Delivering Growth in a Challenging Market Maxim Group Growth Conference September 29, 2009
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect AAWW s current views with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business environments of AAWW and its subsidiaries that may cause actual results to be materially different from any future results, express or implied, in such forward-looking statements. For additional information, we refer you to the risk factors set forth in the documents filed by AAWW with the Securities and Exchange Commission. Other factors and assumptions not identified above are also involved in the preparation of forward-looking statements, and the failure of such other factors and assumptions 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 required by law. This presentation also includes some non-gaap financial measures. You can find our presentations on the most directly comparable GAAP financial measures calculated in accordance with generally accepted accounting principles and our reconciliations in our earnings releases dated Aug. 5, May 5 and Feb. 24, 2009, which are posted on our Web site at www.atlasair.com. 2
AAWW Key Investment Highlights Core aircraft leasing model combined with turnkey operating solutions to drive customer and enterprise value through: Global platform with leading industry position Access to state-of-the-art assets Transformed business model Focused approach to de-risk the business Stable base of relationships with high-credit-quality customers Solid platform for growth 3
Atlas Air Worldwide Holdings, Inc. & Subsidiaries - Ownership: 100% - Ownership: 51% - Ownership: 100% - Ownership: 49% Atlas Air Worldwide Holdings, Inc. (NASDAQ: AAWW) Recognized leader in international aviation outsourcing World s largest fleet of Boeing 747 freighter aircraft Comprehensive global infrastructure Providing superior assets and services to the airline industry, freight-forwarding community, commercial and military customers 4
AAWW: Our Business The leading provider of freighter aircraft leasing and operating solutions Market Dynamics Attractive Wide-Body Freighter Aircraft Cost-Effective Global Operating Solutions Long-Term Customer Relationships Diversified Portfolio of Assets & Services Challenging near-term conditions Favorable long-term demand/supply dynamics Largest fleet of 747 freighters Scarce, efficient assets delivering lowest unit operating costs Crew Maintenance Flight Operations Logistics Support DHL (14 yrs.) Emirates (14) BA (13) Qantas (8) U.S. Military (11) ACMI (1) Dry Leasing AMC (2) Commercial Charter Growth for ACMI solutions Launch customer for 747-8 freighter Network scale & Scope (1) Aircraft, Crew, Maintenance, Insurance. (2) U.S. Air Mobility Command. 5
Our Business Wet Leasing (ACMI) Business Segments Air Mobility Command (AMC) Charter Description Offers aircraft that are crewed, maintained, and insured by Atlas for lease. Customers assume fuel, demand and yield risk ACMI leases typically range from threeto six-year periods AMC Charter provides full planeload charter flights to the U.S. military Commercial Charter Commercial Charter segment provides full planeload charter services to charter brokers, freight forwarders, direct shippers, and airlines Dry Leasing Provides aircraft and engine dry leasing solutions to third parties for one or more dedicated aircraft through the Company s dry leasing subsidiary, Titan 6
A Global Presence Serving Key Trade Lanes Note: Figures represent aircraft departures, based on FY 2008 data. Greenland Canada Iceland Finland Sweden Norway United Kingdom Russia France Kazakhstan Mongolia United Italy States Afghanistan China Japan North Atlantic Ocean Iraq Iran Pakistan Mexico Algeria Libya Egypt Saudi India Cuba Mauritania Mali Niger Arabia Thailand Chad Sudan Venezuela Nigeria Ethiopia Columbia Kenya DR Congo Papua New Indonesia Tanzania Guinea Peru Brazil Angola Bolivia Zambia Namibia Legend: Botswana Indian Ocean Australia Chile >300 frequencies Madagascar South Africa >100 frequencies South Atlantic Ocean Argentina New Zealand <100 frequencies In 2008, AAWW operated 19,042 flights, serving 316 destinations in 110 countries 7
Powering Industries That Depend on Airfreight Atlas Air provides dedicated capacity, allowing our customers to deliver time-sensitive products to major consumer markets around the globe: Technology and consumer goods Pharmaceuticals High-end fashion goods Fresh flowers and perishables Livestock Program charters meet the needs of various industries: Infrastructure equipment to service large projects in growth markets The U.S. Military Drilling and excavation equipment for the oil industry Entertainment charters: major concerts, shows and exhibitions Formula 1 and A1 Grand Prix motor sport 8
AAWW Investment Thesis Well Positioned in Challenging Conditions and for Eventual Recovery Leading Industry Position Service Quality, Scale & Scarcity of Assets Long-Term Strategic Relationships with High-Credit-Quality Customers Stable Base of Contractual Revenues/Reduced Commercial Risk Platform for Growth Well Positioned for Earnings Growth in 2009 9
Current Marketplace Environment Global markets appear to have bottomed Recessionary environment and tight credit conditions that affected global trade and international airfreight traffic appear to be easing 1H09 pressure on yields appears to be abating 4.5 IATA - International Air Freight Demand (FTKs) - % Change vs. Prior Year 5.9 3.3 3.7 1.3-0.8-1.9-2.7-7.7-7.9-13.5-11.3-17.4-16.5-21.4-22.6-23.2-22.1-21.7 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July 2008 2009 Source: IATA August 2009 10
Current Marketplace Environment Global airfreight tonnage remains sizeable 30.4 28.8 31.4 33.5 36.7 37.6 39.8 41.8 40.5 34.8 36.6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009F 2010F Freight Tonnes (millions) - Source: ICAO to 2007-08, IATA 2008-10 And the current cycle will break IATA forecast: airfreight traffic returns to growth in 2010 2009F: (14.0%); 2010F: 5.0% Source: IATA September 2009 11
Global Supply/Demand Trend Industry Traffic and Capacity Trends 10 5 Capacity (Airfreight AFTKs) 0-5 -10-15 Traffic (Airfreight FTKs) -20 Source: IATA August 2009 12 % change year-over-year -25 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09
Asian Cargo Markets Supply/Demand Trend Asia-Pacific Region Traffic and Capacity Trends 10 5 0-5 -10-15 -20-25 Capacity (Airfreight AFTKs) Traffic (Airfreight FTKs) Source: IATA August 2009 13 % change year-over-year -30 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09
2008 2009 Supply Trend 747-200F global fleet has dropped by 43% since 1/1/08 747-400F production ended in 2Q09; -400SF conversion activity has diminished Manufacturer-caused delays have pushed out 747-8F and 777F introductions 145 Aircraft Counts 146 148 140 108 43% Dec 2007 Dec 2008 83 Jul 2009 65 60 56 35 43 38 78 78 78 78 78 71 747-200F MD-11F 747-400F 747-400SF 747-8F 777F Old Technology Shrinking Fast Current Technology Low Growth New Technology Orders Flat * Sources: Ascend, Boeing. Excludes parked aircraft, aircraft in express operations & combis; 747-200F total includes -100s & -300s. July 2009 777F total includes eight deliveries. 14
Well Positioned in Challenging Conditions Transformed AAWW business model has performed well in difficult environment and is positioned for economic recovery Express network ACMI service improves and de-risks earnings Best-in-class 747-400F assets; high-quality customer base; long-term contracts mitigate market risks Next-generation 747-8F aircraft on order Minimal fuel exposure ACMI customers cover fuel, AMC is cost-plus Older 747-200F fleet unencumbered and managed opportunistically Strong balance sheet with high level of liquidity 15
Transformed Model Positioned to Perform Express network ACMI service generates earnings improvement/reduced volatility Pretax Income ($ Millions) 1 $56.3 $35.3 $28.4 $24.8* (Ex. onetime items) $11.3 $0.2 1H05 1H06 1H07 1H08 1H09 1 Includes gains from one-time items of $2.8 in 1H06, $1.0 in 1H07, $2.7 in 1H08, and $13.8 in 1H09. 16
Leading Industry Position AAWW is the largest provider of outsourced wide-body freighter aircraft Global presence and best-in-class assets Operator of 21 out of 26 available ACMI 747-400Fs; only outsource provider with Boeing 747-8Fs on order AAWW s fleet is a full generation ahead of its competitors, creating a competitive advantage which is difficult to overcome Leading Heavy Wide-body Operators # of Aircraft 80 70 60 50 40 30 20 10 0 FedEx UPS AAWW Korean Air Cathay Pacific China Airlines Lufthansa 747s Cargolux EVA Airways Southern/Cargo 360 DC-10s/MD-11s Kalitta SIA Cargo Air France/KLM Evergreen Delta/Northwest Sources: AAWW, Ascend (as of 3/31/09) 17
AAWW Operates the Largest 747 Freighter Fleet The Atlas growth platform is focused on leading-edge 747-400s and next-generation 747-8Fs 22 Boeing 747-400s (one 747-400BCF) All GE-Powered 747-400F On order: 12 Boeing 747-8Fs All GE-Powered 747-8F 6 Boeing 747 Classics All are unencumbered To be managed opportunistically, rationalized over time All GE-Powered 747-200SF 18
Atlas Air Is a Leader in 747 Crew Training The United States government selected Atlas to train pilots for the President Air Force One and E-4B Receive consistently high marks from the Air Force Recurrent training critiques support the high standards and quality of Atlas training 19
Our Customer Portfolio is Balanced and Strong Long-term, profitable relationships Resilient Business Model & Predictable Revenues Strategic focus on cargo Growth-oriented market leaders High degree of customer integration Focus on continuous development Long-term contractual commitments 20
The 747-8F A Market-Leading Asset The 747-8F is expected to deliver market-leading performance 16% lower cash operating cost per tonne mile than the -400F, 2.7% lower than the 777F 5.5% lower total cost per tonne mile versus the 777F 132% Relative Direct Operating Cost Tonne Mile Cost Comparison 100% Relative DOC and Ownership Tonne Mile Cost Comparison DOC % cost difference 109% 100% 87% 84% % cost difference (2.7%) Own (2.8%) 94.5% 777-200ERF 747-8F Source: AAWW Estimates 747-200SF 747-400SF 747-400F 777-200ERF 747-8F Source: Boeing (June 2009) U.S. freighter rules. 3,000-nmi trip. Fuel price, $2.11 per U.S. gallon. 21
747-8F Financing Strategy Delivery schedule still in negotiation AAWW has funded $313M in PDPs to date; additional $48M in 4Q09 $96M funded through equity; additional $38M in 4Q09 $217M financed (for Aircraft 1 5); additional $10M in 4Q09 Will look to source remaining PDP financing (Aircraft 6 12) in 4Q09/1Q10 Permanent financing will be combination of debt and SLBs Firm commitment for Sale-Leaseback financing on 4 aircraft Financing efforts commencing in 2010 Exploring traditional European markets, as well as Asian markets 22
Strong Balance Sheet and Liquidity Limited debt maturity: No near-term balloon or refinancing requirements $672 $646 $583 PDP Debt $306 $232 $477 $411 $468 $419 $394 $217 $217 $455 $429 2005 2006 2007 2008 2Q09 2005 2006 2007 2008 2Q09 Cash Balance ($ Mil) Balance Sheet Debt ($ Mil) 23
AAWW - Well Positioned to Perform Transformed AAWW business model has performed well in difficult environment and is positioned for economic recovery Express network ACMI service improves and de-risks earnings Best-in-class 747-400F assets; high-quality customer base; long-term contracts mitigate market risks Next-generation 747-8F aircraft on order Strong balance sheet with high level of liquidity 24