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UNITED STATES FORM 8-K
CURRENT REPORT
Date of Report (Date of earliest event reported):
August 20, 2010
Mesa Air Group, Inc.
410 North 44th Street, Suite 700
(602) 685-4000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
(Exact name of registrant as specified in its charter)
Phoenix, Arizona 85008
(Address of principal executive offices including zip code)
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events On August 20, 2010, Mesa Air Group, Inc. (the "Company") filed the Monthly Operating Report for the
period from July 1, 2010 to July 31, 2010 with the United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court"). The Bankruptcy Court has had jurisdiction over the reorganization proceedings under Chapter 11 of
the United States Bankruptcy Code for the Company and each of its wholly-owned subsidiaries since January 5, 2010. A copy of the
Monthly Operating Report is attached as Exhibit 99.1 to this report and is incorporated by reference into this Item 8.01. The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly
Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the
Company's securities. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for
the purpose of complying with the monthly reporting requirements of the Office of the United States Trustee. The Monthly Operating
Report was not audited or reviewed by independent accountants, is in a format prescribed by applicable requirements of the Office of
the United States Trustee and is subject to future adjustment and reconciliation. There can be no assurance that, from the perspective
of an investor or potential investor in the Company's securities, the Monthly Operating Report contains any information beyond that
required by the Office of the United States Trustee. The Monthly Operating Report also contains information for periods that are shorter
or otherwise different from those required in the Company's reports pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and such information might not be indicative of the Company's financial condition or operating results for
the period that would be reflected in the Company's financial statements or in its reports pursuant to the Exchange Act. Results set forth
in the Monthly Operating Report should not be viewed as indicative of future results. Item 9.01. Financial Statements and Exhibits d. Exhibits. Exhibit No. Description 99.1 Monthly Operating Report for the Period from July 1, 2010 to July 31, 2010
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MESA AIR GROUP, INC. Date: August 23, 2010
By: /s/ BRIAN S. GILLMAN
Name: BRIAN S. GILLMAN
Title: Executive Vice President and General Counsel
EXHIBIT INDEX
Exhibit No. |
Description |
99.1 |
Monthly Operating Report for the Period from July 1, 2010 to July 31, 2010 Also provided in PDF format as a courtesy. |
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 July 31, 2010 |
Federal Tax ID # 85-0302351 |
Debtors' Address: |
410 N 44th Street Suite 700 |
Phoenix, AZ 85008 |
Monthly Net Income/(Loss): ($27.888) 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: August 20, 2010 /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
|
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 | ||||
July 31, 2010 and filing to date | 5 | |||
Condensed Consolidated Debtors-in-Possession Balance Sheets as of July 31, 2010 | ||||
and all subsequent periods post-petition date | 7 | |||
Condensed Consolidated Debtors-in-Possession Statement of Cash Flows for the month ended | ||||
July 31, 2010 and filing to date | 9 | |||
Notes to the Condensed Consolidated Monthly Operating Report | 11 |
Case Number: 10-10018 (MG) (Jointly Administered)
- 4 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 5 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 6 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 7 -
MESA AIR GROUP, INC., ET AL. Case Number: 10-10018 (MG) (Jointly Administered)
- 8 -
MESA AIR GROUP, INC., ET AL.
The accompanying notes are an integral part of the financial statements.
Case Number: 10-10018 (MG) (Jointly Administered)
- 9 -
MESA AIR GROUP, INC., ET AL.
The accompanying notes are an integral part of the financial statements.
Case Number: 10-10018 (MG) (Jointly Administered)
- 10 -
MESA AIR GROUP, INC., ET AL. 1. Background and Organization General - Mesa Air Group, Inc. ("Mesa" or the
"Company") is a holding company whose principal subsidiaries operate as regional air carriers providing
scheduled passenger and airfreight service. As of July 31, 2010, the Company served 99 cities in 38 states, the District
of Columbia, Canada, and Mexico and operated a fleet of 90 aircraft with approximately 540 daily departures. Chapter 11 Reorganization Cases - On January 5, 2010 (the "Petition Date"), Mesa Air
Group, Inc. and its eleven subsidiaries (the "Debtors") filed voluntary petitions for relief under chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
Southern District of New York (the "Court"). The Debtors continue to operate their businesses as
"debtors-in-possession" under the jurisdiction of the Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Court. On January 14, 2010, the Office of the United States Trustee for the
Southern District of New York appointed a statutory committee of unsecured creditors. 2. Basis of Presentation Condensed Consolidated Debtor-in-Possession Financial Statements - The
unaudited financial statements and supplemental information contained herein represent the condensed consolidated
financial information for the Debtors. The results of operations for the period from January 5, 2010 to January 31, 2010
were estimated based upon estimates that included the use of statistical data, processed revenue, fuel purchases and a
pro-ration of calendar days within the month of January. Amounts presented in the unaudited Statement of Cash Flows
for the period from January 5, 2010 to January 31, 2010 were based on estimated asset and liability balances as of the
filing date and actual balances as of January 31, 2010, as well as the aforementioned estimated results of operations for
the period from January 5, 2010 to January 31, 2010. American Institute of Certified Public Accountants Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization under the Bankruptcy Code" ("SOP 90-7"), which is
applicable to companies in chapter 11, generally does not change the manner in which financial statements are
prepared. It does, however, require that the financial statements for periods subsequent to the filing of the chapter 11
petition distinguish transactions and events that are directly associated with the reorganization from the ongoing
operations of the business. The Debtors' financial statements contained herein have been prepared in accordance with
the guidance in SOP 90-7. Further information concerning the Debtors' accounting policies will be found in the footnotes
to our Annual Report on Form 10-K for the period ended September 30, 2009 once filed and subsequent filings on Form
10-Q when filed with the United States Securities and Exchange Commission. The unaudited consolidated financial statements have been derived from the books and records
of the Debtors. Certain financial information, however, has not been subject to procedures that typically would be
applied to financial information presented in accordance with generally accepted accounting principles in the United
States of America ("U.S. GAAP") and, upon the application of such procedures, the Debtors believe that the
financial information will be subject to changes. These changes could be material. The information furnished in this
report includes primarily normal recurring adjustments, but does not include all of the adjustments that typically would be
made for quarterly financial statements in accordance with U.S. GAAP. Certain prepaid balances and pre- and post-petition
trade accounts payable balances are subject to further review and reclassification. In addition, certain
information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP
have been condensed or omitted. Therefore, this report should be read in conjunction with our consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K for the period ended September 30, 2009
once filed and subsequent filings on Form 10-Q when filed with the United States Securities and Exchange
Commission. The results of operations contained herein are not necessarily indicative of results that may be
expected from any other period or for the full year, and may not necessarily reflect the consolidated results of
operations, financial position and cash flows of the Debtors in the future.
Case Number: 10-10018 (MG) (Jointly Administered)
- 11 -
Intercompany Transactions - Intercompany transactions between Debtors have been
eliminated in the financial statements contained herein. Property and Equipment, net - Recorded at cost net of accumulated
deprecation. Taxes - Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in future years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. The Company records deferred tax assets for the value of benefits expected to be realized from the
utilization of alternative minimum tax credit carry forward, capital loss carryforward and state and federal net operating
loss carryforward. We periodically review these assets to determine the likelihood of realization. To the extent we
believe some portion of the benefit may not be realizable, an estimate of the unrealized position is made and an
allowance recorded. The Company and its consolidated subsidiaries file a consolidated federal income tax return. As of
July 31, 2010, the Company estimated an effective tax rate of 37.1%. The Debtors have received approval to pay pre-petition employee withholding obligations in addition
to employment and wage-related taxes, sales and use taxes, and certain other taxes due in the normal course of
business through certain first day motions. As such, the Debtors have paid such taxes when due. In addition, all post-petition
tax obligations have been fully paid to the proper taxing authorities to the extent they were due during the current
reporting period. Further, employee withholding obligations are pre-funded by the Debtors and paid directly by the
Debtors' payroll contractor, Automatic Data Processing, Inc. ("ADP"). Thus, no further information regarding
taxes is included in this report. 3. Insurance All insurance premiums have been paid to the proper insurance company or broker when due
during the current reporting period, and all insurance policies are in force as of the filing of this report. 4. Cash Management System & Use of Cash The Court has entered orders authorizing the Debtors to continue to use their existing cash
management system including: (i) investment guidelines; (ii) maintenance of existing bank accounts and business forms;
and (iii) the authorization to open and close bank accounts. The Debtors are continuing to collect and disburse cash
since the Petition Date using the existing cash management system, as modified to comply with applicable orders of the
Court.
Case Number: 10-10018 (MG) (Jointly Administered)
- 12 -
5. Reorganization items SOP 90-7 requires separate disclosure of reorganization items such as realized gains and losses
from the settlement of pre-petition liabilities, provisions for losses resulting from the reorganization and restructuring of
the business, as well as professional fees directly related to the process of reorganizing the Debtors under Chapter 11.
The Debtors' reorganization items consist of the following: Professional fees directly related to the reorganization ("Professional Fees") include
fees associated with advisors to the Debtors, the statutory committee of unsecured creditors and certain secured
creditors. Professional Fees are estimated by the Debtors and will be reconciled to actual invoices when received. Of the 58 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 56 of these aircraft and estimated them to be approximately $498,000,000, which amount is
subject to the final settlement between the Debtors and the applicable aircraft parties. 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
Case Number: 10-10018 (MG) (Jointly Administered)
- 13 -
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. 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.
Case Number: 10-10018 (MG) (Jointly Administered)
- 14 -
Of the 58 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 56 of these aircraft and estimated them to be approximately $498,000,000, 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 $2.0 million of invoices received,
not yet paid, as of July 31, 2010. 8. Owned and Leased Aircraft On January 26, 2010, the Court approved the abandonment of twenty (20) Beech 1900D
aircraft and related airframe, engines, propellers, avionics and all other equipment, parts and components installed in or
on, or acceded to, or associated with the related aircraft. On February 23, 2010, the Court approved procedures
for the rejection of aircraft related leases and the abandonment of aircraft subject to security agreements (the
"Rejection Procedures"). Since the approval of the Rejection Procedures, the Debtors have filed
twenty (20) notices of rejection with respect to the leases of twelve (12) aircraft engines and eighty (80) 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.
Case Number: 10-10018 (MG) (Jointly Administered)
- 15 -
10. Payments to Insiders Of the total disbursements listed herein, the amounts paid to insiders during the current reporting period are as
follows:
Case Number: 10-10018 (MG) (Jointly Administered)
- 16 -
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF OPERATIONS
(In $U.S. 000's)
Month ended
Month ended
Month ended
Month ended
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 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
January 5, 2010
Filing
March 31, 2010
February 28, 2010
to January 31, 2010
to Date
Revenues:
Passenger
$ 72,669
$ 65,457
$ 61,488
$ 474,771
Cargo
-
-
-
-
Other
474
463
381
3,146
Total Revenue
73,143
65,921
61,869
477,917
Operating Expenses:
Flight Operations (1)
20,697
19,787
20,719
135,514
Flight Operations - Nonoperating Aircraft (1)
4,512
5,291
2,163
25,743
Aircraft Fuel
18,745
14,992
15,953
123,048
Aircraft and traffic servicing
4,506
3,701
3,897
27,645
Maintenance
16,001
13,788
10,826
96,411
Promotion and sales
471
333
190
2,935
General and administrative
3,316
3,342
3,040
23,740
Depreciation and amortization
3,304
3,322
2,926
22,768
Impairment of long-lived asset
-
-
-
-
Total operating expenses
71,551
64,556
59,714
457,804
Operating Income (Loss)
1,592
1,365
2,155
20,113
Nonoperating income (expense)
Interest Income
370
369
322
2,645
Interest Expense
(1,381)
(1,565)
(1,343)
(9,559)
Other, net (Note 9)
244
309
(323)
(2,427)
Total Nonoperating income (expense)
(767)
(887)
(1,344)
(9,341)
Income (Loss) before reorganization items and income taxes
824
478
811
10,772
Income taxes
(1,373)
(132)
(87)
(182,931)
Loss (Gain) on reorganization items (Note 5)
4,525
854
1,060
503,906
Income (Loss) before discontinued operations
(2,328)
(244)
(162)
(310,203)
Loss (Gain) from discontinued operations
-
2
(704)
(702)
Net Income (Loss)
(2,328)
(246)
542
(309,501)
The accompanying notes are an integral part of the financial statements.
(1) For presentation purposes, the March flight operation expense has been adjusted from what was reported on the March MOR to properly reflect the expense for nonoperating aircraft.
The net adjustment between the two line items is zero.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION BALANCE SHEETS
(In $U.S. 000's, except share data)
July 31, 2010
June 30, 2010
May 31, 2010
April 30, 2010
ASSETS
Current Assets:
Cash and cash equivalents
53,275
52,165
60,833
57,484
Short-term investments
1,405
-
1,258
850
Restricted investments
11,125
11,117
11,341
11,348
Receivables, net of allowance
17,962
17,307
8,024
6,694
Inventories, net of allowance
27,872
27,670
27,631
27,776
Prepaid expenses and other assets
132,124
129,831
127,244
140,167
Total current assets
243,763
238,090
236,333
244,319
Property and equipment, net
537,707
540,650
546,281
547,983
Security and other deposits
7,929
8,393
12,192
12,192
Other assets
134,127
134,389
133,713
134,156
Total Assets
923,525
921,522
928,518
938,650
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
1,990
3,220
3,415
4,061
Air traffic liability
4,276
4,767
4,909
4,140
Other accrued expenses
52,174
40,641
48,317
49,207
Income tax payable
(180,339)
(164,192)
(1,774)
(216)
Deferred revenue and other current liabilities
-
-
-
-
Total current liabilities not subject to compromise
(121,899)
(115,564)
54,868
57,192
Deferred credits and other liabilities
96,435
97,989
97,388
99,738
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
253,154
254,708
254,107
256,457
Liabilities subject to compromise (Note 6)
995,476
957,716
519,577
522,435
Total liabilities
1,126,731
1,096,860
828,552
836,085
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
1,658
1,637
1,605
1,571
Retained Earnings
(323,540)
(295,652)
(20,316)
(17,683)
Total stockholders' equity
(203,206)
(175,338)
99,966
102,565
Total liabilities and stockholders' equity
923,525
921,522
928,518
938,650
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)
March 31, 2010
February 28, 2010
January 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents
54,109
78,707
67,471
Short-term investments
-
873
885
Restricted investments
10,971
11,660
12,764
Receivables, net of allowance
9,766
15,600
10,130
Inventories, net of allowance
27,352
27,329
27,267
Prepaid expenses and other assets
147,607
125,212
141,547
Total current assets
249,806
259,380
260,063
Property and equipment, net
550,505
550,459
552,378
Security and other deposits
12,192
11,787
11,786
Other assets
133,884
134,057
133,964
Total Assets
946,387
955,683
958,191
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise:
Current Liabilities:
Accounts payable (Note 7)
5,912
4,634
4,817
Air traffic liability
4,146
4,151
3,791
Other accrued expenses
49,282
42,205
41,659
Income tax payable
231
3,460
3,597
Deferred revenue and other current liabilities
-
-
-
Total current liabilities not subject to compromise
59,570
54,450
53,863
Deferred credits and other liabilities
101,968
102,581
104,612
Long term deferred income tax
156,719
156,719
156,719
Other long-term debt post petition
-
-
-
Total liabilities not subject to compromise
258,688
259,300
261,332
Liabilities subject to compromise (Note 6)
524,868
536,132
537,002
Total liabilities
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
Deferred Stock Compensation
1,555
1,469
1,417
Retained Earnings
(16,971)
(14,345)
(14,098)
Total stockholders' equity
103,261
105,801
105,995
Total liabilities and stockholders' equity
946,387
955,683
958,191
The accompanying notes are an integral part of the financial statements.
MONTHLY OPERATING REPORT
CONDENSED CONSOLIDATED DEBTORS-IN-POSSESSION STATEMENT OF CASH FLOWS
(In $U.S. 000's)
Month ended
Month ended
Month ended
Month ended
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
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
to Date
Cash flows from operating activities:
Net income (loss) from continuing operations
$ (2,328)
$ (248)
$ (162)
$ (310,207)
Net income (loss) from discontinued operations
$ (0)
$ 2
$ 704
$ 706
Net income (loss)
$ (2,328)
$ (246)
$ 542
$ (309,501)
Adjustments to reconcile net income/(loss) to net cash used
in operating activities:
Depreciation and amortization
3,304
3,323
3,362
23,205
Impairment charges
-
-
(1,080)
(1,080)
Amortization of deferred credits
(512)
(1,464)
(1,338)
(8,093)
Amortization of restricted stock awards
86
52
65
306
Amortization of contract incentive payments
27
27
27
191
Provision for obsolete expendable parts and supplies
148
108
127
1,068
Changes in operating assets and liabilities:
-
Net (purchases) sales of investment securities
873
12
(885)
(1,405)
Receivables
5,834
(5,470)
3,626
(4,194)
Expendable parts and supplies
(171)
(170)
(13)
(1,559)
Prepaid expenses and other assets
(22,396)
16,335
19,133
26,017
Other assets
50
50
50
487
Accounts Payable
5,219
1,098
9,026
16,609
Income taxes payable
(3,230)
(137)
569
(183,367)
Air traffic liability
-
-
-
-
Other accrued liabilities
(2,339)
916
9,188
505,861
Net cash provided by (used in) operating activities
(15,435)
14,435
42,399
64,544
Cash flows from reorganization activities
Net cash provided by (used in) reorganization activities
(1,186)
(854)
(1,060)
(500,568)
Total net cash provided by (used in) operating activities
(16,621)
13,581
41,339
(436,023)
Cash flows from investing activities:
Capital expenditures
(3,324)
(1,378)
(1,538)
(6,306)
Proceeds from sale of flight equipment and expendable inventory
-
-
-
-
Change in restricted cash
688
1,104
1,639
Equity method investment
(238)
(213)
340
104
Investment deposits
-
-
-
-
Change in other assets
9
16
11
(76)
Net returns (payments) of lease and equipment deposits
(404)
(1)
(47)
(556)
Net cash (used in) provided by investing activities
(3,269)
(471)
(1,235)
(5,196)
Cash flows from financing activities:
Unsecured claims for rejected aircrafts
-
-
-
484,304
Principal payments on long-term borrowings
(4,708)
(1,874)
(1,867)
(19,044)
Net cash (used in) provided by financing activities
(4,708)
(1,874)
(1,867)
465,261
Increase (decrease) in cash and cash equivalents
(24,598)
11,236
38,238
24,042
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
53,275
NOTES TO MONTHLY OPERATING REPORT
(In $U.S. 000's)
Month ending
Month ending
Month ending
Month ending
July 31, 2010
June 30, 2010
May 31, 2010
April 30, 2010
Professional fees directly related to reorganization
$ 465
$ 1,059
$ 691
$ 2,590
Loss on rejection of aircraft leases
27,302
446,630
-
-
Loss on sale-leaseback transactions
-
-
-
-
Write-off of debt issuance cost
-
-
-
-
Gains on the sale of aircraft
-
-
-
-
Cost related to the early return and sale of aircraft
1,231
1,221
1,862
-
Abandonment of real property
(704)
-
-
-
Loss/(gains) on contract terminations, net
-
-
-
-
Write off of LOC for engine lease termination & return of aircraft
-
-
-
-
Write-off engine lease termination expenses
15,119
-
-
-
Other
-
-
-
-
Total loss/(gain) on reorganization items
43,414
448,910
2,553
2,590
January 5, 2010
Month ending
Month ending
to
Filing to
March 31, 2010
February 28, 2010
January 31, 2010
Date
Professional fees directly related to reorganization
$ 1,186
$ 854
$ 1,060
$ 7,906
Loss on rejection of aircraft leases
-
-
-
473,932
Loss on sale-leaseback transactions
-
-
-
-
Write-off of debt issuance cost
-
-
-
-
Gains on the sale of aircraft
-
-
-
-
Cost related to the early return and sale of aircraft.
-
-
-
4,314
Abandonment of real property
-
-
-
(704)
Loss/(gains) on contract terminations, net
-
-
-
-
Write off of LOC for engine lease termination & return of aircraft
2,027
-
-
2,027
Write-off engine lease termination expenses
1,312
-
-
16,430
Other
-
-
-
-
Total loss/(gain) on reorganization items
4,525
854
1,060
503,906
(In $U.S. 000's)
July 31,
June 30,
May 31,
April 30,
2010
2010
2010
2010
Accounts payable and other accrued expenses
$ 64,373
$ 63,388
$ 62,058
$ 62,364
Accrued interest expense
4,803
4,805
4,997
4,914
Accrued maintenance events
-
-
-
-
Write-off of debt issuance cost
-
-
-
-
Secured aircraft debt
373,381
379,490
382,100
384,767
Other secured debt
9,174
10,369
10,377
10,385
Unsecured debt
32,321
32,321
51,158
51,160
Bankruptcy related unsecured claims
498,402
454,439
-
-
Bankruptcy related admin claims
4,050
3,975
-
-
Convertible bonds (1)
8,972
8,930
8,888
8,846
Total liabilities subject to compromise
995,476
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
Accrued maintenance events
-
-
-
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 (Jul 1 - Jul 31)
Ornstein,Jonathan G
Wages / Expenses
53,143.99
Lotz,Michael J
Wages / Expenses
51,153.42
Gillman,Brian S
Wages / Expenses
44,116.56
Foley,Paul F
Wages / Expenses
20,192.40
Swigart,James
Wages / Expenses
17,400.00
Butler,David K
Wages / Expenses
16,730.68
Gust,Eric W
Wages / Expenses
16,244.36
Kranzow,Keith C
Wages / Expenses
15,499.95
Appling,Gary W
Wages / Expenses
14,208.68
Thayer, Richard
Wages / Expenses
12,000.00
Ferverda,Michael L
Wages / Expenses
11,538.48
Gomes,Edward P
Wages / Expenses
11,007.42
Pappaioanou,Chris J
Wages / Expenses
10,428.86
Gumm,Ryan J
Wages / Expenses
10,006.03
Nostrand,Peter
Wages / Expenses
9,500.00
Beleson,Robert
Wages / Expenses
9,250.00
Altobello,Daniel
Wages / Expenses
8,660.65
Hornberg,Robert A
Wages / Expenses
8,615.49
Chambers,Kenley B
Wages / Expenses
8,588.41
Parker,Maurice
Wages / Expenses
5,250.00
Manson III,Joseph
Wages / Expenses
4,750.00
Bonilla,Carlos
Wages / Expenses
0.00
$358,285.39
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