Atlas Air Worldwide Holdings Earnings Soar; 2005 Net Income Totals $73.9 Million, $3.56 Per Share; Timely Filer Status Imminent, to Pursue Listing on National Exchange.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 ) (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). :AAWW.PK), a leading provider of global air cargo air cargo: see aviation. services, today reported net income of $73.9 million, or $3.56 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 $1.6 billion for the year ended December December: see month. 31, 2005. Results for the year 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 $193.3 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 $123.8 million, both of which reflect a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern insurance gain of $7.8 million and post-emergence costs and related professional fees of $3.7 million. "2005 was a terrific year for Atlas Air Worldwide Holdings," said President and Chief Executive Officer Jeffrey H. Erickson Erickson can refer to several persons:
Mr. Erickson added, "There was also much more to our success in 2005 than the healthy utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of our aircraft and higher unit revenues in all four of our service types. In particular, our strong performance throughout the year reflected a great deal of energy, enthusiasm, and hard work by everyone involved with the Company. With that spirit and support, and with the strategic initiatives that we are implementing to develop a more efficient, lower-cost operating platform, we'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall continue to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our reputation for excellence and to move the Company forward." "We intend to build upon our momentum and take this company to the next level," said Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. L. Barna "Barna" is also used to refer to Barcelona. Barna (Irish: Bearna) is a village west of Galway city in County Galway, Ireland on the R336 regional road. , Senior Vice President and Chief Financial Officer. "With the imminent Impending; menacingly close at hand; threatening. Imminent peril, for example, is danger that is certain, immediate, and impending, such as the type an individual might be in as a result of a serious illness or accident. filing of our 2005 10-K report, we will have achieved timely filer status ahead of schedule, enabling us to pursue a listing of our common stock on a national securities exchange. "We believe that reaching these milestones will greatly broaden our potential investor base and, therefore, interest in AAWW, ensuring a more liquid market for our shares." For the three months ended December 31, 2005, AAWW reported net income of $27.5 million, or $1.32 per diluted share, on revenues of $470.9 million. Operating income in the fourth quarter of 2005 totaled $61.0 million, while pretax income reached $44.8 million. Both amounts include $0.7 million of post-emergence costs and related professional fees. Conference Call Management will host a conference call to discuss the Company's fourth-quarter and full-year 2005 financial and operating results at 11:00 A.M. Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time on Thursday Thursday: see week. , April 13, 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 April 20, 2006 by dialing (800) 405-2236 (domestic) and (303) 590-3000 (international) and using Pass Code 11058511#. Successor Company Versus Predecessor Company AAWW completed a financial restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and emerged from Chapter 11 bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party in July July: see month. 2004. In conjunction with its emergence, AAWW applied the provisions of fresh-start accounting effective as of July 27, 2004, at which time a new reporting entity was deemed to be created and principal assets and liabilities were stated at fair value. As a result, readers of AAWW's financial statements are cautioned that reported historical financial statements of the Company for periods prior to emergence are not comparable with those for periods after emergence. Notwithstanding the lack of comparability, the following commentary with respect to AAWW's full-year 2005 and 2004 operating results has been prepared to facilitate a year-over-year discussion of those results. The analysis, which is based on a combination of the results for the periods January January: see month. 1, 2004 through July 27, 2004 and July 28, 2004 through December 31, 2004, has not been prepared 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 U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). As noted, results after July 27, 2004 are not on the same basis as results prior to that date. The foregoing limitation on the comparability of AAWW's full-year 2005 and 2004 operating results does not apply to comparisons of results for the three-month periods ended December 31, 2005 and 2004, since each of these periods have the same basis of accounting. 2005 Performance Highlights Versus 2004 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 2005 totaled $1,617.9 million, an increase of $203.2 million compared with revenues of $1,414.7 million in 2004. 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. , meanwhile, were $54.2 million higher than in 2004, rising to $1,424.6 million from $1,370.4 million. Operating income of $193.3 million in 2005, which included a pretax gain of $7.8 million from insurance and post-emergence costs and related professional fees of $3.7 million, increased $149.0 million compared with operating income of $44.3 million in 2004, which included $13.5 million of pre-petition and post-emergence costs and related professional fees. For all of 2005, AAWW posted net income of $73.9 million, including the pretax insurance gain and post-emergence costs and related professional fees. In comparison, it reported net income of $22.7 million for the July 28-December 31, 2004 period, including post-emergence costs and related professional fees of $4.1 million, and net income of $28.2 million in the January 1-July 27, 2004 period, reflecting net reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. benefits of $112.5 million and pre-petition costs and related professional fees of $9.4 million. With respect to non-GAAP measures frequently used by AAWW's management to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. 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, insurance gains, and pre-petition and post-emergence costs and related professional fees, as applicable"), rose to $386.4 million in 2005 compared with $258.8 million in 2004. 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, insurance gains and pre-petition and post-emergence costs and related professional fees, as applicable"), increased to $235.5 million in 2005 from $116.8 million in 2004. 2005 Performance Factors Versus 2004 Total operating revenues in 2005 increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14% versus the previous year, including a 24% increase 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, a 56% increase in AMC (Advanced Mezzanine Card) See AdvancedTCA. charter revenue, and a 56% increase in Commercial charter revenue, offset in part by a 13% reduction in Scheduled Service revenue. The reduction in revenue from Scheduled Service during 2005 reflected AAWW's active effort to manage its fleet by reallocating capacity from the Scheduled Service business into ACMI leasing and AMC charter operations during the year. A strike at AAWW's 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. unit that halted Scheduled Service operations from late in the third quarter until early in the fourth quarter also affected the segment's revenues. Total block hours In aviation, block hours is the time between an aircraft leaving from the departure gate and ariving at the destination gate. increased 2% in 2005 compared with 2004, while the average number of operating aircraft increased 3%. In addition, all four service types realized higher unit revenues on a year-over-year basis. Revenue per block hour increased 4% in the ACMI business, 19% in the AMC charter business, and 24% in the Commercial 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 30% in the Scheduled Service business. In the ACMI segment, a 19% increase in the number of block hours (83,682 versus 70,343) and an improvement in average block-hour rates ($5,569 versus $5,355) contributed to the increase in ACMI revenues. In the AMC and Commercial charter segments, stronger revenues reflected an increase in both block-hour rates (AMC: $15,036 versus $12,625; Commercial: $17,235 versus $13,902) and volumes (AMC: 29,306 block hours versus 22,376; Commercial: 6,257 block hours versus 4,973). Higher rates in the AMC and Commercial charter segments reflected an increase in fuel prices, with the fixed rate for AMC fuel increasing from $1.40 per gallon gallon: see English units of measurement. for the first three quarters of 2005 to $2.20 for the fourth quarter versus $1.01 per gallon for the first three quarters of 2004 and $1.40 in the final quarter of that year. While total capacity in Scheduled Service was reduced by 33% (as measured by ATMs), unit revenues (RATM) increased by 30% ($0.258 versus $0.198) and yield grew by 24% ($0.393 versus $0.316). In addition, load factor increased to 65.7% in 2005 from 62.7% in 2004. The improvement in Scheduled Service's unit-revenue performance was due to a number of factors, including the continued optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of the scheduled-service network and an increased presence in China. Operating expenses in 2005 were 4% higher than in 2004, mainly due to increases in fuel and labor expenses and an increase in aircraft rent. Lower ground handling charges and landing fees, lower depreciation and amortization expense, a significant reduction in pre-petition and post-emergence costs, and the pretax insurance gain partially offset these items. Both depreciation and amortization and aircraft rent were affected by fresh-start accounting adjustments. Total fuel consumption declined by 12% in 2005 compared with 2004, reflecting a 12% reduction in non-ACMI block hours. The reduction in fuel consumption was more than offset by a 40% increase in average fuel prices, which rose to $1.75 per gallon from $1.25 in 2004, leading to a net increase of $81.3 million, or 23%, in total fuel expense compared with 2004. Labor expenses in 2005 were $30.3 million, or 14%, higher than the previous year. Crew salaries, wages and benefits comprised $14.5 million of the year-over-year increase, reflecting a rise in block-hour activity, contractual pay rate increases, and a $1.7 million charge for retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a crew salary and bonus items included in the new Polar labor agreement. Other items contributing to the increase included increased restricted stock expense for awards granted late in 2004 and during 2005, as well as profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of and incentive compensation expense, which were not accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in 2004 due to losses incurred. The reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of capacity out of Scheduled Service and into ACMI operations during the year and the reduction in Scheduled Service flying activity as a result of the Polar strike had a beneficial impact on direct operating expenses, reducing ground handling, landing, and overfly o·ver·fly tr.v. o·ver·flew , o·ver·flown , o·ver·fly·ing, o·ver·flies 1. To fly over (a particular area or territory) in an aircraft or spacecraft. 2. fees by $33.6 million, or 18%, compared with 2004. In addition to the pretax insurance gain of $7.8 million realized during 2005, total operating expenses during 2005 also reflected a $9.8 million reduction in costs and fees associated with AAWW's Chapter 11 reorganization process. 4Q05 Performance Highlights Versus 4Q04 Operating revenues in the fourth quarter of 2005 totaled $470.9 million, an increase of $42.2 million compared with revenues of $428.7 million in the fourth quarter of 2004. Operating expenses of $409.8 million, including post-emergence costs and related professional fees of $0.7 million, were $43.5 million higher than operating expenses of $366.3 million in the same period last year, which included post-emergence costs and related professional fees of $3.7 million. For the quarter, AAWW posted operating income of $61.0 million compared with operating income of $62.5 million in the fourth quarter of 2004. Net income, meanwhile, increased to $27.5 million in the fourth quarter from $27.1 million in the year-ago period. With respect to non-GAAP measures frequently used by AAWW's management to analyze its results, EBITDAR, as adjusted, totaled $108.8 million in the fourth quarter of 2005 compared with $115.8 million in the fourth quarter of 2004. In addition, EBITDA, as adjusted, of $69.9 million compared with EBITDA, as adjusted, of $80.5 million in the fourth quarter of 2004. 4Q05 Performance Factors Versus 4Q04 Operating revenues during the fourth quarter of 2005 increased approximately 10% compared with the same quarter last year, reflecting a 79% increase in AMC charter revenue and a 22% increase in Commercial charter revenue, offset in part by a 1% decline in ACMI revenue and a 14% reduction in Scheduled Service revenue. While total block hours were down 10% compared with the fourth quarter of 2004, all four of AAWW's service types realized higher unit revenues on a year-over-year basis. Revenue per block hour increased 9% in the ACMI business, 31% in the AMC charter business, and 29% in the Commercial charter business. In addition, revenue per available ton mile (RATM) increased 24% in the Scheduled Service business. In the ACMI segment, the 9% improvement in average block-hour rates ($5,958 versus $5,463) largely offset a 9% decline in the number of block hours (19,781 versus 21,823), resulting in a 1% decrease in ACMI revenues. In the AMC and Commercial charter segments, significantly better block-hour rates (AMC: $17,882 versus $13,660; Commercial: $20,252 versus $15,664) contributed to the stronger revenues. AMC volume also increased 36% (7,374 block hours versus 5,404), while Commercial charter block hours were down 5% (2,662 block hours versus 2,815). Improved block-hour rates in the AMC and Commercial charter segments were partly driven by an increase in fuel prices, with the fixed rate for AMC fuel increasing to $2.20 per gallon for the fourth quarter of 2005 from $1.40 per gallon in the fourth quarter of 2004. Reductions in Scheduled Service revenues and capacity during the quarter were largely due to the restructuring of AAWW's scheduled-service network compared with the fourth quarter of 2004 and active efforts to reallocate Verb 1. reallocate - allocate, distribute, or apportion anew; "Congressional seats are reapportioned on the basis of census data" reapportion allocate, apportion - distribute according to a plan or set apart for a special purpose; "I am allocating a loaf of aircraft to more profitable opportunities in other business segments. While these actions reduced total capacity in the Scheduled Service segment (as measured by ATMs) by 30% compared with the year-earlier period, unit revenues (RATM) increased by 24% ($0.295 versus $0.238) and yield grew by 19% ($0.445 versus $0.374). In addition, load factor increased to 66.3% from 63.7% in the fourth quarter of 2004. Operating expenses during the fourth quarter were 12% higher than in the fourth quarter of 2004. Higher fuel and labor costs, an acceleration of maintenance activity, and increases in aircraft rent and in other expense items were mainly responsible for the rise in operating expenses. These items were partially offset, however, by lower ground handling charges and landing fees, reduced depreciation and amortization expense, and the decline in post-emergence costs and related professional fees. Higher fuel costs during the quarter stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. primarily from a 46% increase in the average price of aircraft fuel, which rose to $2.25 per gallon from $1.54 in the fourth quarter of 2004. As a result, total fuel costs climbed $33.7 million, or 30%, compared with same quarter in 2004. The increase in average fuel pricing, however, was partly offset by an 11% decline in total fuel consumption, which reflected a 10% reduction in non-ACMI block hours following the reallocation of capacity out of Scheduled Service since the fourth quarter of 2004. Labor costs were the second-largest factor contributing to the increase in operating expenses during the quarter, increasing $14.3 million, or 26%, compared with the same period in 2004. Crew salaries, wages and benefits accounted for $4.3 million of the year-over-year increase, reflecting contractual pay rate increases. Other items contributing to the increase included provisions for profit sharing for crew members and incentive compensation expense totaling $7.2 million, which were not accrued in 2004 due to losses incurred. A step-up step-up A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock. in maintenance activity also contributed to the rise in operating expenses during the fourth quarter, with aggregate maintenance spending increasing $6.4 million, or 12%. Both an increase in the number of C and D airframe checks (three 747-200 C Checks versus two 747-200 C Checks in the same period last year; one 747-200 D Check and one 747-400 D Check versus one 747-200 D Check in the 2004 period) and an increase in the number of engine overhauls (19 versus 13 in the year-ago period) contributed to the rise in maintenance expenditures. Also during the quarter, aircraft rent increased by $3.5 million, or 10%, while other operating expenses increased by $2.7 million, or 9%. Higher aircraft rent was primarily due to the return to the operating fleet in 2005 of an aircraft that had been on dry lease during the fourth quarter of 2004. The reallocation of capacity out of Scheduled Service and into other operations had a beneficial impact on ground handling charges and landing fees during the quarter, with aggregate charges and fees declining $8.1 million, or 17%. Depreciation and amortization expense during the quarter was $5.7 million, or 40%, lower than in the year-earlier period, mainly reflecting reduced depreciation for rotable parts and reduced amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. . Cash and Cash Equivalents Cash and cash equivalents rose to $305.9 million by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2005 from $277.8 million at September September: see month. 30, 2005 and $133.9 million at December 31, 2004. In addition to AAWW's strong operating performance during 2005, cash and cash equivalents during the year benefited from the release to the Company of $15.0 million in restricted funds from the Polar Creditor An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's Negligence Trust in the third quarter. Outstanding Debt At December 31, 2005, AAWW's balance sheet debt and capital lease obligations totaled $583.1 million, including current maturities of $53.4 million. Also at December 31, 2005, AAWW had $106.8 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 December 31, 2005 totaled $689.9 million, which compared with $711.2 million on September 30, 2005 and $762.5 million on December 31, 2004. Business Strategy and Outlook AAWW's principal business is the airport-to-airport transportation of heavy-freight cargo. AAWW's current fleet of 41 Boeing (language) BOEING - An early system on the IBM 1130. [Listed in CACM 2(5):16, May 1959]. 747 freighter aircraft operates throughout the world, providing air cargo and related services through four principal business segments: ACMI, Scheduled Service, AMC (military) Charters, and Commercial Charters. In addition to maintaining a safe and efficient operation, AAWW's primary focus is on sustaining profitability and growing stockholder value. AAWW is undertaking a number of significant strategic measures designed to achieve these objectives, including: --Optimizing Scheduled Service's route network so that this business segment can sustain profitability. An increased presence in China, including an increase in the number of weekly roundtrip round·trip or round-trip also round trip n. A trip from one place to another and back, usually over the same route. frequencies from nine to 12 at the end of the first quarter of 2006, is expected to help this business segment achieve improved financial results; --Continuing efforts to reduce overhead and operating costs operating costs npl → gastos mpl operacionales and to maximize profitability; --Improving the flexibility and efficiency of operations by overhauling procedures in key facets of flight operations, ground operations, and maintenance; --Selectively disposing of assets, which may include aging aircraft, and replacing them in the future with newer, more efficient aircraft; --Pursuing growth opportunities, including forming strategic alliances with synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. carriers, and offering customers new services and fleet types; and --Continuing efforts to maximize financial flexibility, which may include refinancing Refinancing An extension and/or increase in amount of existing debt. certain indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and issuing new debt and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. equity securities. In late 2005, AAWW announced a cost-savings and revenue-enhancement program that, if successfully implemented, could benefit the Company's operating performance by more than $100 million over the next several years. Approximately one quarter to one third of the potential benefits associated with these opportunities are expected to be derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. , mainly through the development of a better Scheduled Service revenue and capacity management capability. The additional benefits from cost savings are expected to be generated principally through improved procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental and improved efficiencies and processes throughout AAWW's operations. Implementation of the cost-savings and revenue-enhancement program began in early 2006. AAWW currently expects that the benefits that could be realized during 2006 and 2007 may be substantial. In addition to the focus on operational excellence initiatives, and to a continuing emphasis on developing a more efficient, low-cost operating platform, AAWW expects to leverage its three additional weekly frequencies in China to drive profitability in the Scheduled Service segment. Fleet renewal efforts will be another key focus in 2006, as AAWW commences a multi-year strategic initiative designed to phase out older aircraft and to replace them with newer aircraft. While current actions target the phasing out of older aircraft from the fleet, replacement aircraft will not be incorporated into the fleet in 2006. In conjunction with its fleet renewal and optimization strategy, AAWW concluded the sale of one of its 747-200 "Classic" aircraft (Tail Number N921FT) on April 7, 2006, reducing the size of its current fleet to 41 Boeing 747 freighter aircraft. AAWW also intends to reduce its presence in the 747-200 ACMI market over time, and depending on market conditions, it may accelerate the retirement of older aircraft in 2006. The 747-200 ACMI market is generally less profitable than the Company's 747-400 business and is experiencing generally weaker market conditions. Although not necessarily indicative indicative: see mood. of the balance of fiscal 2006, block hours operated in the ACMI segment during the first two months of 2006 were lower compared with the first two months of 2005, primarily due to lower 747-200 block hours. AMC flying is expected to continue to be a significant contributor to AAWW's business activity during 2006. AMC block hours, however, are not expected to equal the level experienced in 2005. About Non-GAAP Financial Measures To supplement AAWW's financial statements presented in accordance with 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 insurance gains and 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, 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. , 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 hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. 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 Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the 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 June June: see month. 30, 2005, as updated by the Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with the Securities and Exchange Commission on December 9, 2005. 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)
Successor Predecessor
------------------------------------------- -----------
For the For the
For the For the Period Period
Three Three For the July 28, Jan. 1,
Months Months 12 Months 2004 2004
Ended Ended Ended through through
Dec.31, Dec. 31, Dec. 31, Dec. 31, July 27,
2005 2004 2005 2004 2004
--------- ---------- ----------- --------- -----------
Operating
Revenues
Scheduled
service $155,153 $ 179,406 $ 555,814 $296,823 $ 343,605
ACMI 117,981 119,211 466,018 182,322 194,332
AMC charter 131,853 73,825 440,642 126,235 156,260
Charter service 53,917 44,088 107,840 53,325 15,812
Other revenue 11,963 12,193 47,583 20,589 25,358
--------- ---------- ----------- --------- -----------
Total operating
revenues 470,867 428,723 1,617,897 679,294 735,367
--------- ---------- ----------- --------- -----------
Operating
Expenses
Aircraft fuel 145,734 112,040 432,367 176,009 175,103
Salaries, wages
and benefits 68,762 54,507 244,509 91,463 122,715
Maintenance,
materials and
repairs 61,192 54,799 233,614 102,682 133,336
Aircraft rent 38,898 35,390 150,879 60,151 81,886
Ground handling 18,210 23,601 71,735 40,815 53,558
Landing fees
and other rent 20,609 23,354 80,054 37,960 53,039
Depreciation
and
amortization 8,498 14,243 46,336 25,457 33,510
Insurance gain (353) - (7,820) - -
Travel 15,841 15,607 60,089 25,741 29,549
Pre-petition
and post-
emergence
costs and
related
professional
fees 718 3,742 3,706 4,106 9,439
Other 31,710 28,971 109,128 47,935 65,931
--------- ---------- ----------- --------- -----------
Total
operating
expenses 409,819 366,254 1,424,597 612,319 758,066
--------- ---------- ----------- --------- -----------
Operating
income (loss) 61,048 62,469 193,300 66,975 (22,699)
--------- ---------- ----------- --------- -----------
Non-operating
Expenses
(Income)
Interest income (2,694) (620) (6,828) (917) (572)
Interest
expense
(excluding
post-petition
contractual
interest of
$20,956 for
the period
January 31, 2004
through
July 27, 2004) 18,957 18,309 74,389 30,582 50,222
Other, net 34 (3,389) 1,976 (3,504) 1,434
Reorganization
items, net - - - - (112,513)
--------- ---------- ----------- --------- -----------
Total non-
operating
expenses 16,297 14,300 69,537 26,161 (61,429)
--------- ---------- ----------- --------- -----------
Income before
income taxes 44,751 48,169 123,763 40,814 38,730
Income tax
expense 17,282 21,107 49,902 18,104 10,484
--------- ---------- ----------- --------- -----------
Net income $ 27,469 $ 27,062 $ 73,861 $ 22,710 $ 28,246
========= ========== =========== ========= ===========
Income (loss)
per share:
Basic $ 1.36 $ 1.34 $ 3.64 $ 1.12 $ 0.74
========= ========== =========== ========= ===========
Diluted $ 1.32 $ 1.32 $ 3.56 $ 1.11 $ 0.74
========= ========== =========== ========= ===========
Weighted
average
shares:
Basic 20,390 20,212 20,280 20,210 38,378
========= ========== =========== ========= ===========
Diluted 20,821 20,490 20,738 20,405 38,378
========= ========== =========== ========= ===========
Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands)
(Unaudited)
Successor Predecessor
------------------------------------------ -----------
For the For the
For the For the Period Period
Three Three For the July 28, Jan. 1,
Months Months 12 Months 2004 2004
Ended Ended Ended through through
Dec. 31, Dec. 31, Dec. 31, Dec. 31, July 27,
2005 2004 2005 2004 2004
---------- ---------- ---------- --------- -----------
Income (loss)
before income
taxes $ 44,751 $ 48,169 $ 123,763 $ 40,814 $ 38,730
Reorganization
items, net - - - - (112,513)
Pre-petition
and post-
emergence
costs and
related
professional
fees 718 3,742 3,706 4,106 9,439
Insurance gain (353) - (7,820) - -
---------- ---------- ---------- --------- -----------
Pretax income
(loss) before
insurance
gain, pre-
petition and
post-emergence
costs and
related
professional
fees, and
reorganization
items, net 45,116 51,911 119,649 44,920 (64,344)
Interest
expense, net 16,263 17,689 67,561 29,665 49,650
Other non-
operating
expense
(income) 34 (3,389) 1,976 (3,504) 1,434
---------- ---------- ---------- --------- -----------
Operating
income (loss)
before non-
operating
expenses,
insurance
gain, pre-
petition and
post-emergence
costs and
related
professional
fees, and
reorganization
items, net 61,413 66,211 189,186 71,081 (13,260)
Depreciation
and
amortization 8,498 14,243 46,336 25,457 33,510
---------- ---------- ---------- --------- -----------
EBITDA, as
adjusted* 69,911 80,454 235,522 96,538 20,250
Aircraft rent 38,898 35,390 150,879 60,151 81,886
---------- ---------- ---------- --------- -----------
EBITDAR, as
adjusted* $ 108,809 $ 115,844 $ 386,401 $156,689 $ 102,136
========== ========== ========== ========= ===========
* EBITDA, as adjusted: Earnings before interest, taxes, depreciation,
amortization, insurance gains 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, insurance gains 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
Months Ended For the Year Ended
December 31, December 31,
------------------ Percent ---------------------- Percent
2005 2004 Change 2005 2004 Change
------------------------------ -------- ---------------------- -------
Operating Fleet:
(average during
the period)
Aircraft count
(1) 39.0 38.7 0.8% 39.0 37.7 3.4%
Block Hours
Scheduled
Service 9,185 13,063 (29.7%) 37,175 55,111 (32.5%)
ACMI 19,781 21,823 (9.4%) 83,682 70,343 19.0%
AMC Charter 7,374 5,404 36.4% 29,306 22,376 31.0%
Commercial
Charter 2,662 2,815 (5.4%) 6,257 4,973 25.8%
All Other 191 257 (25.7%) 839 1,176 (28.7%)
-------- -------- ---------- ----------
Total Block
Hours 39,193 43,362 (9.6%) 157,259 153,979 2.1%
======== ======== ========== ==========
Revenue Per
Block Hour
ACMI $ 5,958 $ 5,463 9.1% $ 5,569 $ 5,355 4.0%
AMC Charter $ 17,882 $ 13,660 30.9% $ 15,036 $ 12,625 19.1%
Commercial
Charter $ 20,252 $ 15,664 29.3% $ 17,235 $ 13,902 24.0%
Scheduled Service Traffic
RTM's(000's) 348,962 480,032 (27.3%) 1,414,865 2,021,903 (30.0%)
ATM's(000's) 526,074 753,123 (30.1%) 2,155,127 3,222,942 (33.1%)
Load Factor 66.3% 63.7% 2.6 pts 65.7% 62.7% 3.0 pts
RATM (2) $ 0.295 $ 0.238 23.9% $ 0.258 $ 0.198 30.3%
RTM Yield(3)$ 0.445 $ 0.374 19.0% $ 0.393 $ 0.316 24.4%
Fuel
Average fuel
cost per
gallon $ 2.25 $ 1.54 46.1% $ 1.75 $ 1.25 40.0%
Fuel gallons
consumed
(000's) 64,651 72,693 (11.1%) 246,619 280,304 (12.0%)
(1) Operating Fleet excludes the following aircraft count that were
dry leased or out of service:
Dry leased 3.0 4.0 (25.0%) 3.0 4.0 (25.0%)
Out of service* -- 0.3 (100.0%) 0.4 3.3 (87.9%)
*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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