fourth-quarter 2012 review fourth-quarter 2016 review · this presentation contains...
TRANSCRIPT
Fourth-Quarter 2012 ReviewFebruary 13, 2013
William J. FlynnPresident and CEO
Spencer SchwartzSenior Vice President and CFO
February 23, 2017
William J. FlynnPresident and CEO
Spencer SchwartzExecutive Vice President and CFO
Fourth-Quarter 2016 Review
2
Safe Harbor StatementThis presentation contains “forward-looking statements” within the meaning of the Private SecuritiesLitigation Reform Act of 1995 that reflect Atlas Air Worldwide Holdings Inc.’s (“AAWW”) current viewswith respect to certain current and future events and financial performance. Such forward-lookingstatements are and will be, as the case may be, subject to many risks, uncertainties and factors relatingto the operations and business environments of AAWW and its subsidiaries that may cause actualresults to be materially different from any future results, express or implied, in such forward-lookingstatements.
For additional information, we refer you to the risk factors set forth in the documents filed by AAWW withthe Securities and Exchange Commission. Other factors and assumptions not identified above are alsoinvolved in the preparation of forward-looking statements, and the failure of such other factors andassumptions to be realized may also cause actual results to differ materially from those discussed.
AAWW assumes no obligation to update the statements in this presentation to reflect actual results,changes in assumptions, or changes in other factors affecting such estimates, other than as requiredby law.
This presentation also includes some non-GAAP financial measures. You can find our presentations onthe most directly comparable GAAP financial measures calculated in accordance with accountingprinciples generally accepted in the United States and our reconciliations in our earnings release datedFebruary 23, 2017, which is posted at www.atlasair.com.
3
AAWW Key Takeaways 2016 was historic year– Acquired Southern Air– Long-term agreements with Amazon– FedEx, NCA and now Asiana agreements
Strong finish– Record quarterly revenues, significant
increase in reported earnings, record adjusted earnings
Well-positioned to grow earnings in 2017– New customer agreements– Initial accretion from Amazon operations– First full year of Southern Air– Partially offset by higher maintenance,
lower cost-based rates paid by the military
4See February 23, 2017 press release for Non-GAAP reconciliations
2017 Framework
Stronger company Solid demand for our aircraft and services
Adjusted income from continuing operations, net of taxes, to grow by Mid-single-digit to Low-double-digit percentage
1Q17 adjusted income from continuing operations, net of taxes, to be Consistent with, or slightly better
than, 1Q16
Seasonal business, ~70% of earnings generated in second half of the year
Block Hours including Amazon, Southern Air to increase ~20% over 2016 More than 75% of total in ACMI Balance in Charter
Maintenance expense: ~$240 million
Depreciation/amort.: ~$170 million
Core capex: ~$55 to $65 million
5
2017 Guidance Framework
Focusing on adjusted income from continuing operations, net of taxes
Most useful information
– Due to unique accounting for outstanding warrants
– Changes in the market price of our shares could have a significant impact
Use treasury stock method to calculate diluted shares for EPS
4Q16 Summary
*See February 23, 2017 press release for Non-GAAP reconciliations.
Adjusted income from continuing ops* $59.0 million, adjusted diluted EPS of $2.24– Record adjusted 4Q income
Benefited from:– Southern Air contribution– Increased commercial demand– Steady Dry Leasing performance
Reported income from continuing ops $28.7 million, or $1.12 per diluted share– Reflects unrealized loss on financial
instruments of $27.9 million related to outstanding warrants
6
4Q16 vs. 4Q15 Segment Revenue
Percentages subject to rounding
Rev
enue
($M
M)
7
$234.2 $216.1
4Q16 4Q15
ACMI (including CMI)$265.2
$228.1
4Q16 4Q15
Charter
$26.6 $24.0
4Q16 4Q15
Dry Leasing
ACMI44%
Charter50%
Dry Leasing5%
Other1%
4Q16
ACMI46%
Charter48%
Dry Leasing5%
Other1%
4Q15
4Q16 vs. 4Q15 Segment Contribution
Percentages subject to rounding
Dire
ct C
ontr
ibut
ion
($M
M)
8
$78.7
$47.6
4Q16 4Q15
ACMI (including CMI)
$55.1
$39.8
4Q16 4Q15
Charter
$8.4 $7.9
4Q16 4Q15
Dry Leasing
ACMI55%
Charter39%
Dry Leasing6%
4Q16
ACMI50%
Charter42%
Dry Leasing8%
4Q15
9
In $Millions 12/31/2016 12/31/2015
Cash, Equivs, S-T Invsts & Rstr Cash 142.6 444.0
Total Balance Sheet Debt 1,851.4 1,901.3
Net Leverage Ratio (Incl. operating leases and EETC Investments)*
4.8 4.6
Balance Sheet & Financial Ratios
*See Appendix for Non-GAAP reconciliation.
Leverage Ratio and Asset Base
10
Expect to pay down ~$45 to $50 million of debt per quarter in 2017
5.8x 5.6x 5.5x
5.3x
4.8x 4.6x 4.5x 4.6x
4.9x
5.4x 5.3x
4.8
1Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q16
Net Leverage Ratio
Leverage Ratio, Net (Incl. EETC)
60 60 60 60 63 63 64 66 67
81 8283
20 1919
1Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q16
Asset Base
Fleet Size Remaining Amazon Aircraft
*See Appendix for Non-GAAP reconciliation.
AAWW Leading The Way Forward
11
2016 was historic year– Acquired Southern Air– Long-term agreements with Amazon– FedEx, NCA and now Asiana agreements
Strong finish– Record quarterly revenues, significant
increase in reported earnings, record adjusted earnings
Well-positioned to grow earnings in 2017– New customer agreements– Initial accretion from Amazon operations– First full year of Southern Air– Partially offset by higher maintenance,
lower cost-based rates paid by the military
12
Appendix AAWW Fourth-Quarter 2016 Review
February 23, 2017
13
$29 $35 $38 $42
$4$2 $2 $0
$23 $18 $11$2
1QA 2QA 3QA 4QA
2016 Maintenance Expense
$57 $55 $50 $44
In $Millions
Heavy Maintenance
LineMaintenance
• Line maintenance expense increases commensurate with additional block hour flying • Line maintenance expense is approximately $682 per block hour• Non-heavy maintenance includes discrete events such as APU, thrust reverser, and landing gear overhauls• Includes impact of Southern Air acquisition as of 2Q16
$206
$54
$144
Totals
$8Non-heavy Maintenance
Figures subject to rounding
14
$38 $42 $45 $48
$2$2 $1 $2
$30$14 $11 $6
1QE 2QE 3QE 4QE
2017 Maintenance Expense
$70 $58 $57 $56
In $Millions
Heavy Maintenance
LineMaintenance
• Line maintenance expense increases commensurate with additional block hour flying • Line maintenance expense is approximately $668 per block hour• Non-heavy maintenance includes discrete events such as APU, thrust reverser, and landing gear overhauls
$240
$60
$173
Totals
$7Non-heavy Maintenance
Figures subject to rounding
15
Reconciliation to Non-GAAP Measures
In $Millions 4Q16 3Q16 2Q16 1Q16 4Q15 3Q15 2Q15 1Q15 4Q14 3Q14 2Q14 1Q14Face Value of Debt $ 1,943.4 $ 1,967.7 $ 2,001.7 $ 1,972.2 $ 2,008.1 $ 1,899.0 $ 2,134.4 $ 1,958.2 $ 2,009.0 $ 2,058.0 $ 2,109.5 $ 2,158.9 Plus: Present Value of Operating Leases 749.9 774.7 799.4 823.7 848.0 872.2 891.0 914.8 939.7 964.3 988.7 1,012.8 Adjusted Debt 2,693.2 2,742.4 2,801.1 2,795.9 2,856.1 2,771.2 3,025.5 2,873.0 2,948.7 3,022.3 3,098.2 3,171.7
Less: Cash and Equivalents $ 138.3 $ 115.6 $ 168.3 $ 331.9 $ 438.9 $ 387.8 $ 530.5 $ 351.4 $ 312.9 $ 275.8 $ 289.6 $ 292.2 Less: EETC Asset 32.3 34.8 35.8 38.1 42.7 45.9 131.3 138.1 138.3 137.9 138.7 140.0
LTM EBITDAR $ 526.0 $ 485.9 $ 484.7 $ 496.4 $ 521.2 $ 517.5 $ 514.6 $ 492.4 $ 468.3 $ 476.5 $ 473.6 $ 473.4 Net Leverage Ratio (Incl. EETC Invest) 4.8 5.3 5.4 4.9 4.6 4.5 4.6 4.8 5.3 5.5 5.6 5.8
16
Thank you.