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8-K - PINNACLE AIRLINES CORP. FORM 8-K - PINNACLE AIRLINES CORPform8-k.htm



Exhibit 99.1
 
Pinnacle Airlines Corp. Announces Fourth Quarter 2010 Financial Results
 

Company reports Diluted Earnings per Share of $0.14 excluding special items

MEMPHIS, TN – February 17, 2011 – Pinnacle Airlines Corp. (NASDAQ: PNCL) (the “Company”) today reported fourth quarter 2010 net income of $2.6 million and diluted earnings per share (“EPS”) of $0.14, excluding a $10.9 million ($6.8 million after-tax) special charge to accrue for a signing bonus and related payroll taxes for pilots under a new tentative collective bargaining agreement (the “Pilot Signing Bonus”).  Including this charge, the Company reported a net loss of $4.3 million and a net loss per share of $0.23 for the fourth quarter 2010.  The Company reported net income and EPS of $5.6 million and $0.31, respectively, for the fourth quarter 2009.

Excluding the Pilot Signing Bonus, the Company’s consolidated net income for the full year 2010 was $19.6 million, a decrease of 16% compared to 2009 net income excluding special items.  Full year 2010 EPS excluding the Pilot Signing Bonus was $1.06, a decrease of 17% as compared to 2009 EPS excluding special items.  For a summary of the Pilot Signing Bonus and special items affecting 2009, please see the attached “Reconciliation of Non-GAAP Disclosures” tables.

In addition to the Pilot Signing Bonus, the Company’s fourth quarter 2010 financial results were negatively impacted by costs related to the initiation of new Q400 service for United Airlines.  Colgan Air, Inc., (“Colgan”), the Company’s regional turboprop operating subsidiary, accepted delivery of six Q400 aircraft during the fourth quarter.  Prior to placing the aircraft into service under the capacity purchase agreement with United, Colgan incurred interest and depreciation expense on the aircraft and labor costs associated with hiring and training crews for the aircraft.  Implementation of the Q400 fleet expansion will continue through the first quarter, after which the Company expects the Q400 growth to have a favorable impact to 2011 earnings.  In addition, the Company’s financial results for the fourth quarter were negatively impacted by winter storms in December.  As is common within the regional airline industry, the Company’s subsidiaries cancelled a higher percentage of flights during irregular operations than the Company’s major airline partners so as to minimize the number of passengers affected by weather cancellations.

“We had a challenging fourth quarter,” said Philip Trenary, the Company’s President and Chief Executive Officer.  “Winter storms impacted our operations during the quarter, at the same time that we were implementing growth with the delivery of Q400 aircraft.  I want to thank all of our People for the outstanding job they did working through ice and snow storms within our system.  I also want to express my appreciation to our customers who were impacted by winter storm disruptions in our system.  We share their frustration with the difficulties presented by winter storms and appreciate their patience and understanding.”

Mesaba Aviation, Inc. (“Mesaba”), which the Company acquired on July 1, 2010, achieved operating income of $3.8 million and $6.8 million for the three and twelve months ended December 31, 2010, respectively.  After taking into account interest expense on a $63.3 million note issued as part of the acquisition, Mesaba’s financial results have been accretive to the Company’s consolidated net income and EPS.  In addition, the Company’s operating cash flows were improved by approximately $23 million during 2010 due to the acquisition of Mesaba.

Fourth Quarter 2010 Accomplishments

·  
The Company took delivery of six Q400 aircraft during the fourth quarter of 2010 and placed three into service under the existing capacity purchase agreement with United Airlines.  As of December 31, 2010, the Company operated 22 Q400 aircraft as United Express.  The Company expects to take delivery of six Q400 aircraft in the first quarter of 2011 and place all but one of these aircraft into service by March 31.  The Company is scheduled to take delivery of one additional aircraft in April and one in August 2011.

 
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·  
The Company and the Air Line Pilots Association reached a tentative agreement in December 2010 covering pilots at all three of the Company’s operating subsidiaries.  The tentative agreement provides industry standard salary and benefits, which will result in a substantial increase in compensation for the majority of the Company’s pilots. The tentative agreement will also maintain the Company’s leading position within the industry, both in terms of attracting and retaining qualified pilots and in maintaining a highly productive and competitive workforce.   Pilots at the Company’s three operating subsidiaries are conducting a vote to ratify the tentative agreement through February 17.  If ratified, the majority of the new terms will go into effect March 1.

“I am extremely pleased that we were able to reach a tentative agreement with ALPA for an industry standard contract that brings together the pilots of Pinnacle, Mesaba and Colgan,” said Philip Trenary.  “The tentative agreement provides for competitive compensation for our pilots and will help ensure that we maintain our place as a leader within the regional industry.”

Fourth Quarter 2010 Financial Operating Results

During the fourth quarter of 2010, Pinnacle Airlines, Inc. (“Pinnacle”), the Company’s largest regional airline operating subsidiary, completed 102,766 block hours and 65,974 departures, decreases of 1% and 1%, respectively, compared to the same period in 2009.  Mesaba completed 62,831 block hours and 37,482 departures during the fourth quarter, with an average daily utilization of 7.6 block hours per day.  Colgan completed 33,996 block hours and 26,700 departures during the fourth quarter, increases of 1% and 1%, respectively, from the same period in 2009.

The Company recorded consolidated operating revenue during the fourth quarter of 2010 of $291.6 million, an increase of $82.4 million, or 39%, over the same period in 2009.  The increase in operating revenue was largely attributable to the acquisition of Mesaba, which contributed additional revenue of $69.8 million.

Excluding the Pilot Signing Bonus, Pinnacle reported fourth quarter 2010 operating income and operating margin of $12.4 million and 7.6%, a decrease of $1.1 million and 1.2 points, respectively, from the fourth quarter of 2009.  As previously discussed, Pinnacle’s results were negatively impacted by winter storms in December.

Colgan reported an operating loss and negative margin of $1.9 million and 3.2%, a decrease of $6.2 million and 10.8 points from the same period in 2009.  This decline is primarily related to increases in depreciation for Q400 aircraft delivered during the quarter and in salaries and benefits and training costs due to a 17% increase in headcount for the growth of Colgan’s operating fleet of Q400 aircraft.  In addition, Colgan’s maintenance costs increased by 52% as compared to the fourth quarter of 2009, primarily as a result of increased repair costs and heavy maintenance checks on Colgan’s Saab fleet during the quarter.  These increased maintenance costs are related to the timing of heavy maintenance requirements within the Saab fleet and the return of two Saab aircraft under lease, and are not expected to continue long-term.

Mesaba reported fourth quarter 2010 operating income and operating margin of $3.8 million and 5.4%, respectively.  Operating income at Mesaba was in line with management’s expectations based on targeted results under Mesaba’s capacity purchase agreements with Delta Air Lines.

Net nonoperating expense of $10.4 million for the three months ended December 31, 2010 increased by approximately $0.3 million as compared to the same period in 2009.  This increase is primarily related to the interest on a $63.3 million note issued as part of the acquisition of Mesaba.  In addition, Colgan incurred additional interest related to eight owned Q400 aircraft that delivered during the second half of 2010.  Revenue will increase in 2011 under the Company’s capacity purchase agreement with United to compensate for the increased ownership costs related to these new aircraft.

Cash and Cash Equivalents and Operating Cash Flow

The Company ended the quarter with total cash and cash equivalents of $100.1 million   Operating cash flow was $5.0 million in the fourth quarter, meeting management’s previously announced expectations.

 
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About Pinnacle Airlines Corp.
 
Pinnacle Airlines Corp. (NASDAQ: PNCL), an airline holding company, is the parent company of Pinnacle Airlines, Inc.; Colgan Air, Inc.; and Mesaba Aviation, Inc.  Pinnacle Airlines, Inc. operates a fleet of 142 regional jets as Delta Connection in the United States, Belize, Mexico, and Canada. Colgan Air, Inc. operates a fleet of 55 regional turboprops as Continental Connection, United Express and US Airways Express in the northeastern United States and Texas.  Mesaba Aviation, Inc. operates a fleet of 60 regional jets and 28 jet-prop aircraft as Delta Connection in the United States.  The corporate headquarters is located in Memphis, Tenn.  Airport hub operations are located in Atlanta, Boston, Detroit, Newark, New York – John F. Kennedy airport, Washington Dulles, Houston, Memphis, Minneapolis/St. Paul, and Salt Lake City.  For further information about the Company, please refer to the Company’s Form 10-K for the year ended December 31, 2010, which will be filed soon with the SEC.
 
Non-GAAP Disclosures

This release and certain tables accompanying this release include certain financial information not prepared in accordance with generally accepted accounting principles ("GAAP").  For 2010, non-GAAP items include operating income, net income, and diluted EPS for the three and twelve months ended December 31, 2010, excluding the previously mentioned one-time charge for the Pilot Signing Bonus covering Pinnacle’s pilots. For 2009, these non-GAAP items include the Company's net nonoperating expense, net income, and diluted EPS for the three and twelve months ended December 31, 2009, excluding special charges related to the excess of property insurance proceeds over cost basis of aircraft, ineffective portion of cash flow hedge, reversal of income tax reserves and related accrued interest, net investment gain, and the gain on debt extinguishment. The Company believes that this information is useful to investors as it indicates more clearly the Company's comparative year-to-year results. None of this information should be considered a substitute for any measures prepared in accordance with GAAP. The Company has included its reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in the accompanying schedules.

Forward-Looking Statements

This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.  Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission, which are available to investors at our website or online from the Commission.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove erroneous, actual results may vary materially from results that were anticipated or projected. The Company does not intend to update these forward-looking statements before its next required filing with the Securities and Exchange Commission.

For further information, please contact Joe Williams, at (901) 346-6162, or visit our website at www.pncl.com.
###

 
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Pinnacle Airlines Corp.
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)


   
Three Months Ended December 31,
 
   
2010
   
2009
 
             
Operating revenues:
           
  Regional airline services
  $ 286,966     $ 206,635  
  Other
    4,666       2,580  
Total operating revenues
    291,632       209,215  
                 
Operating expenses:
               
  Salaries, wages and benefits
    102,414       57,015  
  Aircraft rentals
    33,932       30,069  
  Ground handling services
    26,612       22,560  
  Aircraft maintenance, materials and repairs
    41,491       23,275  
  Other rentals and landing fees
    23,669       16,790  
  Aircraft fuel
    6,777       6,142  
  Commissions and passenger related expenses
    5,740       5,205  
  Depreciation and amortization
    11,220       8,659  
  Other
    36,428       21,705  
Total operating expenses
    288,283       191,420  
                 
Operating income
    3,349       17,795  
                 
Operating income as a percentage of operating revenues
    1.1 %     8.5 %
                 
Nonoperating (expense) income:
               
  Interest expense, net
    (11,451 )     (10,145 )
  Investment gain (loss), net
    1,002       (67 )
  Miscellaneous income, net
    15       122  
Total nonoperating expense
    (10,434 )     (10,090 )
                 
Income (loss) before income taxes
    (7,085 )     7,705  
Income tax benefit (expense)
    2,835       (2,062 )
Net (loss)  income
  $ (4,250 )   $ 5,643  
                 
Basic and diluted earnings (loss) per share
  $ (0.23 )   $ 0.31  
                 
Shares used in computing basic earnings (loss)  per share
    18,165       17,969  
                 
Shares used in computing diluted earnings (loss) per share
    18,165       18,381  


 
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Pinnacle Airlines Corp.
Consolidated Statements of Income
(in thousands, except per share data)

   
Years Ended December 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
Operating revenues:
           
  Regional airline services
  $ 1,004,496     $ 836,249  
  Other
    16,271       9,259  
Total operating revenues
    1,020,767       845,508  
                 
Operating expenses:
               
  Salaries, wages and benefits
    309,791       225,014  
  Aircraft rentals
    127,987       120,748  
  Ground handling services
    101,903       93,182  
  Aircraft maintenance, materials and repairs
    134,305       98,075  
  Other rentals and landing fees
    81,211       70,777  
  Aircraft fuel
    26,011       22,110  
  Commissions and passenger related expenses
    21,830       20,919  
  Depreciation and amortization
    39,147       35,399  
  Other
    117,049       76,595  
  Impairment and aircraft retirement costs
    -       1,980  
Total operating expenses
    959,234       764,799  
                 
Operating income
    61,533       80,709  
                 
Operating income as a percentage of operating revenues
    6.0 %     9.5 %
Nonoperating (expense) income:
               
  Interest expense, net
    (40,745 )     (42,915 )
  Investment gain, net
    1,776       3,877  
  Miscellaneous (expense) income, net
    (1,681 )     567  
Total nonoperating expense
    (40,650 )     (38,471 )
                 
Income before income taxes
    20,883       42,238  
Income tax expense
    (8,113 )     (382 )
Net income
  $ 12,770     $ 41,856  
                 
Basic earnings per share
  $ 0.70     $ 2.33  
                 
Diluted earnings per share
  $ 0.69     $ 2.31  
                 
Shares used in computing basic per share
    18,132       17,969  
                 
Shares used in computing diluted earnings per share
    18,558       18,133  
 

 
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Pinnacle Airlines Corp.
Consolidated Balance Sheets
(in thousands, except share data)

             
   
December 31, 2010
   
December 31, 2009
 
 
 
(Unaudited)
       
Assets            
Current assets
           
Cash and cash equivalents
  $ 100,084     $ 91,574  
Restricted cash
    8,219       3,115  
Receivables, net of allowances of $85 in 2010 and $213 in 2009
    39,401       34,518  
Spare parts and supplies, net of allowances of $6,682 in 2010 and $4,749 in 2009
    34,195       19,472  
Prepaid expenses and other assets
    6,002       3,508  
Deferred income taxes, net of allowance
    14,832       10,406  
Income taxes receivable
    1,201       40,803  
Total current assets
    203,934       203,396  
Property and equipment
               
Flight equipment
    971,512       756,815  
Aircraft pre-delivery payments
    21,641       12,049  
Other property and equipment
    65,544       48,710  
Less accumulated depreciation
    (123,559 )     (86,501 )
Net property and equipment
    935,138       731,073  
                 
Investments
    1,852       2,723  
Other assets, primarily insurance receivables
    308,487       317,659  
Debt issuance costs, net of amortization of $1,198 in 2010 and $5,146 in 2009
    4,799       3,561  
Goodwill
    22,282       18,422  
Intangible assets, net of amortization of $8,709 in 2010 and  $7,179 in 2009
    22,306       12,586  
Total assets
  $ 1,498,798     $ 1,289,420  
                 
Liabilities and stockholders’ equity
               
Current liabilities
               
Current maturities of long-term debt
  $ 56,414     $ 36,085  
Senior convertible notes
    -       30,596  
Pre-delivery payment facility
    19,337       2,027  
Accounts payable
    44,389       24,306  
Deferred revenue
    26,530       24,363  
Accrued expenses and other current liabilities
    99,670       60,610  
Total current liabilities
    246,340       177,987  
Noncurrent pre-delivery payment facility
    -       4,910  
Long-term debt, less current maturities
    664,290       519,234  
Deferred revenue, net of current portion
    158,800       177,711  
Deferred income taxes, net of allowance
    29,328       13,532  
Other liabilities
    280,547       293,809  
                 
Commitments and contingencies
               
                 
Stockholders’ equity
               
     Common stock, $0.01 par value; 40,000,000 shares authorized;
23,145,908 and 22,786,743 shares issued in 2010 and 2009, respectively
    231       228  
     Treasury stock, at cost, 4,493,327 and 4,450,092 shares in 2010 and 2009, respectively
    (68,479 )     (68,152 )
     Additional paid-in capital
    124,652       121,513  
     Accumulated other comprehensive loss
    (12,760 )     (14,431 )
     Retained earnings
    75,849       63,079  
Total stockholders’ equity
    119,493       102,237  
Total liabilities and stockholders’ equity
  $ 1,498,798     $ 1,289,420  
 

 
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Pinnacle Airlines Corp.
Condensed Consolidated Statements of Cash Flows
 (in thousands)

   
Years Ended December 31,
 
   
2010
   
2009
 
   
(Unaudited)
       
             
Cash provided by operating activities
  $ 109,402     $ 105,641  
Cash (used in) provided by investing activities
    (13,539 )     24,224  
Cash used in financing activities
    (87,353 )     (107,760 )
Net increase in cash and cash equivalents
    8,510       22,105  
Cash and cash equivalents at beginning of period
    91,574       69,469  
Cash and cash equivalents at end of period
  $ 100,084     $ 91,574  


 
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Pinnacle Airlines Corp.
Pinnacle Operating Statistics (Unaudited)

   
Three Months Ended December 31,
   
Years Ended December 31,
 
   
2010
   
2009
   
Change
   
2010
   
2009
   
Change
 
Other Data:
                                   
Revenue passengers (in thousands)
    2,606       2,655       (2 )%     10,537       10,771       (2 )%
Revenue passenger miles (“RPMs”) (in thousands)
    1,069,927       1,135,489       (6 )%     4,490,065       4,640,392       (3 )%
Available seat miles (“ASMs”) (in thousands)
    1,411,078       1,470,353       (4 )%     6,009,188       6,108,609       (2 )%
Passenger load factor
    75.8 %     77.2 %  
(1.4) pts.
      74.7 %     76.0 %  
(1.3) pts.
 
Operating revenue per ASM (in cents)
    11.51       10.39       11 %     10.78       10.12       7 %
Operating cost per ASM (in cents)
    11.41       9.47       20 %     9.96       9.13       9 %
Operating revenue per block hour
  $ 1,581     $ 1,470       8 %   $ 1,520     $ 1,449       5 %
Operating cost per block hour
  $ 1,566     $ 1,340       17 %   $ 1,404     $ 1,308       7 %
Block hours
    102,766       103,915       (1 )%     426,285       426,432       (0 )%
Departures
    65,974       66,619       (1 )%     274,850       273,077       1 %
Average daily utilization (block hours)
    7.87       7.99       (2 )%     8.22       8.26       (0 )%
Average stage length (miles)
    410       422       (3 )%     419       426       (2 )%
                                                 
Number of operating aircraft (end of period)
                                               
    CRJ-200
    126       126       0 %                        
    CRJ-900
    16       16       0 %                        
Employees (end of period)
    3,796       3,675       3 %                        


 
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Pinnacle Airlines Corp.
Mesaba Operating Statistics (Unaudited)

   
Three Months Ended
December 31, 2010(1)
   
Year Ended
December 31, 2010(1)
 
             
Other Data:
           
Revenue passengers (in thousands)
    1,482       3,121  
RPMs (in thousands)
    852,482       1,763,373  
ASMs (in thousands)
    1,125,056       2,308,420  
Passenger load factor
    75.8 %     76.4 %
Operating revenue per ASM (in cents)
    6.21       6.12  
Operating cost per ASM (in cents)
    5.87       5.83  
Operating revenue per block hour
  $ 1,112     $ 1,079  
Operating cost per block hour
  $ 1,051     $ 1,027  
Block hours
    62,831       131,017  
Departures
    37,482       80,173  
Average daily utilization (block hours)
    7.63       7.84  
Average stage length (miles)
    543       534  
                 
Number of operating aircraft (end of period)
               
    CRJ-900
    41           
    CRJ-200
    19           
    Saab 340 B+
    26           
Employees (end of period)
    2,149           

(1) 
As previously discussed, the acquisition of Mesaba was completed on July 1, 2010. As such, Mesaba’s 2009 data is not presented. Mesaba’s 2010 data includes the period from the acquisition date through the periods being reported.


 
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Pinnacle Airlines Corp.
Colgan Operating Statistics (Unaudited)

   
Three Months Ended December 31,
   
Years Ended December 31,
 
   
2010
   
2009
   
Change
   
2010
   
2009
   
Change
 
Pro-rate Agreements:
                                   
Revenue passengers (in thousands)
    290       284       2 %     1,157       1,168       (1 )%
RPMs (in thousands)
    50,006       49,747       1 %     199,852       203,848       (2 )%
ASMs (in thousands)
    98,927       108,231       (9 )%     415,391       456,664       (9 )%
Passenger load factor
    50.5 %     46.0 %  
4.5 pts.
      48.1 %     44.6 %  
3.5 pts.
 
Passenger yield (in cents)
    74.24       76.78       (3 )%     76.76       75.56       2 %
Operating revenue per ASM (in cents)
    37.53       35.29       6 %     36.93       33.73       9 %
Operating revenue per block hour
  $ 1,858     $ 1,721       8 %   $ 1,839     $ 1,692       9 %
Block hours
    19,979       22,189       (10 )%     83,440       91,023       (8 )%
Departures
    17,712       18,957       (7 )%     74,132       79,866       (7 )%
Fuel consumption (in thousands of gallons)
    2,653       2,654       (0 )%     9,416       10,994       (14 )%
Average price per gallon
  $ 2.55     $ 2.31       10 %   $ 2.76     $ 2.01       37 %
Average fare
  $ 128     $ 134       (4 ) %   $ 133     $ 132       1 %

   
Three Months Ended December 31,
   
Years Ended December 31,
 
   
2010
   
2009
   
Change
   
2010
   
2009
   
Change
 
Capacity Purchase Agreements:
                                   
Revenue passengers (in thousands)
    433       372       16 %     1,575       1,533       3 %
RPMs (in thousands)
    137,291       112,109       22 %     488,892       437,221       12 %
ASMs (in thousands)
    203,222       162,686       25 %     705,767       638,821       10 %
Passenger load factor
    67.6 %     68.9 %  
(1.3)pts.
      69.3 %     68.4 %  
0.9 pts.
 
Operating revenue per ASM (in cents)
    10.89       11.14       (2 )%     10.97       11.45       (4 ) %
Operating revenue per block hour
  $ 1,579     $ 1,566       1 %   $ 1,589     $ 1,551       2 %
Block hours
    14,017       11,577       21 %     48,697       47,143       3 %
Departures
    8,988       7,509       20 %     31,733       30,702       3 %

   
Three Months Ended December 31,
   
Years Ended December 31,
 
   
2010
   
2009
   
Change
   
2010
   
2009
   
Change
 
Total Colgan:
                                   
Block hours
    33,996       33,766       1 %     132,137       138,166       (4 )%
Departures
    26,700       26,466       1 %     105,865       110,568       (4 )%
ASMs (in thousands)
    302,149       270,917       12 %     1,121,158       1,095,485       2 %
Total operating cost per ASM (in cents)
    20.27       19.26       5 %     20.17       18.89       7 %
Total operating cost per block hour
  $ 1,801     $ 1,545       17 %   $ 1,711     $ 1,498       14 %
                              7.45       7.84       (5 )%
Average daily utilization (block hours)
    7.49       7.65       (2 )%     233       223       4 %
Average stage length (miles)
    241       229       5 %                        
Number of operating aircraft (end of period)
                                               
     Saab 340
    33       34       (3 )%                        
     Q400
    22       14       57 %                        
Employees
    1,533       1,307       17 %                        


 
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Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)

   
Three Months Ended December 31,
 
   
2010
   
2009
 
Operating income:
           
Operating income in accordance with GAAP
  $ 3,349     $ 17,794  
Add:  Pilot Signing Bonus
    10,873       -  
Non-GAAP operating income
  $ 14,222     $ 17,794  
                 
Net income (loss):
               
Net income (loss) in accordance with GAAP
  $ (4,250 )   $ 5,643  
Add:  Pilot Signing Bonus, net of tax
    6,839       -  
Non-GAAP net income
  $ 2,589     $ 5,643  
                 
Diluted earnings (loss) per share:
               
Diluted earnings (loss) per share in accordance with GAAP
  $ (0.23 )   $ 0.31  
Add:  Pilot Signing Bonus, net of tax
    0.37       -  
Non-GAAP diluted earnings per share
  $ 0.14     $ 0.31  



 
11

 

Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)

   
Years Ended December 31,
 
   
2010
   
2009
 
             
Net income:
           
Net income in accordance with GAAP
  $ 12,770     $ 41,856  
Add: Pilot Signing Bonus, net of tax
    6,839       -  
Add: Aircraft retirement charges, net of tax
    -       1,218  
Deduct: Excess of property insurance proceeds over cost basis of  aircraft, net of tax
    -       (514 )
Deduct:  Net investment gain, net of tax
    -       (3,713 )
Add:  Ineffective portion of interest rate hedge, net of tax
    -       876  
Deduct:  Reversal of interest on income tax reserves, net of tax
    -       (1,842 )
Deduct:  Gain on repurchase of senior convertible notes, net of tax
    -       (1,118 )
Deduct:  IRS settlement
    -       (13,551 )
Non-GAAP net income
  $ 19,609     $ 23,212  
                 
Diluted earnings per share:
               
Diluted earnings per share in accordance with GAAP
  $ 0.69     $ 2.31  
Add: Pilot Signing Bonus, net of tax
    0.37       -  
Add: Aircraft retirement charges, net of tax
    -       0.07  
Deduct: Excess of property insurance proceeds over cost basis of aircraft, net of tax
    -       (0.03 )
Deduct:  Net investment gain, net of tax
    -       (0.20 )
Add:  Ineffective portion of interest rate hedge, net of tax
    -       0.05  
Deduct:  Reversal of interest on income tax reserves, net of tax
    -       (0.11 )
Deduct:  Gain on repurchase of senior convertible notes, net of tax
    -       (0.06 )
Deduct:  IRS settlement
    -       (0.75 )
Non-GAAP diluted earnings per share
  $ 1.06     $ 1.28  



 
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