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 October 31, 2010 |
Federal Tax ID # 85-0302351 |
Debtors' Address: |
410 N 44th Street Suite 700 |
Phoenix, AZ 85008 |
Monthly Net Income/(Loss): ($10.398) 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: November 22, 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 -
SCHEDULE OF DISBURSEMENTS | ||||
Disbursements for | Disbursements for | Disbursements for | ||
Case | month ended | month ended | month ended | |
Debtor Name
|
Number
|
October 31, 2010
|
September 30, 2010
|
August 31, 2010
|
Mesa Air New York, Inc. | 10-10017 | - | - | - |
Mesa Air Group, Inc. | 10-10018 | 1,510,870 | 967,890 | 1,520,408 |
Mesa In-Flight, Inc. | 10-10019 | - | - | - |
Freedom Airlines, Inc. | 10-10020 | 306,684 | 986,910 | 1,681,799 |
Mesa Airlines, Inc. | 10-10021 | 37,390,290 | 39,452,779 | 32,573,328 |
MPD, Inc. | 10-10022 | 129,536 | 142,280 | 86,100 |
Ritz Hotel Management Corp. | 10-10023 | - | - | - |
Regional Aircraft Services, Inc. | 10-10024 | 533,859 | 498,269 | 552,482 |
Air Midwest, Inc. | 10-10025 | 211 | - | - |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 8,107,204 | 3,345,808 | 6,858,455 |
Nilchi, Inc. | 10-10027 | - | - | - |
Patar, Inc. | 10-10028 | - | - | - |
Disbursements for | Disbursements for | Disbursements for | ||
Case | month ended | month ended | month ended | |
Debtor Name
|
Number
|
July 31, 2010
|
June 30, 2010
|
May 31, 2010
|
Mesa Air New York, Inc. | 10-10017 | - | - | - |
Mesa Air Group, Inc. | 10-10018 | 1,421,392 | 1,852,506 | 2,487,310 |
Mesa In-Flight, Inc. | 10-10019 | - | - | - |
Freedom Airlines, Inc. | 10-10020 | 1,615,132 | 2,019,124 | 1,898,294 |
Mesa Airlines, Inc. | 10-10021 | 42,081,014 | 49,986,705 | 36,930,775 |
MPD, Inc. | 10-10022 | 107,657 | 136,761 | 151,703 |
Ritz Hotel Management Corp. | 10-10023 | - | - | - |
Regional Aircraft Services, Inc. | 10-10024 | 571,129 | 803,034 | 531,676 |
Air Midwest, Inc. | 10-10025 | 342 | 10,500 | 51 |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 6,127,031 | 7,688,568 | 6,541,883 |
Nilchi, Inc. | 10-10027 | - | - | - |
Patar, Inc. | 10-10028 | - | - | - |
Disbursements for | Disbursements for | Disbursements for | ||
Case | month ended | month ended | month ended | |
Debtor Name
|
Number
|
April 30, 2010
|
March 31, 2010
|
February 28, 2010
|
Mesa Air New York, Inc. | 10-10017 | - | - | - |
Mesa Air Group, Inc. | 10-10018 | 1,688,784 | 1,348,840 | 1,244,806 |
Mesa In-Flight, Inc. | 10-10019 | - | - | - |
Freedom Airlines, Inc. | 10-10020 | 2,339,613 | 2,275,702 | 1,945,715 |
Mesa Airlines, Inc. | 10-10021 | 45,289,526 | 77,630,776 | 30,568,004 |
MPD, Inc. | 10-10022 | 140,811 | 150,175 | 156,100 |
Ritz Hotel Management Corp. | 10-10023 | - | - | - |
Regional Aircraft Services, Inc. | 10-10024 | 526,302 | 262,892 | 519,981 |
Air Midwest, Inc. | 10-10025 | 21 | 2,249 | 147 |
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 8,900,924 | 7,614,996 | 5,833,085 |
Nilchi, Inc. | 10-10027 | - | - | - |
Patar, Inc. | 10-10028 | - | - | - |
Disbursements for | ||||
Case | January 5, 2010 to | |||
Debtor Name
|
Number
|
January 31, 2010
|
||
Mesa Air New York, Inc. | 10-10017 | - | ||
Mesa Air Group, Inc. | 10-10018 | 1,128,964 | ||
Mesa In-Flight, Inc. | 10-10019 | - | ||
Freedom Airlines, Inc. | 10-10020 | 1,137,194 | ||
Mesa Airlines, Inc. | 10-10021 | 20,791,947 | ||
MPD, Inc. | 10-10022 | 102,356 | ||
Ritz Hotel Management Corp. | 10-10023 | - | ||
Regional Aircraft Services, Inc. | 10-10024 | 575,558 | ||
Air Midwest, Inc. | 10-10025 | 195 | ||
Mesa Air Group Airline Inventory Management, LLC | 10-10030 | 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 | ||||
October 31, 2010 and filing to date | 5 | |||
Condensed Consolidated Debtors-in-Possession Balance Sheets as of October 31, 2010 | ||||
and all subsequent periods post-petition date | 8 | |||
Condensed Consolidated Debtors-in-Possession Statement of Cash Flows for the month ended | ||||
October 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. 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.
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.
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.
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. 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 October 31, 2010, the Company served 88 cities in 34 states, the District of Columbia, Canada, and Mexico and
operated a fleet of 77 aircraft with approximately 460 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 October 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: 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: 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 $6.6 million of invoices received, not yet paid,
as of October 31, 2010.
Case Number: 10-10018 (MG) (Jointly Administered)
- 18 -
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:
Case Number: 10-10018 (MG) (Jointly Administered)
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MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS
(In $U.S. 000's)
Month ended
Month ended
Month ended
Month ended
October 31, 2010
September 30, 2010
August 31, 2010
July 31, 2010
Revenues:
Passenger
$ 57,080
$ 60,733
$ 65,145
$ 65,917
Cargo
-
-
-
-
Other
334
456
406
425
Total Revenue
57,413
61,188
65,551
66,342
Operating Expenses:
Flight Operations (1)
14,983
14,270
16,942
17,538
Flight Operations - Nonoperating Aircraft (1)
25
1,029
1,068
2,622
Aircraft Fuel
18,283
17,392
18,643
18,190
Aircraft and traffic servicing
3,798
3,567
4,008
3,929
Maintenance
13,481
8,300
12,508
17,148
Promotion and sales
468
363
449
472
General and administrative
4,322
4,804
3,501
3,095
Depreciation and amortization
2,942
2,879
3,160
3,215
Impairment of long-lived asset
-
-
-
-
Total operating expenses
58,304
52,605
60,279
66,208
Operating Income (Loss)
(890)
8,584
5,272
134
Nonoperating income (expense)
Interest Income
370
315
370
393
Interest Expense
(1,199)
(954)
(567)
(1,316)
Other, net (Note 9)
(336)
(708)
(469)
(133)
Total Nonoperating income (expense)
(1,165)
(1,348)
(666)
(1,057)
Income (Loss) before reorganization items and income taxes
(2,055)
7,236
4,605
(923)
Income taxes
(6,322)
(44,824)
(116,776)
(16,449)
Loss (Gain) on reorganization items (Note 5) (1)
14,664
134,345
322,859
43,414
Income (Loss) before discontinued operations
(10,398)
(82,285)
(201,478)
(27,888)
Loss (Gain) from discontinued operations
-
(262)
-
-
Net Income (Loss)
(10,398)
(82,023)
(201,478)
(27,888)
The accompanying notes are an integral part of the financial statements.
(1) The majority of reorganization expense in July, August, September and October 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
Month ended
June 30, 2010
May 31, 2010
April 30, 2010
March 31, 2010
Revenues:
Passenger
$ 73,955
$ 65,209
$ 70,078
$ 72,669
Cargo
-
-
-
-
Other
469
424
509
474
Total Revenue
74,424
65,632
70,586
73,143
Operating Expenses:
Flight Operations (1)(2)
17,654
18,692
20,426
20,697
Flight Operations - Nonoperating Aircraft (1)(2)
752
5,790
4,615
4,512
Aircraft Fuel
17,900
18,635
18,635
18,745
Aircraft and traffic servicing
3,751
3,604
4,258
4,506
Maintenance
12,142
12,288
14,217
16,001
Promotion and sales
738
468
263
471
General and administrative
4,449
3,169
3,330
3,316
Depreciation and amortization
3,343
3,328
3,330
3,304
Impairment of long-lived asset
-
-
-
-
Total operating expenses
60,729
65,974
69,072
71,551
Operating Income (Loss)
13,695
(341)
1,514
1,592
Nonoperating income (expense)
Interest Income
441
370
381
370
Interest Expense
(1,270)
(1,349)
(1,334)
(1,381)
Other, net (Note 9)
(1,693)
(312)
(519)
244
Total Nonoperating income (expense)
(2,523)
(1,291)
(1,472)
(767)
Income (Loss) before reorganization items and income taxes
11,173
(1,632)
42
824
Income taxes
(162,400)
(1,553)
(937)
(1,373)
Loss (Gain) on reorganization items (Note 5) (3)
448,910
2,553
2,590
4,525
Income (Loss) before discontinued operations
(275,336)
(2,633)
(1,612)
(2,328)
Loss (Gain) from discontinued operations
-
-
-
-
Net Income (Loss)
(275,336)
(2,633)
(1,612)
(2,328)
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.
(2) 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.
(3) The majority of reorganization expense in June 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
January 5, 2010
Filing
February 28, 2010
to January 31, 2010
to Date
Revenues:
Passenger
$ 65,457
$ 61,488
$ 657,728
Cargo
-
-
-
Other
463
381
4,341
Total Revenue
65,921
61,869
662,069
Operating Expenses:
Flight Operations
19,787
20,719
181,709
Flight Operations - Nonoperating Aircraft
5,291
2,163
27,865
Aircraft Fuel
14,992
15,953
177,366
Aircraft and traffic servicing
3,701
3,897
39,019
Maintenance
13,788
10,826
130,701
Promotion and sales
333
190
4,215
General and administrative
3,342
3,040
36,367
Depreciation and amortization
3,322
2,926
31,749
Impairment of long-lived asset
-
-
-
Total operating expenses
64,556
59,714
628,991
Operating Income (Loss)
1,365
2,155
33,078
Nonoperating income (expense)
Interest Income
369
322
3,700
Interest Expense
(1,565)
(1,343)
(12,279)
Other, net (Note 9)
309
(323)
(3,941)
Total Nonoperating income (expense)
(887)
(1,344)
(12,520)
Income (Loss) before reorganization items and income taxes
478
811
20,558
Income taxes
(132)
(87)
(350,853)
Loss (Gain) on reorganization items (Note 5)
854
1,060
975,774
Income (Loss) before discontinued operations
(244)
(162)
(604,364)
Loss (Gain) from discontinued operations
2
(704)
(964)
Net Income (Loss)
(246)
542
(603,400)
The accompanying notes are an integral part of the financial statements.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS
(In $U.S. 000's, except share data)
October 31, 2010
September 30, 2010
August 31, 2010
July 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents
60,482
57,733
58,207
53,275
Short-term investments
1,681
-
1,478
1,405
Restricted investments
9,692
9,692
10,351
11,125
Receivables, net of allowance
6,088
6,278
19,458
17,962
Inventories, net of allowance
27,000
26,636
26,840
27,872
Prepaid expenses and other assets
96,269
95,320
111,230
132,124
Total current assets
201,212
195,659
227,565
243,763
Property and equipment, net
494,442
496,856
515,264
537,707
Security and other deposits
6,433
6,430
7,329
7,929
Other assets (1)
478,177
476,879
431,586
134,127
Total Assets
1,180,264
1,175,823
1,181,745
923,525
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
6,622
5,891
3,638
1,990
Air traffic liability
5,171
4,950
4,653
4,276
Other accrued expenses
52,890
42,611
54,587
52,174
Income tax payable (1)
2,597
2,586
2,217
(180,339)
Deferred revenue and other current liabilities
-
-
-
-
Total current liabilities not subject to compromise
67,279
56,039
65,095
(121,899)
Deferred credits and other liabilities
57,827
59,107
95,672
96,435
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
214,546
215,827
252,391
253,154
Liabilities subject to compromise (Note 6)
1,396,368
1,388,378
1,269,227
995,476
Total liabilities
1,678,194
1,660,244
1,586,713
1,126,731
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
118,676
118,676
118,676
Deferred Stock Compensation
1,732
1,667
1,634
1,658
Retained Earnings
(615,162)
(604,764)
(525,279)
(323,540)
Total stockholders' equity
(497,930)
(484,421)
(404,968)
(203,206)
Total liabilities and stockholders' equity
1,180,264
1,175,823
1,181,745
923,525
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)
June 30, 2010
May 31, 2010
April 30, 2010
March 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents
52,165
60,833
57,484
54,109
Short-term investments
-
1,258
850
-
Restricted investments
11,117
11,341
11,348
10,971
Receivables, net of allowance
17,307
8,024
6,694
9,766
Inventories, net of allowance
27,670
27,631
27,776
27,352
Prepaid expenses and other assets
129,831
127,244
140,167
147,607
Total current assets
238,090
236,333
244,319
249,806
Property and equipment, net
540,650
546,281
547,983
550,505
Security and other deposits
8,393
12,192
12,192
12,192
Other assets
134,389
133,713
134,156
133,884
Total Assets
921,522
928,518
938,650
946,387
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
3,220
3,415
4,061
5,912
Air traffic liability
4,767
4,909
4,140
4,146
Other accrued expenses
40,641
48,317
49,207
49,282
Income tax payable
(164,192)
(1,774)
(216)
231
Deferred revenue and other current liabilities
-
-
-
-
Total current liabilities not subject to compromise
(115,564)
54,868
57,192
59,570
Deferred credits and other liabilities
97,989
97,388
99,738
101,968
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
254,708
254,107
256,457
258,688
Liabilities subject to compromise (Note 6)
957,716
519,577
522,435
524,868
Total liabilities
1,096,860
828,552
836,085
843,126
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
1,637
1,605
1,571
1,555
Retained Earnings
(295,652)
(20,316)
(17,683)
(16,971)
Total stockholders' equity
(175,338)
99,966
102,565
103,261
Total liabilities and stockholders' equity
921,522
928,518
938,650
946,387
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS
(In $U.S. 000's, except share data)
February 28, 2010
January 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents
78,707
67,471
Short-term investments
873
885
Restricted investments
11,660
12,764
Receivables, net of allowance
15,600
10,130
Inventories, net of allowance
27,329
27,267
Prepaid expenses and other assets
125,212
141,547
Total current assets
259,380
260,063
Property and equipment, net
550,459
552,378
Security and other deposits
11,787
11,786
Other assets
134,057
133,964
Total Assets
955,683
958,191
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
4,634
4,817
Air traffic liability
4,151
3,791
Other accrued expenses
42,205
41,659
Income tax payable
3,460
3,597
Deferred revenue and other current liabilities
-
-
Total current liabilities not subject to compromise
54,450
53,863
Deferred credits and other liabilities
102,581
104,612
Long term deferred income tax
156,719
156,719
Other long-term debt post petition
-
-
Total liabilities not subject to compromise
259,300
261,332
Liabilities subject to compromise (Note 6)
536,132
537,002
Total liabilities
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
Deferred Stock Compensation
1,469
1,417
Retained Earnings
(14,345)
(14,098)
Total stockholders' equity
105,801
105,995
Total liabilities and stockholders' equity
955,683
958,191
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
October 31, 2010
September 30, 2010
August 31, 2010
July 31, 2010
Cash flows from operating activities:
Net income (loss) from continuing operations
$ (10,398)
$ (82,285)
$ (201,478)
$ (27,888)
Net income (loss) from discontinued operations
$ -
$ 262
$ -
$ -
Net income (loss)
$ (10,398)
$ (82,023)
$ (201,478)
$ (27,888)
Adjustments to reconcile net income/(loss) to net cash used
in operating activities:
Depreciation and amortization
2,942
2,879
3,160
3,215
Impairment charges
-
-
-
-
Amortization of deferred credits
(794)
(34,949)
(870)
(1,565)
Amortization of restricted stock awards
65
33
(23)
21
Amortization of contract incentive payments
24
27
27
27
Provision for obsolete expendable parts and supplies
105
136
477
107
Changes in operating assets and liabilities:
Net (purchases) sales of investment securities
(1,681)
1,478
(73)
(1,405)
Receivables
190
13,181
(1,496)
(644)
Expendable parts and supplies
(469)
67
555
(308)
Prepaid expenses and other assets
(1,623)
15,910
20,894
(2,254)
Other assets
50
-
690
50
Accounts Payable
9,960
(11,215)
456
10,882
Income taxes payable
(6,311)
(44,252)
(117,413)
(16,148)
Air traffic liability
-
-
-
-
Other accrued liabilities
14,661
149,831
343,235
42,388
Net cash provided by (used in) operating activities
6,722
11,104
48,142
6,476
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities
(12,879)
(134,345)
(322,877)
(43,414)
Total net cash provided by (used in) operating activities
(6,157)
(123,241)
(274,735)
(36,938)
Cash flows from investing activities:
Capital expenditures
(922)
(1,607)
1,762
-
Proceeds from sale of flight equipment and expendable inventory
Change in restricted cash
-
659
774
(8)
Equity method investment
353
637
128
151
Investment deposits
-
-
-
-
Change in other assets
1,412
1
156
7
Net returns (payments) of lease and equipment deposits
(3)
899
599
(90)
Net cash (used in) provided by investing activities
841
588
3,419
60
Cash flows from financing activities:
Unsecured claims for rejected aircrafts
10,883
124,701
279,150
40,587
Principal payments on long-term borrowings
(2,817)
(2,523)
(2,902)
(2,599)
Net cash (used in) provided by financing activities
8,066
122,178
276,248
37,988
Increase (decrease) in cash and cash equivalents
2,749
(474)
4,932
1,110
Cash and cash equivalents at beginning of period
57,733
58,207
53,275
52,165
Cash and cash equivalents at end of period
60,482
57,733
58,207
53,275
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
June 30, 2010
May 31, 2010
April 30, 2010
March 31, 2010
Cash flows from operating activities:
Net income (loss) from continuing operations
$ (275,336)
$ (2,633)
$ (1,612)
$ (2,328)
Net income (loss) from discontinued operations
$ -
$ -
$ -
$ -
Net income (loss)
$ (275,336)
$ (2,633)
$ (1,612)
$ (2,328)
Adjustments to reconcile net income/(loss) to net cash used
in operating activities:
Depreciation and amortization
3,343
3,328
3,330
3,304
Impairment charges
-
-
-
-
Amortization of deferred credits
(494)
(1,357)
(1,363)
(512)
Amortization of restricted stock awards
32
33
16
86
Amortization of contract incentive payments
27
27
27
27
Provision for obsolete expendable parts and supplies
155
301
122
148
Changes in operating assets and liabilities:
Net (purchases) sales of investment securities
1,258
(408)
(850)
873
Receivables
(9,283)
(1,331)
3,072
5,834
Expendable parts and supplies
(195)
(155)
(546)
(171)
Prepaid expenses and other assets
(5,165)
12,922
7,441
(22,396)
Other assets
50
50
188
50
Accounts Payable
(6,948)
(1,398)
(1,270)
5,219
Income taxes payable
(162,418)
(1,557)
(447)
(3,230)
Air traffic liability
-
-
-
-
Other accrued liabilities
452,445
2,005
1,259
(2,339)
Net cash provided by (used in) operating activities
(2,526)
9,828
9,367
(15,435)
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities
(448,910)
(2,553)
(2,590)
(1,186)
Total net cash provided by (used in) operating activities
(451,436)
7,275
6,777
(16,621)
Cash flows from investing activities:
Capital expenditures
2,314
(1,599)
(781)
(3,324)
Proceeds from sale of flight equipment and expendable inventory
-
-
-
Change in restricted cash
225
7
(377)
688
Equity method investment
(785)
334
516
(238)
Investment deposits
-
-
-
-
Change in other assets
5
6
(130)
9
Net returns (payments) of lease and equipment deposits
(14)
-
-
(404)
Net cash (used in) provided by investing activities
1,745
(1,253)
(772)
(3,269)
Cash flows from financing activities:
Unsecured claims for rejected aircrafts
443,717
-
-
-
Principal payments on long-term borrowings
(2,695)
(2,673)
(2,629)
(4,708)
Net cash (used in) provided by financing activities
441,023
(2,673)
(2,629)
(4,708)
Increase (decrease) in cash and cash equivalents
(8,668)
3,350
3,375
(24,598)
Cash and cash equivalents at beginning of period
60,833
57,484
54,109
78,707
Cash and cash equivalents at end of period
52,165
60,833
57,484
54,109
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS
(In $U.S. 000's)
Month ended
January 5, 2010
Filing
February 28, 2010
to January 31, 2010
to Date
Cash flows from operating activities:
Net income (loss) from continuing operations
$ (248)
$ (162)
$ (604,367)
Net income (loss) from discontinued operations
$ 2
$ 704
$ 968
Net income (loss)
$ (246)
$ 542
$ (603,399)
Adjustments to reconcile net income/(loss) to net cash used
in operating activities:
Depreciation and amortization
3,323
3,362
32,186
Impairment charges
-
(1,080)
(1,080)
Amortization of deferred credits
(1,464)
(1,338)
(44,706)
Amortization of restricted stock awards
52
65
381
Amortization of contract incentive payments
27
27
270
Provision for obsolete expendable parts and supplies
108
127
1,787
Changes in operating assets and liabilities:
-
Net (purchases) sales of investment securities
12
(885)
(1,681)
Receivables
(5,470)
3,626
7,680
Expendable parts and supplies
(170)
(13)
(1,406)
Prepaid expenses and other assets
16,335
19,133
61,199
Other assets
50
50
1,228
Accounts Payable
1,098
9,026
15,810
Income taxes payable
(137)
569
(351,343)
Air traffic liability
-
-
-
Other accrued liabilities
916
9,188
1,013,589
Net cash provided by (used in) operating activities
14,435
42,399
130,512
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities
(854)
(1,060)
(970,668)
Total net cash provided by (used in) operating activities
13,581
41,339
(840,157)
Cash flows from investing activities:
Capital expenditures
(1,378)
(1,538)
(7,073)
Proceeds from sale of flight equipment and expendable inventory
-
-
-
Change in restricted cash
1,104
3,071
Equity method investment
(213)
340
1,222
Investment deposits
-
-
-
Change in other assets
16
11
1,493
Net returns (payments) of lease and equipment deposits
(1)
(47)
939
Net cash (used in) provided by investing activities
(471)
(1,235)
(347)
Cash flows from financing activities:
Unsecured claims for rejected aircrafts
-
-
899,038
Principal payments on long-term borrowings
(1,874)
(1,867)
(27,285)
Net cash (used in) provided by financing activities
(1,874)
(1,867)
871,753
Increase (decrease) in cash and cash equivalents
11,236
38,238
31,249
Cash and cash equivalents at beginning of period
67,471
29,233
29,233
Cash and cash equivalents at end of period
78,707
67,471
60,482
NOTES TO MONTHLY OPERATING REPORT
(In $U.S. 000's)
Month ending
Month ending
Month ending
Month ending
October 31, 2010
September 30, 2010
August 31, 2010
July 31, 2010
Professional fees directly related to reorganization
$ 949
$ 1,063
$ 1,048
$ 465
Loss on rejection of aircraft leases (1)
12,870
129,427
309,361
26,384
Loss on sale-leaseback transactions
-
-
-
Write-off of debt issuance cost
-
-
-
Cost related to the early return and sale of aircraft
413
509
2,012
1,231
Abandonment of real property (1)
-
-
215
Write off of LOC for engine lease termination & return of aircraft
-
774
-
Write-off engine lease termination expenses
432
3,545
9,665
15,119
Other
-
(199)
-
-
Total loss/(gain) on reorganization items
14,664
134,345
322,859
43,414
Month ending
Month ending
Month ending
Month ending
June 30, 2010
May 31, 2010
April 30, 2010
March 31, 2010
Professional fees directly related to reorganization
$ 1,059
$ 691
$ 2,590
$ 1,186
Loss on rejection of aircraft leases
446,630
-
-
-
Loss on sale-leaseback transactions
-
-
-
-
Write-off of debt issuance cost
-
-
-
-
Cost related to the early return and sale of aircraft
1,221
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
448,910
2,553
2,590
4,525
January 5, 2010
Month ending
to
Filing to
February 28, 2010
January 31, 2010
Date
Professional fees directly related to reorganization
$ 854
$ 1,060
$ 10,965
Loss on rejection of aircraft leases
-
-
$ 924,672
Loss on sale-leaseback transactions
-
-
$ -
Write-off of debt issuance cost
-
-
$ -
Cost related to the early return and sale of aircraft
-
-
$ 7,248
Abandonment of real property
-
-
$ 215
Write off of LOC for engine lease termination & return of aircraft
-
-
$ 2,801
Write-off engine lease termination expenses
-
-
$ 30,072
Other
-
-
$ (199)
Total loss/(gain) on reorganization items
854
1,060
975,775
(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)
Oct 31,
Sep 30,
Aug 31,
July 31,
2010
2010
2010
2010
Accounts payable and other accrued expenses
$ 62,781
$ 62,832
$ 62,745
$ 64,373
Accrued interest expense
4,041
4,023
4,055
4,803
Write-off of debt issuance cost
-
-
-
-
Secured aircraft debt
365,245
367,935
370,797
373,381
Other secured debt
5,695
5,908
8,693
9,174
Unsecured debt
32,321
32,321
32,321
32,321
Bankruptcy related unsecured claims
910,210
899,553
775,751
498,402
Bankruptcy related admin claims
6,975
6,750
5,850
4,050
Convertible bonds (1)
9,100
9,057
9,014
8,972
Total liabilities subject to compromise
1,396,368
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 (Oct 1 - Oct 31)
Lotz,Michael J
Wages / Expenses
31,489.35
Ornstein,Jonathan G
Wages / Expenses
27,871.57
Gust,Eric W
Wages / Expenses
14,306.61
Gillman,Brian S
Wages / Expenses
13,115.44
Kranzow,Keith C
Wages / Expenses
11,530.46
Foley,Paul F
Wages / Expenses
11,085.61
Butler,David K
Wages / Expenses
10,961.51
Swigart,James
Wages / Expenses
10,800.00
Appling,Gary W
Wages / Expenses
8,615.39
Gomes,Edward P
Wages / Expenses
6,538.46
Pappaioanou,Chris J
Wages / Expenses
6,473.08
Brown, Kenley B
Wages / Expenses
5,923.08
Hornberg,Robert A
Wages / Expenses
5,538.52
Ferverda,Michael L
Wages / Expenses
4,230.77
Gumm,Ryan J
Wages / Expenses
678.36
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
$172,658.21