10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-16545

Atlas Air Worldwide Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-4146982
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)
2000 Westchester Avenue, Purchase, New York	10577
(Address of principal executive offices)	(Zip Code)

(914) 701-8000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of April 30, 2014, there were 25,231,879 shares of the registrant’s Common Stock outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 (unaudited)		2
	Consolidated Statements of Operations for the Three Months ended March 31, 2014 and 2013 (unaudited)		3
	Consolidated Statements of Comprehensive Income for the Three Months ended March 31, 2014 and 2013 (unaudited)		4
	Consolidated Statements of Cash Flows for the Three Months ended March 31, 2014 and 2013 (unaudited)		5
	Consolidated Statements of Stockholders’ Equity as of and for the Three Months ended March 31, 2014 and 2013 (unaudited)		6
	Notes to Unaudited Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		23
Item 4.	Controls and Procedures		23
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		25
Item 1A.	Risk Factors		25
Item 6.	Exhibits		25
	Signatures		26
	Exhibit Index		27

PART I — FINANCIAL INFORMATION

ITEM  1. FINANCIAL STATEMENTS

Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(Unaudited)

	March 31, 2014			December 31, 2013
Assets
Current Assets
Cash and cash equivalents	$	279,652		$	321,816
Short-term investments		9,572			10,904
Restricted cash		12,537			6,491
Accounts receivable, net of allowance of $1,327 and $1,402, respectively		147,299			132,159
Prepaid maintenance		25,698			31,620
Deferred taxes		28,600			54,001
Prepaid expenses and other current assets		36,317			36,962
Total current assets		539,675			593,953
Property and Equipment
Flight equipment		3,452,605			2,969,379
Ground equipment		48,198			46,951
Less: accumulated depreciation		(280,965	)		(256,685	)
Purchase deposits for flight equipment		43,577			69,320
Property and equipment, net		3,263,415			2,828,965
Other Assets
Long-term investments and accrued interest		130,430			130,267
Deposits and other assets		133,326			131,216
Intangible assets, net		74,251			33,858
Total Assets	$	4,141,097		$	3,718,259
Liabilities and Equity
Current Liabilities
Accounts payable	$	49,724		$	65,367
Accrued liabilities		231,412			194,292
Current portion of long-term debt		195,092			157,486
Total current liabilities		476,228			417,145
Other Liabilities
Long-term debt		1,923,694			1,539,139
Deferred taxes		349,448			371,655
Other liabilities		66,720			68,195
Total other liabilities		2,339,862			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; 28,395,768 and 28,200,213 shares issued, 25,159,601 and 25,038,629, shares outstanding (net of treasury stock), as of March 31, 2014 and December 31, 2013, respectively		284			282
Additional paid-in-capital		562,404			561,481
Treasury stock, at cost; 3,236,167 and 3,161,584 shares, respectively		(128,246	)		(125,826	)
Accumulated other comprehensive loss		(10,407	)		(10,677	)
Retained earnings		900,457			892,513
Total stockholders’ equity		1,324,492			1,317,773
Noncontrolling interest		515			4,352
Total equity		1,325,007			1,322,125
Total Liabilities and Equity	$	4,141,097		$	3,718,259

See accompanying Notes to Unaudited Consolidated Financial Statements

2

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

	For the Three Months Ended
	March 31, 2014			March 31, 2013
Operating Revenue
ACMI	$	198,141		$	181,170
AMC charter		62,874			98,037
Commercial charter		114,499			91,100
Dry leasing		24,676			3,747
Other		3,173			3,282
Total Operating Revenue	$	403,363		$	377,336
Operating Expenses
Aircraft fuel		81,744			93,358
Salaries, wages and benefits		72,855			72,531
Maintenance, materials and repairs		59,046			58,369
Aircraft rent		35,410			38,494
Depreciation and amortization		28,155			17,808
Navigation fees, landing fees and other rent		27,126			15,626
Passenger and ground handling services		19,371			16,772
Travel		17,282			15,179
Special charge		8,029			—
Gain on disposal of aircraft		—			(23	)
Other		26,215			26,625
Total Operating Expenses		375,233			354,739
Operating Income		28,130			22,597
Non-operating Expenses / (Income)
Interest income		(4,727	)		(5,176	)
Interest expense		26,452			18,440
Capitalized interest		(312	)		(1,402	)
Other expense (income), net		152			552
Total Non-operating Expenses (Income)		21,565			12,414
Income before income taxes		6,565			10,183
Income tax expense (benefit)		2,539			(9,920	)
Net Income		4,026			20,103
Less: Net income (loss) attributable to noncontrolling interests		(3,918	)		25
Net Income Attributable to Common Stockholders	$	7,944		$	20,078
Earnings per share:
Basic	$	0.32		$	0.76
Diluted	$	0.32		$	0.76
Weighted average shares:
Basic		25,096			26,330
Diluted		25,151			26,439

See accompanying Notes to Unaudited Consolidated Financial Statements

3

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(Unaudited)

	For the Three Months Ended
	March 31, 2014			March 31, 2013
Net Income	$	4,026		$	20,103
Other comprehensive income (loss):
Interest rate derivatives:
Net change in fair value		(251	)		—
Reclassification into earnings		690			770
Income tax benefit (expense)		(246	)		(279	)
Foreign currency translation:
Translation adjustment		158			(314	)
Other comprehensive income (loss)		351			177
Comprehensive Income		4,377			20,280
Less: Comprehensive income (loss) attributable to noncontrolling interests		(3,837	)		(135	)
Comprehensive Income Attributable to Common Stockholders	$	8,214		$	20,415

See accompanying Notes to Unaudited Consolidated Financial Statements

4

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	For the Three Months Ended
	March 31, 2014			March 31, 2013
Operating Activities:
Net Income Attributable to Common Stockholders	$	7,944		$	20,078
Net income (loss) attributable to noncontrolling interests		(3,918	)		25
Net Income		4,026			20,103
Adjustments to reconcile Net Income to net cash provided by operating activities:
Depreciation and amortization		32,401			21,063
Accretion of debt securities discount		(2,073	)		(2,327	)
Provision for allowance for doubtful accounts		83			(67	)
Special charge		8,029			—
Gain on disposal of aircraft		—			(23	)
Deferred taxes		2,554			(9,848	)
Stock-based compensation expense		1,907			3,644
Changes in:
Accounts receivable		(14,585	)		(6,584	)
Prepaid expenses and other current assets		7,050			7,227
Deposits and other assets		6,724			815
Accounts payable and accrued liabilities		(672	)		20,386
Net cash provided by operating activities		45,444			54,389
Investing Activities:
Capital expenditures		(4,095	)		(10,548	)
Purchase deposits and delivery payments for flight equipment		(478,739	)		(235,492	)
Changes in restricted cash		(6,046	)		—
Proceeds from short-term investments		783			2,426
Proceeds from insurance		—			9,109
Proceeds from disposal of aircraft		—			400
Net cash used for investing activities		(488,097	)		(234,105	)
Financing Activities:
Proceeds from debt issuance		572,552			224,848
Prepayment of accelerated share repurchase		—			(30,000	)
Purchase of treasury stock		(2,420	)		(24,233	)
Excess tax benefit from stock-based compensation expense		(982	)		581
Payment of debt issuance costs		(16,974	)		(357	)
Payments of debt		(151,687	)		(70,575	)
Net cash provided by financing activities		400,489			100,264
Net (decrease) increase in cash and cash equivalents		(42,164	)		(79,452	)
Cash and cash equivalents at the beginning of period		321,816			409,763
Cash and cash equivalents at the end of period	$	279,652		$	330,311
Non-cash Investing and Financing Activities:
Acquisition of flight and ground equipment included in Accounts payable and accrued liabilities	$	41,581		$	—

See accompanying Notes to Unaudited Consolidated Financial Statements

5

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(Unaudited)

	Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
Balance at December 31, 2012	$	277	$	(44,850	)	$	544,421		$	(14,263	)	$	798,676	$	1,284,261		$	3,843		$	1,288,104
Net Income (loss)		—		—			—			—			20,078		20,078			25			20,103
Other comprehensive income (loss)		—		—			—			337			—		337			(160	)		177
Stock-based compensation		—		—			3,644			—			—		3,644			—			3,644
Purchase of 519,185 shares of treasury stock		—		(24,233	)		—			—			—		(24,233	)		—			(24,233	)
Issuance of 232,603 shares of restricted stock		2		—			(2	)		—			—		—			—			—
Prepayment of accelerated share repurchase		—		—			(30,000	)		—			—		(30,000	)		—			(30,000	)
Tax benefit on restricted stock and stock options		—		—			581			—			—		581			—			581
Balance at March 31, 2013	$	279	$	(69,083	)	$	518,644		$	(13,926	)	$	818,754	$	1,254,668		$	3,708		$	1,258,376
	Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Total Stockholders’ Equity			Noncontrolling Interest			Total Equity
Balance at December 31, 2013	$	282	$	(125,826	)	$	561,481		$	(10,677	)	$	892,513	$	1,317,773		$	4,352		$	1,322,125
Net Income (loss)		—		—			—			—			7,944		7,944			(3,918	)		4,026
Other comprehensive income (loss)		—		—			—			270			—		270			81			351
Stock-based compensation		—		—			1,907			—			—		1,907			—			1,907
Purchase of 74,583 shares of treasury stock		—		(2,420	)		—			—			—		(2,420	)		—			(2,420	)
Issuance of 195,555 shares of restricted stock		2		—			(2	)		—			—		—			—			—
Tax benefit on restricted stock and stock options		—		—			(982	)		—			—		(982	)		—			(982	)
Balance at March 31, 2014	$	284	$	(128,246	)	$	562,404		$	(10,407	)	$	900,457	$	1,324,492		$	515		$	1,325,007

See accompanying Notes to Unaudited Consolidated Financial Statements

6

Atlas Air Worldwide Holdings, Inc.

Notes to Unaudited Consolidated Financial Statements

March 31, 2014

1. Basis of Presentation

Our consolidated financial statements include the accounts of the holding company, Atlas Air Worldwide Holdings, Inc. (“AAWW”) and its consolidated subsidiaries. AAWW is the parent company of its principal operating subsidiary, Atlas Air, Inc. (“Atlas”), and of Polar Air Cargo LLC (“Old Polar”). AAWW is also the parent company of several subsidiaries related to our dry leasing services (collectively referred to as “Titan”). In addition, we are the primary beneficiary of Global Supply Systems Limited (“GSS”), a consolidated subsidiary. AAWW has a 51% equity interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). We record our share of Polar’s results under the equity method of accounting.

The terms “we,” “us,” “our,” and the “Company” mean AAWW and all entities included in its consolidated financial statements.

We provide outsourced aircraft and aviation operating services throughout the world, serving Africa, Asia, Australia, Europe, the Middle East, North America and South America through: (i) contractual service arrangements, including those through which we provide aircraft to customers and value-added services, including crew, maintenance and insurance (“ACMI”), as well as those through which we provide crew, maintenance and insurance services, with the customer providing the aircraft (“CMI”); (ii) military charter services provided to the U.S. Military Air Mobility Command (the “AMC”) (“AMC Charter”); (iii) seasonal, commercial and ad hoc charter services (“Commercial Charter”); and (iv) dry leasing of aircraft and engines (“Dry Leasing” or “Dry Lease”).

The accompanying unaudited consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the AAWW Annual Report on Form 10-K for the year ended December 31, 2013, which includes additional disclosures and a summary of our significant accounting policies. In our opinion, the Financial Statements contain all adjustments, consisting of normal recurring items, necessary to fairly state the financial position of AAWW and its consolidated subsidiaries as of March 31, 2014, the results of operations for the three months ended March 31, 2014 and 2013, comprehensive income for the three months ended March 31, 2014 and 2013, cash flows for the three months ended March 31, 2014 and 2013, and shareholders’ equity as of and for the three months ended March 31, 2014 and 2013.

Our quarterly results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

Except for per share data, all dollar amounts are in thousands unless otherwise noted.

Certain reclassifications have been made to prior periods’ unaudited consolidated financial statement amounts and related note disclosures to conform to the current period’s presentation.

7

2. Related Parties

DHL Investment and Polar

DHL Network Operations (USA), Inc. (“DHL”), a subsidiary of Deutsche Post AG (“DP”), holds a 49% equity interest and a 25% voting interest in Polar. Polar is a variable interest entity and we do not consolidate Polar because we are not the primary beneficiary as the risks associated with the direct costs of operation are with DHL. Under a 20-year blocked space agreement (the “BSA”), Polar provides air cargo capacity to DHL. Atlas has several agreements with Polar to provide ACMI, CMI, administrative, sales and ground support services to one another. We do not have any financial exposure to fund debt obligations or operating losses of Polar, except for any liquidated damages that we could incur under these agreements. The following table summarizes our transactions with Polar:

	For the Three Months Ended
	March 31, 2014		March 31, 2013
Revenue and Expenses:
ACMI segment revenue from Polar	$	69,695	$	70,847
Other revenue from Polar	$	2,842	$	2,837
Ground handling and airport fees paid to Polar	$	324	$	327
	March 31, 2014		December 31, 2013
Accounts receivable/payable as of:
Receivables from Polar	$	2,685	$	4,249
Payables to Polar	$	2,780	$	3,464
	March 31, 2014		December 31, 2013
Aggregate Carrying Value of Polar Investment as of:
	$	4,870	$	4,870

GATS

We hold a 50% interest in Global Aviation Technical Solutions Co. Ltd. (“GATS”), a joint venture with an unrelated third party. The purpose of the joint venture is to purchase rotable parts and provide repair services for those parts, primarily for our 747-8F aircraft. The joint venture is a variable interest entity and we have not consolidated GATS because we are not the primary beneficiary as we do not exercise financial control. As of March 31, 2014 and December 31, 2013, our investment in GATS was $13.1 million and $13.2 million, respectively, and our maximum exposure to losses from the entity is limited to our investment, which is comprised primarily of rotable parts. GATS does not have any third-party debt obligations.

3. Special Charge

We hold a 49% interest in GSS, a private company. GSS is a variable interest entity and we are the primary beneficiary of GSS for financial reporting purposes. Atlas dry leases three 747-8F owned aircraft to GSS. The leases provide for payment of rent and a provision for maintenance costs associated with the aircraft. GSS provides ACMI services to British Airways Plc (“British Airways”) using these three aircraft. In January 2014, British Airways notified us that they would be terminating the ACMI agreement and returning three 747-8F aircraft in April 2014. As a result, we recognized $2.3 million of employee termination benefits during the three months ended March 31, 2014, after management determined that such costs were probable and estimable. The employee termination benefits are expected to be paid in the second quarter of 2014. We may recognize additional termination benefit costs in future periods. In addition, we recognized a reserve of $5.1 million related to a loan from GSS to its 51% U.K. shareholder.

During the three months ended March 31, 2014, we recorded an adjustment of $0.6 million to the Special charge related to the early termination of operating leases for two 747-400BCF aircraft that we permanently parked in December 2013. The adjustment was related to additional costs to satisfy return conditions. Substantially all cash payments related to the lease termination costs are expected to be paid by 2015.

A summary of the Special charge liabilities is as follows (in thousands):

	Lease Termination Costs			GSS Employee Termination Benefits		Total
Liability as of December 31, 2013	$	12,773		$	—	$	12,773
Special charge items		637			2,306		2,943
Cash payments		(4,529	)		—		(4,529	)
Liability as of March 31, 2014	$	8,881		$	2,306	$	11,187

8

4. Accrued Liabilities

Accrued liabilities consisted of the following as of:

	March 31, 2014		December 31, 2013
Maintenance	$	102,223	$	43,813
Deferred revenue		24,132		26,279
Salaries, wages and benefits		23,018		36,450
Aircraft fuel		16,688		14,905
Other		65,351		72,845
Accrued liabilities	$	231,412	$	194,292

5. Debt

Ex-Im Bank Guaranteed Notes

In January 2014, we refinanced a bridge loan with a note guaranteed by the Export-Import Bank of the United States (“Ex-Im Bank”) in the amount of $140.6 million secured by a mortgage on a 747-8F aircraft (aircraft tail number N854GT) for a period of 134 months (the “2014 Ex-Im Guaranteed Note”). In connection with entry into this guaranteed note, we paid usual and customary fees. This guaranteed note accrues interest at a fixed rate of 2.67% with principal and interest payable quarterly and contains customary covenants and event of default provisions.

Term Loans

In January 2014, we purchased three 777-200LRF aircraft that are leased to a customer on a long-term basis. We accounted for the purchase as an asset acquisition and recognized a lease intangible of $42.7 million related to the long-term Dry Leases, which will be amortized on a straight-line basis over the life of the leases. As part of the transaction, we entered into six separate term loans in the aggregate amount of $432.0 million each secured by a mortgage on the aircraft and the attached leases (the “2014 Term Loans”). In connection with entry into these term loans, we paid usual and customary fees. The term loans accrue interest with principal and interest payable quarterly and contain customary covenants and event of default provisions.

The following table summarizes the terms and amounts for each term loan (in millions):

	Issue Date		Face Value		Collateral Aircraft Tail Number		Original Term		Interest Rate Type		Interest Rate
First 2014 Term Loan		2014	$	115.0		MSN 38969		114 months		Fixed		4.48	%
Second 2014 Term Loan		2014		30.8		MSN 38969		114 months		Fixed		7.30	%
Third 2014 Term Loan		2014		115.0		MSN 37138		118 months		Fixed		4.57	%
Fourth 2014 Term Loan		2014		29.0		MSN 37138		118 months		Fixed		7.38	%
Fifth 2014 Term Loan		2014		115.0		MSN 39286		116 months		Fixed		4.51	%
Sixth 2014 Term Loan		2014		27.2		MSN 39286		116 months		Fixed		7.35	%
			$	432.0

6. Income Taxes

Our effective income tax rates were an expense of 38.7% for the three months ended March 31, 2014 and a benefit of 97.4% for the three months ended March 31, 2013. The effective rate for the three months ended March 31, 2014 differed from the U.S. federal statutory rate primarily due to losses associated with GSS for which we have recognized a valuation allowance due to the uncertainty that the benefit of the losses will be realized. The effective rate for the three months ended March 31, 2013 differed from the U.S. federal statutory rate primarily due to an income tax benefit of $14.2 million related to extraterritorial income (“ETI”) from certain of our aircraft. The effective rates in both periods also differed from the U.S. federal statutory rate due to the income tax impact of foreign operations taxed at different rates, U.S. state income taxes, the nondeductibility of certain expenses for tax purposes, adjustments to our liability for uncertain tax positions, and the relationship of these items to our projected operating results for the year. For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate.

As a result of current and expected future growth in our Dry Leasing business, we determined that the net earnings of certain foreign subsidiaries engaged in this business will be indefinitely reinvested outside of the U.S. Our effective rate for the three months ended March 31, 2014 was favorably impacted by our assertion to indefinitely reinvest these net earnings. As of March 31, 2014, our undistributed net earnings of foreign subsidiaries for which deferred taxes have not been provided were $18.1 million, and the unrecognized deferred tax liability associated with these earnings was $6.3 million.

9

7. Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy:

Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2	Other inputs that are observable directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, or inactive quoted prices for identical assets or liabilities in inactive markets;
Level 3	Unobservable inputs reflecting assumptions about the inputs used in pricing the asset or liability.

We endeavor to utilize the best available information to measure fair value.

We maintain Cash and cash equivalents, Short-term investments and Restricted cash, which include cash on hand, demand deposits, other cash investments that are highly liquid in nature and have original maturities of three months or less at acquisition, money market funds, certificates of deposit and the current portion of debt securities. The carrying value of Cash and cash equivalents, Short-term investments and Restricted cash is based on cost, which approximates fair value.

Long-term investments consist of debt securities for which we have both the ability and the intent to hold until maturity. These investments are classified as held-to-maturity and reported at amortized cost. The fair value of our Long-term investments is based on a discounted cash flow analysis using the contractual cash flows of the investments and a discount rate derived from unadjusted quoted interest rates for debt securities of comparable risk. Such debt securities represent investments in Pass-Through Trust Certificates related to enhanced equipment trust certificates (“EETCs”) issued by Atlas in 1998, 1999 and 2000. Interest on debt securities and accretion of discounts using the effective interest method are included in Interest income.

The fair value of our EETCs is measured based on Level 3 inputs. Fair value is based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms.

The fair values of our term loans and the Ex-Im Bank guaranteed notes are based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms.

The fair value of our interest rate derivatives was based on Level 2 inputs utilized in expected cash flow models. The market inputs used included the implied forward LIBOR yield curve for the same period as the future interest rate swap settlements. These derivatives were designated as hedging instruments.

The following table summarizes the carrying amount, estimated fair value and classification of our financial instruments as of:

	March 31, 2014
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	279,652	$	279,652	$	279,652	$	—	$	—
Short-term investments		9,572		9,572		—		—		9,572
Restricted cash		12,537		12,537		12,537		—		—
Long-term investments and accrued interest		130,430		175,027		—		—		175,027
	$	432,191	$	476,788	$	292,189	$	—	$	184,599
Liabilities
Term loans	$	1,013,670	$	1,027,847	$	—	$	—	$	1,027,847
Ex-Im Bank guaranteed notes		861,250		838,295		—		—		838,295
EETCs		243,866		318,744		—		—		318,744
	$	2,118,786	$	2,184,886	$	—	$	—	$	2,184,886

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	December 31, 2013
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	321,816	$	321,816	$	321,816	$	—	$	—
Short-term investments		10,904		10,904		—		—		10,904
Restricted cash		6,491		6,491		6,491		—		—
Interest rate derivatives		9,182		9,182		—		9,182		—
Long-term investments and accrued interest		130,267		174,795		—		—		174,795
	$	478,660	$	523,188	$	328,307	$	9,182	$	185,699
Liabilities
Interest rate derivatives	$	7,796	$	7,796	$	—	$	7,796	$	—
Term loans		702,668		701,421		—		—		701,421
Ex-Im Bank guaranteed notes		739,741		718,703		—		—		718,703
EETCs		254,216		329,973		—		—		329,973
	$	1,704,421	$	1,757,893	$	—	$	7,796	$	1,750,097

The following table presents the carrying value, gross unrealized gain (loss) and fair value of our long-term investments by contractual maturity as of:

	March 31, 2014						December 31, 2013
	Carrying Value		Gross Unrealized Gain (Loss)		Fair Value		Carrying Value		Gross Unrealized Gain (Loss)		Fair Value
Debt securities
Due after one but within five years	$	—	$	—	$	—	$	—	$	—	$	—
Due after five but within ten years		130,430		44,597		175,027		130,267		44,528		174,795
Total	$	130,430	$	44,597	$	175,027	$	130,267	$	44,528	$	174,795

8. Segment Reporting

We have the following four reportable segments: ACMI (which includes ACMI and CMI services), AMC Charter, Commercial Charter and Dry Leasing. We use an economic performance metric (“Direct Contribution”) that shows the profitability of each segment after allocation of operating and ownership costs. The following table sets forth Operating Revenue and Direct Contribution for our reportable business segments reconciled to Operating Income and Income before Income Taxes:

	For the Three Months Ended
	March 31, 2014			March 31, 2013
Operating Revenue:
ACMI	$	198,141		$	181,170
AMC Charter		62,874			98,037
Commercial Charter		114,499			91,100
Dry Leasing		24,676			3,747
Other		3,173			3,282
Total Operating Revenue	$	403,363		$	377,336
Direct Contribution:
ACMI	$	45,198		$	39,944
AMC Charter		9,468			12,737
Commercial Charter		(12,245	)		(8,685	)
Dry Leasing		8,171			1,176
Total Direct Contribution		50,592			45,172
Add back (subtract):
Unallocated income and expenses, net		(35,998	)		(35,012	)
Special charge		(8,029	)		—
Gain on disposal of aircraft		—			23
Income before Income Taxes		6,565			10,183

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	For the Three Months Ended
	March 31, 2014			March 31, 2013
Add back (subtract):
Interest income		(4,727	)		(5,176	)
Interest expense		26,452			18,440
Capitalized interest		(312	)		(1,402	)
Other expense (income), net		152			552
Operating Income	$	28,130		$	22,597

We are exposed to a concentration of revenue to the AMC and Polar (see Note 2 for further discussion regarding Polar). No other customer accounted for 10.0% of our Total Operating Revenue. We have not experienced any credit issues with either of these customers.

9. Legal Proceedings

Department of Justice Investigation and Related Litigation

In 2010, Old Polar entered into an agreement with the United States Department of Justice (the “DOJ”) to resolve issues relating to the previously disclosed DOJ investigation concerning alleged manipulation by cargo carriers of fuel surcharges and other rate components for air cargo services (the “DOJ Investigation”).

As a result of the DOJ Investigation, the Company and Old Polar have been named defendants, along with a number of other cargo carriers, in several class actions in the United States arising from allegations about the pricing practices of a number of air cargo carriers that have now been consolidated for pretrial purposes in the United States District Court for the Eastern District of New York. The consolidated complaint alleges, among other things, that the defendants, including the Company and Old Polar, manipulated the market price for air cargo services sold domestically and abroad through the use of surcharges, in violation of United States, state, and European Union antitrust laws. The suit seeks treble damages and injunctive relief.

In 2007, the Company and Old Polar commenced an adversary proceeding in bankruptcy court against each of the plaintiffs in this class action litigation seeking to enjoin the plaintiffs from prosecuting claims against the Company and Old Polar that arose prior to 2004, the date on which the Company and Old Polar emerged from bankruptcy. In 2007, the plaintiffs consented to the injunctive relief requested and the bankruptcy court entered an order enjoining plaintiffs from prosecuting Company claims arising prior to 2004.

The court in the antitrust class actions has heard and decided a number of procedural motions. Among those was the plaintiffs’ motion to join Polar Air Cargo Worldwide, Inc. as an additional defendant, which the court granted on April 13, 2011. There was substantial pretrial written discovery and document production, and a number of depositions were taken. A court hearing on whether or not to certify the case as a class action was held in October 2013 and oral arguments were held in November 2013. We are unable to reasonably predict the court’s ruling or the ultimate outcome of the litigation.

The Company, Old Polar and a number of other cargo carriers have also been named as defendants in civil class action suits in the provinces of British Columbia, Ontario and Quebec, Canada that are substantially similar to the class action suits in the United States. The plaintiffs in the British Columbia case have indicated they do not intend to pursue their lawsuit against the Company and Old Polar. We are unable to reasonably predict the outcome of the litigation in Ontario and Quebec.

If the Company or Old Polar were to incur an unfavorable outcome in connection with one or more of the matters described above, such outcome is not expected to materially affect our business, financial condition, results of operations, and/or cash flows.

Brazilian Customs Claim

Old Polar was cited for two alleged customs violations in Sao Paulo, Brazil, relating to shipments of goods dating back to 1999 and 2000. Each claim asserts that goods listed on the flight manifest of two separate Old Polar scheduled service flights were not on board the aircraft upon arrival and therefore were improperly brought into Brazil. The two claims, which also seek unpaid customs duties, taxes and penalties from the date of the alleged infraction, are approximately $8.7 million in aggregate based on March 31, 2014 exchange rates.

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In both cases, we believe that the amounts claimed are substantially overstated due to a calculation error when considering the type and amount of goods allegedly missing, among other things. Furthermore, we may seek appropriate indemnity from the shipper in each claim as may be feasible. In the pending claim for one of the cases, we have received an administrative decision dismissing the claim in its entirety, which remains subject to a mandatory appeal by the Brazil customs authorities. As required to defend such claims, we have made deposits pending resolution of these matters. The balances were $6.0 million as of March 31, 2014 and $5.7 million as of December 31, 2013, and are included in Deposits and other assets.

We are currently defending these and other Brazilian customs claims and the ultimate disposition of these claims, either individually or in the aggregate, is not expected to materially affect our financial condition, results of operations or cash flows.

Trademark Matters

Since 2005, we have been involved in ongoing litigation in Europe against Atlas Transport, an unrelated and unaffiliated entity, over the use of the name “Atlas”. Following application by us to register the mark “ATLAS AIR” in the European Union (“EU”), opposition from Atlas Transport and follow-up filings by us, the Office for Harmonization in the Internal Market (“OHIM”), which handles trademark matters in the EU, declared Atlas Transport’s own trademark “ATLAS” partially invalid because of the prior existence of our Benelux trademark registration. In 2008, OHIM’s First Board of Appeal upheld the lower panel’s decision, and Atlas Transport appealed that decision to the EU General Court (formally the Court of First Instance), which upheld the court’s decision on May 18, 2011. Atlas Transport appealed that ruling to the European Court of Justice (“ECJ”). On March 9, 2012, the ECJ denied the appeal, bringing to an end that aspect of the OHIM proceedings. The Company’s request for OHIM to resume another aspect of the proceedings remains pending.

In 2007, Atlas Transport also filed a lawsuit in the Netherlands challenging the validity of our Benelux trademark. In 2009, following completion of its proceedings, the court issued a judgment in favor of us. Atlas Transport appealed that decision to the Dutch Court of Appeal, but the judgment took effect immediately upon entry. An appellate hearing was held on March 20, 2014, and the court’s decision is pending.

In 2009, Atlas Transport instituted a trademark infringement lawsuit against us in the regional court in Hamburg, Germany. The amended complaint alleges that Atlas Air has been unlawfully using Atlas Transport’s trademark in Germany without permission and should be required to render information on the scope of use and pay compensation. In a supplementary motion, Atlas Transport asserts a cease and desist claim against Atlas Air, to be considered if the court denies the claim for compensation. On May 31, 2011, the court dismissed the case and Atlas Transport filed an appeal, which remains pending.

We believe that the ultimate disposition of these claims, either individually or in the aggregate, will not materially affect our financial condition, results of operations or cash flows.

Other

We have certain other contingencies incident to the ordinary course of business. Management believes that the ultimate disposition of such other contingencies is not expected to materially affect our financial condition, results of operations or cash flows.

10. Earnings Per Share

Basic earnings per share (“EPS”) represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period. Anti-dilutive options that were out of the money for the three months ended March 31, 2014 and 2013 were de minimis and excluded.

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The calculations of basic and diluted EPS were as follows:

	For the Three Months Ended
	March 31, 2014		March 31, 2013
Numerator:
Net Income Attributable to Common Stockholders	$	7,944	$	20,078
Denominator:
Basic EPS weighted average shares outstanding		25,096		26,330
Effect of dilutive stock options and restricted stock		55		109
Diluted EPS weighted average shares outstanding		25,151		26,439
EPS:
Basic	$	0.32	$	0.76
Diluted	$	0.32	$	0.76

Diluted shares reflect the potential dilution that could occur from stock options and restricted share units using the treasury stock method. The calculation does not include restricted share units in which performance or market conditions were not satisfied of 0.5 million for the three months ended March 31, 2014 and 0.6 million for the three months ended March 31, 2013.

11. Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of Accumulated other comprehensive income (loss):

	Interest Rate Derivatives			Foreign Currency Translation		Total
Balance as of December 31, 2013	$	(11,375	)	$	698	$	(10,677	)
Net change in fair value		(251	)		—		(251	)
Reclassification into earnings		690			—		690
Translation adjustment		—			77		77
Tax effect		(246	)		—		(246	)
Balance as of March 31, 2014	$	(11,182	)	$	775	$	(10,407	)

Interest Rate Derivatives

In December 2013, we entered into six forward-starting interest rate swaps with a total notional value of $432.5 million to hedge the risk of changes in quarterly interest payments due to fluctuations in the forward 90-day LIBOR swap rate for debt issuances. The debt issuances were related to the financing of three Boeing 777-200LRF aircraft that we purchased in January 2014 (see Note 5).

In January 2014, we terminated all six of the forward-starting interest rate swaps in connection with the debt issuances, which converted a previously unrealized gain of $1.1 million into a realized gain in Accumulated other comprehensive income (loss). There was no ineffectiveness associated with these hedges upon their termination.

As of March 31, 2014, there was $18.0 million of net unamortized realized loss before taxes remaining in Accumulated other comprehensive income (loss) related to terminated forward-starting interest rate swaps, which had been designated as cash flow hedges to effectively fix the interest rates on two 747-8F financings in 2011 and the three 777-200LRF financings in 2014. The net loss is amortized and reclassified into Interest expense over the remaining life of the related debt. Net realized losses reclassified into earnings were $0.7 million and $0.8 million for the three months ended March 31, 2014 and 2013, respectively. Net realized losses expected to be reclassified into earnings within the next 12 months are $2.7 million as of March 31, 2014.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited Financial Statements appearing in this report and our audited consolidated financial statements and related notes included in our 2013 Annual Report on Form 10-K.

Glossary

The following represents terms and statistics specific to our business and industry. They are used by management to evaluate and measure operations, results, productivity and efficiency.

Block Hour	The time interval between when an aircraft departs the terminal until it arrives at the destination terminal.
C Check	High-level or “heavy” airframe maintenance checks, which are more intensive in scope than Line Maintenance and are generally performed between 18 and 24 months depending on aircraft type.
D Check	High-level or “heavy” airframe maintenance checks, which are the most extensive in scope and are generally performed every six and eight years depending on aircraft type.
Heavy Maintenance	Scheduled maintenance activities, which are the most extensive in scope and are primarily based on time intervals, including, but not limited to, C Checks, D Checks and engine overhauls.
Line Maintenance	Unscheduled maintenance to rectify events occurring during normal day-to-day operations.
Non-heavy Maintenance	Discrete maintenance activities for the overhaul and repair of specific aircraft components.
Yield	The average amount a customer pays to fly one tonne of cargo one mile.

Business Overview

We are a leading global provider of outsourced aircraft and aviation operating services, operating the world’s largest fleet of Boeing 747 freighters, as well as Boeing 747 and 767 passenger aircraft and Boeing 767 freighters. We also provide Boeing 777 aircraft on a Dry Lease basis. We provide unique value to our customers by giving them access to highly reliable new production freighters that deliver the lowest unit cost in the marketplace combined with outsourced aircraft operating services that we believe lead the industry in terms of quality and global scale. Our customers include airlines, express delivery providers, freight forwarders, the U.S. military and charter brokers. We provide global services with operations in Africa, Asia, Australia, Europe, the Middle East, North America and South America.

Our primary service offerings include the following:

• ACMI, whereby we provide outsourced cargo and passenger aircraft operating solutions, including the provision of an aircraft, crew, maintenance and insurance, while customers assume fuel, demand and Yield risk. The customer is responsible for fuel, landing fees, navigation fees and all other operational fees and costs;

• CMI, which is part of our ACMI business segment, whereby we provide outsourced cargo and passenger aircraft operating solutions including the provision of crew, maintenance and insurance, while customers provide the aircraft and assume fuel, demand and Yield risk. The customer is responsible for fuel, landing fees, navigation fees and all other operational fees and costs;

• AMC Charter, whereby we provide cargo and passenger aircraft charter services for the AMC. The AMC pays a fixed charter fee that includes fuel, insurance, landing fees, navigation fees and all other operational fees and costs;

• Commercial Charter, whereby we provide cargo and passenger aircraft charters to customers, including brokers, sports teams and fans, cruise-ship operators, freight forwarders, direct shippers and airlines. The customer pays a fixed charter fee that includes fuel, insurance, landing fees, navigation fees and all other operational fees and costs; and

• Dry Leasing, whereby we provide cargo and passenger aircraft and engine leasing solutions. The customer operates, and is responsible for insuring and maintaining, the flight equipment.

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We look to achieve our growth plans to enhance stakeholder value by:

• Delivering superior service quality to our valued customers;

• Aggressively managing our fleet with a focus on leading-edge aircraft;

• Focusing on securing long-term customer contracts;

• Driving significant and ongoing productivity improvements; and

• Selectively pursuing and evaluating future acquisitions and alliances.

See “Business Overview” and “Business Strategy” in our 2013 Annual Report on Form 10-K for additional information.

Business Developments

Our ACMI results for the first quarter of 2014, compared to 2013, were positively impacted by the following events:

• In January and February 2013, we began CMI flying two new 767-300ERF aircraft owned by DHL.

• In April 2013, we began ACMI flying a 747-400F aircraft for Chapman Freeborn Airchartering Ltd. (“Chapman Freeborn”), which was the first dedicated 747-400F aircraft in its network.

• In May 2013, we took delivery of a 747-8F aircraft that we placed into ACMI service with Etihad Airways (“Etihad”), which was the first 747-8F aircraft in its global network.

• In July 2013, we began CMI flying a VIP-configured 767-200 passenger aircraft owned by MLW Air, LLC. (“MLW Air”). MLW Air’s 767-200 is the only all-first class 767 commercial charter aircraft with worldwide operations registered with the U.S. Federal Aviation Administration.

• In September 2013, we began ACMI flying a 747-400F for Astral Aviation Limited (“Astral Aviation”), which was the first 747-400F aircraft in its global network.

• In February 2014, we began ACMI flying a 747-8F aircraft with BST Logistics (Hong Kong) Company Limited (“BST Logistics”), a business partner of Navitrans International Freight Forwarding Co., Ltd. Service, which was the first 747-8F aircraft in its network.

In January 2014, British Airways notified us that they would be terminating our ACMI agreement and returning three 747-8F aircraft in April 2014. As a result, we have been flying fewer Block Hours for British Airways during 2014. We expect to deploy these aircraft in profitable revenue operations as they are redelivered to us.

AMC Charter Cargo Block Hours have been negatively impacted by reduced demand from the AMC during the first quarter of 2014. This was partially offset by incremental flying as former competitors exited the AMC Charter market.

Commercial Charter Block Hours increased during the first quarter of 2014, reflecting our redeployment of 747-400 aircraft from ACMI during remarketing periods and stronger demand.

As a result of the continuing reduction in AMC Charter cargo demand and volatility in the Commercial Charter market, we continually assess the opportunities for our 747-400 freighter aircraft and will make adjustments to our capacity as necessary. Some of these actions may involve grounding or disposing of aircraft, which could result in asset impairments or other charges in future periods.

In March and July 2013, we purchased three recently-manufactured Boeing 777-200LRF aircraft that are being Dry Leased by Titan to customers on a long-term basis. In January 2014, we purchased three additional recently-manufactured Boeing 777-200LRF aircraft that are being Dry Leased by Titan to a customer on a long-term basis.

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Results of Operations

Three Months Ended March 31, 2014 and 2013

Operating Statistics

The following discussion should be read in conjunction with our Financial Statements and other financial information appearing and referred to elsewhere in this report.

The table below sets forth selected Operating Statistics for the three months ended March 31:

	2014		2013		Increase / (Decrease)			Percent Change
Block Hours
ACMI		28,008		28,089		(81	)		(0.3	)%
AMC Charter:
Cargo		434		1,874		(1,440	)		(76.8	)%
Passenger		2,534		2,561		(27	)		(1.1	)%
Commercial Charter		5,661		4,719		942			20.0	%
Other		236		190		46			24.2	%
Total Block Hours		36,873		37,433		(560	)		(1.5	)%
Revenue Per Block Hour
ACMI	$	7,074	$	6,450	$	624			9.7	%
AMC Charter	$	21,184	$	22,105	$	(921	)		(4.2	)%
Cargo	$	21,440	$	23,334	$	(1,894	)		(8.1	)%
Passenger	$	21,140	$	21,206	$	(66	)		(0.3	)%
Commercial Charter	$	20,226	$	19,305	$	921			4.8	%
Fuel
AMC
Average fuel cost per gallon	$	3.33	$	3.63	$	(0.30	)		(8.3	)%
Fuel gallons consumed (000s)		6,833		11,418		(4,585	)		(40.2	)%
Commercial Charter
Average fuel cost per gallon	$	3.19	$	3.32	$	(0.13	)		(3.9	)%
Fuel gallons consumed (000s)		18,496		15,627		2,869			18.4	%

Segment Operating Fleet (average aircraft equivalents during the period)

	2014		2013		Increase / (Decrease)
ACMI*
747-8F Cargo		8.7		7.0		1.7
747-400 Cargo		12.5		13.1		(0.6	)
747-400 LCF		3.1		1.6		1.5
767-300 Cargo		2.0		1.4		0.6
767-200 Cargo		5.0		5.0		—
747-400 Passenger		1.0		1.0		—
767-200 Passenger		1.0		—		1.0
767-300 Passenger		—		0.7		(0.7	)
Total		33.3		29.8		3.5
AMC Charter
747-400 Cargo		0.6		3.0		(2.4	)
747-400 Passenger		1.8		1.9		(0.1	)
767-300 Passenger		2.8		2.1		0.7
Total		5.2		7.0		(1.8	)

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	2014		2013		Increase / (Decrease)
Commercial Charter
747-8F Cargo		0.2		—		0.2
747-400 Cargo		7.7		7.2		0.5
747-400 Passenger		0.2		0.1		0.1
767-300 Passenger		0.2		0.1		0.1
Total		8.3		7.4		0.9
Dry Leasing
777-200 Cargo		5.8		0.3		5.5
757-200 Cargo		1.0		1.0		—
737-300 Cargo		1.0		1.0		—
737-800 Passenger		2.0		2.0		—
Total		9.8		4.3		5.5
Total Operating Aircraft		56.6		48.5		8.1
Out-of-service**		1.0		0.5		0.5

* ACMI average fleet excludes spare aircraft provided by CMI customers.

** Out-of-service aircraft are completely unencumbered.

Operating Revenue

The following table compares our Operating Revenue for the three months ended March 31 (in thousands):

	2014		2013		Increase / (Decrease)			Percent Change
Operating Revenue
ACMI	$	198,141	$	181,170	$	16,971			9.4	%
AMC Charter		62,874		98,037		(35,163	)		(35.9	)%
Commercial Charter		114,499		91,100		23,399			25.7	%
Dry Leasing		24,676		3,747		20,929			NM
Other		3,173		3,282		(109	)		(3.3	)%
Total Operating Revenue	$	403,363	$	377,336	$	26,027			6.9	%

NM represents year-over-year changes that are not meaningful.

ACMI revenue increased $17.0 million, or 9.4%, primarily due to the entry of 747-8F aircraft into service in May 2013 and February 2014, and increased CMI flying, partially offset by the redeployment of 747-400 aircraft into Commercial Charter. ACMI Revenue per Block Hour was $7,074 for the first quarter of 2014, compared to $6,450 in 2013, an increase of $624 per Block Hour, or 9.7%. The increase in Revenue per Block Hour was primarily driven by the impact of higher rates on an increased number of 747-8F aircraft, partially offset by lower rates on increased CMI flying. ACMI Block Hours were 28,008 for the first quarter of 2014, which were relatively flat compared to 28,089 in 2013. Block Hours were impacted by the start-up of ACMI 747-8F flying for Etihad in May 2013 and BST Logistics in February 2014, and the start-up of ACMI 747-400 flying for Astral Aviation in September 2013 and Chapman Freeborn in April 2013. Block Hours were also impacted by an increase in CMI flying for Boeing and the start-up of CMI 767-200 passenger aircraft flying for MLW Air during the third quarter of 2013. Offsetting these increases was a reduction in Block Hours from the deployment of certain 747-400 cargo aircraft to Commercial Charter and by a reduction in flying by certain ACMI customers.

AMC Charter revenue decreased $35.2 million, or 35.9%, primarily driven by a reduction in both AMC Charter Cargo Block Hours and Revenue per Block Hour. AMC Charter Block Hours were 2,968 for the first quarter of 2014 compared to 4,435 in 2013, a decrease of 1,467 Block Hours, or 33.1%. The decrease in AMC Charter Block Hours was driven by reduced cargo demand from the AMC, partially offset by incremental flying as former competitors exited the AMC Charter market. AMC Charter Revenue per Block Hour was $21,184 for the first quarter of 2014, compared to $22,105 in 2013, a decrease of $921 per Block Hour, or 4.2%, primarily due to a decrease in the average “pegged” fuel price. For the first quarter of 2014, the AMC average “pegged” fuel price was $3.33 per gallon compared to $3.63 in 2013. The “pegged” fuel price is set by the AMC and the impact to revenue from changes in the “pegged” fuel price is generally offset by a corresponding impact to fuel expense.

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Commercial Charter revenue increased $23.4 million, or 25.7%, primarily due to an increase in Block Hours and Revenue per Block Hour. Commercial Charter Block Hours were 5,661 in the first quarter of 2014, compared to 4,719 in 2013, representing an increase of 942 Block Hours, or 20.0%. The increase in Block Hours was primarily due to the deployment of 747-400 and 747-8F cargo aircraft into Commercial Charter during ACMI marketing periods, as well as increased demand during the first quarter of 2014. Revenue per Block Hour was $20,226 in the first quarter of 2014, compared to $19,305 in 2013, an increase of $921 per Block Hour, or 4.8%. This increase reflects the impact of incremental cargo revenue on subcontracted Commercial Charter flights.

Dry Leasing revenue increased $20.9 million primarily due to the acquisition of three 777-200LRF aircraft in January 2014, two 777-200LRF aircraft in July 2013 and one 777-200LRF aircraft in March 2013 that are being leased to customers on a long-term basis.

Operating Expenses

The following table compares our Operating Expenses for the three months ended March 31 (in thousands):

	2014		2013			Increase / (Decrease)			Percent Change
Operating Expenses
Aircraft fuel	$	81,744	$	93,358		$	(11,614	)		(12.4	)%
Salaries, wages and benefits		72,855		72,531			324			0.4	%
Maintenance, materials and repairs		59,046		58,369			677			1.2	%
Aircraft rent		35,410		38,494			(3,084	)		(8.0	)%
Depreciation and amortization		28,155		17,808			10,347			58.1	%
Navigation fees, landing fees and other rent		27,126		15,626			11,500			73.6	%
Passenger and ground handling services		19,371		16,772			2,599			15.5	%
Travel		17,282		15,179			2,103			13.9	%
Special charge		8,029		—			8,029			NM
Gain on disposal of aircraft		—		(23	)		(23	)		NM
Other		26,215		26,625			(410	)		(1.5	)%
Total Operating Expenses	$	375,233	$	354,739

Aircraft fuel decreased $11.6 million, or 12.4%, primarily due to reduced AMC Charter fuel consumption and fuel price decreases in AMC and Commercial Charter, partially offset by increases in Commercial Charter fuel consumption. AMC Charter fuel consumption decreased by 4.6 million gallons, or 40.2%, primarily reflecting the decrease in Block Hours operated. The average fuel price per gallon for the AMC Charter business was $3.33 in the first quarter of 2014, compared to $3.63 in 2013, a decrease of 8.3%. Commercial Charter fuel consumption increased by 2.9 million gallons, or 18.4%, primarily driven by the increase in Block Hours operated. The average fuel price per gallon for the Commercial Charter business was $3.19 for the first quarter of 2014, compared to $3.32 in 2013, a decrease of 3.9%. We do not incur fuel expense in our ACMI or Dry Leasing businesses as the cost of fuel is borne by the customer.

Maintenance, materials and repairs increased $0.7 million, or 1.2%, primarily driven by an increase of $2.6 million for 747-8F and 747-400 aircraft, partially offset by a decrease of $1.9 million for 767 aircraft. Heavy Maintenance expense on 747-8F and 747-400 aircraft increased approximately $4.2 million primarily due to an increase in the number of D Checks in 2014, partially offset by a reduction in the number of engine overhauls and C Checks. Heavy Maintenance expense on 767 aircraft decreased approximately $2.0 million primarily due to a decrease in the number of C Checks in 2014. Non-heavy Maintenance expense on 747-400 aircraft decreased $1.5 million. Line Maintenance expense on all aircraft types was relatively unchanged. Heavy airframe maintenance events and engine overhauls for the three months ended March 31 were:

Heavy Maintenance Events	2014		2013		Increase / (Decrease)
747-400 C Checks		5		6		(1	)
747-400 D Checks		3		—		3
767 C Checks		—		2		(2	)
CF6-80 engine overhauls		5		7		(2	)

Aircraft rent decreased $3.1 million, or 8.0%, primarily due to the early termination of operating leases for two 747-400BCFs that we permanently parked in December 2013.

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Depreciation and amortization increased $10.3 million, or 58.1%, due to additional aircraft operating in the first quarter of 2014.

Navigation fees, landing fees and other rent increased $11.5 million, or 73.6%, primarily due to an increase in purchased capacity from subcontracting certain Commercial Charter flights and an increase in flights for which we incur these costs. We reclassified purchased capacity from Aircraft rent to Navigation fees, landing fees and other rent and we reclassified previously reported amounts to conform to the current period’s presentation.

Passenger and ground handling services increased $2.6 million, or 15.5%, primarily due to higher rates for ground handling from Commercial Charter flying to more expensive locations.

Travel increased $2.1 million, or 13.9%, primarily due to increased travel related to positioning crewmembers for customer schedule and route changes.

Special charge in 2014 represents a $5.1 million reserve recorded related to a GSS receivable for a loan made to its 51% U.K. shareholder, a $2.3 million expense recorded for termination benefits for certain GSS employees and a $0.6 million adjustment to the early termination of operating leases for two 747-400BCF aircraft that we permanently parked in December 2013 (see Note 3 to our Financial Statements).

Non-operating Expenses (Income)

The following table compares our Non-operating Expenses (Income) for the three months ended March 31 (in thousands):

	2014			2013			Increase / (Decrease)			Percent Change
Non-operating Expenses (Income)
Interest income	$	(4,727	)	$	(5,176	)	$	(449	)		(8.7	)%
Interest expense		26,452			18,440			8,012			43.4	%
Capitalized interest		(312	)		(1,402	)		(1,090	)		(77.7	)%
Other expense (income), net		152			552			400			(72.5	)%

Interest expense increased $8.0 million, or 43.4%, primarily due to an increase in our average debt balances related to the financing of aircraft purchases in 2013 and early 2014.

Capitalized interest decreased $1.1 million, or 77.7%, resulting from 747-8F aircraft that entered service in 2013.

Income taxes. Our effective income tax rates were an expense of 38.7% for the three months ended March 31, 2014 and a benefit of 97.4% for the three months ended March 31, 2013. The effective rate for the three months ended March 31, 2014 differed from the U.S. federal statutory rate primarily due to losses associated with GSS for which we have recognized a limited tax benefit. The effective rate for the three months ended March 31, 2013 differed from the U.S. federal statutory rate primarily due to an income tax benefit of $14.2 million related to ETI from certain of our aircraft.

Segments

The following table compares the Direct Contribution of our reportable segments (see Note 8 to our Financial Statements for the reconciliation to Operating income) for the three months ended March 31 (in thousands):

	2014			2013			Increase / (Decrease)			Percent Change
Direct Contribution:
ACMI	$	45,198		$	39,944		$	5,254			13.2	%
AMC Charter		9,468			12,737			(3,269	)		(25.7	)%
Commercial Charter		(12,245	)		(8,685	)		(3,560	)		41.0	%
Dry Leasing		8,171			1,176			6,995			NM
Total Direct Contribution	$	50,592		$	45,172		$	5,420			12.0	%
Unallocated income and expenses, net	$	35,998		$	35,012		$	986			2.8	%

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ACMI Segment

ACMI Direct Contribution increased $5.3 million, or 13.2%, primarily due to higher profitability on our new 747-8F aircraft and increased CMI flying during the first quarter of 2014, partially offset by the redeployment of 747-400 aircraft into Commercial Charter and an increase in heavy maintenance.

AMC Charter Segment

AMC Charter Direct Contribution decreased $3.3 million, or 25.7%, primarily due to a decrease in cargo Block Hours resulting from lower AMC demand. Partially offsetting this reduction in revenue was a reduction in aircraft ownership costs from the redeployment of 747-400 aircraft to Commercial Charter.

Commercial Charter Segment

Commercial Charter Direct Contribution decreased $3.6 million, or 41.0%, primarily due to increased aircraft ownership costs from the deployment of 747-400 cargo aircraft into this segment, increases in volume-driven operating expenses from flying to more expensive locations and an increase in heavy maintenance on 747-400 aircraft. Partially offsetting these items was stronger demand. Our Commercial Charter quarterly results are subject to seasonal and other fluctuations, and the Direct Contribution for any quarter is not necessarily indicative of the results that may be expected for the entire year.

Dry Leasing Segment

Dry Leasing Direct Contribution increased $7.0 million, primarily due the addition of three 777-200LRF aircraft in early January 2014, two 777-200LRF aircraft in July 2013 and one 777-200LRF in March 2013 that are being leased to customers on a long-term basis.

Unallocated income and expenses, net

Unallocated income and expenses were relatively unchanged.

Reconciliation of GAAP to non-GAAP Financial Measures

To supplement our Financial Statements presented in accordance with GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include Adjusted Net Income Attributable to Common Stockholders and adjusted diluted earnings per share (“Adjusted Diluted EPS”), which exclude certain items that impact year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

We use these non-GAAP financial measures in assessing the performance of our 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 business results and assessing our prospects for future performance.

The following is a reconciliation of Net Income Attributable to Common Stockholders and Diluted EPS to the corresponding non-GAAP measures (in thousands, except per share data):

	For the Three Months Ended
	March 31, 2014		March 31, 2013			Percent Change
Net Income Attributable to Common Stockholders	$	7,944	$	20,078			(60.4	%)
After-tax impact from:
ETI tax benefit		—		(14,160	)
Special charge (a)		3,382		—
Loss (gain) on disposal of aircraft		—		(15	)
Adjusted Net Income Attributable to Common Stockholders	$	11,326	$	5,903			91.9	%

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	For the Three Months Ended
	March 31, 2014		March 31, 2013			Percent Change
Diluted EPS	$	0.32	$	0.76			(57.9	%)
After-tax impact from:
ETI tax benefit		—		(0.54	)
Special charge (a)		0.13		—
Loss (gain) on disposal of aircraft		—		(0.00	)
Adjusted Diluted EPS	$	0.45	$	0.22			104.5	%

a) 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.

Liquidity and Capital Resources

Significant liquidity events in the first quarter of 2014 were as follows:

Debt Transactions

In January 2014, we entered into six separate term loans in the aggregate amount of $432.0 million to finance the purchase of three 777-200LRF aircraft that are leased to a customer on a long-term basis.

In January 2014, we refinanced a bridge loan with an Ex-Im Bank guaranteed note in the amount of $140.6 million secured by a mortgage on a 747-8F aircraft (aircraft tail number N854GT).

Operating Activities. Net cash provided by operating activities for the first quarter of 2014 was $45.4 million, compared to $54.4 million for the first quarter of 2013. The decrease primarily reflects changes in the timing of working capital.

Investing Activities. Net cash used for investing activities was $488.1 million for the first quarter of 2014, consisting primarily of $478.7 million of purchase deposit and delivery payments for flight equipment, a $6.0 million increase in restricted cash and $4.1 million of core capital expenditures, excluding flight equipment, partially offset by $0.8 million of proceeds from short-term investments. Purchase deposit and delivery payments for flight equipment are primarily related to the purchase of three 777-200LRF cargo aircraft. All Capital expenditures for the first quarter of 2014 were funded through working capital, except for the aircraft financed as discussed above. Net cash used for investing activities was $234.1 million for the first quarter of 2013, consisting primarily of $235.5 million of purchase deposit and delivery payments for flight equipment, which included $1.4 million of capitalized interest and $10.5 million of capital expenditures, excluding flight equipment, partially offset by $9.1 million of proceeds from insurance and $2.4 million of proceeds from short-term investments.

Financing Activities. Net cash provided by financing activities was $400.5 million for the first quarter of 2014, which primarily reflected the proceeds from debt issuance of $572.6 million, partially offset by $151.7 million of payments on debt obligations, $17.0 million of debt issuance costs and $2.4 million of treasury stock purchases. The proceeds from debt issuance and payments of debt obligations reflect the refinancing of the $103.6 million bridge loan with the 2014 Ex-Im Guaranteed Note. Net cash provided by financing activities was $100.3 million for the first quarter of 2013, which primarily reflected the proceeds from debt issuance of $224.8 million, partially offset by $70.6 million of payments on debt obligations, a $30.0 million prepayment under an accelerated share repurchase program and $24.2 million of treasury stock purchases.

We consider Cash and cash equivalents, Short-term investments, Restricted cash and Net cash provided by operating activities to be sufficient to meet our debt and lease obligations, to fund capital expenditures for the remainder of 2014 and to repurchase shares of our stock. Core capital expenditures for the remainder of 2014 are expected to be approximately $42.7 million, which excludes flight equipment and capitalized interest.

We may access external sources of capital from time to time depending on our cash requirements, assessments of current and anticipated market conditions, and the after-tax cost of capital. To that end, we filed a shelf registration statement with the SEC in 2012 that enables us to sell a yet to be determined amount of debt and/or equity securities over the

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subsequent three years, depending on market conditions, our capital needs and other factors. Our access to capital markets can be adversely impacted by prevailing economic conditions and by financial, business and other factors, some of which are beyond our control. Additionally, our borrowing costs are affected by market conditions and may be adversely impacted by a tightening in credit markets.

As a result of bonus tax depreciation claimed on aircraft delivered to us in prior years, we do not expect to pay any significant U.S. federal income tax until 2017 or later. Our business operations are subject to income tax in several foreign jurisdictions. We do not expect to pay cash income taxes in any foreign jurisdiction for at least several years. We currently do not intend to repatriate cash from certain foreign subsidiaries that is indefinitely reinvested outside the U.S. Any repatriation of cash from these subsidiaries or certain changes in U.S. tax laws could result in additional tax expense.

Contractual Obligations and Debt Agreements

See Note 5 to our Financial Statements for a description of our new debt obligations: the 2014 Term Loans and the 2014 Ex-Im Guaranteed Note. See our 2013 Annual Report on Form 10-K for a tabular disclosure of our contractual obligations as of December 31, 2013 and a description of our debt obligations and amendments thereto.

Off-Balance Sheet Arrangements

There were no material changes in our off-balance sheet arrangements during the three months ended March 31, 2014.

Recent Accounting Pronouncement

None.

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Report”), as well as other reports, releases and written and oral communications issued or made from time to time by or on behalf of AAWW, contain statements that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements are based on management’s beliefs, plans, expectations and assumptions, and on information currently available to management. Generally, the words “will,” “may,” “should,” “expect,” “anticipate,” “intend,” “plan,” “continue,” “believe,” “seek,” “project,” “estimate” and similar expressions used in this Report that do not relate to historical facts are intended to identify forward-looking statements.

The forward-looking statements in this Report are not representations or guarantees of future performance and involve certain risks, uncertainties and assumptions. Such risks, uncertainties and assumptions include, but are not limited to, those described in our Annual Report on Form 10-K for the year ended December 31, 2013. Many of such factors are beyond AAWW’s control and are difficult to predict. As a result, AAWW’s future actions, financial position, results of operations and the market price for shares of AAWW’s common stock could differ materially from those expressed in any forward-looking statements. Readers are therefore cautioned not to place undue reliance on forward-looking statements. AAWW does not intend to publicly update any forward-looking statements that may be made from time to time by, or on behalf of, AAWW, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For additional discussion of our exposure to market risk, refer to Part II, Item  7A “Quantitative and Qualitative Disclosures About Market Risk” included in our 2013 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, 2014. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

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Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended March 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

With respect to the fiscal quarter ended March 31, 2014, the information required in response to this Item is set forth in Note 9 to our Financial Statements and such information is incorporated herein by reference. Such description contains all of the information required with respect hereto.

ITEM 1A. RISK FACTORS

For additional risk factors that may cause actual results to differ materially from those anticipated, please refer to our 2013 Annual Report on Form 10-K.

ITEM 6. EXHIBITS

a. Exhibits

See accompanying Exhibit Index included after the signature page of this report for a list of exhibits filed or furnished with this report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Atlas Air Worldwide Holdings, Inc.
Dated: May 1, 2014	/s/ William J. Flynn
	William J. Flynn
	President and Chief Executive Officer
Dated: May 1, 2014	/s/ Spencer Schwartz
	Spencer Schwartz
	Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
10.1	Atlas Air Worldwide Holdings, Inc. Annual Incentive Program for Senior Executives
10.2	Form of Performance Share Unit Agreement
10.3	Form of Restricted Stock Unit Agreement
10.4	Atlas Air Worldwide Holdings, Inc. 2014 Long term Cash Incentive Plan
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer, furnished herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer, furnished herewith.
32.1	Section 1350 Certifications, furnished herewith.
101.INS	XBRL Instance Document. *
101.SCH	XBRL Taxonomy Extension Schema Document. *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document. *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. *
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document. *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document. *

* Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013, (ii) Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013, (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2014 and 2013, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013, (v) Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2014 and 2013 and (vi) Notes to Unaudited Consolidated Financial Statements. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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EX-10.1

Exhibit 10.1

ATLAS AIR WORLDWIDE HOLDINGS, INC.

ANNUAL INCENTIVE PROGRAM

FOR SENIOR EXECUTIVES

Amended by Compensation Committee: As of February 18, 2014

ATLAS AIR WORLDWIDE HOLDINGS, INC.

ANNUAL INCENTIVE PROGRAM

FOR SENIOR EXECUTIVES

Purpose.

The purpose of the Program is to set forth certain terms and conditions governing cash awards made under Atlas Air Worldwide Holdings, Inc.’s (“AAWW”) 2007 Incentive Plan, as amended (the “Plan”). The Program shall be treated for all purposes as a sub-plan or arrangement for the grant of Cash Awards under the Plan. Awards under the Program are intended to qualify for the performance-based compensation exception to the limitations on tax deductibility imposed by Section 162(m) of the Code and together with the applicable terms of the Plan and Program shall be construed accordingly. The Program shall be effective as of January 1, 2007, and shall be applicable for the 2007 Program Year and subsequent Program Years during the continuance of the Plan unless amended or terminated by the Committee pursuant to Section 10. Capitalized terms not defined herein shall have the meanings given in the Plan.

Definitions.

Award shall mean an opportunity to earn benefits under the Program.

Atlas shall mean AAWW or its subsidiaries, as applicable.

Base Salary shall mean an Eligible Employee’s actual base salary for the applicable period.

Board shall mean the Board of Directors of AAWW.

Beneficiary shall mean a Participant’s beneficiary designated pursuant to Section 8.

Code shall mean the Internal Revenue Code of 1986, as amended from time to time.

Committee shall mean the Compensation Committee of the Board.

Eligible Employee means any of the Chief Executive Officer, President, Executive Vice Presidents and Senior Vice Presidents of AAWW and such other Atlas senior executive officers as shall be designated by the Committee.

Participant shall mean any Eligible Employee during such Eligible Employee’s period of participation in the Program.

Program shall mean this Atlas Air Worldwide Holdings, Inc. Annual Incentive Program for Senior Executives, as it may be amended from time to time.

Program Year shall mean the calendar year.

Administration.

The Program shall be administered by the Committee. The Committee shall have full power and authority in its sole discretion to construe and interpret the Program, establish and

amend administrative regulations to further the purpose of the Program, determine the extent to which Award payments have been earned by virtue of satisfying the financial goal described in Section 5.2, determine whether to reduce under Sections 5.2(b) through 5.2(e), to the extent that cost control, service reliability, management-business objectives and any other performance criteria have not been satisfied, the amount otherwise payable under Section 5.2, determine whether to settle a portion of the Award in Atlas stock and take any other action necessary to administer the Program. All decisions, actions or interpretations of the Committee shall be final, conclusive, and binding upon all Participants.

Participation.

Each Eligible Employee shall participate in the Program if he or she is employed as an Eligible Employee on the first day of the Program Year. An individual who becomes an Eligible Employee during a Program Year but prior to September 30 of the applicable year will participate only with respect to Base Salary earned on and after the date he or she first becomes an Eligible Employee. Any determination by the Committee to provide incentive compensation to an Eligible Employee other than as described in the preceding two sentences shall be treated as a separate award made outside the Program.

Section 5: Determination of Awards.

Maximum Bonus Award. The maximum bonus payable under an Award for each Program Year will be the lesser of (i) the dollar limit set forth in Section 4.c of the Plan, and (ii) the following percentage of Base Salary for each Participant, as such percentages may be increased by the Committee from time to time: two-hundred percent (200%) of Base Salary for the Chief Executive Officer, one-hundred and seventy percent (170%) for Executive Vice Presidents and one-hundred and fifty percent (150%) of Base Salary for each other Participant.

Performance Measures. Payment under an Award is conditioned upon achievement of the threshold Financial Goal, as described below. If the threshold Financial Goal is achieved, the Award payment will be the maximum bonus amount described in Section 5.1 minus such adjustments, if any, as the Committee determines to be appropriate to reflect levels of achievement with respect to the Financial Goal (if that Goal is achieved at a level below the maximum level) and/or one or more of the other factors described below and/or such other factors as shall be designated by the Committee.

Financial Goal. The financial goal is based on Atlas’s earnings per share. For each Program Year, the threshold earnings per share level (which must be met before any amounts will be payable under Awards), the maximum earnings per share level, intermediate earnings per share levels, and the percentage of each Participant’s target bonus award that will be deemed achieved at each such profit level, will be determined by the Committee.

Cost Control Adjustment. The Committee may reduce maximum Award payments, if any, to reflect the level of achievement of such cost control goal or goals as the Committee may establish for the Program Year.

Service Reliability. The Committee may also reduce maximum Award payments, if any, to reflect the level of achievement of such service reliability factors as the Committee may determine for the Program Year.

Management Business Objectives Adjustment. The Committee may also reduce maximum Award payments, if any, to reflect the level of achievement of such individual management business objectives as the Committee may determine in the case of any Participant for the Program Year.

Effect of Corporate Transactions and other Exigencies. Without limiting the generality of the foregoing, the Committee shall have the authority, to the extent consistent with the requirements for satisfying the performance-based compensation exception under 162(m) of the Code, to identify objectively determinable events (for example, but without limitation, acquisitions or dispositions) which, if they occur, would have a material effect on objective Performance Criteria applicable to Awards under the Program, and to adjust such Performance Criteria in an objectively determinable manner to reflect such events.

Payment of Awards under this Program.

General. Subject to Section 6.4, Participant will be entitled to receive payment, if any, under an Award if the Participant is still employed by Atlas on the last day of the Program Year for which the Award is paid, unless in the period between the last day of the Program Year and any payout under the Program, the Participant is terminated by Atlas for Cause (as defined in Section 7) or the Participant terminates his employment with Atlas for any reason. A Participant will receive an Award in the manner and at the times set forth in this Sections 6.

Time of Payment. Any amount payable for an Award for a Program Year shall be paid by Atlas within two weeks following certification by the Committee as to achievement of the performance goals following the completion of the year-end audit for the applicable Program Year, but in no event later than March 15 of the year following the applicable Program Year.

Form of Payment. All amounts payable for an Award shall be paid in cash or Atlas stock, but Atlas stock may be used, if at all, only for the portion of the Award that exceeds fifty percent (50%) of Base Salary.

Termination of Employment.

In General. Except as provided otherwise in this Section 6.4, a Participant whose employment terminates for any reason prior to the last day of the Program Year for which an Award is payable shall forfeit such Award.

Death or Disability. In the event of death or a termination by the Company of the Participant’s employment with the Company or its Subsidiaries (a “Termination of Service”) by reason of the Participant’s Disability, the Committee may, in its sole discretion, direct that all or a portion of a Participant’s Award be paid, taking into account the duration of employment during the Program Year, the Participant’s performance, and such other matters as the Committee shall deem appropriate. For purposes of this Agreement, a termination of Service shall be deemed to be by reason of “Disability” if upon such Termination of Service, the Participant shall have been continuously disabled from performing the duties assigned to the Participant for a period of not less than six consecutive calendar months and such Disability shall be deemed to have commenced on the date following the end of such six consecutive calendar months.

Retirement; Involuntary Termination; Good Reason. If a Participant’s employment terminates during a Program Year by reason of (i) an involuntary termination by Atlas not for Cause (as defined in Section 7 below), (ii) termination by the Participant for Good Reason (as defined below), or (iii) in the sole discretion of the Committee, normal retirement under a retirement program of Atlas, the Participant shall be entitled to receive a payment with respect to an Award for the Program Year in which such termination occurred, as if he or she had been employed by Atlas on the last day of such Program Year in an amount equal to the lesser of (1) the amount he or she would have received if he or she was employed by Atlas on the last day of the Program Year based upon actual company performance measured pursuant to the plan (and assuming for such purpose that 50% of his or her individual Management Business Objectives (“MBOs”) have been achieved), or (2) his or her target bonus percentage. Such payment shall be subject to all terms and conditions of the Program, including without limitation the provisions of Section 5 (relating to determination of the Award) and Section 6.2 (relating to the time of payment of the Award). “Good Reason” under this Section 6 shall mean (i) a material reduction in Participant’s duties and responsibilities from those of Participant’s most recent position with Atlas, or (ii) a reduction of Participant’s aggregate salary, benefits and other compensation (other than bonus opportunity, which shall be paid as provided above) from that which the Participant was most recently entitled during employment with Atlas other than in connection with a reduction as part of a general reduction applicable to all participants in the Program. This Section 6.4 shall not apply to the extent the rights of a Participant in such circumstances are governed by another agreement.

Change in Control.

In the event Atlas undergoes a Change in Control, Awards will be determined and paid in accordance with this Section 7 based on the assumption that each of the Financial Goal, the Cost Control Goal, the MBOs and any other Performance Criteria under Section 2 have been achieved at a level of 100% of target for the Plan Year in which the Change in Control takes place pursuant to Section 5 of the Program; provided, however, if upon completion of the year-end audit for the applicable Program Year it is determined that the Financial Goal or any other Performance Criteria was achieved at a level higher than 100% of target, Awards will be correspondingly adjusted pursuant to Section 5 of the Program. Notwithstanding the above, a Participant whose employment with Atlas terminates prior to the Change in Control shall forfeit such Award, unless such termination is by reason of (i) death, (ii) Disability, (iii) normal retirement under a retirement program of Atlas, (iv) by Atlas not for Cause, or (v) by the Participant for Good Reason (as defined below). For purposes of this Program, “Change in Control of Atlas” shall mean a “change in control event” (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations) with respect to the Company, which generally will include the following events, subject to such additional rules and requirements as may be set forth in the Treasury Regulations and related guidance:

(1) a transfer or issuance of stock of the Company, where stock in the Company remains outstanding after the transaction, and one person, or more than one person acting as a group (as determined under the Treasury Regulations), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair

market value or total voting power of the stock of the Company (however, if a person or group is considered to own more than 50% of the total fair market value or 30% of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not be considered a change in control for purposes of this Section 7);

(2) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of ownership of stock possessing 30% or more of the total voting power of the Company (however, if a person or group is considered to control the Company within the meaning of this sentence (i.e., owns stock of the Company possessing 30% of the total voting power of the Company), then the acquisition of additional control will not be considered a change in control for purposes of this Section 7);

(3) the replacement of a majority of members of the Company’s Board of Directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the appointment or election; or

(4) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company, as determined under the Treasury Regulations (however, a transfer of assets to certain related persons, as provided under the Treasury Regulations, or to an entity that is controlled by the shareholders of the Company immediately after the transfer, will not be considered a change in control for purposes of this Section 7).s. For purposes of this Program, “Continuing Directors” shall mean the directors of Atlas on the date hereof and each other director, if such other director’s nomination for election to the Board of Directors of Atlas is recommended by a majority of the then Continuing Directors. “Cause” shall mean (i) the Participant’s refusal or failure (other than during periods of illness or Disability (as defined in the Plan)) to perform his or her material duties and responsibilities to Atlas, (ii) the conviction or plea of guilty or nolo contendere of the Participant in respect of any felony, other than a motor vehicle offense, (iii) the commission of any act which causes material injury to the reputation, business or business relationships of Atlas including, without limitation, any material breach of written policies of Atlas with respect to trading in securities, (iv) other acts of fraud in connection with the Participant’s duties and responsibilities to Atlas, including, without limitation, misappropriation, theft or embezzlement in the performance of the Participant’s duties and responsibilities as an employee of Atlas, or (v) a violation of any material Atlas policy, including, without limitation, a violation of the laws against workplace discrimination. “Good Reason” under this Section 7 shall mean the failure of the surviving entity in the Change in Control, of failure of an affiliate of the surviving entity, to continue the Participant in a position with the surviving entity or affiliate that (a) is not located within 40 miles of the location of such Participant’s most recent principal location of employment with Atlas, (ii) does not involve substantially comparable duties and responsibilities as such Participant’s most recent position with Atlas, or (iii) does not entitle the Participant to salary, benefits and other compensation (other than bonus opportunity, which shall be paid as provided above) that, in the aggregate, are substantially comparable or more favorable than those to which the Participant most recently was entitled during employment with Atlas. This Section 7 shall not apply to the extent the rights of a Participant in such circumstances are governed by another agreement.

Beneficiary Designation.

Designation and Change of Designation. Each Participant shall file with Atlas a written designation of one or more persons as the Beneficiary who shall be entitled to receive the Award, if any, payable under the Program upon the Participant’s death. A Participant may, from time to time, revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with Atlas. The last such designation received by Atlas shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by Atlas prior to the Participant’s death, and in no event shall it be effective as of any date prior to such receipt.

Absence of Valid Designation. If no such Beneficiary designation is in effect at the time of a Participant’s death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with law, the Participant’s estate shall be deemed to have been designated as the Participant’s Beneficiary and shall receive the payment of the amount, if any, payable under the Program upon his death. If Atlas is in doubt as to the right of any person to receive such amount, Atlas may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or Atlas may pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Program and Atlas therefor.

General Provisions.

Plan to be Unfunded. The Program is intended to constitute an unfunded incentive compensation arrangement. Nothing contained in the Program, and no action taken pursuant to the Program, shall create or be construed to create a trust of any kind. A Participant’s right to receive an Award shall be no greater than the right of an unsecured general creditor of Atlas. All Awards shall be paid from the general funds of Atlas, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such Awards. There shall not vest in any Participant or Beneficiary any right, title, or interest in and to any specific assets of Atlas.

Section 409A of the Code. Awards under the Program are intended to be exempt from the requirements of Section 409A of the Code and shall be construed and administered accordingly. Notwithstanding anything to the contrary in the Program, neither Atlas, nor any affiliate, nor the Committee, nor any person acting on behalf of Atlas, any affiliate, or the Committee, shall be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of an Award to satisfy the requirements of Section 409A or by reason of Section 4999 of the Code; provided, that nothing in this Section 9.3 shall limit the ability of the Committee or Atlas to provide by separate express written agreement with a Participant for a gross-up payment or other payment in connection with any such tax or additional tax.

Rights Limited; Conflicts. Nothing contained in the Program shall give any Eligible Employee the right to continue in the employment of Atlas, or limit the right of Atlas to discharge an Eligible Employee. If there is a conflict between this Program and another senior executive employment program or arrangement, such other program or arrangement shall control.

Governing Law. The Program shall be construed and governed in accordance with the laws of the State of New York.

Taxes. There shall be deducted from all amounts paid under the Program all federal, state, local and other taxes required by law to be withheld with respect to such payments.

Amendment, Suspension, or Termination.

Except with respect to 6.4(c) for any Program Year in effect, the Committee reserves the right to amend, suspend, or terminate the Program at any time.

Awards Subject to Clawback.

Pursuant to the Company’s Executive Compensation Clawback Policy, as the same is in effect following its adoption by the Board and as may be subsequently amended from time to time (the “Clawback Policy”), by his or her acceptance of an Award under the Program, the Participant agrees that the Committee may withhold, and participant will forfeit, compensation otherwise payable under an Award or seek recovery from, and the participant agrees to repay, compensation previously paid under an Award, as the case may be, as provided by the Clawback Policy, or to the extent required to comply with applicable law.

EX-10.2

Exhibit 10.2

ATLAS AIR WORLDWIDE HOLDINGS, INC.

PERFORMANCE SHARE UNIT AGREEMENT

THIS PERFORMANCE SHARE UNIT AGREEMENT, dated as of              , 2014 (the “Agreement”), is between Atlas Air Worldwide Holdings, Inc. (the “Company”), a Delaware corporation, and                      (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2007 Incentive Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows.

1. Award of Performance Share Units. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference and subject to the other provisions of this award, the Employee is hereby awarded              performance share units (“Performance Share Units”), which constitute the right to receive, without payment, (i) up to              shares of common stock of the Company upon the Company’s satisfaction of certain performance criteria as described in Section 2 below (the “Unit Delivered Shares”), and (ii) the right to receive, without payment, additional shares of common stock on the same basis as the Unit Delivered Shares, equal in value (determined as hereafter provided) to the dividends, if any, which would have been paid with respect to the common stock underlying the Unit Delivered Shares had such Unit Delivered Shares been issued to the Employee on the Date of Grant, as defined below (the “Deferred Dividend Shares”), in each case subject to the terms and conditions of the Plan and those set forth herein. For purposes of (ii), the number of Deferred Dividend Shares with respect to any dividend shall be calculated as of the date on which the dividend is paid to holders of Company common stock. For the avoidance of doubt, no shares of Stock (including Deferred Dividend Shares) shall be payable in respect of the Unit Delivered Shares if the Unit Delivered Shares are forfeited, and no Deferred Dividend Shares shall be payable in respect of any dividend for which the record date falls on or after the date on which the Employee or other person entitled to the Unit Delivered Shares becomes the record owner of such shares of Stock for dividend record-date purposes. If the number of shares of Stock (including Deferred Dividend Shares) deliverable with respect to the Performance Share Units includes a fractional share, the value of such fractional share (determined as of the trading day immediately preceding the delivery date described in Section 2(c) or 2(f) below) shall be payable in cash in lieu of such fractional share. Except as otherwise expressly provided, all terms used herein shall have the same meaning as in the Plan.

The Unit Delivered Shares and the Deferred Dividend Shares are collectively referred to herein as the “Performance Share Award” or “this award.” The Performance Share Award is granted on             , 2014 (the “Date of Grant”).

2. Vesting; Delivery of Stock; Termination of Employment.

(a) Vesting Generally. Subject to the following provisions of this Section 2 and the other terms and conditions of this Agreement, the Performance Share Award shall become vested (meaning that the Employee shall be entitled to receive a certain number of

shares of the Company’s common stock (or other consideration to the extent provided in Section 2(f) below)) in respect of each Performance Share Unit as determined pursuant to Section 2(b)) if, and only if: (x) the Employee remains continuously employed by the Company or its subsidiaries from the date hereof until the end of the Performance Period, as defined below, (y) there is a Termination of Employment of the Employee pursuant to Section 2(d) or 2(e), as further provided in such Sections, or (z) the conditions of Section 2(f) are satisfied on or before the last day of the Performance Period.

(b) Determination of Number of Unit Delivered Shares Upon Satisfaction of Performance Criteria. Notwithstanding anything to the contrary in this Agreement but subject to Section 2(f) below, shares of the Company’s common stock underlying the Performance Share Award will only become deliverable by the Company in respect of vested Performance Share Award and only upon satisfaction of the achievement of certain internal ROIC and EBITDA Growth levels as described below (the “Performance Criteria”) during the period beginning January 1, 2014 and ending December 31, 2016 (the “Performance Period”). The number of Delivered Shares and Deferred Dividend Shares in respect of each vested Performance Share Unit, if any, shall be determined in accordance with Annex A hereto (the “Performance Unit Plan Schedule”). Performance Share Units are originally awarded on the basis of one Performance Share Unit to one Unit Delivered Share, subject to adjustment depending on the level of achievement set forth in the Performance Unit Plan Schedule. Intermediate values between specified levels of ROIC and EBITDA are determined by straight line interpolation.

(1) “ROIC” for the Company shall be an average of the Company’s actual ROIC for 2014, 2015 and 2016 and shall mean a fraction where the numerator is NOPAT and the denominator is Average Invested Capital, in each case calculated in accordance with United States generally accepted accounting principles (“GAAP”). “NOPAT” is defined as operating income minus Cash Tax Paid. “Cash Tax Paid” is defined as income taxes as reflected on the income statement minus deferred taxes as reflected on the cash flow statement. “Average Invested Capital” is defined as the average of the beginning and ending Invested Capital during the year. “Invested Capital” is defined as capital lease obligations, plus short and long term debt plus total stockholders’ equity minus an amount equal to cash and cash equivalents. Invested Capital shall exclude investment amounts associated with aircraft acquisition until the first time that such aircraft is flown under a customer contract at which time all amounts accrued with respect to such aircraft shall be considered in the Average Invested Capital calculation from such date. Invested Capital shall be reduced by the amount of any investments held in the Company’s direct or indirect debt securities that remain outstanding and that have not otherwise been defeased.

(2) “EBITDA” for the Company shall mean income from continuing operations before interest, income taxes, depreciation expense and amortization expense. EBITDA Growth shall be calculated by averaging the percentage increase or decrease in EBITDA for each of the three years ended December 31 in the Performance Period. EBITDA increase or decrease for each twelve month period shall be calculated by subtracting EBITDA for the twelve months ended December 31 for the prior year from EBITDA for the twelve months ended December 31 for the current year and dividing the resulting difference in EBITDA by the EBITDA for the twelve months ended December 31 for the prior year.

(3) The calculations for ROIC and EBITDA shall be adjusted for the following non-recurring items to the extent reflected on the Company’s financial statements: (i) any loss or gain resulting from the early extinguishment of debt, (ii) the cumulative effect of a change in accounting principles, (iii) asset impairment charges or (iv) extraordinary items under GAAP. These adjustments shall be made on an “After-tax basis” with respect to ROIC and on a pre-tax basis with respect to EBITDA. “After-tax basis” shall mean the product of the amount of each non-recurring item times the difference between one and the cash tax rate as published in the Company’s annual report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, for the respective fiscal year or 12 month measurement period. The ROIC ratio will exclude the unconsolidated results of Polar Air Cargo Worldwide.

(c) Delivery of Unit Delivered Shares. In connection with the completion of performance, the Committee shall certify, in accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), whether and at what level the Performance Criteria have been achieved. For the purposes of this Agreement, the term “Determination Date” means the date on which the Committee makes such certification. Subject to the terms of this Agreement and satisfaction of any withholding tax liability pursuant to Section 5 hereof, as soon as reasonably practicable following the Determination Date, but in any event no later than March 15, 2017, the Company shall deliver to the Employee a certificate or certificates or shall credit the Employee’s account so as to evidence the number of Unit Delivered Shares and Deferred Dividend Shares, if any, to which the Employee is entitled hereunder, as calculated in accordance with Section 2(b) above.

(d) Death or Disability. In the event of death or a termination by the Company of the Employee’s Employment (a “Termination of Employment”) by reason of the Employee’s Disability occurring after the date hereof, but before the end of the Performance Period and before the occurrence of a Change in Control of the Company (as defined below), the portion of the Performance Share Award that will vest is calculated by dividing the number of days from January 1, 2014 until the date of Disability or death, by the total number of days in the Performance Period, multiplied by the number of Unit Delivered Shares and Deferred Dividend Shares in respect of each Performance Share Unit, if any, earned on the basis of actual achievement level of the Performance Criteria in the Performance Unit Plan Schedule. Any former Employee, upon Disability, or the estate of an Employee, upon death, will continue to hold the vested portion of the Performance Share Award, subject to the restrictions and all terms and conditions of this Agreement, until delivery of Shares pursuant to Section 2(c).

Subject to Section 2(f), the appropriate number of Unit Delivered Shares and Deferred Dividend Shares, if any (calculated as provided in Section 2(b)) shall not be delivered until the completion of the Performance Period and the Determination Date. For purposes of this Agreement, a Termination of Employment shall be deemed to be by reason of “Disability” if upon such Termination of Employment, the Employee shall have been continuously disabled from performing the duties assigned to Employee for a period of not less than six consecutive calendar months and such Disability shall be deemed to have commenced on the date following the end of such six consecutive calendar months.

(e) Termination by the Company Not For Cause. In the event of Termination of Employment of the Employee by reason of an involuntary termination by the

Company and its subsidiaries not for Cause occurring after the date hereof, but before the end of the Performance Period and before the occurrence of a Change in Control of the Company (as defined below), the portion of the Performance Share Award that will vest is calculated by dividing the number of days from January 1, 2014 until the date of the Termination of Employment by reason of an involuntary termination not for Cause, by the total number of days in the Performance Period, multiplied by the number of Unit Delivered Shares and Deferred Dividend Shares in respect of each Performance Share Unit, if any, earned on the basis of actual achievement level of the Performance Criteria in the Performance Unit Plan Schedule. Any former Employee, upon Termination of Employment not for Cause under this Section 2(e), will continue to hold the vested portion of the Performance Share Award, subject to the restrictions and all terms and conditions of this Agreement, until delivery of Shares pursuant to Section 2(c) or 2(f).

Subject to Section 2(f), the appropriate number of Unit Delivered Shares and Deferred Dividend Shares, if any (calculated as provided in Section 2(b) shall not be delivered until the completion of the Performance Period and the Determination Date. For purposes of this Agreement, “Cause” shall mean (i) the Employee’s refusal or failure (other than during periods of illness or disability) to perform the Employee’s material duties and responsibilities to the Company or its subsidiaries, (ii) the conviction or plea of guilty or nolo contendere of the Employee in respect of any felony, other than a motor vehicle offense, (iii) the commission of any act which causes material injury to the reputation, business or business relationships of the Company or any of its subsidiaries including, without limitation, any breach of written policies of the Company with respect to trading in securities, (iv) any other act of fraud, including, without limitation, misappropriation, theft or embezzlement, or (v) a violation of any applicable material policy of the Company or any of its subsidiaries, including, without limitation, a violation of the laws against workplace discrimination.

(f) Change in Control.

(1) Immediately prior to a Change in Control of the Company (as defined below) unless in connection therewith this award is assumed (or a substitute award granted) pursuant to Section 7(a)(1) of the Plan, the Performance Criteria in the Performance Criteria Schedule of this award, if this award is then outstanding, shall be deemed to have been satisfied based on assumed achievement at the 200% achievement level (“Deemed CIC Achievement”) and this award shall be deemed fully vested on such basis. Notwithstanding the immediately preceding sentence, if in connection with the Change in Control of the Company, this award is assumed (or a substitute award granted) pursuant to Section 7(a)(1) of the Plan, this award shall become vested only if (A) the Employee remains continuously employed by the Company or its subsidiaries until the end of the Performance Period, in which case this award will become fully vested at the end of the Performance Period, or (B) there is a Change in Control Termination before the end of the Performance Period, in which case this award will become fully vested immediately prior to the Change in Control Termination. In the case of either (A) or (B), there shall be delivered or paid to the Employee, within ten (10) days following vesting, the Unit Delivered Shares and Deferred Dividend Shares underlying this award, determined on the basis of the Deemed CIC Achievement.

(2) For purposes of this Agreement, the following definitions shall apply:

a. “Change in Control Termination” means the termination of an Employee’s Employment following a Change in Control of the Company (I) by the Company and its subsidiaries not for Cause, (II) by the Employee for “Good Reason” (as defined below), or (III) by reason of the Employee’s death or Disability (as defined in Section 2(d)).

b. “Change in Control of the Company” means a “change in control event” (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations) with respect to the Company, which generally will include the following events, subject to such additional rules and requirements as may be set forth in the Treasury Regulations and related guidance:

(1) a transfer or issuance of stock of the Company, where stock in the Company remains outstanding after the transaction, and one person, or more than one person acting as a group (as determined under the Treasury Regulations), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company (however, if a person or group is considered to own more than 50% of the total fair market value or 30% of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not be considered a change in control for purposes of this Section 2(f));

(2) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of ownership of stock possessing 30% or more of the total voting power of the Company (however, if a person or group is considered to control the Company within the meaning of this sentence (i.e., owns stock of the Company possessing 30% of the total voting power of the Company), then the acquisition of additional control will not be considered a change in control for purposes of this Section 2(f));

(3) the replacement of a majority of members of the Company’s Board of Directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the appointment or election; or

(4) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company, as determined under the Treasury Regulations (however, a transfer of

assets to certain related persons, as provided under the Treasury Regulations, or to an entity that is controlled by the shareholders of the Company immediately after the transfer, will not be considered a change in control for purposes of this Section 2(f)).

c. “Good Reason” means (i) a material reduction in the Employee’s duties and responsibilities from those of the Employee’s most recent position with the Company, (ii) a reduction of the Employee’s aggregate salary, benefits and other compensation (including any incentive opportunity) from that which the Employee was most recently entitled during Employment other than in connection with a reduction as part of a general reduction applicable to all similarly-situated employees of the Company, or (iii) a relocation of the Employee to a position that is located greater than 40 miles from the location of such Employee’s most recent principal location of employment with the Company; provided, however, that the Employee will be treated as having resigned for Good Reason only if he or she provides the Company with a notice of termination within 90 days of the initial existence of one of the conditions described above, following which the Company shall have 30 days from the receipt of the notice of termination to cure the event specified in the notice of termination and, if the Company fails to so cure the event, the Employee must terminate his or her Employment not later than 30 days following the end of such cure period.

(g) Other Terminations of Employment. Except as provided for herein or in the Plan, any Termination of Employment of the Employee occurring prior to the end of the Performance Period (including a Termination of Employment initiated by the employee) shall result in the immediate and automatic termination and forfeiture of the Performance Share Award.

3. Transfer. Any shares of the Company’s common stock underlying the Performance Share Award that are delivered pursuant to Section 2 may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof. This award itself shall not be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part.

4. Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of the common stock underlying the Performance Share Award.

5. Tax Withholding. No shares or cash will be issued or paid under this award unless the Employee pays (or makes provision acceptable to the Company for the prompt payment of) an amount sufficient to allow the Company to satisfy its tax withholding obligations, as determined by the Company. To this end, the Employee shall either:

(a) pay the Company the amount of tax to be withheld (including through payroll withholding if the Company determines that such a payment method is acceptable),

(b) deliver to the Company other shares of Stock owned by the Employee prior to such date having a fair market value, as determined by the Committee, not less than the amount of the withholding tax due, which either have been owned by the Employee for more than six (6) months or were not acquired, directly or indirectly, from the Company,

(c) make a payment to the Company consisting of a combination of cash and such shares of Stock, or

(d) if this award is being settled in Stock, request that the Company cause to be withheld a number of vested shares of Stock having a then fair market value sufficient to discharge minimum required federal, state and local tax withholding (but no greater than such amount).

In no event shall the payment or withholding of taxes be made later than the end of the payment period prescribed in Sections 2(c) or 2(f), as applicable. In the event the Employee fails to timely pay or timely elect withholding of taxes in the manner described in Section 5(a), (b), (c) or (d), the Company reserves the right to withhold cash or a number of vested shares of Stock having a then fair market value sufficient to discharge minimum required federal, state and local tax withholding (but no greater than such amount).

6. References. References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Atlas Air Worldwide Holdings, Inc.

2000 Westchester Avenue

Purchase, New York 10577

Attention: General Counsel

If to the Employee:

At the Employee’s most recent address shown on the Company’s corporate records, or at any other address which the Employee may specify in a notice delivered to the Company in the manner set forth herein.

8. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to principles of conflicts of laws of any jurisdiction which would cause the application of law, other than the State of New York, to be applied.

9. Rights of a Stockholder. The Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Unit Delivered Shares or Deferred Dividend Shares. Once the Unit Delivered Shares and Deferred Dividend Shares vest and the shares of Stock underlying those units or shares have been delivered, but not until such time and only with respect to the shares of Stock so delivered, the Employee shall have the rights of a stockholder, including, but not limited to, the right to vote and to receive dividends.

10. No Right to Continued Employment. This Performance Share Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Performance Share Award interfere with the right of the Company to terminate the Employee’s employment at any time.

11. Provisions of the Plan. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. This Agreement and the awards and grants set forth herein shall be subject to and shall be governed by the terms set forth in the Plan, a copy of which has been furnished to the Employee and which is incorporated by reference into this Agreement. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

12. Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

13. This Agreement and the payment of the Performance Share Award are intended to be exempt from the requirements of Section 409A of the Code and guidance issued thereunder and shall be construed accordingly. Notwithstanding the above, neither the Company, nor any subsidiary, nor the Committee, nor any person acting on behalf of the Company, any subsidiary, or the Committee, shall be liable to the Employee or to the estate or beneficiary of the Employee by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of this Agreement or any payment hereunder to satisfy the requirements of Section 409A of the Code.

[SIGNATURE PAGE FOLLOWS AS A SEPARATE PAGE]

IN WITNESS WHEREOF, the undersigned have executed this Performance Share Unit Agreement as of the date first above written.

ATLAS AIR WORLDWIDE HOLDINGS, INC.
By:
	Name:	Adam R. Kokas
	Title:	Sr. Vice President, General Counsel
		and Chief Human Resources Officer
Employee

EX-10.3

Exhibit 10.3

ATLAS AIR WORLDWIDE HOLDINGS, INC.

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT, dated as of              , 2014 (the “Agreement), between Atlas Air Worldwide Holdings, Inc. (the “Company”), a Delaware corporation, and                      (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2007 Incentive Plan (as amended) (the “Plan”).

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows.

1. Award of Restricted Stock Units. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference and subject to the other provisions of this award, the Employee is hereby awarded              restricted stock units (“Restricted Stock Units”), which constitute the right to receive, without payment, (i)              shares of common stock of the Company (the “Unit Delivered Shares”), and (ii) the right to receive, without payment, additional shares of common stock on the same basis as the Unit Delivered Shares, equal in value (determined as hereafter provided) to the dividends, if any, which would have been paid with respect to the common stock underlying the Unit Delivered Shares had such Unit Delivered Shares been issued to the Employee on the Date of Grant, as defined below (the “Deferred Dividend Shares”), in each case subject to the terms and conditions of the Plan and those set forth herein. For purposes of (ii), the number of Deferred Dividend Shares with respect to any dividend shall be calculated as of the date on which the dividend is paid to holders of Company common stock. For the avoidance of doubt, no shares of Stock (including Deferred Dividend Shares) shall be payable in respect of the Unit Delivered Shares if the Unit Delivered Shares are forfeited, and no Deferred Dividend Shares shall be payable in respect of any dividend for which the record date falls on or after the date on which the Employee or other person entitled to the Unit Delivered Shares becomes the record owner of such shares of Stock for dividend record-date purposes. If the number of shares of Stock (including Deferred Dividend Shares) deliverable with respect to the Restricted Stock Units includes a fractional share, the value of such fractional share (determined as of the trading day immediately preceding the delivery date described in Section 2(d) below) shall be payable in cash in lieu of such fractional share. Except as otherwise expressly provided, all terms used herein shall have the same meaning as in the Plan.

The Unit Delivered Shares and the Deferred Dividend Shares are collectively referred to herein as the “Award” or “this award.” The Award is granted as of             , 2014 (the “Date of Grant”).

2. Vesting of Award; Delivery of Stock, Termination of Employment. Unless otherwise provided by the Committee, the Award under this Agreement shall be subject to the vesting schedule in this Section 2.

1

(a) Vesting. Subject to the following provisions of this Section 2 and the other terms and conditions of this Agreement, the Award shall become vested (meaning that the Employee shall be entitled to receive a certain number of shares of Stock (or other consideration to the extent provided in Section 2(c) below)) on the basis of one Restricted Stock Unit to one share of Stock plus any related Deferred Dividend Shares shall become vested only upon the vesting of the underlying Restricted Stock Unit. The Award will vest, and shares of Stock underlying the Award will only become deliverable, in four annual installments as follows:

Restricted Stock Units shall vest on                 , 2015;

Restricted Stock Units shall vest on                 , 2016;

Restricted Stock Units shall vest on                 , 2017; and

Restricted Stock Units shall vest on                 , 2018.

Except as provided in Section 2(b) and 2(c) below, in the event of termination of the Employee’s Employment prior to the applicable date above, all unvested Restricted Stock Units shall immediately and automatically terminate and be forfeited (and no shares of Stock in respect of such Award that have not previously vested shall thereafter be issued).

(b) Death or Disability. In the event of death or termination by the Company of the Employee’s Employment (a “Termination of Employment”) by reason of the Employee’s Disability occurring after the date hereof and before the occurrence of a Change in Control of the Company (as defined below), the Award shall become immediately and fully vested and shares of Stock will be delivered pursuant to Section 2(d). For purposes of this Agreement, a Termination of Employment shall be deemed to be by reason of “Disability” if upon such Termination of Employment, the Employee shall have been continuously disabled from performing the duties assigned to Employee for a period of not less than six consecutive calendar months and such Disability shall be deemed to have commenced on the date following the end of such six consecutive calendar months.

(c) Change in Control.

(1) Immediately prior to a Change in Control of the Company (as defined below) unless in connection therewith this award is assumed (or a substitute award granted) pursuant to Section 7(a)(1) of the Plan, this award, if then outstanding, shall vest in full. Notwithstanding the immediately preceding sentence, if in connection with the Change in Control of the Company, this award is assumed (or a substitute award granted) pursuant to Section 7(a)(1) of the Plan, this award shall continue to vest pursuant to its terms and there shall be delivered or paid to the Employee, within ten (10) days following vesting, the Unit Delivered Shares and Deferred Dividend Shares underlying this award, except that upon a Change in Control Termination before the occurrence of the last vesting date specified in Section 2(a) above, this award will become fully vested immediately prior to the Change in Control Termination and the corresponding Shares shall be delivered to the Employee pursuant to Section 2(d) below.

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(2) For purposes of this Agreement, the following definitions shall apply:

(a) “Cause” means (i) the Employee’s refusal or failure (other than during periods of illness or disability) to perform the Employee’s material duties and responsibilities to the Company or its subsidiaries, (ii) the conviction or plea of guilty or nolo contendere of the Employee in respect of any felony, other than a motor vehicle offense, (iii) the commission of any act which causes material injury to the reputation, business or business relationships of the Company or any of its subsidiaries including, without limitation, any breach of written policies of the Company with respect to trading in securities, (iv) any other act of fraud, including, without limitation, misappropriation, theft or embezzlement, or (v) a violation of any applicable material policy of the Company or any of its Subsidiaries, including, without limitation, a violation of the laws against workplace discrimination.

(b) “Change in Control Termination” means the termination of an Employee’s Employment following a Change in Control of the Company (I) by the Company and its subsidiaries not for Cause, (II) by the Employee for “Good Reason” (as defined below), or (III) by reason of the Employee’s death or Disability (as defined in Section 2(d)).

(c) “Change in Control of the Company” means a “change in control event” (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations) with respect to the Company, which generally will include the following events, subject to such additional rules and requirements as may be set forth in the Treasury Regulations and related guidance: (1) a transfer or issuance of stock of the Company, where stock in the Company remains outstanding after the transaction, and one person, or more than one person acting as a group (as determined under the Treasury Regulations), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company (however, if a person or group is considered to own more than 50% of the total fair market value or 30% of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not be considered a change in control for purposes of this Section 2(c)); (2) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of ownership of stock possessing 30% or more of the total voting power of the Company (however, if a person or group is considered to control the Company within the meaning of this sentence (i.e., owns stock of the Company possessing 30% of the total voting

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power of the Company), then the acquisition of additional control will not be considered a change in control for purposes of this Section 2(c)); (3) the replacement of a majority of members of the Company’s Board of Directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the appointment or election; or (4) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company, as determined under the Treasury Regulations (however, a transfer of assets to certain related persons, as provided under the Treasury Regulations, or to an entity that is controlled by the shareholders of the Company immediately after the transfer, will not be considered a change in control for purposes of this Section 2(c)).

(d) “Good Reason” means (i) a material reduction in the Employee’s duties and responsibilities from those of the Employee’s most recent position with the Company, (ii) a reduction of the Employee’s aggregate salary, benefits and other compensation (including any incentive opportunity) from that which the Employee was most recently entitled during Employment other than in connection with a reduction as part of a general reduction applicable to all similarly-situated employees of the Company, or (iii) a relocation of the Employee to a position that is located greater than 40 miles from the location of such Employee’s most recent principal location of employment with the Company; provided, however, that the Employee will be treated as having resigned for Good Reason only if he or she provides the Company with a notice of termination within 90 days of the initial existence of one of the conditions described above, following which the Company shall have 30 days from the receipt of the notice of termination to cure the event specified in the notice of termination and, if the Company fails to so cure the event, the Employee must terminate his or her Employment not later than 30 days following the end of such cure period.

(d) Delivery of Shares. Subject to the terms of this Agreement and satisfaction of any withholding tax liability pursuant to Section 5 hereof, as soon as reasonably practicable following a vesting date (including by reason of Section 2(c)(1) above), but in any event no later than March 15 of the year following the year in which the applicable vesting date occurs, the Company shall deliver to the Employee a certificate or shall credit the Employee’s account so as to evidence the number of shares of Stock, if any, to which the Employee is entitled hereunder, as calculated in accordance with this Section 2.

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3. Transfer. Any shares of Stock that are delivered pursuant to Section 2(d) may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof. This award itself shall not be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part.

4. Expenses of Issuance of Stock. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay, and indemnify the Employee from and against any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of the Stock underlying the Award.

5. Tax Withholding. No shares or cash will be issued or paid until the Employee pays (or makes provision acceptable to the Company for the prompt payment of) an amount sufficient to allow the Company to satisfy its tax withholding obligations, as determined by the Company. To this end, the Employee shall either:

(a) pay the Company the amount of tax to be withheld (including through payroll withholding if the Company determines that such payment method is acceptable),

(b) deliver to the Company other shares of Stock owned by the Employee prior to such date having a fair market value, as determined by the Committee, not less than the amount of the withholding tax due, which either have been owned by the Employee for more than six (6) months or were not acquired, directly or indirectly, from the Company,

(c) make a payment to the Company consisting of a combination of cash and such shares of Stock, or

(d) if this award is being settled in Stock, request that the Company cause to be withheld a number of vested shares of Stock having a then-fair market value sufficient to discharge minimum required federal, state and local tax withholding (but no greater than such amount).

In no event shall the payment or withholding of taxes be made later than the end of the payment period prescribed in Section 2(d). In the event the Employee fails to timely pay or timely elect withholding of taxes in the manner described in Section 5(a), (b), (c) or (d), the Company reserves the right to withhold cash or a number of vested shares of Stock having a fair market value sufficient to discharge minimum required federal, state and local withholding (but no greater than such amount).

6. Section 409A Exemption. Awards granted pursuant to this Agreement are intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of

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1986 as amended from time to time and guidance issued thereunder and shall be construed accordingly. Notwithstanding the above, neither the Company, nor any subsidiary, nor the Committee, nor any person acting on behalf of the Company, any subsidiary, or the Committee, shall be liable to the Employee or to the estate or beneficiary of the Employee by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of this Agreement or any payment hereunder to satisfy the requirements of Section 409A of the Code.

7. References. References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

8. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Atlas Air Worldwide Holdings, Inc.

2000 Westchester Avenue

Purchase, New York 10577

Attention: General Counsel

If to the Employee:

At the Employee’s most recent address

shown on the Company’s corporate records,

or at any other address which the Employee

may specify in a notice delivered to the

Company in the manner set forth herein.

9. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to principles of conflicts of laws of any jurisdiction which would cause the application of law, other than the State of New York, to be applied.

10. Rights of a Stockholder. The Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Unit Delivered Shares or Deferred Dividend Shares. Once the Unit Delivered Shares and Deferred Dividend Shares vest and the shares of Stock underlying those units or shares have been delivered, but not until such time and only with respect to the shares of Stock so delivered, the Employee shall have the rights of a stockholder, including, but not limited to, the right to vote and to receive dividends.

11. No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

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12. Provisions of the Plan. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. This Agreement and the awards and grants set forth herein shall be subject to and shall be governed by the terms set forth in the Plan, a copy of which has been furnished to the Employee and which is incorporated by reference into this Agreement. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

13. Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS AS A SEPARATE PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Restricted Stock Unit Agreement as of the date first above written.

ATLAS AIR WORLDWIDE HOLDINGS, INC.
By:
	Name:	Adam R. Kokas
	Title:	Sr. Vice President, General Counsel
		and Chief Human Resources Officer
Employee

EX-10.4

Exhibit 10.4

ATLAS AIR WORLDWIDE HOLDINGS, INC.

2014 LONG TERM CASH INCENTIVE PROGRAM

Approved by Compensation Committee: February 21, 2014

ATLAS AIR WORLDWIDE HOLDINGS, INC.

2014 LONG TERM CASH INCENTIVE PROGRAM

Section 1. Purpose.

The purpose of the Program is to set forth certain terms and conditions governing cash awards made under Atlas Air Worldwide Holdings, Inc.’s (“AAWW” or the “Company”) 2007 Incentive Plan, as amended (the “Plan”). The Program shall be treated for all purposes as a sub-plan or arrangement for the grant of Cash Awards under the Plan and shall be subject to the Plan, which is incorporated herein by reference. Awards under the Program are intended to qualify for the performance-based compensation exception to the limitations on tax deductibility imposed by Section 162(m) of the Code and together with the applicable terms of the Plan and Program shall be construed accordingly. The Program shall be effective as of January 1, 2014, and shall be applicable for the 2014-2016 Performance Period. Capitalized terms not defined herein shall have the meanings given in the Plan.

Section 2. Definitions.

2.1. Award shall mean an opportunity to earn benefits under the Program.

2.2. Atlas shall mean AAWW or its subsidiaries.

2.3. Board shall mean the Board of Directors of AAWW.

2.4. Beneficiary shall mean a Participant’s beneficiary designated pursuant to Section 8.

2.5. Code shall mean the Internal Revenue Code of 1986, as amended from time to time.

2.6. Committee shall mean the Compensation Committee of the Board.

2.7. Determination Date shall have the meaning specified in Section 6.2.

2.8. Eligible Participant means any of the Chief Executive Officer, President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Staff Vice Presidents of Atlas, and such other Atlas officers as may from time to time be designated by the Committee.

2.9. Participant shall mean any Eligible Participant during such Eligible Participant’s period of participation in the Program.

2.10. Performance Period shall mean January 1, 2014 through December 31, 2016.

2.11. Program shall mean this Atlas Air Worldwide Holdings, Inc. 2014 Long Term Cash Incentive Program, as it may be amended from time to time.

Section 3. Administration.

The Program shall be administered by the Committee in accordance with and subject to the provisions of Section 3 of the Plan.

Section 4. Participation.

Each individual who is employed as an Eligible Participant on the first day of the Performance Period shall participate in the Program. An individual who first becomes employed as an Eligible Participant on or prior to September 30, 2014 (March 31, 2014 in the case of an individual whose Award is intended to qualify for the performance-based compensation exception to the limitations on tax deductibility imposed by Section 162(m) of the Code), may participate in the Program in the discretion of the Committee (or, in the case of offices below the level of Senior Vice President, its delegate). An individual employed by Atlas, including an Eligible Participant, may be awarded incentive compensation outside the Program in lieu of or in addition to awards, if any, under the Program.

Section 5. Determination of Awards.

5.1. Target Bonus Award. The target cash bonus payable under an Award for the Performance Period will be the amount established by the Committee (or, in the case of offices below the level of Senior Vice President, its delegate), for each Participant classification (the “Target Bonus Amount”).

5.2. Performance Measures. Payment of a cash bonus Award is conditioned upon written certification by the Committee of satisfaction of the achievement of certain internal ROIC and EBITDA Growth levels as described below (the “Performance Criteria”) during the period beginning January 1, 2014 and ending December 31, 2016 (the “Performance Period”). The actual cash bonus Award amount (the “Payable Amount”) shall be determined in accordance with Annex A hereto (the “Performance Plan Schedule”). Intermediate values between specified levels of ROIC and EBITDA are determined by straight line interpolation. In no event shall the Payable Amount exceed, for any Participant, the maximum amount specified in Section 4(c) of the Plan.

(1) “ROIC” for the Company shall be an average of the Company’s actual ROIC for 2014, 2015 and 2016 and shall mean a fraction where the numerator is NOPAT and the denominator is Average Invested Capital, in each case calculated in accordance with generally accepted accounting principles (“GAAP”). “NOPAT” is defined as operating income minus Cash Tax Paid. “Cash Tax Paid” is defined as income taxes as reflected on the income statement minus deferred taxes as reflected on the cash flow statement. “Average Invested Capital” is defined as the average of the beginning and ending Invested Capital during the year. “Invested Capital” is defined as capital lease obligations, plus short and long term debt plus total stockholders equity minus an amount equal to cash and cash equivalents. Invested Capital shall exclude investment amounts associated with aircraft acquisition until the first time that such aircraft is flown under a customer contract at which time all amounts accrued with respect to such aircraft shall be considered in the Average Invested Capital calculation from such date. Invested Capital shall be reduced by the amount of any investments held in the Company’s direct or indirect debt securities that remain outstanding and that have not otherwise been defeased.

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(2) “EBITDA” for the Company shall mean income from continuing operations, before interest, income taxes, depreciation expense and amortization expense. EBITDA Growth shall be calculated by averaging the percentage increase or decrease in EBITDA for each of the three years ended December 31 in the Performance Period. EBITDA increase or decrease for each twelve month period shall be calculated by subtracting EBITDA for the twelve months ended December 31 for the prior year from EBITDA for the twelve months ended December 31 for the current year and dividing the resulting difference in EBITDA by the EBITDA for the twelve months ended December 31 for the prior year.

(3) The calculations for ROIC and EBITDA shall be adjusted for the following non-recurring items to the extent reflected on the Company’s financial statements: (i) any loss or gain resulting from the early extinguishment of debt, (ii) the cumulative effect of a change in accounting principles, (iii) asset impairment charges and (iv) extraordinary items under GAAP. These adjustments shall be made on an “After-tax basis” with respect to ROIC and on a pre-tax basis with respect to EBITDA. “After-tax basis” shall mean the product of the amount of each non-recurring item times the difference between one and the cash tax rate as published in the Company’s annual report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, for the respective fiscal year or 12 month measurement period. The ROIC ratio will exclude the unconsolidated results of Polar Air Cargo Worldwide.

Section 6. Payment of Awards under this Program.

6.1. General. A Participant will be entitled to receive payment, if any, under an Award if the Participant is still employed by Atlas on December 31, 2016, subject to this Section 6 and Section 7 below. A Participant will receive an Award in the manner and at the times set forth in Sections 6.2, 6.3, 6.4 and Section 7.

6.2. Time of Payment. In connection with the completion of performance, the Committee shall certify, in accordance with Section 162(m) of the Code, whether and at what level the Performance Criteria have been achieved. For the purposes of this Program, the term “Determination Date” means the date on which the Committee makes such certification. Any Payable Amount for an Award for the Performance Period shall be paid by Atlas within two weeks following the Determination Date, but in no event later than March 15, 2017.

6.3. Form of Payment. All Payable Amounts for an Award shall be paid in cash.

6.4. Termination of Employment.

(a) General. Except as provided otherwise in this Section 6.4 or Section 7, a Participant whose employment terminates for any reason prior to the last day of the Performance Period shall forfeit such Award.

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(b) Death or Termination by Reason of Disability. In the event of death or a termination by the Company of the Participant’s Employment with Atlas (a “Termination of Employment”) by reason of the Participant’s Disability occurring after January 1, 2014, but before the end of the Performance Period and before the occurrence of a Change in Control of the Company (as defined below), the portion of the Award that will be payable is calculated by dividing the number of days from January 1, 2014 until the date of Termination of Employment by reason of Disability or death, by the total number of days in the Performance Period, and multiplying that fraction by the Payable Amount. Subject to Section 7, the reduced (prorated) Payable Amount, if any (calculated as provided in Section 5.2) shall not be payable until after the Determination Date. For purposes of this Agreement, a Termination of Employment shall be deemed to be by reason of “Disability” if upon such Termination of Employment, the Participant shall have been continuously disabled from performing the duties assigned to the Participant for a period of not less than six consecutive calendar months and such Disability shall be deemed to have commenced on the date following the end of such six consecutive calendar months.

(c) Termination by the Company Not For Cause. In the event of Termination of Employment of the Participant by reason of an involuntary termination by the Company and its Subsidiaries not for Cause occurring after January 1, 2014, but before the end of the Performance Period and before the occurrence of a Change in Control of the Company (as defined below), the portion of the Award that will be payable, if any, is calculated by dividing the number of days from January 1, 2014 until the date of the Termination of Employment by reason of an involuntary termination not for Cause, by the total number of days in the Performance Period, multiplied by the Payable Amount. Subject to Section 7, the reduced (prorated) Payable Amount, if any (calculated as provided in Section 5.2) shall not be delivered until after the Determination Date. For purposes of this Agreement, “Cause” shall mean (i) the Participant’s refusal or failure (other than during periods of illness or disability) to perform the Participant’s material duties and responsibilities to the Company or its Subsidiaries, (ii) the conviction or plea of guilty or nolo contendere of the Participant in respect of any felony, other than a motor vehicle offense, (iii) the commission of any act which causes material injury to the reputation, business or business relationships of the Company or any of its Subsidiaries including, without limitation, any breach of written policies of the Company with respect to trading in securities, (iv) any other act of fraud, including, without limitation, misappropriation, theft or embezzlement, or (v) a violation of any applicable material policy of the Company or any of its Subsidiaries, including, without limitation, a violation of the laws against workplace discrimination.

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(d) Other Terminations of Employment. Except as provided for herein or in the Plan, any Termination of Employment of the Participant occurring prior to the end of the Performance Period (including a Termination of Employment initiated by the Participant) shall result in the immediate and automatic termination and forfeiture of the Award.

Section 7. Change in Control.

7.1. Vesting; Determination of Payable Amount. Immediately prior to a Change in Control of the Company (as defined below) unless in connection therewith an Award is assumed (or a substitute award granted) pursuant to Section 7(a)(1) of the Plan, the Performance Criteria in the Performance Plan Schedule applicable to an Award, if an Award is then outstanding, shall be deemed to have been satisfied based on assumed achievement at the 200% achievement level (“Deemed CIC Achievement”) and the Company shall pay to the Participant in full satisfaction of its obligations with respect thereto cash in an amount equal to the Payable Amount on the basis of such Deemed CIC Achievement. Notwithstanding the immediately preceding sentence, if in connection with the Change in Control of the Company, an Award is assumed (or a substitute award granted) pursuant to Section 7(a)(1) of the Plan, an Award shall become payable only if (A) the Participant remains continuously employed by the Company or its subsidiaries until the end of the Performance Period, in which case this award will become fully payable at the end of the Performance Period, or (B) there is a Change in Control Termination before the end of the Performance Period, in which case this award will become fully payable immediately prior to the Change in Control Termination. In the case of either (A) or (B), the Company shall pay to the Participant, within ten (10) days following the period specified in (A) or (B), the Payable Amount on the basis of the Deemed CIC Achievement.

7.2. Definitions. For purposes of this Program, the following definitions shall apply:

(a) “Change in Control Termination” means the termination of a Participant’s Employment following a Change in Control of the Company (I) by the Company and its subsidiaries not for Cause, (II) by the Participant for “Good Reason” (as defined below), or (III) by reason of the Participant’s death or Disability (as defined in Section 6.4(b)).

(b) “Change in Control of the Company” means a “change in control event” (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations) with respect to the Company, which generally will include the following events, subject to such additional rules and requirements as may be set forth in the Treasury Regulations and related guidance:

(1) a transfer or issuance of stock of the Company, where stock in the Company remains outstanding after the transaction, and one person, or more than one person acting as a group (as determined under the Treasury Regulations), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company (however, if a person or group is considered to own more than 50% of the

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total fair market value or 30% of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not be considered a change in control for purposes of this Section 7);

(2) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of ownership of stock possessing 30% or more of the total voting power of the Company (however, if a person or group is considered to control the Company within the meaning of this sentence (i.e., owns stock of the Company possessing 30% of the total voting power of the Company), then the acquisition of additional control will not be considered a change in control for purposes of this Section 7);

(3) the replacement of a majority of members of the Company’s Board of Directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the appointment or election; or

(4) the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company, as determined under the Treasury Regulations (however, a transfer of assets to certain related persons, as provided under the Treasury Regulations, or to an entity that is controlled by the shareholders of the Company immediately after the transfer, will not be considered a change in control for purposes of this Section 7).

(c) “Good Reason” means (i) a material reduction in a Participant’s duties and responsibilities from those of the Participant’s most recent position with the Company, (ii) a reduction of a Participant’s aggregate salary, benefits and other compensation (including any incentive opportunity) from that which the Participant was most recently entitled during Employment with the Company other than in connection with a reduction as part of a general reduction applicable to all similarly-situated Participants of the Company, or (iii) a relocation of a Participant to a position that is located greater than 40 miles from the location of such Participant’s most recent principal location of employment with the Company; provided, however, that a Participant will be treated as having resigned for Good Reason only if he or she provides the Company with a notice of termination within 90 days of the initial existence of one of the conditions described above, following which the Company shall have 30 days from the receipt of the notice of termination to cure the event specified in the notice of termination and, if the Company fails to so cure the event, the Participant must terminate his or her Employment not later than 30 days following the end of such cure period.

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Section 8. Beneficiary Designation.

8.1. Designation and Change of Designation. Each Participant shall file with Atlas a written designation of one or more persons as the Beneficiary who shall be entitled to receive the Award, if any, payable under the Program upon the Participant’s death. A Participant may, from time to time, revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with Atlas. The last such designation received by Atlas shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by Atlas prior to the Participant’s death, and in no event shall it be effective as of any date prior to such receipt.

8.2. Absence of Valid Designation. If no such Beneficiary designation is in effect at the time of a Participant’s death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with law, the Participant’s estate shall be deemed to have been designated as the Participant’s Beneficiary and shall receive the payment of the amount, if any, payable under the Program upon the Participant’s death. If Atlas is in doubt as to the right of any person to receive such amount, Atlas may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or Atlas may pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Program and Atlas therefor.

Section 9. General Provisions.

9.1. Plan to be Unfunded. The Program is intended to constitute an unfunded incentive compensation arrangement. Nothing contained in the Program, and no action taken pursuant to the Program, shall create or be construed to create a trust of any kind. A Participant’s right to receive an Award shall be no greater than the right of an unsecured general creditor of Atlas. All Awards shall be paid from the general funds of Atlas, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such Awards. There shall not vest in any Participant or Beneficiary any right, title, or interest in and to any specific assets of Atlas.

9.2. Section 409A of the Code. Awards under the Program are intended to be exempt from the requirements of Section 409A of the Code and shall be construed and administered accordingly. Notwithstanding anything to the contrary in this Program, if at the time of the Participant’s termination of employment, the Participant is a “specified employee,” as defined below, any and all amounts payable under this Program on account of such separation from service that constitute deferred compensation and would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid on the next business day following the expiration of such six (6) month period or, if earlier, upon the Participant’s death; except (A) to the extent of amounts that do not constitute a deferral of compensation within the meaning of Treasury regulation Section 1.409A-1(b), as determined by Atlas in its reasonable good faith discretion or (B) other amounts or benefits that are not subject to the requirements of Section 409A. For purposes of this Program, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury regulations after giving effect to the presumptions contained therein), and the term “specified employee” means an individual determined by the Atlas to be a specified employee under Treasury regulation Section 1.409A-1(i).

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Notwithstanding anything to the contrary in the Program, neither the Company, nor any affiliate, nor the Committee, nor any person acting on behalf of the Company, any affiliate, or the Committee, shall be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of an Award to be exempt from the requirements of Section 409A or by reason of Section 4999 of the Code; provided, that nothing in this Section 9.2 shall limit the ability of the Committee or the Company to provide by separate express written agreement with a Participant for a gross-up payment or other payment in connection with any such tax or additional tax.

9.3. Rights Limited. Nothing contained in the Program shall give any Eligible Participant the right to continue in the employment of Atlas, or limit the right of Atlas to discharge an Eligible Participant.

9.4. Governing Law. The Program shall be construed and governed in accordance with the laws of the State of New York.

9.5. Taxes. There shall be deducted from all amounts paid under the Program all federal, state, local and other taxes required by law to be withheld with respect to such payments.

Section 10. Amendment, Suspension, or Termination.

The Committee reserves the right to amend, suspend, or terminate the Program at any time.

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EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer

I, William J. Flynn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Atlas Air Worldwide Holdings, Inc.;

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the Financial Statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 1, 2014	/s/ William J. Flynn
	William J. Flynn
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer

I, Spencer Schwartz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Atlas Air Worldwide Holdings, Inc.;

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the Financial Statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting ( as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 1, 2014	/s/ Spencer Schwartz
	Spencer Schwartz
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Section 1350 Certifications

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Atlas Air Worldwide Holdings, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2014 as filed with the Securities and Exchange Commission (the “Report”), we, William J. Flynn and Spencer Schwartz, Chief Executive Officer and Chief Financial Officer, respectively, of the Company certify that to our knowledge:

1. the Report complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 1, 2014

/s/ William J. Flynn

William J. Flynn

President and Chief Executive Officer

/s/ Spencer Schwartz

Spencer Schwartz

Executive Vice President and Chief Financial Officer

XML

Debt Term Loan (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Term Loans [Line Items]
Face Value	$ 432.0
First 2014 Term Loan
Term Loans [Line Items]
Issue Date	2014
Face Value	115.0
Collateral Aircraft Tail Number	MSN 38969
Original Term	0 years 114 months
Interest Rate Type	Fixed
Fixed Interest Rate	4.48%
Second 2014 Term Loan
Term Loans [Line Items]
Issue Date	2014
Face Value	30.8
Collateral Aircraft Tail Number	MSN 38969
Original Term	0 years 114 months
Interest Rate Type	Fixed
Fixed Interest Rate	7.30%
Third 2014 Term Loan
Term Loans [Line Items]
Issue Date	2014
Face Value	115.0
Collateral Aircraft Tail Number	MSN 37138
Original Term	0 years 118 months
Interest Rate Type	Fixed
Fixed Interest Rate	4.57%
Fourth 2014 Term Loan
Term Loans [Line Items]
Issue Date	2014
Face Value	29.0
Collateral Aircraft Tail Number	MSN 37138
Original Term	0 years 118 months
Interest Rate Type	Fixed
Fixed Interest Rate	7.38%
Fifth 2014 Term Loan
Term Loans [Line Items]
Issue Date	2014
Face Value	115.0
Collateral Aircraft Tail Number	MSN 39286
Original Term	0 years 116 months
Interest Rate Type	Fixed
Fixed Interest Rate	4.51%
Sixth 2014 Term Loan
Term Loans [Line Items]
Issue Date	2014
Face Value	$ 27.2
Collateral Aircraft Tail Number	MSN 39286
Original Term	0 years 116 months
Interest Rate Type	Fixed
Fixed Interest Rate	7.35%

XML

Earnings Per Share Narrative (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share Details [Abstract]
Restricted shares and units in which performance or market conditions were not satisfied	0.5	0.6

XML

Legal Proceedings (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Legal Proceedings [Abstract]
Brazilian claims in the aggregate	$ 8.7
Amounts on deposit for Brazilian claims included in Deposits and other assets	$ 6.0	$ 5.7

XML

Special Charge Narrative (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Special Charge Narrative Details [Abstract]
Early Termination of Operating Leases	$ 0.6
Special charges related to employee termination benefits	2.3
Special Charge Loan Reserve	$ 5.1

XML

Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Financial Instruments Tables [Abstract]

Carrying Amount, Estimated Fair Value and Classification of Our Financial Instruments

		March 31, 2014
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	279,652	$	279,652	$	279,652	$	-	$	-
	Short-term investments		9,572		9,572		-		-		9,572
	Restricted cash		12,537		12,537		12,537		-		-
	Long-term investments and accrued interest		130,430		175,027		-		-		175,027
		$	432,191	$	476,788	$	292,189	$	-	$	184,599
Liabilities
	Term loans	$	1,013,670	$	1,027,847	$	-	$	-	$	1,027,847
	Ex-Im Bank guaranteed notes		861,250		838,295		-		-		838,295
	EETCs		243,866		318,744		-		-		318,744
		$	2,118,786	$	2,184,886	$	-	$	-	$	2,184,886

		December 31, 2013
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	321,816	$	321,816	$	321,816	$	-	$	-
	Short-term investments		10,904		10,904		-		-		10,904
	Restricted cash		6,491		6,491		6,491		-		-
	Interest rate derivatives		9,182		9,182		-		9,182		-
	Long-term investments and accrued interest		130,267		174,795		-		-		174,795
		$	478,660	$	523,188	$	328,307	$	9,182	$	185,699
Liabilities
	Interest rate derivatives	$	7,796	$	7,796	$	-	$	7,796	$	-
	Term loans		702,668		701,421		-		-		701,421
	Ex-Im Bank guaranteed notes		739,741		718,703		-		-		718,703
	EETCs		254,216		329,973		-		-		329,973
		$	1,704,421	$	1,757,893	$	-	$	7,796	$	1,750,097

Carrying Value, Gross Unrealized Gain (Loss) and Fair Value of Our Long-term Investments by Contractual Maturity

		March 31, 2014						December 31, 2013
			Carrying Value		Gross Unrealized Gain (Loss)		Fair Value		Carrying Value		Gross Unrealized Gain (Loss)		Fair Value
Debt securities
Due after one but within five years		$	-	$	-	$	-	$	-	$	-	$	-
Due after five but within ten years			130,430		44,597		175,027		130,267		44,528		174,795
	Total	$	130,430	$	44,597	$	175,027	$	130,267	$	44,528	$	174,795

XML

Accumulated Other Comprehensive Income (Loss) Narrative (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income Loss Narrative Details [Abstract]
Realized gain on cash flow hedge	$ 1.1
Unamortized realized loss in Accumulated other comprehensive income (loss) related to forward-starting interest rate swaps	18.0
Realized loss on interest rate derivatives in earnings as a component of Interest expense	0.7	0.8
Realized losses related to forward-starting interest rate swaps expected to be reclassified into earnings within the next 12 months	2.7
Derivatives Fair Value [Line Items]
Total notional amount of interest rate derivatives	$ 432.5

XML

Income Taxes Monetary (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Income Tax Disclosure Narrative Details [Abstract]
Undistributed Net Earnings of Foreign Subsidiaries	$ 18.1
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability	$ 6.3

XML

Debt (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Debt Instrument [Line Items]
Face Value	$ 432.0

XML

Earnings Per Share Table (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Numerator:
Net Income Attributable to Common Stockholders	$ 7,944	$ 20,078
Denominator:
Basic EPS weighted average shares outstanding	25,096	26,330
Effect of dilutive stock options and restricted stock	55	109
Diluted EPS weighted average shares outstanding	25,151	26,439
EPS:
Basic	$ 0.32	$ 0.76
Diluted	$ 0.32	$ 0.76

XML

Consolidated Statements of Stockholders' Equity (Parentheticals) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Consolidated Statements of Stockholders Equity
Purchase of shares of treasury stock	74,583	519,185
Exercise of employee stock options	0	0
Issuance of shares of restricted stock	195,555	232,603

XML

Financial Instruments Fair Value Table (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Assets
Cash and cash equivalents	$ 279,652	$ 321,816	$ 330,311	$ 409,763
Short-term investments	9,572	10,904
Restricted cash	12,537	6,491
Long-term investments and accrued interest	130,430	130,267
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Assets
Cash and cash equivalents	279,652	321,816
Short-term investments	9,572	10,904
Restricted cash	12,537	6,491
Interest rate derivatives		9,182
Long-term investments and accrued interest	130,430	130,267
Financial instruments assets	432,191	478,660
Liabilities
Interest rate derivatives		7,796
Term loans	1,013,670	702,668
Ex-Im Bank guaranteed notes	861,250	739,741
EETCs	243,866	254,216
Financial instruments liabilities	2,118,786	1,704,421
Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and cash equivalents	279,652	321,816
Short-term investments	9,572	10,904
Restricted cash	12,537	6,491
Interest rate derivatives		9,182
Long-term investments and accrued interest	175,027	174,795
Financial instruments assets	476,788	523,188
Liabilities
Interest rate derivatives		7,796
Term loans	1,027,847	701,421
Ex-Im Bank guaranteed notes	838,295	718,703
EETCs	318,744	329,973
Financial instruments liabilities	2,184,886	1,757,893
Fair Value, Inputs, Level 1 [Member]
Assets
Cash and cash equivalents	279,652	321,816
Short-term investments	0	0
Restricted cash	12,537	6,491
Interest rate derivatives		0
Long-term investments and accrued interest	0	0
Financial instruments assets	292,189	328,307
Liabilities
Interest rate derivatives		0
Term loans	0	0
Ex-Im Bank guaranteed notes	0	0
EETCs	0	0
Financial instruments liabilities	0	0
Fair Value, Inputs, Level 2 [Member]
Assets
Cash and cash equivalents	0	0
Short-term investments	0	0
Restricted cash	0	0
Interest rate derivatives		9,182
Long-term investments and accrued interest	0	0
Financial instruments assets	0	9,182
Liabilities
Interest rate derivatives		7,796
Term loans	0	0
Ex-Im Bank guaranteed notes	0	0
EETCs	0	0
Financial instruments liabilities	0	7,796
Fair Value, Inputs, Level 3 [Member]
Assets
Cash and cash equivalents	0	0
Short-term investments	9,572	10,904
Restricted cash	0	0
Interest rate derivatives		0
Long-term investments and accrued interest	175,027	174,795
Financial instruments assets	184,599	185,699
Liabilities
Interest rate derivatives		0
Term loans	1,027,847	701,421
Ex-Im Bank guaranteed notes	838,295	718,703
EETCs	318,744	329,973
Financial instruments liabilities	$ 2,184,886	$ 1,750,097

XML

Basis of Presentation (Detail)	Mar. 31, 2014
Basis Of Presentation Details [Abstract]
Equity interest in PACW	51.00%
Voting interest in PACW	75.00%

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss) Tables [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

		Interest Rate		Foreign Currency
		Derivatives		Translation		Total
Balance as of December 31, 2013		$	(11,375)	$	698	$	(10,677)
	Net change in fair value		(251)		-		(251)
	Reclassification into earnings		690		-		690
	Translation adjustment		-		77		77
	Tax effect		(246)		-		(246)
Balance as of March 31, 2014		$	(11,182)	$	775	$	(10,407)

XML

Financial Instruments Contractual Maturity Table (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Debt securities
Due after one but within five years, carrying value	$ 0	$ 0
Due after five but within ten years, carrying value	130,430	130,267
Total, carrying value	130,430	130,267
Due after one but within five years, gross unrealized gain (loss)	0	0
Due after five but within ten years, gross unrealized gain (loss)	44,597	44,528
Total, gross unrealized gain (loss)	44,597	44,528
Due after one but within five years, fair value	0	0
Due after five but within ten years, fair value	175,027	174,795
Total, fair value	$ 175,027	$ 174,795

XML

Summary of Significant Account Policies (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Variable Interest Entities And Off Balance Sheet Arrangements Details [Abstract]
Ownership interest in GATS	50.00%
Investment in GATS	$ 13.1	$ 13.2

XML

Related Parties Percentages (Detail)	Mar. 31, 2014
Related Parties Percentages [Abstract]
DHL equity interest in Polar	49.00%
DHL voting interest in Polar	25.00%

XML

Consolidated Statements of Stockholders' Equity (USD $) In Thousands	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total Stockholders' Equity	Noncontrolling Interest
Balance at Dec. 31, 2012	$ 1,288,104	$ 277	$ (44,850)	$ 544,421	$ (14,263)	$ 798,676	$ 1,284,261	$ 3,843
Net Income (Loss)	20,103	0	0	0	0	20,078	20,078	25
Other comprehensive income (loss)	177	0	0	0	337	0	337	(160)
Stock-based compensation	3,644	0	0	3,644	0	0	3,644	0
Purchase of shares of treasury stock	(24,233)	0	(24,233)	0	0	0	(24,233)	0
Issuance of shares of restricted stock	0	2	0	(2)	0	0	0	0
Prepayment of accelerated share repurchase	(30,000)	0	0	(30,000)	0	0	(30,000)	0
Tax benefit on restricted stock and stock options	581	0	0	581	0	0	581	0
Balance at Mar. 31, 2013	1,258,376	279	(69,083)	518,644	(13,926)	818,754	1,254,668	3,708
Balance at Dec. 31, 2013	1,322,125	282	(125,826)	561,481	(10,677)	892,513	1,317,773	4,352
Net Income (Loss)	4,026	0	0	0	0	7,944	7,944	(3,918)
Other comprehensive income (loss)	351	0	0	0	270	0	270	81
Stock-based compensation	1,907	0	0	1,907	0	0	1,907	0
Purchase of shares of treasury stock	(2,420)	0	(2,420)	0	0	0	(2,420)	0
Issuance of shares of restricted stock	0	2	0	(2)	0	0	0	0
Tax benefit on restricted stock and stock options	(982)	0	0	(982)	0	0	(982)	0
Balance at Mar. 31, 2014	$ 1,325,007	$ 284	$ (128,246)	$ 562,404	$ (10,407)	$ 900,457	$ 1,324,492	$ 515

XML

DHL Investment and Polar Table (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
DHL Investment and Polar Table Details [Line Items]
ACMI segment revenue from Polar	$ 69,695	$ 70,847
Other revenue from Polar	2,842	2,837
Ground handling and airport fees paid to Polar	324	327
Receivables from Polar	2,685		4,249
Payables to Polar	2,780		3,464
Aggregate carrying value of Polar investment	$ 4,870		$ 4,870

XML

Debt (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Debt [Abstract]
Intangible Asset for 777s purchased in Jan 2014	$ 42.7

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current Assets
Cash and cash equivalents	$ 279,652	$ 321,816
Short-term investments	9,572	10,904
Restricted cash	12,537	6,491
Accounts receivable, net of allowance	147,299	132,159
Prepaid maintenance	25,698	31,620
Deferred taxes	28,600	54,001
Prepaid expenses and other current assets	36,317	36,962
Total current assets	539,675	593,953
Property and Equipment
Flight equipment	3,452,605	2,969,379
Ground equipment	48,198	46,951
Less: accumulated depreciation	(280,965)	(256,685)
Purchase deposits for flight equipment	43,577	69,320
Property and equipment, net	3,263,415	2,828,965
Other Assets
Long-term investments and accrued interest	130,430	130,267
Deposits and other assets	133,326	131,216
Intangible assets, net	74,251	33,858
Total Assets	4,141,097	3,718,259
Current Liabilities
Accounts payable	49,724	65,367
Accrued liabilities	231,412	194,292
Current portion of long-term debt	195,092	157,486
Total current liabilities	476,228	417,145
Other Liabilities
Long-term debt	1,923,694	1,539,139
Deferred taxes	349,448	371,655
Other liabilities	66,720	68,195
Total other liabilities	2,339,862	1,978,989
Commitments and contingencies	0	0
Stockholders' Equity
Preferred stock	0	0
Common stock	284	282
Additional paid-in-capital	562,404	561,481
Treasury stock, at cost	(128,246)	(125,826)
Accumulated other comprehensive loss	(10,407)	(10,677)
Retained earnings	900,457	892,513
Total stockholders' equity	1,324,492	1,317,773
Noncontrolling interest	515	4,352
Total equity	1,325,007	1,322,125
Total Liabilities and Equity	$ 4,141,097	$ 3,718,259

XML

Segment Reporting (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Revenue
ACMI	$ 198,141	$ 181,170
AMC Charter	62,874	98,037
Commercial Charter	114,499	91,100
Dry Leasing	24,676	3,747
Other	3,173	3,282
Total Operating Revenue	403,363	377,336
Direct Contribution
ACMI	45,198	39,944
AMC Charter	9,468	12,737
Commercial Charter	(12,245)	(8,685)
Dry Leasing	8,171	1,176
Total Direct Contribution	50,592	45,172
Unallocated income and expenses, net	(35,998)	(35,012)
Special charge	(8,029)	0
Loss (gain) on disposal of aircraft	0	23
Income before income taxes	6,565	10,183
Interest income	(4,727)	(5,176)
Interest expense	26,452	18,440
Capitalized interest	(312)	(1,402)
Other expense (income), net	152	552
Operating Income	$ 28,130	$ 22,597

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Other Comprehensive Income (Loss)
Net Income	$ 4,026	$ 20,103
Interest rate derivatives:
Net change in fair value	(251)	0
Reclassification into earnings	690	770
Income tax benefit (expense)	(246)	(279)
Foreign currency translation:
Translation adjustment	158	(314)
Other comprehensive income (loss)	351	177
Comprehensive Income	4,377	20,280
Less: Comprehensive income (loss) attributable to noncontrolling interests	(3,837)	(135)
Comprehensive Income Attributable to Common Stockholders	$ 8,214	$ 20,415

XML

Special Charge (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Special Charge [LineItems]
Balance	$ 12,773
Special charge items	2,943
Cash payments	(4,529)
Balance	11,187
Lease Termination Costs [Member]
Special Charge [LineItems]
Balance	12,773
Special charge items	637
Cash payments	(4,529)
Balance	8,881
GSS Employee Termination Benefits [Member]
Special Charge [LineItems]
Balance	0
Special charge items	2,306
Cash payments	0
Balance	$ 2,306

XML

Special Charge (Tables)

3 Months Ended

Mar. 31, 2014

Special Charge Tables [Abstract]

Special Charge

	Lease Termination Costs		GSS Employee Termination Benefits		Total
Liability as of December 31, 2013	$	12,773	$	-	$	12,773
Special charge items		637		2,306		2,943
Cash payments		(4,529)		-		(4,529)
Liability as of March 31, 2014	$	8,881	$	2,306	$	11,187

XML

Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Accrued Liabilities Details [Abstract]
Maintenance	$ 102,223	$ 43,813
Deferred revenue	24,132	26,279
Salaries, wages and benefits	23,018	36,450
Aircraft fuel	16,688	14,905
Other	65,351	72,845
Accrued liabilities	$ 231,412	$ 194,292

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2014

Debt Tables [Abstract]

Terms And Amounts For Each Term Loan Outstanding

				Collateral		Interest
	Issue		Face	Aircraft	Original	Rate	Interest
	Date		Value	Tail Number	Term	Type	Rate
First 2014 Term Loan	2014	$	115.0	MSN 38969	P0Y114M	Fixed	4.48%
Second 2014 Term Loan	2014		30.8	MSN 38969	P0Y114M	Fixed	7.30%
Third 2014 Term Loan	2014		115.0	MSN 37138	P0Y118M	Fixed	4.57%
Fourth 2014 Term Loan	2014		29.0	MSN 37138	P0Y118M	Fixed	7.38%
Fifth 2014 Term Loan	2014		115.0	MSN 39286	P0Y116M	Fixed	4.51%
Sixth 2014 Term Loan	2014		27.2	MSN 39286	P0Y116M	Fixed	7.35%
		$	432.0

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Activities:
Net Income Attributable to Common Stockholders	$ 7,944	$ 20,078
Net income (loss) attributable to noncontrolling interests	3,918	(25)
Net Income	4,026	20,103
Adjustments to reconcile Net Income to net cash provided by operating activities:
Depreciation and amortization	32,401	21,063
Accretion of debt securities discount	(2,073)	(2,327)
Provision for allowance for doubtful accounts	83	(67)
Special charge	8,029	0
Loss (gain) on disposal of aircraft	0	(23)
Deferred taxes	2,554	(9,848)
Stock-based compensation expense	1,907	3,644
Changes in:
Accounts receivable	(14,585)	(6,584)
Prepaid expenses and other current assets	7,050	7,227
Deposits and other assets	6,724	815
Accounts payable and accrued liabilities	(672)	20,386
Net cash provided by operating activities	45,444	54,389
Investing Activities:
Capital expenditures	(4,095)	(10,548)
Purchase deposits and delivery payments for flight equipment	(478,739)	(235,492)
Changes in restricted cash	(6,046)	0
Proceeds from short-term investments	783	2,426
Proceeds from insurance	0	9,109
Proceeds from disposal of aircraft	0	400
Net cash used for investing activities	(488,097)	(234,105)
Financing Activities:
Proceeds from debt issuance	572,552	224,848
Prepayment of accelerated share repurchase	0	(30,000)
Purchase of treasury stock	(2,420)	(24,233)
Excess tax benefit from stock-based compensation expense	(982)	581
Payment of debt issuance costs	(16,974)	(357)
Payments of debt	(151,687)	(70,575)
Net cash provided by (used for) financing activities	400,489	100,264
Net increase (decrease) in cash and cash equivalents	(42,164)	(79,452)
Cash and cash equivalents at the beginning of period	321,816	409,763
Cash and cash equivalents at the end of period	279,652	330,311
Non-cash Investing and Financing Activities:
Acquisition of flight and ground equipment included in Accounts payable and accrued liabilities	$ 41,581	$ 0

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Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Consolidated Balance Sheets
Allowance for doubtful accounts receivable	$ 1,327	$ 1,402

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Segment Reporting

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

8. Segment Reporting

We have the following four reportable segments: ACMI (which includes ACMI and CMI services), AMC Charter, Commercial Charter and Dry Leasing. We use an economic performance metric (“Direct Contribution”) that shows the profitability of each segment after allocation of operatingand ownership costs. The following table sets forth Operating Revenue and Direct Contribution for our reportable business segments reconciled to Operating Income and Income before Income Taxes:

	For the Three Months Ended
	March 31, 2014		March 31, 2013
Operating Revenue:
ACMI	$	198,141	$	181,170
AMC Charter		62,874		98,037
Commercial Charter		114,499		91,100
Dry Leasing		24,676		3,747
Other		3,173		3,282
Total Operating Revenue	$	403,363	$	377,336

Direct Contribution:
ACMI	$	45,198	$	39,944
AMC Charter		9,468		12,737
Commercial Charter		(12,245)		(8,685)
Dry Leasing		8,171		1,176
Total Direct Contribution		50,592		45,172
Add back (subtract):
Unallocated income and expenses, net		(35,998)		(35,012)
Special charge		(8,029)		-
Gain on disposal of aircraft		-		23
Income before Income Taxes		6,565		10,183
	For the Three Months Ended
	March 31, 2014		March 31, 2013
Add back (subtract):
Interest income		(4,727)		(5,176)
Interest expense		26,452		18,440
Capitalized interest		(312)		(1,402)
Other expense (income), net		152		552
Operating Income	$	28,130	$	22,597

We are exposed to a concentration of revenue to the AMC andPolar (see Note 2 for further discussion regarding Polar). No other customer accounted for 10.0% of our Total Operating Revenue. We have not experienced any credit issues with either of these customers.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Document period end date	Mar. 31, 2014
Amendment flag	false
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014
Current fiscal year end date	--12-31
Entity central index key	0001135185
Entity current reporting status	Yes
Entity filer category	Large Accelerated Filer
Entity registrant name	ATLAS AIR WORLDWIDE HOLDINGS INC
Entity voluntary filers	No
Entity well known seasoned issuer	Yes
Entity common stock shares outstanding		25,231,879

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Legal Proceedings

3 Months Ended

Mar. 31, 2014

Legal Proceedings [Abstract]

Legal Proceedings

9. Legal Proceedings

Department of Justice Investigation and Related Litigation

In 2010, Old Polar entered into an agreement with the United States Department of Justice (the "DOJ") to resolve issues relating to the previously disclosed DOJ investigation concerning alleged manipulation by cargo carriers of fuel surcharges and other rate components for air cargo services (the “DOJ Investigation”).

As a result of the DOJ Investigation, the Company and Old Polar have been named defendants, along with a number of other cargo carriers, in several class actions in the United States arising from allegations about the pricing practices of a number of air cargo carriers that have now been consolidated for pretrial purposes in the United States District Court for the Eastern District of New York. The consolidated complaint alleges, among other things, that the defendants, including the Company and Old Polar, manipulated the market price for air cargo services sold domestically and abroad through the use of surcharges, in violation of United States, state, and European Union antitrust laws. The suit seeks treble damages and injunctive relief.

In 2007, the Company and Old Polar commenced an adversary proceeding in bankruptcy court against each of the plaintiffs in this class action litigation seeking to enjoin the plaintiffs from prosecuting claims against the Company and Old Polar that arose prior to 2004, the date on which the Company and Old Polar emerged from bankruptcy. In 2007, the plaintiffs consented to the injunctive relief requested and the bankruptcy court entered an order enjoining plaintiffs from prosecuting Company claims arising prior to 2004.

The court in the antitrust class actions has heard and decided a number of procedural motions. Among those was the plaintiffs' motion to join Polar Air Cargo Worldwide, Inc. as an additional defendant, which the court granted on April 13, 2011. There was substantial pretrial written discovery and document production, and a number of depositions were taken. A court hearing on whether or not to certify the case as a class action was held in October 2013 and oral arguments were held in November 2013. We are unable to reasonably predict the court's ruling or the ultimate outcome of the litigation.

The Company, Old Polar and a number of other cargo carriers have also been named as defendants in civil class action suits in the provinces of British Columbia, Ontario and Quebec, Canada that are substantially similar to the class action suits in the United States. The plaintiffs in the British Columbia case have indicated they do not intend to pursue their lawsuit against the Company and Old Polar. We are unable to reasonably predict the outcome of the litigation in Ontario and Quebec.

If the Company or Old Polar were to incur an unfavorable outcome in connection with one or more of the matters described above, such outcome is not expected to materially affect our business, financial condition, results of operations, and/or cash flows.

Brazilian Customs Claim

Old Polar was cited for two alleged customs violations in Sao Paulo, Brazil, relating to shipments of goods dating back to 1999 and 2000. Each claim asserts that goods listed on the flight manifest of two separate Old Polar scheduled service flights were not on board the aircraft upon arrival and therefore were improperly brought into Brazil. The two claims, which also seek unpaid customs duties, taxes and penalties from the date of the alleged infraction, are approximately $8.7 million in aggregate based on March 31, 2014 exchange rates.

In both cases, we believe that the amounts claimed are substantially overstated due to a calculation error when considering the type and amount of goods allegedly missing, among other things. Furthermore, we may seek appropriate indemnity from the shipper in each claim as may be feasible. In the pending claim for one of the cases, we have received an administrative decision dismissing the claim in its entirety, which remains subject to a mandatory appeal by the Brazil customs authorities. As required to defend such claims, we have made deposits pending resolution of these matters. The balances were $6.0 million as of March 31, 2014 and $5.7 million as of December 31, 2013, and are included in Deposits and other assets.

We are currently defending these and other Brazilian customs claims and the ultimate disposition of these claims, either individually or in the aggregate, is not expected to materially affect our financial condition, results of operations or cash flows.

Trademark Matters

Since 2005, we have been involved in ongoing litigation in Europe against Atlas Transport, an unrelated and unaffiliated entity, over the use of the name “Atlas”. Following application by us to register the mark “ATLAS AIR” in the European Union (“EU”), opposition from Atlas Transport and follow-up filings by us, the Office for Harmonization in the Internal Market (“OHIM”), which handles trademark matters in the EU, declared Atlas Transport's own trademark “ATLAS” partially invalid because of the prior existence of our Benelux trademark registration.  In 2008, OHIM's First Board of Appeal upheld the lower panel's decision, and Atlas Transport appealed that decision to the EU General Court (formally the Court of First Instance), which upheld the court's decision on May 18, 2011. Atlas Transport appealed that ruling to the European Court of Justice (“ECJ”). On March 9, 2012, the ECJ denied the appeal, bringing to an end that aspect of the OHIM proceedings. The Company's request for OHIM to resume another aspect of the proceedings remains pending.

In 2007, Atlas Transport also filed a lawsuit in the Netherlands challenging the validity of our Benelux trademark. In 2009, following completion of its proceedings, the court issued a judgment in favor of us. Atlas Transport appealed that decision to the Dutch Court of Appeal, but the judgment took effect immediately upon entry.An appellate hearing was held on March 20, 2014, and the court's decision is pending.

In 2009, Atlas Transport instituted a trademark infringement lawsuit against us in the regional court in Hamburg, Germany. The amended complaint alleges that Atlas Air has been unlawfully using Atlas Transport's trademark in Germany without permission and should be required to render information on the scope of use and pay compensation. In a supplementary motion, Atlas Transport asserts a cease and desist claim against Atlas Air, to be considered if the court denies the claim for compensation. On May 31, 2011, the court dismissed the case and Atlas Transport filed an appeal, which remains pending.

We believe that the ultimate disposition of these claims, either individually or in the aggregate, will not materially affect our financial condition, results of operations or cash flows.

Other

We have certain other contingencies incident to the ordinary course of business. Management believes that the ultimate disposition of such other contingencies is not expected to materially affect our financial condition, results of operations or cash flows.

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Consolidated Balance Sheets Shares (Parentheticals) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Consolidated Balance Sheets
Preferred stock par value	$ 1	$ 1
Preferred stock shares authorized	10,000,000	10,000,000
Preferred stock shares issued	0	0
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	50,000,000	50,000,000
Common stock shares issued	28,395,768	28,200,213
Common stock shares outstanding	25,159,601	25,038,629
Treasury stock shares	3,236,167	3,161,584

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Special Charge

3 Months Ended

Mar. 31, 2014

Special Charge [Abstract]

Special Charge

3. Special Charge

We hold a 49% interest in GSS, a private company. GSS is a variable interest entity and we are the primary beneficiary of GSS for financial reporting purposes. Atlas dry leases three 747-8F owned aircraft to GSS. The leases provide for payment of rent and a provision for maintenance costs associated with the aircraft. GSS provides ACMI services to British Airways Plc (“British Airways”) using these three aircraft. In January 2014, British Airways notified us that they would be terminating the ACMI agreement and returning three 747-8F aircraft in April 2014. As a result, we recognized $2.3million of employee termination benefitsduring the three months ended March 31, 2014, after management determined that such costs were probable and estimable. The employee termination benefits are expected to be paid in the second quarter of 2014. We may recognize additional termination benefit costs in future periods. In addition, we recognized a reserve of $5.1 million related to a loan from GSS to its 51% U.K. shareholder.

During the three months ended March 31, 2014, we recorded an adjustment of $0.6 million to the Special charge related to the early termination of operating leases for two 747-400BCF aircraft that we permanently parked in December 2013. The adjustment was related to additional costs to satisfy return conditions. Substantially all cash payments related to the lease termination costs are expected to be paid by 2015.

A summary of the Special charge liabilities is as follows:

	Lease Termination Costs		GSS Employee Termination Benefits		Total
Liability as of December 31, 2013	$	12,773	$	-	$	12,773
Special charge items		637		2,306		2,943
Cash payments		(4,529)		-		(4,529)
Liability as of March 31, 2014	$	8,881	$	2,306	$	11,187

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DHL Investment and Polar

3 Months Ended

Mar. 31, 2014

DHL Investment And Polar [Abstract]

Related Parties

2. Related Parties

DHL Investment and Polar

DHL Network Operations (USA), Inc. (“DHL”), a subsidiary of Deutsche Post AG (“DP”), holds a 49% equity interest and a 25% voting interest in Polar. Polar is a variable interest entity and we do not consolidate Polar because we are not the primary beneficiary as the risks associated with the direct costs of operation are with DHL. Under a 20-year blocked space agreement (the “BSA”), Polar provides air cargo capacity to DHL.Atlas has several agreements with Polar to provide ACMI, CMI, administrative, sales and ground support services to one another. We do not have any financial exposure to fund debt obligations or operating losses of Polar,except for any liquidated damages that we could incur under these agreements. The following table summarizes our transactions with Polar:

		For the Three Months Ended
Revenue and Expenses:		March 31, 2014		March 31, 2013
	ACMI segment revenue from Polar	$	69,695	$	70,847
	Other revenue from Polar	$	2,842	$	2,837
	Ground handling and airport fees paid to Polar	$	324	$	327
Accounts receivable/payable as of:		March 31, 2014		December 31, 2013
	Receivables from Polar	$	2,685	$	4,249
	Payables to Polar	$	2,780	$	3,464
Aggregate Carrying Value of Polar Investment as of:		March 31, 2014		December 31, 2013
		$	4,870	$	4,870

GATS

We hold a 50% interest in Global Aviation Technical Solutions Co. Ltd. (“GATS”), a joint venture with an unrelated third party. The purpose of the joint venture is to purchase rotable parts and provide repair services for those parts, primarily for our 747-8F aircraft. The joint venture is a variable interest entity and we have not consolidated GATS because we are not the primary beneficiary as we do not exercise financial control. As of March 31, 2014 and December 31, 2013, our investment in GATS was $13.1 million and $13.2 million, respectively, and our maximum exposure to losses from the entity is limited to our investment, which is comprised primarily of rotableparts. GATS does not have any third-party debt obligations.

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Accrued Liabilities Tables [Abstract]

Accrued Liabilities

	March 31, 2014		December 31, 2013
Maintenance	$	102,223	$	43,813
Deferred revenue		24,132		26,279
Salaries, wages and benefits		23,018		36,450
Aircraft fuel		16,688		14,905
Other		65,351		72,845
Accrued liabilities	$	231,412	$	194,292

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Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

10. Earnings Per Share

Basic earnings per share (“EPS”) represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period. Anti-dilutive options that were out of the money for the three months ended March 31, 2014 and 2013 were de minimis and excluded.

The calculations of basic and diluted EPS were as follows:

	For the Three Months Ended
	March 31, 2014		March 31, 2013
Numerator:
Net Income Attributable to Common Stockholders	$	7,944	$	20,078
Denominator:
Basic EPS weighted average shares outstanding		25,096		26,330
Effect of dilutive stock options and restricted stock		55		109
Diluted EPS weighted average shares outstanding		25,151		26,439
EPS:
Basic	$	0.32	$	0.76
Diluted	$	0.32	$	0.76

Diluted shares reflect the potential dilution that could occur from stock options and restricted share units using the treasury stock method. The calculation does not include restricted share units in which performance or market conditions were not satisfied of 0.5 million for the threemonths ended March 31, 2014 and 0.6 million for the threemonths ended March 31, 2013.

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Income Taxes

3 Months Ended

Mar. 31, 2014

Income Taxes [Abstract]

Income Taxes

6. Income Taxes

Our effective income tax rates were an expense of 38.7% for the three months ended March 31, 2014and a benefit of 97.4% for the three months ended March 31, 2013. The effective rate for the three months ended March 31, 2014differed from the U.S. federal statutory rate primarily due to losses associated with GSS for which we have recognized a valuation allowancedue to the uncertainty that the benefit of the losses will be realized. The effective rate for the three months ended March 31, 2013 differed from the U.S. federal statutory rate primarily due to an income tax benefit of $14.2 million related to extraterritorial income (“ETI”) from certain of our aircraft.The effective rates in both periods also differed from the U.S. federal statutory rate due to the income tax impact of foreign operations taxed at different rates, U.S. state income taxes, the nondeductibility of certain expenses for tax purposes, adjustments to our liability for uncertain tax positions, and the relationship of these items to our projected operating results for the year. For interim accounting purposes, we recognize income taxes using an estimated annual effective tax rate.

As a result of current and expected future growth in our Dry Leasing business, we determined that the net earnings of certain foreign subsidiaries engaged in this business will be indefinitely reinvested outside of the U.S. Our effective rate for the three months ended March 31, 2014 was favorably impacted by our assertion to indefinitely reinvest these net earnings. As of March 31, 2014, our undistributed net earnings of foreign subsidiaries for which deferred taxes have not been provided were $18.1 million, and the unrecognized deferred tax liability associated with these earnings was $6.3 million.

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Accrued Liabilities

3 Months Ended

Mar. 31, 2014

Accrued Liabilities Tables [Abstract]

Accrued Liabilities

4. Accrued Liabilities

Accrued liabilities consisted of the following as of:

	March 31, 2014		December 31, 2013
Maintenance	$	102,223	$	43,813
Deferred revenue		24,132		26,279
Salaries, wages and benefits		23,018		36,450
Aircraft fuel		16,688		14,905
Other		65,351		72,845
Accrued liabilities	$	231,412	$	194,292

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Debt

3 Months Ended

Mar. 31, 2014

Debt [Abstract]

Debt

5. Debt

Ex-Im Bank Guaranteed Notes

In January 2014, we refinanced a bridge loan with a note guaranteed by the Export-Import Bank of the United States (“Ex-Im Bank”) in the amount of $140.6 million secured by a mortgage on a 747-8F aircraft (aircraft tail number N854GT) for a period of 134 months (the “2014 Ex-Im Guaranteed Note”). In connection with entry into this guaranteed note, we paid usual and customary fees. This guaranteed note accrues interest at a fixed rate of 2.67% with principal and interest payable quarterly and contains customary covenants and event of default provisions.

Term Loans

In January 2014, we purchased three 777-200LRF aircraft that are leased to a customer on a long-term basis. We accounted for the purchase as an asset acquisition and recognized a lease intangible of $42.7 million related to the long-term Dry Leases, which will be amortized on a straight-line basis over the life of the leases. As part of the transaction, we entered into six separate term loans in the aggregate amount of $432.0 million each secured by a mortgage on the aircraft and the attached leases (the “2014 Term Loans”). In connection with entry into these term loans, we paid usual and customary fees. The term loans accrue interest with principal and interest payable quarterly and contain customary covenants and event of default provisions.

The following table summarizes the terms and amounts for each term loan (in millions):

				Collateral		Interest
	Issue		Face	Aircraft	Original	Rate	Interest
	Date		Value	Tail Number	Term	Type	Rate
First 2014 Term Loan	2014	$	115.0	MSN 38969	P0Y114M	Fixed	4.48%
Second 2014 Term Loan	2014		30.8	MSN 38969	P0Y114M	Fixed	7.30%
Third 2014 Term Loan	2014		115.0	MSN 37138	P0Y118M	Fixed	4.57%
Fourth 2014 Term Loan	2014		29.0	MSN 37138	P0Y118M	Fixed	7.38%
Fifth 2014 Term Loan	2014		115.0	MSN 39286	P0Y116M	Fixed	4.51%
Sixth 2014 Term Loan	2014		27.2	MSN 39286	P0Y116M	Fixed	7.35%
		$	432.0

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Financial Instruments

3 Months Ended

Mar. 31, 2014

Financial Instruments [Abstract]

Financial Instruments

7. Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Inputs used to measure fair value are classified in the following hierarchy:

Level 1       Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2       Other inputs that are observable directly or indirectly, such as quoted prices in

active markets for similar assets or liabilities, or inactive quoted prices for identical

assets or liabilities in inactive markets;

Level 3       Unobservable inputs reflecting assumptions about the inputs used in pricing the

asset or liability.

We endeavor to utilize the best available information to measure fair value.

We maintain Cash and cash equivalents, Short-term investments and Restricted cash, which include cash on hand, demand deposits, other cash investments that are highly liquid in nature and have original maturities of three months or less at acquisition, money market funds, certificates of deposit and the current portion of debt securities. The carrying value of Cash and cash equivalents, Short-term investments and Restricted cash is based on cost, which approximates fair value.

Long-term investments consist of debt securities for which we have both the ability and the intent to hold until maturity. These investments are classified as held-to-maturity and reported at amortized cost. The fair value of our Long-term investments is based on a discounted cash flow analysis using the contractual cash flows of the investments and a discount rate derived from unadjusted quoted interest rates for debt securities of comparable risk. Such debt securities represent investments in Pass-Through Trust Certificates related to enhanced equipment trust certificates (“EETCs”) issued by Atlas in 1998, 1999 and 2000. Interest on debt securities and accretion of discounts using the effective interest method are included in Interest income.

The fair value of our EETCsis measured based on Level 3 inputs.Fair value isbased on a discounted cash flow analysis using current borrowing rates for instruments with similar terms.

The fair values of our term loans and the Ex-Im Bank guaranteed notes are based on a discounted cash flow analysis using current borrowing rates for instruments with similar terms.

The fair value of our interest rate derivatives was based on Level 2 inputs utilized in expected cash flow models. The market inputs used included the implied forward LIBOR yield curve for the same period as the future interest rate swap settlements. These derivatives were designated as hedging instruments.

The following table summarizes the carrying amount, estimated fair value and classification of our financial instruments as of:

		March 31, 2014
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	279,652	$	279,652	$	279,652	$	-	$	-
	Short-term investments		9,572		9,572		-		-		9,572
	Restricted cash		12,537		12,537		12,537		-		-
	Long-term investments and accrued interest		130,430		175,027		-		-		175,027
		$	432,191	$	476,788	$	292,189	$	-	$	184,599
Liabilities
	Term loans	$	1,013,670	$	1,027,847	$	-	$	-	$	1,027,847
	Ex-Im Bank guaranteed notes		861,250		838,295		-		-		838,295
	EETCs		243,866		318,744		-		-		318,744
		$	2,118,786	$	2,184,886	$	-	$	-	$	2,184,886

		December 31, 2013
			Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets
	Cash and cash equivalents	$	321,816	$	321,816	$	321,816	$	-	$	-
	Short-term investments		10,904		10,904		-		-		10,904
	Restricted cash		6,491		6,491		6,491		-		-
	Interest rate derivatives		9,182		9,182		-		9,182		-
	Long-term investments and accrued interest		130,267		174,795		-		-		174,795
		$	478,660	$	523,188	$	328,307	$	9,182	$	185,699
Liabilities
	Interest rate derivatives	$	7,796	$	7,796	$	-	$	7,796	$	-
	Term loans		702,668		701,421		-		-		701,421
	Ex-Im Bank guaranteed notes		739,741		718,703		-		-		718,703
	EETCs		254,216		329,973		-		-		329,973
		$	1,704,421	$	1,757,893	$	-	$	7,796	$	1,750,097

The following table presents the carrying value, gross unrealized gain (loss) and fair value of our long-term investments by contractual maturity as of:

		March 31, 2014						December 31, 2013
			Carrying Value		Gross Unrealized Gain (Loss)		Fair Value		Carrying Value		Gross Unrealized Gain (Loss)		Fair Value
Debt securities
Due after one but within five years		$	-	$	-	$	-	$	-	$	-	$	-
Due after five but within ten years			130,430		44,597		175,027		130,267		44,528		174,795
	Total	$	130,430	$	44,597	$	175,027	$	130,267	$	44,528	$	174,795

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Special Charge GSS Percentages (Detail)	Mar. 31, 2014
Global Supply Systems Percentages [Abstract]
Controlling ownership interest in GSS	51.00%
Ownership interest in GSS	49.00%

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DHL Investment and Polar (Tables)

3 Months Ended

Mar. 31, 2014

DHL Investment And Polar Tables [Abstract]

Summary of Our Transactions with Polar

		For the Three Months Ended
Revenue and Expenses:		March 31, 2014		March 31, 2013
	ACMI segment revenue from Polar	$	69,695	$	70,847
	Other revenue from Polar	$	2,842	$	2,837
	Ground handling and airport fees paid to Polar	$	324	$	327
Accounts receivable/payable as of:		March 31, 2014		December 31, 2013
	Receivables from Polar	$	2,685	$	4,249
	Payables to Polar	$	2,780	$	3,464
Aggregate Carrying Value of Polar Investment as of:		March 31, 2014		December 31, 2013
		$	4,870	$	4,870

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting Tables [Abstract]

Operating Revenue and Direct Contribution For Our Reportable Business Segments

	For the Three Months Ended
	March 31, 2014		March 31, 2013
Operating Revenue:
ACMI	$	198,141	$	181,170
AMC Charter		62,874		98,037
Commercial Charter		114,499		91,100
Dry Leasing		24,676		3,747
Other		3,173		3,282
Total Operating Revenue	$	403,363	$	377,336

Direct Contribution:
ACMI	$	45,198	$	39,944
AMC Charter		9,468		12,737
Commercial Charter		(12,245)		(8,685)
Dry Leasing		8,171		1,176
Total Direct Contribution		50,592		45,172
Add back (subtract):
Unallocated income and expenses, net		(35,998)		(35,012)
Special charge		(8,029)		-
Gain on disposal of aircraft		-		23
Income before Income Taxes		6,565		10,183
	For the Three Months Ended
	March 31, 2014		March 31, 2013
Add back (subtract):
Interest income		(4,727)		(5,176)
Interest expense		26,452		18,440
Capitalized interest		(312)		(1,402)
Other expense (income), net		152		552
Operating Income	$	28,130	$	22,597

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Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	$ (10,677)
Net change in fair value	(251)	0
Reclassification into earnings	690	770
Translation adjustment	77
Tax effect	246	279
Balance	(10,407)
Interest Rate Derivatives
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	(11,375)
Net change in fair value	(251)
Reclassification into earnings	690
Translation adjustment	0
Tax effect	(246)
Balance	(11,182)
Foreign Currency Translation
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	698
Net change in fair value	0
Reclassification into earnings	0
Translation adjustment	77
Tax effect	0
Balance	775
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Net change in fair value	$ (251)

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Income Taxes Tables (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Current
ETI Income Tax Benefit	$ (14.2)
Reconciliation of differences between the U.S. federal statutory income tax rate and the effective income tax rates
Effective income tax rate	38.70%	(97.40%)

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Revenue
ACMI	$ 198,141	$ 181,170
AMC charter	62,874	98,037
Commercial charter	114,499	91,100
Dry leasing	24,676	3,747
Other	3,173	3,282
Total Operating Revenue	403,363	377,336
Operating Expenses
Aircraft fuel	81,744	93,358
Salaries, wages and benefits	72,855	72,531
Maintenance, materials and repairs	59,046	58,369
Aircraft rent	35,410	38,494
Depreciation and amortization	28,155	17,808
Navigation fees, landing fees and other rent	27,126	15,626
Passenger and ground handling services	19,371	16,772
Travel	17,282	15,179
Special charge	8,029	0
Loss (gain) on disposal of aircraft	0	(23)
Other	26,215	26,625
Total Operating Expenses	375,233	354,739
Operating Income	28,130	22,597
Non-operating Expenses (Income)
Interest income	(4,727)	(5,176)
Interest expense	26,452	18,440
Capitalized interest	(312)	(1,402)
Other expense (income), net	152	552
Total Non-operating Expenses (Income)	21,565	12,414
Income before income taxes	6,565	10,183
Income tax expense (benefit)	2,539	(9,920)
Net Income	4,026	20,103
Less: Net income (loss) attributable to noncontrolling interests	(3,918)	25
Net Income Attributable to Common Stockholders	$ 7,944	$ 20,078
Earnings per share:
Basic	$ 0.32	$ 0.76
Diluted	$ 0.32	$ 0.76
Weighted average shares:
Basic	25,096	26,330
Diluted	25,151	26,439

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Basis of Presentation

3 Months Ended

Mar. 31, 2014

Basis Of Presentation [Abstract]

Basis Of Presentation

1. Basis of Presentation

Our consolidated financial statements include the accounts of the holding company, Atlas Air Worldwide Holdings, Inc. (“AAWW”) and its consolidated subsidiaries. AAWW is the parent company of its principal operating subsidiary, Atlas Air, Inc. (“Atlas”), and of Polar Air Cargo LLC (“Old Polar”). AAWW is also the parent company of several subsidiaries related to our dry leasing services (collectively referred to as “Titan”). In addition, we are the primary beneficiary of Global Supply Systems Limited (“GSS”), a consolidated subsidiary. AAWW has a 51% equity interest and 75% voting interest in Polar Air Cargo Worldwide, Inc. (“Polar”). We record our share of Polar's results under the equity method of accounting.

The terms “we,” “us,” “our,” and the “Company” mean AAWW and all entities included in its consolidated financial statements.

We provide outsourced aircraft and aviation operating services throughout the world, serving Africa, Asia, Australia, Europe, the Middle East, North America and South America through: (i) contractual service arrangements, including those through which we provide aircraft to customers and value-added services, including crew, maintenance and insurance (“ACMI”), as well as those through which we provide crew, maintenance and insurance services, with the customer providing the aircraft (“CMI”); (ii) military charter services provided to the U.S. Military Air Mobility Command (the “AMC”) (“AMC Charter”); (iii) seasonal, commercial and adhoc charter services (“Commercial Charter”); and (iv) dry leasing of aircraft and engines (“Dry Leasing” or “Dry Lease”).

The accompanying unaudited consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the AAWW Annual Report on Form 10-K for the year ended December 31, 2013, which includes additional disclosures and a summary of our significant accounting policies. In our opinion, the Financial Statements contain all adjustments, consisting of normal recurring items, necessary to fairly state the financial position of AAWW and its consolidated subsidiaries as of March 31, 2014, the results of operations for the three months ended March 31, 2014 and 2013, comprehensive income for the three months ended March 31, 2014 and 2013, cash flows for the three months ended March 31, 2014 and 2013, and shareholders' equity as of and for the three months ended March 31, 2014 and 2013.

Our quarterly results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

Except for per share data, all dollar amounts are in thousands unless otherwise noted.

Certain reclassifications have been made to prior periods'unaudited consolidated financial statement amounts andrelated note disclosures to conform to the current period's presentation.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share Tables [Abstract]

Calculations of Basic and Diluted EPS

	For the Three Months Ended
	March 31, 2014		March 31, 2013
Numerator:
Net Income Attributable to Common Stockholders	$	7,944	$	20,078
Denominator:
Basic EPS weighted average shares outstanding		25,096		26,330
Effect of dilutive stock options and restricted stock		55		109
Diluted EPS weighted average shares outstanding		25,151		26,439
EPS:
Basic	$	0.32	$	0.76
Diluted	$	0.32	$	0.76

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Debt Guaranteed Notes (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Debt Instrument [Line Items]
Face Value	$ 432.0
First 2014 Ex-Im Guaranteed Note
Debt Instrument [Line Items]
Face Value	$ 140.6
Issue Date	January 2014
Collateral Aircraft Tail Number	Tail # N854GT
Original Term	0 years 134 months
Fixed Interest Rate	2.67%

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income (Loss)

11. Accumulated Other Comprehensive Income (Loss)

The following table summarizes the components of Accumulated other comprehensive income (loss):

		Interest Rate		Foreign Currency
		Derivatives		Translation		Total
Balance as of December 31, 2013		$	(11,375)	$	698	$	(10,677)
	Net change in fair value		(251)		-		(251)
	Reclassification into earnings		690		-		690
	Translation adjustment		-		77		77
	Tax effect		(246)		-		(246)
Balance as of March 31, 2014		$	(11,182)	$	775	$	(10,407)

Interest Rate Derivatives

In December 2013, we entered into six forward-starting interest rate swaps with a total notional value of $432.5 million to hedge the risk of changes in quarterly interest payments due to fluctuations in the forward 90-day LIBOR swap rate for debt issuances. The debt issuances were related to the financing of three Boeing 777-200LRF aircraft that we purchased in January 2014 (see Note 5).

In January 2014, we terminated all six of the forward-starting interest rate swaps in connection with the debt issuances, which converted a previously unrealized gain of $1.1 million into a realized gain in Accumulated other comprehensive income (loss). There was no ineffectiveness associated with these hedges upon their termination.

As of March 31, 2014, there was $18.0 million of net unamortized realized loss before taxes remaining in Accumulated other comprehensive income (loss)related to terminatedforward-starting interest rate swaps,which had been designated as cash flow hedges to effectively fix the interest rates on two 747-8F financings in 2011 and the three 777-200LRF financings in 2014. The net loss is amortized and reclassified into Interest expense over the remaining life of the related debt. Net realized losses reclassified into earnings were $0.7million and $0.8 million for the threemonths ended March 31, 2014 and 2013, respectively. Net realized losses expected to be reclassified into earnings within the next 12 months are $2.7 million as of March 31, 2014.