ATLAS AIR WORLDWIDE HOLDINGS INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

[ü] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2002

[ ] 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 0-25732

Atlas Air Worldwide Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware		13-4146982

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2000 Westchester Ave. Purchase, NY		10577

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (914) 701-8000

Not Applicable

(Former name, former address and former fiscal year , if changed since last report)

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 ü No .

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 par value: 38,264,341 shares outstanding as of July 18, 2002.

This report is available online at www.atlasair.com.

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K.
	Signature

ATLAS AIR WORLDWIDE HOLDINGS, INC. AND SUBSIDIARIES

INDEX


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements

	Condensed Consolidated Statements of Operations- Three Months and Six Months Ended June 30, 2002 and 2001	2

	Condensed Consolidated Balance Sheets- June 30, 2002 and December 31, 2001	3

	Condensed Consolidated Statements of Cash Flows- Six Months Ended June 30, 2002 and 2001	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	16

Item 6.	Exhibits and Reports on Form 8-K	16

	Signature	18

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Atlas Air Worldwide Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except per share amounts)


				Three Months Ended						Six Months Ended
				June 30,						June 30,

				2002			2001			2002			2001

Revenues




	Contracted services			$	112,407		$	144,507		$	220,974		$	305,155




	Charter services				54,655			2,313			135,519			5,363




	Scheduled services				63,482			—			113,371			—




	Other revenues				5,057			2,215			11,908			18,829

			Total operating revenues		235,601			149,035			481,772			329,347




Expenses




	Salaries, wages and benefits				41,933			26,863			82,335			57,022




	Aircraft rents				43,509			31,035			90,428			62,421




	Depreciation and amortization				27,196			20,469			48,891			40,655




	Ground handling and airport fees				21,242			4,386			46,834			8,340




	Maintenance, materials and repairs				43,715			32,247			81,907			61,655




	Aircraft fuel				39,359			2,234			70,277			5,070




	Pilot profit sharing settlement				—			—			—			22,815




	Restructuring and impairment				7,850			71,214			7,850			71,214




	Other operating expenses				51,082			32,499			85,861			56,702

		Total operating expenses			275,886			220,947			514,383			385,894

Operating loss					(40,285	)		(71,912	)		(32,611	)		(56,547	)




Other Income (Expense)




	Interest income				2,771			5,187			6,082			12,821




	Interest expense				(18,592	)		(24,271	)		(44,376	)		(49,648	)




	Interest capitalized				2,266			3,328			4,723			6,191




	Change in hedge fair value				(871	)		41			497			(2,020	)

					(14,426	)		(15,715	)		(33,074	)		(32,656	)

Loss before income taxes and cumulative effect
of a change in accounting principle					(54,711	)		(87,627	)		(65,685	)		(89,203	)




Income tax benefit					(20,507	)		(38,605	)		(24,831	)		(40,188	)

Loss before cumulative effect of a change in
accounting principle					(34,204	)		(49,022	)		(40,854	)		(49,015	)




Cumulative effect of a change in accounting
principle, net of applicable tax benefit of $933					—			—			—			(1,589	)

Net Loss					($34,204	)		($49,022	)		($40,854	)		($50,604	)

Loss per share (basic and diluted):




Loss before cumulative effect of a change in
accounting principle					($0.89	)		($1.28	)		($1.07	)		($1.29	)




Cumulative effect of a change in accounting
principle					—			—			—			($0.04	)

Net loss per share					($0.89	)		($1.28	)		($1.07	)		($1.33	)

The accompanying notes are an integral part of these financial statements.

Atlas Air Worldwide Holdings, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)


					June 30,			December 31,
					2002			2001

				Assets




Current Assets




	Cash and cash equivalents				$	178,473		$	238,693




	Short-term investments					99,816			112,634




	Accounts receivable, (net of allowance of $30,187 and $22,521 respectively)					150,904			168,502




	Income taxes receivable					—			20,544




	Prepaid expenses and other					87,696			30,998

		Total current assets				516,889			571,371




Property and Equipment




	Flight equipment					1,554,803			1,575,135




	Other					60,122			51,156




	Less: accumulated depreciation					(351,670	)		(317,647	)

						1,263,255			1,308,644




	Purchase deposits on flight equipment					52,067			51,982




Other Assets




	Route acquisition cost					51,465			58,499




	Debt issuance costs (net of accumulated amortization of $22,158 and $20,373)					18,831			20,616




	Deposits and other					75,357			73,640

				Total assets	$	1,977,864		$	2,084,752

				Liabilities and Stockholders’ Equity




Current Liabilities




	Accounts payable and accrued liabilities				$	175,487		$	172,018




	Current maturities of long-term debt and capital lease obligations					92,727			65,934

		Total current liabilities				268,214			237,952




	Long-term debt and capital lease obligations, net of current maturities					885,829			959,052




	Deferred income taxes					28,761			53,078




	Other liabilities, deferred gains and deferred credits					345,338			344,762




Stockholders’ Equity




	Preferred stock, $1 par value; 10,000 shares authorized; no shares issued					—			—




	Common stock, $0.01 par value; 50,000 shares authorized; 38,254 and 38,231 shares issued respectively					383			382




	Additional paid-in capital					306,227			305,930




	Treasury stock at cost; 24 and 80 shares, respectively					(403	)		(1,268	)




	Deferred compensation – restricted stock					(301	)		(738	)




	Accumulated other comprehensive loss					(6	)		488




	Retained earnings					143,822			185,114

			Total stockholders’ equity			449,722			489,908

				Total liabilities and stockholders’ equity	$	1,977,864		$	2,084,752

The accompanying notes are an integral part of these financial statements.

Atlas Air Worldwide Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In thousands)


					Six Months Ended
					June 30,

					2002			2001

Cash Flow from Operating Activities:




	Net loss				$	(40,854	)	$	(50,604	)




	Adjustments to reconcile net loss to net cash provided by operating activities:




		Depreciation and amortization				48,891			40,655




		Provision for doubtful accounts				7,666			10,151




		Gain on sale of flight equipment				—			(15,241	)




		Amortization of debt issuance cost and lease financing (gains) and losses				1,785			(4,979	)




		Change in hedge fair value				(497	)		4,542




			Restructuring and impairment			7,850			63,439




	Deferred income taxes					(24,317	)		(52,084	)




	Change in operating assets and liabilities:




			Accounts receivable and other			(10,663	)		33,209




			Deposits and other			369			3,466




			Accounts payable and accrued liabilities			6,780			(96,727	)

		Net cash used for operating activities				(2,990	)		(64,173	)









Cash Flow from Investing Activities:




	Capital expenditures, including purchase deposits for flight equipment					(24,088	)		(127,759	)




	Proceeds from sale of equipment and property								53,887




	Purchase of investments					(15,131	)		(54,526	)




	Maturity of investments					27,554			64,065

			Net cash used for investing activities			(11,665	)		(64,333	)









Cash Flow from Financing Activities




	Payments on long-term debt and capital lease obligations					(46,430	)		(64,074	)




	Issuance of common stock					—			43




	Issuance of treasury stock					1,269			912




	Purchase of treasury stock					(404	)		(126	)




	Net proceeds from debt issuance and lease financing					—			681




	Debt issuance costs and deferred lease costs					—			(2,711	)

				Net cash used for financing activities

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