Exhibit 99.1
Pinnacle Airlines Corp. Announces Second Quarter 2010 Earnings
Company reports Consolidated Earnings per Share of $0.32
MEMPHIS, TN – August 3, 2010 – Pinnacle Airlines Corp. (NASDAQ: PNCL) (the “Company”) today reported second quarter 2010 net income of $5.9 million and fully diluted earnings per share (“EPS”) of $0.32, as compared to net income and EPS for the second quarter of 2009 of $7.3 million and $0.40, respectively, excluding prior year special items. The Company reported consolidated operating income of $19.8 million in the second quarter of 2010, a decrease of $3.9 million from the second quarter of 2009, excluding prior year special items. Among other items, the second quarter of 2010 was negatively affected by higher aviation insurance premiums that were the subject of a previously reported dispute with Delta and were n ot reimbursed totaling $1.7 million ($1.0 million net of related income taxes). The Company has resolved this dispute with Delta and does not expect to incur any additional future un-reimbursed aviation insurance premiums under its Delta Connection agreements. Second quarter 2010 pre-tax income was also reduced by a $1.5 million ($1.0 million net of related income taxes) adjustment to the fair value of interest rate options that the Company purchased to hedge interest rates in connection with the Company’s Q400 growth program.
“On behalf of the People of Pinnacle Airlines Corp., I’m pleased to report another quarter of profitability,” said Philip Trenary, the Company’s President and Chief Executive Officer. “While we are disappointed that income declined slightly from a year ago, we are confident that the steps we are taking now will lead to increased profitability in the future. I am very proud of the job our People perform for our Customers and Shareholders, and I want to thank each and every one of them for their hard work.”
For the six months ended June 30, 2010, the Company reported net income of $7.6 million and EPS of $0.41.
Recent Significant Events
- The Company acquired Mesaba Aviation, Inc. from Delta Air Lines on July 1, 2010. Mesaba operates a fleet of 60 Canadair regional jet aircraft and 32 Saab 340B+ turbo-prop aircraft. With this acquisition, the Company’s consolidated fleet has grown from 190 regional aircraft to 282. This acquisition will significantly increase the Company’s revenue and operating income, and is expected to result in an increase in net income in the second half of 2010.
- The Company also resolved several commercial issues with Delta Air Lines, including a dispute over the reimbursement of aviation insurance premiums, and an issue related to a rate reset under the Company’s CRJ-200 operating agreement with Delta that was to have taken place in 2006.
- In late July, the Company took delivery of the first of 15 additional Q400 regional aircraft to be placed in service under the Company’s operating agreement with Continental. The Company expects to take delivery of seven additional Q400 aircraft in 2010, and seven Q400 aircraft in the first half of 2011.
“I want to welcome the People of Mesaba Airlines to the Pinnacle family,” said Phil Trenary. “Mesaba Airlines has a long history and culture of safe, highly reliable operations. With the expansion of our regional jet fleet through the acquisition of Mesaba, and the growth of our Q400 fleet, we are laying the foundation for consistent, stable earnings growth in the future.”
Second Quarter 2010 Financial and Operating Results
During the second quarter of 2010, Pinnacle Airlines, Inc. (“Pinnacle”), the Company’s regional jet operating subsidiary, completed 108,371 block hours and 70,483 departures, increases of 2% and 2%, respectively, over the same period in 2009. Pinnacle’s average utilization of its operating fleet increased by 1%. Colgan Air, Inc. (“Colgan”), the Company’s regional turboprop operating subsidiary, completed 32,795 block hours and 26,783 departures during the second quarter, decreases of 4% and 3%, respectively, over the same period in 2009. Colgan operated four fewer Saab 340 aircraft within its pro-rate network during the majority of the second quarter. Three of these aircraft were rescheduled back into service during June 2010.
The Company recorded consolidated operating revenue during the second quarter of 2010 of $218.7 million, an increase of $7.5 million, or 4%, over the same period in 2009. Annual rate increases from the Company’s partners, as well as higher reimbursable costs, contributed to the net increase in consolidated operating revenue.
Pinnacle reported second quarter 2010 operating income and an operating margin of $16.8 million and 10.5%, a decrease of $0.2 million and 0.5 points, respectively, from the second quarter of 2009. Operating income decreased slightly due primarily to the $1.7 million of insurance costs that were not reimbursed by Delta. The un-reimbursed insurance costs were offset by higher revenue from an annual increase in rates under Pinnacle’s operating agreements, and by slightly improved aircraft utilization. During the first quarter of 2010, Pinnacle recorded an estimate of operating performance penalties under its CRJ-200 agreement with Delta for the first six months of 2010. Pinnacle’s operating performance improved during the second quarter of 2010, resulting in a $0.5 million reduction of the esti mate for operating performance penalties under the CRJ-200 agreement.
Colgan reported operating income and an operating margin of $3.0 million and 5.1%, a decrease of $2.2 million and 4.0 points, respectively, from the second quarter of 2009 (excluding special charges). Fuel costs associated with Colgan’s pro-rate operations increased by $1.5 million year-over year. Fuel cost per gallon during the first quarter 2010 was $2.66, up 40% from $1.90 per gallon during the same period in 2009. In addition, Colgan experienced an increase in salaries, wages and benefits of $1.2 million from lower productivity, higher health care and other benefits costs, and crew training costs for the additional Q400 aircraft to be delivered this year. These cost increases were partially offset by $1.2 million of additional revenue, from both a small increase under Colgan’s operating agreement with Continental Airlines, and a 10% increase in revenue-per-available-seat-mile in Colgan’s pro-rate markets.
Net nonoperating expense of $10.0 million for the three months ended June 30, 2010 decreased by approximately $2.5 million as compared to the same period in 2009. The decrease was primarily caused by reduced net interest expense from the net repayment of approximately $230 million of the Company’s debt obligations since July 1, 2009. The decrease in net interest expense was partially offset by a change in the fair value of interest rate options that are a part of the Company’s hedging program. The Company is not applying hedge accounting to these interest rate options, and is instead recording adjustments in their fair value each period through the expiration of each option. The options will expire as the Company’s 15 additional Q400 aircraft are delivered in the second ha lf of 2010 and first half of 2011.
Cash and Cash Equivalents
The Company ended the quarter with $79.0 million in unrestricted cash and cash equivalents. The Company generated $3.9 million in cash from operating activities during the second quarter of 2010. Cash flow from operating activities was reduced by the prepayment of approximately $10.0 million of aircraft lease payments on June 30. In addition, the Company paid $2.0 million to purchase interest rate and fuel options during the second quarter of 2010.
Net cash used in investing activities for the three months ended June 30, 2010 was $5.2 million, primarily for pre-delivery payments for future Q400 aircraft deliveries and other routine capital expenditures. Net cash used in financing activities for the three months ended June 30, 2010 totaled $11.8 million, primarily for scheduled principal payments on long-term debt obligations.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp. (NASDAQ: PNCL), an airline holding company, is the parent company of Pinnacle Airlines, Inc.; Colgan Air, Inc.; and Mesaba Aviation, Inc. Pinnacle Airlines, Inc. operates a fleet of 142 regional jets as Delta Connection in the United States, Canada, the Bahamas, Mexico, U.S. Virgin Islands, and Turks and Caicos Islands. Colgan Air, Inc. operates a fleet of 48 regional turboprops as Continental Connection, United Express and US Airways Express in the eastern United States and Canada, Texas and Louisiana. Mesaba Aviation, Inc. operates a fleet of 60 regional jets and 32 jet-prop aircraft as Delta Connection in the United States and Canada. The corporate headquarters is located in Memphis, Tenn. Airport hub operations are located in Atlanta, Boston, Detroit, Newark, Washington Dulles, Houston, Memphis, Minneapolis and Salt Lake City. For further information about the Company, please refer to the Company’s Form 10-Q for the quarter ended June 30, 2010, which will soon be filed with the SEC.
Non-GAAP Disclosures
This release and certain tables accompanying this release include certain financial information not prepared in accordance with generally accepted accounting principles ("GAAP"), including Colgan’s operating income, Colgan’s operating margin, the Company's operating income, operating margin, nonoperating expense, pre-tax income, net income and diluted EPS for the three and six months ended June 30, 2009, excluding special charges related to the excess of property insurance proceeds over cost basis of aircraft, ineffective portion of cash flow hedge, reversal of income tax reserves and related accrued interest, net investment loss, and the gain on debt extinguishment. The Company believes that this information is useful to investors as it indicates more clearly the Company's comparative year-to-year results. None of this inf ormation should be considered a substitute for any measures prepared in accordance with GAAP. The Company has included its reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in the accompanying schedules.
Forward-Looking Statements
This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission, which are available to investors at our website or online from the Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove erroneous, actual results may vary materially from results that were anticipated or projected. The Co mpany does not intend to update these forward-looking statements before its next required filing with the Securities and Exchange Commission.
For further information, please contact Joe Williams, at (901) 346-6162, or visit our website at www.pncl.com.
###
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
| | | Three Months Ended June 30, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Operating revenues | | | | | | |
| Regional airline services | | $ | 214,844 | | | $ | 209,212 | |
| Other | | | 3,876 | | | | 2,051 | |
| Total operating revenues | | | 218,720 | | | | 211,263 | |
| Operating expenses | | | | | | | | |
| Salaries, wages and benefits | | | 57,750 | | | | 55,757 | |
| Aircraft rentals | | | 30,004 | | | | 30,094 | |
| Ground handling services | | | 22,921 | | | | 22,196 | |
| Aircraft maintenance, materials and repairs | | | 27,044 | | | | 26,333 | |
| Other rentals and landing fees | | | 17,411 | | | | 17,925 | |
| Aircraft fuel | | | 6,727 | | | | 5,254 | |
| Commissions and passenger related expense | | | 5,194 | | | | 5,227 | |
| Depreciation and amortization | | | 8,793 | | | | 8,782 | |
| Other | | | 23,107 | | | | 17,512 | |
| Total operating expenses | | | 198,951 | | | | 189,080 | |
| Operating income | | | 19,769 | | | | 22,183 | |
| | | | | | | | | |
| Operating income as a percentage of operating revenues | | | 9.0 | % | | | 10.5 | % |
| Nonoperating (expense) income | | | | | | | | |
| Interest expense, net | | | (8,810 | ) | | | (12,171 | ) |
| Miscellaneous expense, net | | | (1,231 | ) | | | (346 | ) |
| Total nonoperating expense | | | (10,041 | ) | | | (12,517 | ) |
| Income before income taxes | | | 9,728 | | | | 9,666 | |
| Income tax expense | | | (3,841 | ) | | | (3,673 | ) |
| Net income | | $ | 5,887 | | | $ | 5,993 | |
| | | | | | | | | |
| Basic and diluted earnings per share | | $ | 0.32 | | | $ | 0.33 | |
| | | | | | | | | |
| Shares used in computing basic earnings per share | | | 18,137 | | | | 17,970 | |
| Shares used in computing diluted earnings per share | | | 18,449 | | | | 17,979 | |
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
| | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Operating revenues | | | | | | |
| Regional airline services | | $ | 420,333 | | | $ | 415,136 | |
| Other | | | 6,467 | | | | 3,949 | |
| Total operating revenues | | | 426,800 | | | | 419,085 | |
| Operating expenses | | | | | | | | |
| Salaries, wages and benefits | | | 115,178 | | | | 112,597 | |
| Aircraft rentals | | | 60,055 | | | | 60,586 | |
| Ground handling services | | | 47,763 | | | | 48,658 | |
| Aircraft maintenance, materials and repairs | | | 53,616 | | | | 51,469 | |
| Other rentals and landing fees | | | 33,323 | | | | 36,328 | |
| Aircraft fuel | | | 12,420 | | | | 9,771 | |
| Commissions and passenger related expense | | | 9,624 | | | | 10,054 | |
| Depreciation and amortization | | | 17,634 | | | | 17,363 | |
| Other | | | 44,722 | | | | 33,141 | |
| Total operating expenses | | | 394,335 | | | | 379,967 | |
| Operating income | | | 32,465 | | | | 39,118 | |
| | | | | | | | | |
| Operating income as a percentage of operating revenues | | | 7.6 | % | | | 9.3 | % |
| Nonoperating (expense) income | | | | | | | | |
| Interest expense, net | | | (18,601 | ) | | | (21,058 | ) |
| Miscellaneous (expense) income, net | | | (1,279 | ) | | | 55 | |
| Total nonoperating expense | | | (19,880 | ) | | | (21,003 | ) |
| Income before income taxes | | | 12,585 | | | | 18,115 | |
| Income tax (expense) benefit | | | (5,006 | ) | | | 6,721 | |
| Net income | | $ | 7,579 | | | $ | 24,836 | |
| | | | | | | | | |
| Basic earnings per share | | $ | 0.42 | | | $ | 1.38 | |
| Diluted earnings per share | | $ | 0.41 | | | $ | 1.38 | |
| | | | | | | | | |
| Shares used in computing basic earnings per share | | | 18,112 | | | | 17,968 | |
| Shares used in computing diluted earnings per share | | | 18,454 | | | | 17,974 | |
Pinnacle Airlines Corp.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
| | | | | | | |
| | | June 30, 2010 | | | December 31, 2009 | |
| Assets | | (Unaudited) | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 79,010 | | | $ | 91,574 | |
| Restricted cash | | | 3,115 | | | | 3,115 | |
| Receivables, net | | | 34,779 | | | | 34,518 | |
| Spare parts and supplies, net | | | 20,848 | | | | 19,472 | |
| Prepaid expenses and other assets | | | 16,022 | | | | 3,508 | |
| Assets held for sale | | | - | | | | 1,255 | |
| Deferred income taxes, net of allowance | | | 10,111 | | | | 10,406 | |
| Income taxes receivable | | | 1,886 | | | | 40,803 | |
| Total current assets | | | 165,771 | | | | 204,651 | |
| Property and equipment | | | | | | | | |
| Flight equipment | | | 756,917 | | | | 755,236 | |
| Aircraft pre-delivery payments | | | 37,848 | | | | 12,049 | |
| Other property and equipment | | | 49,970 | | | | 48,710 | |
| Less accumulated depreciation | | | (103,838 | ) | | | (86,501 | ) |
| Net property and equipment | | | 740,897 | | | | 729,494 | |
| | | | | | | | | |
| Investments | | | 2,587 | | | | 2,723 | |
| Debt issuance costs, net | | | 4,214 | | | | 3,561 | |
| Goodwill | | | 18,422 | | | | 18,422 | |
| Intangible assets, net | | | 11,590 | | | | 12,586 | |
| Other assets, primarily insurance receivables | | | 320,221 | | | | 317,659 | |
| Total assets | | $ | 1,263,702 | | | $ | 1,289,096 | |
| | | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Current maturities of long-term debt | | $ | 36,607 | | | $ | 36,085 | |
| Senior convertible notes | | | - | | | | 30,596 | |
| Pre-delivery payment facility | | | 27,393 | | | | 2,027 | |
| Accounts payable | | | 26,896 | | | | 23,982 | |
| Deferred revenue | | | 24,363 | | | | 24,363 | |
| Accrued expenses and other current liabilities | | | 61,022 | | | | 60,610 | |
| Total current liabilities | | | 176,281 | | | | 177,663 | |
| Noncurrent pre-delivery payment facility | | | - | | | | 4,910 | |
| Long-term debt, less current maturities | | | 500,771 | | | | 519,234 | |
| Deferred revenue, net of current portion | | | 166,273 | | | | 177,711 | |
| Deferred income taxes | | | 17,782 | | | | 13,532 | |
| Other liabilities | | | 290,479 | | | | 293,809 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
Common stock, $0.01 par value; 40,000,000 shares authorized; 23,065,179 and 22,786,743 shares issued, respectively | | | 231 | | | | 228 | |
| Treasury stock, at cost, 4,493,327 and 4,450,092 shares, respectively | | | (68,479 | ) | | | (68,152 | ) |
| Additional paid-in capital | | | 123,185 | | | | 121,513 | |
| Accumulated other comprehensive loss | | | (13,479 | ) | | | (14,431 | ) |
| Retained earnings | | | 70,658 | | | | 63,079 | |
| Total stockholders’ equity | | | 112,116 | | | | 102,237 | |
| Total liabilities and stockholders’ equity | | $ | 1,263,702 | | | $ | 1,289,096 | |
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Cash provided by operating activities | | $ | 44,819 | | | $ | 62,752 | |
| Cash (used in) provided by investing activities | | | (6,727 | ) | | | 3,728 | |
| Cash used in financing activities | | | (50,656 | ) | | | (41,740 | ) |
| Net (decrease) increase in cash and cash equivalents | | | (12,564 | ) | | | 24,740 | |
| Cash and cash equivalents at beginning of period | | | 91,574 | | | | 69,469 | |
| Cash and cash equivalents at end of period | | $ | 79,010 | | | $ | 94,209 | |
| | | | | | | | | |
Pinnacle Airlines Corp.
Pinnacle Operating Statistics (Unaudited)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| | | | | | | | | | | | | | | | | | | |
| Other Data: | | | | | | | | | | | | | | | | | | |
| Revenue passengers (in thousands) | | | 2,721 | | | | 2,778 | | | | (2 | )% | | | 5,176 | | | | 5,163 | | | | 0 | % |
| Revenue passenger miles (“RPMs”) (in thousands) | | | 1,169,388 | | | | 1,211,030 | | | | (3 | )% | | | 2,229,741 | | | | 2,301,384 | | | | (3 | )% |
| Available seat miles (“ASMs”) (in thousands) | | | 1,545,867 | | | | 1,548,790 | | | | (0 | )% | | | 3,006,041 | | | | 3,129,301 | | | | (4 | )% |
| Passenger load factor | | | 75.6 | % | | | 78.2 | % | | (2.6) pts. | | | | 74.2 | % | | | 73.5 | % | | 0.7 pts. | |
| Operating revenue per ASM (in cents) | | | 10.41 | | | | 9.98 | | | | 4 | % | | | 10.63 | | | | 9.90 | | | | 7 | % |
| Operating cost per ASM (in cents) | | | 9.32 | | | | 8.88 | | | | 5 | % | | | 9.58 | | | | 8.92 | | | | 7 | % |
| Operating revenue per block hour | | $ | 1,484 | | | $ | 1,452 | | | | 2 | % | | $ | 1,499 | | | $ | 1,437 | | | | 4 | % |
| Operating cost per block hour | | $ | 1,329 | | | $ | 1,292 | | | | 3 | % | | $ | 1,351 | | | $ | 1,294 | | | | 4 | % |
| Block hours | | | 108,371 | | | | 106,475 | | | | 2 | % | | | 213,138 | | | | 215,715 | | | | (1 | )% |
| Departures | | | 70,483 | | | | 68,826 | | | | 2 | % | | | 137,058 | | | | 135,456 | | | | 1 | % |
| Average daily utilization (block hours) | | | 8.39 | | | | 8.29 | | | | 1 | % | | | 8.29 | | | | 8.38 | | | | (1 | )% |
| Average stage length (miles) | | | 420 | | | | 427 | | | | (2 | )% | | | 420 | | | | 439 | | | | (4 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of operating aircraft (end of period) | | | | | | | | | | | | | | | | | | | | | | | | |
| CRJ-200 | | | 126 | | | | 124 | | | | 2 | % | | | | | | | | | | | | |
| CRJ-900 | | | 16 | | | | 16 | | | | 0 | % | | | | | | | | | | | | |
| Employees (end of period) | | | 3,694 | | | | 4,060 | | | | (9 | )% | | | | | | | | | | | | |
Pinnacle Airlines Corp.
Colgan Operating Statistics (Unaudited)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Pro-rate Agreements: | | | | | | | | | | | | | | | | | | |
| Revenue passengers (in thousands) | | | 301 | | | | 305 | | | | (1 | )% | | | 532 | | | | 553 | | | | (4 | )% |
| RPMs (in thousands) | | | 51,554 | | | | 53,010 | | | | (3 | )% | | | 90,904 | | | | 95,614 | | | | (5 | )% |
| ASMs (in thousands) | | | 104,764 | | | | 114,768 | | | | (9 | )% | | | 199,515 | | | | 225,791 | | | | (12 | )% |
| Passenger load factor | | | 49.2 | % | | | 46.2 | % | | 3.0 pts. | | | | 45.6 | % | | | 42.3 | % | | 3.3 pts. | |
| Passenger yield (in cents) | | | 75.59 | | | | 73.02 | | | | 4 | % | | | 78.23 | | | | 76.03 | | | | 3 | % |
| Operating revenue per ASM (in cents) | | | 37.20 | | | | 33.73 | | | | 10 | % | | | 35.64 | | | | 32.20 | | | | 11 | % |
| Operating revenue per block hour | | $ | 1,857 | | | $ | 1,720 | | | | 8 | % | | $ | 1,766 | | | $ | 1,627 | | | | 9 | % |
| Block hours | | | 20,986 | | | | 22,507 | | | | (7 | )% | | | 40,269 | | | | 44,683 | | | | (10 | )% |
| Departures | | | 18,844 | | | | 20,018 | | | | (6 | )% | | | 35,905 | | | | 39,638 | | | | (9 | )% |
| Fuel consumption (in thousands of gallons) | | | 2,530 | | | | 2,772 | | | | (9 | )% | | | 4,901 | | | | 5,404 | | | | (9 | )% |
| Average price per gallon | | $ | 2.66 | | | $ | 1.90 | | | | 40 | % | | $ | 2.53 | | | $ | 1.81 | | | | 40 | % |
| Average fare | | $ | 129 | | | $ | 127 | | | | 2 | % | | $ | 134 | | | $ | 131 | | | | 2 | % |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Capacity Purchase Agreements: | | | | | | | | | | | | | | | | | | |
| Revenue passengers (in thousands) | | | 410 | | | | 405 | | | | 1 | % | | | 734 | | | | 734 | | | | 0 | % |
| RPMs (in thousands) | | | 124,271 | | | | 113,096 | | | | 10 | % | | | 218,521 | | | | 202,801 | | | | 8 | % |
| ASMs (in thousands) | | | 173,319 | | | | 157,299 | | | | 10 | % | | | 319,228 | | | | 306,763 | | | | 4 | % |
| Passenger load factor | | | 71.7 | % | | | 71.9 | % | | (0.2) pts. | | | | 68.5 | % | | | 66.1 | % | | 2.4 pts. | |
| Operating revenue per ASM (in cents) | | | 10.83 | | | | 11.41 | | | | (5 | )% | | | 11.29 | | | | 11.85 | | | | (5 | )% |
| Operating revenue per block hour | | $ | 1,590 | | | $ | 1,531 | | | | 4 | % | | $ | 1,604 | | | $ | 1,550 | | | | 3 | % |
| Block hours | | | 11,809 | | | | 11,726 | | | | 1 | % | | | 22,477 | | | | 23,461 | | | | (4 | )% |
| Departures | | | 7,939 | | | | 7,666 | | | | 4 | % | | | 14,966 | | | | 15,134 | | | | (1 | )% |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Total Colgan: | | | | | | | | | | | | | | | | | | |
| Block hours | | | 32,795 | | | | 34,233 | | | | (4 | )% | | | 62,746 | | | | 68,144 | | | | (8 | )% |
| Departures | | | 26,783 | | | | 27,684 | | | | (3 | )% | | | 50,871 | | | | 54,772 | | | | (7 | )% |
| ASMs (in thousands) | | | 278,083 | | | | 272,067 | | | | 2 | % | | | 518,743 | | | | 532,554 | | | | (3 | )% |
| Total operating cost per ASM (in cents) | | | 19.75 | | | | 18.94 | | | | 4 | % | | | 20.50 | | | | 18.95 | | | | 8 | % |
| Total operating cost per block hour | | $ | 1,674 | | | $ | 1,505 | | | | 11 | % | | $ | 1,695 | | | $ | 1,481 | | | | 14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average daily utilization (block hours) | | | 7.59 | | | | 7.84 | | | | (3 | )% | | | 7.24 | | | | 7.72 | | | | (6 | )% |
| Average stage length (miles) | | | 229 | | | | 221 | | | | 4 | % | | | 226 | | | | 219 | | | | (3 | )% |
| Number of operating aircraft (end of period) | | | | | | | | | | | | | | | | | | | | | | | | |
| Saab 340 | | | 34 | (1) | | | 34 | | | | 0 | % | | | | | | | | | | | | |
| Q400 | | | 14 | | | | 14 | | | | 0 | % | | | | | | | | | | | | |
| Employees | | | 1,408 | | | | 1,334 | | | | 6 | % | | | | | | | | | | | | |
| (1) | Four of the Saab 340 aircraft operating as US Airways Express were temporarily removed from scheduled service during the three months ended March 31, 2010. Three of these aircraft were rescheduled into service during June 2010. |
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
| | | Three Months Ended June 30, | |
| | | 2010 | | | 2009 | | | % Increase (Decrease) | |
| Colgan operating (loss) income: | | | | | | | | | |
| Colgan operating (loss) income in accordance with GAAP | | $ | 2,955 | | | $ | 5,188 | | | | (43 | )% |
| Add: Aircraft retirement charges | | | - | | | | 1,533 | | | | N/A | |
| Colgan non-GAAP operating (loss) income | | $ | 2,955 | | | $ | 6,721 | | | | (56 | )% |
| | | | | | | | | | | | | |
| Colgan operating margin: | | | | | | | | | | | | |
| Colgan operating margin in accordance with GAAP | | | 5.1 | % | | | 9.1 | % | | (4.0) pts. | |
| Add: Aircraft retirement charges | | | - | | | | 2.7 | % | | | N/A | |
| Colgan non-GAAP operating margin | | | 5.1 | % | | | 11.8 | % | | (6.7) pts. | |
| | | | | | | | | | | | | |
| Consolidated operating income: | | | | | | | | | | | | |
| Operating income in accordance with GAAP | | $ | 19,769 | | | $ | 22,183 | | | | (11 | )% |
| Add: Aircraft retirement charges | | | - | | | | 1,533 | | | | N/A | |
| Non-GAAP operating income | | $ | 19,769 | | | $ | 23,716 | | | | (17 | )% |
| | | | | | | | | | | | | |
| Consolidated operating margin | | | | | | | | | | | | |
| Operating margin in accordance with GAAP | | | 9.0 | % | | | 10.5 | % | | (1.5) pts. | |
| Add: Aircraft retirement charges | | | - | | | | 0.7 | % | | | N/A | |
| Non-GAAP operating margin | | | 9.0 | % | | | 11.2 | % | | (2.2) pts. | |
| | | | | | | | | | | | | |
| Consolidated nonoperating expense: | | | | | | | | | | | | |
| Nonoperating expense in accordance with GAAP | | $ | (10,041 | ) | | $ | (12,517 | ) | | | (20 | )% |
| Add: Ineffective portion of interest rate hedge | | | - | | | | - | | | | N/A | |
| Deduct: Reversal of interest on income tax reserves | | | - | | | | - | | | | N/A | |
| Deduct: Gain on repurchase of senior convertible notes | | | - | | | | - | | | | N/A | |
| Non-GAAP nonoperating expense | | $ | (10,041 | ) | | $ | (12,517 | ) | | | (20 | )% |
| | | | | | | | | | | | | |
| Consolidated income before income taxes: | | | | | | | | | | | | |
| Income before income taxes in accordance with GAAP | | $ | 9,728 | | | $ | 9,666 | | | | 1 | % |
| Add: Aircraft retirement charges | | | - | | | | 1,533 | | | | N/A | |
| Add: Net investment loss | | | - | | | | 334 | | | | N/A | |
| Non-GAAP income before income taxes | | $ | 9,728 | | | $ | 11,533 | | | | (16 | )% |
| | | | | | | | | | | | | |
| Net income: | | | | | | | | | | | | |
| Net income in accordance with GAAP | | $ | 5,887 | | | $ | 5,993 | | | | (2 | )% |
| Add: Aircraft retirement charges | | | - | | | | 943 | | | | N/A | |
Add: Net investment loss | | | - | | | | 320 | | | | N/A | |
| Non-GAAP net income | | $ | 5,887 | | | $ | 7,256 | | | | (19 | )% |
| | | | | | | | | | | | | |
| Diluted EPS: | | | | | | | | | | | | |
| Diluted EPS in accordance with GAAP | | $ | 0.32 | | | $ | 0.33 | | | | (3 | )% |
| Add: Aircraft retirement charges | | | - | | | | 0.05 | | | | N/A | |
Add: Net investment loss | | | - | | | | 0.02 | | | | N/A | |
| Non-GAAP diluted earnings per share | | $ | 0.32 | | | $ | 0.40 | | | | (20 | )% |
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
| | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | % Increase (Decrease) | |
| Colgan operating (loss) income: | | | | | | | | | |
| Colgan operating (loss) income in accordance with GAAP | | $ | 988 | | | $ | 8,222 | | | | (88 | )% |
| Add: Aircraft retirement charges | | | - | | | | 1,980 | | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft | | | - | | | | (835 | ) | | | N/A | |
| Colgan non-GAAP operating (loss) income | | $ | 988 | | | $ | 9,367 | | | | (89 | )% |
| | | | | | | | | | | | | |
| Colgan operating margin: | | | | | | | | | | | | |
| Colgan operating margin in accordance with GAAP | | | 0.9 | % | | | 7.5 | % | | (6.6) pts. | |
| Add: Aircraft retirement charges | | | - | | | | 0.5 | % | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft | | | - | | | | (0.2 | )% | | | N/A | |
| Colgan non-GAAP operating margin | | | 0.9 | % | | | 7.8 | % | | (6.9) pts. | |
| | | | | | | | | | | | | |
| Consolidated operating income: | | | | | | | | | | | | |
| Operating income in accordance with GAAP | | $ | 32,465 | | | $ | 39,118 | | | | (17 | )% |
| Add: Aircraft retirement charges | | | - | | | | 1,980 | | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft | | | - | | | | (835 | ) | | | N/A | |
| Non-GAAP operating income | | $ | 32,465 | | | $ | 40,263 | | | | (19 | )% |
| | | | | | | | | | | | | |
| Consolidated operating margin | | | | | | | | | | | | |
| Operating margin in accordance with GAAP | | | 7.6 | % | | | 9.3 | % | | (1.7) pts. | |
| Add: Aircraft retirement charges | | | - | | | | 0.5 | % | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft | | | - | | | | (0.2 | )% | | | N/A | |
| Non-GAAP operating margin | | | 7.6 | % | | | 9.6 | % | | (2.0) pts. | |
| | | | | | | | | | | | | |
| Consolidated nonoperating expense: | | | | | | | | | | | | |
| Nonoperating expense in accordance with GAAP | | $ | (19,880 | ) | | $ | (21,003 | ) | | | (5 | )% |
| Add: Ineffective portion of interest rate hedge | | | - | | | | 1,424 | | | | N/A | |
| Add: Net investment loss | | | - | | | | 289 | | | | N/A | |
| Deduct: Reversal of interest on income tax reserves | | | - | | | | (2,926 | ) | | | N/A | |
| Deduct: Gain on repurchase of senior convertible notes | | | - | | | | (1,857 | ) | | | N/A | |
| Non-GAAP nonoperating expense | | $ | (19,880 | ) | | $ | (24,073 | ) | | | (17 | )% |
| | | | | | | | | | | | | |
| Consolidated income before income taxes: | | | | | | | | | | | | |
| Income before income taxes in accordance with GAAP | | $ | 12,585 | | | $ | 18,115 | | | | (31 | )% |
| Add: Aircraft retirement charges | | | | | | | 1,980 | | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft | | | - | | | | (835 | ) | | | N/A | |
| Add: Net investment loss | | | | | | | 289 | | | | N/A | |
| Add: Ineffective portion of interest rate hedge | | | - | | | | 1,424 | | | | N/A | |
| Deduct: Reversal of interest on income tax reserves | | | - | | | | (2,926 | ) | | | N/A | |
| Deduct: Gain on repurchase of senior convertible notes | | | - | | | | (1,857 | ) | | | N/A | |
| Non-GAAP income before income taxes | | $ | 12,585 | | | $ | 16,190 | | | | (22 | )% |
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
| | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | % Increase (Decrease) | |
| Net income: | | | | | | | | | |
| Net income in accordance with GAAP | | $ | 7,579 | | | $ | 24,836 | | | | (69 | )% |
| Add: Aircraft retirement charges, net of tax | | | | | | | 1,218 | | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft, net of tax | | | - | | | | (514 | ) | | | N/A | |
| Add: Net investment loss, net of tax | | | - | | | | 277 | | | | N/A | |
| Add: Ineffective portion of interest rate hedge, net of tax | | | - | | | | 876 | | | | N/A | |
| Deduct: Reversal of interest on income tax reserves, net of tax | | | - | | | | (1,842 | ) | | | N/A | |
| Deduct: Gain on repurchase of senior convertible notes, net of tax | | | - | | | | (1,118 | ) | | | N/A | |
| Deduct: IRS settlement | | | | | | | (13,552 | ) | | | N/A | |
| Non-GAAP net income | | $ | 7,579 | | | $ | 10,181 | | | | (26 | )% |
| | | | | | | | | | | | | |
| Diluted EPS: | | | | | | | | | | | | |
| Diluted EPS in accordance with GAAP | | $ | 0.41 | | | $ | 1.38 | | | | (70 | )% |
| Add: Aircraft retirement charges, net of tax | | | - | | | | 0.07 | | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft, net of tax | | | - | | | | (0.03 | ) | | | N/A | |
| Add: Net investment loss, net of tax | | | - | | | | 0.02 | | | | N/A | |
| Add: Ineffective portion of interest rate hedge, net of tax | | | - | | | | 0.05 | | | | N/A | |
| Deduct: Reversal of interest on income tax reserves, net of tax | | | - | | | | (0.10 | ) | | | N/A | |
| Deduct: Gain on repurchase of senior convertible notes, net of tax | | | - | | | | (0.06 | ) | | | N/A | |
| Deduct: IRS settlement | | | - | | | | (0.75 | ) | | | N/A | |
| Non-GAAP diluted earnings per share | | $ | 0.41 | | | $ | 0.58 | | | | (29 | )% |
