Attached files
file | filename |
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EX-99.1 - MONTHLY OPERATING REPORT - MESA AIR GROUP INC | exhibit99-1.pdf |
8-K - 8-K - MESA AIR GROUP INC | body8k.htm |
Exhibit 99.1
UNITED STATES BANKRUPTCY COURT |
SOUTHERN DISTRICT OF NEW YORK |
Debtors: Mesa Air Group, Inc., ET AL. (1) |
Case Number: Jointly Administered 10-10018 (MG) |
Monthly Operating Report for the Period: |
Month ended September 30, 2010 |
Federal Tax ID # 85-0302351 |
Debtors' Address: |
410 N 44th Street Suite 700 |
Phoenix, AZ 85008 |
Monthly Net Income/(Loss): ($82.023) million |
Debtors' Attorney: |
Pachulski, Stang, Ziehl & Jones LLP |
780 Third Avenue, 36th Floor |
New York, NY 10017-2024 |
Telephone: (212) 561-7700 |
Fax: (212) 561-7777 |
http://www.pszjlaw.com |
Report Preparer: Mesa Air Group, Inc. |
The undersigned, having reviewed the attached report and being familiar with the Debtors' |
financial affairs, verifies under the penalty of perjury that the information contained therein is |
complete, accurate and truthful to the best of my knowledge. (2) |
Date: October 20, 2010 |
/s/ Mike Lotz |
(1) See next page for a listing of Debtors by case number. |
(2) All amounts herein are unaudited and subject to revision. The Debtors reserve all rights to revise this report. |
MESA AIR GROUP, INC., ET AL. | ||
MONTHLY OPERATING REPORT | ||
(1) The Debtors in these jointly administered cases are as follows: | ||
Case | ||
Debtor Name
|
Number
|
|
Mesa Air New York, Inc. | 10-10017 | |
Mesa Air Group, Inc. | 10-10018 | |
Mesa In-Flight, Inc. | 10-10019 | |
Freedom Airlines, Inc. | 10-10020 | |
Mesa Airlines, Inc. | 10-10021 | |
MPD, Inc. | 10-10022 | |
Ritz Hotel Management Corp. | 10-10023 | |
Regional Aircraft Services, Inc. | 10-10024 | |
Air Midwest, Inc. | 10-10025 | |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | |
Nilchi, Inc. | 10-10027 | |
Patar, Inc. | 10-10028 |
Case Number: 10-10018 (MG) (Jointly Administered)
- 2 -
MESA AIR GROUP, INC., ET AL. | ||||
SCHEDULE OF DISBURSEMENTS | ||||
Disbursements for | Disbursements for | Disbursements for | ||
Case | month ended | month ended | month ended | |
Debtor Name
|
Number
|
September 30, 2010
|
August 31, 2010
|
July 31, 2010
|
Mesa Air New York, Inc. | 10-10017 | - | - | - |
Mesa Air Group, Inc. | 10-10018 | 967,890 | 1,520,408 | 1,421,392 |
Mesa In-Flight, Inc. | 10-10019 | - | - | - |
Freedom Airlines, Inc. | 10-10020 | 986,910 | 1,681,799 | 1,615,132 |
Mesa Airlines, Inc. | 10-10021 | 39,452,779 | 32,573,328 | 42,081,014 |
MPD, Inc. | 10-10022 | 142,280 | 86,100 | 107,657 |
Ritz Hotel Management Corp. | 10-10023 | - | - | - |
Regional Aircraft Services, Inc. | 10-10024 | 498,269 | 552,482 | 571,129 |
Air Midwest, Inc. | 10-10025 | - | - | 342 |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 3,345,808 | 6,858,455 | 6,127,031 |
Nilchi, Inc. | 10-10027 | - | - | - |
Patar, Inc. | 10-10028 | - | - | - |
Disbursements for | Disbursements for | Disbursements for | ||
Case | month ended | month ended | month ended | |
Debtor Name
|
Number
|
June 30, 2010
|
May 31, 2010
|
April 30, 2010
|
Mesa Air New York, Inc. | 10-10017 | - | - | - |
Mesa Air Group, Inc. | 10-10018 | 1,852,506 | 2,487,310 | 1,688,784 |
Mesa In-Flight, Inc. | 10-10019 | - | - | - |
Freedom Airlines, Inc. | 10-10020 | 2,019,124 | 1,898,294 | 2,339,613 |
Mesa Airlines, Inc. | 10-10021 | 49,986,705 | 36,930,775 | 45,289,526 |
MPD, Inc. | 10-10022 | 136,761 | 151,703 | 140,811 |
Ritz Hotel Management Corp. | 10-10023 | - | - | - |
Regional Aircraft Services, Inc. | 10-10024 | 803,034 | 531,676 | 526,302 |
Air Midwest, Inc. | 10-10025 | 10,500 | 51 | 21 |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 7,688,568 | 6,541,883 | 8,900,924 |
Nilchi, Inc. | 10-10027 | - | - | - |
Patar, Inc. | 10-10028 | - | - | - |
Disbursements for | Disbursements for | Disbursements for | ||
Case | month ended | month ended | January 5, 2010 to | |
Debtor Name
|
Number
|
March 31, 2010
|
February 28, 2010
|
January 31, 2010
|
Mesa Air New York, Inc. | 10-10017 | - | - | - |
Mesa Air Group, Inc. | 10-10018 | 1,348,840 | 1,244,806 | 1,128,964 |
Mesa In-Flight, Inc. | 10-10019 | - | - | - |
Freedom Airlines, Inc. | 10-10020 | 2,275,702 | 1,945,715 | 1,137,194 |
Mesa Airlines, Inc. | 10-10021 | 77,630,776 | 30,568,004 | 20,791,947 |
MPD, Inc. | 10-10022 | 150,175 | 156,100 | 102,356 |
Ritz Hotel Management Corp. | 10-10023 | - | - | - |
Regional Aircraft Services, Inc. | 10-10024 | 262,892 | 519,981 | 575,558 |
Air Midwest, Inc. | 10-10025 | 2,249 | 147 | 195 |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 7,614,996 | 5,833,085 | 811,717 |
Nilchi, Inc. | 10-10027 | - | - | - |
Patar, Inc. | 10-10028 | - | - | - |
Case Number: 10-10018 (MG) (Jointly Administered)
- 3 -
MESA AIR GROUP, INC., ET AL. | ||||
MONTHLY OPERATING REPORT | ||||
INDEX | ||||
Description | Page | |||
Condensed Consolidated Debtors-in-Possession Statement of Operations for the month ended | ||||
September 30, 2010 and filing to date | 5 | |||
Condensed Consolidated Debtors-in-Possession Balance Sheets as of September 30, 2010 | ||||
and all subsequent periods post-petition date | 7 | |||
Condensed Consolidated Debtors-in-Possession Statement of Cash Flows for the month ended | ||||
September 30, 2010 and filing to date | 9 | |||
Notes to the Condensed Consolidated Monthly Operating Report | 11 |
Case Number: 10-10018 (MG) (Jointly Administered)
- 4 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 5 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 6 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 7 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 8 -
MESA AIR GROUP, INC., ET AL.
The accompanying notes are an integral part of the financial statements.
Case Number: 10-10018 (MG) (Jointly Administered)
- 9 -
MESA AIR GROUP, INC., ET AL.
The accompanying notes are an integral part of the financial statements.
Case Number: 10-10018 (MG) (Jointly Administered)
- 10 -
MESA AIR GROUP, INC., ET AL. 1. Background and Organization General - Mesa Air Group, Inc. ("Mesa" or the
"Company") is a holding company whose principal subsidiaries operate as regional air carriers providing
scheduled passenger and airfreight service. As of September 30, 2010, the Company served 91 cities in 33 states, the
District of Columbia, Canada, and Mexico and operated a fleet of 77 aircraft with approximately 490 daily
departures. Chapter 11 Reorganization Cases - On January 5, 2010 (the "Petition Date"), Mesa Air
Group, Inc. and its eleven subsidiaries (the "Debtors") filed voluntary petitions for relief under chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
Southern District of New York (the "Court"). The Debtors continue to operate their businesses as
"debtors-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Court. On January 14, 2010, the Office of the United States Trustee for the
Southern District of New York appointed a statutory committee of unsecured creditors. 2. Basis of Presentation Condensed Consolidated Debtor-in-Possession Financial Statements - The
unaudited financial statements and supplemental information contained herein represent the condensed consolidated
financial information for the Debtors. The results of operations for the period from January 5, 2010 to January 31, 2010
were estimated based upon estimates that included the use of statistical data, processed revenue, fuel purchases and a
pro-ration of calendar days within the month of January. Amounts presented in the unaudited Statement of Cash Flows
for the period from January 5, 2010 to January 31, 2010 were based on estimated asset and liability balances as of the
filing date and actual balances as of January 31, 2010, as well as the aforementioned estimated results of operations for
the period from January 5, 2010 to January 31, 2010. American Institute of Certified Public Accountants Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization under the Bankruptcy Code" ("SOP 90-7"), which is
applicable to companies in chapter 11, generally does not change the manner in which financial statements are
prepared. It does, however, require that the financial statements for periods subsequent to the filing of the chapter 11
petition distinguish transactions and events that are directly associated with the reorganization from the ongoing
operations of the business. The Debtors' financial statements contained herein have been prepared in accordance with
the guidance in SOP 90-7. Further information concerning the Debtors' accounting policies will be found in the footnotes
to our Annual Report on Form 10-K for the period ended September 30, 2009 once filed and subsequent filings on Form
10-Q when filed with the United States Securities and Exchange Commission. The unaudited consolidated financial statements have been derived from the books and records
of the Debtors. Certain financial information, however, has not been subject to procedures that typically would be
applied to financial information presented in accordance with generally accepted accounting principles in the United
States of America ("U.S. GAAP") and, upon the application of such procedures, the Debtors believe that the
financial information will be subject to changes. These changes could be material. The information furnished in this
report includes primarily normal recurring adjustments, but does not include all of the adjustments that typically would be
made for quarterly financial statements in accordance with U.S. GAAP. Certain prepaid balances and pre- and
post-petition trade accounts payable balances are subject to further review and reclassification. In addition, certain
information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP
have been condensed or omitted. Therefore, this report should be read in conjunction with our consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the period ended September 30, 2009
once filed and subsequent filings on Form 10-Q when filed with the United States Securities and Exchange
Commission. The results of operations contained herein are not necessarily indicative of results that may be
expected from any other period or for the full year, and may not necessarily reflect the consolidated results of
operations, financial position and cash flows of the Debtors in the future. Case Number: 10-10018 (MG) (Jointly Administered)
- 11 -
Intercompany Transactions - Intercompany transactions between Debtors have been
eliminated in the financial statements contained herein. Property and Equipment, net - Recorded at cost net of accumulated
deprecation. Taxes - Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in future years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. The Company records deferred tax assets for the value of benefits expected to be realized from the
utilization of alternative minimum tax credit carry forward, capital loss carryforward and state and federal net operating
loss carryforward. We periodically review these assets to determine the likelihood of realization. To the extent we
believe some portion of the benefit may not be realizable, an estimate of the unrealized position is made and an
allowance recorded. The Company and its consolidated subsidiaries file a consolidated federal income tax return. As of
September 30, 2010, the Company estimated an effective tax rate of 36.85%. The Debtors have received approval to pay pre-petition employee withholding obligations in addition
to employment and wage-related taxes, sales and use taxes, and certain other taxes due in the normal course of
business through certain first day motions. As such, the Debtors have paid such taxes when due. In addition, all
post-petition tax obligations have been fully paid to the proper taxing authorities to the extent they were due during the current
reporting period. Further, employee withholding obligations are pre-funded by the Debtors and paid directly by the
Debtors' payroll contractor, Automatic Data Processing, Inc. ("ADP"). Thus, no further information regarding
taxes is included in this report. 3. Insurance All insurance premiums have been paid to the proper insurance company or broker when due
during the current reporting period, and all insurance policies are in force as of the filing of this report. 4. Cash Management System & Use of Cash The Court has entered orders authorizing the Debtors to continue to use their existing cash
management system including: (i) investment guidelines; (ii) maintenance of existing bank accounts and business forms;
and (iii) the authorization to open and close bank accounts. The Debtors are continuing to collect and disburse cash
since the Petition Date using the existing cash management system, as modified to comply with applicable orders of the
Court. Case Number: 10-10018 (MG) (Jointly Administered)
- 12 -
5. Reorganization items SOP 90-7 requires separate disclosure of reorganization items such as realized gains and losses
from the settlement of pre-petition liabilities, provisions for losses resulting from the reorganization and restructuring of
the business, as well as professional fees directly related to the process of reorganizing the Debtors under Chapter 11.
The Debtors' reorganization items consist of the following: Professional fees directly related to the reorganization ("Professional Fees") include
fees associated with advisors to the Debtors, the statutory committee of unsecured creditors and certain secured
creditors. Professional Fees are estimated by the Debtors and will be reconciled to actual invoices when received. Of the 94 aircrafts that have either been rejected or abandoned since the approval of the
Rejection Procedures (as defined below), the Debtors have booked the damages arising from the
rejection/abandonment of 93 of these aircraft and estimated them to be approximately $900,000,000, which amount is
subject to the final settlement between the Debtors and the applicable aircraft parties. Case Number: 10-10018 (MG) (Jointly Administered)
- 13 -
6. Liabilities Subject to Compromise As a result of the Chapter 11 Filings, most pre-petition indebtedness is subject to
compromise or other treatment under a plan of reorganization. Generally, actions to enforce or otherwise affect
payment of pre-Chapter 11 liabilities are stayed. At hearings held in January and February, the Court granted final
approval of many of the Debtors' "first day" motions covering, among other things, human capital obligations,
supplier relations (including fuel supply and fuel contracts), insurance, customer relations, business operations, certain
tax matters, industry agreements, utilities, case management and retention of professionals. The Debtors have been paying and intend to continue to pay undisputed post-petition claims in
the ordinary course of business. In addition, the Debtors may reject pre-petition executory contracts and unexpired
leases with respect to the Debtors' operations, with the approval of the Bankruptcy Court. Damages resulting from
rejection of executory contracts and unexpired leases are generally treated as general unsecured claims and will be
classified as liabilities subject to comprise. Holders of pre-petition claims will be required to file proofs of claims by a bar
date to be determined by the Court. The deadline for the filing of proofs of claims against the Debtors was May 21,
2010, with certain exceptions pursuant to the bar date order entered by the Court. A bar date is the date by which claims against the Debtors must be filed if the claimants wish to
receive any distribution in the Chapter 11 cases. Differences between liability amounts estimated by the Debtors and
claims filed by creditors will be investigated and, if necessary, the Court will make a final determination of the allowable
claim. The determination of how liabilities will ultimately be treated cannot be made until the Court approves a Chapter
11 plan of reorganization. Accordingly, the ultimate amount or treatment of such liabilities is not determinable at this
time. SOP 90-7 requires pre-petition liabilities that are subject to compromise to be reported at the
amounts expected to be allowed, even if they may be settled for lesser amounts. The amounts currently classified as
liabilities subject to compromise may be subject to future adjustments depending on Court actions, further developments
with respect to disputed claims, determinations of the secured status of certain claims, the values of any collateral
securing such claims, or other events. Case Number: 10-10018 (MG) (Jointly Administered)
- 14 -
Liabilities Subject to Compromise consist of the following: Liabilities subject to compromise include trade accounts payable related to pre-petition
purchases, all of which were scheduled for payment in the post-petition period. As a result, the cash flows from
operations were favorably affected by the stay of payment related to these accounts payable. Of the 94 aircraft that have either been rejected or abandoned since the approval of the
Rejection Procedures (as defined below), the Debtors have booked the damages arising from the
rejection/abandonment of 93 of these aircraft and estimated them to be approximately $900,000,000, which amount is
subject to the final settlement between the Debtors and the applicable aircraft parties. Case Number: 10-10018 (MG) (Jointly Administered)
- 15 -
7. Post-petition Accounts Payable To the best of the Debtors' knowledge, all undisputed post-petition accounts payable have
been and are being paid under agreed-upon payment terms except for approximately $5.9 million of invoices received,
not yet paid, as of September 30, 2010. 8. Owned and Leased Aircraft On January 26, 2010, the Court approved the abandonment of twenty (20) Beech 1900D
aircraft and related airframe, engines, propellers, avionics and all other equipment, parts and components installed in or
on, or acceded to, or associated with the related aircraft. On February 23, 2010, the Court approved
procedures for the rejection of aircraft related leases and the abandonment of aircraft subject to security agreements
(the "Rejection Procedures"). Since the approval of the Rejection Procedures, the Debtors have
filed twenty-three (23) notices of rejection with respect to the leases of twelve (12) aircraft engines and ninety-four (94)
aircraft. The Debtors continue to evaluate their aircraft fleet and will address the remaining leased and owned as
necessary. During this time, the Debtors continue to accrue lease and interest expenses in accordance with
pre-petition contracts until the lease or debt agreements are rejected or abandoned, as the case may be, and new
leases or debt agreements are finalized and approved by the Court. The line item labeled Flight Operations -
Nonoperating Aircraft includes lease expense related to aircraft currently not in operation. 9. Other, Net Other, Net includes gain / (loss) on disposal of assets, debt conversion expense, recognition of our share of
gain/(loss) in our Hawaiian joint venture and other miscellaneous expenses. This total excludes gains / (losses) on
minority investments that are reported quarterly. 10. Payments to Insiders Of the total disbursements listed herein, the amounts paid to insiders during the current reporting period are as
follows:
Case Number: 10-10018 (MG) (Jointly Administered)
- 16 -
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS
(In $U.S. 000's)
Month ended
Month ended
Month ended
Month ended
Month ended
September 30, 2010
August 31, 2010
July 31, 2010
June 30, 2010
May 31, 2010
Revenues:
Passenger
$ 60,733
$ 65,145
$ 65,917
$ 73,955
$ 65,209
Cargo
-
-
-
-
-
Other
456
406
425
469
424
Total Revenue
61,188
65,551
66,342
74,424
65,632
Operating Expenses:
Flight Operations (1)
14,270
16,942
17,538
17,654
18,692
Flight Operations - Nonoperating Aircraft (1)
1,029
1,068
2,622
752
5,790
Aircraft Fuel
17,392
18,643
18,190
17,900
18,635
Aircraft and traffic servicing
3,567
4,008
3,929
3,751
3,604
Maintenance
8,300
12,508
17,148
12,142
12,288
Promotion and sales
363
449
472
738
468
General and administrative
4,804
3,501
3,095
4,449
3,169
Depreciation and amortization
2,879
3,160
3,215
3,343
3,328
Impairment of long-lived asset
-
-
-
-
-
Total operating expenses
52,605
60,279
66,208
60,729
65,974
Operating Income (Loss)
8,584
5,272
134
13,695
(341)
Nonoperating income (expense)
Interest Income
315
370
393
441
370
Interest Expense
(954)
(567)
(1,316)
(1,270)
(1,349)
Other, net (Note 9)
(708)
(469)
(133)
(1,693)
(312)
Total Nonoperating income (expense)
(1,348)
(666)
(1,057)
(2,523)
(1,291)
Income (Loss) before reorganization items and income taxes
7,236
4,605
(923)
11,173
(1,632)
Income taxes
(44,824)
(116,776)
(16,449)
(162,400)
(1,553)
Loss (Gain) on reorganization items (Note 5) (2)
134,345
322,859
43,414
448,910
2,553
Income (Loss) before discontinued operations
(82,285)
(201,478)
(27,888)
(275,336)
(2,633)
Loss (Gain) from discontinued operations
(262)
-
-
-
-
Net Income (Loss)
(82,023)
(201,478)
(27,888)
(275,336)
(2,633)
The accompanying notes are an integral part of the financial statements.
(1) In June adjustments were booked reducing lease expense for rejected aircraft leases. Actual expense in June was
$17,994 for flight operations and $2,558 for flight operations - nonoperating aircraft.
(2) The majority of reorganization expense in June, July and August was for unsecured claims related to the rejection of aircraft leases.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS
(In $U.S. 000's)
Month ended
Month ended
Month ended
January 5, 2010
Filing
April 30, 2010
March 31, 2010
February 28, 2010
to January 31, 2010
to Date
Revenues:
Passenger
$ 70,078
$ 72,669
$ 65,457
$ 61,488
$ 600,648
Cargo
-
-
-
-
-
Other
509
474
463
381
4,007
Total Revenue
70,586
73,143
65,921
61,869
604,656
Operating Expenses:
Flight Operations (1)
20,426
20,697
19,787
20,719
166,726
Flight Operations - Nonoperating Aircraft (1)
4,615
4,512
5,291
2,163
27,840
Aircraft Fuel
18,635
18,745
14,992
15,953
159,084
Aircraft and traffic servicing
4,258
4,506
3,701
3,897
35,221
Maintenance
14,217
16,001
13,788
10,826
117,219
Promotion and sales
263
471
333
190
3,747
General and administrative
3,330
3,316
3,342
3,040
32,045
Depreciation and amortization
3,330
3,304
3,322
2,926
28,806
Impairment of long-lived asset
-
-
-
-
-
Total operating expenses
69,072
71,551
64,556
59,714
570,687
Operating Income (Loss)
1,514
1,592
1,365
2,155
33,969
Nonoperating income (expense)
Interest Income
381
370
369
322
3,330
Interest Expense
(1,334)
(1,381)
(1,565)
(1,343)
(11,081)
Other, net (Note 9)
(519)
244
309
(323)
(3,605)
Total Nonoperating income (expense)
(1,472)
(767)
(887)
(1,344)
(11,355)
Income (Loss) before reorganization items and income taxes
42
824
478
811
22,614
Income taxes
(937)
(1,373)
(132)
(87)
(344,531)
Loss (Gain) on reorganization items (Note 5)
2,590
4,525
854
1,060
961,110
Income (Loss) before discontinued operations
(1,612)
(2,328)
(244)
(162)
(593,966)
Loss (Gain) from discontinued operations
-
-
2
(704)
(964)
Net Income (Loss)
(1,612)
(2,328)
(246)
542
(593,002)
The accompanying notes are an integral part of the financial statements.
(1) For presentation purposes, the March flight operation expense has been adjusted from what was reported on the March MOR to properly
reflect the expense for nonoperating aircraft.
The net adjustment between the two line items is zero.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS
(In $U.S. 000's, except share data)
September 30, 2010
August 31, 2010
July 31, 2010
June 30, 2010
May 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents
57,733
58,207
53,275
52,165
60,833
Short-term investments
-
1,478
1,405
-
1,258
Restricted investments
9,692
10,351
11,125
11,117
11,341
Receivables, net of allowance
6,278
19,458
17,962
17,307
8,024
Inventories, net of allowance
26,636
26,840
27,872
27,670
27,631
Prepaid expenses and other assets
95,320
111,230
132,124
129,831
127,244
Total current assets
195,659
227,565
243,763
238,090
236,333
Property and equipment, net
496,856
515,264
537,707
540,650
546,281
Security and other deposits
6,430
7,329
7,929
8,393
12,192
Other assets (1)
476,879
431,586
134,127
134,389
133,713
Total Assets
1,175,823
1,181,745
923,525
921,522
928,518
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
5,891
3,638
1,990
3,220
3,415
Air traffic liability
4,950
4,653
4,276
4,767
4,909
Other accrued expenses
42,611
54,587
52,174
40,641
48,317
Income tax payable (1)
2,586
2,217
(180,339)
(164,192)
(1,774)
Deferred revenue and other current liabilities
-
-
-
-
-
Total current liabilities not subject to compromise
56,039
65,095
(121,899)
(115,564)
54,868
Deferred credits and other liabilities
59,107
95,672
96,435
97,989
97,388
Long term deferred income tax
156,719
156,719
156,719
156,719
156,719
Other long-term debt post petition
-
-
-
-
-
Total liabilities not subject to compromise
215,827
252,391
253,154
254,708
254,107
Liabilities subject to compromise (Note 6)
1,388,378
1,269,227
995,476
957,716
519,577
Total liabilities
1,660,244
1,586,713
1,126,731
1,096,860
828,552
Stockholders' equity:
Preferred stock, no par value, authorized
2,000,000 shares; none issued
-
-
-
-
-
Common stock, no par value and additional paid-in capital,
900,000,000 shares authorized; 175,217,249 and
175,217,249 shares issued and outstanding, respectively
118,676
118,676
118,676
118,676
118,676
Deferred Stock Compensation
1,667
1,634
1,658
1,637
1,605
Retained Earnings
(604,764)
(525,279)
(323,540)
(295,652)
(20,316)
Total stockholders' equity
(484,421)
(404,968)
(203,206)
(175,338)
99,966
Total liabilities and stockholders' equity
1,175,823
1,181,745
923,525
921,522
928,518
The accompanying notes are an integral part of the financial statements.
(1) For presentation purposes income taxes payable have been moved from the Income tax payable line item in current
liabilities to Other assets as income taxes payable are an asset as of August 2010.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS
(In $U.S. 000's, except share data)
April 30, 2010
March 31, 2010
February 28, 2010
January 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents
57,484
54,109
78,707
67,471
Short-term investments
850
-
873
885
Restricted investments
11,348
10,971
11,660
12,764
Receivables, net of allowance
6,694
9,766
15,600
10,130
Inventories, net of allowance
27,776
27,352
27,329
27,267
Prepaid expenses and other assets
140,167
147,607
125,212
141,547
Total current assets
244,319
249,806
259,380
260,063
Property and equipment, net
547,983
550,505
550,459
552,378
Security and other deposits
12,192
12,192
11,787
11,786
Other assets
134,156
133,884
134,057
133,964
Total Assets
938,650
946,387
955,683
958,191
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
4,061
5,912
4,634
4,817
Air traffic liability
4,140
4,146
4,151
3,791
Other accrued expenses
49,207
49,282
42,205
41,659
Income tax payable
(216)
231
3,460
3,597
Deferred revenue and other current liabilities
-
-
-
-
Total current liabilities not subject to compromise
57,192
59,570
54,450
53,863
Deferred credits and other liabilities
99,738
101,968
102,581
104,612
Long term deferred income tax
156,719
156,719
156,719
156,719
Other long-term debt post petition
-
-
-
-
Total liabilities not subject to compromise
256,457
258,688
259,300
261,332
Liabilities subject to compromise (Note 6)
522,435
524,868
536,132
537,002
Total liabilities
836,085
843,126
849,882
852,196
Stockholders' equity:
Preferred stock, no par value, authorized
2,000,000 shares; none issued
-
-
-
-
Common stock, no par value and additional paid-in capital,
900,000,000 shares authorized; 175,217,249 and
175,217,249 shares issued and outstanding, respectively
118,676
118,676
118,676
118,676
Deferred Stock Compensation
1,571
1,555
1,469
1,417
Retained Earnings
(17,683)
(16,971)
(14,345)
(14,098)
Total stockholders' equity
102,565
103,261
105,801
105,995
Total liabilities and stockholders' equity
938,650
946,387
955,683
958,191
The accompanying notes are an integral part of the financial statements.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS
(In $U.S. 000's)
Month ended
Month ended
Month ended
Month ended
Month ended
September 30, 2010
August 31, 2010
July 31, 2010
June 30, 2010
May 31, 2010
Cash flows from operating activities:
Net income (loss) from continuing operations
$ (82,285)
$ (201,478)
$ (27,888)
$ (275,336)
$ (2,633)
Net income (loss) from discontinued operations
$ 262
$ -
$ -
$ -
$ -
Net income (loss)
$ (82,023)
$ (201,478)
$ (27,888)
$ (275,336)
$ (2,633)
Adjustments to reconcile net income/(loss) to net cash used
in operating activities:
Depreciation and amortization
2,879
3,160
3,215
3,343
3,328
Impairment charges
-
-
-
-
-
Amortization of deferred credits
(34,949)
(870)
(1,565)
(494)
(1,357)
Amortization of restricted stock awards
33
(23)
21
32
33
Amortization of contract incentive payments
27
27
27
27
27
Provision for obsolete expendable parts and supplies
136
477
107
155
301
Changes in operating assets and liabilities:
Net (purchases) sales of investment securities
1,478
(73)
(1,405)
1,258
(408)
Receivables
13,181
(1,496)
(644)
(9,283)
(1,331)
Expendable parts and supplies
67
555
(308)
(195)
(155)
Prepaid expenses and other assets
15,910
20,894
(2,254)
(5,165)
12,922
Other assets
-
690
50
50
50
Accounts Payable
(11,215)
456
10,882
(6,948)
(1,398)
Income taxes payable
(44,252)
(117,413)
(16,148)
(162,418)
(1,557)
Air traffic liability
-
-
-
-
-
Other accrued liabilities
149,831
343,235
42,388
452,445
2,005
Net cash provided by (used in) operating activities
11,104
48,142
6,476
(2,526)
9,828
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities
(134,345)
(322,877)
(43,414)
(448,910)
(2,553)
Total net cash provided by (used in) operating activities
(123,241)
(274,735)
(36,938)
(451,436)
7,275
Cash flows from investing activities:
Capital expenditures
(1,607)
1,762
-
2,314
(1,599)
Proceeds from sale of flight equipment and expendable inventory
-
Change in restricted cash
659
774
(8)
225
7
Equity method investment
637
128
151
(785)
334
Investment deposits
-
-
-
-
-
Change in other assets
1
156
7
5
6
Net returns (payments) of lease and equipment deposits
899
599
(90)
(14)
-
Net cash (used in) provided by investing activities
588
3,419
60
1,745
(1,253)
Cash flows from financing activities:
Unsecured claims for rejected aircrafts
124,701
279,150
40,587
443,717
-
Principal payments on long-term borrowings
(2,523)
(2,902)
(2,599)
(2,695)
(2,673)
Net cash (used in) provided by financing activities
122,178
276,248
37,988
441,023
(2,673)
Increase (decrease) in cash and cash equivalents
(474)
4,932
1,110
(8,668)
3,350
Cash and cash equivalents at beginning of period
58,207
53,275
52,165
60,833
57,484
Cash and cash equivalents at end of period
57,733
58,207
53,275
52,165
60,833
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS
(In $U.S. 000's)
Month ended
Month ended
Month ended
January 5, 2010
Filing to
April 30, 2010
March 31, 2010
February 28, 2010
to January 31, 2010
Date
Cash flows from operating activities:
Net income (loss) from continuing operations
$ (1,612)
$ (2,328)
$ (248)
$ (162)
$ (593,969)
Net income (loss) from discontinued operations
$ -
$ (0)
$ 2
$ 704
$ 968
Net income (loss)
$ (1,612)
$ (2,328)
$ (246)
$ 542
$ (593,002)
Adjustments to reconcile net income/(loss) to net cash used
in operating activities:
Depreciation and amortization
3,330
3,304
3,323
3,362
29,243
Impairment charges
-
-
-
(1,080)
(1,080)
Amortization of deferred credits
(1,363)
(512)
(1,464)
(1,338)
(43,912)
Amortization of restricted stock awards
16
86
52
65
316
Amortization of contract incentive payments
27
27
27
27
246
Provision for obsolete expendable parts and supplies
122
148
108
127
1,681
Changes in operating assets and liabilities:
-
Net (purchases) sales of investment securities
(850)
873
12
(885)
-
Receivables
3,072
5,834
(5,470)
3,626
7,490
Expendable parts and supplies
(546)
(171)
(170)
(13)
(937)
Prepaid expenses and other assets
7,441
(22,396)
16,335
19,133
62,821
Other assets
188
50
50
50
1,178
Accounts Payable
(1,270)
5,219
1,098
9,026
5,850
Income taxes payable
(447)
(3,230)
(137)
569
(345,032)
Air traffic liability
-
-
-
-
-
Other accrued liabilities
1,259
(2,339)
916
9,188
998,928
Net cash provided by (used in) operating activities
9,367
(15,435)
14,435
42,399
123,790
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities
(2,590)
(1,186)
(854)
(1,060)
(957,789)
Total net cash provided by (used in) operating activities
6,777
(16,621)
13,581
41,339
(833,999)
Cash flows from investing activities:
Capital expenditures
(781)
(3,324)
(1,378)
(1,538)
(6,151)
Proceeds from sale of flight equipment and expendable inventory
-
-
-
-
-
Change in restricted cash
(377)
688
1,104
3,071
Equity method investment
516
(238)
(213)
340
869
Investment deposits
-
-
-
-
-
Change in other assets
(130)
9
16
11
81
Net returns (payments) of lease and equipment deposits
-
(404)
(1)
(47)
942
Net cash (used in) provided by investing activities
(772)
(3,269)
(471)
(1,235)
(1,188)
Cash flows from financing activities:
Unsecured claims for rejected aircrafts
-
-
-
-
888,155
Principal payments on long-term borrowings
(2,629)
(4,708)
(1,874)
(1,867)
(24,468)
Net cash (used in) provided by financing activities
(2,629)
(4,708)
(1,874)
(1,867)
863,687
Increase (decrease) in cash and cash equivalents
3,375
(24,598)
11,236
38,238
28,500
Cash and cash equivalents at beginning of period
54,109
78,707
67,471
29,233
29,233
Cash and cash equivalents at end of period
57,484
54,109
78,707
67,471
57,733
NOTES TO MONTHLY OPERATING REPORT
(In $U.S. 000's)
Month ending
Month ending
Month ending
Month ending
September 30, 2010
August 31, 2010
July 31, 2010
June 30, 2010
Professional fees directly related to reorganization
$ 1,063
$ 1,048
$ 465
$ 1,059
Loss on rejection of aircraft leases (1)
129,427
309,361
26,384
446,630
Loss on sale-leaseback transactions
-
-
-
-
Write-off of debt issuance cost
-
-
-
-
Cost related to the early return and sale of aircraft
509
2,012
1,231
1,221
Abandonment of real property (1)
-
-
215
-
Write off of LOC for engine lease termination & return of aircraft
-
774
-
-
Write-off engine lease termination expenses
3,545
9,665
15,119
-
Other
(199)
-
-
-
Total loss/(gain) on reorganization items
134,345
322,859
43,414
448,910
Month ending
Month ending
Month ending
Month ending
May 31, 2010
April 30, 2010
March 31, 2010
February 28, 2010
Professional fees directly related to reorganization
$ 691
$ 2,590
$ 1,186
$ 854
Loss on rejection of aircraft leases
-
-
-
-
Loss on sale-leaseback transactions
-
-
-
-
Write-off of debt issuance cost
-
-
-
-
Cost related to the early return and sale of aircraft
1,862
-
-
-
Abandonment of real property
-
-
-
-
Write off of LOC for engine lease termination & return of aircraft
-
-
2,027
-
Write-off engine lease termination expenses
-
-
1,312
-
Other
-
-
-
-
Total loss/(gain) on reorganization items
2,553
2,590
4,525
854
January 5, 2010
to
Filing to
January 31, 2010
Date
Professional fees directly related to reorganization
$ 1,060
$ 10,016
Loss on rejection of aircraft leases
-
911,802
Loss on sale-leaseback transactions
-
-
Write-off of debt issuance cost
-
-
Cost related to the early return and sale of aircraft
-
6,836
Abandonment of real property
-
215
Write off of LOC for engine lease termination & return of aircraft
-
2,801
Write-off engine lease termination expenses
-
29,640
Other
-
(199)
Total loss/(gain) on reorganization items
1,060
961,110
(1) For presentation purposes the abandonment of real property and loss on rejection of aircraft leases in July were adjusted to properly reflect these transactions.
The net adjustment between the two line items is zero.
(In $U.S. 000's)
Sep 30,
Aug 31,
July 31,
2010
2010
2010
Accounts payable and other accrued expenses
$ 62,832
$ 62,745
$ 64,373
Accrued interest expense
4,023
4,055
4,803
Write-off of debt issuance cost
-
-
-
Secured aircraft debt
367,935
370,797
373,381
Other secured debt
5,908
8,693
9,174
Unsecured debt
32,321
32,321
32,321
Bankruptcy related unsecured claims
899,553
775,751
498,402
Bankruptcy related admin claims
6,750
5,850
4,050
Convertible bonds (1)
9,057
9,014
8,972
Total liabilities subject to compromise
1,388,378
1,269,227
995,476
June 30,
May 31,
April 30,
2010
2010
2010
Accounts payable and other accrued expenses
$ 63,388
$ 62,058
$ 62,364
Accrued interest expense
4,805
4,997
4,914
Write-off of debt issuance cost
-
-
-
Secured aircraft debt
379,490
382,100
384,767
Other secured debt
10,369
10,377
10,385
Unsecured debt
32,321
51,158
51,160
Bankruptcy related unsecured claims
454,439
-
-
Bankruptcy related admin claims
3,975
-
-
Convertible bonds (1)
8,930
8,888
8,846
Total liabilities subject to compromise
957,716
519,577
522,435
March 31,
February 28,
January 31,
2010
2010
2010
Accounts payable and other accrued expenses
$ 62,316
$ 68,090
$ 66,810
Accrued interest expense
4,903
5,937
6,197
Write-off of debt issuance cost
-
-
-
Secured aircraft debt
387,289
391,771
393,692
Other secured debt
10,393
10,407
10,414
Unsecured debt
51,163
59,928
59,889
Bankruptcy related unsecured claims
-
-
-
Bankruptcy related admin claims
-
-
-
Convertible bonds (1)
8,804
-
-
Total liabilities subject to compromise
524,868
536,132
537,002
(1) Convertible bonds were listed under unsecured debt in January and February 2010.
Name
Type of Payment
Amount Paid (Sep 1 - Sep 30)
Gillman,Brian S
Wages / Expenses
51,606.08
Foley,Paul F
Wages / Expenses
48,750.04
Appling,Gary W
Wages / Expenses
44,653.90
Butler,David K
Wages / Expenses
39,807.64
Swigart,James
Wages / Expenses
34,200.00
Kranzow,Keith C
Wages / Expenses
34,134.60
Ferverda,Michael L
Wages / Expenses
26,923.09
Gust,Eric W
Wages / Expenses
17,800.06
Pappaioanou,Chris J
Wages / Expenses
16,113.48
Hornberg,Robert A
Wages / Expenses
15,846.18
Ornstein,Jonathan G
Wages / Expenses
13,704.78
Brown, Kenley B
Wages / Expenses
13,126.89
Gomes,Edward P
Wages / Expenses
12,076.88
Lotz,Michael J
Wages / Expenses
9,476.74
Gumm,Ryan J
Wages / Expenses
4,046.54
Thayer, Richard
Wages / Expenses
500.00
Beleson,Robert
Wages / Expenses
500.00
Altobello,Daniel
Wages / Expenses
500.00
Manson III,Joseph
Wages / Expenses
500.00
Nostrand,Peter
Wages / Expenses
500.00
Parker,Maurice
Wages / Expenses
500.00
Bonilla,Carlos
Wages / Expenses
500.00
$385,766.90