Atlas Air Worldwide Reports Fourth-Quarter and Full-Year 2013 Earnings

  Atlas Air Worldwide Reports Fourth-Quarter and Full-Year 2013 Earnings

  *4Q13 Adjusted Net Income of $41.8 Million, $1.66 per Share
  *Full-Year Adjusted Net Income of $96.8 Million, $3.78 per Share
  *4Q13 Reported Net Income of $30.0 Million, $1.19 per Share
  *Full-Year Reported Net Income of $93.8 Million, $3.66 per Share

Business Wire

PURCHASE, N.Y. -- February 12, 2014

Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW), a leading global provider of
outsourced aircraft and aviation operating solutions, today announced adjusted
net income attributable to common stockholders of $41.8 million, or $1.66 per
diluted share, for the three months ended December 31, 2013, compared with
$48.7 million, or $1.83 per diluted share, for the three months ended December
31, 2012.

On a reported basis, fourth-quarter 2013 net income attributable to common
stockholders totaled $30.0 million, or $1.19 per diluted share, compared with
$52.4 million, or $1.97 per diluted share, in the fourth quarter of 2012.

Free cash flow of $92.3 million in the fourth quarter of 2013 compared with
$53.3 million in the fourth quarter of 2012.

“Earnings in the fourth quarter of 2013 were led by our ACMI operations, a
strong contribution by our Commercial Charter segment, which reported a profit
for the full year, and growth in our Dry Leasing business,” said William J.
Flynn, President and Chief Executive Officer. “Results were also affected by a
substantial reduction in AMC Charter volumes and segment contribution,
reflecting lower demand levels than previously forecast by the military.

“Earnings in Commercial Charter were driven by a sharp increase in block hours
flown by our aircraft as global-market peak-season volumes picked up in late
October through December.

“Operating results during the quarter were supported by the investments we’ve
made to strengthen and diversify our business mix, including our 747-8
freighters in ACMI; the addition of 777 freighters with predictable, long-term
revenue and earnings streams in Dry Leasing; our expanding 767 service;
growing CMI operations within ACMI; VIP and other passenger charters; and
ongoing continuous improvement initiatives.”

Reported results for the period reflected our decision to reduce our operating
fleet by two aircraft. In December, we permanently parked two 747-400BCFs that
we had leased following delays in the delivery of our 747-8 freighters. As a
consequence, our reported earnings included a special charge related to the
termination of the operating leases for these BCFs.

Fourth-Quarter Results

Increased revenues, higher volumes and profitability in our ACMI business
during the fourth quarter were driven by our new 747-8Fs, with an average of
1.7 additional -8F aircraft in service compared with the fourth quarter of
2012; higher rates per block hour for our -8Fs; and the continued ramp up and
expansion of CMI service. ACMI customers also continued to fly above minimum
contract levels. These results were offset by a lower average utilization for
all aircraft in the segment and an increase in maintenance expense due to the
timing of required initial airframe checks on our first three -8F aircraft.

In Dry Leasing, revenue and profitability grew following the acquisition of
one 777-200LRF aircraft in March 2013 and two 777-200LRF aircraft in July
2013. Each aircraft was acquired with a long-term customer lease already in
place.

In AMC Charter, a reduction in cargo and passenger block hours, as well as a
reduced number of one-way AMC missions and a change in the proportion of those
missions from outbound U.S. to inbound U.S., led to a significant decline in
segment contribution. Lower average cargo and passenger revenue per block hour
during the period stemmed from a reduction in the average pegged fuel price
set by the U.S. military.

Profitability in Commercial Charter primarily reflected an increase in volumes
and an improvement in aircraft utilization compared with the fourth quarter of
2012. Charter operations during the quarter benefited from the redeployment of
747-400 and 747-8F aircraft during ACMI marketing periods, higher rates on
747-8F aircraft, and passenger charters for sporting events, concert tours,
VIP and other private charters. Market airfreight yields improved on a
seasonal basis during the period, but remained under pressure overall.

Reported fourth-quarter results included a special charge of $18.6 million,
primarily related to a lease termination charge for the two 747-400BCFs parked
in December.

Reported earnings for the fourth quarter of 2013 also included an effective
income tax rate of 30.7%, reflecting the ongoing beneficial impact of lower
taxes for certain foreign subsidiaries in our Dry Leasing business.

Full-Year Results

For the twelve months ended December 31, 2013, adjusted net income
attributable to common stockholders totaled $96.8 million, or $3.78 per
diluted share, compared with $127.0 million, or $4.78 per diluted share, for
the twelve months ended December 31, 2012.

On a reported basis, full-year 2013 net income attributable to common
stockholders totaled $93.8 million, or $3.66 per diluted share, compared with
$129.9 million, or $4.89 per diluted share, in 2012.

Reported earnings in 2013 included an effective income tax rate of 20.2%,
mostly due to the tax treatment of extraterritorial income from the offshore
leasing of certain of our aircraft. In addition, the effective rate reflected
the net impact of the resolution of certain income tax liabilities.

Free cash flow in 2013 increased to $273.1 million from $208.5 million in
2012.

Cash and Short-Term Investments

At December 31, 2013, our cash, cash equivalents, short-term investments and
restricted cash totaled $339.2 million, compared with $419.9 million at
December 31, 2012.

The change in position reflected cash provided by operating and financing
activities offset by cash used for investing activities.

Net cash used for investing activities during 2013 primarily related to the
purchase of two 747-8F aircraft as well as three 777-200LRF aircraft for our
Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from
the issuance of debt in connection with the acquisitions of these aircraft.
Those proceeds were partially offset by payments on debt obligations and debt
issuance costs.

Share Repurchases

During the year ended December 31, 2013, we repurchased a total of 1,723,577
shares, or 6.5%, of our outstanding common stock at December 31, 2012.

Future repurchases under our remaining $60 million authority may be made at
our discretion, with the actual timing, form and amount dependent on company
and market conditions.

Outlook

We enter 2014 confident about the resilience of our business model and our
ability to leverage the scale and efficiencies in our operations. Reflecting
the business initiatives we have undertaken and the investments we have made,
we have transformed the company to deliver meaningful earnings in any
environment.

Our current outlook reflects two primary considerations.

One, as U.S. military activities overseas are scaled down, the military’s
demand for outsourced airlift, particularly cargo airfreight, also declines.
Our most recent indication is that the decline will be steeper and faster than
previously forecasted by the military. For 2014, we estimate that this decline
will reduce earnings by approximately $0.70 per share from 2013 levels.

Two, global airfreight volumes have been essentially flat for the last three
years. Atlas has remained healthy and profitable throughout this period by
capitalizing on strategic initiatives to strengthen and diversify our business
mix; generate operating efficiencies and continuous improvement gains; and
enhance our portfolio of assets and services.

Should 2014 be the inflection point when growth returns to commercial
airfreight, our business initiatives and the investments we have made have
positioned Atlas to be one of the prime beneficiaries. If 2014 remains flat,
we expect results to approximate 2013, excluding the $0.70 per share decline
in AMC Charter.

At this point of the year, there is limited visibility into second-half
airfreight market demand. We expect to be profitable in the first quarter,
which is usually the lowest volume-generating and highest maintenance expense
quarter of the year. Typically, the majority of our earnings are generated in
the second half, and we will update our expectations as the year progresses.

For the full year, we expect total block hours to be several percentage points
lower than 2013 block hours, with more than 70% in ACMI, less than 10% in AMC
Charter, and the balance in Commercial Charter. Our Dry Leasing segment should
show dramatic growth. Depreciation and heavy maintenance expense should each
increase by about $10 million over 2013. As always, line maintenance will
depend on block hours operated. In addition, we anticipate an effective book
income tax rate of approximately 30%.

Mr. Flynn added: “As we have noted previously, airfreight remains a long-term
growth industry despite current market challenges. We have transformed our
business and expect to be profitable in any environment. We are
well-positioned to capitalize on market improvements and to continue to focus
on the long-term growth of our business. With a resilient business model,
substantial operating leverage, strong customer relationships and a superior
fleet, we continue to strengthen our competitive position and generate
substantial free cash flow, which will enhance stockholder value.”

Conference Call

Management will host a conference call to discuss Atlas Air Worldwide’s
fourth-quarter and full-year 2013 financial and operating results at 11:00
a.m. Eastern Time on Wednesday, February 12, 2014.

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/kkdeegog

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 19 by dialing (855) 859-2056 (domestic) and (404) 537-3406
(international) and using Access Code 50793956#.

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 2014 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          For the Twelve Months Ended
                   Ended
                   December     December        December 31,   December 31,
                   31, 2013      31, 2012        2013            2012
                                                                   
Operating
Revenue
ACMI               $ 202,297     $ 189,343       $ 755,008       $ 682,189
AMC Charter          68,501        111,378         356,340         488,063
Commercial           182,624       144,425         496,112         450,277
Charter
Dry Leasing          13,324        2,979           35,168          11,843
Other               3,855       4,647         14,272        13,660    
Total
Operating          $ 470,601    $ 452,772      $ 1,656,900    $ 1,646,032 
Revenue
Operating
Expenses
Aircraft fuel        120,818       125,204         410,353         436,618
Salaries,
wages and            79,920        78,241          299,136         293,881
benefits
Maintenance,
materials and        29,820        28,194          162,972         165,069
repairs
Aircraft rent        41,662        38,452          160,415         154,968
Navigation
fees, landing        31,882        17,815          90,733          71,698
fees, and
other rent
Depreciation
and                  24,549        17,683          86,389          62,475
amortization
Passenger and
ground               20,394        19,786          72,503          69,886
handling
services
Travel               17,935        14,272          61,420          56,461
Loss (gain) on
disposal of          272           -               351             (2,417    )
aircraft
Special charge       18,642        -               18,642          -
Other               26,680      25,596        107,196       110,902   
Total
Operating           412,574     365,243       1,470,110     1,419,541 
Expenses
Operating           58,027      87,529        186,790       226,491   
Income
Non-operating
Expenses
(Income)
Interest             (4,810  )     (5,007  )       (19,813   )     (19,636   )
income
Interest             21,948        17,934          83,659          64,532
expense
Capitalized          (365    )     (2,371  )       (2,350    )     (18,727   )
interest
Loss on early
extinguishment       -             291             5,518           576
of debt
Other expense       539         (5,983  )      1,954         (5,529    )
(income), net
Total
Non-operating        17,312        4,864           68,968          21,216
Expenses
Income before        40,715        82,665          117,822         205,275
income taxes
Income tax          12,513      29,662        23,833        75,561    
expense
Net Income           28,202        53,003          93,989          129,714
Less: Net
income (loss)
attributable        (1,756  )    621           152           (213      )
to
noncontrolling
interests
Net Income
Attributable       $ 29,958     $ 52,382       $ 93,837       $ 129,927   
to Common
Stockholders
Earnings per
share:
Basic              $ 1.20       $ 1.98         $ 3.67         $ 4.92      
Diluted            $ 1.19       $ 1.97         $ 3.66         $ 4.89      
Weighted
average
shares:
Basic               25,039      26,444        25,541        26,419    
Diluted             25,159      26,615        25,627        26,549    
                                                                             

                                                        
Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(Unaudited)
                                                                            
                                       December 31, 2013     December 31, 2012
Assets
Current Assets
Cash and cash equivalents              $   321,816           $   409,763
Short-term investments                     10,904                10,119
Restricted cash                            6,491                 ―
Accounts receivable, net of
allowance of $1,402 and $3,172,            132,159               127,704
respectively
Prepaid maintenance                        31,620                22,293
Deferred taxes                             54,001                26,390
Prepaid expenses and other current        36,962              36,726     
assets
Total current assets                       593,953               632,995
Property and Equipment
Flight equipment                           2,969,379             2,209,782
Ground equipment                           46,951                39,230
Less: accumulated depreciation             (256,685   )          (185,419   )
Purchase deposits for flight              69,320              147,946    
equipment
Property and equipment, net                2,828,965             2,211,539
Other Assets
Long-term investments and accrued          130,267               140,498
interest
Deposits and other assets                  131,216               132,120
Intangible assets, net                    33,858              35,533     
Total Assets                           $   3,718,259        $   3,152,685  
Liabilities and Equity
Current Liabilities
Accounts payable                       $   65,367            $   20,789
Accrued liabilities                        194,292               152,467
Current portion of long-term              157,486             154,760    
debt^1,2
Total current liabilities                  417,145               328,016
Other Liabilities
Long-term debt^1,2                         1,539,139             1,149,282
Deferred taxes                             373,735               315,949
Other liabilities                         66,115              71,334     
Total other liabilities                    1,978,989             1,536,565
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;
28,200,213 and 27,672,924 shares
issued, 25,038,629 and 26,443,441,         282                   277
shares outstanding (net of
treasury stock), as of December
31, 2013 and December 31, 2012,
respectively
Additional paid-in-capital                 561,481               544,421
Treasury stock, at cost; 3,161,584         (125,826   )          (44,850    )
and 1,229,483 shares, respectively
Accumulated other comprehensive            (10,677    )          (14,263    )
loss
Retained earnings                         892,513             798,676    
Total stockholders’ equity                 1,317,773             1,284,261
Noncontrolling interest                   4,352               3,843      
Total equity                              1,322,125           1,288,104  
Total Liabilities and Equity           $   3,718,259        $   3,152,685  
                                                                            

  ^1  Balance sheet debt at December 31, 2013 totaled $1,696.6 million,
         including the impact of $41.4 million of unamortized discount.
         
    ^2   The face value of our debt at December 31, 2013 totaled $1,738.0
         million, compared with $1,350.8 million on December 31, 2012.

                                    
Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)
                                       
                                       For the Twelve Months Ended
                                       December 31, 2013   December 31, 2012
                                                                 
Operating Activities:
Net Income Attributable to Common      $   93,837            $   129,927
Stockholders
Net income (loss) attributable to         152                 (213       )
noncontrolling interests
Net Income                                 93,989                129,714
Adjustments to reconcile Net
Income to net cash provided by
operating activities:
Depreciation and amortization              101,671               72,194
Accretion of debt securities               (8,889     )          (8,560     )
discount
Provision for allowance for                178                   837
doubtful accounts
Special charge                             18,642                -
Loss on early extinguishment of            5,518                 576
debt
Loss (gain) on disposal of                 351                   (2,417     )
aircraft
Deferred taxes                             22,856                75,365
Stock-based compensation expense           16,690                18,202
Changes in:
Accounts receivable                        (6,029     )          (25,217    )
Prepaid expenses and other current         (4,298     )          48,213
assets
Deposits and other assets                  4,106                 (26,027    )
Accounts payable and accrued              60,215              (24,383    )
liabilities
Net cash provided by operating             305,000               258,497
activities
Investing Activities:
Capital expenditures                       (29,531    )          (31,266    )
Purchase deposits and delivery             (573,416   )          (520,770   )
payments for flight equipment
Changes in restricted cash                 (6,491     )          -
Investment in debt securities              -                     (6,658     )
Proceeds from short-term                   5,569                 4,342
investments
Proceeds from insurance                    9,109                 3,300
Proceeds from disposal of aircraft        4,780               3,215      
Net cash used for investing                (589,980   )          (547,837   )
activities
Financing Activities:
Proceeds from debt issuance                709,484               1,211,560
Refund of accelerated share                21,886                -
repurchase
Prepayment of accelerated share            (21,886    )          -
repurchase
Purchase of treasury stock                 (80,976    )          (3,351     )
Excess tax benefit from                    465                   551
stock-based compensation expense
Payment of debt issuance costs             (19,769    )          (34,141    )
Payments of debt                          (412,171   )         (662,627   )
Net cash provided by financing             197,033               511,992
activities
Net (decrease) increase in cash            (87,947    )          222,652
and cash equivalents
Cash and cash equivalents at the          409,763             187,111    
beginning of period
Cash and cash equivalents at the       $   321,816          $   409,763    
end of period
Non-cash Investing and Financing
Activities:
Acquisition of flight equipment        $   90,498           $   -          
and assumed debt
Acquisition of flight equipment
included in Accounts payable and       $   21,823           $   -          
accrued liabilities
                                                                            

                                              
Atlas Air Worldwide Holdings, Inc.

Direct Contribution

(in thousands)

(Unaudited)
                                                     
                     For the Three Months            For the Twelve Months Ended
                     Ended
                   December 31,  December 31,     December 31,     December 31,
                   2013           2012             2013               2012
Operating
Revenue:
ACMI               $ 202,297      $ 189,343        $ 755,008          $ 682,189
AMC Charter          68,501         111,378          356,340            488,063
Commercial           182,624        144,425          496,112            450,277
Charter
Dry Leasing          13,324         2,979            35,168             11,843
Other               3,855        4,647          14,272           13,660    
Total
Operating          $ 470,601     $ 452,772       $ 1,656,900       $ 1,646,032 
Revenue
Direct
Contribution:
ACMI               $ 70,235       $ 74,924         $ 227,829          $ 191,497
AMC Charter          12,346         23,589           52,489             99,591
Commercial           15,080         16,520           57                 32,079
Charter
Dry Leasing         5,723        631            14,017           4,598     
Total Direct
Contribution       $ 103,384     $ 115,664       $ 294,392         $ 327,765   
for Reportable
Segments
                                                                        
Unallocated
income and           (43,755 )      (32,708 )        (152,059  )        (124,331  )
expenses, net
Special charge       (18,642 )      -                (18,642   )        -
Loss on early
extinguishment       -              (291    )        (5,518    )        (576      )
of debt
Loss (gain) on
disposal of         (272    )     -              (351      )       2,417     
aircraft
Income before       40,715       82,665         117,822          205,275   
Income Taxes
                                                                        
Interest             (4,810  )      (5,007  )        (19,813   )        (19,636   )
income
Interest             21,948         17,934           83,659             64,532
expense
Capitalized          (365    )      (2,371  )        (2,350    )        (18,727   )
interest
Loss on early
extinguishment       -              291              5,518              576
of debt
Other expense       539          (5,983  )       1,954            (5,529    )
(income), net
Operating          $ 58,027      $ 87,529        $ 186,790         $ 226,491   
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, losses (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
                                2013               2012             Change
                                                                    
Net Income Attributable       $ 29,958           $ 52,382           (42.8  %)
to Common Stockholders
After-tax impact from:
Special charge^1                11,714             -
Loss on early                   -                  185
extinguishment of debt^2
Fleet retirement costs^3        -                  159
Insurance gain^4                -                  (4,032    )
Loss (gain) on disposal        174              -               
of aircraft
Adjusted Net Income
Attributable to Common        $ 41,846          $ 48,694          (14.1  %)
Stockholders
                                                                    
Diluted EPS                   $ 1.19             $ 1.97             (39.6  %)
After-tax impact from:
Special charge^1                0.47               -
Loss on early                   -                  0.01
extinguishment of debt^2
Fleet retirement costs^3        -                  0.01
Insurance gain^4                -                  (0.15     )
Loss (gain) on disposal        0.01             -               
of aircraft
Adjusted Diluted EPS          $ 1.66      ^5     $ 1.83      ^5     (9.3   %)
                                                                    
                              For the Twelve Months Ended
                               December 31,      December 31,     Percent
                                2013               2012             Change
                                                                    
Net Income Attributable       $ 93,837           $ 129,927          (27.8  %)
to Common Stockholders
After-tax impact from:
Special charge^1                11,714
Loss on early                   5,160              367
extinguishment of debt^2
Fleet retirement costs^3        -                  2,252
ETI tax benefit                 (14,160   )        -
Insurance gain^4                -                  (4,032    )
Loss (gain) on disposal        224              (1,540    )      
of aircraft
Adjusted Net Income
Attributable to Common        $ 96,775          $ 126,974         (23.8  %)
Stockholders
                                                                    
Diluted EPS                   $ 3.66             $ 4.89             (25.2  %)
After-tax impact from:
Special charge^1                0.46               -
Loss on early                   0.20               0.01
extinguishment of debt^2
Fleet retirement costs^3        -                  0.08
ETI tax benefit                 (0.55     )        -
Insurance gain^4                -                  (0.15     )
Loss (gain) on disposal        0.01             (0.06     )      
of aircraft
Adjusted Diluted EPS          $ 3.78            $ 4.78      ^5     (20.9  %)
                                                                    

^1  Included in Special charge in 2013 are lease termination charges related
     to two 747-400BCFs and an impairment charge for a customer intangible.
     
^2   Loss on early extinguishment of debt was related to the financing of
     747-8F and 777-200LRF aircraft.
     
^3   Fleet retirement costs in 2012 included incremental employee costs
     related to the retirement of our 747-200 fleet.
     
^4   Insurance gain in 2012 related to flood damage at a warehouse.
     
^5   Items may not sum due to rounding.
     

                                    
Atlas Air Worldwide Holdings, Inc.

Reconciliation to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)
                                       
                                       For the Three Months Ended
                                       December 31, 2013   December 31, 2012
                                                                    
Net Cash Provided by Operating         $      97,334         $      60,191
Activities
Less:
Capital expenditures                          4,671                 4,534
Capitalized interest                         365            2,371
Free Cash Flow^1                       $      92,298         $53,286
                                                                    

                                    
                                       For the Twelve Months Ended
                                       December 31, 2013   December 31, 2012
                                                                   
Net Cash Provided by Operating         $     305,000         $     258,497
Activities
Less:
Capital expenditures                         29,531                31,266
Capitalized interest                        2,350           18,727
Free Cash Flow^1                       $     273,119         $     208,504
                                                                   

  ^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           For the Twelve Months
                       Ended                          Ended
                    December 31,  December 31,     December     December
                    2013           2012             31, 2013       31, 2012
                                                                     
Income before       $  40,715      $ 82,665         $ 117,822      $ 205,275
income taxes
Special                18,642        -                18,642         -
Charge^1
Fleet
retirement             -             249              -              3,535
costs^2
Loss on early
extinguishment         -             291              5,518          576
of debt
Insurance              -             (6,329  )        -              (6,329  )
gain^3
Loss (gain) on
disposal of           272          -              351           (2,417  )
aircraft
                                                                     
Adjusted pretax        59,629        76,876           142,333        200,640
income
                                                                     
Interest
(income)               16,773        10,556           61,496         26,169
expense, net
Other
non-operating         539          346            1,954         800     
expenses
(income)
                                                                     
Adjusted
operating              76,941        87,778           205,783        227,609
income
                                                                     
Depreciation
and                   24,549       17,683         86,389        62,475  
amortization
                                                                     
EBITDA, as             101,490       105,461          292,172        290,084
adjusted^4
                                                                     
Aircraft rent         41,662       38,452         160,415       154,968 
                                                                     
EBITDAR, as         $  143,152     $ 143,913       $ 452,587      $ 445,052 
adjusted^5
                                                                             

^1  Included in Special charge in 2013 are lease termination charges related
     to two 747-400BCFs and an impairment charge for a customer intangible.
     
^2   Fleet retirement costs included incremental employee costs related to the
     retirement of our 747-200 fleet.
     
^3   Insurance gain in 2012 related to flood damage at a warehouse.
     
     Adjusted EBITDA: Earnings before interest, taxes, depreciation,
^4   amortization, special charge, fleet retirement costs, loss on early
     extinguishment of debt, insurance gain and loss (gain) on disposal of
     aircraft, as applicable.
     
     Adjusted EBITDAR: Earnings before interest, taxes, depreciation,
^5   amortization, aircraft rent expense, special charge, fleet retirement
     costs, loss on early extinguishment of debt, insurance gain and loss
     (gain) on disposal of aircraft, as applicable.
     

                                                                        
Atlas Air Worldwide Holdings, Inc.

Operating Statistics and Traffic Results

(Unaudited)
                                                                                
                  For the Three                       For the Twelve
                   Months Ended                         Months Ended
                   December 31,          Increase/      December 31,            Increase/
                   2013      2012       (Decrease)     2013       2012        (Decrease)
                                                                                
Block Hours
ACMI               30,084     28,432     1,652          115,358     107,130     8,228
AMC Charter
Cargo              1,036      2,271      (1,235   )     6,331       10,423      (4,092   )
Passenger          2,454      2,902      (448     )     10,718      12,024      (1,306   )
Commercial         9,120      7,204      1,916          25,480      21,965      3,515
Charter
Nonrevenue         395        257        138           1,050       1,165       (115     )
Total Block        43,089     41,066     2,023         158,937     152,707     6,230    
Hours
                                                                                
Revenue Per
Block Hour
ACMI             $ 6,724    $ 6,660    $ 64           $ 6,545   $   6,368     $ 177
AMC Charter        19,628     21,531     (1,903   )     20,901      21,743      (842     )
Cargo              20,328     23,339     (3,011   )     22,299      23,677      (1,378   )
Passenger          19,332     20,115     (783     )     20,075      20,066      9
Commercial         20,025     20,048     (23      )     19,471      20,500      (1,029   )
Charter
                                                                                
Average
Utilization
(block hours
per day)
ACMI^1             9.6        11.2       (1.6     )     10.2        12.0        (1.8     )
AMC Charter
Cargo              10.2       9.9        0.3            6.9         9.2         (2.3     )
Passenger          6.8        7.5        (0.7     )     7.2         8.2         (1.0     )
Commercial         11.0       9.9        1.1           7.9         9.4         (1.5     )
Charter
All
Operating          9.7        10.6       (0.9     )     9.4         11.0        (1.6     )
Aircraft^1,2
                                                                                
Fuel
AMC
Average fuel
cost per         $ 3.35     $ 3.63     $ (0.28    )   $ 3.57    $   3.35      $ 0.22
gallon
Fuel gallons
consumed           8,317      13,270     (4,953   )     42,164      58,178      (16,014  )
(000s)
Commercial
Charter
Average fuel
cost per         $ 3.14     $ 3.27     $ (0.13    )   $ 3.14    $   3.32      $ (0.18    )
gallon
Fuel gallons
consumed           29,575     23,576     5,999          82,785      72,834      9,951
(000s)
                                                                                

         ACMI and All Operating Aircraft averages in the fourth quarter and
  ^1  full-year 2013 reflect the impact of increases in the number of CMI
         aircraft and amount of CMI flying compared with the same periods of
         2012.
         
    ^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                    For the
                 Months Ended                     Twelve Months
                                                  Ended
                 December 31,      Increase/      December 31,      Increase/
                 2013     2012     (Decrease)     2013     2012     (Decrease)
                                                                    
                                                                    
Segment
Operating
Fleet
(average
aircraft
equivalents
during the
period)
ACMI^1
747-8F Cargo     8.0      6.3      1.7            7.8      4.3      3.5
747-400          16.4     15.3     1.1            14.4     16.4     (2.0    )
Cargo^2
767-300          2.0      -        2.0            1.8      -        1.8
Cargo
767-200          5.0      4.5      0.5            5.0      2.5      2.5
Cargo
747-400          1.7      1.1      0.6            1.3      1.1      0.2
Passenger
767-300          -        0.4      (0.4    )      0.2      0.1      0.1
Passenger
767-200          1.0      -        1.0           0.5      -        0.5     
Passenger
Total            34.1     27.6     6.5            31.0     24.4     6.6
AMC Charter
747-400          1.1      2.5      (1.4    )      2.5      2.9      (0.4    )
Cargo
747-200          -        -        -              -        0.2      (0.2    )
Cargo
747-400          1.2      1.8      (0.6    )      1.5      1.7      (0.2    )
Passenger
767-300          2.7      2.4      0.3           2.6      2.3      0.3     
Passenger
Total            5.0      6.7      (1.7    )      6.6      7.1      (0.5    )
Commercial
Charter
747-8F Cargo     0.9      -        0.9            0.6      -        0.6
747-400          7.7      7.6      0.1            7.8      5.8      2.0
Cargo
747-200          -        -        -              -        0.2      (0.2    )
Cargo
747-400          0.1      0.1      -              0.2      0.2      -
Passenger
767-300          0.3      0.2      0.1           0.2      0.2      -       
Passenger
Total            9.0      7.9      1.1            8.8      6.4      2.4
Dry Leasing
777-200          3.0      -        3.0            1.7      -        1.7
Cargo
757-200          1.0      1.0      -              1.0      1.0      -
Cargo
737-300          1.0      1.0      -              1.0      0.4      0.6
Cargo
737-800          2.0      2.0      -             2.0      2.0      -       
Passenger
Total            7.0      4.0      3.0           5.7      3.4      2.3     
Total
Operating        55.1     46.2     8.9           52.1     41.3     10.8    
Aircraft

Out of           1.1      -        1.1            0.9      -        0.9
Service^3
                                                                            

^1  ACMI average fleet excludes spare aircraft provided by CMI customers.
     
     Includes 2.6 and 1.5 Large Cargo Freighters in the three-month periods
^2   ended December 31, 2013 and 2012, respectively. Includes 1.8 and 1.2
     Large Cargo Freighters in the twelve-month periods ended December 31,
     2013 and 2012, respectively.
     
^3   Out-of-service aircraft were temporarily parked during the period and are
     completely unencumbered.

Contact:

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