Atlas Air Worldwide Holdings Provides Fourth-Quarter Update.Business Editors PURCHASE, N.Y.--(BUSINESS WIRE)--Feb. 28, 2003 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. (NYSE NYSE See: New York Stock Exchange :CGO CGO Cargo CGO Code Generation and Optimization CGO Cogeco Inc (stock symbol) CGO Zhengzhou, China (Airport Code) CGO Chief Globalization Officer CGO Company Grade Officer ) today provided the following summary of certain of its operating results for the fourth quarter ending December 31, 2002. The Company also announced the appointment of Jeffrey H. Erickson to the position of acting President of Atlas Air Worldwide Holdings. The Company's third quarter Form 10Q and 2002 Form 10K to the SEC will be delayed until the ongoing re-audit of its annual financial results for fiscal years 2000 and 2001 has been completed. Chief Executive Officer Richard Shuyler said, "In the fourth quarter of 2002, both our scheduled service and charter services benefited from the disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of port operations on the West Coast, primarily resulting in stronger yields, as well as strong demand from the US military. Although Atlas's traditional 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 market is still depressed, we have adapted to today's market by shifting our operations towards maximizing military and commercial charter opportunities. Military charter demand has continued into the first quarter of 2003, and our fleet remains at near capacity operation as a result." Financial Results For a more detailed update regarding the Company's financial and operational performance in the fourth quarter 2002, please refer to the 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 today by the Company with the SEC. 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. for the three months ended December 31, 2002, increased $129.9 million, or 45.8% to $413.7 million, primarily due to the inclusion of Polar Air Cargo's revenues in 2002 as well as strong military charter demand and commercial charter demand created by labor disruptions at West Coast ports. Revenues from traditional ACMI services were down 44.5%, or $67.8 million, compared to the same period during 2001. However, revenues from other contract services were up 201.1%, to $26.5 million year-over-year, and revenues from charter services were up 106.0%, to $153.3 million. For Atlas Air, operated block hours In aviation, block hours is the time between an aircraft leaving from the departure gate and ariving at the destination gate. decreased 0.2% year over year, from 30,311 block hours operated during the fourth quarter of 2001, to 30,236 block hours in the same period in 2002. At Polar, total block hours operated were up 36.5% in the fourth quarter of 2002, compared to the same period in 2001, increasing from 10,929 to 14,922. The revenue and block hour information provided for Polar for the fourth quarter of 2001 does not include the period prior to Atlas Air Worldwide Holdings' acquisition of Polar on November 1, 2001. Liquidity As of December 31, 2002, the Company's cash and investment balance stood at $254.9 million on a consolidated basis at the end of the year and $228.4 million at Atlas Air, Inc. As of the same date, the Company's outstanding long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , including the current portion, amounted to $930.6 million on a consolidated basis and $921.3 million at Atlas Air. Total future payments of 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 obligations, as of that date, amounted to $3.7 billion on a consolidated basis and $2.5 billion at Atlas Air. Debt Covenant and Lease Negotiations, Re-Audit Status Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. has begun negotiating with some of its aircraft lessors to reduce or defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. payments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc five Boeing 747-200 and one Boeing 747-300 aircraft. At this time, Atlas has not made six lease payments, and may choose to defer others pending the outcome of the negotiations. After receiving a notice of lease termination for one Boeing 747-200, Atlas is in the process of returning that aircraft to its lessor One who rents real property or Personal Property to another. A lessor of land is a landlord. Cross-references Landlord and Tenant. lessor n. the owner of real property who rents it to a lessee pursuant to a written lease. . While the company is optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the ongoing lease renegotiations will result in payments that better reflect market conditions, there can be no assurance that other lessors will not elect to exercise remedies available to them, including initiating 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. , under their leases in response to any non-payments. As previously reported, in January the Company entered into an agreement with its bank lenders to amend loan agreements to waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered. For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such previously announced events of default. As part of this amendment, the bank lenders agreed to waive application of financial covenants contained in the loan agreements through March 31, 2003. Atlas Air is currently in discussions with its lenders to address financial covenant levels beyond March 31, 2003. It is likely that the Company will also have to seek additional waivers to extend the requirement for providing financial statements beyond such date. Commitments and Contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. Atlas Air and Boeing have agreed to delay the delivery of one Boeing 747-400 aircraft, previously scheduled for delivery in October 2003, until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 2006. The Company has no obligations or commitments with respect to additional aircraft deliveries beyond the aircraft referred to here. Regulatory Matters The SEC notified the Company on October 17, 2002 that an informal investigation had begun, arising from the Company's October 16, 2002 announcement that it would restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial results for 2000 and 2001. The SEC has since formalized for·mal·ize tr.v. for·mal·ized, for·mal·iz·ing, for·mal·iz·es 1. To give a definite form or shape to. 2. a. To make formal. b. that investigation, and required, among other things, that the Company provide the SEC with certain documents. The Company intends to continue cooperating fully with the SEC in its investigation. About Atlas Air Worldwide Holdings, Inc. Atlas Air Worldwide Holdings, Inc. is the parent company of Atlas Air, Inc. ("Atlas Air"), and of 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"). Atlas Air offers its customers a complete line of freighter services, specializing in ACMI (Aircraft, Crew, Maintenance, and Insurance) contracts, utilizing its fleet of Boeing 747 aircraft. Polar's fleet of Boeing 747 freighter aircraft specializes in time-definite, cost-effective, airport-to-airport scheduled airfreight air·freight n. 1. A system of transporting freight by air. 2. The amount charged for transporting freight by air. air service. Polar and Atlas Air are operated as separate subsidiaries of the Company. For more information, go to http://www.atlasair.com. 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. This press release contains projections and other forward-looking statements that involve assumptions, risks and uncertainties. Readers are cautioned not to place undue reliance on these statements, which speak only as of the day of this Report. These statements are inherently uncertain, and readers must recognize that our actual results may differ materially from our expectations. Further, we undertake no duty to update any of these forward-looking statements. Readers are referred to the documents filed by Atlas Air Worldwide Holdings, Inc. (together with its affiliates, "Atlas", "we" or "us") with the Securities and Exchange Commission, specifically our 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. for the year ended December 31, 2001, our Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the quarters ended March 31, 2002 and June 30, 2002 and our Current Reports on Form 8-K dated October 16, 2002, October 18, 2002, November 14, 2002, December 2, 2002, January 8, 2003, January 21, 2003 and February 26, 2003, which identify important risk factors that could cause our actual results to differ from those contained in the forward-looking statements. Other factors that may affect our plans or results include, without limitation, the outcome of various legal actions brought against Atlas, the filing of additional lawsuits against us, the nature, scope and results of the Company's internal accounting investigation and the Company's ability to effect a restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of its financial statements, the outcome of the SEC's formal investigation concerning our decision to initiate a re-audit of our financial statements for 2000 and 2001, our ability to obtain various waivers from our bank lenders and reduced or deferred operating lease payments from certain of our aircraft lessors, significant changes in fuel prices and other operating and maintenance expenses, the possible outbreak of war in the Middle East, and the availability and cost of war and terrorism risk and other insurance for the Company.
Atlas Air Worldwide Holdings, Inc.
Three Months Ended
December 31, Percent
(in millions) 2002 2001 Difference Variance
---------- ------------ ---------- --------
Operating Revenue:
ACMI Service $84.5 $152.3 $(67.8) (-44.5)
Charter Service 153.3 74.4 78.9 106.0%
Scheduled Service 140.4 37.0 103.4 -
Other Contract Service 26.5 8.8 17.7 201.1%
Other 9.0 11.3 (2.3) (-20.4)
---------- ------------ ---------- --------
Total Operating Revenue $413.7 $283.8 $129.9 45.8%
Polar Air Cargo, Inc.
Three Months Ended(a)
December 31,
2002 2001 Difference Variance
---------- ------------ ---------- --------
(unaudited) (unaudited)
Scheduled Service
Revenue (millions) (1) $140.9 $57.9 $83.0 143.4%
Yield (cents) 33.61 25.62 7.99 31.2%
Load Factor 63.0% 61.3% 1.7 2.8%
Available Ton-Miles
(000's) 665,195 368,630 296,565 80.5%
Revenue Ton-Miles
(000's) 419,278 225,950 193,328 85.6%
(a) The table represents Polar's pro-forma Scheduled Service revenue
for the three months ended December 31, 2001.
Operating Statistics
Three Months Ended
December 31, Percent
2002 2001(1) Difference Variance
-------- -------- ---------- --------
Atlas Air Worldwide Holdings, Inc.
Block Hours: Total Operated 45,158 41,240 3,918 9.5%
ACMI service 17,393 23,491 (6,098) -26.0%
Charter service 12,621 8,906 3,715 41.7%
Scheduled service 11,679 6,018 5,661 94.1%
Other contract service 3,465 2,825 640 22.7%
Three Months Ended
December 31, Percent
2002 2001(1) Difference Variance
-------- -------- ---------- --------
Atlas Air, Inc.
Block Hours: Total Operated 30,236 30,311 (75) (-0.2%)
ACMI service (2) 16,868 22,562 (5,694) (-25.2%)
Charter service (3) 9,903 4,924 4,979 101.1%
Other contract service 3,465 2,825 640 22.7%
Polar Air Cargo, Inc.
Block Hours: Total Operated 14,922 10,929 3,993 36.5%
ACMI service 525 929 (404) (-43.5%)
Scheduled service (4) 11,679 6,018 5,661 94.1%
Charter service 2,718 3,982 (1,264) (-31.7%)
Polar Air Cargo, Inc.
(Scheduled Service) (4) (5)
Revenue Ton Miles (000's) 419,278 142,411
Available Ton Miles (000's) 665,195 241,874
Load Factor 63.0% 58.9%
Yield per RTM (cents) 33.61 25.97
Revenue per ATM (cents) 21.19 15.29
Aircraft at end of period
Atlas Air, Inc. (6) 40 37
Polar Air Cargo, Inc. (7) 11 15
Total aircraft 51 52
(1) 2002 operating statistics include Polar Air Cargo, Inc. (a wholly
owned subsidiary acquired November 1, 2001) for the entire quarter
whereas 2001 statistics include Polar for November and December
only.
(2) Wet-leases to Polar accounted for 6.0% of Atlas Air, Inc's. total
ACMI services block hours in Q4, 2002 and 0% in Q4, 2001.
(3) Charters to Polar represented 10.5% of Atlas Air, Inc.'s total
charter block hours in Q4, 2002.
(4) Scheduled service statistics are prior to revenue eliminations
resulting from consolidation.
(5) See Polar's pro forma scheduled service revenue table above for
further details
(6) Total Atlas aircraft include eight aircraft that are dry-leased to
other carriers (five of which were dry-leased to Polar) in Q4,
2002 and one dry-leased aircraft and six parked aircraft in Q4,
2001.
(7) Total Polar aircraft include one aircraft that was dry-leased to
another carrier in Q4, 2002 and two parked aircraft and one that
was dry-leased to another carrier in Q4, 2001
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