing it and its customers with unmatched service and a platform for future expansion.”
Fukashi Sakamoto, President and Chief Executive Officer, NCA, said, “We are delighted to begin this strategic arrangement with Atlas Air, and we look forward to having a long, mutually beneficial relationship.”
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, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
Live Webcast 10:00 A.M. Eastern, Tuesday, November 8
Friday, November 4, 2016 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) said today that Executive Vice President and Chief Financial Officer Spencer Schwartz will speak on behalf of the Company at the Stephens Inc. Fall Investment Conference on Tuesday, November 8, 2016, at 10:00 a.m. Eastern Time.
A live audio Webcast of Mr. Schwartz’s comments will be broadcast simultaneously on the Internet and can be accessed via http://wsw.com/webcast/stph27/aaww. An archived broadcast of the presentation will be available following the live presentation.
Slides supplementing Mr. Schwartz’s comments will be available for downloading from Atlas Air Worldwide’s website on Tuesday morning, November 8, at www.atlasair.com.
Interested parties should click on “Investor Information,” click on “Presentations,” and then on the link to “Slides – Stephens Inc. Fall Investment Conference.”
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, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
* * *
Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced a loss from continuing operations, net of taxes, of $7.5 million, or $0.30 per diluted share, for the three months ended September 30, 2016. Results for the period were primarily due to the impact of nondeductible expenses triggered by shareholder approval of warrants granted to Amazon in connection with our long-term agreements to dry lease and operate 767-300 aircraft. Results compared with a loss from continuing operations, net of taxes, of $12.8 million, or $0.51 per diluted share, for the three months ended September 30, 2015.
On an adjusted basis, income from continuing operations, net of taxes, in the third quarter of 2016 totaled $27.4 million, or $1.09 per diluted share. That compared with $30.7 million, or $1.23 per diluted share, in the year-ago quarter, which included income tax benefits primarily from the favorable resolution of an IRS exam.
“During the third quarter, we continued to focus on increasing our alignment with the faster-growing express and e-commerce markets,” said William J. Flynn, President and Chief Executive Officer.
“We placed our first aircraft into service for Amazon in August, and we moved forward with preparations to ramp up to 20 by the end of 2018. We also made significant progress toward integrating Southern Air and the two new operating platforms that it adds. Thus far, the contributions and synergies from Southern Air and its express-focused 777 and 737 CMI services have exceeded our expectations.
“Reflecting our expanding business base and the ongoing development of our strategic platform, our third-quarter results were at the upper end of the range that we expected. In ACMI, we started flying for Amazon and benefited from accretion generated by Southern Air. In Charter, our results reflected an increase in military cargo and passenger demand. And our Dry Leasing business maintained its steady, annuity-like performance. Despite publicity about the Hanjin Shipping bankruptcy during the quarter, we did not observe any noticeable impact on airfreight demand or rates.”
Mr. Flynn added: “We are looking forward to a strong fourth quarter, led by our superior fleet, the strength of our brand and our global market leadership in outsourced aircraft and services.
“We expect peak-season demand to be solid and accompanied by a seasonal improvement in commercial airfreight yields. Together with our additional seasonal flying for express operators and a lower level of maintenance expense, we expect both a sequential and a year-over-year improvement in our block-hour volumes, revenue, profitability and margins in the fourth quarter, which we anticipate will account for slightly more than 50% of our 2016 adjusted diluted EPS.”
Mr. Flynn concluded: “We continue to believe strongly in the future of airfreight, express and e-commerce, and we are shaping Atlas to make the most of that future – through the quality and scale of our fleet, through the efficiency of our operations, and through the strength of our business relationships.
“As we announced recently, we have entered into a five-year agreement with FedEx Express to provide it with five 747-400 freighter aircraft for peak-season flying beginning in 2017 and lasting through 2021. We have worked closely and successfully with FedEx for many years, with an agreement to provide five aircraft for 2016 peak-season flying already in place. This new agreement will enable both of our companies to better plan for the longer term.”
ACMI segment contribution increased in the third quarter of 2016, primarily driven by our acquisition of Southern Air but partially offset by the temporary redeployment of 747-8F aircraft to our Charter segment and higher heavy maintenance expense. Segment revenue growth benefited from an increase in block-hour volumes, partially offset by a lower average rate per block hour. Both our volumes and average rate reflected an increase in 777-200 and 737-400 CMI flying following the acquisition of Southern Air, an increase in 767 CMI flying, as well as the temporary redeployment of 747-8F aircraft to our Charter segment.
Higher Charter segment contribution during the period reflected the beneficial impact of additional 747-8F capacity as well as an increase in military cargo and passenger demand. These were partially offset by a decline in market rates and an increase in heavy maintenance expense. Lower revenue per block hour during the period was primarily due to a reduction in fuel prices in 2016 and a decline in market rates, which were partially offset by the beneficial impact of additional 747-8F aircraft.
Segment contribution in Dry Leasing was relatively unchanged on a year-over-year basis.
Higher unallocated income and expenses in the third quarter of 2016 primarily reflected charges resulting from a change in control as defined under certain benefit plans related to the Amazon transaction and the impact of the Southern Air acquisition.
Reported earnings for the third quarter of 2016 included an effective income tax rate of 230.8%, principally due to income tax expense resulting from nondeductible expenses related to shareholder approval of the Amazon transaction. On an adjusted basis, our results reflected an effective income tax rate of 29.9%.
At a special meeting on September 20, 2016, shareholders of the company, by a vote of approximately 99.9% of the votes cast, approved the issuance to Amazon of warrants to acquire up to 30% of the common shares of the company.
This approval constituted a change in control, as defined under certain of the company’s benefit plans. As a result, we recognized $26.2 million of expense, including accelerated compensation expense for certain restricted and performance share and cash awards, during the third quarter. The share-based portion of the compensation expense was $11.6 million.
The warrants granted to Amazon are part of the inherent value creation and alignment of interests designed to strengthen the long-term relationship between the company and Amazon under long-term commercial agreements announced in May 2016.
Under the agreements, the company will lease and operate 20 B767-300 converted freighters in support of Amazon’s package deliveries to its customers. The agreements also provide for future growth of the relationship as Amazon may increase its business with the company.
For the nine months ended September 30, 2016, our continuing operations generated income of $13.9 million. However, after the impact of warrant accounting, we reported a loss of $0.49 per diluted share. For the nine months ended September 30, 2015, our income from continuing operations totaled $44.9 million, or $1.80 per diluted share.
On an adjusted basis, income from continuing operations in the first nine months of 2016 totaled $55.3 million, or $2.20 per diluted share, compared with $85.9 million, or $3.44 per diluted share, in the first nine months of 2015.
Both reported and adjusted results in 2016 reflect the impact of startup expenses for our new service for Amazon, while reported and adjusted results in 2015 benefited from U.S. West Coast port-congestion-related earnings.
At September 30, 2016, our cash, cash equivalents, restricted cash and short-term investments totaled $117.7 million, compared with $444.0 million at December 31, 2015.
The change in position reflected cash used for investing and financing activities, partially offset by cash provided by operating activities.
Net cash used for investing activities during the first nine months of 2016 primarily related to our acquisition of Southern Air, capital expenditures, and purchase deposits and payments for flight equipment, including the acquisition of 767-300 aircraft to be converted to freighter configuration for our service for Amazon. We expect to finance a substantial portion of the acquisition and conversion costs for these aircraft as they are placed into service with Amazon.
Net cash used for financing activities primarily reflected payments on debt obligations, partially offset by new debt financing.
We are encouraged by our performance in the first nine months of 2016, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.
Looking to the fourth quarter, we anticipate solid peak-season volumes and yields. Consistent with our year-to-date performance and our framework for the full year, we expect adjusted diluted EPS from continuing operations of slightly more than $2.25 in the fourth quarter.
Our view includes an EPS impact for necessary startup expenses and the issuance of warrants as we commence our new service for Amazon. It anticipates substantially lower maintenance expense compared with the third quarter of 2016 and the fourth quarter of 2015. And it reflects:
For the full year, we expect total block hours including Southern Air to increase approximately 19% compared with 2015, with more than 70% of our 2016 hours in ACMI and the balance in Charter.
Including Southern Air, aircraft maintenance expense in 2016 should total approximately $200 million, and depreciation and amortization is expected to total approximately $145 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $55 million, mainly for spare parts for our fleet.
We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of the warrants issued to Amazon or certain other significant items that could be material to our reported results.
Management will host a conference call to discuss Atlas Air Worldwide’s third-quarter 2016 financial and operating results at 11:00 a.m. Eastern Time on Thursday, November 3, 2016.
Interested parties are invited to listen to the call live over the Internet at www.atlasair.com (click on “Investor Information,” click on “Presentations” and on the link to the third-quarter call) or at the following Web address:
http://edge.media-server.com/m/p/2vepfcop
For those unable to listen to the live call, a replay will be archived on the above websites following the call. A replay will also be available through November 10 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 2997334#.
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include EBITDAR, as adjusted; EBITDA, as adjusted; Direct Contribution; Adjusted income from continuing operations, net of tax; Adjusted Diluted EPS from continuing operations; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Income from continuing operations, net of taxes, Diluted EPS from continuing operations, and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the Company’s ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.
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, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.
Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreements with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreements; the risk that the anticipated benefits of our agreements with Amazon will not be realized when expected, or at all; the possibility that Amazon may terminate its agreements with the companies; the effect of the announcement or pendency of the transactions contemplated by the agreements with Amazon; costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2016 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.
* * *
Wednesday, August 24, 2016 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced that it has entered into a five-year agreement with FedEx Express to provide it with five 747-400 freighter aircraft for peak flying seasons beginning in 2017 and lasting through 2021. Peak season flying generally occurs in the month of December and potentially earlier. An agreement to provide five aircraft for the 2016 peak season flying is already in place.
“We have worked closely and successfully with FedEx for many years, but this is our first agreement that allows both companies to plan for the longer term,” said William J. Flynn, President and Chief Executive Officer. “We are excited to continue to serve FedEx and its 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., 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, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
* * *
Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced income from continuing operations, net of taxes, of $20.9 million, or a loss of $0.26 per diluted share reflecting the impact of warrant accounting and transaction-related expenses, for the three months ended June 30, 2016, compared with income from continuing operations, net of taxes, of $28.4 million, or $1.13 per diluted share, for the three months ended June 30, 2015.
On an adjusted basis, income from continuing operations, net of taxes, in the second quarter of 2016 totaled $20.2 million, or $0.80 per diluted share, compared with $29.4 million, or $1.17 per diluted share, in the year-ago quarter.
“The second quarter was one of the most important in the company’s history,” said William J. Flynn, President and Chief Executive Officer. “We acquired Southern Air and added two new operating platforms. And we agreed with Amazon to lease and operate 20 B767-300s.
“We believe strongly in the future of airfreight, especially in the future of the express and e-commerce sectors. Our long-term strategy is to build Atlas to make the most of that future – through the quality and scale of our fleet, through the efficiency of our operations, and through the strength of our business relationships.
“The ongoing development of our strategic platform is expanding our business base, moving us more deeply into the faster-growing express and e-commerce markets, and driving long-term growth opportunities. In an otherwise challenging environment during the quarter, these historic transactions stand out.
“Our acquisition of Southern Air in early April and the addition of its express-focused 777 and 737 CMI services generated immediate earnings accretion in the second quarter. Our quarterly earnings also reflected an increase in military cargo and passenger demand but a slower pace in general commercial cargo. In addition, we incurred initial startup expenses in preparation for our new long-term 767 service for Amazon and its growing e-commerce business.
“We expect to place our first aircraft into service for Amazon soon in this quarter. We have secured all of the conversion slots and the vast majority of the feedstock aircraft required to support 20 B767-300s for Amazon by the end of 2018.
“The acquisition of Southern Air creates more options for us in all of our market segments, and our relationship with Amazon includes an opportunity for additional business beyond our initial service for them. We continue to expect both Amazon and Southern Air to be meaningfully accretive to our longer-term earnings and cash flows.”
Mr. Flynn added: “Led by the strength of our brand and our global market leadership in outsourced aircraft and services, we are uniquely situated to continue to leverage our core competencies, diversify our business mix, and develop new organizational capabilities to drive business growth.”
Second-Quarter Results
Higher ACMI revenues and block hours in the second quarter of 2016 were driven by our acquisition of Southern Air and an increase in 747-400 flying, partially offset by the temporary redeployment of 747-8F aircraft to our Charter segment. Lower revenue per block hour during the period reflected an increase in CMI flying following the acquisition of Southern Air as well as the temporary redeployment of 747-8F aircraft. Segment results were also affected by an increase in crew costs associated with Amazon and other fleet growth initiatives, as well as an increase in heavy maintenance expense.
Segment contribution in Charter was relatively unchanged on a year-over-year basis. The impact of the U.S. West Coast port disruption in 2015 and increases in crew costs associated with our fleet growth initiatives were partially offset by increased military cargo and passenger demand and the temporary deployment of 747-8F aircraft to Charter. Lower revenue per block hour during the period was primarily due to a reduction in fuel prices in 2016 and the impact of higher rates related to the U.S. West Coast port disruption in 2015.
In Dry Leasing, lower revenue and segment contribution resulted from a decrease in revenue from maintenance payments related to the scheduled return of a passenger aircraft, partially offset by revenue from the placements of 767 freighter aircraft in December 2015 and February 2016.
Reported earnings for the second quarter of 2016 included an effective income tax rate of 26.4%, which reflected our continued reinvestment of the net earnings of certain foreign subsidiaries outside of the U.S. as well as reduction in state taxes resulting from changes in our flying.
Impact of Warrant Accounting on EPS Calculation
During the second quarter of 2016, the company recorded a liability related to vested warrants granted to Amazon in connection with long-term commercial agreements for the leasing and operation of 767-300s. The liability will need to be remeasured at fair value each period until the warrants are exercised or expire in May 2021. Any mark-to-market adjustments will be shown as unrealized gains or losses in earnings.
During the quarter, the company reported an unrealized gain of $26.5 million and recorded a tax expense of $8.7 million.
For purposes of calculating fully diluted EPS under U.S. GAAP, the warrants were treated as if they were exercised upon their issuance. Accordingly, the unrealized gain was disregarded in calculating EPS while the tax expense remained in the calculation. This generated a loss of $0.26 per diluted share on income from continuing operations of $20.9 million.
Half-Year Results
For the six months ended June 30, 2016, income from continuing operations totaled $21.4 million, or a loss of $0.24 per diluted share after the impact of warrant accounting and transaction-related expenses, compared with $57.6 million, or $2.29 per diluted share, for the six months ended June 30, 2015.
On an adjusted basis, first-half 2016 income from continuing operations totaled $27.9 million, or $1.11 per diluted share, compared with $55.2 million, or $2.20 per diluted share, in the first half of 2015.
Cash and Short-Term Investments
At June 30, 2016, our cash, cash equivalents, restricted cash and short-term investments totaled $170.3 million, compared with $444.0 million at December 31, 2015.
The change in position reflected cash used for investing and financing activities, partially offset by cash provided by operating activities.
Net cash used for investing activities during the first half of 2016 primarily related to our acquisition of Southern Air, capital expenditures, and purchase deposits and payments for flight equipment, including the acquisition of 767-300 aircraft to be converted to freighter configuration for our service for Amazon.
Net cash used for financing activities primarily reflected payments on debt obligations, partially offset by new debt financing.
Outlook
As we commence our new service for Amazon, we will incur an EPS impact for necessary startup expenses and the issuance of warrants. As a result, we currently expect that our adjusted EPS from continuing operations in 2016 will be lower than our adjusted EPS in 2015 by a high-single-digit percentage.
Our view also reflects anticipated demand for our services and aircraft, the benefits that we expect from our fleet initiatives and debt refinancings in 2015, and accretion from our acquisition of Southern Air. In addition, it reflects our decision to sell a subsidiary that we acquired in connection with our acquisition of Southern Air and whose results are presented as a discontinued operation.
Excluding the anticipated impact from Amazon startup expenses and from Southern Air’s operations on EPS in 2016, as well as West Coast port congestion-related earnings in 2015, we anticipate that adjusted EPS in our base business will grow by a low- to mid-single-digit percentage in 2016.
Given the inherent seasonality of airfreight demand, we expect the majority of our earnings in 2016 to be generated in the second half. Unlike 2015, which benefited from increased first-half demand driven by U.S. West Coast port congestion, we anticipate that results in 2016 will be more reflective of historical patterns, with slightly more than three-quarters of our adjusted EPS occurring in the second half.
In addition, we expect adjusted earnings per share in the third quarter of 2016 to be approximately 20% to 25% of our full-year 2016 adjusted EPS.
Looking to the fourth quarter of 2016, we expect adjusted EPS to benefit from substantially lower maintenance expense compared with the fourth quarter of 2015; our acquisition of Southern Air in April 2016; the addition of our tenth 747-8F, which entered our fleet midway through the fourth quarter of 2015; and the addition of two converted 767 freighters to our Dry Leasing portfolio in December 2015 and February 2016, which we are also operating on a CMI basis.
For the full year, we continue to expect total block hours including Southern Air to increase approximately 20% compared with 2015, with about 75% of our 2016 hours in ACMI and the balance in Charter.
Including Southern Air, aircraft maintenance expense in 2016 should total approximately $200 million, and depreciation and amortization is expected to total approximately $145 million. In addition, we anticipate an effective book income tax rate of approximately 31%. Core capital expenditures, excluding aircraft and engine purchases, are expected to total approximately $62 to $67 million, mainly for spare parts for our fleet.
We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of the warrants issued to Amazon or certain other significant items that could be material to our reported results.
Conference Call
Management will host a conference call to discuss Atlas Air Worldwide’s second-quarter 2016 financial and operating results at 11:00 a.m. Eastern Time on Wednesday, August 3, 2016.
Interested parties are invited to listen to the call live over the Internet at www.atlasair.com (click on “Investor Information,” click on “Presentations” and on the link to the second-quarter call) or at the following Web address:
http://edge.media-server.com/m/p/i94ohgj9
For those unable to listen to the live call, a replay will be archived on the above websites following the call. A replay will also be available through August 10 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 48968441#.
About Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include EBITDAR, as adjusted; EBITDA, as adjusted; Direct Contribution; Adjusted income from continuing operations, net of tax; Adjusted Diluted EPS from continuing operations; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Income from continuing operations, net of taxes, Diluted EPS from continuing operations, and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the Company’s ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.
About Atlas Air Worldwide:
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc. (Atlas), Southern Air Holdings, Inc. (Southern) and Titan Aviation Holdings, Inc. (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Atlas Air Worldwide’s companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas, Southern, Titan and Polar offer a range of outsourced aircraft and aviation operating services that include ACMI service – in which customers receive an aircraft, crew, maintenance and insurance on a long-term basis; CMI service, for customers that provide their own aircraft; express network and airport-to-airport cargo service; cargo and passenger charters; and dry leasing of aircraft and engines.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and similar expressions used in this release that do not relate to historical facts are intended to identify forward-looking statements.
Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreements with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreements; our ability to obtain any shareholder approvals that may be required with respect to the equity arrangements expressed in our agreement with Amazon; the risk that the anticipated benefits of our agreements with Amazon will not be realized when expected, or at all; the possibility that Amazon may terminate its agreements with the companies; the effect of the announcement or pendency of the transactions contemplated by the agreements with Amazon; costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2016 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.
* * *
Service to Include 20 B767-300 Aircraft with a Lease Term of 10 Years
Amazon Granted Rights to Acquire AAWW Equity
Thursday, May 05, 2016 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) announced today that it will provide air cargo services to support Amazon’s (Nasdaq: AMZN) package deliveries to its customers. The new agreements are expected to be meaningfully accretive to Atlas Air Worldwide’s earnings and cash flows over time.
“We are excited to begin a strategic long-term relationship with Amazon to support the continuing expansion of its e-commerce business and to enhance its customer delivery capabilities,” said President and Chief Executive Officer William J. Flynn. “We appreciate Amazon’s confidence in our capabilities, global scale and operating excellence.”
The long-term commercial agreements will include the operation of 20 B767-300 converted freighters for Amazon on a CMI (crew, maintenance and insurance) basis by Atlas Air Worldwide’s airline subsidiary, Atlas Air, Inc., as well as dry leasing by its Titan Aviation leasing unit. The dry leases will have a term of 10 years, while the CMI operations will be for seven years (with extension provisions for a total term of 10 years). Operations under the agreements are expected to begin in the second half of 2016 and ramp up to full service through 2018.
“We are excited to welcome a great provider, Atlas Air, to support package delivery to the rapidly growing number of Prime members who love ultra-fast delivery, great prices and vast selection from Amazon,” said Dave Clark, Amazon’s senior vice president of worldwide operations.
As part of the inherent value creation and to align interests and strengthen the long-term relationship, Atlas Air Worldwide granted Amazon warrants to acquire up to 20 percent (after the issuance) of AAWW’s common shares at a price of $37.50 per share over a period of five years, with vesting tied in part to the commencement of operations of the 20 B767-300 freighter aircraft and other conditions.
The agreements also provide for future growth of the relationship as Amazon may increase its business with Atlas. Atlas Air Worldwide granted Amazon warrants to acquire up to an additional 10 percent (after the issuance) of AAWW’s common shares at the same exercise price, over a period of seven years, with vesting tied to payments made by Amazon in connection with that business.
Morgan Stanley & Co. LLC is serving as financial advisor and Cravath, Swaine & Moore LLP is serving as legal advisor, both to Atlas Air Worldwide, in connection with the transaction.
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. (Atlas), Southern Air Holdings, Inc. (Southern Air) and Titan Aviation Holdings, Inc. (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Atlas Air Worldwide’s companies operate the world’s largest fleet of Boeing 747 freighter aircraft and provide customers the broadest array of 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas, Southern Air, Titan and Polar offer a range of outsourced aircraft and aviation operating services that include ACMI service – in which customers receive an aircraft, crew, maintenance and insurance on a long-term basis; CMI service – in which customers receive crew, maintenance and insurance but not an aircraft; express network and airport-to-airport cargo service; cargo and passenger charters; and dry leasing of aircraft and engines.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the Company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreement with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreement; our ability to obtain any shareholder approvals that may be required with respect to the equity arrangements expressed in our agreement with Amazon; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
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.
Service to Include 20 B767-300 Aircraft with a Lease Term of 10 Years
Amazon Granted Rights to Acquire AAWW Equity
Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) announced today that it will provide air cargo services to support Amazon’s (Nasdaq: AMZN) package deliveries to its customers. The new agreements are expected to be meaningfully accretive to Atlas Air Worldwide’s earnings and cash flows over time.
“We are excited to begin a strategic long-term relationship with Amazon to support the continuing expansion of its e-commerce business and to enhance its customer delivery capabilities,” said President and Chief Executive Officer William J. Flynn. “We appreciate Amazon’s confidence in our capabilities, global scale and operating excellence.”
The long-term commercial agreements will include the operation of 20 B767-300 converted freighters for Amazon on a CMI (crew, maintenance and insurance) basis by Atlas Air Worldwide’s airline subsidiary, Atlas Air, Inc., as well as dry leasing by its Titan Aviation leasing unit. The dry leases will have a term of 10 years, while the CMI operations will be for seven years (with extension provisions for a total term of 10 years). Operations under the agreements are expected to begin in the second half of 2016 and ramp up to full service through 2018.
“We are excited to welcome a great provider, Atlas Air, to support package delivery to the rapidly growing number of Prime members who love ultra-fast delivery, great prices and vast selection from Amazon,” said Dave Clark, Amazon’s senior vice president of worldwide operations.
As part of the inherent value creation and to align interests and strengthen the long-term relationship, Atlas Air Worldwide granted Amazon warrants to acquire up to 20 percent (after the issuance) of AAWW’s common shares at a price of $37.50 per share over a period of five years, with vesting tied in part to the commencement of operations of the 20 B767-300 freighter aircraft and other conditions.
The agreements also provide for future growth of the relationship as Amazon may increase its business with Atlas. Atlas Air Worldwide granted Amazon warrants to acquire up to an additional 10 percent (after the issuance) of AAWW’s common shares at the same exercise price, over a period of seven years, with vesting tied to payments made by Amazon in connection with that business.
Morgan Stanley & Co. LLC is serving as financial advisor and Cravath, Swaine & Moore LLP is serving as legal advisor, both to Atlas Air Worldwide, in connection with the transaction.
Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc. (Atlas), Southern Air Holdings, Inc. (Southern Air) and Titan Aviation Holdings, Inc. (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Atlas Air Worldwide’s companies operate the world’s largest fleet of Boeing 747 freighter aircraft and provide customers the broadest array of 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas, Southern Air, Titan and Polar offer a range of outsourced aircraft and aviation operating services that include ACMI service – in which customers receive an aircraft, crew, maintenance and insurance on a long-term basis; CMI service – in which customers receive crew, maintenance and insurance but not an aircraft; express network and airport-to-airport cargo service; cargo and passenger charters; and dry leasing of aircraft and engines.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the Company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: our ability to effectively operate the network service contemplated by our agreement with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreement; our ability to obtain any shareholder approvals that may be required with respect to the equity arrangements expressed in our agreement with Amazon; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
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.
Immediately Accretive, Strategically Compelling, Highly Complementary 777 and 737 Aircraft Platforms Provide Foundation for Additional Growth
Thursday, April 07, 2016 — Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today said it has completed its acquisition of privately held Southern Air Holdings, Inc., a premier provider of intercontinental and domestic CMI (crew, maintenance and insurance) services, in an immediately accretive transaction for cash consideration of approximately $110 million, subject to customary adjustments. The company did not assume any debt in connection with the acquisition.
The strategically compelling, highly complementary combination provides Atlas Air Worldwide immediate entry into 777 and 737 aircraft operating platforms with opportunities for additional growth, enhancing Atlas Air Worldwide’s position as a leading global provider of outsourced aircraft and aviation operating services.
Southern Air is the parent company of Worldwide Air Logistics Group, Inc. and its two operating subsidiaries, Southern Air, Inc. and Florida West International Airways, Inc.
“We are proud to welcome Southern Air, its operating companies, and its professional, experienced workforce to the Atlas family,” said William J. Flynn, President and Chief Executive Officer of Atlas Air Worldwide. “Together, we will be a stronger, more diversified, more profitable company offering access to the widest range of modern, efficient aircraft for domestic, regional and international applications.
“We have known and respected Southern Air for some time, and we have a lot in common. We are both committed to safety, customer service, and performance excellence. Our complementary operations will also provide a broader array of services for customers and new avenues of business growth, which will generate greater opportunities for employees and drive value for shareholders.”
Southern Air’s five 777 and five 737 CMI aircraft complement Atlas Air Worldwide’s 747 ACMI (aircraft, crew, maintenance and insurance) and Charter operations, its 747 and 767 CMI services, and its freighter-centric Dry Leasing portfolio of 777, 757 and 737 aircraft. In total, the companies will have a fleet of more than 75 aircraft.
Consistent with prior guidance, the combination with Southern Air is anticipated to add approximately $100 million in annualized revenues to Atlas Air Worldwide. It is also expected to be immediately accretive to Atlas Air Worldwide’s adjusted earnings per share in 2016 with EBITDA and adjusted net income margins in line with Atlas Air Worldwide’s.
Reflecting the company’s balance sheet position, Atlas Air Worldwide funded the acquisition of Southern Air using available cash on hand.
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. (Atlas), Southern Air Holdings, Inc. (Southern Air) and Titan Aviation Holdings, Inc. (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Atlas Air Worldwide’s companies operate the world’s largest fleet of Boeing 747 freighter aircraft and provide customers the broadest array of 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas, Southern Air, Titan and Polar offer a range of outsourced aircraft and aviation operating services that include ACMI service – in which customers receive an aircraft, crew, maintenance and insurance on a long-term basis; CMI service – in which customers receive crew, maintenance and insurance but not an aircraft; express network and airport-to-airport cargo service; cargo and passenger charters; and dry leasing of aircraft and engines.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the Company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the “companies”) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2016 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.
* * *
