2000 Westchester Avenue, Purchase, New York 10577 •(914) 701-8000
FOR IMMEDIATE RELEASE
Contacts: Dan Loh (Investors) –(914) 701-8200
Beth Roach (Media) – (914) 701-6576
Atlas Air Worldwide Reports First-Quarter 2017 Results
Reported Income from Continuing Operations of $0.04 Million Adjusted Income from Continuing Operations of $8.3 Million Anticipate Solid Earnings Growth in 2017 Significant New Customer Relationships
PURCHASE, N.Y.,May 3, 2017 –Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) today announced income from continuing operations, net of taxes, of $0.04 million, which included an unrealized loss on financial instruments of $5.2 million related to outstanding warrants, for the three months ended March 31, 2017. Results compared with income from continuing operations, net of taxes, of $0.5 million for the three months ended March 31, 2016.
On an adjusted basis, income from continuing operations, net of taxes, in the first quarter of 2017 totaled $8.3 million compared with $7.7 million in the year-ago quarter.
Diluted earnings per share from continuing operations, net of taxes were $0.00 for the three months ended March 31, 2017 and $0.02 for the three months ended March 31, 2016. Adjusted diluted EPS from continuing operations, net of taxes, totaled $0.31 in both periods.
“We are off to an exciting start in 2017,” said President and Chief Executive Officer William J. Flynn. “We are building on our 2016 achievements and growing our earnings this year.
“We will have a full year of contribution from Southern Air and expect a positive impact on our full-year results from our service for Amazon. We placed our second 767-300 aircraft into service for Amazon in February, and just added our third and fourth aircraft in May.
“In addition to announcing our first-quarter earnings and reaffirming our full-year earnings framework today, we are very pleased to have announced the placement of two of our 747-8 freighters with Cathay Pacific Cargo on an ACMI basis, with service beginning in May.
“Cathay Pacific is a prominent global airline based in Hong Kong and a standout performer in the airfreight market. We are delighted to work with Cathay Pacific’s cargo division to facilitate the strong growth of its global network.
“In addition to Cathay Pacific, we have recently announced other significant new customer agreements with Asiana Cargo, Nippon Cargo Airlines and FedEx that will all contribute to earnings growth this year.”
Mr. Flynn added: “Earnings in the first quarter were in line with our expectations and our outlook for the year.
“Consistent with our prior outlook, we anticipate that our adjusted income from continuing operations, net of taxes, will grow by a mid-single-digit to low-double-digit percentage compared with our 2016 adjusted income of $114.3 million.
“Our view reflects our expanding business base and the ongoing development of our strategic platform. It also reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.”
First-Quarter Results
Higher ACMI contribution in the first quarter of 2017 was primarily driven by our acquisition of Southern Air and lower costs related to crew training, partially offset by higher heavy maintenance costs and the temporary redeployment of 747-8F aircraft to our Charter segment. Segment revenue growth benefited from an increase in block-hour volumes, partially offset by a lower average rate per block hour. Both our volumes and average rate reflected an increase in 777 and 737 CMI flying following the acquisition of Southern Air, an increase in 767 CMI flying, as well as the temporary redeployment of 747-8F aircraft to our Charter segment.
Lower Charter segment contribution during the period reflected an increase in heavy maintenance costs and lower average rates. These impacts were partially offset by an increase in military passenger and cargo demand, which drove an increase in block-hour volumes, lower costs related to crew training, and the temporary redeployment of 747-8F aircraft from our ACMI segment. Average Charter rates during the quarter primarily reflected a reduction in cost-based rates paid by the military.
In Dry Leasing, lower revenue and segment contribution resulted from a decrease in revenue from maintenance payments related to the scheduled return of a passenger aircraft in 2016, partially offset by revenue from the placement of two 767-300 converted freighter aircraft with Amazon in August 2016 and February 2017, and one 767-300 converted freighter aircraft with DHL Express in February 2016.
Higher unallocated income and expenses in the first quarter of 2017 primarily reflected the impact of the Southern Air acquisition and fleet-growth initiatives.
Reported earnings in the first quarter of 2017 included an effective income tax rate of 94.0%, due mainly to nondeductible changes in the value of outstanding warrants, partially offset by the impact of adopting amended accounting guidance for share-based compensation, which recognizes excess tax benefits associated with share-based compensation within income tax expense. As a result of adopting the guidance, we recognized $1.5 million of excess tax benefits as a reduction of income tax expense during the quarter. On an adjusted basis, our results reflected an effective income tax rate of 9.5%, primarily due to adopting the amended accounting guidance for share-based compensation.
Cash and Short-Term Investments
At March 31, 2017, our cash, cash equivalents, short-term investments and restricted cash totaled $124.2 million, compared with $142.6 million at December 31, 2016.
The change in position resulted from cash used for investing activities, partially offset by cash provided by operating and financing activities.
Net cash used for investing activities during the first quarter of 2017 primarily related to capital expenditures and payments for flight equipment and modifications, including the acquisition of 767-300 aircraft to be converted to freighter configuration.
Net cash provided by financing activities primarily reflected proceeds from our revolving credit facility, partially offset by payments on debt obligations.
Outlook
Consistent with our prior outlook, we continue to expect our adjusted income from continuing operations, net of taxes, to grow by a mid-single-digit to low-double-digit percentage compared with 2016 adjusted income of $114.3 million.
In addition, we expect adjusted income from continuing operations, net of taxes, in the second quarter of 2017 to be approximately 15% to 20% higher than second-quarter 2016 adjusted income of $20.2 million.
Our view reflects solid demand from our customers, the benefits we expect from our fleet initiatives, and the steps we have taken to align our business with the faster-growing express and e-commerce markets.
We believe the current demand, including our new services for Asiana Cargo, Cathay Pacific Cargo, FedEx, and Nippon Cargo Airlines, the initial accretion from our Amazon operations, and the first full-year of contribution from Southern Air provide a strong foundation for earnings growth this year.
Given the inherent seasonality of airfreight demand, we anticipate that results in 2017 will reflect historical patterns, with more than 70% of our adjusted income occurring in the second half.
For the full year, we expect total block hours to increase approximately 20% compared with 2016, with more than 75% of our hours in ACMI and the balance in Charter.
Aircraft maintenance expense in 2017 should total approximately $245 million, and depreciation and amortization is expected to total approximately $170 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are expected to total approximately $55to $65 million, mainly for parts and components for our fleet.
We provide guidance on an adjusted basis because we are unable to predict, with reasonable certainty, the effects of outstanding warrants and other items that could be material to our reported results.
Conference Call
Management will host a conference call to discuss Atlas Air Worldwide’s first-quarter 2017 financial and operating results at 11:00 a.m. Eastern Time on Wednesday, May 3, 2017.
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 first-quarter call) or at the following Web address:
http://edge.media-server.com/m/p/khrc6h4w
For those unable to listen to the live call, a replay will be archived on the above websites following the call. A replay will also be available through May 9 by dialing (855) 859-2056 (U.S. Toll Free) or (404) 537-3406 (from outside the U.S.) and using Access Code 8110092#.
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 income from continuing operations, net of taxes; Adjusted Diluted EPS from continuing operations, net of taxes; Adjusted effective tax rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting 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 Income from continuing operations, net of taxes; Diluted EPS from continuing operations, net of taxes; Effective tax rate; and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP.
Our management uses these non-GAAP financial measures in assessing the performance of the company’s ongoing operations and in planning and forecasting future periods. In addition, management’s incentive compensation will be determined, in part, by using Adjusted Income from continuing operations, net of taxes. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental 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 a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc., Southern Air Holdings, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers a broad array of Boeing 747, 777, 767, 757 and 737 aircraft for domestic, regional and international applications.
Atlas Air Worldwide’s press releases, SEC filings and other information may be accessed through the company’s home page, www.atlasair.com.
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Atlas Air Worldwide’s current views with respect to certain current and future events and financial performance. 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 release that do not relate to historical facts are intended to identify forward-looking statements.
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: our ability to effectively operate the network service contemplated by our agreements with Amazon, including the cost and timing of securing any aircraft necessary to fulfill our agreements; the risk that the anticipated benefits of our agreements with Amazon will not be realized when expected, or at all; the possibility that Amazon may terminate its agreements with the companies; the effect of the announcement or pendency of the transactions contemplated by the agreements with Amazon; costs associated with the acquisition of Southern Air; failure to achieve expected synergies, accretion and other anticipated benefits of the transaction or to successfully integrate the Southern Air business; adverse reactions to the acquisition by employees, key customers, including DHL Express, suppliers or competitors of either Atlas Air Worldwide, Southern Air, or their subsidiaries; our ability to effectively operate the 777 platform or grow the business of Southern Air; the ability of the companies to operate pursuant to the terms of their financing facilities; the ability of the companies to obtain and maintain normal terms with vendors and service providers; the companies’ ability to maintain contracts that are critical to their operations; the ability of the companies to fund and execute their business plan; the ability of the companies to attract, motivate and/or retain key executives and associates; the ability of the companies to attract and retain customers; the continued availability of our wide-body aircraft; demand for cargo services in the markets in which the companies operate; economic conditions; the effects of any hostilities or act of war (in the Middle East or elsewhere) or any terrorist attack; labor costs and relations; financing costs; the cost and availability of war risk insurance; our ability to maintain adequate internal controls over financial reporting; aviation fuel costs; security-related costs; competitive pressures on pricing (especially from lower-cost competitors); volatility in the international currency markets; weather conditions; government legislation and regulation; consumer perceptions of the companies’ products and services; anticipated and future litigation; and other risks and uncertainties set forth from time to time in Atlas Air Worldwide’s reports to the United States Securities and Exchange Commission.
For additional information, we refer you to the risk factors set forth under the heading “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent reports on Form 10-Q filed by Atlas Air Worldwide with the Securities and Exchange Commission. Other factors and assumptions not identified above may also affect the forward-looking statements, and these other factors and assumptions may also cause actual results to differ materially from those discussed.
Except as stated in this release, Atlas Air Worldwide is not providing guidance or estimates regarding its anticipated business and financial performance for 2017 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.
* * *
1
Atlas Air Worldwide Holdings, Inc. Consolidated Statements of Operations (in thousands, except per share data) (Unaudited)
For the Three Months Ended
March 31, 2017
March 31, 2016
Operating Revenue
$
475,394
$
418,615
Operating Expenses
Salaries, wages and benefits
104,087
93,845
Aircraft fuel
82,432
63,220
Maintenance, materials and repairs
72,816
57,024
Depreciation and amortization
37,894
35,005
Aircraft rent
36,073
37,037
Travel
32,359
30,323
Passenger and ground handling services
25,123
20,879
Navigation fees, landing fees and other rent
18,535
21,974
Gain on disposal of aircraft
(54
)
—
Special charge
—
6,631
Transaction-related expenses
915
793
Other
41,178
31,827
Total Operating Expenses
451,358
398,558
Operating Income
24,036
20,057
Non-operating Expenses (Income)
Interest income
(1,256
)
(1,604
)
Interest expense
21,524
21,302
Capitalized interest
(1,780
)
(357
)
Loss on early extinguishment of debt
—
132
Unrealized loss on financial instruments
5,213
—
Other income
(253
)
(240
)
Total Non-operating Expenses (Income)
23,448
19,233
Income from continuing operations before income taxes
588
824
Income tax expense
553
353
471
Income from continuing operations, net of taxes
35
471
Loss from discontinued operations, net of taxes
(787
)
—
Net Income (Loss)
$
(752
)
$
471
Earnings per share from continuing operations:
Basic
$
0.00
$
0.02
Diluted
$
0.00
$
0.02
Loss per share from discontinued operations:
Basic
$
(0.03
)
$
—
Diluted
$
(0.03
)
$
—
Earnings (loss) per share:
Basic
$
(0.03
)
$
0.02
0.0
Diluted
$
(0.03
)
$
0.02
Weighted average shares:
Basic
25,162
24,711
Diluted
25,744
24,846
2
Atlas Air Worldwide Holdings, Inc. Consolidated Balance Sheets (in thousands, except share data) (Unaudited)
March 31, 2017
December 31, 2016
Assets
Current Assets
Cash and cash equivalents
$
109,100
$
123,890
Short-term investments
5,242
4,313
Restricted cash
9,836
14,360
Accounts receivable, net of allowance of $1,644 and $997, respectively
157,953
166,486
Prepaid maintenance
6,284
4,418
Prepaid expenses and other current assets
47,796
44,603
Total current assets
336,211
358,070
Property and Equipment
Flight equipment
3,993,853
3,886,714
Ground equipment
70,567
68,688
Less: accumulated depreciation
(602,420
)
(568,946
)
Flight equipment modifications in progress
242,013
154,226
Property and equipment, net
3,704,013
3,540,682
Other Assets
Long-term investments and accrued interest
26,699
27,951
Deferred costs and other assets
229,437
204,647
Intangible assets, net and goodwill
113,496
116,029
Total Assets
$
4,409,856
$
4,247,379
Liabilities and Equity
Current Liabilities
Accounts payable
$
54,610
$
59,543
Accrued liabilities
394,885
320,887
Current portion of long-term debt and capital lease
176,208
184,748
Total current liabilities
625,703
565,178
Other Liabilities
Long-term debt and capital lease
1,804,175
1,666,663
Deferred taxes
297,675
298,165
Financial instruments and other liabilities
170,679
200,035
Total other liabilities
2,272,529
2,164,863
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; 100,000,000 shares authorized;
30,052,095 and 29,633,605 shares issued, 25,258,361 and 25,017,242, shares
outstanding
(net of treasury stock), as of March 31, 2017 and December 31, 2016, respectively
300
296
Additional paid-in-capital
661,290
657,082
Treasury stock, at cost: 4,793,734 and 4,616,363 shares, respectively
(192,549
)
(183,119
)
Accumulated other comprehensive loss
(4,737
)
(4,993
)
Retained earnings
1,047,320
1,048,072
Total stockholders’ equity
1,511,624
1,517,338
Total Liabilities and Equity
$
4,409,856
$
4,247,379
1
Balance sheet debt at March 31, 2017 totaled $1,980.4 million, including the impact of $41.3 million of unamortized discount and debt issuance costs of $46.4 million.
2
The face value of our debt at March 31, 2017 totaled $2,068.1 million, compared with $1,943.4 million on December 31, 2016.
Atlas Air Worldwide Holdings, Inc. Consolidated Statements of Cash Flows (in thousands) (Unaudited)
For the Three Months Ended
March 31, 2017
March 31, 2016
Operating Activities:
Income from continuing operations, net of taxes
$
35
$
471
Less: Loss from discontinued operations, net of taxes
(787
)
—
Net Income (Loss)
(752
)
471
Adjustments to reconcile Net Income (Loss) to net cash provided by operating activities:
Depreciation and amortization
43,217
39,817
Accretion of debt securities discount
(307
)
(332
)
Provision for allowance for doubtful accounts
435
221
Special charge, net of cash payments
—
6,631
Loss on early extinguishment of debt
—
132
Unrealized loss on financial instruments
5,213
—
Gain on disposal of aircraft
(54
)
—
Deferred taxes
418
292
Stock-based compensation expense
4,212
5,455
Changes in:
Accounts receivable
8,134
29,871
Prepaid expenses, current assets and other assets
(30,336
)
(10,575
)
Accounts payable and accrued liabilities
(11,526
)
(52,544
)
Net cash provided by operating activities
18,654
19,439
Investing Activities:
Capital expenditures
(21,673
)
(10,682
)
Payments for flight equipment and modifications
(118,897
)
(84,230
)
Proceeds from investments
631
4,955
Proceeds from disposal of aircraft
137
—
Net cash used for investing activities
(139,802
)
(89,957
)
Financing Activities:
Proceeds from revolving credit facility
150,000
—
Proceeds from debt issuance
—
14,790
Customer maintenance reserves received
14,837
3,547
Customer maintenance reserves paid
(6,384
)
—
Purchase of treasury stock
(9,430
)
(4,112
)
Excess tax benefit from stock-based compensation expense
—
158
Payment of debt issuance costs
(90
)
(217
)
Payments of debt
(47,099
)
(50,666
)
Net cash (used for) provided by financing activities
101,834
(36,500
)
Net decrease in cash, cash equivalents and restricted cash
(19,314
)
(107,018
)
Cash, cash equivalents and restricted cash at the beginning of period
138,250
438,931
Cash, cash equivalents and restricted cash at the end of period
$
118,936
$
331,913
Noncash Investing and Financing Activities:
Acquisition of flight equipment included in Accounts payable and accrued liabilities
$
48,015
$
12,059
Acquisition of flight equipment under capital lease
$
32,380
$
—
Atlas Air Worldwide Holdings, Inc. Direct Contribution (in thousands) (Unaudited)
For the Three Months Ended
March 31, 2017
March 31, 2016
Operating Revenue:
ACMI
$
200,694
$
182,740
Charter
243,898
202,303
Dry Leasing
26,757
28,192
Customer incentive asset amortization
(445
)
—
Other
4,490
5,380
Total Operating Revenue
$
475,394
$
418,615
Direct Contribution:
ACMI
$
35,963
$
24,739
Charter
17,186
20,776
Dry Leasing
9,723
10,408
Total Direct Contribution for Reportable Segments
62,872
55,923
Unallocated income and expenses, net
(56,210
)
(47,543
)
Loss on early extinguishment of debt
—
(132
)
Unrealized loss on financial instruments
(5,213
)
—
Special charge
—
(6,631
)
Transaction-related expenses
(915
)
(793
)
Gain on disposal of aircraft
54
—
Income from continuing operations before income taxes
588
824
Add back (subtract):
Interest income
(1,256
)
(1,604
)
Interest expense
21,524
21,302
Capitalized interest
(1,780
)
(357
)
Loss on early extinguishment of debt
—
132
Unrealized loss on financial instruments
5,213
—
Other expense
(253
)
(240
)
Operating Income
$
24,036
$
20,057
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, Charter, and Dry Leasing. Each segment has different commercial and economic characteristics, which are separately reviewed by our chief operating decision maker.
Direct Contribution consists of income (loss) from continuing operations before taxes, excluding special charges, transaction-related expenses, nonrecurring items, gains (losses) on the disposal of aircraft, losses on the early extinguishment of debt, unrealized losses on financial instruments, gains on investments, and unallocated income and expenses, net.
Direct operating and ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense on the portion of debt used for financing aircraft, interest income on debt securities, and aircraft depreciation.
Unallocated income and expenses, net include corporate overhead, nonaircraft depreciation, noncash expenses and income, interest expense on the portion of debt used for general corporate purposes, interest income on nondebt securities, capitalized interest, foreign exchange gains and losses, other revenue and other nonoperating costs.
3
Atlas Air Worldwide Holdings, Inc. Reconciliation to Non-GAAP Measures (in thousands, except per share data) (Unaudited)
For the Three Months Ended
March 31, 2017
March 31, 2016
Percent Change
Income from continuing operations, net of taxes
$
35
$
471
(92.6
)%
Impact from:
Gain on disposal of aircraft
(54
)
—
Special charge
—
6,631
Transaction-related expenses
915
793
Accrual for legal matters and professional fees
74
290
Noncash expenses and income, net1
2,412
1,844
Charges associated with refinancing debt
—
132
Unrealized loss on financial instruments2
5,213
—
Income tax effect of reconciling items
(320
)
(2,418
)
Adjusted Income from continuing operations, net of taxes
$
8,275
$
7,743
6.9
%
Weighted average diluted shares outstanding
25,744
24,846
Add: dilutive warrants3
1,111
—
Adjusted weighted average diluted shares outstanding
26,855
24,846
Adjusted Diluted EPS from continuing operations, net of taxes
$
0.31
$
0.31
NM
1
Noncash expenses and income, net in 2017 primarily related to amortization of debt discount on outstanding convertible notes and amortization of customer incentive related to outstanding warrants. Noncash expenses and income, net in 2016 primarily related to amortization of debt discount on outstanding convertible notes.
2
Unrealized loss on financial instruments related to outstanding warrants.
3
Dilutive warrantsrepresent potentially dilutive common shares. These shares were excluded from Diluted EPS from continuing operations, net of taxes, prepared in accordance with GAAP as they would have been antidilutive.
Atlas Air Worldwide Holdings, Inc. Reconciliation to Non-GAAP Measures (in thousands, except per share data) (Unaudited)
For the Three Months Ended
March 31, 2017
March 31, 2016
Net Cash Provided by Operating Activities
$
18,654
$
19,439
Less:
Capital expenditures
21,673
10,682
Capitalized interest
1,780
357
Free Cash Flow1
$
(4,799)
$
8,400
1
Free Cash Flow = Cash Flows from Operations minus Base Capital Expenditures and Capitalized Interest.
Base Capital Expenditures excludes purchases of aircraft.
4
Atlas Air Worldwide Holdings, Inc. Reconciliation to Non-GAAP Measures (in thousands) (Unaudited)
For the Three Months Ended
March 31, 2017
March 31, 2016
Income from continuing operations, net of taxes
$
35
$
471
Income tax expense
553
353
Income from continuing operations before income taxes
588
824
Noncash expenses and income, net1
2,412
1,844
Gain on disposal of aircraft
(54
)
—
Special charge2
—
6,631
Transaction-related expenses
915
793
Accrual for legal matters and professional fees
74
290
Charges associated with refinancing debt
—
132
Unrealized loss on financial instruments
5,213
—
Adjusted pretax income
9,148
10,514
Interest (income) expense, net3
17,117
18,093
Other non-operating expenses (income)
(253
)
(240
)
Adjusted operating income
26,012
28,367
Depreciation and amortization
37,894
35,005
EBITDA, as adjusted4
$
63,906
$
63,372
Aircraft rent3
35,477
36,441
EBITDAR, as adjusted5
$
99,383
$
99,813
Income tax expense
$
553
$
353
Income tax effect of reconciling items6
(320
)
(2,417
)
Adjusted income tax expense
873
2,770
Adjusted pretax income
$
9,148
$
10,514
Adjusted effective tax rate
9.5
%
26.3
%
1
Reflects impact of noncash expenses and income related to convertible notes, debt and investments, and amortization of customer incentive related to outstanding warrants.
2
Special charge in 2016 primarily represented a loss on engines held for sale.
3
Reflects impact of noncash expenses and income related to convertible notes, debt, operating leases and investments.
4
Adjusted EBITDA: Earnings before interest, taxes, depreciation, amortization, noncash interest expenses and income, net, gain on disposal of aircraft, special charge, transaction-related expenses, accrual for legal matters and professional fees, charges associated with refinancing debt, and unrealized loss on financial instruments, as applicable.
5
Adjusted EBITDAR: Earnings before interest, taxes, depreciation, amortization, aircraft rent expense, noncash interest expenses and income, net, gain on disposal of aircraft, special charge, transaction-related expenses, accrual for legal matters and professional fees, charges associated with refinancing debt, and unrealized loss on financial instruments, as applicable.
6
See Non-GAAP reconciliation of Adjusted income from continuing operations, net of taxes.
Atlas Air Worldwide Holdings, Inc. Operating Statistics and Traffic Results (Unaudited)
For the Three Months Ended
Increase/
March 31, 2017
March 31, 2016
(Decrease)
Block Hours
ACMI
38,916
29,529
9,387
Charter
Cargo
10,939
8,230
2,709
Passenger
4,845
3,935
910
Other
416
457
(41
)
Total Block Hours
55,116
42,151
12,965
Revenue Per Block Hour
ACMI
$
5,157
$
6,188
$
(1,031
)
Charter
$
15,452
$
16,630
$
(1,178
)
Cargo
$
15,289
$
16,042
$
(753
)
Passenger
$
15,820
$
17,859
$
(2,039
)
Average Utilization (block hours per day)
ACMI1
8.7
8.4
0.3
Charter
Cargo
8.7
8.1
0.6
Passenger
7.8
8.6
(0.8
)
All Operating Aircraft1,2
8.7
8.5
0.2
Fuel
Charter
Average fuel cost per gallon
$
1.88
$
1.81
$
0.07
Fuel gallons consumed (000s)
43,927
34,945
8,982
1 ACMI and All Operating Aircraft averages in the first quarter of 2017 reflect the impact of
increases in the number of CMI aircraft and amount of CMI flying compared with the first quarter of 2016.
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
Increase/
March 31, 2017
March 31, 2016
(Decrease)
Segment Operating Fleet (average aircraft equivalents during the period)
ACMI1
747-8F Cargo
7.0
8.8
(1.8
)
747-400 Cargo
12.8
12.6
0.2
747-400 Dreamlifter
3.0
2.8
0.2
777-200 Cargo
5.0
—
5.0
767-300 Cargo
5.8
3.4
2.4
767-200 Cargo
9.0
9.0
—
737-400 Cargo
5.0
—
5.0
747-400 Passenger
1.0
1.0
—
767-200 Passenger
1.0
1.0
—
Total
49.6
38.6
11.0
Charter
747-8F Cargo
2.9
1.1
1.8
747-400 Cargo
11.0
10.0
1.0
747-400 Passenger
2.0
2.0
—
767-300 Passenger
4.9
3.0
1.9
Total
20.8
16.1
4.7
Dry Leasing
777-200 Cargo
6.0
6.0
—
767-300 Cargo
3.6
1.4
2.2
757-200 Cargo
1.0
1.0
—
737-300 Cargo
1.0
1.0
—
737-800 Passenger
1.0
1.0
—
Total
12.6
10.4
2.2
Less: Aircraft Dry Leased to CMI customers
(3.6
)
(1.4
)
2.2
Total Operating Average Aircraft Equivalents
79.4
63.7
15.7
Out of Service2
—
—
—
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.
5
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