ExpressJet Holdings Inc. (XJT) filed Quarterly Report for the period ended 2009-09-30.
ExpressJet Holdings, Inc., operating as Continental Express, is an operator of regional jets. Expressjet Holdings Inc. has a market cap of $40.01 million; its shares were traded at around $2.56 with and P/S ratio of 0.03.
Highlight of Business Operations:
The Debt with Conversion Options Subtopic requires retrospective application to the terms of instruments as they existed for all periods presented. The adoption of the Debt with Conversion Options Subtopic affects the accounting for our original 4.25% convertible notes due 2023 issued in 2003 (the “Original 4.25% Convertible Notes due 2023”) which on August 2, 2008, became our 11.25% Convertible Secured Notes due 2023. The retrospective application of this pronouncement resulted in increased non-cash interest expense for 2003 through 2008. We adjusted the Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2008 to include non-cash interest expense (presented as Amortization of debt discount in our Condensed Consolidated Statements of Operations) of $2.5 million and $8.4 million related to our Original 4.25% Convertible Notes due 2023. During the first half of 2008, we recognized extinguishment gains of $2.1 million related to repurchases of our Original 4.25% Convertible Notes due 2023 prior to the tender offer we initiated in July 2008 in connection with such notes. At the time of our tender offer, our Original 4.25% Convertible Notes due 2023 were trading at a discount as a result of the nature of the credit environment and our own liquidity position. As a result, the repurchase of debt under the tender offer resulted in debt extinguishment gains. The 11.25% Convertible Secured Notes due 2023, of which $68.5 million remained outstanding after the tender offer in 2008, were also subject to the Debt with Conversion Options Subtopic, and we determined the fair value of the liability component to be $40.7, million at that time. The remainder was allocated to equity and accounted for as a debt discount which will be amortized over the period until the next put date in August 2011. The fair value of the liability component of the 11.25% Convertible Secured Notes due 2023 was based on current market data of our convertible notes, considering interest rates for stand alone debt given the disruption in the credit markets and our own credit rating. Adjustments to income taxes have been recorded on the foregoing adjustments to the extent tax benefits were available. As of September 30, 2009, $37.0 million, net of discount of $15.1 million, of our 11.25% Convertible Secured Notes due 2023 remain outstanding.
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