10-Q 1 aaww-20220331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-16545

 

img197045708_0.jpg 

Atlas Air Worldwide Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

13-4146982

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification No.)

 

 

 

2000 Westchester Avenue, Purchase, New York

 

10577

(Address of principal executive offices)

 

(Zip Code)

 

(914) 701-8000

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.01 Par Value

 

AAWW

 

The NASDAQ Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of April 29, 2022, there were 28,190,379 shares of the registrant’s Common Stock outstanding.

 

 

 


 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

Part I. FINANCIAL INFORMATION

 

3

 

 

 

 

 

Item 1.

 

Financial Statements

 

3

 

 

 

 

 

 

 

Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (unaudited)

 

3

 

 

 

 

 

 

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (unaudited)

 

4

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021 (unaudited)

 

5

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)

 

6

 

 

 

 

 

 

 

Consolidated Statements of Stockholders’ Equity as of and for the Three Months Ended March 31, 2022 and 2021 (unaudited)

 

7

 

 

 

 

 

 

 

Notes to Unaudited Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

18

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

26

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

26

 

 

 

PART II. OTHER INFORMATION

 

27

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

27

 

 

 

 

 

Item 1A.

 

Risk Factors

 

27

 

 

 

 

 

Item 6.

 

Exhibits

 

27

 

 

 

 

 

 

 

Exhibit Index

 

28

 

 

 

 

 

 

 

Signatures

 

29

 

 


 

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Atlas Air Worldwide Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

730,349

 

 

$

910,965

 

Restricted cash

 

 

10,554

 

 

 

10,052

 

Accounts receivable, net of allowance of $4,178 and $4,003, respectively

 

 

297,264

 

 

 

305,905

 

Prepaid expenses, assets held for sale and other current assets

 

 

93,910

 

 

 

99,100

 

Total current assets

 

 

1,132,077

 

 

 

1,326,022

 

Property and Equipment

 

 

 

 

 

 

Flight equipment

 

 

5,507,628

 

 

 

5,449,100

 

Ground equipment

 

 

103,498

 

 

 

101,824

 

Less: accumulated depreciation

 

 

(1,360,736

)

 

 

(1,319,636

)

Flight equipment purchase deposits and modifications in progress

 

 

438,308

 

 

 

352,422

 

Property and equipment, net

 

 

4,688,698

 

 

 

4,583,710

 

Other Assets

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

130,748

 

 

 

138,744

 

Deferred costs and other assets

 

 

317,993

 

 

 

329,971

 

Intangible assets, net and goodwill

 

 

63,289

 

 

 

64,796

 

Total Assets

 

$

6,332,805

 

 

$

6,443,243

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

122,751

 

 

$

82,885

 

Accrued liabilities

 

 

615,134

 

 

 

641,978

 

Current portion of long-term debt and finance leases

 

 

607,999

 

 

 

639,811

 

Current portion of long-term operating leases

 

 

55,587

 

 

 

55,383

 

Total current liabilities

 

 

1,401,471

 

 

 

1,420,057

 

Other Liabilities

 

 

 

 

 

 

Long-term debt and finance leases

 

 

1,615,305

 

 

 

1,655,075

 

Long-term operating leases

 

 

152,150

 

 

 

166,022

 

Deferred taxes

 

 

371,518

 

 

 

354,798

 

Financial instruments and other liabilities

 

 

31,031

 

 

 

37,954

 

Total other liabilities

 

 

2,170,004

 

 

 

2,213,849

 

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;
    
35,071,410 and 34,707,860 shares issued, 28,363,266 and 29,215,702
    shares outstanding (net of treasury stock), as of March 31, 2022
    and December 31, 2021, respectively

 

 

351

 

 

 

347

 

Additional paid-in capital

 

 

828,391

 

 

 

934,516

 

Treasury stock, at cost; 6,708,144 and 5,492,158 shares, respectively

 

 

(317,480

)

 

 

(225,461

)

Accumulated other comprehensive loss

 

 

(433

)

 

 

(511

)

Retained earnings

 

 

2,250,501

 

 

 

2,100,446

 

Total stockholders’ equity

 

 

2,761,330

 

 

 

2,809,337

 

Total Liabilities and Equity

 

$

6,332,805

 

 

$

6,443,243

 

 

See accompanying Notes to Unaudited Consolidated Financial Statements

3


 

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

March 31, 2022

 

 

March 31, 2021

 

Operating Revenue

 

$

1,037,156

 

 

$

861,300

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

Salaries, wages and benefits

 

 

298,019

 

 

 

202,614

 

Aircraft fuel

 

 

244,337

 

 

 

163,551

 

Maintenance, materials and repairs

 

 

118,899

 

 

 

121,133

 

Depreciation and amortization

 

 

72,202

 

 

 

67,789

 

Travel

 

 

42,768

 

 

 

37,672

 

Navigation fees, landing fees and other rent

 

 

39,354

 

 

 

44,887

 

Passenger and ground handling services

 

 

34,936

 

 

 

40,065

 

Aircraft rent

 

 

12,995

 

 

 

20,756

 

Loss (gain) on disposal of flight equipment

 

 

(6,240

)

 

 

16

 

Special charge

 

 

2,633

 

 

 

-

 

Transaction-related expenses

 

 

-

 

 

 

201

 

Other

 

 

55,857

 

 

 

58,412

 

Total Operating Expenses

 

 

915,760

 

 

 

757,096

 

 

 

 

 

 

 

 

Operating Income

 

 

121,396

 

 

 

104,204

 

 

 

 

 

 

 

 

Non-operating Expenses (Income)

 

 

 

 

 

 

Interest income

 

 

(240

)

 

 

(211

)

Interest expense

 

 

20,423

 

 

 

27,180

 

Capitalized interest

 

 

(3,764

)

 

 

(1,271

)

Unrealized loss on financial instruments

 

 

-

 

 

 

113

 

Other (income) expense, net

 

 

(618

)

 

 

(39,456

)

Total Non-operating Expenses (Income)

 

 

15,801

 

 

 

(13,645

)

 

 

 

 

 

 

 

Income before income taxes

 

 

105,595

 

 

 

117,849

 

Income tax expense

 

 

24,084

 

 

 

27,916

 

Net Income

 

$

81,511

 

 

$

89,933

 

Earnings per share:

 

 

 

 

 

 

Basic

 

$

2.82

 

 

$

3.16

 

Diluted

 

$

2.38

 

 

$

3.05

 

Weighted average shares:

 

 

 

 

 

 

Basic

 

 

28,854

 

 

 

28,491

 

Diluted

 

 

34,690

 

 

 

29,478

 

 

 

 

 

 

 

 

 

See accompanying Notes to Unaudited Consolidated Financial Statements

4


 

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

March 31, 2022

 

 

March 31, 2021

 

Net Income

 

$

81,511

 

 

$

89,933

 

Other comprehensive income:

 

 

 

 

 

 

Reclassification to interest expense

 

 

105

 

 

 

268

 

Income tax benefit

 

 

(27

)

 

 

(64

)

Other comprehensive income

 

 

78

 

 

 

204

 

Comprehensive Income

 

$

81,589

 

 

$

90,137

 

 

See accompanying Notes to Unaudited Consolidated Financial Statements

5


 

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

 

March 31, 2022

 

 

March 31, 2021

 

Operating Activities:

 

 

 

 

 

 

Net Income

 

$

81,511

 

 

$

89,933

 

 

 

 

 

 

 

 

Adjustments to reconcile Net Income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

85,257

 

 

 

86,172

 

Provision for (reversal of) expected credit losses

 

 

(15

)

 

 

(397

)

Special charge

 

 

2,633

 

 

 

-

 

Unrealized loss on financial instruments

 

 

-

 

 

 

113

 

Loss (gain) on disposal of flight equipment

 

 

(6,240

)

 

 

16

 

Deferred taxes

 

 

23,682

 

 

 

27,839

 

Stock-based compensation

 

 

2,195

 

 

 

4,060

 

Changes in:

 

 

 

 

 

 

Accounts receivable

 

 

9,960

 

 

 

(22,745

)

Prepaid expenses, current assets and other assets

 

 

(3,619

)

 

 

(7,500

)

Accounts payable, accrued liabilities and other liabilities

 

 

12,475

 

 

 

(89,366

)

Net cash provided by operating activities

 

 

207,839

 

 

 

88,125

 

Investing Activities:

 

 

 

 

 

 

Capital expenditures

 

 

(29,895

)

 

 

(26,662

)

Purchase deposits and payments for flight equipment and modifications

 

 

(154,420

)

 

 

(126,807

)

Investment in joint ventures

 

 

(783

)

 

 

(1,608

)

Proceeds from disposal of flight equipment

 

 

13,500

 

 

 

1,850

 

Net cash used for investing activities

 

 

(171,598

)

 

 

(153,227

)

Financing Activities:

 

 

 

 

 

 

Proceeds from debt issuance

 

 

-

 

 

 

16,161

 

Payment of debt issuance costs

 

 

(81

)

 

 

(900

)

Payments of debt and finance lease obligations

 

 

(108,466

)

 

 

(77,953

)

Prepayment of accelerated share repurchase

 

 

(20,034

)

 

 

-

 

Purchase of treasury stock

 

 

(79,966

)

 

 

-

 

Customer maintenance reserves and deposits received

 

 

4,245

 

 

 

5,152

 

Customer maintenance reserves paid

 

 

-

 

 

 

(12,265

)

Treasury shares withheld for payment of taxes

 

 

(12,053

)

 

 

(7,350

)

Net cash used for financing activities

 

 

(216,355

)

 

 

(77,155

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(180,114

)

 

 

(142,257

)

Cash, cash equivalents and restricted cash at the beginning of period

 

 

921,017

 

 

 

856,281

 

Cash, cash equivalents and restricted cash at the end of period

 

$

740,903

 

 

$

714,024

 

 

 

 

 

 

 

 

Noncash Investing and Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of property and equipment included in Accounts payable and accrued liabilities

 

$

3,146

 

 

$

24,938

 

Acquisition of property and equipment acquired under operating leases

 

$

104

 

 

$

4,015

 

Acquisition of flight equipment under finance leases

 

$

3,108

 

 

$

20,171

 

Issuance of shares related to settlement of warrant liability

 

$

-

 

 

$

31,582

 

 

 

 

 

 

 

 

 

See accompanying Notes to Unaudited Consolidated Financial Statements

 

6


 

Atlas Air Worldwide Holdings, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(Unaudited)

 

 

 

 

 

As of and for the Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Total

 

 

 

Common

 

 

Treasury

 

 

Paid-In

 

 

Accumulated Other

 

 

Retained

 

 

Stockholders'

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Comprehensive Loss

 

 

Earnings

 

 

Equity

 

Balance at December 31, 2021

 

$

347

 

 

$

(225,461

)

 

$

934,516

 

 

$

(511

)

 

$

2,100,446

 

 

$

2,809,337

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

81,511

 

 

 

81,511

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

78

 

 

 

-

 

 

 

78

 

Cumulative effect of change in accounting principle

 

 

-

 

 

 

-

 

 

 

(92,586

)

 

 

-

 

 

 

68,544

 

 

 

(24,042

)

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

2,195

 

 

 

-

 

 

 

-

 

 

 

2,195

 

Issuance of warrants

 

 

-

 

 

 

-

 

 

 

4,304

 

 

 

-

 

 

 

-

 

 

 

4,304

 

Prepayment of accelerated share repurchase

 

 

-

 

 

 

-

 

 

 

(20,034

)

 

 

-

 

 

 

-

 

 

 

(20,034

)

Purchase of 1,061,257 shares of treasury stock

 

 

-

 

 

 

(79,966

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(79,966

)

Treasury shares of 154,729 withheld for payment of taxes

 

 

-

 

 

 

(12,053

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12,053

)

Issuance of 363,550 shares of restricted stock

 

 

4

 

 

 

-

 

 

 

(4

)

 

 

-

 

 

 

-

 

 

 

-

 

Balance at March 31, 2022

 

$

351

 

 

$

(317,480

)

 

$

828,391

 

 

$

(433

)

 

$

2,250,501

 

 

$

2,761,330

 

 

 

 

As of and for the Three Months Ended March 31, 2021

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Total

 

 

 

Common

 

 

Treasury

 

 

Paid-In

 

 

Accumulated Other

 

 

Retained

 

 

Stockholders'

 

 

 

Stock

 

 

Stock

 

 

Capital

 

 

Comprehensive Loss

 

 

Earnings

 

 

Equity

 

Balance at December 31, 2020

 

$

329

 

 

$

(217,889

)

 

$

873,874

 

 

$

(1,904

)

 

$

1,607,129

 

 

$

2,261,539

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

89,933

 

 

 

89,933

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

204

 

 

 

-

 

 

 

204

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

4,060

 

 

 

-

 

 

 

-

 

 

 

4,060

 

Issuance of warrants

 

 

-

 

 

 

-

 

 

 

3,228

 

 

 

-

 

 

 

-

 

 

 

3,228

 

Treasury shares of 128,867 withheld for payment of taxes

 

 

-

 

 

 

(7,350

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,350

)

Issuance of 1,280,450 shares related to settlement of warrants

 

 

13