FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________to _________________
Commission file number 1-13934
MIDWEST EXPRESS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1828757
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6744 South Howell Avenue
Oak Creek, Wisconsin 53154
(Address of Principal executive offices)
(Zip code)
414-570-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
As of April 30, 1998, there were 9,425,894 shares of Common Stock, $.01
par value, of the Registrant outstanding. On April 22, 1998, the Company
announced that its board of directors had approved a plan to split its
stock 3-for-2 in the form of a 50% stock dividend. The effect of the
stock dividend has been reflected in the accompanying financial
statements, and had the dividend been paid as of April 30, 1998, there
would have been 14,138,841 shares of Common Stock outstanding.
<PAGE>
MIDWEST EXPRESS HOLDINGS, INC.
FORM 10-Q
For the period ended March 31, 1998
INDEX
PART I - FINANCIAL INFORMATION
Page
No.
Item 1. Financial Statements (unaudited)
Consolidated Statements of Income 3
Condensed Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Unaudited Notes to Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 6
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
PART I - Financial Statements
<TABLE>
MIDWEST EXPRESS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
<S> <C> <C>
Operating revenues:
Passenger service $ 79,201 $ 71,428
Cargo 2,931 2,593
Other 6,280 5,899
-------- --------
Total operating revenues 88,412 79,920
Operating expenses:
Salaries, wages and benefits 26,303 21,409
Aircraft fuel and oil 11,203 13,402
Commissions 6,625 7,119
Dining services 4,398 3,825
Station rental, landing and other fees 7,205 6,616
Aircraft maintenance materials and repairs 7,468 5,910
Depreciation and amortization 2,335 2,101
Aircraft rentals 4,711 4,262
Other 8,761 8,803
-------- --------
Total operating expenses 79,009 73,447
-------- --------
Operating income 9,403 6,473
-------- --------
Other income (expense):
Interest income 413 300
Interest expense (71) -
Other (17) (4)
Total other income (expense) 325 296
-------- --------
Income before income taxes 9,728 6,769
Provision for income taxes 3,648 2,538
-------- --------
Net income $ 6,080 $ 4,231
======== ========
Net income per common share - basic $ 0.43 $ 0.30
======== ========
Net income per common share - diluted $ 0.42 $ 0.30
======== ========
See notes to consolidated financial statements.
</TABLE>
PART I - Financial Statements
<TABLE>
MIDWEST EXPRESS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
March 31, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 34,989 $ 32,066
Accounts receivable:
Traffic, less allowance for doubtful accounts of $243 and $231 at March 31, 1998
and December 31, 1997, respectively 6,676 5,106
Other 669 444
-------- --------
Total accounts receivable 7,345 5,550
Inventories 3,614 3,942
Prepaid expenses 5,911 3,414
Deferred income taxes 5,698 4,655
Aircraft and modifications intended to be financed by
sale and leaseback transactions 6,000 6,000
-------- --------
Total current assets 63,557 55,627
-------- --------
Property and equipment, at cost 178,875 160,048
Less accumulated depreciation 73,153 70,892
-------- --------
Net property and equipment 105,722 89,156
Landing slots and leasehold rights, net 4,818 4,900
Purchase deposits on flight equipment 5,833 14,500
Other assets 2,033 2,565
-------- --------
Total assets $181,963 $ 166,748
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,696 $ 5,560
Air traffic liability 34,097 28,934
Accrued liabilities 34,117 33,989
--------- --------
Total current liabilities 74,910 68,483
--------- --------
Long-term debt 3,305 3,333
Deferred income taxes 12,979 12,509
Noncurrent scheduled maintenance expense 8,946 7,594
Accrued pension and other postretirement benefits 6,522 5,462
Other noncurrent liabilities 5,775 5,969
--------- --------
Total liabilities 112,437 103,350
========= ========
Shareholders' equity:
Preferred stock, without par value, 5,000,000 shares authorized, no shares issued or - -
outstanding
Common stock, $.01 par value, 25,000,000 shares authorized, 14,464,211 shares issued in 1998 145 96
and 9,642,807 in 1997
Additional paid-in capital 9,505 9,531
Treasury stock, at cost; 331,413 shares in 1998 and (4,547) (4,572)
223,490 shares in 1997
Retained earnings 64,423 58,343
--------- ---------
Total shareholders' equity 69,526 63,398
--------- ---------
Total liabilities and shareholders' equity $181,963 $166,748
========= =========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
PART I - Financial Statements
<TABLE>
MIDWEST EXPRESS HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
<S> <C> <C>
Operating activities:
Net income $ 6,080 $ 4,231
Items not involving the use of cash:
Depreciation and amortization 2,335 2,101
Deferred income taxes (573) 46
Other 1,192 1,062
Changes in operating assets and liabilities:
Accounts receivable (1,795) 114
Inventories 328 120
Prepaid expenses (2,497) (1,804)
Accounts payable 1,136 (50)
Income taxes payable 3,520 914
Accrued liabilities (3,392) (5,858)
Air traffic liability 5,163 7,842
--------- -------
Net cash provided by operating activities 11,497 8,718
--------- -------
Investing activities:
Capital expenditures (9,510) (5,468)
Aircraft acquisitions and modifications financed by or
intended to be financed by sale and leaseback transactions - (5,063)
Other (1,302) (211)
--------- --------
Net cash used in investing activities (10,812) (10,742)
Financing activities-
Other 2,238 (24)
--------- --------
Net cash provided by (used in) financing 2,238 (24)
activities --------- --------
Net increase (decrease) in cash and cash equivalents 2,923 (2,048)
Cash and cash equivalents, beginning of period 32,066 27,589
--------- --------
Cash and cash equivalents, end of period $ 34,989 $ 25,541
========= ========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
Midwest Express Holdings, Inc.
Unaudited Notes to Consolidated Financial Statements
1. Business and Basis of Presentation
Basis of Presentation
The consolidated financial statements for the three-month period ended
March 31, 1998 are unaudited and reflect all adjustments (consisting
only of normal recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation of the financial
position and operating results for the interim period. The
consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto, together with
management's discussion and analysis of financial condition and
results of operations, contained in the Company's Annual Report to
Shareholders and incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997. The results
of operations for the three-month period ended March 31, 1998 are not
necessarily indicative of the results for the entire fiscal year
ending December 31, 1998.
Stock Split
On April 22, 1998, the Company announced that its board of directors
had approved a plan to split its stock 3-for-2 in the form of a 50%
stock dividend. The new shares will be issued May 27 to shareholders
of record as of May 11. The financial and share information presented
herein for all periods has been adjusted to reflect the effect of the
stock dividend.
PART I Item 2.
Management's Discussion and Analysis of Results of Operations
and Financial Condition
Results of Operations
Overview
The Company's 1998 first quarter operating income was $9.4 million, an
increase of $2.9 million from the first quarter 1997. Net income
increased by $1.8 million, or 43.7%, to $6.1 million. Year-to-date net
income per share on a diluted basis was $.42, a $.12 or 40.0% increase
over 1997 results.
The Company's total revenue in the first quarter increased $8.5 million,
or 10.6%, relative to the first quarter 1997, while operating costs
increased by $5.6 million, or 7.6%. The favorable change in revenue in
the quarter was primarily the result of increased passenger volume
resulting from service expansions during 1997, resulting in record
passenger traffic, which increased 11.9%. The Company had two additional
aircraft in scheduled service during the 1998 quarter, with the principal
new routes being Milwaukee-Orlando and Kansas City-New York LaGuardia. The
Company also had increased supplemental revenue from the Midwest Express
credit card program, cargo operations and ground handling contracts.
The Company's costs were affected by higher labor and maintenance costs
and other expenses associated with the service expansion during 1997.
These higher costs were partially offset by lower fuel prices and reduced
travel agent commission expense. The Company benefited from significantly
lower fuel prices in the first quarter 1998, which averaged 23.3% less
than in the first quarter 1997. Lower fuel prices favorably impacted
operating income by $3.4 million in the first quarter 1998. In addition, a
reduced travel agent commission structure contributed $1.0 million to
operating income in the first quarter 1998. Additional detail on cost
changes is included in subsequent sections.
Operating Statistics
<TABLE>
The following table provides selected operating statistics for Midwest
Express and Skyway.
<CAPTION>
Three Months Ended
March 31
%
1998 1997 Change
<S> <C> <C> <C>
Midwest Express Operations
Origin & Destination Passengers 375,618 340,379 10.4%
Revenue Passenger Miles (000s) 351,856 313,416 12.3%
Scheduled Service Available Seat Miles (000s) 585,786 520,437 12.6%
Total Available Seat Miles (000s) 596,659 536,718 11.2%
Load Factor (%) 60.1% 60.2% -0.1 pts
Revenue Yield $0.198 $0.200 -0.8%
Cost per total ASM $0.118 $0.121 -2.4%
Average Passenger Trip Length 936.7 920.8 1.7%
Number of Flights 9,793 9,144 7.1%
Into-plane Fuel Cost per Gallon $0.615 $0.804 -23.5%
Full-time equivalent Employees at End of Period 1,934 1,730 11.7%
Aircraft in Service at End of Period 24 22 n.m.
Skyway Airlines Operations
Origin & Destination Passengers 70,863 68,782 3.0%
Revenue Passenger Miles (000s) 16,434 15,823 3.9%
Scheduled Service Available Seat Miles (000s) 39,520 38,665 2.2%
Total Available Seat Miles (000s) 39,555 38,741 2.1%
Load Factor (%) 41.6% 40.9% 0.7 pts
Revenue Yield $0.574 $0.555 3.4%
Cost per total ASM $0.241 $0.245 -1.5%
Average Passenger Trip Length 231.9 230.0 0.8%
Number of Flights 10,517 10,073 4.4%
Into-plane Fuel Cost per Gallon $0.675 $0.858 -21.3%
Full-time equivalent Employees at End of Period 278 247 12.6%
Aircraft in Service at End of Period 15 15 -
Note: All statistics exclude charter operations except the following:
total available seat miles ("ASM"), cost per total ASM, into-
plane fuel cost, number of employees and aircraft in service.
Aircraft acquired but not yet placed into service are excluded
from the aircraft in service statistics.
</TABLE>
<TABLE>
The following table provides operating revenues and expenses for the
Company expressed as cents per total ASM, including charter operations,
and as a percentage of total revenues.
<CAPTION>
Three Months Ended March 31,
1998 1997
Per Total % of Per Total % of
ASM Revenue ASM Revenue
<S> <C> <C> <C> <C>
Operating revenues:
Passenger service $0.124 89.6% $0.124 89.4%
Cargo 0.005 3.3% 0.005 3.2%
Other 0.010 7.1% 0.010 7.4%
-------- -------- -------- --------
Total operating revenues 0.139 100.0% 0.139 100.0%
Operating expenses:
Salaries, wages and benefits 0.041 29.8% 0.038 26.8%
Aircraft fuel and oil 0.018 12.7% 0.023 16.8%
Commissions 0.010 7.5% 0.012 8.9%
Dining services 0.007 5.0% 0.007 4.8%
Station rental, landing and 0.011 8.2% 0.012 8.3%
other fees
Aircraft maintenance materials 0.012 8.4% 0.010 7.4%
and repairs
Depreciation and amortization 0.004 2.6% 0.004 2.6%
Aircraft rentals 0.007 5.3% 0.008 5.3%
Other 0.014 9.9% 0.015 11.0%
-------- ------- -------- -------
Total operating expenses $0.124 89.4% $0.128 91.9%
======== ======= ======== =======
Total ASMs (000s) 636,214 575,459
Note: Numbers in this table cannot be recalculated due to
rounding.
</TABLE>
Three Months Ended March 31, 1998 Compared to
Three Months Ended March 31, 1997
Operating Revenues
Company operating revenues totalled $88.4 million in the first quarter
1998, a $8.5 million or 10.6% increase over the first quarter 1997.
Passenger revenues accounted for 89.6% of total revenues and increased
$7.8 million, or 10.9%, from 1997 to $79.2 million. The increase is
attributable to an 11.9% increase in passenger volume, as measured by
revenue passenger miles.
Midwest Express passenger revenue increased by $7.1 million, or 11.4%,
from 1997 to $69.8 million. This increase was caused by a 10.4% increase
in origin and destination passengers. Total capacity, as measured by
scheduled service ASMs, increased 12.6% because of two additional aircraft
in scheduled service during the first quarter 1998. Load factor decreased
from 60.2% in 1997 to 60.1% in 1998.
Skyway passenger revenue increased by $.6 million, or 7.4%, from 1997 to
$9.4 million. This increase was caused by a 3.4% increase in revenue
yield and by a 3.0% increase in origin and destination passengers. Total
capacity increased by 2.2%. Load factor increased from 40.9% in 1997 to
41.6% in 1998.
Revenue from cargo, charter and other services increased $.7 million in
the first quarter 1998. Midwest Express benefited from increased revenue
from the Midwest Express MasterCard program of $.5 million, additional
ground service contracts of $.2 million and improved cargo operations of
$.3 million. Charter revenue decreased $.5 million due to fewer charter
bookings.
Operating Expenses
1998 operating expenses increased by $5.6 million, or 7.6%, from 1997.
The increase was primarily the result of increases in labor, maintenance
and costs associated with service expansions since the first quarter 1997,
offset by lower fuel and travel agent commission costs. Cost per total ASM
decreased 2.7%, from 12.8 cents in 1997 to 12.4 cents in 1998.
Salaries, wages and benefits increased by $4.9 million, or 22.9%. On a
cost per total ASM basis, these costs increased 11.1%, from 3.7 cents in
1997 to 4.1 cents in 1998. The labor cost increase reflects the addition of
approximately 234 full-time equivalent employees (203 at Midwest Express
and 31 at Skyway) since March 31, 1997 and increases in labor rates.
Midwest Express added employees throughout the organization to support the
aircraft placed in service during 1997; Skyway added employees primarily
in the flight operations and maintenance functions. The labor cost
increase was also due fewer maintenance labor hours being capitalized to
major maintenance projects, thereby resulting in more maintenance labor
hours being charged to expensed projects during the quarter. Labor costs
increased $.2 million because of accruals for Midwest Express' profit
sharing and management incentive programs. The profit sharing and
incentive plans, which benefit substantially all employees, based entirely
on achieving certain levels of profitability, are payable annually and
accrued monthly based on earnings-to-date and projected results for the
remainder of the year.
Aircraft fuel and oil, and associated taxes decreased $2.2 million, or
16.4%, in 1998. Into-plane fuel prices decreased 23.3% in 1998, averaging
62.0 cents per gallon in 1998 and 80.8 cents per gallon in 1997. Fuel
consumption increased by 9.0% in the quarter, primarily because Midwest
Express operated 8.8% more aircraft flight hours. Fuel costs in April 1998
continued to trend downward, averaging 60.5 cents per gallon.
Commissions decreased by $.5 million, or 6.9%, and 15.8% on a cost per
total ASM basis. The new commission rate structure implemented in the
third quarter 1997, which lowered travel agent commissions from 10% to 8%,
reduced commission expenses by $1.0 million. This reduction was partially
offset by the increase in passenger revenue of 10.9%.
Dining services costs increased by $.6 million, or 15.0%, from 1997. The
increase was primarily due to the 10.4% increase in origin and destination
passengers.
Maintenance costs increased by $1.6 million, or 26.4%, from 1997. The
increase was caused by more flight hours at Midwest Express, an increase
in unscheduled engine overhauls, higher engine and airframe overhaul
accruals, and higher material and aircraft component repair costs. The
cost increase for engine overhaul accruals was the result of higher
expected costs to complete future major engine maintenance.
Station rental, landing and other fees increased by $.6 million, or 8.9%,
from 1997. The increase was caused by 7.1% more flight segments at
Midwest Express.
Depreciation and amortization increased by $.2 million, or 11.1%, from
1997. The increase was primarily the result of the depreciation
associated with capital spending.
Aircraft rental costs increased by $.5 million, or 10.6%, from 1997 as a
result of Midwest Express leasing two additional aircraft in 1997. Also,
Midwest Express had partial lease payments on two DC-9-30 aircraft that
will go into service during the second quarter 1998.
Provision for Income Taxes
Income tax expense for the first quarter 1998 was $3.6 million, a $1.1
million increase from 1997. The effective tax rate for the first quarter
of 1998 and 1997 was 37.5%. For purposes of calculating the Company's
income tax expense and effective tax rate, the Company treats amounts
payable to an affiliate of Kimberly-Clark under a tax allocation and
separation agreement entered into in connection with the Company's initial
public offering as if they were payable to taxing authorities.
Net Income
Net income for the first quarter increased $1.8 million from 1997. The
net income margin improved from 5.3% in 1997 to 6.9% in 1998.
Liquidity and Capital Resources
The Company's cash and cash equivalents totalled $35.0 million at March
31, 1998, compared to $32.1 million at December 31, 1997. Net cash
provided by operating activities totalled $11.5 million for the three
months ended March 31, 1998. Net cash used in investing activities
totalled $10.8 million, primarily due to capital expenditures of $9.5
million.
As of March 31, 1998, the Company had a working capital deficit of $11.4
million versus a $12.9 million deficit on December 31, 1997. The working
capital deficit is due to the Company's air traffic liability (advance
bookings, whereby passengers have purchased tickets for future flights),
accrued scheduled maintenance expense and accrued lease payments. Because
of these items, the Company expects to operate periodically with a working
capital deficit, which is not unusual for the industry.
As of March 31, 1998, the Company's two credit facilities, a $55.0 million
revolving bank credit facility and a $20.0 million secondary revolving
credit facility with Kimberly-Clark, have not been used except for letters
of credit totalling approximately $12.5 million that reduce the amount of
available credit.
Capital expenditures totalled $9.5 million for the three months ended
March 31, 1998. Capital expenditures primarily consisted of aircraft
refurbishment costs, the construction of a new hangar facility,
capitalized engine overhauls, capitalized aircraft major maintenance and
ground equipment.
During the second quarter 1998, the Company intends to finalize sale and
leaseback transactions on two DC-9-30 aircraft, in which case the Company
will be reimbursed for approximately $6.0 million of related aircraft
acquisition and modification costs incurred to March 31, 1998.
During 1997, the Company executed definitive purchase documents to acquire
eight McDonnell Douglas MD-80 series aircraft. During the first quarter of
1998, the Company took delivery of the first of these aircraft. The
Company will receive the remaining seven aircraft during the remainder of
1998 and throughout 1999. The Company anticipates financing each aircraft
upon delivery with a combination of cash flow from operations and debt
financing.
As of March 31, 1998, leases relating to three of Midwest Express' jet
aircraft are guaranteed by Kimberly-Clark in return for a guarantee fee
paid by the Company. Kimberly-Clark will continue to guarantee these
leases until the end of the current lease terms. None of these jet
aircraft leases expires before 2001.
The Company's Board of Directors has authorized a $15.0 million share
repurchase program. As of March 31, 1998, the Company has purchased a
total of 353,325 shares of common stock at a cost of $4.8 million under
the share repurchase program.
The Company believes its cash flow from operations, funds available from
credit facilities and available long-term financing for the acquisition of
jet aircraft and turboprop aircraft will be adequate to provide for
working capital needs and capital expenditures through 1998.
Pending Developments
This 10-Q filing, and particularly this Pending Developments section,
contains forward-looking statements that may state the Company's or
management's intentions, hopes, beliefs, expectations or predictions for
the future. It is important to note that the Company's actual results
could differ materially from those projected results due to factors that
include, but are not limited to, uncertainties related to general economic
factors, industry conditions, scheduling developments, government
regulations, labor relations, aircraft maintenance and refurbishment
schedules, and potential delays relating to acquired aircraft. Additional
information concerning factors that could cause actual results to differ
materially from those in the forward-looking statements is contained from
time to time in the Company's SEC filings, including but not limited to
the Company's prospectus dated May 23, 1996 included in Registration
Statement on Form S-1 No. 333-03325.
Stock Split - On April 22, 1998, the Company announced that its board of
directors had approved a plan to split its stock 3-for-2 in the form of a
50% stock dividend. The new shares will be issued May 27 to shareholders
of record as of May 11. Fractional shares will be paid to shareholders in
cash. The financial and share information presented in Management's
Discussion and Analysis of Results of Operations and Financial Condition
for all periods has been adjusted to reflect the effect of the stock
split.
Other Issues - The Company's annual report for the year ended December 31,
1997, disclosed certain issues relating to DC-9 aircraft, MD-80 series
aircraft, labor relations, sales taxes and the Year 2000. These issues
remain pending.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) Twelfth Amendment to Airline Lease, as amended
between Milwaukee County and Midwest Express, dated
April 21, 1998.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended March 31, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Midwest Express Holdings, Inc.
Date: May 15, 1998 By /s/ Timothy E. Hoeksema
Timothy E. Hoeksema
Chairman of the Board, President
and Chief Executive Officer
Date: May 15, 1998 By /s/ Robert S. Bahlman
Robert S. Bahlman
Senior Vice President, Chief
Financial Officer, Treasurer and
Controller
<PAGE>
EXHIBIT INDEX
Exhibit
No.
(10) Twelfth Amendment to Airline Lease, as amended
between Milwaukee County and Midwest Express,
dated April 21, 1998.
(27) Financial Data Schedule.
<PAGE>
AMENDMENT NO. 12
TO
AIRLINE LEASE NO. AC-865
THIS AMENDMENT TO CONTRACT OF LEASE is made and entered into as of
the 21st day of April, 1998, by and between MILWAUKEE COUNTY, a municipal
corporation, organized and existing as one of the counties in Wisconsin
(hereinafter referred to as "Lessor" or "County"), and MIDWEST EXPRESS
AIRLINES, INC., a corporation organized and existing under the laws of the
State of Wisconsin (hereinafter referred to as "Lessee" or "Airline").
W I T N E S S E T H:
THAT, WHEREAS, the parties hereto have heretofore entered into an
Airline Lease dated April 5, 1985, as amended, relating to space,
occupancy and the use of the premises and facilities of General Mitchell
International Airport (GMIA) for the transportation of persons and cargo
by air; and
WHEREAS, Airline requests that Lessor assign Gate D-37, and
associated hold room, hold room stairwell, lower level operations area
space, and 129 linear feet of ramp associated with the gate located on
Concourse D; and,
WHEREAS, on March 19, 1998, County's Board of Supervisors approved
amending Airline's Lease to include Gate D-37, and associated hold room,
hold room stairwell, lower level operations area space, and ramp;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements herein contained and other valuable
considerations, it is mutually agreed between the parties hereto that the
aforesaid agreement dated April 5, 1985, as amended, be and it is hereby
further amended in the following particulars, to wit:
1. Effective on April 1, 1998, paragraph S of Article IV shall be
deleted in its entirety and a new paragraph S inserted therefore,
reading as follows:
"S. LESSEE'S EXCLUSIVE USE SPACE WITHIN THE TERMINAL BUILDING ON
APRIL 1, 1998
For purposes of calculation of Lessee's Terminal
rents for those areas designated for Lessee's exclusive use in
the Terminal Building, the following space definitions, relative
cost factors, and resultant ERUs shall be utilized:
Relative
Space Function Sq. Ft. Cost Factor ERUs
Concourse Lower
Level 191.00 .20 38.20
Office Unfinished
(Unheated)
Concourse Lower
Level 4,105.00 .70 2,873.50
Office Finished
(Heated)
Concourse Lower Level 25,896.90 .85 22,012.37
Office Finished
(Heated & Air
Conditioned)
Concourse Upper Level 0 .95 0
Office Unfinished
Concourse Upper Level 833.00 .95 791.35
Office Finished
Ticket Counter 661.70 1.10 727.87
Ticket Counter Office 1,307.40 .95 1,242.03
Gate Hold Rooms 26,061.00 1.00 26,061.00
Baggage Makeup Area 3,939.10 .75 2,954.33
Baggage Service Office 405.00 1.00 405.00
Hold Room Stairwell 2,075.44 .15 311.32
Basement 0 .25 0
Mezzanine Office Areas 0 .90 0
Operations Control Tower 401.00 1.08 433.08
--------- ---------
TOTALS 65,876.54 57,850.05
The spaces outlined above are those occupied by Lessee on April
1, 1998, which includes an additional 947 square feet of
Concourse Lower Level Office (Unfinished) space, 535 square feet
of Concourse Lower Level Office Finished (Heated and Air
Conditioned) space, 1,363 square feet of Gate Hold Room space,
and 109 feet of Hold Room Stairwell space, as shown on Exhibit
"P", pages 8 and 9 of 11, Revised 4/98, attached hereto and made
a part hereof."
2. Effective April 1, 1998, the areas referred to in Article IV,
paragraph I, will be further amended to add approximately 129 linear
feet of ramp area associated with the gate 37 on Concourse D, as
shown on Exhibit "J", Page 1 of 1, Dated "REV. 4/98."
3. Except as specifically provided herein, the terms and conditions of
the Lease heretofore entered into between the parties dated April 5,
1985, as amended, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed by their respective proper officers and their corporate seals
hereto affixed on the dates hereinafter set forth.
COUNTY
Dated at Milwaukee, Wisconsin, this 21st day of April, 1998.
APPROVED: MILWAUKEE COUNTY
a municipal corporation
/s/C. BARRY BATEMAN 4/14/98 By /s/ TYRONE P. DUMAS 4/16/98
Airport Director Date Tyrone P. Dumas
Director of Public Works
/s/ ANDREW HUNSICK 4/15/98 By /s/ ROD LANSER 4/21/98
Corporation Counsel Date Rod Lanser
County Clerk
AIRLINE
Dated at Milwaukee, Wisconsin, this 2nd day
of April, 1998.
MIDWEST EXPRESS AIRLINES, INC.
a Wisconsin corporation
By /s/ ROBERT S. BAHLMAN
Title SR. VICE PRESIDENT
Date April 2, 1998
By ___________________________
Title ________________________
Date _________________________
STATE OF WISCONSIN )
) ss
MILWAUKEE COUNTY )
Personally came before me this 16th day of April, 1998, the above named
Tyrone P. Dumas, Director of Public Works for Milwaukee County, to me
known to be the person who executed the foregoing instrument on behalf of
Milwaukee County, and acknowledged the same to be the free act and deed of
said County, made by its authority.
/s/ CAROLYN PUCCI-SCHIEL
Notary Public, Milwaukee Co., Wis.
My commission expires 2-3-02
STATE OF WISCONSIN )
) ss
MILWAUKEE COUNTY )
Personally came before me this 21st day of April, 1998, the above named
Rod Lanser, County Clerk, of Milwaukee County, to me known to be the
person who executed the foregoing instrument on behalf of Milwaukee
County, and acknowledged the same to be the free act and deed of said
County, made by its authority.
/s/ MARK E. RYAN
Notary Public, Milwaukee Co., Wis.
My commission expires 10/15/00
STATE OF WISCONSIN)
) ss
MILWAUKEE COUNTY )
Personally came before me this 2st day of April,
1998, Robert S. Bahlman, Sr. Vice President,
(Name) (Title)
and ____________________________, _____________________________,
(Name) (Title)
of Midwest Express Airlines, Inc., Lessee above, to me known to be the
persons who executed the foregoing instrument and to me known to be such
officers of said corporation, and acknowledged that they executed the
foregoing instrument as such officers as the deed of said corporation, by
its authority.
/s/ LINDA SNYDER
Notary Public, Linda Snyder
My commission expires: 1/7/01
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