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Table of Contents
resolution that would allow a slot transaction with Delta to proceed. However, the Company cannot predict the outcome of these
discussions or the related judicial proceeding, or whether a slot transaction with Delta will be completed.
18. Selected Quarterly Financial Information (unaudited)
Summarized quarterly financial information for 2010 and 2009 is as follows (in millions, except share and per share amounts):
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
2010
Operating revenues $ 2,651 $ 3,171 $ 3,179 $ 2,907
Operating expenses 2,661 2,800 2,864 2,802
Operating income (loss) (10) 371 315 105
Nonoperating expenses, net (35) (92) (74) (78)
Income tax provision (benefit) — — 1 (1)
Net income (loss) (45) 279 240 28
Earnings (loss) per common share:
Basic: $ (0.28) $ 1.73 $ 1.49 $ 0.17
Diluted: $ (0.28) $ 1.41 $ 1.22 $ 0.17
Shares used for computation (in thousands):
Basic 161,115 161,292 161,464 161,776
Diluted 161,115 203,809 204,535 202,200
2009
Operating revenues $ 2,455 $ 2,658 $ 2,719 $ 2,626
Operating expenses 2,480 2,536 2,713 2,612
Operating income (loss) (25) 122 6 14
Nonoperating expenses, net (78) (64) (86) (131)
Income tax benefit — — — (38)
Net income (loss) (103) 58 (80) (79)
Earnings (loss) per common share:
Basic: $ (0.90) $ 0.47 $ (0.60) $ (0.49)
Diluted: $ (0.90) $ 0.42 $ (0.60) $ (0.49)
Shares used for computation (in thousands):
Basic 114,121 123,790 132,985 161,103
Diluted 114,121 144,125 132,985 161,103
The Company's 2010 and 2009 fourth quarter results were impacted by recognition of the following items:
Fourth quarter 2010 operating expenses included a $6 million non-cash charge related to the decline in market value of certain spare
parts. Nonoperating expenses, net included an $11 million settlement gain, offset by $5 million in non-cash charges related to the write
off of debt issuance costs.
Fourth quarter 2009 operating expenses included $36 million of net special charges consisting of $16 million in non-cash impairment
charges due to the decline in fair value of certain indefinite lived intangible assets associated with international routes, $5 million in
aircraft costs as a result of capacity reductions, $6 million in severance charges, $6 million in costs related to the 2009 liquidity
improvement program and $3 million in non-cash charges related to the decline in market value of certain Express spare parts.
Nonoperating expenses, net included $49 million in non-cash charges associated with the sale of 10 Embraer 190 aircraft and write off of
related debt discount and issuance costs. Income tax benefit includes $21 million of a non-cash income tax benefit related to gains
recorded within other comprehensive income, a $14 million tax benefit related to a legislation change allowing the Company to carry
back 100% of 2008 AMT net operating losses, resulting in the recovery of AMT amounts paid in prior years and a $3 million tax benefit
related to the reversal of the deferred tax liability associated with the indefinite lived intangible assets that were impaired during 2009.
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