Airtran 1999 Annual Report Download - page 46

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The results of the third quarter of 1999 include net proceeds of $19,640,000 from
the settlement of a lawsuit against a third party maintenance provider.
Year-end adjustments resulted in increasing the loss before income taxes during the
fourth quarter of 1999 by approximately $5,250,000. Of this amount, approximately
$3,160,000 relates to the correction of revenue recorded in earlier quarters during
1999 and approximately $2,090,000 relates to changes in management’s estimates
and assumptions primarily related to accruals for vacation and group health insurance.
At December 31, 1997, the Company had accrued the estimated costs to reactivate
certain aircraft. During the quarter ended June 30, 1998, the reactivation of these
aircraft was completed and the associated costs were finalized. The remaining
maintenance accrual was therefore revised based on this additional information
and $3 million was reversed into income, increasing income for the quarter ended
June 30, 1998, by approximately $0.05 per share on a diluted basis.
15. Supplemental Guarantor Financial Information
The Company’s $150,000,000 of 10.25% Senior Notes issued during 1996 are
fully and unconditionally guaranteed on a joint and several basis by AirTran Airways,
a wholly-owned subsidiary of the Company, and by AirTran Airways’ subsidiary
(“Guarantors”). The $80,000,000 of 10.50% Senior Secured Notes issued by AirTran
Airlines, now AirTran Airways, during 1997 are fully and unconditionally guaranteed
on a joint and several basis by AirTran Holdings, Inc., and AirTran Airways’ subsidiary.
AirTran Airways and its subsidiary conduct all of the operations of the Company.
All of the subsidiary Guarantors are wholly-owned or indirect subsidiaries of the
Company, and there are no direct or indirect subsidiaries of the Company that
are not Guarantors. Separate financial statements of the subsidiary Guarantors
are not presented because AirTran Holdings, Inc. and all of its subsidiaries guarantee
the Senior Notes and the Senior Secured Notes on a full, unconditional and joint and
several basis.
Summarized consolidated financial information as of and for the year ended
December 31, 1999, is as follows (in thousands):
AirTran AirTran
Airways AirTran Holdings, Inc.
and Holdings, and
Subsidiary Inc. Eliminations Subsidiaries
Current assets $103,644 $ — $ — $103,644
Non-current assets 362,355 113,172 (112,157) 363,370
Current liabilities 107,723 3,203 — 110,926
Non-current liabilities 399,322 150,000 (153,203) 396,119
Operating revenues 523,468 — — 523,468
Operating loss (71,988) — — (71,988)
Loss before income
taxes (96,655) — — (96,655)
Net loss (99,394) — — (99,394)
Summarized consolidated financial information as of and for the year ended
December 31, 1998, is as follows (in thousands):
AirTran AirTran
Airlines AirTran Holdings, Inc.
and AirTran Holdings, and
Subsidiary Airways Inc. Eliminations Subsidiaries
Current assets $ 52,957 $ — $ — $ — $ 52,957
Non-current assets 321,646 3,290 208,835 (210,322) 323,449
Current liabilities 83,798 — 3,203 (3,290) 83,711
Non-current liabilities 240,268 — 150,000 (153,203) 237,065
Operating revenues 439,307 — — — 439,307
Operating loss (18,557) — — — (18,557)
Loss before income
taxes (39,922) (816) — — (40,738)
Net loss (39,922) (816) — — (40,738)