ATLAS AIR WORLDWIDE ANNUAL REPORT 2020 GOING ABOVE ¬ LOOKING BEYOND 23169_AAWW_AnnualReport20_Covers.indd 1 4/9/21 12:06 PM FINANCIAL AND OPERATING HIGHLIGHTS For the Year Ended ($ in millions, except per share) 12/31/20 12/31/19 LETTER FROM THE CHAIRMAN OF THE BOARD Operating revenue 3,211.1 2,739.2 Adjusted EBITDA1 844.2 504.8 Net income (loss) 360.3 (293.1) Positioned to Deliver Adjusted net income1 379.0 139.6 Value and Results Diluted EPS 13.50 (11.35) Adjusted diluted EPS1 13.67 5.24 To Our Shareholders: 2020 was an unprecedented year Total assets 6,029.2 5,385.6 for the world and for our company. Debt and finance leases 2,319.1 2,380.7 William J. Flynn With the COVID-19 pandemic disrupting businesses, Chairman of the Board Stockholders’ equity 2,261.5 1,792.2 communities and individuals around the globe, Aircraft fleet (total)2 115 123 Atlas Air Worldwide demonstrated the resiliency of its business model and the important role airfreight plays in Block hours 344,821 321,140 transporting goods, particularly during times of need. 1 Adjusted EBITDA, adjusted net income Atlas Air Worldwide and adjusted diluted EPS, are non-GAAP Holdings, Inc. measures that exclude certain items. See Page 43 and Page 44 of our 2020 [Nasdaq: AAWW] is Annual Report on Form 10-K, included Steered by our skillful management team, strong. It also includes diversifying our management team, led by Chief Executive with this Annual Report to Shareholders, everyone at Atlas worked tirelessly to customer base, strategically allocating Officer, John Dietrich. Supporting John are a global leader in for a reconciliation to the most directly innovative, outsourced comparable financial measures in navigate through a very complex regulatory resources, reducing costs and improving our Chief Operating Officer, Jim Forbes; aviation services. accordance with GAAP. and operating environment—all while our balance sheet. Senior Vice President Human Resources, 2 Includes customer-owned aircraft keeping the safety of our employees and Because of these actions, Atlas was Patricia Goodwin-Peters; General Counsel operated by the company. Leading express and our operation as first priorities. ready to respond to market demand and and Secretary, Adam Kokas; Chief Financial e-commerce delivery Atlas Air Worldwide’s success this year— support COVID-19 relief efforts globally. Officer, Spencer Schwartz; and Chief providers, shippers, and every year—depends on our talented And with passenger belly cargo capacity Commercial Officer, Michael Steen. freight forwarders, people. I would like to extend my deepest significantly reduced due to the pandemic, My fellow board members and I would like airlines, military, gratitude to our more than 4,000 Atlas the agility of our business model enabled us to express our most sincere appreciation charter and dry-lease team members for their commitment to to quickly deploy our assets and innovative to John, his senior team and all of our customers rely on us delivering safe, high-quality service for our solutions to serve the increased demand for dedicated employees whose tremendous and our broad array customers and for keeping global supply dedicated airfreight capacity. efforts are so critical to our success. of 747, 777, 767 and chains moving throughout this pandemic. Our teams stepped up and leveraged With a winning strategy, a world-class 737 aircraft to increase Our company operates the world’s largest the scale of our fleet and scope of our team, resilient business model and a fleet flexibility and fleet of 747 freighters, complementing global network to execute on near-term sound financial structure, we continue network efficiency, and our broad array of 777, 767 and 737 opportunities as well as numerous new long- to be very excited about the future of to drive an expanded aircraft that serve our customers’ unique term agreements with strategic customers. Atlas Air Worldwide. global presence. requirements. As our performance shows, with the We have taken decisive actions over the right initiatives in place, Atlas Air Worldwide last several years that have strengthened is well-positioned to deliver value to our leadership position in global aviation our customers and solid results for our outsourcing. These include our focus on shareholders. express, e-commerce and the fastest- As we navigate a world that continues to April 15, 2021 growing global markets, where the demand deal with the evolving effects of COVID-19, for our aircraft and services remains we are fortunate to be guided by a dynamic GOING ABOVE ¬ LOOKING BEYOND ¬ 1 23169_AAWW_AnnualReport20_Covers.indd 2 23169_AAWW_AnnualReport20_Covers_Editorials.indd 1 4/9/214/9/21 11:40 12:06 AM PM LETTER FROM THE PRESIDENT AND CEO Maximizing Opportunities and Our Plans for Growth Dear Shareholders: At Atlas Air Worldwide, our operations are guided by our core values—Safety, Service Excellence, Integrity, Innovation, Teamwork and Responsibility. Since the onset of the COVID-19 pandemic last year, these values have served as the bedrock that has enabled us to successfully navigate through John W. Dietrich this global crisis. President and Chief Executive Officer I am incredibly proud of our team of over essential, and they are even more critical now solutions to overcome a complex operating our customer base and grew with existing facilities during the year, which will enable 4,000 pilots and ground staff for their as the world pursues economic recovery. and regulatory environment to keep their customers. it to serve the strong demand for leasing dedication and tireless contributions to networks moving. To serve the increased demand for freighters. The venture also completed its first securing the global supply chain during this Resilient Business Model As a result, we delivered record revenues our aircraft and services, we reactivated transaction in November 2020, which was the time of significant disruption. Our efforts Drove Performance and earnings, including surpassing four 747-400 freighters and successfully acquisition of a 777-200 freighter, under a have helped deliver life-saving personal Over the years, our performance has $3 billion in revenue for the first time in our operationalized a 777-200 freighter that was sale-leaseback agreement with our Southern protective equipment and medical supplies shown that our resilient business model company’s history. We also paid down a previously in our Titan Dry Leasing business. Air subsidiary. And through a sale-leaseback to those working on the front lines in our allows us to endure challenging market significant amount of debt and substantially We flexed our network to execute on transaction with Icelandair in March 2021, the A YEAR OF COMPANY RECORDS communities. At the same time, as the conditions as well as to capitalize on strengthened our balance sheet. near-term opportunities. We also entered into joint venture will add two 767-300s, growing largest supplier of airlift to the U.S. military, attractive opportunities in more favorable Volumes in 2020 rose to a record numerous long-term charter programs with its portfolio to three aircraft. we continued to provide them with essential environments. Our unrivaled portfolio of 344,821 block hours, with revenue growing strategic customers, including Cainiao, DHL cargo and passenger services. assets, the scale of our global network and to a record $3.21 billion and total direct Global Forwarding, Flexport and HP Inc. These Caring for the World We Carry 344,821 As we work toward better days ahead, our sound financial structure, fuel our ability contribution by our business segments customers came to Atlas to secure dedicated Responsibility is one of our core values we remain committed to moving vaccines, increasing to $780.7 million. capacity with our high-quality services. block hours to execute our strategic growth plans. that holds us to the highest standards pharmaceuticals, educational supplies, The pandemic imposed significant On an adjusted basis, EBITDA1 grew to We continued to expand our operations of caring for each other, our planet and e-commerce and other daily essentials, with operating restrictions and limitations, and $844.2 million, with adjusted net income1 for Amazon. We began flying three additional our communities. We believe that actively the safety, speed and reliability that only it structurally reduced the availability of increasing to $379.0 million, or $13.67 per 737-800 freighters on a CMI basis in 2020, engaging in environmental, social and $3.21B airfreight can provide. international widebody air cargo capacity. diluted share1 in 2020. bringing the total number of 737s we operate governance (ESG) matters is critical to the in revenue Atlas operates the world’s largest fleet While these factors presented a challenging Reported net income totaled $360.3 for Amazon to eight, complementing the long-term success of our company and of 747 freighters, along with large fleets backdrop for the airfreight industry, they million, or $13.50 per diluted share, which large fleet of 767s that we have with them. benefits all our stakeholders. We advanced of 777s, 767s and 737s that play a key drove substantial demand for Atlas’ assets included an unrealized loss on financial And our agreements provide the opportunity our efforts throughout 2020, building $844.2M role in our customers’ operating networks and services. instruments of $71.1 million related to to operate additional aircraft for Amazon in upon a number of achievements in 2019, and in the world’s supply chain. With over Amid ever-changing challenges driven outstanding warrants. the future. which included a formalized ESG Policy, adjusted EBITDA1 68,000 flights a year to more than 300 by COVID-19, we added widebody capacity We were pleased to announce that Titan the creation of an ESG Steering Committee global destinations, we connect producers and increased aircraft utilization to fly Maximizing Growth Opportunities Aircraft Investments, the joint venture and publication of our first ESG Report.