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ExpressJet Merger
9 Months Ended
Sep. 30, 2011
ExpressJet Merger 
ExpressJet Merger

Note B — ExpressJet Merger

 

On November 12, 2010, the Company acquired ExpressJet Holdings, Inc. (of which ExpressJet is an indirect wholly-owned subsidiary) (“ExpressJet Holdings”) through the merger of ExpressJet Holdings with and into a wholly-owned subsidiary of Atlantic Southeast (the “ExpressJet Merger”). As a result of the ExpressJet Merger, each issued and outstanding share of ExpressJet Holdings common stock (other than shares owned by the Company or any of its subsidiaries) was converted into the right to receive $6.75 per share in cash, payable to the holder thereof, without interest. Based on the number of outstanding shares of ExpressJet Holdings common stock as of the effective time of the ExpressJet Merger, the aggregate value of the merger consideration was $131.6 million. After giving effect to the number of shares of ExpressJet Holdings acquired by the Company and its subsidiaries prior to the effective time of the ExpressJet Merger, the aggregate value of the ExpressJet Merger consideration was $136.5 million.  During the fourth quarter of 2010, the Company recorded a purchase accounting gain of $15.6 million.  This amount represents the difference between the consideration paid and the net fair value of ExpressJet Holdings’ assets acquired and liabilities assumed.  The net fair value of the assets and liabilities acquired in the ExpressJet Merger was more than the consideration paid.

 

In connection with the preparation of the Company’s 2010 tax return, the Company’s management identified an adjustment to the ExpressJet acquisition that resulted in an increase to the acquired deferred tax liabilities of $5.7 million.  The adjustment is reflected on the condensed consolidated statement of operations under the caption “Adjustment to purchase accounting gain.” The Company has determined that the adjustment to the purchase accounting gain is not material to either the prior or current period financial statements

 

The following unaudited pro forma combined results of operations give effect to the ExpressJet Merger as if it had occurred at the beginning of the periods presented. The unaudited pro forma combined results of operations do not purport to represent the Company’s consolidated results of operations had the ExpressJet Merger occurred on the date assumed, nor are these results necessarily indicative of the Company’s future consolidated results of operations. The Company expects to realize benefits from integrating the operations of Atlantic Southeast and ExpressJet, and to incur significant one-time cash costs in connection with that integration. The unaudited pro forma combined results of operations (in thousands) do not reflect these potential benefits or costs nor can the Company provide any assurance that the anticipated benefits will be achieved or that the Company’s actual costs will be consistent with the anticipated costs.

 

 

 

Three Months Ended
September 30, 2010

 

Nine Months Ended
September 30, 2010

 

Revenue

 

$

905,556

 

$

2,585,813

 

Net Income

 

$

18,092

 

$

22,058

 

Basic earnings per share

 

$

0.32

 

$

0.39

 

Diluted earnings per share

 

$

0.32

 

$

0.39