exhibit99-1.htm

Exhibit 99.1

Pinnacle Airlines Corp. Announces 2009 Fourth Quarter Earnings

Company reports Consolidated Earnings per Share of $0.31

MEMPHIS, TN – February 18, 2010 – Pinnacle Airlines Corp. (NASDAQ: PNCL) (the “Company”) today reported fourth quarter 2009 net income of $5.6 million and fully diluted earnings per share (“EPS”) of $0.31. This represents an increase of 153% and 158% over net income and EPS recorded in the fourth quarter of 2008 of $2.2 million and $0.12, respectively, excluding special charges. The Company reported consolidated operating income of $17.8 million in the fourth quarter of 2009, an increase of 9% over consolidated operating income of $16.3 million in the fourth quarter of 2008.

For the year ended December 31, 2009, the Company reported net income of $41.9 million and EPS of $2.31. The Company’s financial results during 2009 include a number of previously announced special items that increased net income by $18.7 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 $23.2 million for the full year 2009, an increase of 68% over net income of $13.8 million in 2008, excluding special charges. The Company’s 2009 EPS excluding these nonrecurring items was $1.28, an increase of 66% over EPS of $0.77 for 2008, excluding special charges.

The Company also announced today that all of the remaining $31 million par amount of 3.25% Senior Convertible Notes (the “Notes”) were repaid on February 16, the day after the date that holders of the Notes could elect to tender the Notes to the Company. After repayment of the Notes, the Company’s balance of unrestricted cash and cash equivalents on February 16 was approximately $60 million.

In January 2010, the Company entered into a short-term loan agreement for $10.0 million, secured by the Company’s federal income tax refund. The interest rate on this loan is currently 4.5%.This short-term loan provided the Company with a low-cost alternative to maintain a strong working capital position until its 2009 federal tax refund is received late in the first quarter or early in the second quarter of 2010.

“2009 was a significant year for Pinnacle Airlines Corp.,” said Phil Trenary, the Company’s President and Chief Executive Officer. “We began the year with many challenges, both operationally and financially, but our People delivered solid results for our Customers and Shareholders. With the full repayment of our convertible notes, we are better positioned to take advantage of opportunities in the regional airline industry in 2010 and beyond.”

Fourth Quarter 2009 Financial and Operating Results

During the fourth quarter of 2009, Pinnacle Airlines, Inc. (“Pinnacle”), the Company’s regional jet operating subsidiary, completed 103,915 block hours and 66,619 departures, decreases of 7% and 1%, respectively, over the same period in 2008. Pinnacle experienced an 8% decrease year-over-year in the average 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 33,766 block hours and 26,466 departures during the fourth quarter, decreases of 7% 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 during 2009.

The Company recorded consolidated operating revenue during the fourth quarter of 2009 of $209.2 million, a decrease of $8.3 million, or 4%, 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 utilization noted above. Consolidated operating income was $17.8 million for the fourth quarter of 2009. Consolidated operating income for the fourth quarter of 2008 was approximately $16.3 million.

Pinnacle reported fourth quarter 2009 operating income and an operating margin of $13.5 million and 8.8%, respectively, a decrease of $0.4 million and 0.2 points, respectively, from the fourth quarter of 2008. Pinnacle’s operating income in the fourth quarter of 2009 was reduced by approximately $1.7 million related to an ongoing contractual disagreement with Delta Air Lines, Inc. (“Delta”), the Company’s largest operating partner. Delta has disputed the contractual requirement to reimburse Pinnacle in full for its aviation hull and passenger liability insurance premiums. Under generally accepted accounting principles, Pinnacle will not record the unreimbursed insurance amounts as revenue until the parties resolve the issue.

Colgan reported operating income and an operating margin of $4.3 million and 7.6%, an increase of $1.8 million and 3.6 points, respectively, from the fourth quarter of 2008. Colgan’s decreased fuel costs in its pro-rate operations were a primary factor leading to the increase in operating income. Fuel cost per gallon during the fourth quarter 2009 was $2.31, down 9%, from $2.53 per gallon during the same period in 2008. The decline in fuel costs was partially offset by a decrease in Colgan’s revenue-per-available-seat-mile within its pro-rate operations of approximately 9%, and increases in Colgan’s rising employee health insurance costs and wage and rate adjustments during 2009.

Net nonoperating expense was $10.1 million for the fourth quarter of 2009, as compared to nonoperating expense of $19.8 million for the same period in 2008, which included an $8.1 million impairment charge related to the Company’s Auction Rate Securities (“ARS”) portfolio. Interest income decreased by $1.5 million, primarily from a decrease in interest rates earned on invested assets, as well as the sale of the Company’s ARS portfolio in August 2009. Interest expense for the fourth quarter was $10.2 million, a decrease of $3.2 million from the fourth quarter of 2008, primarily related to a reduction in interest expense on the Company’s Notes, a large portion of which were repurchased throughout 2009.

Cash and Cash Equivalents

The Company ended the quarter with $91.6 million in unrestricted cash and cash equivalents. The Company generated $21.7 million in cash and cash equivalents from operating activities during the fourth quarter of 2009. Net cash used in investing activities for the three months ended December 31, 2009 was $0.1 million, primarily resulting from $1.4 million related to certain capital expenditures, partially offset by $1.3 million related to the redemption of certain of the Company’s previously mentioned ARS. Net cash used in financing activities for the three months ended December 31, 2009 totaled $11.2 million, primarily comprised of $10.8 scheduled principal payments on long-term debt obligations and $0.3 million of other financing activities.

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-K for the year ended December 31, 2009, 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"), 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 months ended December 31, 2008 and years ended December 31, 2009 and 2008, excluding nonrecurring items related to impairment and 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.

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 Operations (Unaudited)

(in thousands, except per share data)

	Three Months Ended December 31,
		2009			2008
				(Restated)
Operating revenues:
Regional airline services	$	206,635		$	215,245
Other		2,580			2,253
Total operating revenues		209,215			217,498
Operating expenses:
Salaries, wages and benefits		57,015			54,389
Aircraft rentals		30,069			31,120
Ground handling services		22,560			23,647
Aircraft maintenance, materials and repairs		23,275			27,100
Other rentals and landing fees		16,790			19,282
Aircraft fuel		6,142			7,847
Commissions and passenger related expense		5,205			5,587
Depreciation and amortization		8,659			7,952
Other		21,705			24,368
Impairment and aircraft retirement costs		-			(140	)
Total operating expenses		191,420			201,152

Operating income		17,795			16,346

Operating income as a percentage of operating revenues		8.5	%		7.5	%

Nonoperating (expense) income:
Interest income		5			1,543
Interest expense		(10,150	)		(13,352	)
Investment loss, net		(67	)		(8,125	)
Miscellaneous income, net		122			115
Total nonoperating expense		(10,090	)		(19,819	)
Income (loss) before income taxes		7,705			(3,473	)
Income tax expense		(2,062	)		(2,053	)
Net income (loss)	$	5,643		$	(5,526	)

Basic and diluted earnings (loss) per share	$	0.31		$	(0.31	)

Shares used in computing basic earnings (loss) per share		17,969			17,867

Shares used in computing diluted earnings (loss) per share		18,381			17,867

Pinnacle Airlines Corp.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

	Years Ended December 31,
		2009			2008
	(Unaudited)			(Restated)
Operating revenues:
Regional airline services	$	836,249		$	855,659
Other		9,259			9,126
Total operating revenues		845,508			864,785
Operating expenses:
Salaries, wages and benefits		225,014			219,971
Aircraft rentals		120,748			128,559
Ground handling services		93,182			96,359
Aircraft maintenance, materials and repairs		98,075			93,361
Other rentals and landing fees		70,777			71,405
Aircraft fuel		22,110			49,450
Commissions and passenger related expense		20,919			27,025
Depreciation and amortization		35,399			26,518
Other		76,595			92,982
Impairment and aircraft retirement costs		1,980			13,548
Total operating expenses		764,799			819,178

Operating income		80,709			45,607

Operating income as a percentage of operating revenues		9.5	%		5.3	%

Nonoperating (expense) income:
Interest income		1,947			6,870
Interest expense		(44,862	)		(44,547	)
Investment gain (loss), net		3,877			(16,800	)
Miscellaneous income, net		567			281
Total nonoperating expense		(38,471	)		(54,196	)
Income (loss) before income taxes		42,238			(8,589	)
Income tax expense		(382	)		(2,408	)
Net income (loss)	$	41,856		$	(10,997	)

Basic earnings (loss) per share	$	2.33		$	(0.62	)

Diluted earnings (loss) per share	$	2.31		$	(0.62	)

Shares used in computing basic earnings (loss) per share		17,969			17,865

Shares used in computing diluted earnings (loss) per share		18,133			17,865

Pinnacle Airlines Corp.

Condensed Consolidated Balance Sheets

(in thousands, except share data)


	December 31, 2009			December 31, 2008
Assets	(Unaudited)			(Restated)
Current assets
Cash and cash equivalents	$	91,574		$	69,469
Restricted cash		3,115			5,417
Receivables, net of allowances of $213 in 2009 and $135 in 2008		34,518			31,619
Spare parts and supplies, net of allowances of $4,749 in 2009 and $4,213 in 2008		19,472			17,106
Prepaid expenses and other assets		3,508			8,160
Assets held for sale		-			2,786
Deferred income taxes, net of allowance		10,406			13,908
Income taxes receivable		40,803			31,117
Total current assets		203,396			179,582

Property and equipment
Flight equipment		756,815			721,499
Aircraft pre-delivery payments		12,049			5,721
Other property and equipment		48,710			46,218
Less accumulated depreciation		(86,501	)		(53,507	)
Net property and equipment		731,073			719,931
Investments		2,723			116,900
Deferred income taxes, net of allowance		-			40,847
Other assets		317,659			33,724
Debt issuance costs, net of amortization of $5,146 in 2009 and $3,911 in 2008		3,561			3,711
Goodwill		18,422			18,422
Intangible assets, net of amortization of $7,179 in 2009 and $5,180 in 2008		12,586			14,585
Total assets	$	1,289,420		$	1,127,702

Liabilities and stockholders’ equity
Current liabilities
Current maturities of long-term debt	$	36,085		$	32,116
Bank line of credit		-			8,275
Senior convertible notes		30,596			10,754
Pre-delivery payment facility		2,027			4,075
Accounts payable		24,306			30,431
Deferred revenue		24,363			23,851
Accrued expenses and other current liabilities		60,610			74,669
Total current liabilities		177,987			184,171

Senior convertible notes		-			97,683
Noncurrent pre-delivery payment facility		4,910			-
Long-term debt, less current maturities		519,234			502,741
Credit facility		-			90,000
Deferred revenue, net of current portion		177,711			192,191
Deferred income taxes, net of allowance		13,532			-
Other liabilities		293,809			5,182
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value; 40,000,000 shares authorized; 22,786,743 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		121,513			119,611
Accumulated other comprehensive loss		(14,431	)		(17,173	)
Retained earnings		63,079			21,223
Total stockholders’ equity		102,237			55,734
Total liabilities and stockholders’ equity	$	1,289,420		$	1,127,702

Pinnacle Airlines Corp.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Years Ended December 31,
		2009			2008
				(restated)

Cash provided by operating activities	$	105,641		$	28,806
Cash provided by investing activities		24,224			20,404
Cash used in financing activities		(107,760	)		(6,526	)
Net increase in cash and cash equivalents		22,105			42,684
Cash and cash equivalents at beginning of period		69,469			26,785
Cash and cash equivalents at end of period	$	91,574		$	69,469

Pinnacle Airlines Corp.

Pinnacle Operating Statistics (Unaudited)

	Three Months Ended December 31,									Years Ended December 31,
	2009			2008			Change				2009			2008		Change
Other Data:
Revenue passengers (in thousands)		2,655			2,623			1	%		10,771			10,393			4	%
Revenue passenger miles (“RPMs”) (in thousands)		1,135,489			1,221,749			(7	)%		4,640,392			4,844,526			(4	)%
Available seat miles (“ASMs”) (in thousands)		1,470,353			1,605,043			(8	)%		6,108,609			6,320,269			(3	)%
Passenger load factor		77.2	%		76.1	%	1.1 pts.				76.0	%		76.7	%	(0.7) pts.
Operating revenue per ASM (in cents)		10.39			9.65			8	%		10.12			9.70			4	%
Operating cost per ASM (in cents)		9.47			8.78			8	%		9.13			8.85			3	%
Operating revenue per block hour	$	1,470		$	1,393			6	%	$	1,449		$	1,384			5	%
Operating cost per block hour	$	1,340		$	1,268			6	%	$	1,308		$	1,263			4	%
Block hours		103,915			111,167			(7	)%		426,432			442,911			(4	)%
Departures		66,619			67,325			(1	)%		273,077			267,893			2	%
Average daily utilization (block hours)		7.99			8.67			(8	)%		8.58			8.75			(2	)%
Average stage length (miles)		422			455			(7	)%		426			460			(7	)%

Number of operating aircraft (end of period)
CRJ-200		126			124			2	%
CRJ-900		16			18			(11	)%
Employees (end of period)		3,675			4,204			(13	)%

Pinnacle Airlines Corp.

Colgan Operating Statistics (Unaudited)

	Three Months Ended December 31,									Years Ended December 31,
	2009			2008			Change			2009			2008			Change

Pro-rate Agreements:
Revenue passengers (in thousands)		284			298			(5	)%		1,168			1,380			(15	)%
RPMs (in thousands)		49,747			51,544			(3	)%		203,848			249,520			(18	)%
ASMs (in thousands)		108,231			111,222			(3	)%		456,664			558,389			(18	)%
Passenger load factor		46.0	%		46.3	%	(0.3) pts.				44.6	%		44.7	%	(0.1)pts.
Passenger yield (in cents)		76.78			83.49			(8	)%		75.56			78.94			(4	)%
Operating revenue per ASM (in cents)		35.29			38.69			(9	)%		33.73			35.28			(4	)%
Operating revenue per block hour	$	1,721		$	1,875			(8	)%	$	1,692		$	1,716			(1	)%
Block hours		22,189			22,954			(3	)%		91,023			114,816			(21	)%
Departures		18,957			20,147			(6	)%		79,866			97,174			(18	)%
Fuel consumption (in thousands of gallons)		2,654			3,097			(14	)%		10,994			14,761			(26	)%
Average price per gallon	$	2.31		$	2.53			(9	)%	$	2.01		$	3.35			(40	)%
Average fare	$	134		$	144			(7	)%	$	132		$	143			(8	)%

Capacity Purchase Agreement:
Revenue passengers (in thousands)		372			383			(3	)%		1,533			1,153			33	%
RPMs (in thousands)		112,109			112,044			0	%		437,221			326,627			34	%
ASMs (in thousands)		162,686			176,991			(8	)%		638,821			501,832			27	%
Passenger load factor		68.9	%		63.3	%	5.6 pts.				68.4	%		65.1	%	3.3 pts.
Operating revenue per ASM (in cents)		11.14			11.05			1	%		11.45			10.86			5	%
Operating revenue per block hour	$	1,566		$	1,470			7	%	$	1,551		$	1,432			8	%
Block hours		11,577			13,307			(13	)%		47,143			38,074			24	%
Departures		7,509			8,437			(11	)%		30,702			24,461			26	%

Total Colgan:
Block hours		33,766		36,261	(7	)%		138,166		152,890	(10	)%
Departures		26,466		28,584	(7	)%		110,568		121,635	(9	)%
ASMs (in thousands)		270,917		288,213	(6	)%		1,095,485		1,060,221	3	%
Total operating cost per ASM (in cents)		19.26		20.88	(8	)%		18.89		24.50	(23	)%
Total operating cost per ASM (in cents) (excluding impairment and aircraft lease return costs)		19.26		20.93	(8	)%		18.71		23.22	(19	)%
Total operating cost per block hour	$	1,545	$	1,659	(7	)%	$	1,498	$	1,699	(12	)%
Total operating cost per block hour (excluding impairment and aircraft lease return costs)	$	1,545	$	1,663	(7	)%	$	1,484	$	1,610	(8	)%
Average daily utilization (block hours)		7.65		7.48	2	%		7.84		7.86	(0	) %
Average stage length (miles)		229		228	0	%		223		228	(2	)%
Number of operating aircraft (end of period)
Saab 340		34		34	0	%
Beech 1900		-		2	(100	)%
Q400		14		15	(7	)%
Employees		1,307		1,324	(1	)%

Pinnacle Airlines Corp.

Reconciliation of Non-GAAP Disclosures (Unaudited)

(in thousands, except per share data)

	Three Months Ended December 31,
	2009		2008			$ change			% change

GAAP pre-tax income (loss)	$	7,705	$	(3,473	)	$	11,178			(322	)%
Net investment loss		-		8,125			(8,125	)		N/A
Non-GAAP pre-tax income	$	7,705	$	4,652		$	3,053			66	%

GAAP net income (loss)	$	5,643	$	(5,526	)	$	11,169			(202	)%
Net investment loss, net of tax		-		7,759			(7,759	)		N/A
Non-GAAP net income	$	5,643	$	2,233		$	3,410			153	%

GAAP EPS	$	0.31	$	(0.31	)	$	0.62			(200	)%
Net investment loss, net of tax		-		0.43			(0.43	)		N/A
Non-GAAP EPS	$	0.31	$	0.12		$	0.19			158	%

Pinnacle Airlines Corp.

Reconciliation of Non-GAAP Disclosures (Unaudited)

(in thousands, except per share data)

	Years Ended December 31,
	2009			2008			$ change				% change

GAAP Colgan operating income (loss)	$	20,616		$	(8,010	)	$	28,626				(357	)%
Impairment and aircraft retirement charges		1,980			13,548			(11,568	)			(85	)%
Excess of property insurance proceeds over cost basis of aircraft		(835	)		-			(835	)			N/A
Non-GAAP Colgan operating income	$	21,761		$	5,538		$	16,223				293	%

GAAP Colgan operating margin		9.1	%		(3.2	)%		12.3		pts.
Impairment and aircraft retirement charges		0.9	%		5.4	%		(4.5	)	pts.
Excess of property insurance proceeds over cost basis of aircraft		(0.4	)%		-			(0.4	)	pts.
Non-GAAP Colgan operating margin		9.6	%		2.2	%		7.4		pts.

GAAP operating income	$	80,709		$	45,607		$	35,102				77	%
Impairment and aircraft retirement charges		1,980			13,548			(11,568	)			(85	)%
Excess of property insurance proceeds over cost basis of aircraft		(835	)		-			(835	)			N/A
Non-GAAP operating income	$	81,854		$	59,155		$	22,699				38	%

GAAP operating margin		9.5	%		5.3	%		4.2		pts.
Impairment and aircraft retirement charges		0.2	%		1.6	%		(1.4	)	pts.
Excess of property insurance proceeds over cost basis of aircraft		(0.1	)%		-			(0.1	)	pts.
Non-GAAP operating margin		9.6	%		6.9	%		2.7		pts.

GAAP pre-tax income (loss)	$	42,238		$	(8,589	)	$	50,827				(592	)%
Impairment and aircraft retirement charges		1,980			13,548			(11,568	)			(85	)%
Excess of property insurance proceeds over cost basis of aircraft		(835	)		-			(835	)			N/A
Net investment (gain) loss		(3,877	)		16,800			(20,677	)			(123	)%
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	$	36,147		$	21,759		$	14,388				66	%

GAAP net income (loss)	$	41,856		$	(10,997	)	$	52,853				(481	)%
Impairment and aircraft retirement charges, net of tax		1,218			8,688			(7,470	)			(86	)%
Excess of property insurance proceeds over cost basis of aircraft, net of tax		(514	)		-			(514	)			N/A
Net investment (gain) loss, net of tax		(3,713	)		16,091			(19,804	)			(123	)%
Ineffective portion of hedge, net of tax		876			-			876				N/A
Reversal of interest on tax reserves, net of tax		(1,842	)		-			(1,842	)			N/A
Gain on debt extinguishment, net of tax		(1,118	)		-			(1,118	)			N/A
IRS settlement		(13,551	)		-			(13,551	)			N/A
Non-GAAP net income	$	23,212		$	13,782		$	9,430				68	%

GAAP EPS	$	2.31		$	(0.62	)	$	2.93				(473	)%
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		(0.20	)		0.90			(1.10	)			(122	)%
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	$	1.28		$	0.77		$	0.51				66	%