Atlas Air Worldwide Reports Second-Quarter 2014 Results

  Atlas Air Worldwide Reports Second-Quarter 2014 Results

  *Adjusted Net Income of $15.9 Million, $0.63 per Share
  *Reported Net Income of $29.6 Million, $1.17 per Share
  *Maintaining Full-Year Earnings Outlook

Business Wire

PURCHASE, N.Y. -- July 31, 2014

Atlas Air Worldwide Holdings, Inc. (Nasdaq:AAWW), a leading global provider of
outsourced aircraft and aviation operating services, today announced adjusted
net income attributable to common stockholders of $15.9 million, or $0.63 per
diluted share, for the three months ended June 30, 2014, compared with $20.4
million, or $0.79 per diluted share, for the three months ended June 30, 2013.

On a reported basis, net income attributable to common stockholders in the
second quarter of 2014 totaled $29.6 million, or $1.17 per diluted share,
compared with $20.1 million, or $0.78 per diluted share, in the year-ago
quarter.

“We are off to a good start in 2014. Airfreight demand is improving, and we
are encouraged about our full-year outlook,” said William J. Flynn, President
and Chief Executive Officer. “As we continue to gather additional insight into
second-half yields, demand and military requirements, we are maintaining our
full-year earnings framework.”

Mr. Flynn added: “Atlas is an entrepreneurial company. Our second-quarter
results illustrate the positive contributions being generated by the
investments we’ve made and the initiatives we’ve undertaken. In the face of an
uncertain airfreight market and an anticipated decline in military cargo
demand, we have diversified our business mix and are driving business
resilience.

“Results within our ACMI segment are benefiting from modern 747-8 freighters
as well as an increase in flying for our CMI customers. In Dry Leasing, the
investments we’ve made since early 2013 in attractive 777 freighters on
long-term leases with strong customers are driving a significant increase in
contribution from highly predictable revenue and earnings streams.

“In addition, the expansion of our 767 platform and our growth into military
and commercial passenger charter operations are providing added strength,
complementing the improvement in airfreight demand.

“Led by the strength of our brand, our global market leadership in outsourced
aircraft assets and services, and our ability to work closely with our
customers as they enhance their route networks and grow their businesses, we
are well-positioned to take advantage of market opportunities and improvement
– and to continue our focus on longer-term business growth.”

Adjusted earnings in the second quarter of 2014 exclude an income tax benefit
of $24.0 million, or $0.95 per diluted share, due to beneficial tax planning
related to the tax treatment of extraterritorial income. This was partly
offset by a noncash loss of $9.4 million after tax, or $0.37 per diluted
share, resulting from the trade-in of used spare engines for new engines under
the company’s engine-acquisition program, as well as additional charges
totaling $1.0 million after tax, or $0.04 per diluted share, which were
primarily related to the company’s U.K. affiliate, Global Supply Systems
Limited.

Adjusted earnings in the second quarter of 2013 exclude an after-tax loss of
$0.6 million, or $0.02 per diluted share, on the early extinguishment of debt,
partly offset by an after-tax gain of $0.3 million, or $0.01 per diluted
share, on the disposal of aircraft.

Second-Quarter Results

Profitability in our ACMI business during the second quarter reflected an
increase in 747-8F revenue and an increase in CMI flying, offset by higher
maintenance expense for aircraft operating in this segment.

ACMI revenues benefited from an increase in our average rate per block hour
driven by our 747-8Fs, but were impacted by a decline in block-hour volumes
related to the return of three 8Fs from British Airways in April and early
May. This decline was partially offset by the placement of two of the 8Fs with
DHL Express in May, the start-up of ACMI 8F flying for BST Logistics in
February 2014 and Etihad in May 2013, as well as the start-up of ACMI 747-400
flying for Astral Aviation in September 2013. Block-hour volumes during the
second quarter also reflected an increase in CMI Dreamlifter flying for Boeing
and the initiation of CMI 767-200 passenger aircraft service for MLW Air
during the third quarter of 2013.

In Dry Leasing, revenue and profitability grew following the addition of three
777F aircraft in January 2014 and two in July 2013, which raised our 777F
fleet count to six. Each of these aircraft are leased to customers on a
long-term basis.

In AMC Charter, results benefited from an increase in the volume of passenger
flying on higher-yielding 747-400 aircraft, partially offset by a decrease in
demand for cargo flying. Segment results in Commercial Charter reflected a
decrease in market rates and increases in maintenance and crewmember travel
expense, partially offset by an increase in block-hour volumes.

Reported earnings for the period reflected an effective income tax rate
benefit of 461.0%, driven by tax-planning efforts regarding a federal income
tax benefit related to the treatment of extraterritorial income from the
offshore leasing of certain of our aircraft.

Half-Year Results

For the six months ended June 30, 2014, adjusted net income attributable to
common stockholders totaled $27.3 million, or $1.08 per diluted share,
compared with $26.3 million, or $1.01 per diluted share, for the six months
ended June 30, 2013.

On a reported basis, first-half 2014 net income attributable to common
stockholders totaled $37.5 million, or $1.49 per diluted share, compared with
$40.1 million, or $1.54 per diluted share, in the first half of 2013.

Cash and Short-Term Investments

At June 30, 2014, our cash, cash equivalents, short-term investments and
restricted cash totaled $299.2 million, compared with $339.2 million at
December 31, 2013.

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 the first half of 2014 primarily
related to the purchase of three 777F 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.

Outlook

We are encouraged by our performance in the first half of 2014 and the
positive direction of market trends so far this year.

Airfreight volumes continue to improve, and recent forecasts suggest that
airfreight demand may grow by several percentage points in 2014 – the first
real growth after three essentially flat years. Airfreight yields continue to
lag behind, however, and there is still limited visibility into peak-season
yields, demand and second-half military requirements. As a result, we are
maintaining our earnings outlook for the full year.

On a sequential basis, per-share earnings in the third quarter of this year
should improve over our adjusted second-quarter results by an increment
similar to the increase between our first- and second-quarter adjusted
earnings.

For the full year, we expect total block hours to be comparable to 2013, with
more than 70% in ACMI, approximately 10% in AMC Charter, and the balance in
Commercial Charter. Our Dry Leasing segment should show dramatic growth
compared with 2013. While our share of military flying, mainly in passenger
service, has increased due to a reduction in the number of carriers serving
the market and our ability to capitalize on additional flying opportunities,
we continue to expect an overall decline in military demand, primarily in
cargo, compared with 2013.

We also expect aircraft maintenance expense to total approximately $180
million in 2014, with depreciation of approximately $120 to $125 million. Core
capital expenditures this year are expected to total approximately $45 to $50
million, mainly for spare parts for our expanded fleet.

We remain confident in the resilience of our business model, as well as our
ability to adapt to the market and to leverage the scale and efficiencies in
our operations. The business initiatives we have undertaken and the
investments we have made have enabled the company to deliver meaningful
earnings in any environment.

Should 2014 be the inflection point when growth returns to commercial
airfreight and yields improve, our business initiatives and the investments we
have made have positioned Atlas to be one of the prime beneficiaries.

Conference Call

Management will host a conference call to discuss Atlas Air Worldwide’s
second-quarter 2014 financial and operating results at 11:00 a.m. Eastern Time
on Thursday, July 31, 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 second-quarter call) or at the following Web address:

http://www.media-server.com/m/p/a4o8ndjm

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
August 6 by dialing (855) 859-2056 (domestic) and (404) 537-3406
(international) and using Access Code 70670671#.

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 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 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 Ended    For the Six Months Ended
                       June 30,      June 30,        June 30,      June 30,
                       2014            2013            2014            2013
                                                                         
Operating
Revenue
ACMI                   $ 186,720       $ 181,957       $ 384,861       $ 363,127
AMC Charter              91,281          94,135          154,155         192,172
Commercial               133,953         117,783         248,452         208,883
Charter
Dry Leasing              25,524          6,223           50,200          9,970
Other                   3,691         3,475         6,864         6,757   
Total
Operating              $ 441,169      $ 403,573      $ 844,532      $ 780,909 
Revenue
                                                                         
Operating
Expenses
Aircraft fuel            103,842         102,743         185,586         196,101
Salaries,
wages and                77,948          72,518          150,803         145,049
benefits
Maintenance,
materials and            50,386          43,477          109,432         101,846
repairs
Aircraft rent            34,826          39,854          70,236          78,348
Depreciation
and                      30,381          20,371          58,536          38,179
amortization
Navigation
fees, landing            30,906          18,744          58,032          34,370
fees and other
rent
Passenger and
ground                   21,859          17,300          41,230          34,072
handling
services
Travel                   18,774          13,771          36,056          28,950
Special charge           1,449           -               9,477           -
Loss/(gain) on
disposal of              14,679          (399    )       14,679          (422    )
aircraft
Other                   29,462        26,733        55,678        53,358  
Total
Operating               414,512       355,112       789,745       709,851 
Expenses
Operating               26,657        48,461        54,787        71,058  
Income
                                                                         
Non-operating
Expenses
(Income)
Interest                 (4,719  )       (4,978  )       (9,446  )       (10,154 )
income
Interest                 26,365          20,677          52,817          39,117
expense
Capitalized              (67     )       (292    )       (379    )       (1,694  )
interest
Loss on early
extinguishment           -               994             -               994
of debt
Other expense           (88     )      1,104         64            1,656   
(income), net
Total
Non-operating            21,491          17,505          43,056          29,919
Expenses
(Income)
Income before            5,166           30,956          11,731          41,139
income taxes
Income tax
expense                 (23,815 )      9,993         (21,276 )      73      
(benefit)
                                                                         
Net Income               28,981          20,963          33,007          41,066
Less: Net
income (loss)
attributable
to
noncontrolling          (612    )      903           (4,530  )      928     
interests
Net Income
Attributable
to Common              $ 29,593       $ 20,060       $ 37,537       $ 40,138  
Stockholders
                                                                         
Earnings per
share:
Basic                  $ 1.17         $ 0.78         $ 1.49         $ 1.54    
Diluted                $ 1.17         $ 0.78         $ 1.49         $ 1.54    
                                                                         
Weighted
average
shares:
Basic                   25,241        25,691        25,169        26,009  
Diluted                 25,279        25,716        25,215        26,076  



Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(Unaudited)

                                       June 30, 2014   December 31, 2013
Assets
Current Assets
Cash and cash equivalents                  $ 276,404         $   321,816
Short-term investments                       9,592               10,904
Restricted Cash                              13,215              6,491
Accounts receivable, net of
allowance of $1,618 and $1,402,              162,860             132,159
respectively
Prepaid maintenance                          10,411              31,620
Deferred taxes                               28,977              54,001
Prepaid expenses and other current          30,131            36,962     
assets
Total current assets                         531,590             593,953
Property and Equipment
Flight equipment                             3,474,759           2,969,379
Ground equipment                             49,246              46,951
Less: accumulated depreciation               (304,257  )         (256,685   )
Purchase deposits for flight                5,665             69,320     
equipment
Property and equipment, net                  3,225,413           2,828,965
Other Assets
Long-term investments and accrued            129,092             130,267
interest
Deposits and other assets                    142,012             131,216
Intangible assets, net                      71,957            33,858     
Total Assets                               $ 4,100,064      $   3,718,259  
                                                                 
Liabilities and Equity
Current Liabilities
Accounts payable                           $ 46,094          $   65,367
Accrued liabilities                          233,079             194,292
Current portion of long-term                193,819           157,486    
debt^1,2
Total current liabilities                    472,992             417,145
Other Liabilities
Long-term debt^1,2                           1,876,961           1,539,139
Deferred taxes                               328,707             371,655
Other liabilities                           65,853            68,195     
Total other liabilities                      2,271,521           1,978,989
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;
28,547,138 and
28,200,213 shares issued,
25,256,124 and 25,038,629, shares
outstanding
(net of treasury stock), as of
June 30, 2014 and December 31,               285                 282
2013, respectively
Additional paid-in-capital                   565,310             561,481
Treasury stock, at cost; 3,291,014           (130,203  )         (125,826   )
and 3,161,584 shares, respectively
Accumulated other comprehensive              (9,891    )         (10,677    )
loss
Retained earnings                           930,050           892,513    
Total stockholders’ equity                   1,355,551           1,317,773
Noncontrolling interest                     ―                  4,352      
Total equity                                1,355,551         1,322,125  
Total Liabilities and Equity               $ 4,100,064      $   3,718,259  


^1 Balance sheet debt at June 30, 2014 totaled $2,070.8 million, including the
impact of $38.7 million of unamortized discount.

^2 The face value of our debt at June 30, 2014 totaled $2,109.5 million,
compared with $1,738.0 million on December 31, 2013.


Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

                                           For the Six Months Ended
                                               June 30, 2014   June 30, 2013
                                                                             
Operating Activities:
Net Income Attributable to Common              $  37,537         $  40,138
Stockholders
Net income (loss) attributable to                (4,530   )       928      
noncontrolling interests
Net Income                                        33,007            41,066
Adjustments to reconcile Net Income to
net cash provided by operating
activities:
Depreciation and amortization                     67,195            45,374
Accretion of debt securities discount             (4,081   )        (4,591   )
Provision for allowance for doubtful              232               17
accounts
Special charge                                    7,171             -
Loss on early extinguishment of debt              -                 994
Loss (gain) on disposal of aircraft               14,679            (422     )
Deferred taxes                                    (21,498  )        (548     )
Stock-based compensation expense                  5,805             7,866
Changes in:
Accounts receivable                               (23,248  )        11,844
Prepaid expenses and other current                27,613            9,478
assets
Deposits and other assets                         (4,603   )        481
Accounts payable and accrued                     4,854           15,072   
liabilities
Net cash provided by operating                    107,126           126,631
activities
Investing Activities:
Capital expenditures                              (10,653  )        (19,491  )
Purchase deposits and delivery                    (494,072 )        (342,584 )
payments for flight equipment
Changes in restricted cash                        (6,724   )        -
Proceeds from short-term investments              2,060             4,422
Proceeds from insurance                           -                 9,109
Proceeds from disposal of aircraft               -               2,100    
Net cash used for investing activities            (509,389 )        (346,444 )
Financing Activities:
Proceeds from debt issuance                       572,552           510,808
Refund of accelerated share repurchase            -                 13,510
Maintenance reserves received                     8,757             1,546
Prepayment of accelerated share                   -                 (29,510  )
repurchase
Purchase of treasury stock                        (4,377   )        (73,253  )
Excess tax benefit from stock-based               (1,973   )        465
compensation expense
Payment of debt issuance costs                    (17,087  )        (13,096  )
Payments of debt                                 (201,021 )       (244,645 )
Net cash provided by financing                    356,851           165,825
activities
Net increase (decrease) in cash and               (45,412  )        (53,988  )
cash equivalents
Cash and cash equivalents at the                 321,816         409,763  
beginning of period
Cash and cash equivalents at the end           $  276,404       $  355,775  
of period
                                                                             
Non-cash Investing and Financing
Activities
Acquisition of flight and ground
equipment included in Accounts payable
and                                            $  29,087          -        

accrued liabilities
Disposition of aircraft included in            $  7,000           -        
Accounts receivable



Atlas Air Worldwide Holdings, Inc.

Direct Contribution

(in thousands)

(Unaudited)

                    For the Three Months Ended        For the Six Months Ended
                       June 30,        June 30,           June 30,        June 30,
                       2014               2013               2014               2013
Operating
Revenue:
ACMI                   $ 186,720          $ 181,957          $ 384,861          $ 363,127
AMC Charter              91,281             94,135             154,155            192,172
Commercial               133,953            117,783            248,452            208,883
Charter
Dry Leasing              25,524             6,223              50,200             9,970
Other                   3,691            3,475            6,864            6,757   
Total
Operating              $ 441,169         $ 403,573         $ 844,532         $ 780,909 
Revenue
Direct
Contribution:
ACMI                   $ 44,128           $ 55,063           $ 89,326           $ 95,007
AMC Charter              15,620             12,658             25,088             25,395
Commercial               (6,056  )          (2,480  )          (18,301 )          (11,164 )
Charter
Dry Leasing             8,738            2,437            16,909           3,613   
Total Direct           $ 62,430          $ 67,678          $ 113,022         $ 112,851 
Contribution
                                                                                  
Add back
(subtract):
Unallocated
income and               (41,136 )          (36,127 )          (77,135 )          (71,140 )
expenses, net
Loss on early
extinguishment           -                  (994    )          -                  (994    )
of debt
Special charge           (1,449  )          -                  (9,477  )          -
Loss (gain) on
disposal of             (14,679 )         399              (14,679 )         422     
aircraft
Income before           5,166            30,956           11,731           41,139  
Income Taxes
                                                                                  
Add back
(subtract):
Interest                 (4,719  )          (4,978  )          (9,446  )          (10,154 )
income
Interest                 26,365             20,677             52,817             39,117
expense
Capitalized              (67     )          (292    )          (379    )          (1,694  )
interest
Loss on early
extinguishment           -                  994                -                  994
of debt
Other expense           (88     )         1,104            64               1,656   
(income), net
Operating              $ 26,657          $ 48,461          $ 54,787          $ 71,058  
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
                             June 30,        June 30,       Percent
                              2014                2013              Change
                                                                    
Net Income
Attributable to             $ 29,593            $ 20,060            47.5   %
Common
Stockholders
After-tax impact
from:
ETI tax benefit               (24,013  )          -
Loss (gain) on
disposal of                   9,389               (254     )
aircraft
Special charge^1              658                 -
Accrual for legal             300                 -
matters
Loss on early
extinguishment of            -                 633              
debt^2
Adjusted Net
Income
Attributable to              15,927            20,439           (22.1  %)
Common
Stockholders
                                                                    
Diluted EPS                 $ 1.17              $ 0.78              50.0   %
After-tax impact
from:
ETI tax benefit               (0.95    )          -
Loss (gain) on
disposal of                   0.37                (0.01    )
aircraft
Special charge^1              0.03                -
Accrual for legal             0.01                -
matters
Loss on early
extinguishment of            -                 0.02             
debt^2
Adjusted Diluted             0.63              0.79             (20.3  %)
EPS
                                                                    
                            For the Six Months Ended
                             June 30,           June 30,          Percent
                              2014                2013              Change
                                                                    
Net Income
Attributable to             $ 37,537            $ 40,138            (6.5   %)
Common
Stockholders
After-tax impact
from:
ETI tax benefit               (24,013  )          (14,160  )
Loss (gain) on
disposal of                   9,389               (269     )
aircraft
Special charge^1              4,041               -
Accrual for legal             300                 -
matters
Loss on early
extinguishment of            -                 633              
debt^2
Adjusted Net
Income
Attributable to             $ 27,254           $ 26,342           3.5    %
Common
Stockholders
                                                                    
Diluted EPS                 $ 1.49              $ 1.54              (3.2   %)
After-tax impact
from:
ETI tax benefit               (0.95    )          (0.54    )
Loss (gain) on
disposal of                   0.37                (0.01    )
aircraft
Special charge^1              0.16                -
Accrual for legal             0.01                -
matters
Loss on early
extinguishment of            -                 0.02             
debt^2
Adjusted Diluted            $ 1.08             $ 1.01             6.9    %
EPS


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

^2 Loss on early extinguishment of debt was related to the financing of 747-8F
aircraft.


Atlas Air Worldwide Holdings, Inc.

Reconciliation to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

                                        For the Three Months Ended
                                             June 30, 2014     June 30, 2013
                                             
Net Cash Provided by Operating                  $  61,682      $ 72,242
Activities
Less:
Capital expenditures                               6,558         8,943
Capitalized interest                              67            292
Free Cash Flow^1                                $  55,057      $ 63,007
                                                                 
                                                                 
                                             For the Six Months Ended
                                             June 30, 2014       June 30, 2013
                                                                 
Net Cash Provided by Operating                  $  107,126     $ 126,631
Activities
Less:
Capital expenditures                               10,653        19,491
Capitalized interest                              379           1,694
Free Cash Flow^1                                $  96,094      $ 105,446


^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,        June 30,           June 30,      June 30,
                       2014               2013               2014             2013
                                       
Income before          $ 5,166            $ 30,956           $ 11,731         $ 41,139
income taxes
Loss (gain) on
disposal of              14,679             (399    )          14,679           (422    )
aircraft
Special                  1,449              -                  9,477            -
charge^1
Accrual for              469                -                  469              -
legal matters
Loss on early
extinguishment          -                994              -               994     
of debt^2
                                                                                
Adjusted                 21,763             31,551             36,356           41,711
pretax income
                                                                                
Interest
(income)                 21,579             15,407             42,992           27,269
expense, net
Other
non-operating           (88     )         1,104            64              1,656   
expenses
(income)
                                                                                
Adjusted
operating                43,254             48,062             79,412           70,636
income
                                                                                
Depreciation
and                     30,381           20,371           58,536          38,179  
amortization
                                                                                
EBITDA, as               73,635             68,433             137,948          108,815
adjusted^3
                                                                                
Aircraft rent           34,826           39,854           70,236          78,348  
                                                                                
EBITDAR, as            $ 108,461         $ 108,287         $ 208,184        $ 187,163 
adjusted^4


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

^2 Loss on early extinguishment of debt was related to the financing of 747-8F
aircraft.

^3 Adjusted EBITDA: Earnings before interest, taxes, depreciation,
amortization, special charge, and loss (gain) on disposal of aircraft, as
applicable.

^4 Adjusted EBITDAR: Earnings before interest, taxes, depreciation,
amortization, aircraft rent expense, special charge, loss on early
extinguishment of debt, and loss (gain) on disposal of aircraft, 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/
                       2014       2013         (Decrease)       2014       2013         (Decrease)
                                                                                            
Block Hours
ACMI                   27,652       28,372       (720    )        55,675       56,461       (786     )
AMC Charter
Cargo                  1,167        1,891        (724    )        1,601        3,765        (2,164   )
Passenger              3,165        2,675        490              5,699        5,235        464
Commercial             6,727        6,331        396              12,373       11,050       1,323
Charter
Nonrevenue             299          245          54              535          435          100      
Total Block            39,010       39,514       (504    )        75,883       76,946       (1,063   )
Hours
                                                                                            
Revenue Per
Block Hour
ACMI                 $ 6,752      $ 6,413      $ 339            $ 6,913      $ 6,431      $ 482
AMC Charter            21,071       20,617       455              21,117       21,352       (235     )
Cargo                  23,043       22,615       428              22,608       22,973       (365     )
Passenger              20,344       19,204       1,140            20,698       20,187       511
Commercial             19,913       18,604       1,309            20,080       18,903       1,177
Charter
                                                                                            
Average
Utilization
(block hours
per day)
ACMI^1                 9.4          10.7         (1.3    )        9.4          10.5         (1.1     )
AMC Charter
Cargo                  8.5          7.4          1.1              8.0          7.2          0.8
Passenger              7.7          6.4          1.3              7.0          6.7          0.3
Commercial             8.5          7.5          1.0             8.0          7.4          0.6      
Charter
All
Operating              9.1          9.5          (0.4    )        8.9          9.4          (0.5     )
Aircraft^1,2
                                                                                            
Fuel
AMC
Average fuel
cost per             $ 3.35       $ 3.63       $ (0.28   )      $ 3.34       $ 3.63       $ (0.29    )
gallon
Fuel gallons
consumed               10,470       11,105       (635    )        17,303       22,523       (5,220   )
(000s)
Commercial
Charter
Average fuel
cost per             $ 3.11       $ 3.03       $ 0.08           $ 3.15       $ 3.15       $ -
gallon
Fuel gallons
consumed               22,090       20,628       1,462            40,556       36,254       4,302
(000s)


^1 ACMI and All Operating Aircraft averages in the second quarter and first
six months of 2014 reflect the impact of increases in the number of CMI
aircraft and amount of CMI flying compared with the same periods of 2013.

^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 Six    
                    Months Ended                      Months Ended
                    June 30,           Increase/      June 30,          Increase/
                    2014   2013      (Decrease)     2014   2013     (Decrease)
Segment
Operating
Fleet

(average
aircraft

equivalents
during the

period)
ACMI^1
747-8F              8.3      8.2       0.1            8.5      7.6      0.9
Cargo
747-400             11.7     11.4      0.3            12.1     12.3     (0.2    )
Cargo
747-400             3.3      1.6       1.7            3.2      1.6      1.6
Dreamlifter
767-300             2.0      2.0       -              2.0      1.7      0.3
Cargo
767-200             5.0      5.0       -              5.0      5.0      -
Cargo
747-400             1.0      1.0       -              1.0      1.0      -
Passenger
767-300             -        -         -              -        0.4      (0.4    )
Passenger
767-200             1.0      -         1.0           1.0      -        1.0     
Passenger
Total               32.3     29.2      3.1            32.8     29.6     3.2
AMC Charter
747-400             1.5      2.8       (1.3    )      1.1      2.9      (1.8    )
Cargo
747-400             1.8      1.8       -              1.8      1.8      -
Passenger
767-300             2.7      2.8       (0.1    )      2.7      2.5      0.2     
Passenger
Total               6.0      7.4       (1.4    )      5.6      7.2      (1.6    )
Commercial
Charter
747-8F              0.6      0.3       0.3            0.4      0.1      0.3
Cargo
747-400             7.7      8.6       (0.9    )      7.7      7.9      (0.2    )
Cargo
747-400             0.2      0.2       -              0.2      0.2      -
Passenger
767-300             0.2      0.2       -             0.2      0.1      0.1     
Passenger
Total               8.7      9.3       (0.6    )      8.5      8.3      0.2
Dry Leasing
777-200             6.0      1.0       5.0            5.9      0.6      5.3
Cargo
757-200             1.0      1.0       -              1.0      1.0      -
Cargo
737-300             1.0      1.0       -              1.0      1.0      -
Cargo
737-800             2.0      2.0       -             2.0      2.0      -       
Passenger
Total               10.0     5.0       5.0           9.9      4.6      5.3     
Total
Operating           57.0     50.9      6.1           56.8     49.7     7.1     
Aircraft
                                                                        
                                                                        
Out of              1.0      1.0       -              1.0      0.7      0.3
Service^2


^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.

Contact:

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