MESA AIR GROUP INC - FORM 8-K - EX-99.1 - MONTHLY OPERATING REPORT - January 25, 2011

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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 December 31, 2010
 
Federal Tax ID # 85-0302351
 
Debtors' Address:
410 N 44th Street Suite 700
Phoenix, AZ 85008
 
 
Monthly Net Income/(Loss): ($11.160) 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: January 24, 2011   

/s/ Mike Lotz                  
     Mike Lotz
     President and Chief Financial Officer
 
 
(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
December 31, 2010
November 30, 2010
October 31, 2010
Mesa Air New York, Inc. 10-10017 -   -   -  
Mesa Air Group, Inc. 10-10018 1,239,635  1,235,603  1,510,870 
Mesa In-Flight, Inc. 10-10019 -   -   -  
Freedom Airlines, Inc. 10-10020 120,454  284,979  306,684 
Mesa Airlines, Inc. 10-10021 39,465,756  38,975,470  37,390,290 
MPD, Inc. 10-10022 157,486  108,220  129,536 
Ritz Hotel Management Corp. 10-10023 -   -   -  
Regional Aircraft Services, Inc. 10-10024 794,829  530,217  533,859 
Air Midwest, Inc. 10-10025 289  -   211 
Mesa Air Group Airline Inventory Management, LLC 10-10030 7,483,573  4,159,024  8,107,204 
Nilchi, Inc. 10-10027 -   -   -  
Patar, Inc. 10-10028 -   -   -  
         
    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        
December 31, 2010 and filing to date       5
Condensed Consolidated Debtors-in-Possession Balance Sheets as of December 31, 2010        
and all subsequent periods post-petition date       8
Condensed Consolidated Debtors-in-Possession Statement of Cash Flows for the month ended        
December 31, 2010 and filing to date       11
Notes to the Condensed Consolidated Monthly Operating Report       14

 

 

 

 

Case Number: 10-10018 (MG) (Jointly Administered)

- 4 -

MESA AIR GROUP, INC., ET AL.
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
    December 31, 2010
November 30, 2010
October 31, 2010
September 30, 2010
August 31, 2010
             
Revenues:            
     Passenger   $ 58,323  $ 55,461  $ 57,080  $ 60,733  $ 65,145 
     Cargo   -  -  -  -  - 
     Other   266 
301 
334 
456 
406 
          Total Revenue   58,589 
55,762 
57,413 
61,188 
65,551 
             
Operating Expenses:            
     Flight Operations   15,173  15,042  14,983  14,270  16,942 
     Flight Operations - Nonoperating Aircraft   -  13  25  1,029  1,068 
     Aircraft Fuel   18,322  18,694  18,283  17,392  18,643 
     Aircraft and traffic servicing   3,807  3,835  3,798  3,567  4,008 
     Maintenance   12,295  9,797  13,481  8,300  12,508 
     Promotion and sales   501  372  468  363  449 
     General and administrative   1,926  4,019  4,322  4,804  3,501 
     Depreciation and amortization   2,822  2,951  2,942  2,879  3,160 
     Impairment of long-lived asset   - 
- 
- 
- 
- 
          Total operating expenses   54,846 
54,721 
58,304 
52,605 
60,279 
             
Operating Income (Loss)   3,743  1,041  (890) 8,584  5,272 
             
Nonoperating income (expense)            
     Interest Income   370  369  370  315  370 
     Interest Expense   (1,191) (1,183) (1,199) (954) (567)
     Other, net (Note 9)   (581)
(562)
(336)
(708)
(469)
          Total Nonoperating income (expense)   (1,402)
(1,375)
(1,165)
(1,348)
(666)
             
Income (Loss) before reorganization items and income taxes   2,341  (334) (2,055) 7,236  4,605 
             
     Income taxes   (6,512) (178) (6,322) (44,824) (116,776)
     Loss (Gain) on reorganization items (Note 5) (1)   20,014 
148 
14,664 
134,345 
322,859 
             
Income (Loss) before discontinued operations   (11,160) (304) (10,398) (82,285) (201,478)
             
     Loss (Gain) from discontinued operations   - 
- 
- 
(262)
- 
             
Net Income (Loss)   (11,160)
(304)
(10,398)
(82,023)
(201,478)
             
The accompanying notes are an integral part of the financial statements.
             
(1) The majority of reorganization expense in August, September, October and December was for unsecured claims related to the rejection of aircraft leases.

Case Number: 10-10018 (MG) (Jointly Administered)

- 5 -

MESA AIR GROUP, INC., ET AL.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS

           
(In $U.S. 000's)   Month ended Month ended Month ended Month ended
    July 31, 2010
June 30, 2010
May 31, 2010
April 30, 2010
           
Revenues:          
     Passenger   $ 65,917  $ 73,955  $ 65,209  $ 70,078 
     Cargo   -  -  -  - 
     Other   425 
469 
424 
509 
          Total Revenue   66,342 
74,424 
65,632 
70,586 
           
Operating Expenses:          
     Flight Operations(1)   17,538  17,654  18,692  20,426 
     Flight Operations - Nonoperating Aircraft(1)   2,622  752  5,790  4,615 
     Aircraft Fuel   18,190  17,900  18,635  18,635 
     Aircraft and traffic servicing   3,929  3,751  3,604  4,258 
     Maintenance   17,148  12,142  12,288  14,217 
     Promotion and sales   472  738  468  263 
     General and administrative   3,095  4,449  3,169  3,330 
     Depreciation and amortization   3,215  3,343  3,328  3,330 
     Impairment of long-lived asset   - 
- 
- 
- 
          Total operating expenses   66,208 
60,729 
65,974 
69,072 
           
Operating Income (Loss)   134  13,695  (341) 1,514 
           
Nonoperating income (expense)          
     Interest Income   393  441  370  381 
     Interest Expense   (1,316) (1,270) (1,349) (1,334)
     Other, net (Note 9)   (133)
(1,693)
(312)
(519)
          Total Nonoperating income (expense)   (1,057)
(2,523)
(1,291)
(1,472)
           
Income (Loss) before reorganization items and income taxes   (923) 11,173  (1,632) 42 
           
     Income taxes   (16,449) (162,400) (1,553) (937)
     Loss (Gain) on reorganization items (Note 5) (2)   43,414 
448,910 
2,553 
2,590 
           
Income (Loss) before discontinued operations   (27,888) (275,336) (2,633) (1,612)
           
     Loss (Gain) from discontinued operations   - 
- 
- 
- 
           
Net Income (Loss)   (27,888)
(275,336)
(2,633)
(1,612)
           
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 and July were for unsecured claims related to the rejection of aircraft leases.

Case Number: 10-10018 (MG) (Jointly Administered)

- 6 -

MESA AIR GROUP, INC., ET AL.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS

           
(In $U.S. 000's)   Month ended Month ended January 5, 2010 Filing
    March 31, 2010
February 28, 2010
to January 31, 2010
     to Date     
           
Revenues:          
     Passenger   $ 72,669  $ 65,457  $ 61,488  $ 771,512 
     Cargo   -  -  -  - 
     Other   474 
463 
381 
4,908 
          Total Revenue   73,143 
65,921 
61,869 
776,420 
           
Operating Expenses:          
     Flight Operations(1)   20,697  19,787  20,719  211,924 
     Flight Operations - Nonoperating Aircraft(1)   4,512  5,291  2,163  27,878 
     Aircraft Fuel   18,745  14,992  15,953  214,382 
     Aircraft and traffic servicing   4,506  3,701  3,897  46,660 
     Maintenance   16,001  13,788  10,826  152,792 
     Promotion and sales   471  333  190  5,088 
     General and administrative   3,316  3,342  3,040  42,311 
     Depreciation and amortization   3,304  3,322  2,926  37,522 
     Impairment of long-lived asset   - 
- 
- 
- 
          Total operating expenses   71,551 
64,556 
59,714 
738,557 
           
Operating Income (Loss)   1,592  1,365  2,155  37,863 
           
Nonoperating income (expense)          
     Interest Income   370  369  322  4,439 
     Interest Expense   (1,381) (1,565) (1,343) (14,653)
     Other, net (Note 9)   244 
309 
(323)
(5,084)
          Total Nonoperating income (expense)   (767)
(887)
(1,344)
(15,298)
           
Income (Loss) before reorganization items and income taxes   824  478  811  22,565 
           
     Income taxes   (1,373) (132) (87) (357,543)
     Loss (Gain) on reorganization items (Note 5)   4,525 
854 
1,060 
995,936 
           
Income (Loss) before discontinued operations   (2,328) (244) (162) (615,828)
           
     Loss (Gain) from discontinued operations   - 
2 
(704)
(964)
           
Net Income (Loss)   (2,328)
(246)
542 
(614,864)
           
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. 

Case Number: 10-10018 (MG) (Jointly Administered)

- 7 -

MESA AIR GROUP, INC., ET AL.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS

           
(In $U.S. 000's, except share data)          
    December 31, 2010
November 30, 2010
October 31, 2010
September 30, 2010
           
ASSETS        
Current Assets:          
     Cash and cash equivalents   43,422  62,526  60,482  57,733 
     Short-term investments   -   1,747  1,681  -  
     Restricted investments   9,620  9,692  9,692  9,692 
     Receivables, net of allowance   18,926  15,154  6,088  6,278 
     Inventories, net of allowance   20,984  27,488  27,000  26,636 
     Prepaid expenses and other assets   84,596 
91,403 
96,269 
95,320 
Total current assets   177,548  208,010  201,212  195,659 
           
Property and equipment, net   473,245  492,006  494,442  496,856 
Security and other deposits   6,494  6,484  6,433  6,430 
Other assets   492,935 
477,685 
478,177 
476,879 
Total Assets   1,150,221 
1,184,184 
1,180,264 
1,175,823 
           
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities not subject to compromise:          
Current Liabilities:          
     Accounts payable (Note 7)   3,768  14,540  6,622  5,891 
     Air traffic liability   5,401  5,085  5,171  4,950 
     Other accrued expenses   46,082  55,624  52,890  42,611 
     Income tax payable   2,568  2,595  2,597  2,586 
     Deferred revenue and other current liabilities   -  
-  
-  
-  
Total current liabilities not subject to compromise   57,818 
77,844 
67,279 
56,039 
           
     Deferred credits and other liabilities   55,101  55,586  57,827  59,107 
     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   211,820 
212,306 
214,546 
215,827 
           
     Liabilities subject to compromise (Note 6)   1,389,906 
1,392,232 
1,396,368 
1,388,378 
Total liabilities   1,659,545 
1,682,382 
1,678,194 
1,660,244 
           
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   115,500  115,500  115,500  118,676 
     Deferred Stock Compensation   1,803  1,768  1,732  1,667 
     Retained Earnings   (626,626)
(615,466)
(615,162)
(604,764)
Total stockholders' equity   (509,324)
(498,198)
(497,930)
(484,421)
           
Total liabilities and stockholders' equity   1,150,221 
1,184,184 
1,180,264 
1,175,823 
           
The accompanying notes are an integral part of the financial statements.

Case Number: 10-10018 (MG) (Jointly Administered)

- 8 -

MESA AIR GROUP, INC., ET AL.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS

           
(In $U.S. 000's, except share data)          
    August 31, 2010
July 31, 2010
June 30, 2010
May 31, 2010
           
ASSETS        
Current Assets:          
     Cash and cash equivalents   58,207  53,275  52,165  60,833 
     Short-term investments   1,478  1,405  -   1,258 
     Restricted investments   10,351  11,125  11,117  11,341 
     Receivables, net of allowance   19,458  17,962  17,307  8,024 
     Inventories, net of allowance   26,840  27,872  27,670  27,631 
     Prepaid expenses and other assets   111,230 
132,124 
129,831 
127,244 
Total current assets   227,565  243,763  238,090  236,333 
           
Property and equipment, net   515,264  537,707  540,650  546,281 
Security and other deposits   7,329  7,929  8,393  12,192 
Other assets (1)   431,586 
134,127 
134,389 
133,713 
Total Assets   1,181,745 
923,525 
921,522 
928,518 
           
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities not subject to compromise:          
Current Liabilities:          
     Accounts payable (Note 7)   3,638  1,990  3,220  3,415 
     Air traffic liability   4,653  4,276  4,767  4,909 
     Other accrued expenses   54,587  52,174  40,641  48,317 
     Income tax payable   2,217  (180,339) (164,192) (1,774)
     Deferred revenue and other current liabilities   -  
-  
-  
-  
Total current liabilities not subject to compromise   65,095 
(121,899)
(115,564)
54,868 
           
     Deferred credits and other liabilities   95,672  96,435  97,989  97,388 
     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   252,391 
253,154 
254,708 
254,107 
           
     Liabilities subject to compromise (Note 6)   1,269,227 
995,476 
957,716 
519,577 
Total liabilities   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 
     Deferred Stock Compensation   1,634  1,658  1,637  1,605 
     Retained Earnings   (525,279)
(323,540)
(295,652)
(20,316)
Total stockholders' equity   (404,968)
(203,206)
(175,338)
99,966 
           
Total liabilities and stockholders' equity   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.

Case Number: 10-10018 (MG) (Jointly Administered)

- 9 -

MESA AIR GROUP, INC., ET AL.
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.

Case Number: 10-10018 (MG) (Jointly Administered)

- 10 -

MESA AIR GROUP, INC., ET AL.
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
      December 31, 2010
November 30, 2010
October 31, 2010
September 30, 2010
August 31, 2010
               
Cash flows from operating activities:              
     Net income (loss) from continuing operations     $ (11,160) $ (304) $ (10,398) $ (82,285) $ (201,478)
     Net income (loss) from discontinued operations     $ -  
$ -  
$ -  
$ 262 
$ -  
     Net income (loss)     $ (11,160) $ (304) $ (10,398) $ (82,023) $ (201,478)
               
     Adjustments to reconcile net income/(loss) to net cash used              
          in operating activities:              
          Depreciation and amortization      2,822  2,951  2,942  2,879  3,160 
          Impairment charges     -   -   -   -   -  
          Amortization of deferred credits      105  (758) (794) (34,949) (870)
          Amortization of restricted stock awards      35  36  65  33  (23)
          Amortization of contract incentive payments     24  24  24  27  27 
          Provision for obsolete expendable parts and supplies     (1,111) 101  105  136  477 
     Changes in operating assets and liabilities:              
          Net (purchases) sales of investment securities     1,747  (66) (1,681) 1,478  (73)
          Receivables     (3,772) (9,066) 190  13,181  (1,496)
          Expendable parts and supplies     7,615  (589) (469) 67  555 
          Prepaid expenses and other assets     6,807  4,866  (1,623) 15,910  20,894 
          Other assets     50  50  50  -   690 
          Accounts Payable     (20,240) 9,047  9,960  (11,215) 456 
          Income taxes payable     (6,539) (180) (6,311) (44,252) (117,413)
          Air traffic liability     -   -   -   -   -  
          Other accrued liabilities     26,145 
(1,199)
14,661 
149,831 
343,235 
     Net cash provided by (used in) operating activities     2,527  4,912  6,722  11,104  48,142 
               
Cash flows from reorganization activities              
     Net cash provided by (used in) reorganization activities     (20,014)
(148)
(12,879)
(134,345)
(322,877)
               
     Total net cash provided by (used in) operating activities     (17,487)
4,765 
(6,157)
(123,241)
(274,735)
               
Cash flows from investing activities:              
     Capital expenditures      730  (514) (922) (1,607) 1,762 
     Proceeds from sale of flight equipment and expendable inventory              
     Change in restricted cash      72  -   -   659  774 
     Equity method investment     320  584  353  637  128 
     Investment deposits     -   -   -   -   -  
     Change in other assets      1  5  1,412  1  156 
     Net returns (payments) of lease and equipment deposits      (10)
(51)
(3)
899 
599 
     Net cash (used in) provided by investing activities     1,114 
24 
841 
588 
3,419 
               
Cash flows from financing activities:              
     Unsecured claims for rejected aircrafts     -   -   10,883  124,701  279,150 
     Principal payments on long-term borrowings     (2,731)
(2,744)
(2,817)
(2,523)
(2,902)
               
     Net cash (used in) provided by financing activities     (2,731)
(2,744)
8,066 
122,178 
276,248 
               
Increase (decrease) in cash and cash equivalents     (19,104) 2,044  2,749  (474) 4,932 
               
Cash and cash equivalents at beginning of period     62,526 
60,482 
57,733 
58,207 
53,275 
               
Cash and cash equivalents at end of period     43,422 
62,526 
60,482 
57,733 
58,207 

The accompanying notes are an integral part of the financial statements.

Case Number: 10-10018 (MG) (Jointly Administered)

- 11 -

MESA AIR GROUP, INC., ET AL.
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
      July 31, 2010
June 30, 2010
May 31, 2010
April 30, 2010
             
Cash flows from operating activities:            
     Net income (loss) from continuing operations     $ (27,888) $ (275,336) $ (2,633) $ (1,612)
     Net income (loss) from discontinued operations     $ -  
$ -  
$ -  
$ -  
     Net income (loss)     $ (27,888) $ (275,336) $ (2,633) $ (1,612)
             
     Adjustments to reconcile net income/(loss) to net cash used            
          in operating activities:            
          Depreciation and amortization      3,215  3,343  3,328  3,330 
          Impairment charges     -   -   -   -  
          Amortization of deferred credits      (1,565) (494) (1,357) (1,363)
          Amortization of restricted stock awards      21  32  33  16 
          Amortization of contract incentive payments     27  27  27  27 
          Provision for obsolete expendable parts and supplies     107  155  301  122 
     Changes in operating assets and liabilities:            
          Net (purchases) sales of investment securities     (1,405) 1,258  (408) (850)
          Receivables     (644) (9,283) (1,331) 3,072 
          Expendable parts and supplies     (308) (195) (155) (546)
          Prepaid expenses and other assets     (2,254) (5,165) 12,922  7,441 
          Other assets     50  50  50  188 
          Accounts Payable     10,882  (6,948) (1,398) (1,270)
          Income taxes payable     (16,148) (162,418) (1,557) (447)
          Air traffic liability     -   -   -   -  
          Other accrued liabilities     42,388 
452,445 
2,005 
1,259 
     Net cash provided by (used in) operating activities     6,476  (2,526) 9,828  9,367 
             
Cash flows from reorganization activities            
     Net cash provided by (used in) reorganization activities     (43,414)
(448,910)
(2,553)
(2,590)
             
     Total net cash provided by (used in) operating activities     (36,938)
(451,436)
7,275 
6,777 
             
Cash flows from investing activities:            
     Capital expenditures      -   2,314  (1,599) (781)
     Proceeds from sale of flight equipment and expendable inventory         -   -  
     Change in restricted cash      (8) 225  7  (377)
     Equity method investment     151  (785) 334  516 
     Investment deposits     -   -   -   -  
     Change in other assets      7  5  6  (130)
     Net returns (payments) of lease and equipment deposits      (90)
(14)
-  
-  
     Net cash (used in) provided by investing activities     60 
1,745 
(1,253)
(772)
             
Cash flows from financing activities:            
     Unsecured claims for rejected aircrafts     40,587  443,717  -   -  
     Principal payments on long-term borrowings     (2,599)
(2,695)
(2,673)
(2,629)
             
     Net cash (used in) provided by financing activities     37,988 
441,023 
(2,673)
(2,629)
             
Increase (decrease) in cash and cash equivalents     1,110  (8,668) 3,350  3,375 
             
Cash and cash equivalents at beginning of period     52,165 
60,833 
57,484 
54,109 
             
Cash and cash equivalents at end of period     53,275 
52,165 
60,833 
57,484 

The accompanying notes are an integral part of the financial statements.

Case Number: 10-10018 (MG) (Jointly Administered)

- 12 -

MESA AIR GROUP, INC., ET AL.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS

             
(In $U.S. 000's)     Month ended Month ended January 5, 2010 Filing to
      March 31, 2010
February 28, 2010
to January 31, 2010
       Date       
             
Cash flows from operating activities:            
     Net income (loss) from continuing operations     $ (2,328) $ (248) $ (162) $ (615,832)
     Net income (loss) from discontinued operations     $ (0)
$ 2 
$ 704 
$ 968 
     Net income (loss)     $ (2,328) $ (246) $ 542  $ (614,864)
             
     Adjustments to reconcile net income/(loss) to net cash used            
          in operating activities:            
          Depreciation and amortization      3,304  3,323  3,362  37,959 
          Impairment charges     -   -   (1,080) (1,080)
          Amortization of deferred credits      (512) (1,464) (1,338) (45,360)
          Amortization of restricted stock awards      86  52  65  452 
          Amortization of contract incentive payments     27  27  27  317 
          Provision for obsolete expendable parts and supplies     148  108  127  777 
     Changes in operating assets and liabilities:            
          Net (purchases) sales of investment securities     873  12  (885) -  
          Receivables     5,834  (5,470) 3,626  (5,158)
          Expendable parts and supplies     (171) (170) (13) 5,620 
          Prepaid expenses and other assets     (22,396) 16,335  19,133  72,871 
          Other assets     50  50  50  1,327 
          Accounts Payable     5,219  1,098  9,026  4,617 
          Income taxes payable     (3,230) (137) 569  (358,062)
          Air traffic liability     -   -   -   -  
          Other accrued liabilities     (2,339)
916 
9,188 
1,038,535 
     Net cash provided by (used in) operating activities     (15,435) 14,435  42,399  137,951 
             
Cash flows from reorganization activities            
     Net cash provided by (used in) reorganization activities     (1,186)
(854)
(1,060)
(990,830)
             
     Total net cash provided by (used in) operating activities     (16,621)
13,581 
41,339 
(852,879)
             
Cash flows from investing activities:            
     Capital expenditures      (3,324) (1,378) (1,538) (6,858)
     Proceeds from sale of flight equipment and expendable inventory     -   -   -   -  
     Change in restricted cash      688  1,104    3,144 
     Equity method investment     (238) (213) 340  2,126 
     Investment deposits     -   -   -   -  
     Change in other assets      9  16  11  1,500 
     Net returns (payments) of lease and equipment deposits      (404)
(1)
(47)
879 
     Net cash (used in) provided by investing activities     (3,269)
(471)
(1,235)
790 
             
Cash flows from financing activities:            
     Unsecured claims for rejected aircrafts     -   -   -   899,038 
     Principal payments on long-term borrowings     (4,708)
(1,874)
(1,867)
(32,761)
             
     Net cash (used in) provided by financing activities     (4,708)
(1,874)
(1,867)
866,277 
             
Increase (decrease) in cash and cash equivalents     (24,598) 11,236  38,238  14,189 
             
Cash and cash equivalents at beginning of period     78,707 
67,471 
29,233 
29,233 
             
Cash and cash equivalents at end of period     54,109 
78,707 
67,471 
43,422 

The accompanying notes are an integral part of the financial statements.

Case Number: 10-10018 (MG) (Jointly Administered)

- 13 -

MESA AIR GROUP, INC., ET AL.
 NOTES TO MONTHLY OPERATING REPORT

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 December 31, 2010, the Company served 94 cities in 38 states, the District of Columbia and Mexico and operated a fleet of 76 aircraft with approximately 450 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)

- 14 -

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 December 31, 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)

- 15 -

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:

(In $U.S. 000's)        
  Month ending Month ending Month ending Month ending
  December 31, 2010
November 30, 2010
October 31, 2010
September 30, 2010
Professional fees directly related to reorganization $ 1,479  $ 968  $ 949  $ 1,063 
Loss on rejection of aircraft leases (1) 18,480  (1,050) 12,870  129,427 
Cost related to the early return and sale of aircraft 54  516  413  509 
Abandonment of real property (1) -   -   -   -  
Write off of LOC for engine lease termination & return of aircraft -   -   -   -  
Write-off engine lease termination expenses -   (286) 432  3,545 
Other -  
-  
-  
(199)
     Total loss/(gain) on reorganization items 20,014 
148 
14,664 
134,345 
         
  Month ending Month ending Month ending Month ending
  August 31, 2010
July 31, 2010
June 30, 2010
May 31, 2010
Professional fees directly related to reorganization $ 1,048  $ 465  $ 1,059  $ 691 
Loss on rejection of aircraft leases 309,361  26,384  446,630  -  
Cost related to the early return and sale of aircraft 2,012  1,231  1,221  1,862 
Abandonment of real property -   215  -   -  
Write off of LOC for engine lease termination & return of aircraft 774  -   -   -  
Write-off engine lease termination expenses 9,665  15,119  -   -  
Other -  
-  
-  
-  
     Total loss/(gain) on reorganization items 322,859 
43,414 
448,910 
2,553 
         
        January 5, 2010
  Month ending Month ending Month ending to
  April 30, 2010
March 31, 2010
February 28, 2010
January 31, 2010
Professional fees directly related to reorganization $ 2,590  $ 1,186  $ 854  $ 1,060 
Loss on rejection of aircraft leases -   -   -   -  
Cost related to the early return and sale of aircraft -   -   -   -  
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 2,590 
4,525 
854 
1,060 
         
  Filing to      
  Date
     
Professional fees directly related to reorganization $ 13,412       
Loss on rejection of aircraft leases $ 942,103       
Cost related to the early return and sale of aircraft $ 7,818       
Abandonment of real property $ 215       
Write off of LOC for engine lease termination & return of aircraft $ 2,801       
Write-off engine lease termination expenses $ 29,786       
Other $ (199)
     
     Total loss/(gain) on reorganization items 995,936 
     
         
(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.

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 93 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 92 of these aircraft and estimated them to be approximately $910,000,000, which amount is subject to the final settlement between the Debtors and the applicable aircraft parties.

Case Number: 10-10018 (MG) (Jointly Administered)

- 16 -

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)

- 17 -

Liabilities Subject to Compromise consist of the following:

(In $U.S. 000's)        
  Dec 31, Nov 30, Oct 31, Sep 30,
  2010
2010
2010
2010
Accounts payable and other accrued expenses $ 61,817  $ 62,397  $ 62,781  $ 62,832 
Accrued interest expense 4,035  4,016  4,041  4,023 
Secured aircraft debt 359,859  362,572  365,245  367,935 
Other secured debt 5,605  5,622  5,695  5,908 
Unsecured debt 32,321  32,321  32,321  32,321 
Bankruptcy related unsecured claims 910,108  909,185  910,210  899,553 
Bankruptcy related admin claims 6,975  6,975  6,975  6,750 
Convertible bonds (1) 9,186 
9,143 
9,100 
9,057 
     Total liabilities subject to compromise 1,389,906 
1,392,232 
1,396,368 
1,388,378 
         
  Aug 31, July 31, June 30, May 31,
  2010
2010
2010
2010
Accounts payable and other accrued expenses $ 62,745  $ 64,373  $ 63,388  $ 62,058 
Accrued interest expense 4,055  4,803  4,805  4,997 
Secured aircraft debt 370,797  373,381  379,490  382,100 
Other secured debt 8,693  9,174  10,369  10,377 
Unsecured debt 32,321  32,321  32,321  51,158 
Bankruptcy related unsecured claims 775,751  498,402  454,439  -  
Bankruptcy related admin claims 5,850  4,050  3,975  -  
Convertible bonds (1) 9,014 
8,972 
8,930 
8,888 
     Total liabilities subject to compromise 1,269,227 
995,476 
957,716 
519,577 
         
  April 30, March 31, February 28, January 31,
  2010
2010
2010
2010
Accounts payable and other accrued expenses $ 62,364  $ 62,316  $ 68,090  $ 66,810 
Accrued interest expense 4,914  4,903  5,937  6,197 
Secured aircraft debt 384,767  387,289  391,771  393,692 
Other secured debt 10,385  10,393  10,407  10,414 
Unsecured debt 51,160  51,163  59,928  59,889 
Bankruptcy related unsecured claims -   -   -   -  
Bankruptcy related admin claims -   -   -   -  
Convertible bonds (1) 8,846 
8,804 
-  
-  
     Total liabilities subject to compromise 522,435 
524,868 
536,132 
537,002 
         
(1) Convertible bonds were listed under unsecured debt in January and February 2010.

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 93 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 92 of these aircraft and estimated them to be approximately $910,000,000, which amount is subject to the final settlement between the Debtors and the applicable aircraft parties.

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 $3.8 million of invoices received, not yet paid, as of December 31, 2010.

Case Number: 10-10018 (MG) (Jointly Administered)

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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 and the rejection of five (5) aircraft engine leases.  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 seven (7) aircraft engines and ninety-three (93) 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:

Name
  Type of Payment
  Amount Paid (Dec 1 - Dec 31)
Ornstein, Jonathan G   Wages / Expenses   53,129.05
Gillman, Brian S   Wages / Expenses   46,790.00
Lotz, Michael J   Wages / Expenses   46,153.89
Foley, Paul F   Wages / Expenses   40,331.93
Appling, Gary W   Wages / Expenses   38,249.89
Butler, David K   Wages / Expenses   34,615.24
Kranzow, Keith C   Wages / Expenses   29,884.60
Ferverda, Michael L   Wages / Expenses   21,153.86
Pappaioanou, Chris J   Wages / Expenses   20,428.85
Swigart, James   Wages / Expenses   19,416.38
Hornberg, Robert A   Wages / Expenses   18,923.11
Gomes, Edward P   Wages / Expenses   17,637.22
Brown, Kenley B   Wages / Expenses   16,384.58
Gumm, Ryan J   Wages / Expenses   0.00
Gust, Eric W   Wages / Expenses   0.00
Thayer, Richard   Wages / Expenses   0.00
Beleson, Robert   Wages / Expenses   0.00
Altobello, Daniel   Wages / Expenses   0.00
Manson III, Joseph   Wages / Expenses   0.00
Nostrand, Peter   Wages / Expenses   0.00
Parker, Maurice   Wages / Expenses   0.00
Bonilla, Carlos   Wages / Expenses   0.00
        $403,098.60

Case Number: 10-10018 (MG) (Jointly Administered)

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MESA AIR GROUP INC Reports

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