Exhibit 99.1
Pinnacle Airlines Corp. Announces Third Quarter 2010 Profit of $9.4 Million
Company reports Diluted Earnings per Share of $0.51
MEMPHIS, TN – November 9, 2010 – Pinnacle Airlines Corp. (NASDAQ: PNCL) (the “Company”) today reported third quarter 2010 net income of $9.4 million and diluted earnings per share (“EPS”) of $0.51, an increase of 29% and 28%, respectively, over net income and EPS for the third quarter of 2009, excluding special items. The Company reported consolidated operating income of $25.7 million in the third quarter of 2010, an increase of $1.9 million from the third quarter of 2009.
Mesaba Aviation, Inc. (“Mesaba”), which the Company acquired on July 1, 2010, achieved operating income of $3.1 million for the third quarter of 2010. Mesaba’s EBITDA (earnings before interest, taxes, depreciation and amortization) was $4.4 million, which is consistent with the Company’s previously announced quarterly target under Mesaba’s operating agreements with Delta. Inclusive of interest expense on a $63.3 million note issued as part of the acquisition, Mesaba contributed $1.0 million to the Company’s consolidated pre-tax earnings.
“I want to thank the People of Pinnacle Airlines Corp. for delivering a strong financial quarter for our shareholders,” said Philip Trenary, the Company’s President and Chief Executive Officer. “Both Pinnacle Airlines and Colgan Air reported solid financial results in the third quarter of 2010, and the acquisition of Mesaba was accretive from day one.”
For the nine months ended September 30, 2010, the Company reported net income of $17.0 million and diluted EPS of $0.92, as compared to $17.6 million and $0.97 for the nine months ended September 30, 2009, excluding special items.
The Company took delivery of two Q400 aircraft during the third quarter of 2010 to be operated under the existing capacity purchase agreement with United Continental Holdings, Inc. In October and November, the Company took delivery of three additional Q400 aircraft, the first new regional aircraft to be added to the United/Continental network since the merger of Continental Airlines and United Airlines closed on October 1. One of these Q400 aircraft is the first regional aircraft to be delivered in the new United Express branded paint scheme. The Company expects to take delivery of three additional Q400 aircraft during the remainder of the fourth quarter 2010 and seven Q400 aircraft in the first half of 2011. This investment in new regional aircraft will increase the Company’s operation s as a United Express carrier and further diversify the Company’s revenue.
The Company ended the quarter with total cash and cash equivalents of $126.7 million. Operating cash flow during the third quarter was $59.6 million. Operating cash flow was unusually high during the third quarter due to the acquisition of Mesaba and the timing of payments related to prepaid expenses, trade payables and accrued expenses. The Company expects operating cash flow in the fourth quarter to be lower than the average achieved in the first three quarters of 2010, as prepaid expenses, trade payables and accrued expenses are expected to return to lower levels. In addition, Management expects the balance of cash and cash equivalents to decline through April 2011 as the Company acquires new Q400 aircraft to operate under its capacity purchase agreement with United Continental Holdings, I nc.
“Our operating cash flow and liquidity strengthened considerably during the third quarter of 2010,” said Peter Hunt, the Company’s Chief Financial Officer. “However, our liquidity will decrease in the fourth quarter of 2010 and first quarter of 2011 as we make investments in new, next-generation Q400 aircraft. These investments will position us to continue to grow earnings and cash flow in the future.”
Third Quarter 2010 Financial and Operating Results
During the third quarter of 2010, Pinnacle Airlines, Inc. (“Pinnacle”), the Company’s largest regional airline operating subsidiary, completed 110,381 block hours and 71,818 departures, increases of 3% and 1%, respectively, over the same period in 2009. Pinnacle’s average daily utilization of its operating fleet increased by 2%. Mesaba completed 68,186 block hours and 42,691 departures during the third quarter, with an average daily utilization of 8.1 block hours per day. Colgan Air, Inc. (“Colgan”), the Company’s regional turboprop operating subsidiary, completed 35,384 block hours and 28,288 departures during the third quarter, decreases of 2% and 4%, respectively, from the same period in 2009. Colgan operated one less Saab 340 aircraft within its p ro-rate network during the third quarter.
The Company recorded consolidated operating revenue during the third quarter of 2010 of $302.3 million, an increase of $85.1 million, or 39%, over the same period in 2009. The increase in operating revenue was largely attributable to the acquisition of Mesaba, which contributed additional revenue of $71.5 million. Annual rate increases from the Company’s partners and higher reimbursable costs also contributed to the increase in consolidated operating revenue.
Pinnacle reported third quarter 2010 operating income and operating margin of $16.5 million and 9.9%, an increase of $0.8 million and a decrease of 0.2 points, respectively, from the third quarter of 2009. Operating income increased as a result of higher revenue from an annual increase in rates under Pinnacle’s operating agreements, slightly improved aircraft utilization, and a $0.5 million reduction in estimated performance based penalties that the Company had previously recorded.
Mesaba reported third quarter 2010 operating income and operating margin of $3.1 million and 4.3%, respectively. Mesaba is temporarily operating a fleet of Saab 340 B+ aircraft under a capacity purchase agreement with Delta that is structurally designed to produce little or no EBITDA, resulting in a lower aggregate operating margin until this agreement expires in June 2012.
Colgan reported operating income and operating margin of $6.1 million and 9.5%, a decrease of $2.0 million and 3.6 points, respectively, from the third quarter of 2009. Fuel costs associated with Colgan’s pro-rate operations increased by $0.6 million year-over-year. Fuel cost per gallon during the third quarter of 2010 was $2.47, up 17% from $2.11 per gallon during the same period in 2009. In addition, Colgan experienced an increase in salaries, wages and benefits of $1.0 million from lower productivity, higher health care and other benefits costs, and a buildup of crews in advance of the delivery of additional Q400 aircraft. Colgan maintenance expense increased $2.9 million quarter-over-quarter primarily as a result of a maintenance contract covering Colgan’s Q400 engines as well as increased heavy airframe maintenance on Saab 340 aircraft. These cost increases were partially offset by $2.7 million of additional revenue, primarily from a 10% increase in revenue-per-available-seat-mile in Colgan’s pro-rate markets.
Net nonoperating expense of $10.3 million for the three months ended September 30, 2010 increased by approximately $3.0 million as compared to the same period in 2009. The Company recorded a nonrecurring gain of $4.2 million in the third quarter of 2009 related to sale of its ARS portfolio. Excluding this gain, net nonoperating expense decreased by $1.3 million. This decline is primarily due to the repayment of the Company’s senior convertible notes in the second half of 2009 and early 2010, partially offset by interest on a $63.3 million note issued as part of the acquisition of Mesaba.
Cash Flow
The Company generated $59.6 million in cash from operating activities during the third quarter of 2010. The acquisition of Mesaba contributed to the increase in cash and cash equivalents, as Mesaba receives payments weekly under its contracts with Delta, yet the related operational expenses are typically not required to be paid to vendors for up to 30 days after completing flights. In addition, Mesaba’s actual working capital (as defined under the stock purchase agreement with Delta Airlines) as of July 1, 2010 was $6.3 million higher than the targeted working capital under the stock purchase agreement, which ultimately resulted in additional operating cash flow during the third quarter. The Company reimbursed Delta for this excess working capital in October 2010 through a $5.0 million cash paymen t and through a $1.3 million increase in the note issued to Delta as part of the acquisition. Finally, the timing of payments related to prepaid expenses, trade payables and accrued expenses had a positive impact on operating cash flow during the third quarter.
Net cash used in investing activities for the three months ended September 30, 2010 was $0.2 million. Approximately $4.2 million in outflows for routine capital expenditures were offset by approximately $4.0 million in inflows from ARS redemptions and cash received in the acquisition of Mesaba.
Net cash used in financing activities for the three months ended September 30, 2010 totaled $11.7 million, which is primarily related to 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, Belize, Mexico, and Canada. Colgan Air, Inc. operates a fleet of 50 regional turboprops as Continental Connection, United Express and US Airways Express in the northeastern United States and Texas. Mesaba Aviation, Inc. operates a fleet of 60 regional jets and 30 jet-prop aircraft as Delta Connection in the United States. The corporate headquarters is located in Memphis, Tenn. Airport hub operations are located in Atlanta, Boston, Detroit, Newark, New York – John F. Kennedy airport, Washington Dulles, Houston, Memphis, Minnea polis/St. Paul, and Salt Lake City. For further information about the Company, please refer to the Company’s Form 10-Q for the quarter ended September 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 Mesaba’s EBITDA for the three months ended September 30, 2010. For 2009, these non-GAAP items include the Company's net nonoperating expense, net income, and diluted EPS for the three and nine months ended September 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 gain, and the gain on debt extinguishment. The Company believes that this information is useful to investors as it indicates more clearly the Company's comparative year-to-year results. None of this information should be considered a substitute for any measures prepared in accordance with GAAP. The Company has included its reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in the accompanying schedules.
Forward-Looking Statements
This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission, which are available to investors at our website or online from the Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove erroneous, actual results may vary materially from results that were anticipated or projected. The 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.
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Pinnacle Airlines Corp.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
| | | Three Months Ended September 30, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Operating revenues | | | | | | |
| Regional airline services | | $ | 297,197 | | | $ | 214,478 | |
| Other | | | 5,138 | | | | 2,730 | |
| Total operating revenues | | | 302,335 | | | | 217,208 | |
| Operating expenses | | | | | | | | |
| Salaries, wages and benefits | | | 92,199 | | | | 55,402 | |
| Aircraft rentals | | | 34,000 | | | | 30,093 | |
| Ground handling services | | | 27,528 | | | | 21,964 | |
| Aircraft maintenance, materials and repairs | | | 39,198 | | | | 25,311 | |
| Other rentals and landing fees | | | 24,219 | | | | 17,659 | |
| Aircraft fuel | | | 6,814 | | | | 6,197 | |
| Commissions and passenger related expense | | | 6,466 | | | | 5,660 | |
| Depreciation and amortization | | | 10,293 | | | | 9,377 | |
| Other | | | 35,899 | | | | 21,749 | |
| Total operating expenses | | | 276,616 | | | | 193,412 | |
| Operating income | | | 25,719 | | | | 23,796 | |
| | | | | | | | | |
| Operating income as a percentage of operating revenues | | | 8.5 | % | | | 11.0 | % |
| Nonoperating (expense) income | | | | | | | | |
| Interest expense, net | | | (10,693 | ) | | | (11,712 | ) |
| Miscellaneous income, net | | | 357 | | | | 4,334 | |
| Total nonoperating expense | | | (10,336 | ) | | | (7,378 | ) |
| Income before income taxes | | | 15,383 | | | | 16,418 | |
| Income tax expense | | | (5,942 | ) | | | (5,041 | ) |
| Net income | | $ | 9,441 | | | $ | 11,377 | |
| | | | | | | | | |
| Basic earnings per share | | $ | 0.52 | | | $ | 0.63 | |
| | | | | | | | | |
| Diluted earnings per share | | $ | 0.51 | | | $ | 0.62 | |
| | | | | | | | | |
| Shares used in computing basic earnings per share | | | 18,137 | | | | 17,970 | |
| Shares used in computing diluted earnings per share | | | 18,392 | | | | 18,204 | |
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
| | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Operating revenues | | | | | | |
| Regional airline services | | $ | 717,530 | | | $ | 629,614 | |
| Other | | | 11,605 | | | | 6,679 | |
| Total operating revenues | | | 729,135 | | | | 636,293 | |
| Operating expenses | | | | | | | | |
| Salaries, wages and benefits | | | 207,377 | | | | 167,999 | |
| Aircraft rentals | | | 94,055 | | | | 90,679 | |
| Ground handling services | | | 75,291 | | | | 70,622 | |
| Aircraft maintenance, materials and repairs | | | 92,814 | | | | 76,780 | |
| Other rentals and landing fees | | | 57,542 | | | | 53,987 | |
| Aircraft fuel | | | 19,234 | | | | 15,968 | |
| Commissions and passenger related expense | | | 16,090 | | | | 15,714 | |
| Depreciation and amortization | | | 27,927 | | | | 26,740 | |
| Other | | | 80,621 | | | | 54,890 | |
| Total operating expenses | | | 670,951 | | | | 573,379 | |
| Operating income | | | 58,184 | | | | 62,914 | |
| | | | | | | | | |
| Operating income as a percentage of operating revenues | | | 8.0 | % | | | 9.9 | % |
| Nonoperating (expense) income | | | | | | | | |
| Interest expense, net | | | (29,294 | ) | | | (32,770 | ) |
| Miscellaneous (expense) income, net | | | (922 | ) | | | 4,389 | |
| Total nonoperating expense | | | (30,216 | ) | | | (28,381 | ) |
| Income before income taxes | | | 27,968 | | | | 34,533 | |
| Income tax (expense) benefit | | | (10,948 | ) | | | 1,680 | |
| Net income | | $ | 17,020 | | | $ | 36,213 | |
| | | | | | | | | |
| Basic earnings per share | | $ | 0.94 | | | $ | 2.02 | |
| | | | | | | | | |
| Diluted earnings per share | | $ | 0.92 | | | $ | 2.01 | |
| | | | | | | | | |
| Shares used in computing basic earnings per share | | | 18,121 | | | | 17,968 | |
| Shares used in computing diluted earnings per share | | | 18,433 | | | | 18,050 | |
Pinnacle Airlines Corp.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
| | | | | | | |
| | | September 30, 2010 | | | December 31, 2009 | |
| Assets | | (Unaudited) | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 126,729 | | | $ | 91,574 | |
| Restricted cash | | | 8,018 | | | | 3,115 | |
| Receivables, net | | | 43,021 | | | | 34,518 | |
| Spare parts and supplies, net | | | 34,879 | | | | 19,472 | |
| Prepaid expenses and other assets | | | 7,594 | | | | 3,508 | |
| Assets held for sale | | | - | | | | 1,255 | |
| Deferred income taxes, net of allowance | | | 10,141 | | | | 10,406 | |
| Income taxes receivable | | | 3,966 | | | | 40,803 | |
| Total current assets | | | 234,348 | | | | 204,651 | |
| Property and equipment | | | | | | | | |
| Flight equipment | | | 848,622 | | | | 755,236 | |
| Aircraft pre-delivery payments | | | 38,981 | | | | 12,049 | |
| Other property and equipment | | | 66,132 | | | | 48,710 | |
| Less accumulated depreciation | | | (112,792 | ) | | | (86,501 | ) |
| Net property and equipment | | | 840,943 | | | | 729,494 | |
| | | | | | | | | |
| Investments | | | 1,709 | | | | 2,723 | |
| Debt issuance costs, net | | | 4,421 | | | | 3,561 | |
| Goodwill | | | 25,339 | | | | 18,422 | |
| Intangible assets, net | | | 16,066 | | | | 12,586 | |
| Other assets, primarily insurance receivables | | | 317,880 | | | | 317,659 | |
| Total assets | | $ | 1,440,706 | | | $ | 1,289,096 | |
| | | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Current maturities of long-term debt | | $ | 51,132 | | | $ | 36,085 | |
| Senior convertible notes | | | - | | | | 30,596 | |
| Pre-delivery payment facility | | | 30,552 | | | | 2,027 | |
| Accounts payable | | | 50,598 | | | | 23,982 | |
| Deferred revenue | | | 26,530 | | | | 24,363 | |
| Accrued expenses and other current liabilities | | | 98,309 | | | | 60,610 | |
| Total current liabilities | | | 257,121 | | | | 177,663 | |
| Noncurrent pre-delivery payment facility | | | - | | | | 4,910 | |
| Long-term debt, less current maturities | | | 577,255 | | | | 519,234 | |
| Deferred revenue, net of current portion | | | 166,860 | | | | 177,711 | |
| Deferred income taxes | | | 26,495 | | | | 13,532 | |
| Other liabilities | | | 290,236 | | | | 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 | | | 123,900 | | | | 121,513 | |
| Accumulated other comprehensive loss | | | (13,012 | ) | | | (14,431 | ) |
| Retained earnings | | | 80,099 | | | | 63,079 | |
| Total stockholders’ equity | | | 122,739 | | | | 102,237 | |
| Total liabilities and stockholders’ equity | | $ | 1,440,706 | | | $ | 1,289,096 | |
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Cash provided by operating activities | | $ | 104,377 | | | $ | 83,982 | |
| Cash (used in) provided by investing activities | | | (6,910 | ) | | | 24,325 | |
| Cash used in financing activities | | | (62,312 | ) | | | (96,565 | ) |
| Net increase in cash and cash equivalents | | | 35,155 | | | | 11,742 | |
| Cash and cash equivalents at beginning of period | | | 91,574 | | | | 69,469 | |
| Cash and cash equivalents at end of period | | $ | 126,729 | | | $ | 81,211 | |
Pinnacle Airlines Corp.
Pinnacle Operating Statistics (Unaudited)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| | | | | | | | | | | | | | | | | | | |
| Other Data: | | | | | | | | | | | | | | | | | | |
| Revenue passengers (in thousands) | | | 2,755 | | | | 2,953 | | | | (7 | )% | | | 7,931 | | | | 8,116 | | | | (2 | )% |
| Revenue passenger miles (“RPMs”) (in thousands) | | | 1,190,396 | | | | 1,203,519 | | | | (1 | )% | | | 3,420,138 | | | | 3,504,903 | | | | (2 | )% |
| Available seat miles (“ASMs”) (in thousands) | | | 1,592,069 | | | | 1,508,956 | | | | 6 | % | | | 4,598,110 | | | | 4,638,257 | | | | (1 | )% |
| Passenger load factor | | | 74.8 | % | | | 79.8 | % | | (5.0) pts. | | | | 74.4 | % | | | 75.6 | % | | (1.2) pts. | |
| Operating revenue per ASM (in cents) | | | 10.43 | | | | 10.29 | | | | 1 | % | | | 10.56 | | | | 10.03 | | | | 5 | % |
| Operating cost per ASM (in cents) | | | 9.40 | | | | 9.25 | | | | 2 | % | | | 9.52 | | | | 9.02 | | | | 6 | % |
| Operating revenue per block hour | | $ | 1,505 | | | $ | 1,454 | | | | 4 | % | | $ | 1,501 | | | $ | 1,442 | | | | 4 | % |
| Operating cost per block hour | | $ | 1,355 | | | $ | 1,307 | | | | 4 | % | | $ | 1,353 | | | $ | 1,298 | | | | 4 | % |
| Block hours | | | 110,381 | | | | 106,802 | | | | 3 | % | | | 323,519 | | | | 322,517 | | | | 0 | % |
| Departures | | | 71,818 | | | | 71,002 | | | | 1 | % | | | 208,876 | | | | 206,458 | | | | 1 | % |
| Average daily utilization (block hours) | | | 8.45 | | | | 8.29 | | | | 2 | % | | | 8.35 | | | | 8.36 | | | | (0 | )% |
| Average stage length (miles) | | | 425 | | | | 404 | | | | 5 | % | | | 422 | | | | 427 | | | | (1 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Number of operating aircraft (end of period) | | | | | | | | | | | | | | | | | | | | | | | | |
| CRJ-200 | | | 126 | | | | 126 | | | | 0 | % | | | | | | | | | | | | |
| CRJ-900 | | | 16 | | | | 16 | | | | 0 | % | | | | | | | | | | | | |
| Employees (end of period) | | | 3,727 | | | | 3,903 | | | | (5 | )% | | | | | | | | | | | | |
Pinnacle Airlines Corp.
Mesaba Operating Statistics (Unaudited)
| | | Three Months Ended September 30, 2010(1) | |
| | | | |
| Other Data: | | | |
| Revenue passengers (in thousands) | | | 1,639 | |
| RPMs (in thousands) | | | 910,891 | |
| ASMs (in thousands) | | | 1,183,364 | |
| Passenger load factor | | | 77.0 | % |
| Operating revenue per ASM (in cents) | | | 6.05 | |
| Operating cost per ASM (in cents) | | | 5.79 | |
| Operating revenue per block hour | | $ | 1,049 | |
| Operating cost per block hour | | $ | 1,004 | |
| Block hours | | | 68,186 | |
| Departures | | | 42,691 | |
| Average daily utilization (block hours) | | | 8.06 | |
| Average stage length (miles) | | | 525 | |
| | | | | |
| Number of operating aircraft (end of period) | | | | |
| CRJ-900 | | | 41 | |
| CRJ-200 | | | 19 | |
| Saab 340 B+ | | | 32 | |
| Employees (end of period) | | | 2,228 | |
| (1) | As previously discussed, the acquisition of Mesaba was completed on July 1, 2010. As such, Mesaba’s 2009 data is not presented. Mesaba’s 2010 data includes the period from the acquisition date through the three months ended September 30, 2010. |
Pinnacle Airlines Corp.
Colgan Operating Statistics (Unaudited)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Pro-rate Agreements: | | | | | | | | | | | | | | | | | | |
| Revenue passengers (in thousands) | | | 335 | | | | 332 | | | | 1 | % | | | 867 | | | | 885 | | | | (2 | )% |
| RPMs (in thousands) | | | 58,942 | | | | 58,486 | | | | 1 | % | | | 149,846 | | | | 154,100 | | | | (3 | )% |
| ASMs (in thousands) | | | 116,949 | | | | 122,642 | | | | (5 | )% | | | 316,464 | | | | 348,434 | | | | (9 | )% |
| Passenger load factor | | | 50.4 | % | | | 47.7 | % | | 2.7 pts. | | | | 47.4 | % | | | 44.2 | % | | 3.2 pts. | |
| Passenger yield (in cents) | | | 76.64 | | | | 73.75 | | | | 4 | % | | | 77.60 | | | | 75.16 | | | | 3 | % |
| Operating revenue per ASM (in cents) | | | 38.63 | | | | 35.17 | | | | 10 | % | | | 36.75 | | | | 33.24 | | | | 11 | % |
| Operating revenue per block hour | | $ | 1,948 | | | $ | 1,786 | | | | 9 | % | | $ | 1,832 | | | $ | 1,683 | | | | 9 | % |
| Block hours | | | 23,192 | | | | 24,152 | | | | (4 | )% | | | 63,461 | | | | 68,836 | | | | (8 | )% |
| Departures | | | 20,515 | | | | 21,273 | | | | (4 | )% | | | 56,420 | | | | 60,911 | | | | (7 | )% |
| Fuel consumption (in thousands of gallons) | | | 2,759 | | | | 2,935 | | | | (6 | )% | | | 7,660 | | | | 8,340 | | | | (8 | )% |
| Average price per gallon | | $ | 2.47 | | | $ | 2.11 | | | | 17 | % | | $ | 2.51 | | | $ | 1.91 | | | | 31 | % |
| Average fare | | $ | 135 | | | $ | 130 | | | | 4 | % | | $ | 134 | | | $ | 131 | | | | 2 | % |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Capacity Purchase Agreements: | | | | | | | | | | | | | | | | | | |
| Revenue passengers (in thousands) | | | 408 | | | | 427 | | | | (4 | )% | | | 1,142 | | | | 1,161 | | | | (2 | )% |
| RPMs (in thousands) | | | 133,080 | | | | 122,312 | | | | 9 | % | | | 351,601 | | | | 325,113 | | | | 8 | % |
| ASMs (in thousands) | | | 183,317 | | | | 169,371 | | | | 8 | % | | | 502,545 | | | | 476,134 | | | | 6 | % |
| Passenger load factor | | | 72.6 | % | | | 72.2 | % | | 0.4 pts. | | | | 70.0 | % | | | 68.3 | % | | 1.7 pts. | |
| Operating revenue per ASM (in cents) | | | 10.49 | | | | 11.00 | | | | (5 | )% | | | 11.00 | | | | 11.55 | | | | (5 | )% |
| Operating revenue per block hour | | $ | 1,577 | | | $ | 1,540 | | | | 2 | % | | $ | 1,594 | | | $ | 1,547 | | | | 3 | % |
| Block hours | | | 12,192 | | | | 12,103 | | | | 1 | % | | | 34,669 | | | | 35,563 | | | | (3 | )% |
| Departures | | | 7,773 | | | | 8,059 | | | | (4 | )% | | | 22,739 | | | | 23,193 | | | | (2 | )% |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Total Colgan: | | | | | | | | | | | | | | | | | | |
| Block hours | | | 35,384 | | | | 36,255 | | | | (2 | )% | | | 98,130 | | | | 104,399 | | | | (6 | )% |
| Departures | | | 28,288 | | | | 29,332 | | | | (4 | )% | | | 79,159 | | | | 84,104 | | | | (6 | )% |
| ASMs (in thousands) | | | 300,265 | | | | 292,013 | | | | 3 | % | | | 819,009 | | | | 824,568 | | | | (1 | )% |
| Total operating cost per ASM (in cents) | | | 19.50 | | | | 18.44 | | | | 6 | % | | | 20.13 | | | | 18.77 | | | | 7 | % |
| Total operating cost per block hour | | $ | 1,654 | | | $ | 1,485 | | | | 11 | % | | $ | 1,680 | | | $ | 1,483 | | | | 13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average daily utilization (block hours) | | | 7.91 | | | | 8.21 | | | | (4 | )% | | | 7.44 | | | | 7.89 | | | | (6 | )% |
| Average stage length (miles) | | | 238 | | | | 224 | | | | 6 | % | | | 230 | | | | 221 | | | | (4 | )% |
| Number of operating aircraft (end of period) | | | | | | | | | | | | | | | | | | | | | | | | |
| Saab 340 | | | 34 | | | | 34 | | | | 0 | % | | | | | | | | | | | | |
| Q400 | | | 16 | | | | 14 | | | | 14 | % | | | | | | | | | | | | |
| Employees | | | 1,442 | | | | 1,326 | | | | 9 | % | | | | | | | | | | | | |
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
| | | Three Months Ended September 30, | |
| | | 2010 | | | 2009 | | | % Increase (Decrease) | |
| Net nonoperating expense: | | | | | | | | | |
| Net nonoperating expense in accordance with GAAP | | $ | (10,336 | ) | | $ | (7,378 | ) | | | 40 | % |
| Deduct: Net investment gain | | | - | | | | (4,233 | ) | | | N/A | |
| Non-GAAP net nonoperating expense | | $ | (10,336 | ) | | $ | (11,611 | ) | | | (11 | )% |
| | | | | | | | | | | | | |
| Mesaba EBITDA (earnings before interest, taxes, depreciation and amortization): | | | | | | | | | | | | |
| Mesaba operating income in accordance with GAAP | | $ | 3,065 | | | | N/A | | | | N/A | |
| Add: Mesaba depreciation and amortization | | | 1,340 | | | | N/A | | | | N/A | |
| Non-GAAP Mesaba EBITDA | | $ | 4,405 | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | |
| Net income: | | | | | | | | | | | | |
| Net income in accordance with GAAP | | $ | 9,441 | | | $ | 11,377 | | | | (17 | )% |
| Deduct: Net investment gain, net of tax | | | - | | | | (4,054 | ) | | | N/A | |
| Non-GAAP net income | | $ | 9,441 | | | $ | 7,323 | | | | 29 | % |
| | | | | | | | | | | | | |
| Diluted EPS: | | | | | | | | | | | | |
| Diluted EPS in accordance with GAAP | | $ | 0.51 | | | $ | 0.62 | | | | (18 | )% |
| Deduct: Net investment gain, net of tax | | | - | | | | (0.22 | ) | | | N/A | |
| Non-GAAP diluted earnings per share | | $ | 0.51 | | | $ | 0.40 | | | | 28 | % |
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
| | | Nine Months Ended September 30, | |
| | | 2010 | | | 2009 | | | % Increase (Decrease) | |
| Net income: | | | | | | | | | |
| Net income in accordance with GAAP | | $ | 17,020 | | | $ | 36,213 | | | | (53 | )% |
| Add: Aircraft retirement charges, net of tax | | | - | | | | 1,280 | | | | N/A | |
| Deduct: Excess of property insurance proceeds over cost basis of aircraft, net of tax | | | - | | | | (540 | ) | | | N/A | |
| Deduct: Net investment gain, net of tax | | | - | | | | (3,777 | ) | | | N/A | |
| Add: Ineffective portion of interest rate hedge, net of tax | | | - | | | | 921 | | | | N/A | |
| Deduct: Reversal of interest on income tax reserves, net of tax | | | - | | | | (1,849 | ) | | | N/A | |
| Deduct: Gain on repurchase of senior convertible notes, net of tax | | | - | | | | (1,122 | ) | | | N/A | |
| Deduct: IRS settlement | | | | | | | (13,551 | ) | | | N/A | |
| Non-GAAP net income | | $ | 17,020 | | | $ | 17,575 | | | | (3 | )% |
| | | | | | | | | | | | | |
| Diluted EPS: | | | | | | | | | | | | |
| Diluted EPS in accordance with GAAP | | $ | 0.92 | | | $ | 2.01 | | | | (54 | )% |
| 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 | |
| Deduct: Net investment gain, net of tax | | | - | | | | (0.21 | ) | | | 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 | | | - | | | | (0.11 | ) | | | 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 | | $ | 0.92 | | | $ | 0.97 | | | | (5 | )% |
