Exhibit 99
For Immediate Release Contact: Rick DeLisi
January 29, 2003 Director, Corporate Communications
Page 1 of 6 (703) 650-6550
Atlantic Coast Airlines Holdings, Inc. Reports
Fourth Quarter and Year-End 2002 Financial and Operating
Results
Dulles, VA, (January 29, 2003) - Atlantic Coast Airlines
Holdings, Inc. (Nasdaq/NM: ACAI), parent of Atlantic Coast
Airlines (ACA), which operates flights as United Express and
Delta Connection in the Eastern and Midwestern United States
as well as Canada, today reported annual net income of $39.3
million ($0.85 per diluted share) compared to 2001 net
income of $34.3 million ($0.76 per diluted share). The
company's net income for 2002 includes pre-tax charges of
$24.3 million for its continuing turboprop early retirement
program, $2.6 million in bad debt expense attributed to the
potential write-off of net amounts due from United Airlines
as a result of its bankruptcy filing, $1.8 million in
credits from the reversal of accruals from prior periods for
estimated expenses under the company's code share
agreements, and $0.9 million in government compensation
received pursuant to the Air Transportation Safety and
System Stabilization Act. Net income for 2001 included a
pre-tax charge of $23.0 million for turboprop early
retirement and $9.7 million in government compensation.
Excluding these charges and credits, the company would have
reported net income of $53.9 million ($1.17 per diluted
share) compared to $42.2 million ($0.93 per diluted share)
for 2001.
For the fourth quarter 2002, the company reported a net loss
of $1.0 million (two cents per diluted share) which equaled
the net loss of $1.0 million (two cents per diluted share)
in 2001. The results for the fourth quarter 2002 include
$21.5 million in pre-tax charges for the continuing
turboprop early retirement program, $2.6 million in bad debt
expense attributed to the potential write-off of net amounts
due from United Airlines as a result of its bankruptcy
filing, and $1.8 million in credits from the reversal of
accruals from prior periods for estimated expenses under the
Company's code share agreements. The results for the
fourth quarter of 2001 included a pre-tax charge of $23.0
million for turboprop early retirement and $5.1 million in
government compensation. Excluding these charges and
credits, the company would have reported fourth quarter net
income of $12.5 million (28 cents per diluted share)
compared to $9.7 million (21 cents per diluted share) for
2001. A reconciliation of results as reported in accordance
with GAAP to pro-forma results is included at the end of
this press release in the table entitled "Pro-Forma
Financial Results".
The company's fourth quarter 2002 results also reflect the
items noted below:
- - The company continues to accrue expenses subject to a rate
dispute with a vendor related to the power-by-the-hour
maintenance contract for certain of the company's regional
jet engines. In the fourth quarter, the company accrued an
additional $1.3 million.
- - Increased legal costs and contingency planning expenses of
approximately $0.4 million as a result of the United
Airlines and Fairchild Dornier bankruptcy filings.
- - Training and post-implementation support costs of
approximately $0.4 million for a new enterprise maintenance
and finance software implemented during the fourth quarter.
During the fourth quarter 2002, ACA generated approximately
1.1 billion available seat miles (ASMs), an increase of 11.9
percent over the same period last year. The company carried
2,002,515 passengers, an increase of 44.2 percent over the
same period last year. Load factor improved 10.3 points to
68.0% for the fourth quarter compared to 57.7% in the fourth
quarter 2001.
The company continues to assess the effects of the
bankruptcy filing by United Airlines and its related
companies. Based on the company's most recent estimates,
the company believes that United owed ACA approximately $8.0
million as of the date of United's bankruptcy filing for
unpaid pre-petition obligations relating to United Express
services prior to the filing and that, if these pre-petition
amounts are not ultimately paid by United, ACA will have the
right to offset amounts ACA owes United for pre-petition
services totaling approximately $5.4 million.
In January 2003, the company and Delta Air Lines agreed on
rates to be paid for fiscal year 2003 under the terms of the
company's Delta Connection Agreement.
The company also reported the following developments during
the fourth quarter:
- - ACA's Delta Connection operation completed the
repositioning of all aircraft, crew and maintenance
resources from New York LaGuardia (LGA) to Cincinnati (CVG).
As part of the transition, a total of 17 new Delta
Connection destinations were added to the ACA route system
from Cincinnati.
- - ACA/United Express began new service from Chicago O'Hare
International Airport (ORD) to five destinations: Colorado
Springs (COS), Detroit (DTW), St. Louis (STL), South Bend
(SBN) and Bloomington (BMI). New service was also
introduced from Washington Dulles International Airport
(IAD) to Toronto (YYZ).
Statements in this press release and by company executives
regarding projections and expectations of future operations,
earnings, revenues and costs represent forward-looking
statements and information that are based on management's
current expectations as of the date of this press release.
In this context, the words "anticipate", "believe",
"estimate", "expect" and similar expressions, as they relate
to the company's management, are intended to identify such
forward-looking statements. Such forward-looking statements
are subject to risks, uncertainties, assumptions and other
factors that may cause the actual results of the company to
be materially different from those reflected in such forward-
looking statements. A number of risks and uncertainties
exist which could cause actual results to differ materially
from these projected results. Such factors include, among
others: United's decision to elect either to affirm all of
the terms of the company's existing United Express
Agreement, or to reject the agreement in its entirety; the
timing of such decision; any efforts by United to negotiate
changes as a condition to affirming the contract; United's
ability and willingness to make future payments to the
company under the United Express Agreement; the company's
ability to collect pre-petition obligations from United or
to offset pre-petition obligations due to United;
willingness of finance parties to continue to finance
additional aircraft deliveries pending United's decision
whether to affirm or reject the United Express Agreement and
of market conditions generally; United's ability to
successfully reorganize in bankruptcy; changes in levels of
service agreed to by the company with its code-share
partners due to market conditions; the ability and timing of
agreeing upon rates with United; the ability of these
partners to manage their operations and cash flow, and
ability and willingness of these partners to continue to
deploy the company's aircraft and to utilize and pay for
scheduled service at agreed upon rates; availability and
cost of product support for the company's 328JET aircraft;
whether the company is able to recover or realize on its
claims against Fairchild Dornier in its insolvency
proceedings and unexpected costs arising from the
insolvency of Fairchild Dornier; general economic and
industry conditions; additional acts of war; and risks and
uncertainties arising from the events of September 11 and
from the slow economy which may impact the company, its code-
share partners, and aircraft manufacturers in ways that the
company is not currently able to predict. These and other
factors are more fully disclosed under the company's
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" in ACAI's Annual Report on Form
10-K for the year ended December 31, 2001 and in its
Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002. These statements are made as of January
29, 2003 and ACA undertakes no obligation to update any such
forward-looking information, whether as a result of new
information, future events, changed expectations or
otherwise.
Atlantic Coast Airlines has a fleet of 139
aircraft-including 109 regional jets-and offers
approximately 850 daily departures, serving 84 destinations
in the U.S. and Canada. ACA employs over 5,100 aviation
professionals.
ACAI Fourth Quarter and Year-End 2002 Financial and
Operating Results
Condensed Consolidated Financial Results
(in thousands, except per share amounts)
Fourth Quarter Ended
December 31,
2002 2001 Pct.
Change
Operating revenues:
Passenger revenue $ 200,581 $ 153,970 30.3%
Other revenue 3,750 2,120 76.9%
Total operating revenues 204,331 156,090 30.9%
Operating expenses:
Salaries and related costs 57,089 47,276 20.8%
Aircraft fuel 32,992 22,216 48.5%
Aircraft maintenance
and materials 18,616 12,739 46.1%
Aircraft rentals 29,712 24,648 20.5%
Traffic commissions and
related fees 5,127 3,551 44.4%
Facility rents and
landing fees 11,109 8,739 27.1%
Depreciation and
amortization 6,088 4,097 48.6%
Other 24,822 17,847 39.1%
Aircraft early
retirement charge 21,526 23,026 (6.5%)
Total operating expenses 207,081 164,139 26.2%
Operating loss (2,750) (8,049) (65.8%)
Non-operating income 358 572 37.4%
Government compensation - 5,078 nmf
Income before taxes (2,392) (2,399) (0.3%)
Income tax benefit (1,422) (1,396) 1.9%
Net loss $ (970) $ (1,003) (3.3%)
Net loss per common
and common equivalent
shares:
Basic $ (0.02) $ (0.02)
Diluted $ (0.02) $ (0.02)
Weighted average number
of common and common
equivalent shares (000s):
Basic 45,195 43,999
Diluted 45,195 43,999
Operating Statistics-Fourth Quarter
2002 2001 Pct.
Change
Revenue passenger
miles (000's) 758,892 575,739 31.8%
Available seat
miles (000's) 1,116,715 998,277 11.9%
Load Factor 68.0% 57.7% 10.3 pts.
Passengers 2,002,515 1,388,735 44.2%
Yield per RPM (cents) 26.4 26.7 (1.1%)
Passenger revenue per ASM
(cents) 18.0 15.4 16.9%
Operating cost per ASM
(cents) 18.5 16.4 12.8%
Operating cost per ASM
excluding aircraft early
retirement charge (cents) 16.6 14.1 17.7%
Operating cost per ASM
excluding fuel and
aircraft early retirement
charge (cents) 13.7 11.9 15.1%
Operating margin (1.3%) (5.2%) 3.9 pts.
Operating margin excluding
aircraft early retirement
charge 9.2% 9.6% (0.4 pts)
Average passenger trip
length (miles) 379 415 (8.7%)
Condensed Consolidated Financial Results
(in thousands, except per share amounts)
Twelve Months Ended
December 31,
2002 2001 Pct.
Change
Operating revenues:
Passenger revenue $ 749,103 $ 577,604 29.7%
Other revenue 11,420 5,812 96.5%
Total operating revenues 760,523 583,416 30.4%
Operating expenses:
Salaries and related costs 203,341 164,446 23.7%
Aircraft fuel 115,801 88,308 31.1%
Aircraft maintenance
and materials 72,233 48,478 49.0%
Aircraft rentals 112,068 90,323 24.1%
Traffic commissions and
related fees 20,914 15,589 34.2%
Facility rents and
landing fees 43,805 32,025 36.8%
Depreciation and
amortization 21,155 15,353 37.8%
Other 84,242 61,674 36.6%
Aircraft early retirement
charge 24,331 23,026 5.7%
Total operating expenses 697,890 539,222 29.4%
Operating income 62,633 44,194 41.7%
Non-operating income 848 2,931 (71.1%)
Government compensation 944 9,710 nmf
Income before taxes 64,425 56,835 13.4%
Income tax expense 25,139 22,513 11.7%
Net income $ 39,286 $ 34,322 14.5%
Net income per common
and common equivalent
shares:
Basic $ 0.87 $ 0.79
Diluted 0.85 0.76
Weighted average number
of common and common
equivalent shares (000s):
Basic 45,047 43,434
Diluted 46,019 45,210
Operating Statistics-Twelve Months Ended December 31,
2002 2001 Pct.
Change
Revenue passenger
miles (000's) 2,833,155 1,895,152 49.5%
Available seat
miles (000's) 4,345,860 3,292,798 32.0%
Load Factor 65.2% 57.6% 7.6 pts.
Passengers 7,160,480 4,937,208 45.0%
Yield per RPM (cents) 26.4 30.5 (13.4%)
Passenger revenue per ASM
(cents) 17.2 17.5 (1.7%)
Operating cost per ASM
(cents) 16.1 16.4 (1.8%)
Operating cost per ASM
excluding aircraft early
retirement charge (cents) 15.5 15.7 (1.3%)
Operating cost per ASM
excluding fuel and
aircraft early retirement
charge (cents) 12.8 13.0 (1.5%)
Operating margin 8.2% 7.6% 0.6 pts.
Operating margin excluding
aircraft early retirement
charge 11.4% 11.5% (0.1 pts)
Average passenger trip
length (miles) 396 384 3.1%
Pro-Forma Financial Results
(in thousands, except per share amounts)
Full-Year 2002 Income Net EPS
Before Income
Tax
Income as reported in
accordance with GAAP $ 64,425 $ 39,286 $ 0.85
J-41 retirement charge
adjustment 24,331 14,696 0.32
Other (Bad debt expense due to 2,584 1,561 0.03
United bankruptcy)
Other (Reversal of prior period (1,772) (1,070) (0.02)
accruals)
Government compensation (944) (570) (0.01)
Pro-forma results $ 88,624 $ 53,903 $ 1.17
Full-Year 2001 Income Net EPS
Before Income
Tax
Income as reported in
accordance with GAAP $ 56,835 $ 34,322 $ 0.76
J-41 retirement charge
adjustment 23,026 13,700 0.30
Other (Bad debt expense due to
United bankruptcy) - - -
Other (Reversal of prior period
accruals) - - -
Government compensation (9,710) (5,826) (0.13)
Pro-forma results $ 70,151 $ 42,196 $ 0.93
Fourth Quarter 2002 Income Net EPS
(Loss) Income
Before (Loss)
Tax
Loss as reported in accordance
with GAAP $ (2,392) $ (970) $(0.02)
J-41 retirement charge
adjustment 21,526 13,002 0.29
Other (Bad debt expense due to
United bankruptcy) 2,584 1,561 0.03
Other (Reversal of prior period
accruals) (1,772) (1,070) (0.02)
Government compensation - - -
Pro-forma results $ 19,946 $ 12,523 $ 0.28
Fourth Quarter 2001 Income Net EPS
(Loss) Income
Before (Loss)
Tax
Loss as reported in accordance
with GAAP $ (2,399) $ (1,003) $(0.02)
J-41 retirement charge
adjustment 23,026 13,700 0.30
Other (Bad debt expense due to
United bankruptcy) - - -
Other (Reversal of prior period
accruals) - - -
Government compensation (5,078) (3,046) (0.07)
Pro-forma results $ 15,549 $ 9,651 $ 0.21