UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): | November 6, 2014 |
Atlas Air Worldwide Holdings, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware | 001-16545 | 13-4146982 |
_____________________ (State or other jurisdiction |
_____________ (Commission |
______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
2000 Westchester Avenue, Purchase, New York | 10577 | |
_________________________________ (Address of principal executive offices) |
___________ (Zip Code) |
Registrants telephone number, including area code: | 914-701-8000 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 6, 2014, Atlas Air Worldwide Holdings, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2014, among other things. A copy of this press release is attached as Exhibit 99 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including Exhibit 99, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
Item 9.01 Financial Statements and Exhibits.
99 - Atlas Air Worldwide Holdings, Inc. press release, dated November 6, 2014, announcing its financial results for the quarter ended September 30, 2014.
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 hereunto duly authorized.
Atlas Air Worldwide Holdings, Inc. | ||||
November 6, 2014 | By: |
/s/ Adam R. Kokas
|
||
|
||||
Name: Adam R. Kokas | ||||
Title: Executive Vice President, General Counsel, Secretary and Chief Human Resources Officer |
Exhibit Index
Exhibit No. | Description | |
|
|
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99
|
Atlas Air Worldwide Holdings, Inc. press release, dated November 6, 2014, announcing its financial results for the quarter ended September 30, 2014. |
FOR IMMEDIATE RELEASE
Contacts: | Dan Loh (Investors) (914) 701-8200 Bonnie Rodney (Media) (914) 701-8580 |
Atlas Air Worldwide
Reports Third-Quarter 2014 Results
| Adjusted Net Income of $27.4 Million, $1.09 per Share |
| Reported Net Income of $27.6 Million, $1.10 per Share |
| Repurchased 1.8% of Shares Outstanding in the Third Quarter |
| Raising Fourth-Quarter and Full-Year Earnings Outlooks |
PURCHASE, N.Y., November 6, 2014 Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW), a leading global provider of outsourced aircraft and aviation operating services, today announced adjusted net income attributable to common stockholders of $27.4 million, or $1.09 per diluted share, for the three months ended September 30, 2014, compared with $28.6 million, or $1.13 per diluted share, for the three months ended September 30, 2013.
On a reported basis, net income attributable to common stockholders in the third quarter of 2014 totaled $27.6 million, or $1.10 per diluted share, compared with $23.7 million, or $0.94 per diluted share, in the year-ago quarter.
Both our third-quarter results and our recently announced placements of three additional ACMI aircraft and four more CMI aircraft illustrate the strength of our business and the demand for our industry-leading assets and services, said William J. Flynn, President and Chief Executive Officer.
With airfreight volumes continuing to improve and market yields beginning to pick up, we expect our diversified mix and new placements to drive sequential EPS growth in the fourth quarter. We anticipate adjusted fully diluted earnings per share of approximately $1.33 to $1.43 in the fourth quarter, and we are raising our full-year 2014 adjusted earnings outlook to approximately $3.50 to $3.60 per diluted share.
Mr. Flynn added: ACMI earnings in the third quarter were complemented by a profit in Commercial Charter, growth in our Dry Leasing business, and an improved contribution by our military charter operations. Earnings in Commercial Charter were driven by a sharp increase in block hours flown, reflecting the broad-based uptick in airfreight demand. In Dry Leasing, our results benefited from our addition of 777 freighters that generate predictable, long-term revenue and earnings streams. And in AMC Charter, we benefited from an enhanced share of available military flying requirements.
Reflecting our commitment to shareholder value, we acquired 1.8% of our outstanding common stock through our share repurchase program during the third quarter. Our capital allocation strategy is dedicated to creating, enhancing and returning value to our shareholders, both through business growth and returns of capital.
We recently placed three incremental Boeing 747 freighters, a 747-8F and two 747-400Fs, into ACMI service for the benefit of DHL Express, the worlds leading international express shipping company, and Etihad Cargo, the fast-growing freight division of Etihad Airways. The placements increase the number of our aircraft in ACMI to 22 from 19.
In addition, we recently announced the expansion of our 767 CMI service in North America for DHL Express. This expansion covers four incremental 767-200 freighter aircraft owned by DHL that we expect to begin flying during the first quarter of 2015.
Adjusted earnings in the third quarter of 2014 excluded a tax adjustment of $0.1 million, or $0.01 per diluted share, related to the companys Global Supply Systems Limited subsidiary. Adjusted earnings in the third quarter of 2013 excluded an after-tax loss of $4.5 million, or $0.18 per diluted share, on the early extinguishment of debt, and a loss of $0.3 million, or $0.01 per diluted share, on the disposal of aircraft.
Third-Quarter Results
Profitability in our ACMI business during the third quarter reflected an increase in 747-8F revenue and an increase in CMI flying, offset by an increase in maintenance expense on our -8F aircraft and lower 747-400 flying by certain ACMI customers.
In Dry Leasing, revenue and profitability grew following the addition of three 777F aircraft in January 2014 and two in July 2013, which raised our 777F fleet count to six. Each of these aircraft are leased to customers on a long-term basis.
Results in AMC Charter benefited from an increase in block hours and aircraft utilization, partially offset by a decrease in revenue per block hour due to a reduction of the average pegged fuel price set by the AMC. Stronger than expected demand for cargo flying and incremental passenger flying as a result of former competitors exiting the AMC Charter market drove contribution growth in the third quarter.
Profitability in Commercial Charter primarily reflected an increase in volumes and improvement in aircraft utilization compared with the third quarter of 2013. Charter operations during the quarter benefited from the broad-based uptick in demand, partially offset by additional travel and ground handling expenses from flying to high-cost locations.
Reported earnings for the period included an effective income tax rate of 29.1%, reflecting the ongoing beneficial impact of lower taxes for certain foreign subsidiaries in our Dry Leasing business.
Nine-Month Results
For the nine months ended September 30, 2014, adjusted net income attributable to common stockholders totaled $54.7 million, or $2.17 per diluted share, compared with $54.9 million, or $2.13 per diluted share, for the nine months ended September 30, 2013.
On a reported basis, nine-month 2014 net income attributable to common stockholders totaled $65.1 million, or $2.59 per diluted share, compared with $63.9 million, or $2.48 per diluted share, in the first nine months of 2013.
Cash and Short-Term Investments
At September 30, 2014, our cash, cash equivalents, short-term investments and restricted cash totaled $287.7 million, compared with $339.2 million at December 31, 2013.
The change in position reflected cash provided by operating and financing activities offset by cash used for investing activities.
Net cash used for investing activities during the first nine months of 2014 primarily related to the purchase of three 777F aircraft for our Dry Leasing business.
Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the acquisitions of these aircraft. Those proceeds were partially offset by payments on debt obligations and debt issuance costs.
Share Repurchases
During the third quarter, we repurchased 458,937 shares of our common stock for $15.0 million, or 1.8% of our outstanding common stock at June 30, 2014.
Future repurchases under our remaining $45.0 million authority may be made at our discretion, and the actual timing, form and amount will depend on company and market conditions.
Outlook
We are encouraged by our performance in the first nine months of 2014 and the positive direction of market trends so far this year.
Airfreight volumes continue to improve, and recent industry reports suggest that airfreight demand will grow by several percentage points in 2014 outpacing supply and driving the first real growth since 2010. We are seeing a general increase in demand across all regions, with the greatest growth in the transpacific market. An increase in online shopping and several new high-tech product launches during peak season also continue to favor airfreight.
As a result, we anticipate adjusted and reported fully diluted earnings per share of approximately $1.33 to $1.43 in the fourth quarter. We are also raising our full-year 2014 adjusted earnings outlook to approximately $3.50 to $3.60 per diluted share, and our reported earnings outlook to approximately $3.92 to $4.02.
For the full year, we expect to fly approximately 160,000 block hours, with more than 70% in ACMI, approximately 10% in AMC Charter, and the balance in Commercial Charter. Our Dry Leasing segment should show dramatic growth compared with 2013. While our share of military flying, mainly in passenger service, has increased due to our ability to capitalize on additional flying opportunities and a reduction in the number of carriers serving the market, we expect an overall decline in military demand in the fourth quarter of 2014 compared with 2013.
We also expect aircraft maintenance expense to total approximately $190 to $195 million in 2014, primarily due to performing several conditions-based engine overhauls for our 747-400 fleet during the fourth quarter. Depreciation this year is anticipated to total approximately $120 million, and core capital expenditures are expected to total about $30 to $35 million, mainly for spare parts for our expanded fleet.
We remain confident in the resilience of our business model, as well as our ability to adapt to the market and to leverage the scale and efficiencies in our operations. The business initiatives we have undertaken and the investments we have made have enabled the company to deliver meaningful earnings in any environment.
With a resilient business model, a superior fleet, strong customer relationships, and outstanding employees, we are well-positioned to capitalize on market improvements and to continue to focus on the long-term growth of our business.
Conference Call
Management will host a conference call to discuss Atlas Air Worldwides third-quarter 2014 financial and operating results at 11:00 a.m. Eastern Time on Thursday, November 6, 2014.
Interested parties are invited to listen to the call live over the Internet at www.atlasair.com (click on Investor Information, click on Presentations and on the link to the third-quarter call) or at the following Web address:
http://www.media-server.com/m/p/mfukjxmu
For those unable to listen to the live call, a replay will be available on the above Web sites following the call. A replay will also be available through November 12 by dialing (855) 859-2056 (domestic) and (404) 537-3406 (international) and using Access Code 24791883#.
About Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include EBITDAR, as adjusted; EBITDA, as adjusted; Direct Contribution; Adjusted Net Income Attributable to Common Stockholders; Adjusted Diluted EPS; and Free Cash Flow, which exclude certain items. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the Companys ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance.
About Atlas Air Worldwide:
Atlas Air Worldwide is the parent company of Atlas Air, Inc. (Atlas) and Titan Aviation Holdings, Inc. (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar). Through Atlas and Polar, Atlas Air Worldwide operates the worlds largest fleet of Boeing 747 freighter aircraft.
Atlas, Titan and Polar offer a range of outsourced aircraft and aviation operating services that include ACMI service in which customers receive an aircraft, crew, maintenance and insurance on a long-term basis; CMI service, for customers that provide their own aircraft; express network and scheduled air cargo service; military cargo and passenger charters; commercial cargo and passenger charters; and dry leasing of aircraft and engines.
Atlas Air Worldwides press releases, SEC filings and other information can be accessed through the Companys home page, www.atlasair.com.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwides current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of Atlas Air Worldwide and its subsidiaries (collectively, the companies) that may cause the actual results of the companies to be materially different from any future results, express or implied, in such forward-looking statements.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwides reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading Risk Factors in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2014 or thereafter.
Atlas Air Worldwide assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.
* * *
Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | |||||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||
ACMI
|
$ | 184,068 | $ | 189,583 | $ | 568,929 | $ | 552,710 | ||||||||||||||||
AMC Charter
|
109,780 | 95,668 | 263,935 | 287,840 | ||||||||||||||||||||
Commercial Charter
|
143,075 | 104,605 | 391,527 | 313,488 | ||||||||||||||||||||
Dry Leasing
|
25,411 | 11,874 | 75,611 | 21,844 | ||||||||||||||||||||
Other
|
3,467 | 3,660 | 10,331 | 10,417 | ||||||||||||||||||||
Total Operating Revenue |
$ | 465,801 | $ | 405,390 | $ | 1,310,333 | $ | 1,186,299 | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Aircraft fuel
|
115,690 | 93,434 | 301,276 | 289,535 | ||||||||||||||||||||
Salaries, wages and benefits |
78,834 | 74,167 | 229,637 | 219,216 | ||||||||||||||||||||
Maintenance, materials and repairs |
35,084 | 31,306 | 144,516 | 133,152 | ||||||||||||||||||||
Aircraft rent
|
34,183 | 40,405 | 104,419 | 118,753 | ||||||||||||||||||||
Navigation fees, landing fees and other rent |
35,336 | 24,481 | 93,368 | 58,851 | ||||||||||||||||||||
Depreciation and amortization |
29,865 | 23,661 | 88,401 | 61,840 | ||||||||||||||||||||
Passenger and ground handling services |
24,876 | 18,037 | 66,106 | 52,109 | ||||||||||||||||||||
Travel
|
21,642 | 14,535 | 57,698 | 43,485 | ||||||||||||||||||||
Loss on disposal of aircraft |
- | 501 | 14,679 | 79 | ||||||||||||||||||||
Special charge
|
90 | - | 9,567 | | ||||||||||||||||||||
Other
|
29,212 | 27,157 | 84,890 | 80,515 | ||||||||||||||||||||
Total Operating Expenses |
404,812 | 347,684 | 1,194,557 | 1,057,535 | ||||||||||||||||||||
Operating Income
|
60,989 | 57,706 | 115,776 | 128,764 | ||||||||||||||||||||
Non-operating Expenses (Income) | ||||||||||||||||||||||||
Interest income
|
(4,588 | ) | (4,849 | ) | (14,034 | ) | (15,003 | ) | ||||||||||||||||
Interest expense
|
25,960 | 22,594 | 78,777 | 61,711 | ||||||||||||||||||||
Capitalized interest
|
(44 | ) | (291 | ) | (423 | ) | (1,985 | ) | ||||||||||||||||
Loss on early extinguishment of debt |
- | 4,524 | - | 5,518 | ||||||||||||||||||||
Other expense (income), net |
767 | (241 | ) | 831 | 1,415 | |||||||||||||||||||
Total Non-operating Expenses |
22,095 | 21,737 | 65,151 | 51,656 | ||||||||||||||||||||
767 | ||||||||||||||||||||||||
Income before income taxes |
38,894 | 35,969 | 50,625 | 77,108 | ||||||||||||||||||||
Income tax expense (benefit) |
11,318 | 11,247 | (9,958 | ) | 11,320 | |||||||||||||||||||
Net Income | 27,576 | 24,722 | 60,583 | 65,788 | ||||||||||||||||||||
Less: Net income (loss) attributable |
||||||||||||||||||||||||
to noncontrolling interests |
- | 981 | (4,530 | ) | 1,909 | |||||||||||||||||||
Net Income Attributable | ||||||||||||||||||||||||
to Common Stockholders | $ | 27,576 | $ | 23,741 | $ | 65,113 | $ | 63,879 | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||
Basic
|
$ | 1.10 | $ | 0.94 | $ | 2.59 | $ | 2.48 | ||||||||||||||||
Diluted
|
$ | 1.10 | $ | 0.94 | $ | 2.59 | $ | 2.48 | ||||||||||||||||
Weighted average shares: | ||||||||||||||||||||||||
Basic
|
24,983 | 25,124 | 25,106 | 25,710 | ||||||||||||||||||||
Diluted
|
25,064 | 25,212 | 25,164 | 25,784 | ||||||||||||||||||||
Atlas Air Worldwide Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
September 30, | ||||||||||||||
2014 | December 31, 2013 | |||||||||||||
Assets | ||||||||||||||
Current Assets | ||||||||||||||
Cash and cash equivalents
|
$ | 262,224 | $ | 321,816 | ||||||||||
Short-term investments
|
11,931 | 10,904 | ||||||||||||
Restricted cash
|
13,563 | 6,491 | ||||||||||||
Accounts receivable, net of allowance of $1,748 and $1,402, respectively |
167,845 | 132,159 | ||||||||||||
Prepaid maintenance
|
11,389 | 31,620 | ||||||||||||
Deferred taxes
|
29,203 | 54,001 | ||||||||||||
Prepaid expenses and other current assets |
26,835 | 36,962 | ||||||||||||
Total current assets
|
522,990 | 593,953 | ||||||||||||
Property and Equipment | ||||||||||||||
Flight equipment
|
3,485,877 | 2,969,379 | ||||||||||||
Ground equipment
|
50,305 | 46,951 | ||||||||||||
Less: accumulated depreciation | (328,953 | ) | (256,685 | ) | ||||||||||
Purchase deposits for flight equipment |
5,947 | 69,320 | ||||||||||||
Property and equipment, net |
3,213,176 | 2,828,965 | ||||||||||||
Other Assets | ||||||||||||||
Long-term investments and accrued interest |
126,002 | 130,267 | ||||||||||||
Deposits and other assets
|
136,438 | 131,216 | ||||||||||||
Intangible assets, net
|
69,676 | 33,858 | ||||||||||||
Total Assets | $ | 4,068,282 | $ | 3,718,259 | ||||||||||
Liabilities and Equity | ||||||||||||||
Current Liabilities | ||||||||||||||
Accounts payable
|
$ | 39,234 | $ | 65,367 | ||||||||||
Accrued liabilities
|
229,072 | 194,292 | ||||||||||||
Current portion of long-term debt1,2 |
191,487 | 157,486 | ||||||||||||
Total current liabilities
|
459,793 | 417,145 | ||||||||||||
Other Liabilities | ||||||||||||||
Long-term debt1,2 |
1,829,148 | 1,539,139 | ||||||||||||
Deferred taxes
|
340,444 | 371,655 | ||||||||||||
Other liabilities
|
66,822 | 68,195 | ||||||||||||
Total other liabilities
|
2,236,414 | 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; 28,556,909 and | ||||||||||||||
28,200,213 shares issued, 24,804,020 and 25,038,629, shares outstanding | ||||||||||||||
(net of treasury stock), as of September 30, 2014 and December 31, 2013, respectively |
286 |
282 |
||||||||||||
Additional paid-in-capital
|
569,230 | 561,481 | ||||||||||||
Treasury stock, at cost; 3,752,889 and 3,161,584 shares, respectively |
(145,305 | ) | (125,826 | ) | ||||||||||
Accumulated other comprehensive loss |
(9,762 | ) | (10,677 | ) | ||||||||||
Retained earnings
|
957,626 | 892,513 | ||||||||||||
Total stockholders equity
|
1,372,075 | 1,317,773 | ||||||||||||
Noncontrolling interest
|
¯ | 4,352 | ||||||||||||
Total equity
|
1,372,075 | 1,322,125 | ||||||||||||
Total Liabilities and Equity | $ | 4,068,282 | $ | 3,718,259 | ||||||||||
1 Balance sheet debt at September 30, 2014 totaled $2,020.6 million, including the impact of $37.4 million of unamortized discount.
2 The face value of our debt at September 30, 2014 totaled $2,058.0 million, compared with $1,738.0 million on December 31,
2013.
Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
For the Nine Months Ended | ||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||
Operating Activities: | ||||||||||||
Net Income Attributable to Common Stockholders | $ | 65,113 | $ | 63,879 | ||||||||
Net Income (loss) attributable to noncontrolling interests | (4,530) | 1,909 | ||||||||||
Net Income | 60,583 | 65,788 | ||||||||||
Adjustments to reconcile Net Income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization |
101,493 | 73,324 | ||||||||||
Accretion of debt securities discount |
(6,022 | ) | (6,758 | ) | ||||||||
Provision for allowance for doubtful accounts |
420 | 217 | ||||||||||
Special charge, net of cash payment |
6,484 | ¯ | ||||||||||
Loss on early extinguishment of debt |
¯ | 5,518 | ||||||||||
Loss (gain) on disposal of aircraft |
14,679 | 79 | ||||||||||
Deferred taxes |
(10,282 | ) | 10,511 | |||||||||
Stock-based compensation expense |
9,769 | 12,176 | ||||||||||
Changes in: | ||||||||||||
Accounts receivable |
(27,147 | ) | 6,818 | |||||||||
Prepaid expenses and other current assets |
36,931 | 12,494 | ||||||||||
Deposits and other assets |
(5,978 | ) | 2,834 | |||||||||
Accounts payable and accrued liabilities |
(12,402 | ) | 22,092 | |||||||||
Net cash provided by operating activities | 168,528 | 205,093 | ||||||||||
Investing Activities: | ||||||||||||
Capital expenditures |
(17,509 | ) | (24,860 | ) | ||||||||
Purchase deposits and delivery payments for flight equipment |
(502,782 | ) | (561,979 | ) | ||||||||
Changes in restricted cash |
(7,072 | ) | (5,886 | ) | ||||||||
Proceeds from short-term investments |
2,886 | 4,672 | ||||||||||
Proceeds from insurance |
¯ | 9,109 | ||||||||||
Proceeds from disposal of aircraft |
¯ | 4,250 | ||||||||||
Net cash used for investing activities | (524,477 | ) | (574,694 | ) | ||||||||
Financing Activities: | ||||||||||||
Proceeds from debt issuance |
572,552 | 709,484 | ||||||||||
Maintenance reserves received |
12,950 | 2,195 | ||||||||||
Refund of accelerated share repurchase |
¯ | 21,886 | ||||||||||
Prepayment of accelerated share repurchase |
¯ | (21,886 | ) | |||||||||
Purchase of treasury stock |
(19,479 | ) | (80,946 | ) | ||||||||
Excess tax benefit from stock-based compensation expense |
¯ | 850 | ||||||||||
Payment of debt issuance costs |
(17,117 | ) | (19,682 | ) | ||||||||
Payments of debt |
(252,549 | ) | (371,096 | ) | ||||||||
Net cash provided by financing activities | 296,357 | 240,805 | ||||||||||
Net decrease in cash and cash equivalents | (59,592 | ) | (128,796 | ) | ||||||||
Cash and cash equivalents at the beginning of period | 321,816 | 409,763 | ||||||||||
Cash and cash equivalents at the end of period | $ | 262,224 | $ | 280,967 | ||||||||
Non-cash Investing and Financing Activities: | ||||||||||||
Acquisition of flight equipment and assumed debt | $ | ¯ | $ | 90,498 | ||||||||
Acquisition of flight and ground equipment included in Accounts payable | ||||||||||||
and Accrued liabilities | $ | 29,087 | $ | ¯ | ||||||||
Disposition of aircraft included in Accounts receivable | $ | 5,072 | $ | ¯ | ||||||||
Atlas Air Worldwide Holdings, Inc.
Direct Contribution
(in thousands)
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | |||||||||||||
Operating Revenue:
|
||||||||||||||||
ACMI
|
$ | 184,068 | $ | 189,583 | $ | 568,929 | $ | 552,710 | ||||||||
AMC Charter
|
109,780 | 95,668 | 263,935 | 287,840 | ||||||||||||
Commercial Charter
|
143,075 | 104,605 | 391,527 | 313,488 | ||||||||||||
Dry Leasing
|
25,411 | 11,874 | 75,611 | 21,844 | ||||||||||||
Other
|
3,467 | 3,660 | 10,331 | 10,417 | ||||||||||||
Total Operating Revenue
|
$ | 465,801 | $ | 405,390 | $ | 1,310,333 | $ | 1,186,299 | ||||||||
Direct Contribution:
|
||||||||||||||||
ACMI
|
$ | 54,228 | $ | 62,587 | $ | 143,554 | $ | 157,594 | ||||||||
AMC Charter
|
17,603 | 14,749 | 42,691 | 40,144 | ||||||||||||
Commercial Charter
|
571 | (3,859 | ) | (17,731 | ) | (15,023 | ) | |||||||||
Dry Leasing
|
8,721 | 4,681 | 25,630 | 8,294 | ||||||||||||
Total Direct Contribution
|
$ | 81,123 | $ | 78,158 | $ | 194,144 | $ | 191,009 | ||||||||
Add back (subtract):
|
||||||||||||||||
Unallocated income and expenses, net |
(42,139) |
(37,164) |
(119,273) |
(108,304) |
||||||||||||
Loss on early extinguishment of debt |
- |
(4,524) |
- |
(5,518) |
||||||||||||
Special charge
|
(90) | - | (9,567) | - | ||||||||||||
Loss on disposal of aircraft
|
- | (501 | ) | (14,679) | (79 | ) | ||||||||||
Income before Income Taxes
|
38,894 | 35,969 | 50,625 | 77,108 | ||||||||||||
Add back (subtract):
|
||||||||||||||||
Interest income
|
(4,588 | ) | (4,849 | ) | (14,034 | ) | (15,003 | ) | ||||||||
Interest expense
|
25,960 | 22,594 | 78,777 | 61,711 | ||||||||||||
Capitalized interest
|
(44 | ) | (291 | ) | (423 | ) | (1,985 | ) | ||||||||
Loss on early extinguishment of debt |
- |
4,524 |
- |
5,518 |
||||||||||||
Other expense (income), net
|
767 | (241 | ) | 831 | 1,415 | |||||||||||
Operating Income
|
$ | 60,989 | $ | 57,706 | $ | 115,776 | $ | 128,764 |
Atlas Air Worldwide uses an economic performance metric, Direct Contribution, to show the profitability of each of its segments after allocation of direct ownership costs. Atlas Air Worldwide currently has the following reportable segments: ACMI, AMC Charter, Commercial Charter, and Dry Leasing. Each segment has different operating and economic characteristics, which are separately reviewed by senior management.
Direct Contribution consists of income (loss) before taxes, excluding special charges, nonrecurring items, losses (gains) on the sale of aircraft, and unallocated fixed costs.
Direct costs include crew costs, maintenance costs, fuel, ground operations, sales costs, aircraft rent, interest expense related to aircraft debt and aircraft depreciation.
Unallocated income and expenses include corporate overhead, non-aircraft depreciation, interest income, foreign exchange gains and losses, other revenue and other non-operating costs, including one-time items.
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
For the Three Months Ended | ||||||||||||
September 30, 2014 | September 30, 2013 | Percent Change | ||||||||||
Net Income Attributable to Common Stockholders
|
$ | 27,576 | $ | 23,741 | 16.2 | % | ||||||
After-tax impact from:
|
||||||||||||
Loss on disposal of aircraft
|
- | 319 | ||||||||||
Special charge1
|
(135 | ) | | |||||||||
Loss on early extinguishment of debt2
|
- | 4,524 | ||||||||||
Adjusted Net Income Attributable to Common Stockholders |
$ 27,441 |
$ 28,584 |
(4.0%) |
|||||||||
Diluted EPS
|
$ | 1.10 | $ | 0.94 | 17.0 | % | ||||||
After-tax impact from:
|
||||||||||||
Loss on disposal of aircraft
|
- | 0.01 | ||||||||||
Special charge1
|
(0.01 | ) | | |||||||||
Loss on early extinguishment of debt2
|
- | 0.18 | ||||||||||
Adjusted Diluted EPS
|
$ | 1.09 | $ | 1.13 | (3.5 | %) | ||||||
For the Nine Months Ended | ||||||||||||
September 30, 2014 | September 30, 2013 | Percent Change | ||||||||||
Net Income Attributable to Common Stockholders
|
$ | 65,113 | $ | 63,879 | 1.9 | % | ||||||
After-tax impact from:
|
||||||||||||
ETI tax benefit
|
(24,013 | ) | (14,160 | ) | ||||||||
Loss on disposal of aircraft
|
9,389 | 50 | ||||||||||
Special charge1
|
3,905 | | ||||||||||
Accrual for legal matters
|
300 | | ||||||||||
Loss on early extinguishment of debt2
|
- | 5,157 | ||||||||||
Adjusted Net Income Attributable to Common Stockholders |
$ 54,694 |
$ 54,926 |
(0.4%) |
|||||||||
Diluted EPS
|
$ | 2.59 | $ | 2.48 | 4.4 | % | ||||||
After-tax impact from:
|
||||||||||||
ETI tax benefit
|
(0.95 | ) | (0.55 | ) | ||||||||
Loss on disposal of aircraft
|
0.37 | | ||||||||||
Special charge1
|
0.16 | | ||||||||||
Accrual for legal matters
|
0.01 | | ||||||||||
Loss on early extinguishment of debt2
|
- | 0.20 | ||||||||||
Adjusted Diluted EPS
|
$ 2.173 | $ | 2.13 | 1.9 | % | |||||||
1 | Included in Special charge in 2014 were employee termination benefits, a loan reserve, professional fees and tax adjustments related to |
GSS, and an adjustment to lease termination costs for two 747-400BCFs.
2 Loss on early extinguishment of debt was related to the financing of 747-8F aircraft.
3 Items do not sum due to rounding.
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)
4Q14 | Full-Year 2014 | |||||||||||
Diluted EPS | Diluted EPS | |||||||||||
Guidance1 Guidance1,2 | ||||||||||||
$ | ||||||||||||
GAAP Measure |
$ | 1.33-1.43 | 3.92-4.02 | |||||||||
ETI tax benefit |
| (0.95 | ) | |||||||||
Loss on disposal of aircraft |
- | 0.37 | ||||||||||
Special charge |
| 0.16 | ||||||||||
Accrual for legal matters |
- | 0.01 | ||||||||||
Non-GAAP Measure |
$ | 1.33-1.43 | $ | 3.50-3.60 | ||||||||
1 Approximate $/share. |
||||||||||||
2 Items do not sum due to rounding. |
For the Three Months Ended | ||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||
Net Cash Provided by Operating Activities |
$ | 61,402 | $ | 78,462 | ||||||||||||||||
Less: |
||||||||||||||||||||
Capital expenditures |
6,856 | 5,369 | ||||||||||||||||||
Capitalized interest |
44 | 291 | ||||||||||||||||||
Free Cash Flow1 |
$ | 54,502 | $ | 72,802 | ||||||||||||||||
For the Nine Months Ended | ||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||
Net Cash Provided by Operating Activities |
$ | 168,528 | $ | 205,093 | ||||||||||||||||
Less: |
||||||||||||||||||||
Capital expenditures |
17,509 | 24,860 | ||||||||||||||||||
Capitalized interest |
423 | 1,985 | ||||||||||||||||||
Free Cash Flow1 |
$ | 150,596 | $ | 178,248 | ||||||||||||||||
1 | Free Cash Flow = Cash Flows from Operations minus Base Capital Expenditures and Capitalized Interest. |
Base Capital Expenditures excludes purchases of aircraft.
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands)
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||
September 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | |||||||
Income before income taxes
|
$ 38,894 | $ 35,969 | $ 50,625 | $ | 77,108 | |||||
Loss on disposal of aircraft
|
- | 501 | 14,679 | 79 | ||||||
Special charge1
|
90 | - | 9,567 | - | ||||||
Accrual for legal matters
|
- | - | 469 | - | ||||||
Loss on early extinguishment of debt2 |
- |
4,524 |
- |
5,518 |
||||||
Adjusted pretax income
|
38,984 | 40,994 | 75,340 | 82,705 | ||||||
Interest (income) expense, net
|
21,328 | 17,454 | 64,320 | 44,723 | ||||||
Other non-operating expenses (income) |
767 |
(241) |
831 |
1,415 |
||||||
Adjusted operating income
|
61,079 | 58,207 | 140,491 | 128,843 | ||||||
Depreciation and amortization
|
29,865 | 23,661 | 88,401 | 61,840 | ||||||
EBITDA, as adjusted3
|
90,944 | 81,868 | 228,892 | 190,683 | ||||||
Aircraft rent
|
34,183 | 40,405 | 104,419 | 118,753 | ||||||
EBITDAR, as adjusted4
|
$ 125,127 | $ 122,273 | $ 333,311 | $ | 309,436 |
1 | Included in Special charge in 2014 were GSS employee termination benefits, a loan reserve, professional fees and tax adjustments related to GSS, and an adjustment to lease termination costs for two 747-400BCFs. |
2 | Loss on early extinguishment of debt was related to the financing of 747-8F aircraft. |
3 | Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, loss on disposal of aircraft, special charge, accrual for legal matters, and loss on early extinguishment of debt, as applicable. |
4 | Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, aircraft rent expense, loss on disposal of aircraft, special charge, accrual for legal matters, and loss on early extinguishment of debt, as applicable. |
Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
September 30, | Increase/ | September 30, | Increase/ | |||||||||||||||||||||||||||||||||
2014 | 2013 | (Decrease) | 2014 | 2013 | (Decrease) | |||||||||||||||||||||||||||||||
Block Hours | ||||||||||||||||||||||||||||||||||||
ACMI |
28,096 | 28,813 | (717 | ) | 83,770 | 85,274 | (1,504 | ) | ||||||||||||||||||||||||||||
AMC Charter |
||||||||||||||||||||||||||||||||||||
Cargo |
1,892 | 1,531 | 361 | 3,493 | 5,296 | (1,803 | ) | |||||||||||||||||||||||||||||
Passenger |
3,679 | 3,029 | 650 | 9,378 | 8,264 | 1,114 | ||||||||||||||||||||||||||||||
Commercial Charter |
7,111 | 5,310 | 1,801 | 19,484 | 16,360 | 3,124 | ||||||||||||||||||||||||||||||
Nonrevenue |
261 | 220 | 41 | 796 | 655 | 141 | ||||||||||||||||||||||||||||||
Total Block Hours |
41,039 | 38,903 | 2,136 | 116,921 | 115,849 | 1,072 | ||||||||||||||||||||||||||||||
Revenue Per Block Hour | ||||||||||||||||||||||||||||||||||||
ACMI |
$ | 6,551 | $ | 6,580 | $ | (29 | ) | $ | 6,792 | $ | 6,482 | $ | 310 | |||||||||||||||||||||||
AMC Charter |
||||||||||||||||||||||||||||||||||||
Cargo |
19,710 | 21,962 | (2,252 | ) | 21,039 | 22,681 | (1,642 | ) | ||||||||||||||||||||||||||||
Passenger |
19,703 | 20,483 | (780 | ) | 20,308 | 20,296 | 12 | |||||||||||||||||||||||||||||
Commercial Charter |
20,120 | 19,700 | 420 | 20,095 | 19,162 | 933 | ||||||||||||||||||||||||||||||
Average Utilization (block hours per day) | ||||||||||||||||||||||||||||||||||||
ACMI1 |
9.6 | 10.1 | (0.5 | ) | 9.4 | 10.4 | (1.0 | ) | ||||||||||||||||||||||||||||
AMC Charter |
||||||||||||||||||||||||||||||||||||
Cargo |
9.3 | 5.4 | 3.9 | 8.5 | 6.7 | 1.8 | ||||||||||||||||||||||||||||||
Passenger |
9.5 | 8.0 | 1.5 | 7.8 | 7.0 | 0.8 | ||||||||||||||||||||||||||||||
Commercial Charter |
9.1 | 6.3 | 2.8 | 8.4 | 7.0 | 1.4 | ||||||||||||||||||||||||||||||
All Operating Aircraft1,2 |
9.5 | 8.9 | 0.6 | 9.1 | 9.3 | (0.2 | ) | |||||||||||||||||||||||||||||
Fuel | ||||||||||||||||||||||||||||||||||||
AMC |
||||||||||||||||||||||||||||||||||||
Average fuel cost | ||||||||||||||||||||||||||||||||||||
per gallon | $ | 3.36 | $ | 3.62 | $ | (0.26 | ) | $ | 3.35 | $ | 3.63 | $ | (0.28 | ) | ||||||||||||||||||||||
Fuel gallons | 13,341 | 11,324 | 2,017 | 30,644 | 33,847 | (3,203 | ) | |||||||||||||||||||||||||||||
consumed (000s) | ||||||||||||||||||||||||||||||||||||
Commercial Charter |
||||||||||||||||||||||||||||||||||||
Average fuel cost | ||||||||||||||||||||||||||||||||||||
per gallon | $ | 3.06 | $ | 3.09 | $ | (0.03 | ) | $ | 3.12 | $ | 3.13 | $ | (0.01 | ) | ||||||||||||||||||||||
Fuel gallons | 23,142 | 16,956 | 6,186 | 63,698 | 53,210 | 10,488 | ||||||||||||||||||||||||||||||
consumed (000s) | ||||||||||||||||||||||||||||||||||||
1 ACMI and All Operating Aircraft averages in the third quarter and first nine months of 2014 reflect the impact of increases in the number of CMI |
||||||||||||||||||||||||||||||||||||
aircraft and amount of CMI flying compared with the same periods of 2013. |
||||||||||||||||||||||||||||||||||||
2 Average of All Operating Aircraft excludes Dry Leasing aircraft, which do not contribute to block-hour volumes. |
Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | Increase/ | September 30, | Increase/ | |||||||||||||
2014 | 2013 | (Decrease) | 2014 | 2013 | (Decrease) | |||||||||||
Segment Operating Fleet (average | ||||||||||||||||||||||||||||
aircraft equivalents during the | ||||||||||||||||||||||||||||
period) | ||||||||||||||||||||||||||||
ACMI1 |
||||||||||||||||||||||||||||
747-8F Cargo |
8.4 | 8.0 | 0.4 | 8.5 | 7.7 | 0.8 | ||||||||||||||||||||||
747-400 Cargo |
11.1 | 12.0 | (0.9 | ) | 11.8 | 12.2 | (0.4 | ) | ||||||||||||||||||||
747-400 Dreamlifter |
3.0 | 1.6 | 1.4 | 3.1 | 1.6 | 1.5 | ||||||||||||||||||||||
767-300 Cargo |
2.0 | 2.0 | | 2.0 | 1.8 | 0.2 | ||||||||||||||||||||||
767-200 Cargo |
5.0 | 5.0 | | 5.0 | 5.0 | | ||||||||||||||||||||||
747-400 Passenger |
1.3 | 1.4 | (0.1 | ) | 1.1 | 1.1 | | |||||||||||||||||||||
767-300 Passenger |
0.1 | | 0.1 | | 0.3 | (0.3 | ) | |||||||||||||||||||||
767-200 Passenger |
1.0 | 1.0 | | 1.0 | 0.3 | 0.7 | ||||||||||||||||||||||
Total |
31.9 | 31.0 | 0.9 | 32.5 | 30.0 | 2.5 | ||||||||||||||||||||||
AMC Charter |
||||||||||||||||||||||||||||
747-400 Cargo |
2.2 | 3.1 | (0.9 | ) | 1.5 | 2.9 | (1.4 | ) | ||||||||||||||||||||
747-400 Passenger |
1.5 | 1.4 | 0.1 | 1.7 | 1.7 | | ||||||||||||||||||||||
767-300 Passenger |
2.7 | 2.7 | | 2.7 | 2.6 | 0.1 | ||||||||||||||||||||||
Total |
6.4 | 7.2 | (0.8 | ) | 5.9 | 7.2 | (1.3 | ) | ||||||||||||||||||||
Commercial Charter |
||||||||||||||||||||||||||||
747-8F Cargo |
0.5 | 1.0 | (0.5 | ) | 0.5 | 0.4 | 0.1 | |||||||||||||||||||||
747-400 Cargo |
7.6 | 7.7 | (0.1 | ) | 7.7 | 7.8 | (0.1 | ) | ||||||||||||||||||||
747-400 Passenger |
0.1 | 0.2 | (0.1 | ) | 0.1 | 0.2 | (0.1 | ) | ||||||||||||||||||||
767-300 Passenger |
0.3 | 0.2 | 0.1 | 0.2 | 0.2 | | ||||||||||||||||||||||
Total |
8.5 | 9.1 | (0.6 | ) | 8.5 | 8.6 | (0.1 | ) | ||||||||||||||||||||
Dry Leasing |
||||||||||||||||||||||||||||
777-200 Cargo |
6.0 | 2.6 | 3.4 | 5.9 | 1.3 | 4.6 | ||||||||||||||||||||||
757-200 Cargo |
1.0 | 1.0 | | 1.0 | 1.0 | | ||||||||||||||||||||||
737-300 Cargo |
1.0 | 1.0 | | 1.0 | 1.0 | | ||||||||||||||||||||||
737-800 Passenger |
2.0 | 2.0 | | 2.0 | 2.0 | | ||||||||||||||||||||||
Total |
10.0 | 6.6 | 3.4 | 9.9 | 5.3 | 4.6 | ||||||||||||||||||||||
Total Operating Aircraft |
56.8 | 53.9 | 2.9 | 56.8 | 51.1 | 5.7 | ||||||||||||||||||||||
Out of Service2 |
1.0 | 1.0 | | 1.0 | 0.8 | 0.2 |
1
|
ACMI average fleet excludes spare aircraft provided by CMI customers. | |
2
|
Out-of-service aircraft were temporarily parked during the period and are completely unencumbered. |