Frontier Airlines 2008 Annual Report Download - page 85

16. SUBSEQUENT EVENTS
On March 5, 2009, we agreed to a firm commitment for $40,000 in post-petition debtor-in-possession (DIP) financing to
Frontier. This new DIP facility refinances the existing DIP loan that matures in April 2009. The DIP facility is subject to approval by
the United States Bankruptcy Court for the Southern District of New York and other pre-closing conditions. Frontier and its
subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008. As a
condition to the loan, Frontier has agreed to allow the Company’s damage claim in the amount of $150,000 arising out of Frontier’s
rejection of the Airline Services Agreement, dated January 11, 2007.
Mokulele is currently in default of its loan and code-share agreement. We are negotiating with Mokulele the terms of a
possible recapitalization of Mokulele, but there can be no assurance that Mokulele will be recapitalized. As a part of these
negotiations, we are contemplating converting $3,000 of our loan and injecting $3,000 of cash in exchange for 50% of Mokulele's
common stock. Even if this recapitalization is completed, Mokulele could require additional funding, part or all of which may come
from us. If the business environment does not improve for Mokulele, our financial condition, results of operations and liquidity could
be adversely affected.
As of December 31, 2008, the Company’s market capitalization was approximately $367,600 as compared to its book value
of approximately $475,900. For the period subsequent to December 31, 2008, through the filing date of this Form 10-K, the
Company's market capitalization declined by an additional 55% and continues to be well below book value. Due to the continued
recessionary economic environment, as well as other uncertainties, the Company may be required to record an impairment charge as
early as the first quarter of 2009. The Company will continue to monitor circumstances and events in future periods to determine
whether additional goodwill impairment testing is warranted.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Not Applicable
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
We maintain "disclosure controls and procedures", as such term is defined under Securities Exchange Act Rule 13a-15(e),
that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized
and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management
recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives and our management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. We have carried out an evaluation, as of the end of the period covered by
this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their
evaluation and subject to the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls
and procedures were effective in ensuring that material information relating to us is made known to the Chief Executive Officer and
Chief Financial Officer by others within the Company during the period in which this report was being prepared.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposed in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies may deteriorate.
Under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the
Company’s management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December
31, 2008 using the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal
Control-Integrated Framework. Based on that evaluation, the Company’s management concluded that our internal control over
financial reporting was effective as of December 31, 2008.
The Company's effectiveness of our internal control over financial reporting as of December 31, 2008 has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, which also audited our Consolidated Financial Statements.
Deloitte & Touche LLP’s report on the Company's effectiveness of internal control over financial reporting appears on page 33 herein.
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 16, 2009 Powered by Morningstar® Document Research℠