ATLAS AIR WORLDWIDE ANNUAL REPORT 2019 LETTER FROM THE CEO & CHAIRMAN Leading the Way Forward FINANCIAL AND OPERATING HIGHLIGHTS For the Year Ended ($ in millions, except per share) 12/31/2019 12/31/2018 % Change To Our Shareholders: Operating revenue 2,739.2 2,677.7 2.3 Inventive, adaptive and forward-thinking, Atlas Air Worldwide is a 1 Adjusted EBITDA 504.8 551.3 (8.4) leading global provider of outsourced aircraft and aviation operating Income (loss) from continuing operations, net of taxes (293.1) 270.6 (208.3) services. With service to 400 destinations in 90 countries, the scale Adjusted income from continuing operations, net of taxes1 139.6 204.3 (31.7) and scope of our operations are unrivaled. As such, Atlas is well- William J. Flynn positioned to navigate through the current economic uncertainty and Chairman of the Board Diluted EPS from continuing operations (11.35) 5.22 (317.4) coronavirus outbreak, and to play an important role in the movement May 7, 2020 Adjusted diluted EPS from continuing operations, net of taxes1 5.24 7.27 (27.9) of essential goods around the world, particularly during these times of need. There are so many people who depend on the goods we carry, Total assets 5,385.6 5,534.8 (2.7) including supplies and daily necessities, now more than ever. Debt and finance leases 2,380.7 2,469.8 (3.6) John W. Dietrich President and Leading the way forward, we continue to leverage our core Stockholders’ equity 1,792.2 2,068.0 (13.3) Chief Executive Officer competencies and market leadership to execute on strategic Aircraft fleet (total)2 123 112 9.8 May 7, 2020 opportunities and initiatives, and further shape our future. Block hours 321,140 296,264 8.4 Our Business View and Our Outlook First, and always, maintaining safety, security and compliance is our 1 Adjusted EBITDA, adjusted income from continuing Though the spread of the novel coronavirus has created ongoing top corporate priority. We will continue to promote a safe, compliant Atlas Air Worldwide Holdings, Inc. [Nasdaq: AAWW] is a global operations, net of taxes, and adjusted diluted EPS from continuing operations, net of taxes, are uncertainty, our business view and outlook remains positive and is operation in everything we do. leader in innovative, outsourced aviation services. non-GAAP measures that exclude certain items. focused on several important themes. See Page 43 and Page 44 of our 2019 Annual Report We also have a tremendous team of highly experienced, customer- on Form 10-K, included with this Annual Report to • Airfreight is and will continue to be a long-term growth industry focused employees who bring diverse skill sets to help us drive our Leading express and e-commerce delivery providers, shippers, Shareholders, for a reconciliation to the most directly freight forwarders, airlines, military, charter and dry-lease comparable financial measures in accordance that is a critical part of the global supply chain, providing business forward. with GAAP. businesses and communities with timely access to the goods 2 We have a strong core of long-term customers, and we play a key customers rely on us and our broad array of 747, 777, 767 and Includes customer-owned aircraft operated by they require—from parts and materials used in manufacturing the company. role in their operating networks. 737 aircraft to increase fleet flexibility and network efficiency processes to food, pharmaceuticals, supplies and other necessities people rely on. These are customers that we value, including DHL, Amazon, Asiana, and to drive an expanded global presence. Boeing, FedEx, NCA, Qantas, UPS, the U.S. military and the NFL, Atlas is well-positioned as an industry leader with a modern and • as well as many other airlines, freight forwarders, charter brokers, diversified fleet of aircraft, long-standing strategic customers, sports teams and direct shippers. and an extraordinary workforce. We can also be a driver of positive economic and social impact, both near-term and long-term. We have a modern, diversified fleet that provides customers the biggest and broadest array of aircraft for international, regional and • As we move the business forward, we will continue to manage our domestic cargo and passenger operations. costs and best align our resources with our strategic priorities, with a focus on growth customers and opportunities that generate We are a major player in express, e-commerce, the U.S. military the best returns. and fast-growing markets. We are also a significant player in the transpacific, the growing market between South America and the Our thoughts about the strength of our business and the future rest of the world, and in the U.S. begin with the company’s strategic principles. ANNUAL REPORT 2019 1 We are constantly focused on operating Our newly formed joint venture between unrealized gain on financial instruments efficiencies, cost management, and the Titan and Bain Capital Credit is an exciting of $75.1 million. 2019 FORM 10-K on-time performance that our customers step along that growth path. Over the next Positioned for the Future expect. Similarly, we are focused on several years, the joint venture intends Though these are extraordinary times, with ensuring that our resources are put to the to develop a diversified freighter-aircraft the future uncertainty caused by the novel most profitable use. leasing portfolio with an anticipated value Driving Value to Customers coronavirus, we believe Atlas Air Worldwide of approximately $1 billion. And we have a disciplined capital allocation is well-positioned for continued success in strategy, with a focus on maintaining a Importantly, the joint venture is consistent 2020 and beyond. and Shareholders strong balance sheet. with our corporate strategy, aiming to As history has taught us through other capitalize on the growing demand for cargo 2019 Developments crises, airfreight plays a key role in not only aircraft in the express and e-commerce With our principles firmly set, we continued delivering relief supplies in times of need, markets. to strengthen our leadership position in but also in facilitating the movement of global aviation outsourcing during 2019. Our 2019 Performance goods as the global supply chain rebalances. We expanded our strategic relationship Notwithstanding a challenging airfreight In fact, airfreight typically rebounds more with Amazon and now operate five 737-800 environment in 2019, our results reflected quickly during periods of economic recovery. freighters on a CMI basis, complementing a fourth-quarter peak season that included We have a strong core of long-term the 19 767-300 cargo aircraft we already a pickup in customer demand and improved customers, and we play an important role in lease to them and the 17 we fly for them. yields compared with the middle of the their operating networks, especially as they And we have the potential to operate year. They also reflected our team coming navigate challenging times. together to deliver the high-quality services additional aircraft for them in the future. We have a strategic focus on faster-growing that our customers appreciate. We also increased our 777F service for global airfreight markets, and will continue to DHL Express in 2019, expanded our 747F We flew our highest block hours ever— leverage our significant commercial charter operations for Asiana Cargo and Nippon 321,140—in 2019, and we delivered record business to capitalize on demand. operating revenue of $2.74 billion. Cargo Airlines, and added a new 747-400 Together with the exceptional teamwork of freighter service for EL AL in early 2020. We also generated earnings on an adjusted our employees and the guidance of our board We continued to see solid demand for our basis that were among the best in company of directors, Atlas Air Worldwide remains military and commercial passenger charter history—adjusted EBITDA1 of $504.8 million innovative, adaptive and forward-looking— services during the year, and acquired a and adjusted income from continuing leading the outsourced aviation sector, supplementary passenger 747 to perform operations, net of taxes,1 of $139.6 million, driving ahead with our strategic initiatives, additional flying for the U.S. military and or $5.24 per diluted share. serving the needs of the global community NFL teams. On a reported basis, our full-year results and delivering value to our customers and While operating aircraft is the cornerstone reflected a loss from continuing operations, shareholders. of what we do, growing our freighter-centric net of taxes, of $293.1 million, or $11.35 1 Non-GAAP measures that exclude certain items. dry-leasing business has been a strategic per diluted share, which included a noncash See Page 43 and Page 44 of our 2019 Annual Report priority since launching Titan Aviation special charge of $638.4 million ($503.1 on Form 10-K, included with this Annual Report to Shareholders, for a reconciliation to the most directly Holdings in 2009. million after tax), partially offset by an comparable financial measures in accordance with GAAP. In Memoriam Our company was deeply saddened by the loss of Flight 3591 in February 2019, which claimed the lives of two of our pilots and a third pilot from another airline traveling with them. Our thoughts and prayers remain with their families, and we will continue to provide them care and support. The safety of our pilots and ground staff is our top priority, and we mourn the passing of our valued colleagues. We also mourn the passing of the Chairman of our Board, Robert (Bob) Agnew, in August 2019. Bob was a member of the Atlas Air Worldwide board since July 2004, and was named Chairman in 2017.