Atlas Air Worldwide Holdings, Inc. Reports Second-Quarter 2006 Results; Net Income Totals $10.7 Million, $0.51 per Share.PURCHASE, N.Y. -- Atlas Air Atlas Air is an American cargo airline based in Purchase, New York, United States. It operates scheduled freight flights on an ACMI contract basis for some of the world's leading airlines, flying to 101 cities in 46 countries. Worldwide Holdings, Inc. (AAWW AAWW Asian American Writers' Workshop AAWW Alpaca Association of Western Washington AAWW Anti-Air Warfare Warship ) (Nasdaq: AAWW), a leading provider of global air cargo air cargo: see aviation. services, today reported net income of $10.7 million, or $0.51 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on revenues of $366.4 million for the quarter ended June June: see month. 30, 2006. Results for the quarter included operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $30.6 million and pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. of $17.5 million. For the three months ended June 30, 2005, AAWW reported net income of $15.9 million, or $0.77 per diluted share, on revenues of $395.2 million. Operating income in the second quarter of 2005 totaled $43.8 million with pretax income of $26.9 million. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack J. Flynn Flynn , Errol 1909-1959. Tasmanian-born American actor known for his swashbuckling roles in motion pictures such as Captain Blood (1935). , AAWW President and Chief Executive Officer, said, "Results for the second quarter reflected solid operating performance. We benefited from improved unit pricing unit pricing n. The pricing of goods on the basis of cost per unit of measure. metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. in our major business segments and from a substantial reduction in our maintenance expenditures, where we expect to see continued improvement over the balance of the year. The current quarter experienced a more normal level of AMC (Advanced Mezzanine Card) See AdvancedTCA. activity, reduced flying by 747 Classic aircraft, and substantially higher fuel prices in Scheduled Service. "We continue to execute our strategic plan to position the Company for future growth. In the near term, we will benefit from the seasonal pick-up pick-up Noun 1. a small truck with an open body used for light deliveries 2. Informal a casual acquaintance made for a sexual purpose 3. Informal a. in all of our commercial lines of business that traditionally leads to a pre-holiday peak season beginning in September and lasting through mid-December. We also expect our second-half performance to include approximately $13 million in benefits from the $100 million operational excellence initiative that we announced at the end of 2005, with the current-year benefit principally realized in the fourth quarter. In addition, we have received notice that our base rate per block hour for AMC military business, excluding fuel costs, will increase in excess of 5% on October 1, 2006. "We are also moving forward with our re-fleeting strategy. We have phased out seven 747 Classics and are disposing of these assets in the secondary, more commoditized markets. In addition, we have eliminated in excess of $25 million of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. operating and overhead costs overhead costs see fixed costs. associated with these aircraft. "We recently enhanced our strategic and operating flexibility by repaying and terminating two outstanding debt facilities and terminating an exit credit facility. We anticipate that we will be taking further steps to enhance our capital structure. "Our next step will be a significant investment in next-generation freighter technology, which we hope to announce shortly. We believe that we will provide a more compelling value proposition to our customers with leading-edge freighter aircraft that possess better reliability, range, capacity, and fuel efficiency and improve our commercial-risk profile. "We are exploring several opportunities to maximize the inherent value of our traditional Scheduled Service business, increase its earnings, and further mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the risks associated with this
business segment."Our team is focused on executing our strategy and delivering on our plan. We believe that we are setting the stage for an exciting, dynamic future for AAWW." Conference Call Management will host a conference call to discuss the AAWW's second-quarter 2006 financial and operating results at 11:00 A.M. Eastern Daylight Time on Monday, August 14, 2006. Interested parties are invited to listen to the call live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.atlasair.com or www.earnings.com. For those unable to listen to the live call, a replay will be available on the above Web sites for 90 days following the call. A replay will also be available through August 21, 2006 by dialing (800) 405-2236 (domestic) and (303) 590-3000 (international) and using Pass Code 11068010#. 2Q06 Performance Factors Versus 2Q05 Total operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. in the second quarter of 2006 were $28.8 million, or 7.3%, lower than in the previous year's second quarter. Aggregate revenues in the latest reporting period reflected a 16.5% decrease in ACMI ACMI Aircraft, Crew, Maintenance and Insurance (wet lease) ACMI Art & Creative Materials Institute ACMI Air Combat Maneuvering Instrumentation ACMI American College of Medical Informatics ACMI Australian Center for the Moving Image revenue and a 31.1% decrease in AMC Charter revenue, offset in part by a 78.6% increase in Commercial Charter revenue and an 8.2% increase in Scheduled Service revenue. Higher year-over-year unit revenues in AAWW's three major service segments mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the impact of a 17.6% reduction in total block hours In aviation, block hours is the time between an aircraft leaving from the departure gate and ariving at the destination gate. . Revenue per block hour increased 9.2% in the ACMI business and 13.4% in the AMC Charter business, while revenue per available ton mile 1. (Railroads) A unit of measurement of the freight transportation performed by a railroad during a given period, usually a year, the total of which consists of the sum of the products obtained by multiplying the aggregate weight of each shipment in tons during the given (RATM RATM Rage Against The Machine (band) ) increased 4.9% in the Scheduled Service business. Improved average block-hour rates in the ACMI segment during the quarter ($5,920 versus $5,423) contrasted with a 23.5% decline in block hours (17,292 versus 22,611), which reflected a reduction in 747-200 flying. Twelve aircraft (10 Boeing 747-400s The Boeing 747-400 is the latest version of the Boeing 747 in service. The -400 series is the best selling and the most advanced model of the 747 family. The 747-400 is being replaced by the Boeing 747-8, expected to enter service in 2009. and two Boeing 747-200s) were directly supporting the Company's ACMI operations at June 30, 2006, compared with 19 aircraft (10 Boeing 747-400s and nine Boeing 747-200s) at June 30, 2005. ACMI performance in the second quarter of 2006 benefited from relative strength in demand for Boeing 747-400 freighter aircraft, which counterbalanced coun·ter·bal·ance n. 1. A force or influence equally counteracting another. 2. A weight that acts to balance another; a counterpoise or counterweight. tr.v. weaker conditions in the ACMI market for Boeing 747-200 freighter aircraft. Unit revenues (RATM) in the Scheduled Service segment increased by 4.9% ($0.255 versus $0.243) during the quarter and yield grew by 10.7% ($0.405 versus $0.366), while traffic (as measured by revenue ton miles, or RTMs) decreased 2.2% and capacity (as measured by available ton miles, or ATMs) increased 3.1%. As a result, load factor declined compared with the year-ago period (63.1% versus 66.5%). The positive impact of improved unit revenues on Scheduled Service's total revenues, however, was more than offset by the impact of higher fuel prices and an increase in fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). allocated to the segment due to excess, underutilized 747-200 capacity during the quarter. In the AMC segment, better block-hour rates ($15,761 versus $13,901) were not strong enough to offset a 39.2% decline in block hours (4,565 versus 7,507). The improvement in block-hour rates primarily reflected an increase in the pegged peg n. 1. a. A small cylindrical or tapered pin, as of wood, used to fasten things or plug a hole. b. A similar pin forming a projection that may be used as a support or boundary marker. 2. rate for AMC fuel, which was set at $2.20 per gallon gallon: see English units of measurement. in the second quarter of 2006 compared with $1.40 per gallon in the second quarter of 2005. The decrease in AMC Charter activity during the quarter was primarily due to an overall reduction in the U.S. military's heavy-lift requirements. Segment performance was also burdened by an excess of underutilized 747-200 capacity during the quarter. Commercial Charter activity in the second quarter of 2006 reflected an increase in block-hour volumes (1,822 versus 998) offset by a slight decrease in block-hour rates ($15,257 versus $15,593). Higher block-hour activity in the Commercial Charter segment reflected AAWW's active efforts to allocate To reserve a resource such as memory or disk. See memory allocation. available capacity to the segment in line with business opportunities and market conditions. Commercial Charter's performance during the quarter, however, was negatively affected by higher fuel costs and the burden of excess, underutilized 747-200 capacity. Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Excluding a gain on the sale of assets, operating expenses in the second quarter of 2006 were $12.8 million, or 3.6%, lower than in the comparable 2005 period. Significantly lower maintenance and depreciation expense, lower landing fees, and reduced travel expenditures were offset in part by higher aircraft fuel and labor expenses. Maintenance expense was $15.4 million, or 26.2%, lower in the second quarter of 2006 compared with the same quarter in 2005. Both a decrease in the number of airframe C checks (one 747-200 C Check versus four in the second quarter of 2005) and a reduction in the number of engine overhauls (13 versus 16) contributed to the lower level of maintenance expenditures. Maintenance expense during the quarter also benefited from the lower level of block-hour activity compared with the second quarter of 2005 and from a reduction in maintenance activity associated with Classic aircraft that the Company has decided to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: flying. Depreciation and amortization decreased $6.5 million, or 50.1%, primarily due to a $3.8 million reduction in the scrapping of rotable parts combined with a $2.5 million decrease in the amortization of customer contracts. Landing fees declined $3.1 million, or 15.0%, during the quarter, mainly due to the reduction in AMC block hours. Travel expense also declined $2.0 million, or 13.5%, primarily due to a reduction in crew travel related to the decline in total block-hour activity. Other operating expenses decreased $0.1 million, or 0.5%, versus the second quarter of 2005, primarily due to a $1.5 million decrease in professional fees related to the redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re of internal controls that occurred in 2005, a $1.6 million decrease in freight and other expenses, and a $1.1 million benefit from a reduction in accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. and penalties related to an employment tax settlement with the Internal Revenue Service, offset by a $4.2 million increase in legal and consulting fees. Aircraft fuel expense increased $13.4 million, or 13.1%, versus the second quarter of 2005, as higher fuel prices were only partly offset by a 13.0% decline in total fuel consumption, which reflected a 10.5% reduction in non-ACMI block hours. Fuel consumption in the Scheduled Service and Commercial Charter businesses increased 7.8%, reflecting a 9.0% increase in total Scheduled Service and Commercial Charter block hours, while the average price for fuel consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. in these segments increased 16.4% ($2.06 per gallon versus $1.77). In addition, fuel consumption in the AMC business decreased 42.8%, as AMC block hours declined 39.2%, but the pegged price for AMC fuel increased 57.1% ($2.20 per gallon versus $1.40). Labor expenses were $1.4 million, or 2.4%, higher than in the year-ago second quarter. The increase was primarily due to a $1.6 million rise in non-crew salaries. Included in the increase is $0.8 million for the expensing of management and crew stock options pursuant to SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R and a $1.8 million payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. related to foreign-based employees. Offsetting these items, however, was a $4.3 million decrease in employment taxes related to the settlement of a tax dispute with the Internal Revenue Service during the second quarter of 2006. Cash and Cash Equivalents At June 30, 2006, AAWW's cash and cash equivalents totaled $311.6 million compared with $305.9 million at year-end 2005. Outstanding Debt Also at June 30, 2006, AAWW's balance sheet debt and capital lease obligations totaled $554.8 million, including current maturities of $151.5 million. As of June 30, 2006, AAWW had $99.9 million of unamortized discount related to fair market value adjustments recorded against its debt as a result of the application of fresh-start accounting. AAWW's on-balance sheet debt and capital lease obligations before discount at June 30, 2006 totaled $654.7 million, which compared with $689.9 million on December 31, 2005. Subsequent Events Affecting Cash and Outstanding Debt On July 31, 2006, AAWW repaid from its existing cash balances approximately $141.0 million of principal (before discount related to fair market value adjustments) outstanding under two credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities administered by Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank Trust Company Americas, the Aircraft Credit Facility and the AFL AFL: see American Federation of Labor and Congress of Industrial Organizations. III Credit Facility. In connection with the repayment, AAWW expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. a one-time, non-cash pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern expense of approximately $12.5 million in the third quarter of 2006, related to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the remaining unamortized discount associated with the two facilities. AAWW also terminated an existing revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility (the Exit Facility) with Wachovia Bank National Association on August 3, 2006. No borrowings were outstanding under the Exit Facility. The removal of all the restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. associated with the three facilities, as well as the removal of associated financing liens, enhances AAWW strategic and operating flexibility. Non-GAAP Financial Measures With respect to non-GAAP measures frequently used by AAWW's management to analyze its results, EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs - EBITDAR An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) , as adjusted (defined as "earnings before interest, taxes, depreciation, amortization, aircraft rent expense, gains on asset sales, and pre-petition and post-emergence costs and related professional fees, as applicable"), totaled $72.7 million in the second quarter of 2006 compared with $95.2 million in the second quarter of 2005. In addition, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , as adjusted (defined as "earnings before interest, taxes, depreciation, amortization, gains on asset sales, and pre-petition and post-emergence costs and related professional fees, as applicable"), totaled $34.5 million in the latest reporting period compared with $57.7 million in the second quarter of 2005. About Non-GAAP Financial Measures To supplement AAWW's financial statements presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , AAWW presents certain non-GAAP financial measures to assist in the evaluation of the performance of its business. These non-GAAP measures include EBITDAR, as adjusted, and EBITDA, as adjusted, each excluding pre-petition and post-emergence costs and related professional fees. AAWW's management uses these non-GAAP financial measures in assessing the performance of the Company's ongoing operations and liquidity and in planning and forecasting future periods. About Atlas Air Worldwide Holdings, Inc.: AAWW is the parent company of Atlas Air, Inc. (Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. ) and Polar Air Cargo Polar Air Cargo is an American cargo airline based in Purchase, New York, USA. It operates scheduled all-cargo services to Asia, Europe, Australia, New Zealand and the Americas. Its main base is John F. , Inc. (Polar), which together operate the world's largest fleet of Boeing 747 freighter aircraft. AAWW, through its principal subsidiaries Atlas and Polar, offers scheduled air cargo service, cargo charters, military charters, and ACMI aircraft leasing in which customers receive a dedicated aircraft, crew, maintenance and insurance on a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. lease basis. AAWW's press releases, SEC filings and other information can be accessed through the Company's home page, www.atlasair.com. This release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that reflect AAWW's current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the operations and business environments of AAWW 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 continued ability to remedy weaknesses in our 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; pending and future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; and other risks and uncertainties set forth from time to time in AAWW's reports to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission. For additional information, we refer you to the risk factors set forth under the heading "Risk Factors" in the Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed by AAWW with the Securities and Exchange Commission on April 14, 2006. Other factors and assumptions not identified above are also involved in the preparation of forward-looking statements, and the failure of such other factors and assumptions to be realized may also cause actual results to differ materially from those discussed. Except as stated in this release, AAWW is not providing guidance or estimates regarding its anticipated business and financial performance for 2006. AAWW assumes no obligation to update such statements contained in this release to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law.
Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
For the Three Months For the Six Months
Ended Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
Operating Revenues
Scheduled Service $152,579 $140,971 $281,259 $262,115
ACMI 102,368 122,624 200,552 232,161
AMC Charter 71,951 104,357 145,077 193,273
Commercial Charter 27,799 15,562 48,283 31,100
Other revenue 11,723 11,671 23,399 23,482
--------- --------- --------- ---------
$366,420 $395,185 $698,570 $742,131
--------- --------- --------- ---------
Operating Expenses
Aircraft fuel 115,311 101,911 216,487 181,518
Salaries, wages and
benefits 59,099 57,709 119,170 114,061
Maintenance, materials and
repairs 43,495 58,936 83,879 122,955
Aircraft rent 38,166 37,570 75,955 74,429
Ground handling and airport
fees 19,025 19,350 34,910 37,508
Landing fees and other rent 17,561 20,665 33,877 39,052
Depreciation and
amortization 6,520 13,066 20,045 26,070
Gain on sale of aircraft (2,779) - (2,779) -
Travel 12,589 14,553 25,838 29,352
Pre-petition and post-
emergence costs
and related professional
fees 179 843 277 2,484
Other 26,684 26,825 53,236 50,463
--------- --------- --------- ---------
Total operating expenses 335,850 351,428 660,895 677,892
--------- --------- --------- ---------
Operating income 30,570 43,757 37,675 64,239
--------- --------- --------- ---------
Non-operating Expenses
Interest income (3,627) (1,301) (7,242) (2,119)
Interest expense 17,188 17,976 34,488 35,798
Other (income) expense, net (481) 212 (911) 2,170
--------- --------- --------- ---------
Total non-operating
expenses 13,080 16,887 26,335 35,849
--------- --------- --------- ---------
Income before income taxes 17,490 26,870 11,340 28,390
Income tax expense 6,795 11,016 4,343 11,861
--------- --------- --------- ---------
Net income $10,695 $15,854 $6,997 $16,529
========= ========= ========= =========
Income per share:
Basic $0.52 $0.78 $0.34 $0.82
========= ========= ========= =========
Diluted $0.51 $0.77 $0.33 $0.80
========= ========= ========= =========
Weighted average shares:
Basic 20,591 20,209 20,554 20,210
========= ========= ========= =========
Diluted 21,094 20,700 21,063 20,670
========= ========= ========= =========
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands)
(Unaudited)
For the For the For the
Three Three Six For the
Months Months Months Six
Ended Ended Ended Months
June June June Ended
30, 30, 30, June 30,
2006 2005 2006 2005
-------- -------- --------- ---------
Income before income taxes $17,490 $26,870 $11,340 $28,390
Pre-petition and post-
emergence costs and related
professional fees 179 843 277 2,484
Gain on asset sale (2,779) - (2,779) -
-------- -------- --------- ---------
Pretax income before gain on
asset sale and pre-petition
and post-emergence costs and
related professional fees 14,890 27,713 8,838 30,874
Interest expense, net 13,561 16,675 27,246 33,679
Other non-operating (income)
expense (481) 212 (911) 2,170
-------- -------- --------- ---------
Operating income before non-
operating expenses, gain on
asset sale, and pre-petition
and post-emergence costs and
related professional fees 27,970 44,600 35,173 66,723
Depreciation and amortization 6,520 13,066 20,045 26,070
-------- -------- --------- ---------
EBITDA, as adjusted* 34,490 57,666 55,218 92,793
Aircraft rent 38,166 37,570 75,955 74,429
-------- -------- --------- ---------
EBITDAR, as adjusted* $72,656 $95,236 $131,173 $167,222
======== ======== ========= =========
* EBITDA, as adjusted: Earnings before interest, taxes,
depreciation, amortization, gains on asset sales, and
pre-petition and post-emergence costs and related professional
fees, as applicable.
* EBITDAR, as adjusted: Earnings before interest, taxes,
depreciation, amortization, aircraft rent expense, gains on
asset sales, and pre-petition and post-emergence costs and
related professional fees, as applicable.
Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)
For the Three For the Six Months
Months Ended Ended
June 30, June 30,
----------------- Percent -------------------- Percent
2006 2005 Change 2006 2005 Change
-------- -------- ------- --------- ---------- --------
Fleet:
(average during the period)
Operating aircraft
count (1)* 38.1 39.0 (2.3%) 38.5 39.1 (1.5%)
Block Hours
Scheduled
Service 10,090 9,935 1.6% 18,651 19,017 (1.9%)
ACMI 17,292 22,611 (23.5%) 34,066 43,098 (21.0%)
AMC Charter 4,565 7,507 (39.2%) 9,076 13,738 (33.9%)
Commercial
Charter 1,822 998 82.6% 3,264 2,231 46.3%
All Other 215 203 5.9% 377 467 (19.3%)
-------- -------- ------------------ ---------- --------
Total Block
Hours 33,984 41,254 (17.6%) 65,434 78,551 (16.7%)
======== ======== ================== ========== ========
Revenue Per
Block Hour
ACMI $5,920 $5,423 9.2% $5,887 $5,387 9.3%
AMC Charter $15,761 $13,901 13.4% $15,985 $14,068 13.6%
Commercial
Charter $15,257 $15,593 (2.2%) $14,793 $13,940 6.1%
Scheduled
Service
Traffic
RTM's (000's) 376,986 385,631 (2.2%) 694,017 722,296 (3.9%)
ATM's (000's) 597,889 580,186 3.1%1,098,496 1,109,884 (1.0%)
Load Factor 63.1% 66.5% -3.4 pts 63.2% 65.1% -1.9 pts
RATM (2) $0.255 $0.243 4.9% $0.256 $0.236 8.4%
RTM Yield (3) $0.405 $0.366 10.7% $0.405 $0.363 11.7%
Fuel
Scheduled Service and Commercial Charter:
Average fuel
cost per
gallon $2.06 $1.77 16.4% $2.06 $1.63 26.4%
Fuel gallons
consumed
(000's) 40,063 37,155 7.8% 73,473 70,935 3.6%
AMC Charter:
Average pegged
fuel cost per
gallon $2.20 $1.40 57.1% $2.20 $1.40 57.1%
Fuel gallons
consumed
(000's) 14,831 25,939 (42.8%) 29,750 46,856 (36.5%)
(1) Operating Fleet excludes the following aircraft count
that were dry leased or out of service:
Dry leased 3.0 3.0 -- 3.0 3.1 (3.3%)
Out of
service** -- 0.7 (100.0%) -- 0.7 (100.0%)
* For the Six Months Ended June 30, 2006: Includes one
aircraft held for sale that did no commercial flying
during the period through its disposition in April 2006.
** For the Three and Six Months Ended June 30, 2005:
Includes the impact of one aircraft that was damaged and
removed from service on January 24, 2005 with respect to
which AAWW received a $12.6 million cash-in-lieu-of-repair
settlement from its insurance carriers in July 2005.
(2) RATM represents scheduled service revenue dollars per
available ton mile.
(3) RTM Yield represents scheduled service revenue dollars
per revenue ton mile.
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