SOURCE: Pinnacle Airlines
Company Reports Consolidated Earnings per Share of $0.32
MEMPHIS, TN–(Marketwire – August 3, 2010) – Pinnacle Airlines Corp. (
“Company”) today reported second quarter 2010 net income of $5.9 million
and fully diluted earnings per share (“EPS”) of $0.32, as compared to net
income and EPS for the second quarter of 2009 of $7.3 million and $0.40,
respectively, excluding prior year special items. The Company reported
consolidated operating income of $19.8 million in the second quarter of
2010, a decrease of $3.9 million from the second quarter of 2009, excluding
prior year special items. Among other items, the second quarter of 2010
was negatively affected by higher aviation insurance premiums that were the
subject of a previously reported dispute with Delta and were not reimbursed
totaling $1.7 million ($1.0 million net of related income taxes). The
Company has resolved this dispute with Delta and does not expect to incur
any additional future un-reimbursed aviation insurance premiums under its
Delta Connection agreements. Second quarter 2010 pre-tax income was also
reduced by a $1.5 million ($1.0 million net of related income taxes)
adjustment to the fair value of interest rate options that the Company
purchased to hedge interest rates in connection with the Company’s Q400
growth program.
“On behalf of the People of Pinnacle Airlines Corp., I’m pleased to report
another quarter of profitability,” said Philip Trenary, the Company’s
President and Chief Executive Officer. “While we are disappointed that
income declined slightly from a year ago, we are confident that the steps
we are taking now will lead to increased profitability in the future. I am
very proud of the job our People perform for our Customers and
Shareholders, and I want to thank each and every one of them for their hard
work.”
For the six months ended June 30, 2010, the Company reported net income of
$7.6 million and EPS of $0.41.
Recent Significant Events
– The Company acquired Mesaba Aviation, Inc. from Delta Air Lines on July
1, 2010. Mesaba operates a fleet of 60 Canadair regional jet aircraft and
32 Saab 340B+ turbo-prop aircraft. With this acquisition, the Company’s
consolidated fleet has grown from 190 regional aircraft to 282. This
acquisition will significantly increase the Company’s revenue and operating
income, and is expected to result in an increase in net income in the
second half of 2010.
– The Company also resolved several commercial issues with Delta Air Lines,
including a dispute over the reimbursement of aviation insurance premiums,
and an issue related to a rate reset under the Company’s CRJ-200 operating
agreement with Delta that was to have taken place in 2006.
– In late July, the Company took delivery of the first of 15 additional
Q400 regional aircraft to be placed in service under the Company’s
operating agreement with Continental. The Company expects to take delivery
of seven additional Q400 aircraft in 2010, and seven Q400 aircraft in the
first half of 2011.
“I want to welcome the People of Mesaba Airlines to the Pinnacle family,”
said Phil Trenary. “Mesaba Airlines has a long history and culture of
safe, highly reliable operations. With the expansion of our regional jet
fleet through the acquisition of Mesaba, and the growth of our Q400 fleet,
we are laying the foundation for consistent, stable earnings growth in the
future.”
Second Quarter 2010 Financial and Operating Results
During the second quarter of 2010, Pinnacle Airlines, Inc. (“Pinnacle”),
the Company’s regional jet operating subsidiary, completed 108,371 block
hours and 70,483 departures, increases of 2% and 2%, respectively, over the
same period in 2009. Pinnacle’s average utilization of its operating fleet
increased by 1%. Colgan Air, Inc. (“Colgan”), the Company’s regional
turboprop operating subsidiary, completed 32,795 block hours and 26,783
departures during the second quarter, decreases of 4% and 3%, respectively,
over the same period in 2009. Colgan operated four fewer Saab 340 aircraft
within its pro-rate network during the majority of the second quarter.
Three of these aircraft were rescheduled back into service during June
2010.
The Company recorded consolidated operating revenue during the second
quarter of 2010 of $218.7 million, an increase of $7.5 million, or 4%, over
the same period in 2009. Annual rate increases from the Company’s
partners, as well as higher reimbursable costs, contributed to the net
increase in consolidated operating revenue.
Pinnacle reported second quarter 2010 operating income and an operating
margin of $16.8 million and 10.5%, a decrease of $0.2 million and 0.5
points, respectively, from the second quarter of 2009. Operating income
decreased slightly due primarily to the $1.7 million of insurance costs
that were not reimbursed by Delta. The un-reimbursed insurance costs were
offset by higher revenue from an annual increase in rates under Pinnacle’s
operating agreements, and by slightly improved aircraft utilization.
During the first quarter of 2010, Pinnacle recorded an estimate of
operating performance penalties under its CRJ-200 agreement with Delta for
the first six months of 2010. Pinnacle’s operating performance improved
during the second quarter of 2010, resulting in a $0.5 million reduction of
the estimate for operating performance penalties under the CRJ-200
agreement.
Colgan reported operating income and an operating margin of $3.0 million
and 5.1%, a decrease of $2.2 million and 4.0 points, respectively, from the
second quarter of 2009 (excluding special charges). Fuel costs associated
with Colgan’s pro-rate operations increased by $1.5 million year-over year.
Fuel cost per gallon during the first quarter 2010 was $2.66, up 40% from
$1.90 per gallon during the same period in 2009. In addition, Colgan
experienced an increase in salaries, wages and benefits of $1.2 million
from lower productivity, higher health care and other benefits costs, and
crew training costs for the additional Q400 aircraft to be delivered this
year. These cost increases were partially offset by $1.2 million of
additional revenue, from both a small increase under Colgan’s operating
agreement with Continental Airlines, and a 10% increase in
revenue-per-available-seat-mile in Colgan’s pro-rate markets.
Net nonoperating expense of $10.0 million for the three months ended June
30, 2010 decreased by approximately $2.5 million as compared to the same
period in 2009. The decrease was primarily caused by reduced net interest
expense from the net repayment of approximately $230 million of the
Company’s debt obligations since July 1, 2009. The decrease in net
interest expense was partially offset by a change in the fair value of
interest rate options that are a part of the Company’s hedging program.
The Company is not applying hedge accounting to these interest rate
options, and is instead recording adjustments in their fair value each
period through the expiration of each option. The options will expire as
the Company’s 15 additional Q400 aircraft are delivered in the second half
of 2010 and first half of 2011.
Cash and Cash Equivalents
The Company ended the quarter with $79.0 million in unrestricted cash and
cash equivalents. The Company generated $3.9 million in cash from
operating activities during the second quarter of 2010. Cash flow from
operating activities was reduced by the prepayment of approximately $10.0
million of aircraft lease payments on June 30. In addition, the Company
paid $2.0 million to purchase interest rate and fuel options during the
second quarter of 2010.
Net cash used in investing activities for the three months ended June 30,
2010 was $5.2 million, primarily for pre-delivery payments for future Q400
aircraft deliveries and other routine capital expenditures. Net cash used
in financing activities for the three months ended June 30, 2010 totaled
$11.8 million, primarily for scheduled principal payments on long-term debt
obligations.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp. (
parent company of Pinnacle Airlines, Inc.; Colgan Air, Inc.; and Mesaba
Aviation, Inc. Pinnacle Airlines, Inc. operates a fleet of 142 regional
jets as Delta Connection in the United States, Canada, the Bahamas, Mexico,
U.S. Virgin Islands, and Turks and Caicos Islands. Colgan Air, Inc.
operates a fleet of 48 regional turboprops as Continental Connection,
United Express and US Airways Express in the eastern United States and
Canada, Texas and Louisiana. Mesaba Aviation, Inc. operates a fleet of 60
regional jets and 32 jet-prop aircraft as Delta Connection in the United
States and Canada. The corporate headquarters is located in Memphis, Tenn.
Airport hub operations are located in Atlanta, Boston, Detroit, Newark,
Washington Dulles, Houston, Memphis, Minneapolis and Salt Lake City. For
further information about the Company, please refer to the Company’s Form
10-Q for the quarter ended June 30, 2010, which will soon be filed with the
SEC.
Non-GAAP Disclosures
This release and certain tables accompanying this release include certain
financial information not prepared in accordance with generally accepted
accounting principles (“GAAP”), including Colgan’s operating income,
Colgan’s operating margin, the Company’s operating income, operating
margin, nonoperating expense, pre-tax income, net income and diluted EPS
for the three and six months ended June 30, 2009, excluding special charges
related to the excess of property insurance proceeds over cost basis of
aircraft, ineffective portion of cash flow hedge, reversal of income tax
reserves and related accrued interest, net investment loss, and the gain on
debt extinguishment. The Company believes that this information is useful
to investors as it indicates more clearly the Company’s comparative
year-to-year results. None of this information should be considered a
substitute for any measures prepared in accordance with GAAP. The Company
has included its reconciliations of these non-GAAP financial measures to
the most comparable GAAP financial measures in the accompanying schedules.
Forward-Looking Statements
This press release contains various forward-looking statements that are
based on management’s beliefs, as well as assumptions made by and
information currently available to management. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove
to have been correct. Such statements are subject to certain risks,
uncertainties and assumptions, including those set forth in our filings
with the Securities and Exchange Commission, which are available to
investors at our website or online from the Commission. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove erroneous, actual results may vary materially from
results that were anticipated or projected. The Company does not intend to
update these forward-looking statements before its next required filing
with the Securities and Exchange Commission.
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three Months Ended
June 30,
--------------------
2010 2009
--------- ---------
Operating revenues
Regional airline services $ 214,844 $ 209,212
Other 3,876 2,051
--------- ---------
Total operating revenues 218,720 211,263
Operating expenses
Salaries, wages and benefits 57,750 55,757
Aircraft rentals 30,004 30,094
Ground handling services 22,921 22,196
Aircraft maintenance, materials and repairs 27,044 26,333
Other rentals and landing fees 17,411 17,925
Aircraft fuel 6,727 5,254
Commissions and passenger related expense 5,194 5,227
Depreciation and amortization 8,793 8,782
Other 23,107 17,512
--------- ---------
Total operating expenses 198,951 189,080
--------- ---------
Operating income 19,769 22,183
Operating income as a percentage of operating
revenues 9.0% 10.5%
Nonoperating (expense) income
Interest expense, net (8,810) (12,171)
Miscellaneous expense, net (1,231) (346)
--------- ---------
Total nonoperating expense (10,041) (12,517)
--------- ---------
Income before income taxes 9,728 9,666
Income tax expense (3,841) (3,673)
--------- ---------
Net income $ 5,887 $ 5,993
========= =========
Basic and diluted earnings per share $ 0.32 $ 0.33
========= =========
Shares used in computing basic earnings per share 18,137 17,970
========= =========
Shares used in computing diluted earnings per share 18,449 17,979
========= =========
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Six Months Ended
June 30,
--------------------
2010 2009
--------- ---------
Operating revenues
Regional airline services $ 420,333 $ 415,136
Other 6,467 3,949
--------- ---------
Total operating revenues 426,800 419,085
Operating expenses
Salaries, wages and benefits 115,178 112,597
Aircraft rentals 60,055 60,586
Ground handling services 47,763 48,658
Aircraft maintenance, materials and repairs 53,616 51,469
Other rentals and landing fees 33,323 36,328
Aircraft fuel 12,420 9,771
Commissions and passenger related expense 9,624 10,054
Depreciation and amortization 17,634 17,363
Other 44,722 33,141
--------- ---------
Total operating expenses 394,335 379,967
--------- ---------
Operating income 32,465 39,118
Operating income as a percentage of operating
revenues 7.6% 9.3%
Nonoperating (expense) income
Interest expense, net (18,601) (21,058)
Miscellaneous (expense) income, net (1,279) 55
--------- ---------
Total nonoperating expense (19,880) (21,003)
--------- ---------
Income before income taxes 12,585 18,115
Income tax (expense) benefit (5,006) 6,721
--------- ---------
Net income $ 7,579 $ 24,836
========= =========
Basic earnings per share $ 0.42 $ 1.38
========= =========
Diluted earnings per share $ 0.41 $ 1.38
========= =========
Shares used in computing basic earnings per share 18,112 17,968
========= =========
Shares used in computing diluted earnings per share 18,454 17,974
========= =========
Pinnacle Airlines Corp.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
June 30, December 31,
2010 2009
------------ ------------
Assets (Unaudited)
Current assets
Cash and cash equivalents $ 79,010 $ 91,574
Restricted cash 3,115 3,115
Receivables, net 34,779 34,518
Spare parts and supplies, net 20,848 19,472
Prepaid expenses and other assets 16,022 3,508
Assets held for sale - 1,255
Deferred income taxes, net of allowance 10,111 10,406
Income taxes receivable 1,886 40,803
------------ ------------
Total current assets 165,771 204,651
Property and equipment
Flight equipment 756,917 755,236
Aircraft pre-delivery payments 37,848 12,049
Other property and equipment 49,970 48,710
Less accumulated depreciation (103,838) (86,501)
------------ ------------
Net property and equipment 740,897 729,494
Investments 2,587 2,723
Debt issuance costs, net 4,214 3,561
Goodwill 18,422 18,422
Intangible assets, net 11,590 12,586
Other assets, primarily insurance receivables 320,221 317,659
------------ ------------
Total assets $ 1,263,702 $ 1,289,096
============ ============
Liabilities and stockholders' equity
Current liabilities
Current maturities of long-term debt $ 36,607 $ 36,085
Senior convertible notes - 30,596
Pre-delivery payment facility 27,393 2,027
Accounts payable 26,896 23,982
Deferred revenue 24,363 24,363
Accrued expenses and other current liabilities 61,022 60,610
------------ ------------
Total current liabilities 176,281 177,663
Noncurrent pre-delivery payment facility - 4,910
Long-term debt, less current maturities 500,771 519,234
Deferred revenue, net of current portion 166,273 177,711
Deferred income taxes 17,782 13,532
Other liabilities 290,479 293,809
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value; 40,000,000
shares authorized; 23,065,179 and 22,786,743
shares issued, respectively 231 228
Treasury stock, at cost, 4,493,327 and
4,450,092 shares, respectively (68,479) (68,152)
Additional paid-in capital 123,185 121,513
Accumulated other comprehensive loss (13,479) (14,431)
Retained earnings 70,658 63,079
------------ ------------
Total stockholders' equity 112,116 102,237
------------ ------------
Total liabilities and stockholders' equity $ 1,263,702 $ 1,289,096
============ ============
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended
June 30,
------------------
2010 2009
-------- --------
Cash provided by operating activities $ 44,819 $ 62,752
Cash (used in) provided by investing activities (6,727) 3,728
Cash used in financing activities (50,656) (41,740)
-------- --------
Net (decrease) increase in cash and cash equivalents (12,564) 24,740
Cash and cash equivalents at beginning of period 91,574 69,469
-------- --------
Cash and cash equivalents at end of period $ 79,010 $ 94,209
======== ========
Pinnacle Airlines Corp.
Pinnacle Operating Statistics (Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- -----------------------------
2010 2009 Change 2010 2009 Change
--------- --------- ------- --------- --------- -------
Other Data:
Revenue
passengers
(in
thousands) 2,721 2,778 (2)% 5,176 5,163 0%
Revenue
passenger
miles
("RPMs")
(in
thousands) 1,169,388 1,211,030 (3)% 2,229,741 2,301,384 (3)%
Available
seat miles
("ASMs")
(in
thousands) 1,545,867 1,548,790 (0)% 3,006,041 3,129,301 (4)%
Passenger
load
factor 75.6% 78.2% (2.6) pts. 74.2% 73.5% 0.7 pts.
Operating
revenue
per ASM
(in cents) 10.41 9.98 4% 10.63 9.90 7%
Operating
cost per
ASM
(in cents) 9.32 8.88 5% 9.58 8.92 7%
Operating
revenue
per block
hour $ 1,484 $ 1,452 2% $ 1,499 $ 1,437 4%
Operating
cost per
block hour $ 1,329 $ 1,292 3% $ 1,351 $ 1,294 4%
Block hours 108,371 106,475 2% 213,138 215,715 (1)%
Departures 70,483 68,826 2% 137,058 135,456 1%
Average
daily
utilization
(block
hours) 8.39 8.29 1% 8.29 8.38 (1)%
Average
stage length
(miles) 420 427 (2)% 420 439 (4)%
Number of
operating
aircraft
(end of
period)
CRJ-200 126 124 2%
CRJ-900 16 16 0%
Employees
(end of
period) 3,694 4,060 (9)%
Pinnacle Airlines Corp.
Colgan Operating Statistics (Unaudited)
Three Months Ended
June 30, Six Months Ended June 30,
------------------------ -------------------------
2010 2009 Change 2010 2009 Change
------- ------- ------ ------- ------- -------
Pro-rate
Agreements:
Revenue passengers
(in thousands) 301 305 (1)% 532 553 (4)%
RPMs (in thousands) 51,554 53,010 (3)% 90,904 95,614 (5)%
ASMs (in thousands) 104,764 114,768 (9)% 199,515 225,791 (12)%
Passenger load
factor 49.2% 46.2% 3.0 pts. 45.6% 42.3% 3.3 pts.
Passenger yield (in
cents) 75.59 73.02 4% 78.23 76.03 3%
Operating revenue
per ASM (in cents) 37.20 33.73 10% 35.64 32.20 11%
Operating revenue
per block hour $ 1,857 $ 1,720 8% $ 1,766 $ 1,627 9%
Block hours 20,986 22,507 (7)% 40,269 44,683 (10)%
Departures 18,844 20,018 (6)% 35,905 39,638 (9)%
Fuel consumption
(in thousands of
gallons) 2,530 2,772 (9)% 4,901 5,404 (9)%
Average price per
gallon $ 2.66 $ 1.90 40% $ 2.53 $ 1.81 40%
Average fare $ 129 $ 127 2% $ 134 $ 131 2%
Three Months Ended
June 30, Six Months Ended June 30,
------------------------ -------------------------
2010 2009 Change 2010 2009 Change
------- ------- ------ ------- ------- -------
Capacity Purchase
Agreements:
Revenue passengers
(in thousands) 410 405 1% 734 734 0%
RPMs (in thousands) 124,271 113,096 10% 218,521 202,801 8%
ASMs (in thousands) 173,319 157,299 10% 319,228 306,763 4%
Passenger load
factor 71.7% 71.9% (0.2) pts. 68.5% 66.1% 2.4 pts.
Operating revenue
per ASM (in cents) 10.83 11.41 (5)% 11.29 11.85 (5)%
Operating revenue
per block hour $ 1,590 $ 1,531 4% $ 1,604 $ 1,550 3%
Block hours 11,809 11,726 1% 22,477 23,461 (4)%
Departures 7,939 7,666 4% 14,966 15,134 (1)%
Three Months Ended
June 30, Six Months Ended June 30,
------------------------ -------------------------
2010 2009 Change 2010 2009 Change
------- ------- ------ ------- ------- -------
Total Colgan:
Block hours 32,795 34,233 (4)% 62,746 68,144 (8)%
Departures 26,783 27,684 (3)% 50,871 54,772 (7)%
ASMs (in thousands) 278,083 272,067 2% 518,743 532,554 (3)%
Total operating
cost per ASM (in
cents) 19.75 18.94 4% 20.50 18.95 8%
Total operating
cost per block
hour $ 1,674 $ 1,505 11% $ 1,695 $ 1,481 14%
Average daily
utilization (block
hours) 7.59 7.84 (3)% 7.24 7.72 (6)%
Average stage
length (miles) 229 221 4% 226 219 (3)%
Number of operating
aircraft (end of
period)
Saab 340 34(1) 34 0%
Q400 14 14 0%
Employees 1,408 1,334 6%
(1) Four of the Saab 340 aircraft operating as US Airways Express were
temporarily removed from scheduled service during the three months
ended March 31, 2010. Three of these aircraft were rescheduled into
service during June 2010.
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
Three Months Ended June 30,
------------------------------------
% Increase
2010 2009 (Decrease)
----------- ----------- ----------
Colgan operating (loss) income:
Colgan operating (loss) income in
accordance with GAAP $ 2,955 $ 5,188 (43)%
Add: Aircraft retirement charges - 1,533 N/A
----------- ----------- ----------
Colgan non-GAAP operating (loss)
income $ 2,955 $ 6,721 (56)%
=========== =========== ==========
Colgan operating margin:
Colgan operating margin in
accordance with GAAP 5.1% 9.1% (4.0) pts.
Add: Aircraft retirement charges - 2.7% N/A
----------- ----------- ----------
Colgan non-GAAP operating margin 5.1% 11.8% (6.7) pts.
=========== =========== ==========
Consolidated operating income:
Operating income in accordance with
GAAP $ 19,769 $ 22,183 (11)%
Add: Aircraft retirement charges - 1,533 N/A
----------- ----------- ----------
Non-GAAP operating income $ 19,769 $ 23,716 (17)%
=========== =========== ==========
Consolidated operating margin
Operating margin in accordance with
GAAP 9.0% 10.5% (1.5) pts.
Add: Aircraft retirement charges - 0.7% N/A
----------- ----------- ----------
Non-GAAP operating margin 9.0% 11.2% (2.2) pts.
=========== =========== ==========
Consolidated nonoperating expense:
Nonoperating expense in accordance
with GAAP $ (10,041) $ (12,517) (20)%
Add: Ineffective portion of
interest rate hedge - - N/A
Deduct: Reversal of interest on
income tax reserves - - N/A
Deduct: Gain on repurchase of
senior convertible notes - - N/A
----------- ----------- ----------
Non-GAAP nonoperating expense $ (10,041) $ (12,517) (20)%
=========== =========== ==========
Consolidated income before income
taxes:
Income before income taxes in
accordance with GAAP $ 9,728 $ 9,666 1%
Add: Aircraft retirement charges - 1,533 N/A
Add: Net investment loss - 334 N/A
----------- ----------- ----------
Non-GAAP income before income taxes $ 9,728 $ 11,533 (16)%
=========== =========== ==========
Net income:
Net income in accordance with GAAP $ 5,887 $ 5,993 (2)%
Add: Aircraft retirement charges - 943 N/A
Add: Net investment loss - 320 N/A
----------- ----------- ----------
Non-GAAP net income $ 5,887 $ 7,256 (19)%
=========== =========== ==========
Diluted EPS:
Diluted EPS in accordance with GAAP $ 0.32 $ 0.33 (3)%
Add: Aircraft retirement charges - 0.05 N/A
Add: Net investment loss - 0.02 N/A
----------- ----------- ----------
Non-GAAP diluted earnings per share $ 0.32 $ 0.40 (20)%
=========== =========== ==========
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
Six Months Ended June 30,
------------------------------------
% Increase
2010 2009 (Decrease)
----------- ---------- ----------
Colgan operating (loss) income:
Colgan operating (loss) income in
accordance with GAAP $ 988 $ 8,222 (88)%
Add: Aircraft retirement charges - 1,980 N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft - (835) N/A
----------- ---------- ----------
Colgan non-GAAP operating (loss)
income $ 988 $ 9,367 (89)%
=========== ========== ==========
Colgan operating margin:
Colgan operating margin in
accordance with GAAP 0.9% 7.5% (6.6) pts.
Add: Aircraft retirement charges - 0.5% N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft - (0.2)% N/A
----------- ---------- ----------
Colgan non-GAAP operating margin 0.9% 7.8% (6.9) pts.
=========== ========== ==========
Consolidated operating income:
Operating income in accordance with
GAAP $ 32,465 $ 39,118 (17)%
Add: Aircraft retirement charges - 1,980 N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft - (835) N/A
----------- ---------- ----------
Non-GAAP operating income $ 32,465 $ 40,263 (19)%
=========== ========== ==========
Consolidated operating margin
Operating margin in accordance with
GAAP 7.6% 9.3% (1.7) pts.
Add: Aircraft retirement charges - 0.5% N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft - (0.2)% N/A
----------- ---------- ----------
Non-GAAP operating margin 7.6% 9.6% (2.0) pts.
=========== ========== ==========
Consolidated nonoperating expense:
Nonoperating expense in accordance
with GAAP $ (19,880) $ (21,003) (5)%
Add: Ineffective portion of
interest rate hedge - 1,424 N/A
Add: Net investment loss - 289 N/A
Deduct: Reversal of interest on
income tax reserves - (2,926) N/A
Deduct: Gain on repurchase of
senior convertible notes - (1,857) N/A
----------- ---------- ----------
Non-GAAP nonoperating expense $ (19,880) $ (24,073) (17)%
=========== ========== ==========
Consolidated income before income
taxes:
Income before income taxes in
accordance with GAAP $ 12,585 $ 18,115 (31)%
Add: Aircraft retirement charges 1,980 N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft - (835) N/A
Add: Net investment loss 289 N/A
Add: Ineffective portion of
interest rate hedge - 1,424 N/A
Deduct: Reversal of interest on
income tax reserves - (2,926) N/A
Deduct: Gain on repurchase of
senior convertible notes - (1,857) N/A
----------- ---------- ----------
Non-GAAP income before income taxes $ 12,585 $ 16,190 (22)%
=========== ========== ==========
Net income:
Net income in accordance with GAAP $ 7,579 $ 24,836 (69)%
Add: Aircraft retirement charges,
net of tax 1,218 N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft, net of tax - (514) N/A
Add: Net investment loss, net of
tax - 277 N/A
Add: Ineffective portion of
interest rate hedge, net of tax - 876 N/A
Deduct: Reversal of interest on
income tax reserves, net of tax - (1,842) N/A
Deduct: Gain on repurchase of
senior convertible notes, net of
tax - (1,118) N/A
Deduct: IRS settlement (13,552) N/A
----------- ---------- ----------
Non-GAAP net income $ 7,579 $ 10,181 (26)%
=========== ========== ==========
Diluted EPS:
Diluted EPS in accordance with GAAP $ 0.41 $ 1.38 (70)%
Add: Aircraft retirement charges,
net of tax - 0.07 N/A
Deduct: Excess of property
insurance proceeds over cost basis
of aircraft, net of tax - (0.03) N/A
Add: Net investment loss, net of
tax - 0.02 N/A
Add: Ineffective portion of
interest rate hedge, net of tax - 0.05 N/A
Deduct: Reversal of interest on
income tax reserves, net of tax - (0.10) N/A
Deduct: Gain on repurchase of
senior convertible notes, net of
tax - (0.06) N/A
Deduct: IRS settlement - (0.75) N/A
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Non-GAAP diluted earnings per share $ 0.41 $ 0.58 (29)%
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