-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S+CbYOgpZfnLMosINPROhLnasGCqJEgFIi4BwWmfZ2YyQQ5YL5CiIDAcVHd0ogvf JZrauTYuvveSM1ZZ/uSiEg== 0000950134-97-008102.txt : 19971110 0000950134-97-008102.hdr.sgml : 19971110 ACCESSION NUMBER: 0000950134-97-008102 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970917 ITEM INFORMATION: FILED AS OF DATE: 19971107 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KITTY HAWK INC CENTRAL INDEX KEY: 0000932110 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [4522] IRS NUMBER: 752564006 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-25202 FILM NUMBER: 97710761 BUSINESS ADDRESS: STREET 1: P O BOX 612787 STREET 2: 1515 W 20TH ST CITY: DALLAS/FORT WORTH IN STATE: TX ZIP: 75261 BUSINESS PHONE: 2144562220 MAIL ADDRESS: STREET 1: P O BOX 612787 CITY: DALLAS/FORT WORTH IN STATE: TX ZIP: 75261 8-K/A 1 AMENDMENT TO FORM 8-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): SEPTEMBER 17, 1997 KITTY HAWK, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) State of Delaware 0-25202 75-2564006 (STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.) 1515 West 20th Street P.O. Box 612787 Dallas/Fort Worth International Airport, Texas 75261 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Registrant's telephone number, including area code: (972) 456-2200 Not Applicable (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ================================================================================ 2 The undersigned Registrant hereby amends the following items, financial statements, exhibits and other portions of its Current Report on Form 8-K, originally filed with the Securities and Exchange Commission on October 2, 1997, as set forth herein. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. On September 17, 1997, Kitty Hawk, Inc., through its wholly owned subsidiary Kitty Hawk Aircargo, Inc., acquired sixteen Boeing 727 aircraft and certain related contracts (the "Acquisition of the AIA 727 Fleet") from American International Airways, Inc. ("AIA"). The purpose of this amended Form 8-K is to file required financial statements relating to the Acquisition of the AIA 727 Fleet, including required pro forma financial information. The following financial statements relating to the Acquisition of the AIA 727 Fleet are attached hereto: (a) Financial Statements
FINANCIAL STATEMENT INDEX PAGE ------------------------- ---- Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2 Statements of Certain Assets Sold of AIA as of June 30, 1997 (Unaudited) and December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3 Statements of Revenues and Direct Expenses for the six months ended June 30, 1997 and 1996 (Unaudited) and for the years ended December 31, 1996 and 1995 . . . . . . . . . . . . . . F-4 Notes to Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
(b) Pro Forma Financial Information
PRO FORMA FINANCIAL STATEMENTS INDEX PAGE ------------------------------------ ---- Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . F-8 Unaudited Pro Forma Balance Sheet at June 30, 1997 . . . . . . . . . . . . . . . . . . . . F-9 Unaudited Pro Forma Statement of Operations for the twelve months ended December 31, 1996 . F-10 Unaudited Pro Forma Statement of Operations for the six months ended June 30, 1997 . . . . F-11 Notes to Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . F-12
(c) Exhibits 2.1 Agreement for Sale and Purchase of AIA 727 Fleet, dated as of July 31, 1997, by and among, AIA, the Company, Kalitta Flying Service, Inc., Conrad Kalitta and Kitty Hawk Aircargo, Inc. (1) 23.1 Consent of Deloitte & Touche LLP. (2) - --------------------- (1) Previously filed. (2) Filed herewith. Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the Agreement for Sale and Purchase of the AIA 727 Fleet have been omitted. The Company hereby agrees to furnish such schedules and exhibits upon request of the Securities and Exchange Commission. 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KITTY HAWK, INC. Date: November 6, 1997 By: /s/ RICHARD R. WADSWORTH -------------------------------- Name: Richard R. Wadsworth Title: Senior Vice President -- Finance, Chief Financial Officer and Secretary 3 4 AMERICAN INTERNATIONAL AIRWAYS, INC. Statements of Certain Assets Sold of AIA for the Six Months Ended June 30, 1997 (Unaudited) and the Years Ended December 31, 1996 and 1995, and the Related Statements of Revenues and Direct Expenses for the Six Months Ended June 30, 1997 and 1996 (Unaudited) and for the Years Ended December 31, 1996 and 1995, and Independent Auditors' Report F-1 5 INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholder of American International Airways, Inc. Ypsilanti, Michigan We have audited the accompanying statements of certain assets sold of American International Airways, Inc. ("AIA") as of December 31, 1996 and 1995, and the related statements of revenues and direct expenses for the years then ended. These statements are the responsibility of AIA's management. Our responsibility is to express an opinion on these statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of certain assets sold of AIA and the related statements of revenues and direct expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements of certain assets sold of AIA and the related statements of revenues and direct expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statements of certain assets sold of AIA and the related statements of revenues and direct expenses. We believe that our audits provide a reasonable basis for our opinion. The accompanying statements of certain assets sold of AIA and the related statements of revenues and direct expenses were prepared for the purpose of complying with the Purchase Agreement as discussed in Note 2 and are not intended to be a complete presentation of the financial position and results of operations of AIA and related companies. In our opinion, the accompanying statements referred to above present fairly, in all material respects, the certain assets sold of AIA as of December 31, 1996 and 1995, and the related revenues and direct expenses for the years then ended, in conformity with generally accepted accounting principles. Deloitte & Touche LLP Ann Arbor, Michigan September 29, 1997 F-2 6 AMERICAN INTERNATIONAL AIRWAYS, INC. STATEMENTS OF CERTAIN ASSETS SOLD OF AIA JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996 AND 1995 - -------------------------------------------------------------------------------
JUNE 30, DECEMBER 31, ----------- --------------------------- 1997 1996 1995 (UNAUDITED) AIRCRAFT, AT COST $36,835,183 $36,715,178 $33,704,207 LESS ACCUMULATED DEPRECIATION 15,015,136 12,871,603 9,009,568 ----------- ----------- ----------- NET BOOK VALUE OF ASSETS $21,820,047 $23,843,575 $24,694,639 =========== =========== ===========
See accompanying notes. F-3 7 AMERICAN INTERNATIONAL AIRWAYS, INC. STATEMENTS OF REVENUES AND DIRECT EXPENSES FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED) AND FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 - -------------------------------------------------------------------------------
JUNE 30, DECEMBER 31, --------------------------------- --------------------------------- 1997 1996 1996 1995 (UNAUDITED) REVENUES: Third-party customer revenue $ 13,387,085 $ 9,613,470 $ 20,311,118 $ 18,241,309 Related party revenue 7,351,273 9,005,627 18,158,957 6,849,286 -------------- -------------- -------------- -------------- Total revenues 20,738,358 18,619,097 38,470,075 25,090,595 DIRECT EXPENSES: Depreciation 2,143,533 1,932,964 3,889,737 2,212,339 Insurance 668,307 669,019 1,326,124 974,463 Flight crew compensation and travel related expenses 6,209,087 5,464,808 11,641,195 8,742,751 Maintenance 9,171,933 4,180,374 9,478,540 9,840,280 -------------- -------------- -------------- -------------- Total direct expenses 18,192,860 12,247,165 26,335,596 21,769,833 -------------- -------------- -------------- -------------- EXCESS OF REVENUES OVER DIRECT EXPENSES $ 2,545,498 $ 6,371,932 $ 12,134,479 $ 3,320,762 ============== ============== ============== ==============
See accompanying notes. F-4 8 AMERICAN INTERNATIONAL AIRWAYS, INC. NOTES TO STATEMENTS - ------------------------------------------------------------------------------- 1. PROPOSED MERGER AND SALE OF BOEING 727 AIRCRAFT On September 22, 1997, American International Airways, Inc. and its 60% owned partnership, American International Cargo ("AIC") (collectively, "AIA"); Kalitta Flying Services, Inc. ("KFS"), O.K. Turbines, Inc. ("O.K."), American International Travel, Inc. ("AIT") and Flight One Logistics, Inc. ("FOL") (collectively referred to as the "Companies"), the sole stockholder of the Companies, and Kitty Hawk, Inc. ("Kitty Hawk") entered into a merger agreement, under which each of the respective Companies will be merged with separate subsidiaries of Kitty Hawk, with each of the Companies surviving the merger as a direct, wholly owned subsidiary of Kitty Hawk. On October 23, 1997, the merger agreement was amended so that at the effective time of the merger, the outstanding shares of capital stock of four Companies (AIA, AIT, FOL and O.K.) will be converted into the right to receive their pro rata portion of 4,099,150 shares of Kitty Hawk common stock (unaudited). The outstanding shares of capital stock of KFS will be converted into the right to receive $20,000,000. As an interim step toward the merger, on August 27, 1997, the Companies entered into an agreement to sell to Kitty Hawk sixteen Boeing 727 aircraft constituting the majority of the Companies' Boeing 727 Fleet (the "Boeing 727 Fleet") as set forth in an "Agreement for Sale and Purchase of AIA 727 Fleet" (the "Purchase Agreement") dated July 31, 1997, for $51 million. As a part of this transaction, which closed on September 17, 1997, the Companies assigned to Kitty Hawk all of its customer contracts relating to the aircraft. The purchase agreement provides the Companies the option to repurchase, no later than March 31, 1998, all except three of the 727 aircraft from Kitty Hawk at Kitty Hawk's purchase price, less $14 million for the three aircraft not subject to the option, plus any costs incurred by Kitty Hawk to maintain the repurchased aircraft. Similarly, Kitty Hawk has the option to require the Companies to repurchase, no later than December 31, 1997, all except three of the 727 aircraft at Kitty Hawk's purchase price less $14 million for the three aircraft not subject to the option, plus any costs incurred by Kitty Hawk to maintain the repurchased aircraft. 2. BASIS OF PRESENTATION The accompanying statements of certain assets sold of AIA and the related statements of revenues and direct expenses were prepared for the purpose of complying with the Purchase Agreement and are not intended to be a complete presentation of the financial position and results of operations of AIA. Prior to the purchase, these assets were part of the larger AIA aircraft fleet, were an integral part of AIA's operations and did not constitute a legal or reporting entity for which financial statements were prepared. Revenues represent charges for aircraft usage billed to third party customers under contracts and charges to American International Freight ("AIF"), a division of AIA, and AIC under lease arrangements. Contract and lease arrangements require AIA to supply aircraft, crew, maintenance, and insurance ("ACMI") and to meet certain on-time performance standards. Customers, including AIF and AIC, are responsible for substantially all other operating expenses, including fuel. These contracts have been assigned to Kitty Hawk under the Purchase Agreement. Also, upon the consummation of this transaction, Kitty Hawk will continue the leases of the Boeing 727 Fleet to AIF and AIC to meet their scheduled freight service requirements. F-5 9 Direct expenses include depreciation, insurance, flight crew compensation and travel related expenses, and maintenance. Maintenance is comprised primarily of labor, parts and supplies associated with the maintenance, repair and overhaul of aircraft and engines and maintenance services provided by others. Since a portion of maintenance expenses are accumulated and accounted for in AIA's accounting system without regard to the type of aircraft, these expenses have been allocated to the Boeing 727 Fleet based upon the percentage of the historical cost of the Boeing 727 Fleet to the historical cost of the Companies' total Fleet. Allocated expenses amounted to $1.9 million, $2.4 million, $5.2 million and $5.4 million for the six months ended June 30, 1997 and 1996 (unaudited) and for the years ended December 31, 1996 and 1995, respectively. 3. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The statements have been prepared on the accrual basis of accounting. INTERIM STATEMENTS - The statements of certain assets sold of AIA and the related statements of revenues and direct expenses for the six months ended June 30, 1997 and 1996 reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of certain assets sold of AIA and the related revenue and direct expenses for such periods. The revenue and direct expenses for the six months ended June 30, 1997 are not necessarily indicative of the revenue and direct expenses for the full year. BOEING 727 AIRCRAFT are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over an estimated useful life of seven years. REVENUE RECOGNITION - Revenue is recognized upon completion of a flight. FOREIGN TRANSACTIONS - All significant monetary transactions of AIA are denominated in U.S. currency. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. MAJOR CUSTOMERS - AIA had Boeing 727 Fleet sales to major customers representing the following percentages:
JUNE 30, DECEMBER 31, ------------ ------------ 1997 1996 1996 1995 (UNAUDITED) Third-party customer 38% 24% 23% 34% Third-party customer -- 17% 12% 14% Third-party customer 14% -- -- -- Related party customer 26% 39% 38% 26%
4. COMMITMENTS AND CONTINGENCIES At December 31, 1996, AIA was in violation of certain restrictive covenants included in the credit agreements associated with the Boeing 727 fleet. In September 1997, AIA's lenders waived such non-compliance and released the assets as collateral in order for this transaction to be consummated. F-6 10 Currently, thirteen of the Boeing 727 aircraft do not comply with the Federal Aviation Administration's Stage III noise control standards. AIA has estimated that modification costs would be $24 million for the aircraft to be in compliance with the Stage III noise control standards which go into effect by January 1, 2000. ****** F-7 11 UNAUDITED PRO FORMA FINANCIAL INFORMATION The following sets forth Unaudited Pro Forma Financial Information of Kitty Hawk, Inc. (the "Company") for the twelve months ended December 31, 1996 and the six months ended June 30, 1997, in each case giving effect to the Acquisition of the AIA 727 Fleet. The Company's Unaudited Pro Forma Statement of Operations Information presents the Acquisition of the AIA 727 Fleet as if it had been consummated at the beginning of 1996. The Company's Unaudited Pro Forma Balance Sheet Information presents the Acquisition of the AIA 727 Fleet as if it had been consummated on June 30, 1997. The Unaudited Pro Forma Financial Information of the Company is presented for illustrative purposes only and does not purport to present the financial position or results of operation of the Company had the Acquisition of the AIA 727 Fleet occurred on the dates indicated, nor are they necessarily indicative of the results of operations which may be expected to occur in the future. The Unaudited Pro Forma Financial Information should be read in conjunction with the separate historical financial statements of the Company included in its Form 10-Q for the period ended June 30, 1997 and its Transition Report on Form 10-K/A for the transition period from September 1, 1996 to December 31, 1996 and the statements of assets and revenues and direct expenses of certain assets sold of AIA appearing elsewhere in this Form 8- K. The historical balance sheet information of the Company has been derived from the unaudited June 30, 1997 balance sheet included in its Form 10-Q for the period ended June 30, 1997. The balance sheet information for the AIA 727 Fleet has been derived from the unaudited statements of assets of certain assets sold of AIA as of June 30, 1997 included elsewhere in this Form 8-K. The historical statement of operations data for the Company for the twelve months ended December 31, 1996 has been derived from unaudited information presented in Footnote 10 to the Company's audited financial statements included in its Transition Report on Form 10-K/A for the transition period from September 1, 1996 to December 31, 1996. The historical statement of operations data for the Company for the six months ended June 30, 1997 has been derived from the unaudited statement of operations included in its Form 10-Q for the period ended June 30, 1997. The statement of operations data for the AIA 727 Fleet for the twelve months ended December 31, 1996 has been derived from the audited statements of revenues and direct expenses of certain assets sold of AIA appearing elsewhere in this Form 8-K. The statement of operations data for the AIA 727 Fleet for the six months ended June 30, 1997 has been derived from the unaudited statement of revenues and direct expenses of certain assets sold of AIA appearing elsewhere in this Form 8-K. The pro forma adjustments relating to the acquisition of the AIA 727 Fleet represent the Company's preliminary determination of these adjustments and are based upon available information and certain assumptions the Company considers reasonable under the circumstances. Final amounts could differ from those set forth therein and those differences could be material. The unaudited interim financial statements of the Company and the AIA 727 Fleet referred to above include, in the opinion of management of the Company and of AIA, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the Company and of the AIA 727 Fleet for the unaudited interim period. F-8 12 UNAUDITED PRO FORMA FINANCIAL INFORMATION BALANCE SHEET June 30, 1997
Historical ------------------------------ Pro Forma AIA 727 ----------------------------- Kitty Hawk Fleet Adjustments Combined ---------- -------- ----------- --------- (in thousands) Current Assets: Cash and cash equivalents $ 8,952 $ (5,260) 2a $ 3,692 Trade accounts receivable 15,122 15,122 Inventory and aircraft supplies 4,435 4,435 Prepaid expenses and other current assets 5,366 5,366 --------- -------- --------- Total current assets 33,875 (5,260) 28,615 Property and equipment, net 83,483 $ 21,820 33,364 2b,c,e 138,667 --------- -------- -------- --------- Total assets $ 117,358 $ 21,820 $ 28,104 $ 167,282 ========= ======== ======== ========= Current Liabilities: Accounts payable and accrued expenses $ 18,513 $ 3,003 2c $ 21,516 Current maturities of long-term debt 4,774 4,774 --------- -------- --------- Total current liabilities 23,287 3,003 26,290 Long-term debt 29,277 45,900 2d 75,177 Deferred income taxes 2,545 1,021 2e 3,566 Stockholders' equity, net 62,249 62,249 --------- -------- --------- Total liabilities and stockholders' equity $ 117,358 $ 49,924 $ 167,282 ========= ======== =========
See accompanying notes. F-9 13 UNAUDITED PRO FORMA FINANCIAL INFORMATION STATEMENT OF OPERATIONS Twelve months ended December 31, 1996
Historical ------------------------------ Pro Forma AIA 727 ----------------------------- Kitty Hawk Fleet Adjustments Combined ---------- -------- ----------- --------- (in thousands, except per share data) Revenues: Air freight carrier $ 55,504 $ 38,470 $ 93,974 Air logistics 77,168 77,168 ---------- -------- --------- Total revenues 132,672 38,470 171,142 Costs of Revenues: Air freight carrier 40,860 26,336 $ 2,065 1a 69,261 Air logistics 67,938 67,938 ---------- -------- ----------- --------- Total costs of revenues 108,798 26,336 2,065 137,199 Gross profit 23,874 $ 12,134 (2,065) 33,943 ======== General and administrative expenses 8,943 75 1b 9,018 Non-qualified employee profit sharing 1,243 1,243 Stock option grants to executives 4,231 4,231 ---------- ----------- --------- Total operating expenses 14,417 75 14,492 Operating income 9,457 (2,140) 19,451 Other Income (Expense): Interest expense, net (2,062) (3,902) 1c (5,964) Other, net 291 291 ---------- ----------- --------- Income before income taxes 7,686 (6,042) 13,778 Income taxes 3,038 2,408 1d 5,446 ---------- ----------- --------- Net income $ 4,648 $ (8,450) $ 8,332 ========== =========== ========= Net income per share $ 0.55 $ 0.98 ========== ========= Weighted average common and common equivalent shares outstanding 8,477 8,477 ========== =========
See accompanying notes. F-10 14 UNAUDITED PRO FORMA FINANCIAL INFORMATION STATEMENT OF OPERATIONS Six Months ended June 30 , 1997
Historical ------------------------------ Pro Forma AIA 727 ----------------------------- Kitty Hawk Fleet Adjustments Combined ---------- -------- ----------- --------- (in thousands, except per share data) Revenues: Air freight carrier $ 33,237 $ 20,738 $ 53,975 Air logistics 27,232 27,232 -------- -------- -------- Total revenues 60,469 20,738 81,207 Costs of Revenues: Air freight carrier 22,844 18,193 $ (1,385) 1a 39,652 Air logistics 24,819 24,819 -------- -------- -------- -------- Total costs of revenues 47,663 18,193 (1,385) 64,471 Gross profit 12,806 $ 2,545 1,385 16,736 ======== General and administrative expenses 4,884 38 1b 4,922 Non-qualified employee profit sharing 672 672 -------- -------- -------- Total operating expenses 5,556 38 5,594 Operating income 7,250 1,347 11,142 Other Income (Expense): Interest expense, net (1,049) (1,951) 1c (3,000) Other, net 424 424 -------- -------- -------- Income before income taxes 6,625 (604) 8,566 Income taxes 2,650 776 1d 3,426 -------- -------- -------- Net income $ 3,975 $ (1,380) $ 5,140 ======== ======== ======== Net income per share $ 0.38 $ 0.49 ======== ======== Weighted average common and common equivalent shares outstanding 10,452 10,452 ======== ========
See accompanying notes. F-11 15 NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (Dollars in thousands) 1. Pro Forma Statement of Operations - The Company's Pro Forma Statement of Operations data for the twelve months ended December 31, 1996 and the six months ended June 30, 1997 includes the following adjustments:
Twelve months ended Six months December 31, ended June 30, 1996 1997 --------------- -------------- a. Costs of revenues o Increasing depreciation expense from the step-up in fair value of acquired aircraft and adjusting the useful lives of the acquired aircraft to 10 years $ 1,628 $ 615 o Conform AIA's aircraft maintenance accounting policy to that of Kitty Hawk 437 (2,000) ------- -------- 2,065 (1,385) b. Additional general and administrative personnel 75 38 c. Increase interest expense 3,902 1,951 d. Tax expense: o Adjustment to reflect income tax expense on the gross profit of the AIA 727 Fleet at Kitty Hawk's historical effective rate 4,804 1,018 o Adjustment to reflect income tax benefit on the pro forma adjustments at Kitty Hawk's historical effective rate (2,396) (242) ------- -------- 2,408 776 ------- -------- $ 8,450 $ 1,380 ======= ========
No income tax expense has been reflected on the AIA 727 Fleet statement of operations data as AIA filed income taxes under Subchapter S of the U.S. Federal Income Tax Code. Interest expense on the long-term debt assumes an interest rate of 8.5%. F-12 16 NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (continued) 2. Pro Forma Balance Sheet - The Company's Pro Forma Balance Sheet data as of June 30, 1997 includes the following adjustments:
As of June 30, 1997 -------------- a. Cash payment to AIA and related acquisition expenses $ (5,260) b. Record AIA 727 Fleet at fair value, less carrying value of assets acquired 29,340 c. Adjusting accrued maintenance to conform AIA's accounting policy to that of Kitty Hawk 3,003 d. Record long-term debt 45,900 e. Record deferred taxes related to accrued maintenance 1,021
Effective with the acquisition of the AIA 727 Fleet, the Company borrowed $45,900 to finance the purchase of the AIA 727 Fleet. The note bears interest at the applicable rate under the agreement, plus 1.0% from January 1 through December 31, 1999, and 1.5% beginning January 1, 2000 and matures on June 30, 2001. Interest only is payable through March 31, 1998. The loan begins to amortize on June 30, 1998 with equal quarterly installments of principal and interest until maturity. F-13 17 INDEX TO EXHIBITS EXHIBIT NUMBER DESCRIPTION - ------ ----------- 2.1 Agreement for Sale and Purchase of AIA 727 Fleet, dated as of July 31, 1997, by and among, AIA, the Company, Kalitta Flying Service, Inc., Conrad Kalitta and Kitty Hawk Aircargo, Inc.(1) 23.1 Consent of Deloitte & Touche, LLP.(2) - ----------- (1) Previously filed. (2) Filed herewith. Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the Agreement for Sale and Purchase of the AIA 727 Fleet have been omitted. The Company hereby agrees to furnish such schedules and exhibits upon request of the Securities and Exchange Commission. EX-23.1 2 CONSENT OF DELOITTE & TOUCHE, L.L.P 1 EXHIBIT 23.1 To the Board of Directors and Stockholder of American International Airways, Inc. and Related Companies Ypsilanti, Michigan We consent to the incorporation by reference in Registration Statements 333-15667, 333-28553 and 333-23597 of Kitty Hawk, Inc. on Forms S-8, pertaining to the Kitty Hawk, Inc. Amended and Restated Annual Incentive Compensation Plan, Kitty Hawk, Inc. Amended and Restated Employee Stock Purchase Plan and Kitty Hawk, Inc. Amended and Restated Omnibus Securities Plan, respectively, of our report dated September 29, 1997, with respect to the statements of certain assets sold of AIA for the years ended December 31, 1996 and 1995, and the related statements of revenues and direct expenses for the years then ended, appearing in the Current Report - Form 8-KA of Kitty Hawk, Inc. dated November 6, 1997. /s/ Deloitte & Touche LLP Ann Arbor, Michigan November 6, 1997 -----END PRIVACY-ENHANCED MESSAGE-----