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Atlas Air Worldwide Reports Second-Quarter 2015 Results

  • Adjusted Net Income of $29.4 Million, $1.17 per Share
  • Reported Net Income of $28.4 Million, $1.13 per Share
  • Reiterating Full-Year Outlook

PURCHASE, N.Y., July 30, 2015 (GLOBE NEWSWIRE) -- Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW) today announced adjusted net income attributable to common stockholders of $29.4 million, or $1.17 per diluted share, for the three months ended June 30, 2015, compared with $15.9 million, or $0.63 per diluted share, for the three months ended June 30, 2014.

On a reported basis, net income attributable to common stockholders in the second quarter of 2015 totaled $28.4 million, or $1.13 per diluted share, compared with $29.6 million, or $1.17 per diluted share, in the year-ago quarter.

Free cash flow of $68.5 million in the second quarter of 2015 compared with $59.2 million in the second quarter of 2014.

“Earnings in the second quarter were driven by contribution and margin strength in ACMI, Charter and Dry Leasing,” said William J. Flynn, President and Chief Executive Officer.

“We are seeing good demand for our aircraft and services as we enter the second half of 2015, as many of our customers are outperforming the overall market. We are working closely with our customers to provide them with the most efficient aircraft and effective operating services for their needs.

“As we gather additional insight into second-half demand, yields and military requirements, we continue to look forward to a strong year and a significant increase in earnings compared with 2014.”

Responding to market demand and customer requirements, we are implementing several previously announced fleet initiatives that are incorporated in our framework outlook for the year: placing an additional 747-400 freighter in ACMI service with DHL Express at the start of the third quarter; acquiring a new 747-8 freighter scheduled to be delivered to us in November; returning an owned, unencumbered 747-400 converted freighter to active service to meet additional Charter demand; securing a short-term operating lease on a second 747-400 converted freighter in Charter with more favorable terms; and expanding our Titan Dry Leasing portfolio by acquiring and converting two 767 passenger aircraft into freighter configuration. The freighters will be leased to DHL on a long-term basis when they are delivered in the fourth quarter.

Mr. Flynn added: “Our approach to business growth remains disciplined, and we are managing our fleet accordingly. In addition, we are utilizing proceeds from our recent convertible note issuance to refinance higher cost debt, which will reduce aircraft ownership costs, increase fleet flexibility and enhance cash flows.

“Led by the strength of our brand and our global market leadership in outsourced aircraft assets and services, we are taking advantage of market opportunities and continuing to focus on longer-term business growth.”

Second-Quarter Results

Revenue and direct contribution in ACMI in the second quarter benefited from an increase in block hour volumes, driven by the start-up of four additional 767 CMI aircraft and an improvement in 747 cargo aircraft utilization. Segment contribution also benefited from lower heavy maintenance expense. These were partially offset by a reduction in revenue per block hour, which reflected the impact of payments received from a customer in 2014 in connection with the return of an aircraft as well as an increase in CMI flying in 2015.

In Charter, significantly higher segment revenues reflected an increase in commercial cargo demand and improvements in military passenger and cargo demand. In addition, segment contribution benefited from those higher flying levels and a reduction in heavy maintenance expense. The decrease in revenue per block hour was primarily driven by the impact of lower fuel prices.

In Dry Leasing, revenue and profitability grew as we realized revenue from maintenance payments related to the scheduled return of a 757-200 cargo aircraft in April. This aircraft was subsequently leased to DHL Express on a long-term basis during the quarter.

Reported earnings for the second quarter of 2015 included an effective income tax rate of 31.0%, which reflected our continued reinvestment of the net earnings of certain foreign subsidiaries outside of the U.S.

Half-Year Results

For the six months ended June 30, 2015, adjusted net income attributable to common stockholders totaled $55.2 million, or $2.20 per diluted share, compared with $27.1 million, or $1.07 per diluted share, for the six months ended June 30, 2014.

On a reported basis, first-half 2015 net income attributable to common stockholders totaled $57.6 million, or $2.29 per diluted share, compared with $37.5 million, or $1.49 per diluted share, in the first half of 2014.

Free cash flow totaled $148.8 million in the first six months of 2015 compared with $96.1 million in the first six months of 2014.

Liquidity and Capital Resources

At June 30, 2015, our cash, cash equivalents, restricted cash and short-term investments totaled $554.9 million, compared with $330.7 million at December 31, 2014.

The change in position reflected net cash of $171.1 million provided by operating activities; net cash of $104.4 million provided by financing activities, which included $99.1 million of debt payments; and net cash of $59.4 million used for investing activities.

In June 2015, we issued $224.5 million of convertible senior notes due June 2022 with a cash coupon of 2.25%. We used a portion of the approximately $218 million of net proceeds from the offering in June to fund the $16.6 million net cost of convertible note hedges and warrants related to the notes. These transactions are intended to offset any actual dilution from the conversion of the notes and to effectively increase the overall conversion price from $74.05 to $95.01 per share.

During the third quarter of 2015, we expect to use approximately $113 million of the net proceeds to retire higher-rate Enhanced Equipment Trust Certificates (EETCs) related to five of our 747-400 freighter aircraft. The redemption amount gives effect to the company’s ownership interests in the EETCs being retired, which have an average cash coupon of 8.1%.

We expect to use the remaining net proceeds from the convertible note issuance for working capital and capital expenditures, repayment or refinancing of debt, and general corporate purposes.

Outlook

We are encouraged by our strong first-half performance. We are seeing good demand for our aircraft and services this quarter and for the remainder of the year. And we continue to anticipate significant growth in adjusted diluted earnings per share in 2015.

On a sequential basis, we expect earnings per share in the third quarter of 2015 to be slightly better than our second-quarter 2015 adjusted earnings, followed by further earnings improvement in the fourth quarter.

Taking our first-half 2015 earnings strength into account, we continue to expect approximately 55% of our earnings to occur in the second half.

In addition, we anticipate that block-hour volumes this year will increase approximately 10% compared with 2014, including the impact of the 747-8 freighter scheduled to be delivered in November and 747-400BCF that we returned to service at the end of the second quarter. More than 70% of our total block hours should be in ACMI and the balance in Charter. Our ACMI outlook reflects expected growth in both 747 freighter operations as well as CMI flying. Our Charter outlook reflects our strong presence in the global charter market and military demand that is holding up well compared with 2014 levels.

In Dry Leasing, our portfolio is expected to include our recent acquisition and subsequent conversion of two 767 passenger aircraft to freighter configuration. Following their conversion, which should be completed during the fourth quarter of this year, the aircraft will be leased to DHL Express.

Given the flying levels that we anticipate, we continue to expect that aircraft maintenance expense in 2015 should total approximately $190 million. In addition, depreciation should be approximately $125 million. We also anticipate an effective income tax rate of approximately 30%. Core capital expenditures, excluding aircraft and engine purchases, are expected to total approximately $45 million, mainly for spare parts for our fleet. Expenditures for additional aircraft and engines should total approximately $240 million.

Conference Call

Management will host a conference call to discuss Atlas Air Worldwide’s second-quarter 2015 financial and operating results at 11:00 a.m. Eastern Time on Thursday, July 30, 2015.

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/ix8yiry7

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 6 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 79167828#.

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 Net Income Attributable to Common Stockholders; Adjusted Diluted EPS; and Free Cash Flow, which exclude certain items. 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 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 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) and Titan Aviation Holdings, Inc. (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Through Atlas and Polar, Atlas Air Worldwide operates the world’s largest fleet of Boeing 747 freighter aircraft.

Atlas, 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. 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: 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 2015 or thereafter.

Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.

Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
Operating Revenue
ACMI$ 189,255 $ 186,720 $ 378,302 $ 384,861
Charter 235,436 225,234 455,574 402,607
Dry Leasing 27,401 25,524 59,320 50,200
Other 3,741 3,691 7,482 6,864
Total Operating Revenue$ 455,833 $ 441,169 $ 900,678 $ 844,532
Operating Expenses
Salaries, wages and benefits 86,862 77,948 175,635 150,803
Aircraft fuel 96,711 103,842 174,826 185,586
Maintenance, materials and repairs 41,438 50,386 100,270 109,432
Aircraft rent 36,811 34,826 71,072 70,236
Depreciation and amortization 31,936 30,381 63,966 58,536
Navigation fees, landing fees and other rent
22,666 30,906 46,169 58,032
Travel 23,830 18,774 44,643 36,056
Passenger and ground handling services 21,353 21,859 41,316 41,230
Loss on disposal of aircraft 114 14,679 1,323 14,679
Special charge 499 1,449 (69) 9,477
Other 32,329 29,462 63,273 55,678
Total Operating Expenses 394,549 414,512 782,424 789,745
Operating Income 61,284 26,657 118,254 54,787
Non-operating Expenses (Income)
Interest income (4,425) (4,719) (8,913) (9,446)
Interest expense 25,033 26,365 49,581 52,817
Capitalized interest (177) (67) (203) (379)
Other expense (income), net (284) (88) 391 64
Total Non-operating Expenses 20,147 21,491 40,856 43,056
Income before income taxes 41,137 5,166 77,398 11,731
Income tax expense (benefit) 12,747 (23,815) 19,776 (21,276)
Net Income 28,390 28,981 57,622 33,007
Less: Net income (loss) attributable to noncontrolling interests - (612) - (4,530)
Net Income Attributable to Common Stockholders $ 28,390 $ 29,593 $ 57,622 $ 37,537
Earnings per share:
Basic$ 1.13 $ 1.17 $ 2.31 $ 1.49
Diluted$ 1.13 $ 1.17 $ 2.29 $ 1.49
Weighted average shares:
Basic 25,029 25,241 24,953 25,169
Diluted 25,198 25,279 25,135 25,215


Atlas Air Worldwide Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
June 30, 2015 December 31, 2014
Assets
Current Assets
Cash and cash equivalents$ 514,750 $ 298,601
Short-term investments 24,373 17,802
Restricted cash 15,731 14,281
Accounts receivable, net of allowance of $1,631 and $1,658, respectively 152,906 162,092
Prepaid maintenance 15,589 20,806
Deferred taxes 41,862 40,923
Prepaid expenses and other current assets 31,313 51,599
Total current assets 796,524 606,104
Property and Equipment
Flight equipment 3,489,587 3,448,791
Ground equipment 55,227 51,418
Less: accumulated depreciation (400,368) (348,036)
Purchase deposits for flight equipment 58,820 20,054
Property and equipment, net 3,203,266 3,172,227
Other Assets
Long-term investments and accrued interest 106,951 120,478
Deposits and other assets 77,337 80,258
Intangible assets, net 62,918 67,410
Total Assets$ 4,246,996 $ 4,046,477
Liabilities and Equity
Current Liabilities
Accounts payable$ 39,274 $ 42,864
Accrued liabilities 261,342 251,594
Current portion of long-term debt1,2 180,902 181,202
Total current liabilities 481,518 475,660
Other Liabilities
Long-term debt1,2 1,812,483 1,736,739
Deferred taxes 370,216 350,868
Other liabilities 67,442 65,415
Total other liabilities 2,250,141 2,153,022
Commitments and contingencies
Equity
Stockholders’ Equity
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued
Common stock, $0.01 par value; 50,000,000 shares authorized; 28,938,970 and
28,561,160 shares issued, 25,050,599 and 24,807,718, shares outstanding
(net of treasury stock), as of June 30, 2015 and December 31, 2014, respectively 289 286
Additional paid-in-capital 618,911 573,133
Treasury stock, at cost; 3,888,371 and 3,753,442 shares, respectively (151,636) (145,322)
Accumulated other comprehensive loss (9,119) (9,572)
Retained earnings 1,056,892 999,270
Total equity 1,515,337 1,417,795
Total Liabilities and Equity$ 4,246,996 $ 4,046,477

1 Balance sheet debt at June 30, 2015 totaled $1,993.4 million, including the impact of $85.4 million of unamortized discount and debt issuance costs of $55.6 million.

2 The face value of our debt at June 30, 2015 totaled $2,134.4 million, compared with $2,009.0 million on December 31, 2014.

Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
For the Six Months Ended
June 30, 2015 June 30, 2014
Operating Activities:
Net Income $ 57,622 $ 33,007
Adjustments to reconcile Net Income to net cash provided by operating activities:
Depreciation and amortization 73,263 67,195
Accretion of debt securities discount (3,760) (4,081)
Provision for allowance for doubtful accounts 46 232
Special charge, net of cash payments (715) 7,171
Loss on disposal of aircraft 1,323 14,679
Deferred taxes 19,773 (21,498)
Stock-based compensation expense 9,837 5,805
Changes in:
Accounts receivable 10,135 (23,248)
Prepaid expenses and other current assets 8,937 27,613
Deposits and other assets 1,645 (4,603)
Accounts payable and accrued liabilities (7,009) 4,854
Net cash provided by operating activities 171,097 107,126
Investing Activities:
Capital expenditures (22,117) (10,653)
Purchase deposits and delivery payments for flight equipment (62,841) (494,072)
Changes in restricted cash (1,450) (6,724)
Proceeds from short-term investments 2,394 2,060
Proceeds from disposal of aircraft 24,625 -
Net cash used for investing activities (59,389) (509,389)
Financing Activities:
Proceeds from debt issuance 224,500 572,552
Customer maintenance reserves received 8,701 8,757
Customer maintenance reserves paid (1,752) -
Proceeds from sale of warrants 36,290 -
Payments for convertible note hedges (52,903) -
Proceeds from stock option exercises 1,193 -
Purchase of treasury stock (6,314) (4,377)
Excess tax benefit from stock-based compensation expense 588 (1,973)
Payment of debt issuance costs (6,812) (17,087)
Payments of debt (99,050) (201,021)
Net cash provided by financing activities 104,441 356,851
Net increase (decrease) in cash and cash equivalents 216,149 (45,412)
Cash and cash equivalents at the beginning of period 298,601 321,816
Cash and cash equivalents at the end of period $ 514,750 $ 276,404
Non-cash Investing and Financing Activities
Acquisition of flight and ground equipment included in Accounts payable and accrued liabilities $ 6,940 $ 29,087
Disposition of aircraft included in Accounts receivable $ - $ 7,000


Atlas Air Worldwide Holdings, Inc.
Direct Contribution
(in thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
Operating Revenue:
ACMI$ 189,255 $ 186,720 $ 378,302 $ 384,861
Charter 235,436 225,234 455,574 402,607
Dry Leasing 27,401 25,524 59,320 50,200
Other 3,741 3,691 7,482 6,864
Total Operating Revenue$ 455,833 $ 441,169 $ 900,678 $ 844,532
Direct Contribution:
ACMI$ 51,157 $ 44,677 $ 91,059 $ 90,133
Charter 25,019 8,196 55,478 4,007
Dry Leasing 10,894 8,738 26,419 16,909
Total Direct Contribution $ 87,070 $ 61,611 $ 172,956 $ 111,049
Add back (subtract):
Unallocated income and expenses, net1 (45,320) (40,317) (94,304) (75,162)
Special charge (499) (1,449) 69 (9,477)
Loss (gain) on disposal of aircraft (114) (14,679) (1,323) (14,679)
Income before Income Taxes 41,137 5,166 77,398 11,731
Add back (subtract):
Interest income (4,425) (4,719) (8,913) (9,446)
Interest expense 25,033 26,365 49,581 52,817
Capitalized interest (177) (67) (203) (379)
Other expense (income), net (284) (88) 391 64
Operating Income$ 61,284 $ 26,657 $ 118,254 $ 54,787

Atlas Air Worldwide uses an economic performance metric, Direct Contribution, to show the profitability of each of its segments after allocation of direct ownership costs. Atlas Air Worldwide currently has the following reportable segments: ACMI, Charter, and Dry Leasing. Each segment has different operating and economic characteristics, which are separately reviewed by our chief operating decision maker.

Direct Contribution consists of income (loss) before taxes, excluding special charges, nonrecurring items, gains on the sale of aircraft, and unallocated fixed costs.

Direct costs include crew costs, maintenance costs, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt and aircraft depreciation.

Unallocated income and expenses include corporate overhead, non-aircraft depreciation, unallocated interest expense and income, foreign exchange gains and losses, other revenue and other non-operating costs, including unusual items and certain noncash income and expenses.

1 During the first quarter of 2015, we revised the methodology for allocating certain unallocated expenses to our segments. Prior period information has been adjusted consistently to reflect this change.

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
For the Three Months Ended
June 30, 2015 June 30, 2014 Percent Change
Net Income Attributable to Common Stockholders $ 28,390 $ 29,593 (4.1%)
After-tax impact from:
Noncash expense and income, net1 636 (53)
ETI tax benefit - (24,013)
Loss on disposal of aircraft 72 9,389
Special charge2 319 658
Accrual for legal matters - 300
Adjusted Net Income Attributable to Common Stockholders 29,417 15,874 85.3%
Diluted EPS $ 1.13 $ 1.17 (3.4%)
After-tax impact from:
Noncash expense and income, net1 0.03 -
ETI tax benefit - (0.95)
Loss on disposal of aircraft - 0.37
Special charge2 0.01 0.03
Accrual for legal matters - 0.01
Adjusted Diluted EPS 1.17 0.63 85.7%
For the Six Months Ended
June 30, 2015 June 30, 2014 Percent Change
Net Income Attributable to Common Stockholders $ 57,622 $ 37,537 53.5%
After-tax impact from:
Noncash expense and income, net1 697 (169)
ETI tax benefit (4,008) (24,013)
Loss on disposal of aircraft 956 9,389
Special charge2 (92) 4,041
Accrual for legal matters - 300
Adjusted Net Income Attributable to Common Stockholders $ 55,175 $ 27,085 103.7%
Diluted EPS $ 2.29 $ 1.49 53.7%
After-tax impact from:
Noncash expense and income, net1 0.03 (0.01)
ETI tax benefit (0.16) (0.95)
Loss on disposal of aircraft 0.04 0.37
Special charge2 - 0.16
Accrual for legal matters - 0.01
Adjusted Diluted EPS $ 2.20 $ 1.07 105.6%

1 Noncash expenses and income, net in 2015 primarily relates to amortization of the debt discount on the convertible notes.

2 Included in Special charge in 2014 were employee termination benefits, a loan reserve and tax adjustments related to GSS, and adjustments to lease termination costs for two 747-400BCFs.

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
For the Three Months Ended
June 30, 2015 June 30, 2014
Net Cash Provided by Operating Activities $80,449 $ 65,858
Less:
Capital expenditures 11,732 6,558
Capitalized interest 177 67
Free Cash Flow1 $ 68,540$ 59,233


For the Six Months Ended
June 30, 2015 June 30, 2014
Net Cash Provided by Operating Activities $ 171,097 $ 107,126
Less:
Capital expenditures 22,117 10,653
Capitalized interest 203 379
Free Cash Flow1 $ 148,777$ 96,094

1 Free Cash Flow = Cash Flows from Operations minus Base Capital Expenditures and Capitalized Interest.

Base Capital Expenditures excludes purchases of aircraft.

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands)
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
Income before income taxes$ 41,137 $ 5,166 $ 77,398 $ 11,731
Noncash interest expenses and income, net 731 (83) 826 (264)
Loss on disposal of aircraft 114 14,679 1,323 14,679
Special charge1 499 1,449 (69) 9,477
Accrual for legal matters - 469 - 469
Adjusted pretax income 42,481 21,680 79,478 36,092
Interest (income) expense, net2 20,296 22,259 40,831 44,449
Other non-operating expenses (income) (284) (88) 391 64
Adjusted operating income 62,493 43,851 120,700 80,605
Depreciation and amortization 31,936 30,381 63,966 58,536
EBITDA, as adjusted3 94,429 74,232 184,666 139,141
Aircraft rent2 36,215 34,229 69,880 69,043
EBITDAR, as adjusted4$ 130,644 $ 108,461 $ 254,546 $ 208,184

1 Included in Special charge in 2014 were employee termination benefits, a loan reserve and tax adjustments related to GSS, and adjustments to lease termination costs for two 747-400BCFs.

2 Reflects impact of noncash expenses and income related to convertible notes, debt and investments.

3 Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, noncash interest expenses and income, net, loss on disposal of aircraft, special charge, and accrual for legal matters, as applicable.

4 Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, aircraft rent expense, noncash interest expenses and income, net, loss on disposal of aircraft, special charge, and accrual for legal matters, as applicable.

Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, Increase/ June 30, Increase/
2015 2014 (Decrease) 2015 2014 (Decrease)
Block Hours
ACMI 30,958 27,652 3,306 60,418 55,675 4,743
Charter
Cargo 9,214 7,572 1,642 17,482 13,471 4,011
Passenger 4,259 3,487 772 7,480 6,202 1,278
Other 303 299 4 634 535 99
Total Block Hours 44,734 39,010 5,724 86,014 75,883 10,131
Revenue Per Block Hour
ACMI$6,113$6,752$ (639 ) $6,261$6,913$ (652)
Charter 17,475 20,367 (2,892) 18,251 20,465 (2,214)
Cargo 16,358 20,035 (3,677) 17,724 20,148 (2,424)
Passenger 19,891 21,087 (1,196) 19,482 21,154 (1,672)
Average Utilization (block hours per day)
ACMI1 9.3 9.4 (0.1) 9.5 9.4 0.1
Charter
Cargo 9.6 8.5 1.1 9.8 8.1 1.7
Passenger 9.6 7.8 1.8 8.4 7.0 1.4
All Operating Aircraft1,2 9.5 9.1 0.4 9.5 8.9 0.6
Fuel
Charter
Average fuel cost per gallon$ 2.46$ 3.19$ (0.73) $ 2.40$ 3.21$ (0.81)
Fuel gallons consumed (000s) 39,383 32,560 6,823 72,694 57,859 14,835

1 ACMI and All Operating Aircraft averages in the second quarter and first six months of 2015 reflect the impact of increases in the number of CMI aircraft and amount of CMI flying compared with the same periods of 2014.

2 Average of All Operating Aircraft excludes Dry Leasing aircraft, which do not contribute to block-hour volumes.

Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30,Increase/June 30,Increase/
20152014(Decrease)20152014(Decrease)
Segment Operating Fleet (average aircraft equivalents during the period)
ACMI1
747-8F Cargo9.08.3 0.7 8.88.5 0.3
747-400 Cargo11.411.7 (0.3)11.712.1 (0.4)
747-400 Dreamlifter3.13.3 (0.2)3.13.2 (0.1)
767-300 Cargo2.02.0 - 2.02.0 -
767-200 Cargo8.95.0 3.9 7.75.0 2.7
747-400 Passenger1.01.0 - 1.01.0 -
767-200 Passenger1.01.0 - 1.01.0 -
Total36.432.3 4.1 35.332.8 2.5
Charter
747-8F Cargo-0.7 (0.7)0.20.4 (0.2)
747-400 Cargo10.59.1 1.4 9.78.8 0.9
747-400 Passenger2.01.9 0.1 2.02.0 -
767-300 Passenger2.93.0 (0.1)2.92.9 -
Total15.414.7 0.7 14.814.1 0.7
Dry Leasing
777-200 Cargo6.06.0 - 6.05.9 0.1
757-200 Cargo1.01.0 - 1.01.0 -
737-300 Cargo1.01.0 - 1.01.0 -
737-800 Passenger1.02.0 (1.0)1.32.0 (0.7)
Total9.010.0 (1.0)9.39.9 (0.6)
Total Operating Aircraft60.857.0 3.8 59.456.8 2.6
Out of Service20.81.0 (0.2)0.91.0 (0.1)
1 ACMI average fleet excludes spare aircraft provided by CMI customers.
2 Out-of-service aircraft were temporarily parked during the period and are completely unencumbered.

Dan Loh (Investors) – (914) 701-8200 Bonnie Rodney (Media) – (914) 701-8580

Source:Atlas Air Worldwide Holdings Inc