Atlas Air latest results and news.

Atlas Air, Inc has just released its latest figures for last year showing an adjusted net income of $551.0 million on a bumper year for the cargo giants.

“2021 was another outstanding year with excellent financial and operating performance. Our greatest strength is our people and I’d like to thank everyone at Atlas for working together to deliver these very strong results. We are also very pleased to have achieved a long-term labour agreement with our pilots that recognizes their significant contributions to Atlas. With the strength, flexibility and resiliency of our global business model, our experienced and dedicated team delivered high-quality service to our customers in an operating environment with persistent pandemic-related obstacles,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich.

The company also just announced it has entered into a long-term, dedicated charter agreement to operate two of its new incoming Boeing 747-8 freighters on a global basis for Kuehne+Nagel, one of the world’s largest freight forwarders.

Atlas Air will commence operation of these aircraft for Kuehne+Nagel following their delivery from Boeing, with one expected in the third quarter and the second in the fourth quarter of 2022. Atlas Air operates one of the world’s largest fleets of 747-8Fs, the most capable freighter aircraft in the world. These two aircraft placed with Kuehne+Nagel are the last 747s Boeing will produce.

As previously announced, Atlas ordered the last four 747 production aircraft to capitalize on strong demand and deliver value for its customers, while also bolstering its commitment to environmental stewardship through the reduction of aircraft emissions, resource consumption and noise. This legendary aircraft has been in production for over 50 years and will continue to serve the needs of our global supply chains for decades into the future.

“We are delighted to expand our partnership with Kuehne+Nagel by providing dedicated capacity for their growing global airfreight network,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “The Boeing 747-8F serves an incredibly important role in global airfreight, with advanced technology that allows for lower fuel consumption, higher capacity and unique nose-loading capability. We look forward to taking delivery of these two 747s and operating them for Kuehne+Nagel to support their network for years to come.”

Yngve Ruud, Member of the Management Board of Kuehne+Nagel, responsible for Air Logistics, commented: "As a market leader in airfreight, Kuehne+Nagel further expands its dedicated charter network to support customers with solutions for long-term planning and high-quality service. We are proud to partner with Atlas Air and include these two new Boeing 747-8Fs in our already extensive global capacity offering."

The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F.

A new deal was arranged with Cainiao Network, the logistics arm of Alibaba Group, by adding a new Boeing 747-8 Freighter under a long-term agreement to increase capacity on routes between China and the Americas.

This expansion builds upon Atlas Air’s partnership with Cainiao, and the new aircraft will enter service for Cainiao in the second quarter of 2022, linking China with the United States, Brazil and Chile.

This 747-8F aircraft is among the last 747s ever to be produced by Boeing. As previously announced, Atlas ordered the last four 747 production aircraft to capitalize on strong demand and deliver value for its customers, while also bolstering its commitment to environmental stewardship through the reduction of aircraft emissions, resource consumption and noise. The iconic Boeing 747 program has been in operation for over 50 years and will continue to play a critical role in keeping global supply chains moving for decades to come.

“We are very pleased to extend our strong partnership with Cainiao with the placement of one of our new 747-8Fs, the best performing widebody freighter in the industry with unique nose-loading capability,” said Atlas Air Worldwide President and Chief Executive Officer John W. Dietrich. “Cainiao is a leader in the fast-growing e-Commerce logistics market, and we look forward to continuing to support its global network with the superior and reliable service Atlas Air provides. This fuel-efficient, high-capacity aircraft reinforces the commitment to environmental stewardship that Atlas and Cainiao share.”

“Through our successful partnership, Cainiao has been able to offer our customers across the Americas with faster and more eco-friendly deliveries provided by Atlas’ global operating capabilities. We are excited to add the new Boeing freighter to our expanding partnership in response to the growing demand for e-Commerce and greener logistics across the world,” said William Xiong, Cainiao's Chief Strategist and General Manager for Export Logistics.

The Boeing 747-8 Freighter is the most capable, technologically advanced and environmentally friendly widebody freighter. The 747-8F provides 20% higher payload capacity and 16% lower fuel consumption than the very capable 747-400F.

In November 2021, Cainiao expanded its partnership with Atlas Air to include daily charter flights operated between China and Latin America in response to the growth of cross-border trade between China and Latin America.

Full-Year Results

Volumes in 2021 grew to 364,061 block hours compared with 344,821 in 2020, with revenue increasing to $4.0 billion in 2021 from $3.2 billion in 2020.

For the twelve months ended December 31, 2021, our reported net income rose to $493.3 million, or $16.16 per diluted share, compared with $360.3 million, or $13.50 per diluted share, in 2020.

On an adjusted basis, EBITDA grew to $1.1 billion in 2021 compared with $844.2 million in 2020. For the twelve months ended December 31, 2021, adjusted net income increased to $551.0 million, or $18.51 per diluted share, compared with $379.0 million, or $13.67 per diluted share, in 2020.

Reported results in 2021 included an effective income tax rate of 23.8%. On an adjusted basis, our results reflected an effective income tax rate of 22.0%.

Fourth-Quarter Results

Volumes in the fourth quarter of 2021 totaled 91,985 block hours compared with 96,079 in the fourth quarter of 2020, with revenue rising to $1.2 billion compared with $932.5 million in the prior-year quarter.

For the three months ended December 31, 2021, our reported net income totaled $176.7 million, or $5.55 per diluted share, compared with net income of $184.0 million, or $6.15 per diluted share, in the fourth quarter of 2020.

On an adjusted basis, EBITDA was $361.8 million in the fourth quarter this year compared with $279.7 million in the fourth quarter of 2020. Adjusted net income in the fourth quarter of 2021 totaled $211.6 million, or $7.05 per diluted share, compared with $143.2 million, or $4.83 per diluted share, in the prior-year period.

Reported earnings in the fourth quarter of 2021 also included an effective income tax rate of 24.3%. On an adjusted basis, our results reflected an effective income tax rate of 21.7%.

Higher Airline Operations revenue primarily reflected an increase in the average rate per block hour. The higher average rate per block hour was primarily due to an increased proportion of higher-yielding flying, including the impact of new and extended long-term contracts, the ongoing reduction of available cargo capacity in the market, the continued disruption of global supply chains, as well as higher fuel costs. Block-hour volumes during the period reflected a reduction in less profitable smaller gauge CMI service flying, partially offset by our ability to increase the utilization of our current fleet to meet strong customer demand. Block-hour volumes benefited from the operation of a 747-400 freighter we reactivated during the fourth quarter of 2020.

Higher Airline Operations segment contribution in the fourth quarter of 2021 was primarily driven by the positive factors benefiting segment revenue mentioned above as well as lower heavy maintenance expense. These improvements were partially offset by higher pilot costs related to our new joint collective bargaining agreement (JCBA).

In Dry Leasing, segment revenue and contribution in the fourth quarter of 2021 were relatively unchanged compared with the prior-year period.

Unallocated income and expenses, net, increased during the quarter, primarily due to $67.2 million in CARES Act grant income in 2020 and a $14.1 million increase related to adjustments to paid time-off benefits in our new JCBA in 2021 (both of which were excluded from our adjusted results), as well as a $6.6 million reduction in refunds of aircraft rent paid in previous years.

Fleet Management

We have now placed all four of our new and incoming 747-8Fs under long-term agreements. We expect delivery of these aircraft between May and October this year.

In addition, we look forward to the deliveries and placements of the four new 777-200LRFs we recently announced, for which there is very strong demand. We expect one to be delivered late in the fourth quarter of this year and three more throughout 2023.

As previously disclosed, we purchased six of our existing 747-400Fs during 2021 that were formerly on lease to us. We are also purchasing another five of our other 747-400Fs at the end of their leases during the course of this year, which range from February to December.

Acquiring these widebody freighters underscores our confidence in the demand for dedicated international airfreight capacity, particularly in express, e-Commerce and fast-growing global markets. These investments are consistent with our long-term strategic growth plan and will provide customers with modern and environmentally-efficient aircraft, which will drive strong returns for Atlas in the years ahead.

Cash

At December 31, 2021, our cash, including cash equivalents and restricted cash, totaled $921.0 million compared with $856.3 million at December 31, 2020.

The increase resulted from cash provided by operating activities, partially offset by cash used for investing and financing activities.

Net cash used for investing activities during 2021 primarily related to payments for flight equipment and modifications, including all pre-delivery payments for 747-8F aircraft, as well as capital expenditures, spare engines and GEnx performance upgrade kits.

Net cash used for financing activities during the period primarily related to payments on debt obligations, partially offset by proceeds from debt issuance.

Share Repurchases

In February 2022, our Board of Directors approved the establishment of a new share repurchase program authorizing up to $200.0 million of our common stock. Purchases may be made at our discretion in the form of accelerated share repurchase programs, open market repurchase programs, privately negotiated transactions, or a combination of these methods.

As part of the share repurchase program, the company will enter into a $100.0 million accelerated share repurchase program (ASR). Purchases under the ASR are expected to be completed by the end of the second quarter.

Outlook*

We expect strong performance in the first quarter of 2022, with adjusted EBITDA and adjusted net income similar to the first quarter of 2021. We anticipate revenue of about $1.0 billion from flying approximately 85,000 block hours.

This outlook reflects higher yields, including the contribution from numerous new or enhanced long-term customer contracts, as well as higher pilot costs from our new JCBA.

We expect first-quarter results to continue to be impacted by ongoing pandemic-related expenses, including premium pay for employees flying into locations significantly impacted by COVID-19 and other operational costs, including for regulatory compliance and providing a safe working environment for our employees.

For the full year in 2022, we expect aircraft maintenance expense to be similar to 2021, and depreciation and amortization to total about $300 million. In addition, core capital expenditures, which exclude aircraft and engine purchases, are projected to total approximately $135 to $145 million, mainly for parts and components for our fleet.

Due to the uncertainty related to the pandemic, ongoing supply chain disruptions and other factors, we are not providing additional guidance at this time.

Other than with regard to revenue, we provide guidance on an adjusted basis because we are unable to predict with reasonable certainty and without unreasonable effort the effects on future gains and losses on asset sales, special charges and other unanticipated items that could be material to our reported results.*

About Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures to assist in the evaluation of our business performance. These non-GAAP measures include Adjusted EBITDA; Adjusted net income; Adjusted Diluted EPS; Adjusted effective tax rate; and Free Cash Flow, which exclude certain noncash income and expenses, and items impacting year-over-year comparisons of our results. These non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for Net income; Diluted EPS; Effective tax rate; and Net Cash Provided by Operating Activities, which are the most directly comparable measures of performance prepared in accordance with U.S. GAAP, respectively.

Our management uses these non-GAAP financial measures in assessing the performance of the company’s ongoing operations and in planning and forecasting future periods. We believe that these adjusted measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provide meaningful supplemental information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance. For example:

• Adjusted EBITDA; Adjusted net income; and Adjusted Diluted EPS provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance. In addition, management’s incentive compensation is determined, in part, by using Adjusted EBITDA and Adjusted net income.
  
  
• Adjusted effective tax rate provides insight into the tax effects of our ongoing business operations.
  
  
• Free Cash Flow helps investors assess our ability, over the long term, to create value for our shareholders as it represents cash available to execute our capital allocation strategy.
  

*Other than with regard to revenue, we provide guidance only on an adjusted basis and are unable to provide forward-looking guidance on a U.S. GAAP basis or a reconciliation to the most directly comparable U.S. GAAP measures because we are unable to predict with reasonable certainty and without unreasonable effort, the ultimate outcome of certain significant items, including future gains and losses on asset sales, special charges and other unanticipated items. These items are uncertain, depend on various factors, and could have a material impact on our U.S. GAAP results.

About Atlas Air Worldwide:

Atlas Air Worldwide is a leading global provider of outsourced aircraft and aviation operating services. It is the parent company of Atlas Air, Inc. and Titan Aviation Holdings, Inc., and is the majority shareholder of Polar Air Cargo Worldwide, Inc. Our companies operate the world’s largest fleet of 747 freighter aircraft and provide customers the broadest array of Boeing 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.

Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

		For the Three Months Ended								For the Twelve Months Ended
		December  31, 2021				December 31, 2020				December 31, 2021						December 31, 2020
Operating Revenue		$	1,162,997			$	932,475			$	4,030,829				$		3,211,116
Operating Expenses
Salaries, wages and benefits			282,023				203,363				924,440						737,963
Aircraft fuel			230,470				130,976				824,928						440,649
Maintenance, materials and repairs			116,038				127,211				472,537						506,297
Depreciation and amortization			73,291				68,667				281,209						257,672
Navigation fees, landing fees and other rent			45,142				45,198				184,060						155,107
Travel			42,401				40,043				162,986						154,792
Passenger and ground handling services			35,125				40,467				156,962						138,822
Aircraft rent			13,817				24,343				67,745							96,865
Loss (gain) on disposal of aircraft			-				(370	)			(794	)						(7,248		)
Special charge			-				(216	)			-							16,265
Transaction-related expenses			515				494				1,001							2,780
Other			61,095				58,455				244,461							216,384
Total Operating Expenses			899,917				738,631				3,319,535							2,716,348
Operating Income			263,080				193,844				711,294							494,768
Non-operating Expenses (Income)
Interest income			(164	)			(147	)			(723	)						(1,076		)
Interest expense			26,147				27,886				107,492							114,635
Capitalized interest			(2,860	)			(397	)			(8,316	)						(925		)
Loss on early extinguishment of debt			6,042				-				6,042							81
Unrealized loss (gain) on financial instruments			-				(2,298	)			113							71,053
Other (income) expense, net			469				(73,661	)			(40,705	)						(185,742		)
Total Non-operating Expenses (Income)			29,634				(48,617	)			63,903							(1,974		)
Income before income taxes			233,446				242,461				647,391							496,742
Income tax expense			56,707				58,494				154,074							136,456
Net Income		$	176,739			$	183,967			$	493,317					$		360,286
Earnings per share:
Basic		$	6.07			$	6.72			$	17.06					$		13.64
Diluted		$	5.55			$	6.15			$	16.16					$		13.50
Weighted average shares:
Basic			29,107				27,395				28,910							26,408
Diluted			31,821				29,666				30,543							26,690

Atlas Air Worldwide Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)

		December 31, 2021				December 31, 2020
Assets
Current Assets
Cash and cash equivalents		$	910,965			$	845,589
Restricted cash			10,052				10,692
Accounts receivable, net of allowance of $4,003 and $1,233, respectively			305,905				265,521
Prepaid expenses, assets held for sale and other current assets			99,100				95,919
Total current assets			1,326,022				1,217,721
Property and Equipment
Flight equipment			5,449,100				5,061,387
Ground equipment			101,824				86,670
Less: accumulated depreciation			(1,319,636	)			(1,147,613	)
Flight equipment purchase deposits and modifications in progress			352,422				110,150
Property and equipment, net			4,583,710				4,110,594
Other Assets
Operating lease right-of-use assets			138,744				255,805
Deferred costs and other assets			329,971				374,242
Intangible assets, net and goodwill			64,796				70,826
Total Assets		$	6,443,243			$	6,029,188
Liabilities and Equity
Current Liabilities
Accounts payable		$	82,885			$	107,604
Accrued liabilities			641,978				583,160
Current portion of long-term debt and finance leases			639,811				298,690
Current portion of long-term operating leases			55,383				157,732
Total current liabilities			1,420,057				1,147,186
Other Liabilities
Long-term debt and finance leases			1,655,075				2,020,451
Long-term operating leases			166,022				318,850
Deferred taxes			354,798				203,586
Financial instruments and other liabilities			37,954				77,576
Total other liabilities			2,213,849				2,620,463
Commitments and contingencies
Equity
Stockholders’ Equity
Preferred stock, $1 par value; 10,000,000 shares authorized; no shares issued			-				-
Common stock, $0.01 par value; 100,000,000 shares authorized; 34,707,860 and 32,877,533 shares issued, 29,215,702 and 27,517,297 shares outstanding (net of treasury stock), as of December 31, 2021 and December 31, 2020, respectively			347				329
Additional paid-in capital			934,516				873,874
Treasury stock, at cost; 5,492,158 and 5,360,236 shares, respectively			(225,461	)			(217,889	)
Accumulated other comprehensive loss			(511	)			(1,904	)
Retained earnings			2,100,446				1,607,129
Total stockholders’ equity			2,809,337				2,261,539
Total Liabilities and Equity		$	6,443,243			$	6,029,188

1  Balance sheet debt at December 31, 2021 totaled $2,294.9 million, including the impact of $31.5 million of unamortized discount and debt issuance costs of $22.7 million, compared with $2,319.1 million, including the impact of $50.6 million of unamortized discount and debt issuance costs of $29.3 million at December 31, 2020.
2  The face value of our debt at December 31, 2021 totaled $2,349.1 million, compared with $2,399.0 million on December 31, 2020.

Atlas Air Worldwide Holdings, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

		For the Twelve Months Ended
		December 31, 2021				December 31, 2020
Operating Activities:
Net Income		$	493,317			$	360,286
Adjustments to reconcile Net Income to net cash provided by operating activities:
Depreciation and amortization			357,330				328,101
Accretion of debt securities discount			-				(2	)
Provision for (reversal of) expected credit losses			(378	)			463
Loss on early extinguishment of debt			6,042				81
Special charge, net of cash payments			-				16,265
Unrealized loss on financial instruments			113				71,053
Gain on disposal of aircraft			(794	)			(7,248	)
Deferred taxes			152,399				133,598
Stock-based compensation			14,014				21,997
Changes in:
Accounts receivable			(37,800	)			26,132
Prepaid expenses, current assets and other assets			(49,763	)			(56,716	)
Accounts payable, accrued liabilities and other liabilities			(11,496	)			115,532
Net cash provided by operating activities			922,984				1,009,542
Investing Activities:
Capital expenditures			(90,288	)			(78,933	)
Purchase deposits and payments for flight equipment and modifications			(407,684	)			(184,273	)
Investment in joint ventures			(4,893	)			(9,298	)
Proceeds from investments			-				881
Proceeds from disposal of aircraft			9,470				126,335
Net cash used for investing activities			(493,395	)			(145,288	)
Financing Activities:
Proceeds from debt issuance			212,717				417,733
Payment of debt issuance costs			(9,541	)			(6,100	)
Payments of debt and finance lease obligations			(542,594	)			(429,749	)
Proceeds from revolving credit facility			-				75,000
Payment of revolving credit facility			-				(175,000	)
Customer maintenance reserves and deposits received			17,745				15,168
Customer maintenance reserves paid			(35,608	)			(14,437	)
Treasury shares withheld for payment of taxes			(7,572	)			(4,018	)
Net cash used for financing activities			(364,853	)			(121,403	)
Net increase in cash, cash equivalents and restricted cash			64,736				742,851
Cash, cash equivalents and restricted cash at the beginning of period			856,281				113,430
Cash, cash equivalents and restricted cash at the end of period		$	921,017			$	856,281
Noncash Investing and Financing Activities:
Acquisition of property and equipment included in Accounts payable and accrued liabilities		$	38,985			$	36,619
Acquisition of property and equipment acquired under operating leases		$	16,117			$	91,538
Acquisition of flight equipment under finance leases		$	191,994			$	18,476
Customer maintenance reserves settled with sale of aircraft		$	-			$	6,497
Issuance of shares related to settlement of warrant liability		$	31,583			$	49,545

Atlas Air Worldwide Holdings, Inc.
Direct Contribution
(in thousands)
(Unaudited)

		For the Three Months Ended								For the Twelve Months Ended
		December 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Operating Revenue:
Airline Operations		$	1,125,786			$	896,936			$	3,888,601			$	3,066,399
Dry Leasing			41,671				41,609				163,365				165,181
Customer incentive asset amortization			(10,906	)			(10,676	)			(44,162	)			(39,090	)
Other			6,446				4,606				23,025				18,626
Total Operating Revenue		$	1,162,997			$	932,475			$	4,030,829			$	3,211,116
Direct Contribution:
Airline Operations		$	354,684			$	256,624			$	1,020,887			$	739,619
Dry Leasing			10,822				11,023				42,587				41,070
Total Direct Contribution for Reportable Segments			365,506				267,647				1,063,474				780,689
Unallocated income and (expenses), net			(125,503	)			(27,576	)			(409,721	)			(201,016	)
Loss on early extinguishment of debt			(6,042	)			-				(6,042	)			(81	)
Unrealized gain (loss) on financial instruments			-				2,298				(113	)			(71,053	)
Special charge			-				216				-				(16,265	)
Transaction-related expenses			(515	)			(494	)			(1,001	)			(2,780	)
Gain on disposal of aircraft			-				370				794				7,248
Income before income taxes			233,446				242,461				647,391				496,742
Add back (subtract):
Interest income			(164	)			(147	)			(723	)			(1,076	)
Interest expense			26,147				27,886				107,492				114,635
Capitalized interest			(2,860	)			(397	)			(8,316	)			(925	)
Loss on early extinguishment of debt			6,042				-				6,042				81
Unrealized loss (gain) on financial instruments			-				(2,298	)			113				71,053
Other (income) expense, net			469				(73,661	)			(40,705	)			(185,742	)
Operating Income		$	263,080			$	193,844			$	711,294			$	494,768

Atlas Air Worldwide uses an economic performance metric, Direct Contribution, to show the profitability of each of its segments after allocation of direct operating and ownership costs. Atlas Air Worldwide currently has the following reportable segments: Airline Operations and Dry Leasing.

Direct Contribution consists of income (loss) before taxes, excluding loss on early extinguishment of debt, unrealized loss on financial instruments, special charge, transaction-related expenses, loss (gain) on disposal of aircraft, nonrecurring items, and unallocated expenses and (income), net.

Direct operating and ownership costs include crew costs, maintenance, fuel, ground operations, sales costs, aircraft rent, interest expense on the portion of debt used for financing aircraft, interest income on debt securities, and aircraft depreciation.

Unallocated expenses and (income), net include corporate overhead, nonaircraft depreciation, noncash expenses and income, interest expense on the portion of debt used for general corporate purposes, interest income on nondebt securities, capitalized interest, foreign exchange gains and losses, other revenue, other nonoperating costs and CARES Act grant income.

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)

			For the Three Months Ended
			December 31, 2021					December 31, 2020				Percent Change
Net Income			$	176,739				$	183,967				(3.9	)%
Impact from:
CARES Act grant income1				-					(67,212	)
Customer incentive asset amortization				10,906					10,676
Adjustments to JCBA paid time-off benefits2				14,061					-
Special charge				-					(216	)
Noncash expenses and income, net3				4,897					4,599
Unrealized gain on financial instruments				-					(2,298	)
Other, net4				6,931					294
Income tax effect of reconciling items				(6,018	)				13,406
Special tax item7				4,041					-
Adjusted Net Income			$	211,557				$	143,216				47.7	%
Weighted average diluted shares outstanding				31,821					29,666
effect of convertible notes hedges6				(1,802	)				-
Adjusted weighted average diluted shares outstanding				30,019					29,666
Adjusted Diluted EPS			$	7.05				$	4.83				46.0	%
			For the Twelve Months Ended
			December 31, 2021					December 31, 2020				Percent Change
Net Income			$	493,317				$	360,286				36.9	%
Impact from:
CARES Act grant income1				(40,944	)				(151,590	)
Customer incentive asset amortization				44,162					39,090
Adjustments to JCBA paid time-off benefits2				29,211					-
Special charge				-					16,265
Noncash expenses and income, net3				19,136					17,971
Unrealized loss on financial instruments				113					71,053
Other, net4				7,752					2,382
Income tax effect of reconciling items				(5,795	)				23,580
Special tax item7				4,041					-
Adjusted Net Income			$	550,993				$	379,037				45.4	%
Weighted average diluted shares outstanding				30,543					26,690
Add: dilutive warrant5				-					1,040
effect of convertible notes hedges6				(782	)				-
Adjusted weighted average diluted shares outstanding				29,761					27,730
Adjusted Diluted EPS			$	18.51				$	13.67				35.4	%

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)

			For the Three Months Ended
			December 31, 2021					December 31, 2020				Percent Change
Income before taxes			$	233,446				$	242,461				(3.7)	%
Impact from:
CARES Act grant income1				-					(67,212	)
Customer incentive asset amortization				10,906					10,676
Adjustments to JCBA paid time-off benefits2				14,061					-
Special charge				-					(216	)
Noncash expenses and income, net3				4,897					4,599
Unrealized gain on financial instruments				-					(2,298	)
Other, net4				6,931					294
Adjusted income before income taxes				270,241					188,304				43.5	%
Interest (income) expense, net				18,226					22,743
Other (income) expense, net				469					(6,449	)
Adjusted operating income			$	288,936				$	204,598				41.2	%
Income tax expense			$	56,707				$	58,494
Income tax effect of reconciling items				(6,018	)				13,406
Special tax item7				4,041					-
Adjusted income tax expense				58,684					45,088
Adjusted income before income taxes			$	270,241				$	188,304
Effective tax expense rate				24.3	%				24.1	%
Adjusted effective tax expense rate				21.7	%				23.9	%
			For the Twelve Months Ended
			December 31, 2021					December 31, 2020				Percent Change
Income before taxes			$	647,391				$	496,742				30.3	%
Impact from:
CARES Act grant income1				(40,944	)				(151,590	)
Customer incentive asset amortization				44,162					39,090
Adjustments to JCBA paid time-off benefits2				29,211					-
Special charge				-					16,265
Noncash expenses and income, net3				19,136					17,971
Unrealized loss on financial instruments				113					71,053
Other, net4				7,752					2,382
Adjusted income before income taxes				706,821					491,913				43.7	%
Interest (income) expense, net				79,317					94,663
Other (income) expense, net				239					(34,071	)
Adjusted operating income			$	786,377				$	552,505				42.4	%
Income tax expense			$	154,074				$	136,456
Income tax effect of reconciling items				(5,795	)				23,580
Special tax item7				4,041					-
Adjusted income tax expense				155,828					112,876
Adjusted income before income taxes			$	706,821				$	491,913
Effective tax expense rate				23.8	%				27.5	%
Adjusted effective tax expense rate				22.0	%				22.9	%

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)

			For the Three Months Ended
			December 31, 2021					December 31, 2020				Percent Change
Net Income			$	176,739				$	183,967				(3.9)	%
Interest expense, net				23,123					27,342
Depreciation and amortization				73,291					68,667
Income tax expense				56,707					58,494
EBITDA				329,860					338,470
CARES Act grant income1				-					(67,212	)
Customer incentive asset amortization				10,906					10,676
Adjustments to JCBA paid time-off benefits2				14,061					-
Special charge				-					(216	)
Unrealized gain on financial instruments				-					(2,298	)
Other, net4				6,931					294
Adjusted EBITDA			$	361,758				$	279,714				29.3	%
			For the Twelve Months Ended
			December 31, 2021					December 31, 2020				Percent Change
Net Income			$	493,317				$	360,286				36.9	%
Interest expense, net				98,453					112,634
Depreciation and amortization				281,209					257,672
Income tax expense				154,074					136,456
EBITDA				1,027,053					867,048
CARES Act grant income1				(40,944	)				(151,590	)
Customer incentive asset amortization				44,162					39,090
Adjustments to JCBA paid time-off benefits2				29,211					-
Special charge				-					16,265
Unrealized loss on financial instruments				113					71,053
Other, net4				7,752					2,382
Adjusted EBITDA			$	1,067,347				$	844,248				26.4	%

1 CARES Act grant income in 2021 and 2020 related to income associated with the Payroll Support Program.

2 Adjustments to JCBA paid time-off benefits in 2021 are related to our new JCBA.

3 Noncash expenses and income, net in 2021 and 2020 primarily related to amortization of debt discount on the convertible notes.

4 Other, net in 2021 primarily related to $6.0 million of costs associated with the refinancing of debt, as well as leadership transition costs and costs associated with our acquisition of an airline, partially offset by a gain on the sale of aircraft. Other, net in 2020 primarily related to a $7.2 million net gain on the sale of aircraft, as well as costs associated with the Payroll Support Program, costs associated with the refinancing of debt, costs associated with our acquisition of an airline and accrual for legal matters and professional fees.

5 Dilutive warrants represent potentially dilutive common shares related to warrants issued to a customer. These warrants are excluded from Diluted EPS prepared in accordance with GAAP when they would have been antidilutive.

6 Represents the economic benefit from our convertible notes hedges in offsetting dilution from our convertible notes as we concluded in no event would economic dilution result from conversion of each of the convertible notes when our stock price is below the exercise price of the respective convertible note warrants.

7 Special tax item in 2021 represents the income tax expense from the integration of a previously-acquired airline.

Atlas Air Worldwide Holdings, Inc.
Reconciliation to Non-GAAP Measures
(in thousands, except per share data)
(Unaudited)

		For the Three Months Ended
		December 31, 2021				December 31, 2020
Net Cash Provided by Operating Activities		$	314,051			$	226,834
Less:
Capital expenditures			26,156				33,799
Capitalized interest			2,860			$	397
Free Cash Flow1		$	285,035			$	192,638
		For the Twelve Months Ended
		December 31, 2021				December 31, 2020
Net Cash Provided by Operating Activities		$	922,984			$	1,009,542
Less:
Capital expenditures			90,288				78,933
Capitalized interest			8,316			$	925
Free Cash Flow1		$	824,380			$	929,684

1 Free Cash Flow = Net Cash from Operations minus Core Capital Expenditures and Capitalized Interest.

Core Capital Expenditures excludes purchases of aircraft.

Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)

		For the Three Months Ended								Increase/				For the Twelve Months Ended								Increase/
		December 31, 2021				December 31, 2020				(Decrease)				December 31, 2021				December 31, 2020				(Decrease)
Block Hours
Airline Operations			91,092				95,161				(4,069	)			359,862				340,294				19,568
Cargo			88,661				90,704				(2,043	)			343,957				323,385				20,572
Passenger			2,431				4,457				(2,026	)			15,905				16,909				(1,004	)
Other			893				918				(25	)			4,199				4,527				(328	)
Total Block Hours			91,985				96,079				(4,094	)			364,061				344,821				19,240
Revenue Per Block Hour
Airline Operations		$	12,359			$	9,425			$	2,934			$	10,806			$	9,011			$	1,795
Cargo		$	12,153			$	8,950			$	3,203			$	10,413			$	8,522			$	1,891
Passenger		$	19,862			$	19,109			$	753			$	19,290			$	18,372			$	918
Average Utilization (block hours per day)
Airline Operations
Cargo			11.2				10.5				0.7				10.7				9.3				1.4
Passenger			2.9				4.5				(1.6	)			4.4				4.3				0.1
All Operating Aircraft1			10.5				9.9				0.6				10.2				8.9				1.3
Fuel
Charter
Average fuel cost per gallon		$	2.32			$	1.37			$	0.95			$	2.00			$	1.41			$	0.59
Fuel gallons consumed (000s)			99,183				95,921				3,262				411,845				313,428				98,417

1 Average of All Operating Aircraft excludes Dry Leasing aircraft, which do not contribute to block-hour volumes.

Atlas Air Worldwide Holdings, Inc.
Operating Statistics and Traffic Results
(Unaudited)

		For the Three Months Ended								Increase/				For the Twelve Months Ended								Increase/
		December 31, 2021				December 31, 2020				(Decrease)				December 31, 2021				December 31, 2020				(Decrease)
Segment Operating Fleet (average aircraft equivalents during the period)
Airline Operations1
747-8F Cargo			10.0				10.0				-				10.0				10.0				-
747-400 Cargo			34.5				33.8				0.7				34.5				32.6				1.9
747-400 Dreamlifter			0.3				1.7				(1.4	)			0.8				2.4				(1.6	)
747-400 Passenger			4.2				5.0				(0.8	)			4.8				5.0				(0.2	)
777-200 Cargo			9.0				9.0				-				9.0				8.7				0.3
767-300 Cargo			24.0				24.0				-				24.0				24.0				-
767-300 Passenger			4.9				4.8				0.1				4.9				4.8				0.1
767-200 Cargo			-				7.9				(7.9	)			2.0				8.7				(6.7	)
767-200 Passenger			-				1.0				(1.0	)			0.1				1.0				(0.9	)
737-800 Cargo			8.0				7.8				0.2				8.0				5.8				2.2
737-400 Cargo			-				-				-				-				2.6				(2.6	)
Total			94.9				105.0				(10.1	)			98.1				105.6				(7.5	)
Dry Leasing
777-200 Cargo			7.0				7.0				-				7.0				7.0				-
767-300 Cargo			21.0				21.0				-				21.0				21.0				-
757-200 Cargo			-				-				-				-				0.1				(0.1	)
737-300 Cargo			1.0				1.0				-				1.0				1.0				-
737-800 Passenger			-				-				-				-				0.2				(0.2	)
Total			29.0				29.0				-				29.0				29.3				(0.3	)
Less: Aircraft Dry Leased to CMI customers			(21.0	)			(21.0	)			-				(21.0	)			(21.0	)			-
Total Operating Average Aircraft Equivalents			102.9				113.0				(10.1	)			106.1				113.9				(7.8	)
Out-of-Service2			-				0.7				(0.7	)			-				2.2				(2.2	)

1 Airline Operations average fleet excludes spare aircraft provided by CMI customers.
                
2 Out-of-service includes aircraft that are temporarily parked.

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