Pinnacle Airlines Corp. Announces 2009 Third Quarter Earnings
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MEMPHIS, TN -- (MARKET WIRE) -- 11/03/09 -- Pinnacle Airlines Corp. (NASDAQ: PNCL) (the "Company") today reported third quarter 2009 net income of $11.4 million and fully diluted earnings per share ("EPS") of $0.62. Excluding a gain related to the sale of the Company's Auction Rate Securities ("ARS") portfolio, the Company achieved net income and EPS of $7.3 million and $0.40, respectively, in the third quarter of 2009. This represents increases of 6% and 5%, respectively, over net income of $6.9 million and EPS of $0.38 in the third quarter of 2008 (excluding certain special items). The Company reported consolidated operating income of $23.8 million in the third quarter of 2009, an increase of 13% over consolidated operating income of $21.1 million in the third quarter of 2008, excluding special items.
"Once again, our People at Colgan Air and Pinnacle Airlines have delivered consistent financial performance for our shareholders, despite the many challenges facing our industry today," said Phil Trenary, the Company's President and Chief Executive Officer. "I offer my thanks to all of our People for the outstanding job they perform day in and day out."
For the nine months ended September 30, 2009, the Company reported net income of $36.2 million and EPS of $2.01. In addition to the gain on the sale of the Company's ARS portfolio recorded during the third quarter, the Company's year-to-date financial results include a number of previously announced special items that increased net income by $14.9 million. These nonrecurring items, along with special items that occurred in 2008, are listed in the attached table "Reconciliation of Non-GAAP Disclosures." Excluding these special items, the Company achieved net income of $17.6 million for the nine months of 2009, an increase of 51% over net income of $11.7 million year-to-date in 2008. Year-to-date 2009 EPS excluding these nonrecurring items was $0.97, an increase of 49% over EPS of $0.65 year-to-date in 2008.
Recent Significant Financial Events
The Company completed a number of transactions during the third quarter of 2009 to increase its liquidity in preparation for the first quarter of 2010 when holders of its remaining outstanding 3.25% senior convertible notes (the "Notes") may require the Company to repurchase the Notes. These transactions included the following:
-- The Company completed a $25 million, three-year term loan financing with C.I.T. Leasing secured by its pool of spare rotable and expendable aircraft parts. The interest rate for this financing is a variable rate indexed to LIBOR and was 8.5% at September 30, 2009.
-- The Company sold its portfolio of ARS as part of a settlement with a financial institution. After repayment of a related credit facility, the Company netted an additional $27 million in cash proceeds from the sale. In addition, the Company received options to repurchase the ARS at any time during the next three years should the market for ARS become more liquid. The Company recorded a net gain of $4.2 million on the settlement. The Company has recorded the options as an asset at their fair value of $4.1 million at September 30, 2009. The Company will record in earnings any change in the fair value of its unexercised options each quarter during the three-year term of the options.
-- The Company repurchased approximately $78 million par value of the Notes at a purchase price of $75 million. After completion of this purchase, approximately $31 million par amount of the Notes remains outstanding.
"We laid out a number of liquidity objectives at the beginning of the year, and I'm pleased to report that we've made great strides in accomplishing them," said Peter Hunt, the Company's Chief Financial Officer. "We have made tremendous progress in deleveraging our balance sheet and increasing our liquidity."
Third Quarter 2009 Financial and Operating Results
During the third quarter of 2009, Pinnacle Airlines, Inc. ("Pinnacle"), the Company's regional jet operating subsidiary, completed 106,802 block hours and 71,002 departures, a decrease and increase of (1)% and 6%, respectively, over the same period in 2008. Capacity increases associated with Pinnacle's new CRJ-900 aircraft fleet operating under the Delta Connection Agreement ("DCA") were partially offset by a (1)% decrease in the average number of CRJ-200 aircraft as compared to 2008. In addition, Pinnacle has experienced a (5)% decrease in aircraft utilization of its fleet, primarily from route network changes resulting in shorter average flights. Colgan Air, Inc. ("Colgan"), the Company's regional turboprop operating subsidiary, completed 36,255 block hours and 29,332 departures during the third quarter, decreases of (16)% and (15)%, respectively, over the same period in 2008. The decrease in operations is primarily related to the retirement of seven Saab and Beech aircraft in conjunction with eliminating certain markets operated under the Company's pro-rate agreements. Also contributing to this decrease was a reduction of one Q400 aircraft in Colgan's fleet during the three months ended September 30, 2009 as compared to the same period in 2008.
The Company recorded consolidated operating revenue during the third quarter of 2009 of $217.2 million, a decrease of $4.6 million, or 2%, over the same period in 2008. This decrease is primarily related to a reduction in Colgan's pro-rate operations and the decrease in Pinnacle's capacity noted above. Consolidated operating income was $23.8 million for the third quarter of 2009. Consolidated operating income for the third quarter of 2008 was approximately $21.1 million, excluding nonrecurring items. Pinnacle reported third quarter 2009 operating income and an operating margin of $15.7 million and 10.1%, respectively, an increase of $3.7 million and 2.0 points, respectively, from the third quarter of 2008. Increases in Pinnacle's operating income related to its new CRJ-900 operations were partially offset by unit cost increases related to salaries, wages and benefits and maintenance.
Colgan reported operating income and an operating margin of $8.1 million and 13.1%, a decrease of $1.0 million and 0.7 points, respectively, from the third quarter of 2008, excluding nonrecurring items. Colgan's unit revenue in its pro rate operations declined by (4)% due to the current economic conditions. Offsetting this decline in unit revenue, Colgan's average fuel cost per gallon decreased (44)% during the quarter, as compared to 2008. During the third quarter of 2009, Colgan also accelerated the amortization of certain slots that it plans to vacate in early 2010, increasing depreciation and amortization by $0.6 million. In addition, Colgan recorded a one-time reduction of maintenance expense of $1.4 million in the third quarter of 2008 related to the adjustment of certain maintenance accruals.
Net nonoperating expense was $7.4 million for the third quarter of 2009, including the previously discussed $4.2 million net investment gain related to the Company's ARS portfolio. Net nonoperating expense for the same period in 2008 was $11.3 million. Interest expense for the third quarter was $12.0 million, a decrease of $0.8 million from the third quarter of 2008. Interest income decreased by $1.0 million, primarily from a decrease in interest rates earned on invested assets. Interest expense includes $2.1 million and $2.5 million of additional expense for the third quarter of 2009 and 2008 related to the Company's previously disclosed adoption of a new accounting standard, which resulted in a change in the Company's accounting for the Notes. Prior year amounts have been restated to reflect the new accounting standard. The effect of this change was a non-cash reduction to EPS of $0.06 and $0.08 for the third quarter of 2009 and 2008, respectively.
Cash and Cash Equivalents
The Company ended the quarter with $81.2 million in unrestricted cash and cash equivalents. The Company generated $21.2 million in cash and cash equivalents from operating activities during the third quarter of 2009. Net cash provided by investing activities for the three months ended September 30, 2009 was $24.8 million, primarily resulting from the Company's sale of its ARS portfolio. Net cash used in financing activities for the three months ended September 30, 2009 totaled $59.0 million, comprised of $75 million used to repurchase a portion of the Notes and $8.2 million of scheduled principal payments on long-term debt obligations, partially offset by $24.2 million in net proceeds received from its term loan with C.I.T. Leasing.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp., an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Pinnacle Airlines, Inc. operates under Delta brands and operates 126 CRJ-200 and 16 CRJ-900 regional jet aircraft throughout the United States and in the District of Columbia, Belize, Mexico, Turks and Caicos Islands, the U.S. Virgin Islands and three Canadian provinces. Colgan Air, Inc. operates as Continental Connection, United Express and US Airways Express and operates a fleet of 14 Q400 and 34 Saab aircraft throughout the United States and Canada. For further information about the Company, please refer to the Company's Form 10-Q for the three months ended September 30, 2009, which will be filed with the SEC shortly.
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"), Colgan's operating income, Colgan's operating margin, the Company's operating income, operating margin, pre-tax income, net income and EPS for the three and nine months ended September 30, 2009 and 2008, excluding nonrecurring items related to aircraft retirement charges, the excess of property insurance proceeds over cost basis of aircraft, net investment gains and losses, ineffective portion of cash flow hedge, reversal of income tax reserves and related accrued interest, 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 Company does not intend to update these forward-looking statements before its next required filing with the Securities and Exchange Commission.
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Three Months Ended September 30,
--------------------------------
2009 2008
--------------- ---------------
(Restated)
Operating revenues
Regional airline services $ 214,478 $ 220,242
Other 2,730 1,550
--------------- ---------------
Total operating revenues 217,208 221,792
Operating expenses
Salaries, wages and benefits 55,402 56,378
Aircraft rentals 30,093 31,411
Ground handling services 21,964 21,651
Aircraft maintenance, materials and
repairs 25,311 20,612
Other rentals and landing fees 17,659 19,369
Aircraft fuel 6,197 14,831
Commissions and passenger related
expense 5,660 7,183
Depreciation and amortization 9,377 7,586
Other 21,749 21,692
Impairment and aircraft retirement
charges - 1,069
--------------- ---------------
Total operating expenses 193,412 201,782
--------------- ---------------
Operating income 23,796 20,010
Operating income as a percentage of
operating revenues 11.0% 9.0%
Nonoperating (expense) income
Interest income 277 1,289
Interest expense (11,989) (12,758)
Investment gain 4,233 -
Miscellaneous income, net 101 192
--------------- ---------------
Total nonoperating expense (7,378) (11,277)
--------------- ---------------
Income before income taxes 16,418 8,733
Income tax expense (5,041) (2,526)
--------------- ---------------
Net income $ 11,377 $ 6,207
=============== ===============
Basic earnings per share $ 0.63 $ 0.35
=============== ===============
Diluted earnings per share $ 0.62 $ 0.35
=============== ===============
Shares used in computing basic earnings
per share 17,970 17,867
=============== ===============
Shares used in computing diluted earnings
per share 18,204 17,891
=============== ===============
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
Nine Months Ended September 30,
--------------------------------
2009 2008
--------------- ---------------
(Restated)
Operating revenues
Regional airline services $ 629,614 $ 640,414
Other 6,679 6,873
--------------- ---------------
Total operating revenues 636,293 647,287
Operating expenses
Salaries, wages and benefits 167,999 165,582
Aircraft rentals 90,679 97,439
Ground handling services 70,622 72,712
Aircraft maintenance, materials and
repairs 74,800 66,261
Other rentals and landing fees 53,987 52,123
Aircraft fuel 15,968 41,603
Commissions and passenger related
expense 15,714 21,438
Depreciation and amortization 26,740 18,566
Other 54,890 68,614
Impairment and aircraft retirement
charges 1,980 13,688
--------------- ---------------
Total operating expenses 573,379 618,026
--------------- ---------------
Operating income 62,914 29,261
Operating income as a percentage of
operating revenues 9.9% 4.5%
Nonoperating (expense) income
Interest income 1,942 5,326
Interest expense (34,712) (31,194)
Investment gain (loss) 3,944 (8,675)
Miscellaneous income, net 445 166
--------------- ---------------
Total nonoperating expense (28,381) (34,377)
--------------- ---------------
Income (loss) before income taxes 34,533 (5,116)
Income tax benefit (expense) 1,680 (355)
--------------- ---------------
Net income (loss) $ 36,213 $ (5,471)
=============== ===============
Basic earnings (loss) per share $ 2.02 $ (0.31)
=============== ===============
Diluted earnings (loss) per share $ 2.01 $ (0.31)
=============== ===============
Shares used in computing basic earnings
(loss) per share 17,968 17,864
=============== ===============
Shares used in computing diluted earnings
(loss) per share 18,050 17,864
=============== ===============
Pinnacle Airlines Corp.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
September 30, 2009 December 31, 2008
------------------ ------------------
Assets (Unaudited) (Restated)
Current assets
Cash and cash equivalents $ 81,211 $ 69,469
Restricted cash 4,158 5,417
Receivables, net 33,486 31,619
Spare parts and supplies, net 18,570 17,106
Prepaid expenses and other assets 6,157 8,160
Assets held for sale 1,020 2,786
Deferred income taxes, net of
allowance 10,058 13,908
Income taxes receivable 34,186 31,117
------------------ ------------------
Total current assets 188,846 179,582
Property and equipment
Flight equipment 754,274 721,499
Aircraft pre-delivery payments 10,022 5,721
Other property and equipment 47,336 46,218
Less accumulated depreciation (77,954) (53,507)
------------------ ------------------
Net property and equipment 733,678 719,931
Investments 4,078 116,900
Deferred income taxes, net of
allowance - 40,847
Other assets 319,726 33,724
Debt issuance costs, net 3,737 3,711
Goodwill 18,422 18,422
Intangible assets, net 12,784 14,585
------------------ ------------------
Total assets $ 1,281,271 $ 1,127,702
================== ==================
Liabilities and stockholders' equity
Current liabilities
Current maturities of long-term
debt $ 35,918 $ 32,116
Bank line of credit - 8,275
Senior convertible notes 29,853 10,754
Pre-delivery payment facility - 4,075
Accounts payable 20,748 30,431
Deferred revenue 24,363 23,851
Accrued expenses and other
current liabilities 59,131 74,669
------------------ ------------------
Total current liabilities 170,013 184,171
Senior convertible notes - 97,683
Noncurrent pre-delivery payment
facility 4,910 -
Long-term debt, less current
maturities 529,045 502,741
Credit facility - 90,000
Deferred revenue, net of current
portion 182,464 192,191
Deferred income taxes, net of
allowance 4,191 -
Other liabilities 295,214 5,182
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value;
40,000,000 shares authorized;
22,792,426 and 22,514,782 shares
issued, respectively 228 225
Treasury stock, at cost,
4,450,092 shares (68,152) (68,152)
Additional paid-in capital 120,838 119,610
Accumulated other comprehensive
loss (14,916) (17,172)
Retained earnings 57,436 21,223
------------------ ------------------
Total stockholders' equity 95,434 55,734
------------------ ------------------
Total liabilities and stockholders'
equity $ 1,281,271 $ 1,127,702
================== ==================
Pinnacle Airlines Corp.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended September 30,
--------------------------------
2009 2008
--------------- ---------------
Cash provided by operating activities $ 83,982 $ 13,827
Cash provided by investing activities 24,325 25,538
Cash used in financing activities (96,565) (2,321)
--------------- ---------------
Net increase in cash and cash equivalents 11,742 37,044
Cash and cash equivalents at beginning of
period 69,469 26,785
--------------- ---------------
Cash and cash equivalents at end of
period $ 81,211 $ 63,829
=============== ===============
Pinnacle Airlines Corp.
Pinnacle Operating Statistics (Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
------------------------------ ------------------------------
2009 2008 Change 2009 2008 Change
--------- --------- ------- --------- --------- -------
Other Data:
Revenue
passengers
(in
thousands) 2,953 2,619 13 % 8,116 7,770 4 %
Revenue
passenger
miles
("RPMs")
(in
thousands) 1,203,519 1,236,067 (3)% 3,504,903 3,622,776 (3)%
Available
seat miles
("ASMs")
(in
thousands) 1,508,956 1,598,929 (6)% 4,638,257 4,715,054 (2)%
Passenger
load
factor 79.8% 77.3% 2.5 pts. 75.6% 76.8% (1.2)pts.
Operating
revenue
per ASM
(in cents) 10.29 9.27 11 % 10.03 9.72 3 %
Operating
cost per
ASM (in
cents) 9.25 8.51 9 % 9.02 8.88 2 %
Operating
revenue
per block
hour $ 1,454 $ 1,376 6 % $ 1,442 $ 1,381 4 %
Operating
cost per
block hour $ 1,307 $ 1,265 3 % $ 1,298 $ 1,261 3 %
Block hours 106,802 107,632 (1)% 322,517 331,744 (3)%
Departures 71,002 66,779 6 % 206,458 200,568 3 %
Average
daily
utilization
(block
hours) 8.29 8.74 (5)% 8.36 8.91 (6)%
Average
stage
length
(miles) 404 465 (13)% 427 462 (8)%
Number of
operating
aircraft
(end of
period)
CRJ-200 126 124 2 %
CRJ-900 16 11 45 %
Employees
(end of
period) 3,903 4,164 (6)%
Pinnacle Airlines Corp.
Colgan Operating Statistics (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2009 2008 Change 2009 2008 Change
Pro-rate
Agreements:
Revenue
passengers (in
thousands) 332 356 (7)% 885 1,082 (18)%
RPMs (in
thousands) 58,486 65,192 (10)% 154,100 197,977 (22)%
ASMs (in
thousands) 122,642 146,997 (17)% 348,434 446,643 (22)%
Passenger load
factor 47.7% 44.3% 3.4 pts. 44.2% 44.3% (0.1) pts.
Passenger yield
(in cents) 73.75 82.26 (10)% 75.16 77.76 (3)%
Operating revenue
per ASM (in
cents) 35.17 36.48 (4)% 33.24 34.47 (4)%
Operating revenue
per block hour $ 1,786 $ 1,804 (1)% $ 1,683 $ 1,675 0 %
Block hours 24,152 29,722 (19)% 68,836 91,888 (25)%
Departures 21,273 25,679 (17)% 60,911 77,147 (21)%
Fuel consumption
(in thousands of
gallons) 2,935 3,918 (25)% 8,340 11,535 (28)%
Average price per
gallon $ 2.11 $ 3.79 (44)% $ 1.91 $ 3.61 (47)%
Average fare $ 130 $ 151 (14)% $ 131 $ 142 (8)%
Capacity Purchase
Agreement:
Revenue
passengers (in
thousands) 427 394 8 % 1,161 770 51 %
RPMs (in
thousands) 122,312 109,687 12 % 325,113 214,582 52 %
ASMs (in
thousands) 169,371 175,823 (4)% 476,134 325,365 46 %
Passenger load
factor 72.2% 62.4% 9.8 pts. 68.3% 66.0% 2.3 pts.
Operating revenue
per ASM (in
cents) 11.00 11.36 (3)% 11.55 10.74 8 %
Operating revenue
per block hour $ 1,540 $ 1,504 2 % $ 1,547 $ 1,413 9 %
Block hours 12,103 13,282 (9)% 35,563 24,741 44 %
Departures 8,059 8,641 (7)% 23,193 15,927 46 %
Total Colgan:
Block hours 36,255 43,004 (16)% 104,399 116,629 (10)%
Departures 29,332 34,320 (15)% 84,104 93,074 (10)%
ASMs (in
thousands) 292,013 322,820 (10)% 824,568 772,008 7 %
Total operating
cost per ASM (in
cents) 18.44 20.34 (9)% 18.77 25.85 (27)%
Total operating
cost per ASM (in
cents)
(excluding
impairment
and aircraft
lease
return costs) 18.44 20.01 (8)% 18.53 24.07 (23)%
Total operating
cost per block
hour $ 1,485 $ 1,527 (3)% $ 1,483 $ 1,711 (13)%
Total operating
cost per block
hour
(excluding
impairment
and aircraft
lease
return costs) $ 1,485 $ 1,502 (1)% $ 1,464 $ 1,593 (8)%
Average daily
utilization
(block hours) 8.21 7.88 4 % 7.89 7.56 4 %
Average stage
length (miles) 224 221 1 % 221 209 6 %
Number of
operating
aircraft (end of
period)
Saab 340 34 37 (8)%
Beech 1900 - 4 (100)%
Q400 14 15 (7)%
Employees 1,326 1,389 (5)%
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
Three Months Ended September 30,
-----------------------------------------------
2009 2008 $ change % change
--------- --------- --------- --------
GAAP Colgan operating
income $ 8,110 $ 7,994 $ 116 1 %
Impairment and aircraft
retirement charges - 1,069 (1,069) N/A
--------- --------- --------- --------
Non-GAAP Colgan operating
income $ 8,110 $ 9,063 $ (953) (11)%
========= ========= ========= ========
GAAP Colgan operating
margin 13.1% 10.9% 2.2 pts.
Impairment and aircraft
retirement charges - 1.5% (1.5) pts.
--------- --------- ---------
Non-GAAP Colgan operating
margin 13.1% 12.4% 0.7 pts.
========= ========= =========
GAAP operating income $ 23,796 $ 20,010 $ 3,786 19 %
Impairment and aircraft
retirement charges - 1,069 (1,069) N/A
--------- --------- --------- --------
Non-GAAP operating income $ 23,796 $ 21,079 $ 2,717 13 %
========= ========= ========= ========
GAAP operating margin 11.0% 9.0% 2.0 pts.
Impairment and aircraft
retirement charges - 0.5% (0.5) pts.
--------- --------- ---------
Non-GAAP operating margin 11.0% 9.5% 1.5 pts.
========= ========= =========
GAAP pre-tax income $ 16,418 $ 8,733 $ 7,685 88 %
Impairment and aircraft
retirement charges - 1,069 (1,069) N/A
Net investment gain (4,233) - (4,233) N/A
--------- --------- --------- --------
Non-GAAP pre-tax income $ 12,185 $ 9,802 $ 2,383 24 %
========= ========= ========= ========
GAAP net income $ 11,377 $ 6,207 $ 5,170 83 %
Impairment and aircraft
retirement charges, net
of tax - 674 (674) N/A
Net investment gain, net
of tax (4,054) - (4,054) N/A
--------- --------- --------- --------
Non-GAAP net income $ 7,323 $ 6,881 $ 442 6 %
========= ========= ========= ========
GAAP EPS $ 0.62 $ 0.35 $ 0.27 77 %
Impairment and aircraft
retirement charges, net
of tax - 0.03 (0.03) N/A
Net investment gain, net
of tax (0.22) - (0.22) N/A
--------- --------- --------- --------
Non-GAAP EPS $ 0.40 $ 0.38 $ 0.02 5 %
========= ========= ========= ========
Pinnacle Airlines Corp.
Reconciliation of Non-GAAP Disclosures (Unaudited)
(in thousands, except per share data)
Nine Months Ended September 30,
----------------------------------------------
2009 2008 $ change % change
-------- -------- --------- --------
GAAP Colgan operating
income (loss) $ 16,332 $(10,491) $ 26,823 (256)%
Impairment and aircraft
retirement charges 1,980 13,688 (11,708) (86)%
Excess of property
insurance proceeds over
cost basis of aircraft (835) - (835) N/A
-------- -------- --------- --------
Non-GAAP Colgan operating
income $ 17,477 $ 3,197 $ 14,280 447 %
======== ======== ========= ========
GAAP Colgan operating
margin 9.5 % (5.5)% 15.0 pts.
Impairment and aircraft
retirement charges 1.2 % 7.2 % (6.0) pts.
Excess of property
insurance proceeds over
cost basis of aircraft (0.5)% - (0.5) pts.
-------- -------- ---------
Non-GAAP Colgan operating
margin 10.2 % 1.7 % 8.5 pts.
======== ======== =========
GAAP operating income $ 62,914 $ 29,261 $ 33,653 115 %
Impairment and aircraft
retirement charges 1,980 13,688 (11,708) (86)%
Excess of property
insurance proceeds over
cost basis of aircraft (835) - (835) N/A
-------- -------- --------- --------
Non-GAAP operating income $ 64,059 $ 42,949 $ 21,110 49 %
======== ======== ========= ========
GAAP operating margin 9.9 % 4.5 % 5.4 pts.
Impairment and aircraft
retirement charges 0.3 % 2.1 % (1.8) pts.
Excess of property
insurance proceeds over
cost basis of aircraft (0.1)% - (0.1) pts.
-------- -------- ---------
Non-GAAP operating margin 10.1 % 6.6 % 3.5 pts.
======== ======== =========
GAAP pre-tax income (loss) $ 34,533 $ (5,116) $ 39,649 (775)%
Impairment and aircraft
retirement charges 1,980 13,688 (11,708) (86)%
Excess of property
insurance proceeds over
cost basis of aircraft (835) - (835) N/A
Net investment (gain) loss (3,944) 8,675 (12,619) (145)%
Ineffective portion of
hedge 1,424 - 1,424 N/A
Reversal of interest on
tax reserves (2,926) - (2,926) N/A
Gain on debt
extinguishment (1,857) - (1,857) N/A
-------- -------- --------- --------
Non-GAAP pre-tax income $ 28,375 $ 17,247 $ 11,128 65 %
======== ======== ========= ========
GAAP net income (loss) $ 36,213 $ (5,471) $ 41,684 (762)%
Impairment and aircraft
retirement charges, net
of tax 1,280 8,828 (7,548) (86)%
Excess of property
insurance proceeds over
cost basis of aircraft,
net of tax (540) - (540) N/A
Net investment (gain)
loss, net of tax (3,777) 8,309 (12,086) (145)%
Ineffective portion of
hedge, net of tax 921 - 921 N/A
Reversal of interest on
tax reserves, net of tax (1,849) - (1,849) N/A
Gain on debt extinguishment,
net of tax (1,122) - (1,122) N/A
IRS settlement (13,551) - (13,551) N/A
-------- -------- --------- --------
Non-GAAP net income $ 17,575 $ 11,666 $ 5,909 51 %
======== ======== ========= ========
GAAP EPS $ 2.01 $ (0.31) $ 2.32 (748)%
Impairment and aircraft
retirement charges, net
of tax 0.07 0.49 (0.42) (86)%
Excess of property
insurance proceeds over
cost basis of aircraft,
net of tax (0.03) - (0.03) N/A
Net investment (gain)
loss, net of tax (0.21) 0.47 (0.68) (145)%
Ineffective portion of
hedge, net of tax 0.05 - 0.05 N/A
Reversal of interest on
tax reserves, net of tax (0.11) - (0.11) N/A
Gain on debt extinguishment,
net of tax (0.06) - (0.06) N/A
IRS settlement (0.75) - (0.75) N/A
-------- -------- --------- --------
Non-GAAP EPS $ 0.97 $ 0.65 $ 0.32 49 %
======== ======== ========= ========
For further information, please contact: Joe Williams (901) 346-6162 www.pncl.com
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