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Atlas Air Worldwide Reports Fourth-Quarter and Full-Year 2012 Earnings



  Atlas Air Worldwide Reports Fourth-Quarter and Full-Year 2012 Earnings

  * 4Q12 Adjusted Net Income Up 23% to $48.7 Million, $1.83 per Share
  * Full-Year Adjusted Net Income Rose 17% to $127.0 Million, $4.78 per Share
  * 4Q12 Reported Net Income Up 56% to $52.4 Million, $1.97 per Share
  * Full-Year Reported Net Income Rose 35% to $129.9 Million, $4.89 per Share
  * Share Repurchases Expected to Commence 1Q13

Business Wire

PURCHASE, N.Y. -- February 13, 2013

Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), a leading global provider
of outsourced aircraft and aviation operating solutions, today announced a 23%
increase in adjusted net income attributable to common stockholders for the
fourth quarter of 2012, with adjusted net income rising to $48.7 million, or
$1.83 per diluted share. For the full year, adjusted net income attributable
to common stockholders rose 17% to $127.0 million, or $4.78 per share.

On a reported basis, net income attributable to common stockholders totaled
$52.4 million, or $1.97 per diluted share, in the fourth quarter, and $129.9
million, or $4.89 per diluted share, for the year.

Adjusted earnings exclude net gains in the fourth quarter and for the full
year that primarily reflected an insurance gain of $0.15 per diluted share
related to flood damage at an aircraft parts warehouse during Superstorm
Sandy.

Revenues grew 17% to $452.8 million in the fourth quarter and 18% to $1.65
billion for the year. Free cash flow for 2012 totaled $208.5 million.

“Our fourth-quarter and our full-year results highlight the resilience of our
business model and our ability to deliver improved margins, strong earnings
and growing free cash flow in a challenging business environment,” said
William J. Flynn, President and Chief Executive Officer.

“We are executing a strategic plan that leverages our core competencies. Our
plan includes 747-8F aircraft in ACMI; new organizational capabilities, such
as our military passenger flying, growing CMI operations and expanding 767
service; and additional operating efficiencies driven by our culture of
continuous improvement.

“As a result, we achieved the best quarterly and second-best annual operating
results in the company’s history and generated significant free cash flow. We
also maintained a strong balance sheet, and we expect that cash in excess of
business investments and balance sheet maintenance will be available to return
capital to stockholders through share repurchases beginning this quarter.

“Looking to full-year 2013, the actions we have taken to transform our company
and diversify our business model should enable us to overcome market and
business headwinds and deliver earnings per share consistent with 2012, with
strong free cash flow generation.”

Fourth-Quarter Results

Revenue and profitability growth in our core ACMI business during the fourth
quarter were driven by our new 747-8Fs, which began to enter service late in
the fourth quarter of 2011. Volume growth was primarily due to the continued
ramp up of CMI flying for Boeing and DHL Express. ACMI results during the
period benefited from higher rates per block hour and lower maintenance
expense for our 747-8Fs, partially offset by the redeployment of 747-400
aircraft to other business segments. ACMI customers flew 4.3% above
contractual minimums during the quarter.

In AMC Charter, strong growth in our passenger service and rate premiums
earned on flying more efficient 747-400 cargo aircraft in the fourth quarter
of 2012 compared with less efficient 747-200 aircraft in 2011 partially offset
a 48% reduction in cargo block hours and a reduction in the number of one-way
AMC missions.

In Commercial Charter, increased revenues and volumes reflected the deployment
of 747-400 cargo aircraft in lieu of retired 747-200s, the deployment of an
additional 747-400 cargo aircraft to support increased demand in South
America, and 747-400 aircraft from ACMI during remarketing periods. Commercial
Charter results were affected by a reduction in yields driven by softer
charter-market conditions compared with the fourth quarter of 2011, and a
reduction in return legs due to fewer one-way AMC Charter missions.

Fourth-quarter results in each segment were affected by increased crew costs,
with AMC Charter and Commercial Charter incurring other volume-driven
operating expenses and higher aircraft ownership costs related to the
deployment of 747-400 aircraft in lieu of 747-200 aircraft.

Unallocated income and expenses during the quarter reflected a pretax
insurance gain of $6.3 million (equivalent to $0.15 per fully diluted share on
an after-tax basis) related to flood damage incurred at an aircraft parts
warehouse during Superstorm Sandy.

Income Taxes

Adjusted and reported earnings for the fourth quarter of 2012 included an
effective income tax rate of 35.9%, reflecting an adjustment to reserves
related to U.S. federal income tax benefits claimed in prior periods that
totaled $0.06 per fully diluted share.

Adjusted and reported earnings for the full year of 2012 included an effective
income tax rate of 36.8%, relating to the adjustment to U.S. federal income
tax reserves and the settlement of income tax examinations in Hong Kong that
totaled $0.09 per fully diluted share.

Cash, Cash Equivalents and Short-Term Investments

At December 31, 2012, our cash, cash equivalents and short-term investments
totaled $419.9 million, compared with $195.2 million at December 31, 2011.

The growth in cash, cash equivalents and short-term investments in 2012 was
primarily driven by an increase in cash provided by operating and financing
activities, partially offset by an increase in cash used for investing
activities.

Net cash used for investing activities in 2012 primarily related to the
purchase of four 747-8F aircraft for our ACMI operations, a third 767-300ER
passenger aircraft for our AMC Charter operations, and a 737-300 cargo
aircraft for our Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from
the issuance of debt in connection with the delivery of the four 747-8Fs.
These proceeds were partially offset by payments on debt obligations and debt
issuance costs. Both the proceeds from our issuance of debt and the payments
on our debt obligations reflect the refinancing of a total of $571 million of
floating-rate term loans with fixed-rate notes issued in the capital markets.

Share Repurchases

We recently reviewed our capital allocation strategy, which addressed the
appropriate allocation of the company’s current and expected future cash
balances between investments to support business growth, balance sheet
strength, and returns of capital to stockholders.

Cash in excess of our business investment and balance sheet maintenance
requirements will be available for share repurchases, which will be
immediately accretive. Reflecting our strong balance sheet and cash flows, we
intend to begin actively purchasing shares in the first quarter of 2013.

Share purchases would recommence under a previously announced share repurchase
program. Repurchases of shares may take the form of an open market repurchase
program, accelerated share repurchase program, privately negotiated
transactions, or a combination of these methods. The actual timing and amount
of our repurchases will depend on market conditions.

Outlook

“We continue to anticipate strong earnings and cash flow in 2013,” said Mr.
Flynn.

“While global economic growth and airfreight market conditions remain
uncertain, our model is working. We are well-positioned to serve our customers
and the airfreight markets, and we expect that our reported fully diluted
earnings per share this year will total approximately $4.65.”

Earnings in 2013 will reflect strong growth from the company’s 747-8Fs, driven
by an increase in the number of -8F aircraft in service compared with 2012.

That growth will offset headwinds related to a combined 18% reduction in
military cargo and passenger block hours compared with 2012, which, when
combined with the impact of a reduction in one-way military missions on our
commercial charter operations, will reduce diluted earnings per share by
$1.19.

Additional expected headwinds totaling $0.91 per share compared with 2012
include increased heavy maintenance expense, a reduction in capitalized
interest, and income tax benefits that we recognized in 2012.

Reflecting the transformation and diversification of the company’s business
model, we expect to overcome these headwinds and deliver earnings per share
consistent with 2012, with strong free cash flow generation.

Market growth during 2013 should be seasonal and second-half weighted. In
addition, more than 60% of our estimated maintenance expense of $193 million
should be incurred in the first half of the year. As a result, we anticipate a
sequential increase in our quarterly earnings throughout the year, starting at
a marginal level in the first quarter with approximately 75% occurring in the
second half.

Block-hour volumes should total approximately 185,000 hours in 2013, an
increase of more than 32,000 hours compared with 2012.

Forecast block-hour volumes in 2013 reflect our decision to temporarily park
an unencumbered, company-owned 747-400 converted freighter in mid-February to
reduce costs and enhance profitability in our charter business.

ACMI segment flying should account for about 133,000, or 72%, of expected 2013
block hours, with about 33,500, or 18%, in Commercial Charter and 18,500, or
10%, in AMC Charter. Passenger charter flying should account for more than
10,000 AMC Charter block hours in 2013.

Based on anticipated deliveries and placements in the first half of 2013 for
the two remaining 747-8Fs in our outstanding order, the average number of -8Fs
in service in 2013 should increase to more than eight from 4.3 in 2012. In
ACMI, customers are expected to fly approximately 3% to 5% above contractual
minimums for the entire year.

In addition, we are assessing a recent court decision that may enable us to
reduce our effective income tax rate in 2013. We expect to complete our
assessment and report on its outcome by the time we announce our first-quarter
earnings in early May, as well as update our annual guidance as we regularly
do each quarter.

“Our capital allocation strategy demonstrates our commitment to creating,
enhancing and returning value to our stockholders,” Mr. Flynn added. “Any
impact from prospective share repurchases in 2013 is not included in, and
would be accretive to, our guidance.”

Long-Term Growth

Mr. Flynn concluded: “We are executing a strategic plan that has built a
resilient company with strong earnings, cash flow and a solid balance sheet.
We are also leveraging our core competencies, industry leadership and deep
understanding of our markets to deliver advantage and value to our customers
and stockholders.

“Our disciplined approach to business growth in the next five years includes
evaluating potential opportunities for adding incremental aircraft that
provide our customers with the most efficient assets to meet their needs;
expansion of our Titan dry-leasing platform through investments in aircraft
with lease commitments; and continuing to develop our operating capabilities.”

Conference Call

Management will host a conference call to discuss Atlas Air Worldwide’s
fourth-quarter and full-year 2012 financial and operating results at 11:00
a.m. Eastern Time on Wednesday, February 13, 2013.

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://www.media-server.com/m/p/n2ftjd93

For those unable to listen to the live call, a replay will be available on the
above Web sites following the call. A replay will also be available through
February 20 by dialing (855) 859-2056 (domestic) and (404) 537-3406
(international) and using Access Code 94807143#.

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 the parent company of Atlas Air, Inc. (Atlas) and Titan
Aviation Leasing (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 solutions 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 scheduled
air cargo service; military cargo and passenger charters; commercial cargo and
passenger charters; and dry leasing of aircraft and engines.

Atlas Air Worldwide’s press releases, SEC filings and other information can 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 2013 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 Twelve Months Ended
                December 31,     December 31,    December 31,    December 31,
                2012             2011            2012            2011
                                                                    
Operating
Revenue
ACMI            $  189,343       $  162,626      $ 682,189       $ 632,509
AMC charter        111,378          126,495        488,063         442,725
Commercial         144,425          92,572         450,277         299,528
charter
Dry leasing        2,979            2,953          11,843          9,695
Other              4,647            3,513          13,660          13,759     
Total Operating $  452,772       $  388,159      $ 1,646,032     $ 1,398,216  
Revenue
                                                                    
Operating
Expenses
Aircraft fuel      125,204          110,391        436,618         388,579
Salaries, wages    78,241           76,671         293,881         261,844
and benefits
Aircraft rent      39,833           43,113         166,142         164,089
Maintenance,
materials and      28,194           23,050         165,069         167,749
repairs
Passenger and
ground handling    19,786           10,122         69,886          31,460
services
Depreciation
and                17,683           12,276         62,475          39,345
amortization
Navigation,
landing fees       16,434           13,303         60,524          50,059
and other rent
Travel             14,272           13,709         56,461          44,037
Loss/(Gain) on
disposal of        -                100            (2,417    )     (364      )
aircraft
Special charge     -                5,441          -               5,441
Other              25,596           26,494         110,902         94,877     
Total Operating    365,243          334,670        1,419,541       1,247,116  
Expenses
Operating          87,529           53,489         226,491         151,100    
Income
                                                                    
Non-operating
Expenses /
(Income)
Interest income    (5,007   )       (4,993   )     (19,636   )     (20,193   )
Interest           17,934           12,111         64,532          42,120
expense
Capitalized        (2,371   )       (9,052   )     (18,727   )     (27,636   )
interest
Loss on early
extinguishment     291              -              576             -
of debt
Other (income)     (5,983   )       305            (5,529    )     (180      )
expense, net
Total
Non-operating      4,864            (1,629   )     21,216          (5,889    )
Expenses
(Income)
Income before      82,665           55,118         205,275         156,989
income taxes
Income tax         29,662           22,085         75,561          60,680     
expense
                                                                    
Net Income         53,003           33,033         129,714         96,309
Less: Net
income (loss)
attributable to    621              (480     )     (213      )     226        
noncontrolling
interests
Net Income
Attributable to $  52,382        $  33,513       $ 129,927       $ 96,083     
Common
Stockholders
                                                                    
Earnings per
share:
Basic           $  1.98          $  1.27         $ 4.92          $ 3.66       
Diluted         $  1.97          $  1.27         $ 4.89          $ 3.64       
                                                                    
Weighted
average shares:
Basic              26,444           26,305         26,419          26,227     
Diluted            26,615           26,442         26,549          26,422     
                                                                    

 
Atlas Air Worldwide Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
                                                            
                                         December 31, 2012   December 31, 2011
Assets
Current Assets
Cash and cash equivalents                $   409,763         $   187,111
Short-term investments                       10,119              8,097
Accounts receivable, net of allowance of     127,704             93,213
$3,172 and $1,931, respectively
Prepaid maintenance                          22,293              35,902
Deferred taxes                               26,390              10,580
Prepaid expenses and other current           36,726              58,934      
assets
Total current assets                         632,995             393,837
Property and Equipment
Flight equipment                             2,209,782           1,466,384
Ground equipment                             39,230              33,788
Less: accumulated depreciation               (185,419   )        (159,123   )
Purchase deposits for flight equipment       147,946             407,184     
Property and equipment, net                  2,211,539           1,748,233
Other Assets
Long-term investments and accrued            140,498             135,735
interest
Deposits and other assets                    132,120             73,232
Intangible assets, net                       35,533              39,961      
Total Assets                             $   3,152,685       $   2,390,998   
                                                                  
Liabilities and Equity
Current Liabilities
Accounts payable                         $   20,789          $   27,352
Accrued liabilities                          152,467             175,298
Current portion of long-term debt^1,2        154,760             70,007      
Total current liabilities                    328,016             272,657
Other Liabilities
Long-term debt^1,2                           1,149,282           680,009
Deferred taxes                               265,384             178,069
Other liabilities                            121,899             118,888     
Total other liabilities                      1,536,565           976,966
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; 27,672,924
and 27,462,116 shares issued, 26,443,441     277                 275
and 26,304,764, shares outstanding (net
of treasury stock), as of December 30,
2012 and December 31, 2011, respectively
Additional paid-in-capital                   544,421             525,670
Treasury stock, at cost: 1,229,483 and       (44,850    )        (41,499    )
1,157,352 shares, respectively
Accumulated other comprehensive loss         (14,263    )        (15,683    )
Retained earnings                            798,676             668,749     
Total stockholders’ equity                   1,284,261           1,137,512
Noncontrolling interest                      3,843               3,863       
Total equity                                 1,288,104           1,141,375   
Total Liabilities and Equity             $   3,152,685       $   2,390,998   
                                                                             

^1   Balance sheet debt at December 31, 2012 totaled $1,304.0 million,
     including the impact of $46.8 million of unamortized discount.
^2   The face value of our debt at December 31, 2012 totaled $1,350.8 million,
     compared with $801.9 million on December 31, 2011.
      

                                                                              
Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
                                    
                                     For the Twelve Months Ended
                                     December 31, 2012     December 31, 2011  
Operating Activities:
Net Income Attributable to Common    $    129,927          $     96,083
Stockholders
Net income (loss) attributable to         (213         )         226          
noncontrolling interests
Net Income                                129,714                96,309
Adjustments to reconcile Net
Income to net cash provided by
operating activities:
Depreciation and amortization             72,194                 47,313
Accretion of debt securities              (8,560       )         (8,341      )
discount
Provision for allowance for               837                    335
doubtful accounts
Special charge                            ―                      5,441
Loss on early extinguishment of           576                    ―
debt
Gain on disposal of aircraft              (2,417       )         (364        )
Deferred taxes                            75,365                 81,616
Stock-based compensation expense          18,202                 12,528
Changes in:
Accounts receivable                       (25,217      )         (12,914     )
Prepaid expenses and other current        48,213                 (50,303     )
assets
Deposits and other assets                 (26,027      )         (21,854     )
Accounts payable and accrued              (24,383      )         (6,808      )
liabilities
Net cash provided by operating            258,497                142,958
activities
                                                                              
Investing Activities:
Capital expenditures                      (31,266      )         (37,374     )
Purchase deposits and delivery            (520,770     )         (764,268    )
payments for flight equipment
Investment in debt securities             (6,658       )         ―
Proceeds from short-term                  4,342                  6,165
investments
Proceeds from insurance                   3,300                  ―
Proceeds from disposal of aircraft        3,215                  1,480        
Net cash used for investing               (547,837     )         (793,997    )
activities
                                                                              
Financing Activities:
Proceeds from debt issuance               1,211,560              360,250
Proceeds from stock option                ―                      4,733
exercises
Purchase of treasury stock                (3,351       )         (9,251      )
Excess tax benefit from                   551                    3,117
stock-based compensation expense
Payment of debt issuance costs            (34,141      )         (6,980      )
Payments of debt                          (662,627     )         (102,571    )
Net cash provided by financing            511,992                249,298
activities
Net increase (decrease) in cash           222,652                (401,741    )
and cash equivalents
Cash and cash equivalents at the          187,111                588,852      
beginning of period
Cash and cash equivalents at the     $    409,763          $     187,111      
end of period
                                                                              

 
Atlas Air Worldwide Holdings, Inc.
Direct Contribution
(in thousands)
(Unaudited)
                                                
                  For the Three Months Ended     For the Twelve Months Ended
                  December 31,     December      December 31,    December 31,
                  2012             31, 2011      2012            2011
Operating
Revenue:
ACMI              $  189,343       $ 162,626     $ 682,189       $ 632,509
AMC Charter          111,378         126,495       488,063         442,725
Commercial           144,425         92,572        450,277         299,528
Charter
Dry Leasing          2,979           2,953         11,843          9,695
Other                4,647           3,513         13,660          13,759     
Total Operating   $  452,772       $ 388,159     $ 1,646,032     $ 1,398,216  
Revenue
                                                                    
Direct
Contribution:
ACMI              $  74,924        $ 47,051      $ 191,497       $ 148,320
AMC Charter          23,589          31,075        99,591          86,962
Commercial           16,520          15,109        32,079          40,200
Charter
Dry Leasing          631             1,231         4,598           4,631      
Total Direct
Contribution         115,664         94,466        327,765         280,113    
for Reportable
Segments
                                                                    
Unallocated
income and           (32,708  )      (33,807 )     (124,331  )     (118,047  )
expenses
Special charge       -               (5,441  )     -               (5,441    )
Loss on early
extinguishment       (291     )      -             (576      )     -
of debt
(Loss)/Gain on
sale of              -               (100    )     2,417           364        
aircraft
Income before        82,665          55,118        205,275         156,989    
Income Taxes
                                                                    
Interest income      (5,007   )      (4,993  )     (19,636   )     (20,193   )
Interest             17,934          12,111        64,532          42,120
expense
Capitalized          (2,371   )      (9,052  )     (18,727   )     (27,636   )
interest
Loss on early
extinguishment       291             -             576             -
of debt
Other (Income)       (5,983   )      305           (5,529    )     (180      )
Expense, net
Operating         $  87,529        $ 53,489      $ 226,491       $ 151,100    
Income
                                                                              

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, AMC Charter, Commercial Charter, and Dry Leasing. Each segment
has different operating and economic characteristics, which are separately
reviewed by senior management.

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, interest income, foreign exchange gains and losses, other
revenue and other non-operating costs, including one-time items.

 
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
                                   
                                    For the Three Months Ended
                                      December 31,     December 31,   Percent
                                      2012             2011           Change
                                                                       
Net Income Attributable to Common   $ 52,382         $ 33,513         56.3  %
Stockholders
After-tax impact from:
Fleet retirement costs^1              159              -               
Pre-operating expenses^2              -                2,621
Loss on early extinguishment of       185              -
debt
Special charge^3                      -                3,466
Insurance gain^4                      (4,032    )      -
Loss/(Gain) on disposal of            -                64              
aircraft
Adjusted Net Income Attributable    $ 48,694         $ 39,664         22.8  %
to Common Stockholders
                                                                       
Diluted EPS                         $ 1.97           $ 1.27           55.1  %
After-tax impact from:
Fleet retirement costs^1              0.01             -
Pre-operating expenses^2              -                0.10
Loss on early extinguishment of       0.01             -
debt
Special charge^3                      -                0.13
Insurance gain^4                      (0.15     )      -
Gain on disposal of aircraft          -                0.00            
Adjusted Diluted EPS^4              $ 1.83           $ 1.50           22.0  %
                                                                       
                                    For the Twelve Months Ended
                                      December 31,     December 31,   Percent
                                      2012             2011           Change
                                                                       
Net Income Attributable to Common   $ 129,927        $ 96,083         35.2  %
Stockholders
After-tax impact from:
Fleet retirement costs^1              2,252            -
Pre-operating expenses^2              -                9,455
Loss on early extinguishment of       367              -
debt
Special charge^3                      -                3,466
Insurance gain^4                      (4,032    )      -
Gain on disposal of aircraft          (1,540    )      (232      )     
Adjusted Net Income Attributable    $ 126,974        $ 108,772        16.7  %
to Common Stockholders
                                                                       
Diluted EPS                         $ 4.89           $ 3.64           34.3  %
After-tax impact from:
Fleet retirement costs^1              0.08             -
Pre-operating expenses^2              -                0.36
Loss on early extinguishment of       0.01             -
debt
Special charge^3                      -                0.13
Insurance gain^4                      (0.15     )      -
Gain on disposal of aircraft          (0.06     )      (0.01     )     
Adjusted Diluted EPS^4              $ 4.78           $ 4.12           16.0  %
                                                                             

^1   Fleet retirement costs in 2012 included incremental employee costs
     related to the retirement of our 747-200 fleet.
     Pre-operating expenses in 2011 related to the introduction of new
^2   aircraft types and included incremental costs incurred as a result of
     delivery delays.
^3   Included in Special charge in 2011 are asset impairment and employee
     termination charges related to the retirement of the 747-200 fleet.
^4   Insurance gain in 2012 related to flood damage at a warehouse.
      

 
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
                                
                                 For the Twelve Months Ended
                                       December 31, 2012     December 31, 2011
                                                              
Net Cash Provided by Operating       $ 258,497             $ 142,958
Activities
Less:
Capital expenditures                   31,266                37,374
Capitalized interest                   18,727                27,636
Free Cash Flow^1                     $ 208,504             $ 77,948
                                                              

^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 Twelve Months
                                                    Ended
                   December 31,      December 31,   December 31,   December
                   2012              2011           2012           31, 2011
                                                                      
Income before      $  82,665         $ 55,118       $ 205,275      $ 156,989
income taxes
Fleet retirement      249              -              3,535          -
costs^1
Pre-operating         -                5,298          -              17,130
expenses^2
Loss on early
extinguishment        291              -              576            -
of debt
Special charge^3                       5,441                         5,441
Insurance gain^4      (6,329   )       -              (6,329  )      -
Loss/(Gain) on
disposal of           -                100            (2,417  )      (364    )
aircraft
                                                                      
Adjusted pretax       76,876           65,957         200,640        179,196
income
                                                                      
Interest
(income)              10,556           (1,934  )      26,169         (5,709  )
expense, net
Other
non-operating         (5,983   )       305            (5,529  )      (180    )
expenses
                                                                      
Adjusted
operating income
before fleet
retirement
costs,
pre-operating
expenses, loss
on early              81,449           64,328         221,280        173,307
extinguishment
of debt, special
charge,
insurance gain
and loss/(gain)
on disposal of
aircraft
                                                                      
Depreciation and      17,683           12,276         62,475         39,345   
amortization
                                                                      
Adjusted              99,132           76,604         283,755        212,652
EBITDA^5
                                                                      
Aircraft rent         39,833           43,113         166,142        164,089  
                                                                      
Adjusted           $  138,965        $ 119,717      $ 449,897      $ 376,741  
EBITDAR^5
                                                                              

^1   Fleet retirement costs in 2012 included incremental employee costs
     related to the retirement of our 747-200 fleet.
     Pre-operating expenses in 2011 were related to the introduction of new
^2   aircraft types and include incremental costs incurred as a result of
     delivery delays.
^3   Included in Special charge in 2011 are asset impairment and employee
     termination charges related to the retirement of the 747-200 fleet.
^4   Insurance gain related to flood damage at a warehouse in 2012.
     Adjusted EBITDA: Earnings before interest, taxes, depreciation,
^5   amortization, fleet retirement costs, pre-operating expenses, loss on
     early extinguishment of debt, and gains on disposal of aircraft, as
     applicable.
     Adjusted EBITDAR: Earnings before interest, taxes, depreciation,
^6   amortization, aircraft rent expense, fleet retirement costs,
     pre-operating expenses, loss on early extinguishment of debt, and gains
     on disposal of aircraft, as applicable.
      

 
Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
                                              
              For the Three                    For the Twelve Months
              Months Ended                     Ended
                December 31,      Increase/      December 31,        Increase/
                2012     2011     (Decrease)     2012      2011      (Decrease)
                                                                      
Block Hours
ACMI            28,432   26,382   2,050          107,130   102,695   4,435
AMC Charter
Cargo           2,271    4,397    (2,126   )     10,423    17,840    (7,417   )
Passenger       2,902    724      2,178          12,024    1,368     10,656
Commercial      7,204    4,142    3,062          21,965    13,879    8,086
Charter
Non revenue     257      476      (219     )     1,165     1,273     (108     )
Total Block     41,066   36,121   4,945          152,707   137,055   15,652    
Hours
                                                                      
Revenue Per
Block Hour
ACMI          $ 6,660  $ 6,164  $ 496          $ 6,368   $ 6,159   $ 209
AMC Charter
Cargo           23,339   24,377   (1,038   )     23,677    22,739    938
Passenger       20,115   26,673   (6,558   )     20,066    27,086    (7,020   )
Commercial      20,048   22,350   (2,302   )     20,500    21,581    (1,081   )
Charter
                                                                      
Average
Utilization
(block
hours per
day)
ACMI            11.2     13.0     (1.8     )     12.0      13.0      (1.0     )
AMC Charter
Cargo           9.9      10.2     (0.3     )     9.2       9.6       (0.4     )
Passenger       7.5      4.4      3.1            8.2       4.7       3.5
Commercial      9.9      10.2     (0.3     )     9.4       10.3      (0.9     )
Charter
All
Operating       10.6     11.9     (1.3     )     11.0      12.0      (1.0     )
Aircraft^1
                                                                      
Fuel
AMC
Average
fuel cost     $ 3.63   $ 3.97   $ (0.34    )   $ 3.35    $ 3.63    $ (0.28    )
per gallon
Fuel
gallons         13,270   15,405   (2,135   )     58,178    60,976    (2,798   )
consumed
(000s)
Commercial
Charter
Average
fuel cost     $ 3.27   $ 3.24   $ 0.03         $ 3.32    $ 3.29    $ 0.03
per gallon
Fuel
gallons         23,576   15,209   8,367          72,834    50,872    21,962
consumed
(000s)
 

^1   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              For the Twelve
               Ended                             Months Ended
                  December 31,      Increase/      December 31,     Increase/
                   2012      2011   (Decrease)      2012     2011   (Decrease)
Segment
Operating
Fleet (average
aircraft
equivalents
during the
period)
ACMI^1
747-8F Cargo      6.3       0.8     5.5            4.3      0.2     4.1
747-400           15.3      19.8    (4.5    )      16.4     20.3    (3.9    )
Cargo^2
747-200 Cargo     -         0.5     (0.5    )      -        0.2     (0.2    )
767-200 Cargo     4.5       -       4.5            2.5      -       2.5
747-400           1.1       1.0     0.1            1.1      1.0     0.1
Passenger
767-300           0.4       -       0.4            0.1      -       0.1      
Passenger
Total             27.6      22.1    5.5            24.4     21.7    2.7
AMC Charter
747-400 Cargo     2.5       2.4     0.1            2.9      1.6     1.3
747-200 Cargo     -         2.3     (2.3    )      0.2      3.5     (3.3    )
747-400           1.8       1.8     -              1.7      0.8     0.9
Passenger
767-300           2.4       -       2.4            2.3      -       2.3      
Passenger
Total             6.7       6.5     0.2            7.1      5.9     1.2
Commercial
Charter
747-400 Cargo     7.6       2.4     5.2            5.8      2.0     3.8
747-200 Cargo     -         1.9     (1.9    )      0.2      1.7     (1.5    )
747-400           0.1       0.1     -              0.2      -       0.2
Passenger
767-300           0.2       -       0.2            0.2      -       0.2      
Passenger
Total             7.9       4.4     3.5            6.4      3.7     2.7
Dry Leasing
757-200 Cargo     1.0       1.0     -              1.0      1.0     -
737-300 Cargo     1.0       -       1.0            0.4      -       0.4
737-800           2.0       2.0     -              2.0      1.2     0.8      
Passenger
Total             4.0       3.0     1.0            3.4      2.2     1.2      
Total
Operating         46.2      36.0    10.2           41.3     33.5    7.8      
Aircraft
                                                                     
Out of            -         0.1     (0.1    )      -        0.4     (0.4    )
Service^3
                                                                     

^1   ACMI average fleet excludes spare aircraft provided by CMI customers.
     Includes 1.5 and 0.7 Large Cargo Freighters in the three-month periods
^2   ended December 31, 2012 and 2011, respectively. Includes 1.2 and 0.7
     Large Cargo Freighters in the twelve-month periods ended December 31,
     2012 and 2011, respectively.
     Out-of-service aircraft were temporarily parked during the period and are
^3   completely unencumbered. Permanently parked aircraft, all of which are
     also completely unencumbered, are not included in the operating
     statistics above.

Contact:

Atlas Air Worldwide Holdings, Inc.
Investors:
Dan Loh, 914-701-8200
or
Media:
Bonnie Rodney, 914-701-8580
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