##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2006
 or
 o
    
    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 001-31898
 PINNACLE AIRLINES CORP.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    03-0376558(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)1689 Nonconnah Blvd, Suite 111Memphis, Tennessee
    
    38132(Address of principal executive offices)
    
    (Zip Code)
 901-348-4100
 (Registrants telephone number, including area code)
  þ o
  o þ o
  o þ




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##### 



Table of Contents
 PART I. Financial Information
    
    
    1Item 1. Financial Statements
    
    
    1Condensed Consolidated Statements of Operations (Unaudited)
    
    
    1Condensed Consolidated Balance Sheets (Unaudited)
    
    
    3Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Results of Operations and Financial
 Condition
    
    
    21Item 3. Quantitative and Qualitative Disclosure about Market Risk
    
    
    33Item 4. Controls and Procedures
    
    
    33PART II. Other Information
    
    
    34Item 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Changes in Securities and Use of Proceeds
    
    
    34Item 3. Defaults Upon Senior Securities
    
    
    34Item 4. Submission of Matters to a Vote of Security Holders
    
    
    34Item 5. Other Information
    
    
    34Item 6. Exhibits
    
    
    35Ex-31.1 Section 302 CertificationEx-31.2 Section 302 CertificationEx-32   Section 906 Certification




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 Pinnacle Airlines Corp.
 
 Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
 Three Months Ended September 30,2006
    
    
    2005Operating revenuesRegional airline services
    
    $
    206,827
    
    
    $
    218,832Other
    
    
    1,673
    
    
    
    2,111Total operating revenues
    
    
    208,500
    
    
    
    220,943Operating expensesSalaries, wages and benefits
    
    
    34,567
    
    
    
    35,155Aircraft fuel
    
    
    28,041
    
    
    
    30,555Aircraft maintenance, materials and repairs
    
    
    8,691
    
    
    
    7,473Aircraft rentals
    
    
    66,031
    
    
    
    73,737Other rentals and landing fees
    
    
    11,480
    
    
    
    11,464Ground handling services
    
    
    21,663
    
    
    
    23,616Depreciation
    
    
    1,003
    
    
    
    1,041Other
    
    
    15,002
    
    
    
    16,344Provision for (decreases) increases in losses associated
with bankruptcy filings of Northwest and Mesaba
    
    
    (3,537
    )
    
    
    53,914Total operating expenses
    
    
    182,941
    
    
    
    253,299Operating income (loss)
    
    
    25,559
    
    
    
    (32,356
    )Operating income (loss) as a percentage of operating revenues
    
    
    12.3
    %
    
    
    (14.6
    %)Nonoperating income (expense)Interest expense
    
    
    (1,198
    )
    
    
    (1,109
    )Interest income
    
    
    640
    
    
    
    402Miscellaneous income (expense), net
    
    
    18
    
    
    
    (2
    )Total nonoperating expense
    
    
    (540
    )
    
    
    (709
    )Income (loss) before income taxes
    
    
    25,019
    
    
    
    (33,065
    )Income tax expense (benefit)
    
    
    9,182
    
    
    
    (11,673
    )Net income (loss)
    
    $
    15,837
    
    
    $
    (21,392
    )Basic and diluted earnings (loss) per share
    
    $
    0.72
    
    
    $
    (0.98
    )Shares used in computing basic earnings (loss) per share
    
    
    21,945
    
    
    
    21,908Shares used in computing diluted earnings (loss) per share
    
    
    21,990
    
    
    
    21,908
  1




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##### Table of Contents



Pinnacle Airlines Corp.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
 Nine Months Ended September 30,2006
    
    
    2005Operating revenuesRegional airline services
    
    $
    614,643
    
    
    $
    622,541Other
    
    
    5,460
    
    
    
    6,033Total operating revenues
    
    
    620,103
    
    
    
    628,574Operating expensesSalaries, wages and benefits
    
    
    104,587
    
    
    
    99,664Aircraft fuel
    
    
    81,953
    
    
    
    84,660Aircraft maintenance, materials and repairs
    
    
    26,949
    
    
    
    23,546Aircraft rentals
    
    
    198,093
    
    
    
    206,632Other rentals and landing fees
    
    
    33,954
    
    
    
    32,668Ground handling services
    
    
    65,787
    
    
    
    69,405Depreciation
    
    
    2,932
    
    
    
    3,019Other
    
    
    41,437
    
    
    
    44,570Provision for (decreases) increases in losses
associated with bankruptcy filings of Northwest and
Mesaba
    
    
    (2,172
    )
    
    
    53,914Total operating expenses
    
    
    553,520
    
    
    
    618,078Operating income
    
    
    66,583
    
    
    
    10,496Operating income as a percentage of operating revenues
    
    
    10.7
    %
    
    
    1.7
    %Nonoperating income (expense)Interest expense
    
    
    (4,150
    )
    
    
    (3,266
    )Interest income
    
    
    1,789
    
    
    
    819Miscellaneous income (expense), net
    
    
    69
    
    
    
    (2
    )Gain on extinguishment of debt
    
    
    
    
    
    
    18,000Total nonoperating (expense) income
    
    
    (2,292
    )
    
    
    15,551Income before income taxes
    
    
    64,291
    
    
    
    26,047Income tax expense
    
    
    23,267
    
    
    
    10,311Net income
    
    $
    41,024
    
    
    $
    15,736Basic and diluted earnings per share
    
    $
    1.87
    
    
    $
    0.72Shares used in computing basic earnings per share
    
    
    21,945
    
    
    
    21,908Shares used in computing diluted earnings per share
    
    
    21,981
    
    
    
    21,923
  2




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##### Table of Contents



Pinnacle Airlines Corp.
 
 Condensed Consolidated Balance Sheets
(in thousands, except share data)
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)AssetsCurrent assetsCash and cash equivalents
    
    $
    1,330
    
    
    $
    31,567Short-term investments
    
    
    57,375
    
    
    
    44,160Receivables, net of allowance
    
    
    64,157
    
    
    
    30,192Spare parts and supplies, net
    
    
    7,571
    
    
    
    6,368Prepaid expenses and other assets
    
    
    9,915
    
    
    
    5,014Deferred income taxes, net of allowance
    
    
    7,566
    
    
    
    9,146Total current assets
    
    
    147,914
    
    
    
    126,447Property and equipmentAircraft and rotable spares
    
    
    39,002
    
    
    
    39,362Other property and equipment
    
    
    21,162
    
    
    
    19,209Office furniture and fixtures
    
    
    2,031
    
    
    
    2,00262,195
    
    
    
    60,573Less accumulated depreciation
    
    
    (20,890
    )
    
    
    (18,038
    )Net property and equipment
    
    
    41,305
    
    
    
    42,535Other assets, primarily aircraft deposits
    
    
    24,225
    
    
    
    22,765Debt issuance costs, net
    
    
    4,033
    
    
    
    4,198Contractual rights under airline services agreement, net
    
    
    13,533
    
    
    
    14,435Goodwill, net
    
    
    18,422
    
    
    
    18,422Total assets
    
    $
    249,432
    
    
    $
    228,802
  3




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##### Table of Contents



Pinnacle Airlines Corp.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)Liabilities and stockholders equityCurrent liabilitiesAccounts payable
    
    $
    15,071
    
    
    $
    12,945Accrued expenses
    
    
    27,795
    
    
    
    25,161Line of credit with First Tennessee
    
    
    
    
    
    
    17,000Income taxes payable
    
    
    14,355
    
    
    
    17,756Other current liabilities
    
    
    1,176
    
    
    
    7,161Total current liabilities
    
    
    58,397
    
    
    
    80,023Deferred income taxes
    
    
    7,507
    
    
    
    7,426Other liabilities
    
    
    2,466
    
    
    
    1,735Senior convertible notes
    
    
    121,000
    
    
    
    121,000Commitments and contingenciesStockholders equityPreferred stock, par value $0.01 per share;
1,000,000 shares authorized, no shares issued
    
    
    
    
    
    
    Series A preferred stock, stated value $100 per
share; one share authorized and issued
    
    
    
    
    
    
    Series common stock, par value $0.01 per share;
5,000,000 shares authorized; no shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value; 40,000,000 shares
authorized; 22,080,585 and 21,945,260 shares
issued, respectively
    
    
    221
    
    
    
    219Additional paid-in capital
    
    
    85,968
    
    
    
    85,550Accumulated deficit
    
    
    (26,127
    )
    
    
    (67,151
    )Total stockholders equity
    
    
    60,062
    
    
    
    18,618Total liabilities and stockholders equity
    
    $
    249,432
    
    
    $
    228,802
  4




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##### Table of Contents



Pinnacle Airlines Corp.
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Nine Months Ended September 30,2006
    
    
    2005Operating activitiesNet income
    
    $
    41,024
    
    
    $
    15,736Adjustments to reconcile net income to cash provided by
operating activities:Provision for (decreases) increases in losses associated
with bankruptcy filings of Northwest and Mesaba
    
    
    (2,172
    )
    
    
    53,914Pilot post-retirement liability
    
    
    1,514
    
    
    
    Depreciation
    
    
    2,932
    
    
    
    3,019Deferred income tax (benefit) expense
    
    
    1,661
    
    
    
    (19,008
    )Gain on extinguishment of debt
    
    
    
    
    
    
    (18,000
    )Stock-based compensation expense
    
    
    420
    
    
    
    436Amortization of debt issuance costs
    
    
    165
    
    
    
    141Amortization of contractual rights
    
    
    902
    
    
    
    379Other
    
    
    (408
    )
    
    
    672Changes in operating assets and liabilities:Receivables
    
    
    (34,720
    )
    
    
    (50,859
    )Spare parts and supplies
    
    
    (1,511
    )
    
    
    (1,423
    )Prepaid expenses and other assets
    
    
    (4,901
    )
    
    
    192Aircraft and engine deposits
    
    
    
    
    
    
    (3,734
    )Accounts payable and accrued expenses
    
    
    4,760
    
    
    
    12,313Other liabilities
    
    
    (3,675
    )
    
    
    (361
    )Income taxes payable
    
    
    (3,401
    )
    
    
    19,797Cash provided by operating activities
    
    
    2,590
    
    
    
    13,214Investing activitiesPurchases of property and equipment
    
    
    (2,612
    )
    
    
    (7,068
    )Purchase of contractual rights
    
    
    
    
    
    
    (5,115
    )Purchase of short-term investments
    
    
    (631,090
    )
    
    
    (45,350
    )Proceeds from sale of short-term investments
    
    
    617,875
    
    
    
    41,350Cash used in investing activities
    
    
    (15,827
    )
    
    
    (16,183
    )Financing activitiesPayment to extinguish note payable
    
    
    
    
    
    
    (101,600
    )(Repayment) proceeds under line of credit
    
    
    (17,000
    )
    
    
    17,000Repayments of line of credit with Northwest
    
    
    
    
    
    
    (5,000
    )Gross proceeds from issuance of senior convertible notes
    
    
    
    
    
    
    121,000Debt issuance costs
    
    
    
    
    
    
    (4,393
    )Other costs to retire note payable
    
    
    
    
    
    
    (400
    )Cash (used in) provided by financing activities
    
    
    (17,000
    )
    
    
    26,607Net (decrease) increase in cash and cash equivalents
    
    
    (30,237
    )
    
    
    23,638Cash and cash equivalents at beginning of period
    
    
    31,567
    
    
    
    34,912Cash and cash equivalents at end of period
    
    $
    1,330
    
    
    $
    58,550Supplemental disclosure of cash flow informationInterest paid
    
    $
    4,584
    
    
    $
    2,584Income tax payments
    
    $
    25,006
    
    
    $
    9,523
  5




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##### Table of Contents



Pinnacle Airlines Corp.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
  1. Basis of Presentation
    2. Northwest Bankruptcy Filing
     6




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 2. Northwest Bankruptcy Filing (continued)
     7




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 2. Northwest Bankruptcy Filing (continued)
    3. Mesaba Bankruptcy Filing
    8




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 3. Mesaba Bankruptcy Filing (continued)
     4. Aircraft Security Deposits
  5. Related Party Transactions
  9




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 5. Related Party Transactions (continued)
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Revenue:Regional airline services revenue
    
    $
    206,827
    
    
    $
    218,832
    
    
    $
    614,643
    
    
    $
    622,541Other revenue
    
    
    1,107
    
    
    
    1,644
    
    
    
    3,598
    
    
    
    4,436Expenses:Aircraft fuel
    
    
    27,923
    
    
    
    30,555
    
    
    
    81,573
    
    
    
    84,660Aircraft rentals
    
    
    66,031
    
    
    
    73,737
    
    
    
    198,093
    
    
    
    206,632Other rentals and landing fees
    
    
    5,008
    
    
    
    2,813
    
    
    
    15,189
    
    
    
    8,438Ground handling services
    
    
    16,006
    
    
    
    17,657
    
    
    
    49,287
    
    
    
    49,699Other
    
    
    1,306
    
    
    
    1,186
    
    
    
    3,574
    
    
    
    1,699Provision for increases
(decreases) in losses associated
with bankruptcy filings of
Northwest and Mesaba
    
    
    23
    
    
    
    49,030
    
    
    
    (1,529
    )
    
    
    49,030Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    463
     10




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 6. Employee Benefit Plans
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    26
    
    
    $
    
    
    
    $
    158
    
    
    $
    Interest cost
    
    
    9
    
    
    
    
    
    
    
    56
    
    
    
    Adjustment related to prior periods
    
    
    (77
    )
    
    
    
    
    
    
    1,300
    
    
    
    Periodic (benefit) cost
    
    $
    (42
    )
    
    $
    
    
    
    $
    1,514
    
    
    $
    
 Materiality
 7. Senior Convertible Notes
   11




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 8. Line of Credit
   9. Leases
    Operating LeasesAircraft
    
    
    Non-aircraftRemainder of 2006
    
    $
    66,840
    
    
    $
    4,2892007
    
    
    262,785
    
    
    
    16,8072008
    
    
    261,792
    
    
    
    16,0322009
    
    
    260,458
    
    
    
    15,7872010
    
    
    260,400
    
    
    
    15,835Thereafter
    
    
    1,822,800
    
    
    
    50,395Total minimum operating lease payments
    
    $
    2,935,075
    
    
    $
    119,145
  12




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 10. Earnings (Loss) Per Share
    Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income (loss)
    
    $
    15,837
    
    
    $
    (21,392
    )
    
    $
    41,024
    
    
    $
    15,736Basic and diluted earnings (loss) per share
    
    $
    0.72
    
    
    $
    (0.98
    )
    
    $
    1.87
    
    
    $
    0.72Share computation:Weighted average number of shares out-standing for basic earnings per share
    
    
    21,945
    
    
    
    21,908
    
    
    
    21,945
    
    
    
    21,908Unvested restricted stock
    
    
    45
    
    
    
    
    
    
    
    36
    
    
    
    15Weighted average number of shares out-standing for diluted earnings per share
    
    
    21,990
    
    
    
    21,908
    
    
    
    21,981
    
    
    
    21,923
  11. Stock-Based Compensation
   13




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 11. Stock-Based Compensation (continued)
    Stock Options
    Weighted AverageStock Options
    
    Exercise PriceOutstanding at December 31, 2005
    
    
    652
    
    
    $
    13.88Granted
    
    
    292
    
    
    $
    6.47Forfeited
    
    
    9
    
    
    $
    14.00Outstanding at September 30, 2006
    
    
    935
    
    
    $
    11.56Options exercisable at September 30, 2006
    
    
    643
    
    
    $
    13.87
  14




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 11. Stock-Based Compensation (continued)
   Expected Price Volatility 
 Risk-Free Interest Rate 
 Expected Lives 
 Forfeiture Rate 
 Dividend Yield 
  15




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 11. Stock-Based Compensation (continued)
 Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2005
    
    
    September 30, 2005Net income (loss), as reported
    
    $
    (21,392
    )
    
    $
    15,736Add: Stock-based compensation
expense included in reported net
income, net of tax
    
    
    61
    
    
    
    275Deduct: Total pro forma
stock-based compensation
expense, net of tax
    
    
    (259
    )
    
    
    (946
    )Pro forma net income (loss)
    
    $
    (21,590
    )
    
    $
    15,065Earnings (loss) per common share:Basic and diluted  as reported
    
    $
    (0.98
    )
    
    $
    0.72Basic and diluted  pro forma
    
    $
    (0.99
    )
    
    $
    0.69
 Restricted Stock
   12. Income Taxes
  Three Months Ended September 30,2006
    
    
    2005$
    
    
    %
    
    
    $
    
    
    %Income tax expense at statutory rate
    
    $
    8,757
    
    
    
    35.0
    %
    
    $
    (11,573
    )
    
    
    (35.0
    )%State income taxes, net of federal taxes
    
    
    652
    
    
    
    2.6
    %
    
    
    (93
    )
    
    
    (0.3
    )%Valuation allowance
    
    
    (88
    )
    
    
    (0.3
    )%
    
    
    
    
    
    
    Other
    
    
    (139
    )
    
    
    (0.6
    )%
    
    
    (7
    )
    
    
    (0.0
    )%Income tax expense (benefit)
    
    $
    9,182
    
    
    
    36.7
    %
    
    $
    (11,673
    )
    
    
    (35.3
    )%
 Nine Months Ended September 30,2006
    
    
    2005$
    
    
    %
    
    
    $
    
    
    %Income tax expense at statutory rate
    
    $
    22,502
    
    
    
    35.0
    %
    
    $
    9,116
    
    
    
    35.0
    %State income taxes, net of federal taxes
    
    
    1,451
    
    
    
    2.3
    %
    
    
    1,134
    
    
    
    4.4
    %Valuation allowance
    
    
    (288
    )
    
    
    (0.4
    )%
    
    
    
    
    
    
    Other
    
    
    (398
    )
    
    
    (0.7
    )%
    
    
    61
    
    
    
    0.2
    %Income tax expense
    
    $
    23,267
    
    
    
    36.2
    %
    
    $
    10,311
    
    
    
    39.6
    %
 16




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 12. Income Taxes (continued)
      13. Contractual Rights under Airline Services Agreement
   17




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 14. Short-Term Investments
      15. Commitments and Contingencies
 Employees
 Legal Proceedings.
 18




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
 15. Commitments and Contingencies (continued)
 Purchase Commitments.
   Self-Insurance.
 Regulatory Matters
 Guarantees and Indemnifications
    19




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##### Table of Contents



Pinnacle Airlines Corp.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all amounts in thousands, except per share data)
  20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
 General
   Overview
      21




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial
Condition
 Three Months Ended September 30,% Increase2006
    
    
    2005
    
    
    (Decrease)(in thousands, except per share data)Operating Income:Operating income (loss) in accordance with GAAP
    
    $
    25,559
    
    
    $
    (32,356
    )
    
    
    179
    %Add: Provision for (decreases) increases in
losses associated with bankruptcy filings of
Northwest and Mesaba
    
    
    (3,537
    )
    
    
    53,914
    
    
    
    (107
    )%Non-GAAP operating income
    
    $
    22,022
    
    
    $
    21,558
    
    
    
    2
    %Net Income:Net income (loss) in accordance with GAAP
    
    $
    15,837
    
    
    $
    (21,392
    )
    
    
    174
    %Add: Provision for (decreases) increases in
losses associated with bankruptcy filings of
Northwest and Mesaba, net of related tax
    
    
    (2,227
    )
    
    
    34,519
    
    
    
    (106
    )%Non-GAAP net income
    
    $
    13,610
    
    
    $
    13,127
    
    
    
    4
    %Basic and Diluted EPS:Basic and diluted EPS in accordance with GAAP
    
    $
    0.72
    
    
    $
    (0.98
    )
    
    
    173
    %Add: Provision for (decreases) increases in
losses associated with bankruptcy filings of
Northwest and Mesaba, net of related tax
    
    
    (0.10
    )
    
    
    1.58
    
    
    
    (106
    )%Non-GAAP basic and diluted EPS
    
    $
    0.62
    
    
    $
    0.60
    
    
    
    3
    %
 Nine Months Ended September 30,% Increase2006
    
    
    2005
    
    
    (Decrease)(in thousands, except per share data)Operating Income:Operating income in accordance with GAAP
    
    $
    66,583
    
    
    $
    10,496
    
    
    
    534
    %Add: Pilot post-retirement liability
    
    
    1,300
    
    
    
    
    
    
    
    100
    %Add: Provision for (decreases) increases in losses
associated with bankruptcy filings of Northwest and
Mesaba
    
    
    (2,172
    )
    
    
    53,914
    
    
    
    (104
    )%Non-GAAP operating income
    
    $
    65,711
    
    
    $
    64,410
    
    
    
    2
    %Net Income:Net income in accordance with GAAP
    
    $
    41,024
    
    
    $
    15,736
    
    
    
    161
    %Add: Pilot post-retirement liability, net of
related tax
    
    
    830
    
    
    
    
    
    
    
    100
    %Add: Provision for (decreases) increases in
losses associated with bankruptcy filings of
Northwest and Mesaba, net of related tax
    
    
    (1,366
    )
    
    
    34,519
    
    
    
    (104
    )%Deduct: Gain on repurchase of debt, net of
related
tax
    
    
    
    
    
    
    (11,302
    )
    
    
    (100
    )%Non-GAAP net income
    
    $
    40,488
    
    
    $
    38,953
    
    
    
    4
    %Basic and Diluted EPS:Basic and diluted EPS in accordance with GAAP
    
    $
    1.87
    
    
    $
    0.72
    
    
    
    160
    %Add: Pilot post-retirement liability, net of
related tax
    
    
    0.04
    
    
    
    
    
    
    
    100
    %Add: Provision for (decreases) increases in losses
associated with bankruptcy filings of Northwest and
Mesaba, net of related tax
    
    
    (0.07
    )
    
    
    1.58
    
    
    
    (104
    )%Deduct: Gain on repurchase of debt, net of related
tax
    
    
    
    
    
    
    (0.52
    )
    
    
    (100
    )%Non-GAAP basic and diluted EPS
    
    $
    1.84
    
    
    $
    1.78
    
    
    
    3
    %
 22




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
 Outlook
      23




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
 Results of Operations
  Comparison of Three Months Ended September 30, 2006 to Three Months Ended September 30,
2005
 Revenues
   Three Months Ended September 30,(in thousands)2006
    
    
    2005Reimbursed
    
    
    Unreimbursed
    
    
    Other
    
    
    Total
    
    
    Reimbursed
    
    
    Unreimbursed
    
    
    Other
    
    
    TotalOperating revenues:Regional airline services
    
    $
    136,968
    
    
    $
    69,859
    
    
    $
    
    
    
    $
    206,827
    
    
    $
    148,291
    
    
    $
    70,541
    
    
    $
    
    
    
    $
    218,832Other revenue
    
    
    
    
    
    
    1,673
    
    
    
    
    
    
    
    1,673
    
    
    
    
    
    
    
    2,111
    
    
    
    
    
    
    
    2,111Total operating revenues
    
    
    136,968
    
    
    
    71,532
    
    
    
    
    
    
    
    208,500
    
    
    
    148,291
    
    
    
    72,652
    
    
    
    
    
    
    
    220,943Operating expenses:Salaries, wages and benefits
    
    
    
    
    
    
    34,567
    
    
    
    
    
    
    
    34,567
    
    
    
    
    
    
    
    35,155
    
    
    
    
    
    
    
    35,155Aircraft fuel
    
    
    27,923
    
    
    
    118
    
    
    
    
    
    
    
    28,041
    
    
    
    30,338
    
    
    
    217
    
    
    
    
    
    
    
    30,555Aircraft maintenance,
materials and repairs
    
    
    3,626
    
    
    
    5,065
    
    
    
    
    
    
    
    8,691
    
    
    
    2,537
    
    
    
    4,936
    
    
    
    
    
    
    
    7,473Aircraft rentals
    
    
    66,031
    
    
    
    
    
    
    
    
    
    
    
    66,031
    
    
    
    73,737
    
    
    
    
    
    
    
    
    
    
    
    73,737Other rentals and landing fees
    
    
    4,820
    
    
    
    6,660
    
    
    
    
    
    
    
    11,480
    
    
    
    4,726
    
    
    
    6,738
    
    
    
    
    
    
    
    11,464Ground handling services
    
    
    15,940
    
    
    
    5,723
    
    
    
    
    
    
    
    21,663
    
    
    
    17,637
    
    
    
    5,979
    
    
    
    
    
    
    
    23,616Depreciation
    
    
    
    
    
    
    1,003
    
    
    
    
    
    
    
    1,003
    
    
    
    
    
    
    
    1,041
    
    
    
    
    
    
    
    1,041Other
    
    
    4,931
    
    
    
    10,071
    
    
    
    
    
    
    
    15,002
    
    
    
    4,487
    
    
    
    11,857
    
    
    
    
    
    
    
    16,344Provision for (decreases)
increases in losses
associated with bankruptcy filings
of Northwest and Mesaba
    
    
    
    
    
    
    
    
    
    
    (3,537
    )
    
    
    (3,537
    )
    
    
    
    
    
    
    
    
    
    
    53,914
    
    
    
    53,914Total operating expenses
    
    
    123,271
    
    
    
    63,207
    
    
    
    (3,537
    )
    
    
    182,941
    
    
    
    133,462
    
    
    
    65,923
    
    
    
    53,914
    
    
    
    253,299Operating income:
    
    $
    13,697
    
    
    $
    8,325
    
    
    $
    3,537
    
    
    $
    25,559
    
    
    $
    14,829
    
    
    $
    6,729
    
    
    $
    (53,914
    )
    
    $
    (32,356
    )Operating income as a percent of
operating revenues
    
    
    10.0
    %
    
    
    11.6
    %
    
    
    
    
    
    
    12.3
    %
    
    
    10.0
    %
    
    
    9.3
    %
    
    
    
    
    
    
    (14.6
    %)
   24




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
  Operating Expenses
       Income Tax Expense
   Comparison of Nine Months Ended September 30, 2006 to Nine Months Ended September 30, 2005
 Revenues
  25




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
 Nine Months Ended September 30,(in thousands)2006
    
    
    2005Reimbursed
    
    
    Unreimbursed
    
    
    Other
    
    
    Total
    
    
    Reimbursed
    
    
    Unreimbursed
    
    
    Other
    
    
    TotalOperating revenues:Regional airline services
    
    $
    407,816
    
    
    $
    206,827
    
    
    $
    
    
    
    $
    614,643
    
    
    $
    420,349
    
    
    $
    202,192
    
    
    $
    
    
    
    $
    622,541Other revenue
    
    
    
    
    
    
    5,460
    
    
    
    
    
    
    
    5,460
    
    
    
    
    
    
    
    6,033
    
    
    
    
    
    
    
    6,033Total operating revenues
    
    
    407,816
    
    
    
    212,287
    
    
    
    
    
    
    
    620,103
    
    
    
    420,349
    
    
    
    208,225
    
    
    
    
    
    
    
    628,574Operating expenses:Salaries, wages and benefits
    
    
    
    
    
    
    104,587
    
    
    
    
    
    
    
    104,587
    
    
    
    
    
    
    
    99,664
    
    
    
    
    
    
    
    99,664Aircraft fuel
    
    
    81,573
    
    
    
    380
    
    
    
    
    
    
    
    81,953
    
    
    
    84,172
    
    
    
    488
    
    
    
    
    
    
    
    84,660Aircraft maintenance,
materials and repairs
    
    
    12,063
    
    
    
    14,886
    
    
    
    
    
    
    
    26,949
    
    
    
    10,030
    
    
    
    13,516
    
    
    
    
    
    
    
    23,546Aircraft rentals
    
    
    198,093
    
    
    
    
    
    
    
    
    
    
    
    198,093
    
    
    
    206,632
    
    
    
    
    
    
    
    
    
    
    
    206,632Other rentals and landing fees
    
    
    14,627
    
    
    
    19,327
    
    
    
    
    
    
    
    33,954
    
    
    
    14,068
    
    
    
    18,600
    
    
    
    
    
    
    
    32,668Ground handling services
    
    
    49,141
    
    
    
    16,646
    
    
    
    
    
    
    
    65,787
    
    
    
    51,528
    
    
    
    17,877
    
    
    
    
    
    
    
    69,405Depreciation
    
    
    
    
    
    
    2,932
    
    
    
    
    
    
    
    2,932
    
    
    
    
    
    
    
    3,019
    
    
    
    
    
    
    
    3,019Other
    
    
    11,537
    
    
    
    29,900
    
    
    
    
    
    
    
    41,437
    
    
    
    11,884
    
    
    
    32,686
    
    
    
    
    
    
    
    44,570Provision for (decreases)
increases in losses
associated
with bankruptcy filings
of Northwest and Mesaba
    
    
    
    
    
    
    
    
    
    
    (2,172
    )
    
    
    (2,172
    )
    
    
    
    
    
    
    
    
    
    
    53,914
    
    
    
    53,914Total operating expenses
    
    
    367,034
    
    
    
    188,658
    
    
    
    (2,172
    )
    
    
    553,520
    
    
    
    378,314
    
    
    
    185,850
    
    
    
    53,914
    
    
    
    618,078Operating income:
    
    $
    40,782
    
    
    $
    23,629
    
    
    $
    2,172
    
    
    $
    66,583
    
    
    $
    42,035
    
    
    $
    22,375
    
    
    $
    (53,914
    )
    
    $
    10,496Operating income as a percent of
operating revenues
    
    
    10.0
    %
    
    
    11.1
    %
    
    
    
    
    
    
    10.7
    %
    
    
    10.0
    %
    
    
    10.7
    %
    
    
    
    
    
    
    1.7
    %
   Operating Expenses
     26




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
  Nonoperating Income and Expenses
  Income Tax Expense
   Certain Statistical Information
  Three Months Ended September 30,2006
    
    
    2005Amount
    
    
    Percent of
    
    
    Cents per
    
    
    Cost per
    
    
    Amount (in
    
    
    Percent of
    
    
    Cents per
    
    
    Cost per(in thousands)
    
    
    Revenue
    
    
    ASM
    
    
    Block Hour
    
    
    thousands)
    
    
    Revenue
    
    
    ASM
    
    
    Block HourOperating expenses:Salaries, wages and benefits
    
    $
    34,567
    
    
    
    17
    %
    
    
    2.37
    
    
    $
    331
    
    
    $
    35,155
    
    
    
    16
    %
    
    
    2.26
    
    
    $
    305Aircraft fuel
    
    
    28,041
    
    
    
    13
    %
    
    
    1.92
    
    
    
    269
    
    
    
    30,555
    
    
    
    14
    %
    
    
    1.96
    
    
    
    265Aircraft maintenance,
materials and repairs
    
    
    8,691
    
    
    
    4
    %
    
    
    0.59
    
    
    
    83
    
    
    
    7,473
    
    
    
    4
    %
    
    
    0.48
    
    
    
    65Aircraft rentals
    
    
    66,031
    
    
    
    32
    %
    
    
    4.52
    
    
    
    632
    
    
    
    73,737
    
    
    
    33
    %
    
    
    4.74
    
    
    
    639Other rentals and landing fees
    
    
    11,480
    
    
    
    6
    %
    
    
    0.79
    
    
    
    110
    
    
    
    11,464
    
    
    
    5
    %
    
    
    0.74
    
    
    
    99Ground handling services
    
    
    21,663
    
    
    
    10
    %
    
    
    1.48
    
    
    
    207
    
    
    
    23,616
    
    
    
    11
    %
    
    
    1.52
    
    
    
    205Depreciation
    
    
    1,003
    
    
    
    1
    %
    
    
    0.07
    
    
    
    10
    
    
    
    1,041
    
    
    
    0
    %
    
    
    0.07
    
    
    
    9Other
    
    
    15,002
    
    
    
    7
    %
    
    
    1.03
    
    
    
    144
    
    
    
    16,344
    
    
    
    7
    %
    
    
    1.05
    
    
    
    141Provision for (decreases)
increases in losses
associated with
bankruptcy filings of
Northwest and Mesaba
    
    
    (3,537
    )
    
    
    (2
    )%
    
    
    (0.24
    )
    
    
    (34
    )
    
    
    53,914
    
    
    
    23
    %
    
    
    3.47
    
    
    
    467Total operating
expenses
    
    $
    182,941
    
    
    
    88
    %
    
    
    12.53
    
    
    
    1,752
    
    
    $
    253,299
    
    
    
    113
    %
    
    
    16.29
    
    
    $
    2,195
 Nine Months Ended September 30,2006
    
    
    2005Amount
    
    
    Percent of
    
    
    Cents per
    
    
    Cost per
    
    
    Amount
    
    
    Percent of
    
    
    Cents per
    
    
    Cost per(in thousands)
    
    
    Revenue
    
    
    ASM
    
    
    Block Hour
    
    
    (in thousands)
    
    
    Revenue
    
    
    ASM
    
    
    Block HourOperating expenses:Salaries, wages and benefits
    
    $
    104,587
    
    
    
    17
    %
    
    
    2.51
    
    
    $
    337
    
    
    $
    99,664
    
    
    
    16
    %
    
    
    2.30
    
    
    $
    306Aircraft fuel
    
    
    81,953
    
    
    
    13
    %
    
    
    1.96
    
    
    
    264
    
    
    
    84,660
    
    
    
    14
    %
    
    
    1.96
    
    
    
    260Aircraft maintenance,
materials and repairs
    
    
    26,949
    
    
    
    4
    %
    
    
    0.64
    
    
    
    87
    
    
    
    23,546
    
    
    
    4
    %
    
    
    0.54
    
    
    
    72Aircraft rentals
    
    
    198,093
    
    
    
    32
    %
    
    
    4.75
    
    
    
    638
    
    
    
    206,632
    
    
    
    33
    %
    
    
    4.78
    
    
    
    634Other rentals and landing fees
    
    
    33,954
    
    
    
    5
    %
    
    
    0.81
    
    
    
    109
    
    
    
    32,668
    
    
    
    5
    %
    
    
    0.76
    
    
    
    100Ground handling services
    
    
    65,787
    
    
    
    11
    %
    
    
    1.58
    
    
    
    212
    
    
    
    69,405
    
    
    
    11
    %
    
    
    1.60
    
    
    
    213Depreciation
    
    
    2,932
    
    
    
    0
    %
    
    
    0.07
    
    
    
    9
    
    
    
    3,019
    
    
    
    0
    %
    
    
    0.07
    
    
    
    10Other
    
    
    41,437
    
    
    
    7
    %
    
    
    0.99
    
    
    
    134
    
    
    
    44,570
    
    
    
    7
    %
    
    
    1.03
    
    
    
    136Provision for (decreases)
increases in losses
associated with
bankruptcy filings of
Northwest and Mesaba
    
    
    (2,172
    )
    
    
    0
    %
    
    
    (0.05
    )
    
    
    (7
    )
    
    
    53,914
    
    
    
    8
    %
    
    
    1.18
    
    
    
    157Total operating
expenses
    
    $
    553,520
    
    
    
    89
    %
    
    
    13.26
    
    
    $
    1,783
    
    
    $
    618,078
    
    
    
    98
    %
    
    
    14.22
    
    
    $
    1,888
 27




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
  Three Months Ended September 30,2006
    
    2005
    
    ChangeOther Data:Revenue passengers (in thousands)
    
    
    2,330
    
    
    
    2,192
    
    
    
    6
    %Revenue passenger miles (in thousands) (1)
    
    
    1,110,898
    
    
    
    1,160,095
    
    
    
    (4
    )%Available seat miles (in thousands)
    
    
    1,459,943
    
    
    
    1,555,520
    
    
    
    (6
    )%Passenger load factor (2)
    
    
    76.1
    %
    
    
    74.6
    %
    
    1.5pts.Operating revenue per available seat mile (in cents)
    
    
    14.28
    
    
    
    14.20
    
    
    
    1
    %Operating costs per available seat mile (in cents)
    
    
    12.53
    
    
    
    16.29
    
    
    
    (23
    )%Operating revenue per block hour
    
    $
    1,996
    
    
    $
    1,915
    
    
    
    4
    %Operating costs per block hour
    
    $
    1,752
    
    
    $
    2,195
    
    
    
    (20
    )%Block hours
    
    
    104,435
    
    
    
    115,358
    
    
    
    (9
    )%Cycles
    
    
    63,713
    
    
    
    66,094
    
    
    
    (4
    )%Average daily utilization (block hours)
    
    
    9.15
    
    
    
    9.04
    
    
    
    1
    %Average stage length (miles)
    
    
    471
    
    
    
    510
    
    
    
    (8
    )%Number of operating aircraft (end of period)
    
    
    124
    
    
    
    139
    
    
    
    (11
    )%Employees (end of period)
    
    
    3,554
    
    
    
    3,605
    
    
    
    (1
    )%
 Nine Months Ended September 30,2006
    
    2005
    
    ChangeOther Data:Revenue passengers (in thousands)
    
    
    6,685
    
    
    
    5,971
    
    
    
    12
    %Revenue passenger miles (in thousands) (1)
    
    
    3,193,715
    
    
    
    3,064,647
    
    
    
    4
    %Available seat miles (in thousands)
    
    
    4,173,150
    
    
    
    4,326,501
    
    
    
    (4
    )%Passenger load factor (2)
    
    
    76.5
    %
    
    
    70.8
    %
    
    5.7pts.Operating revenue per available seat mile (in cents)
    
    
    14.86
    
    
    
    14.53
    
    
    
    2
    %Operating costs per available seat mile (in cents)
    
    
    13.26
    
    
    
    14.22
    
    
    
    (7
    )%Operating revenue per block hour
    
    $
    1,997
    
    
    $
    1,929
    
    
    
    4
    %Operating costs per block hour
    
    $
    1,783
    
    
    $
    1,888
    
    
    
    (6
    )%Block hours
    
    
    310,503
    
    
    
    325,802
    
    
    
    (5
    )%Cycles
    
    
    188,031
    
    
    
    187,188
    
    
    
    0
    %Average daily utilization (block hours)
    
    
    9.17
    
    
    
    9.20
    
    
    
    (0
    )%Average stage length (miles)
    
    
    471
    
    
    
    502
    
    
    
    (6
    )%Number of operating aircraft (end of period)
    
    
    124
    
    
    
    139
    
    
    
    (11
    )%Employees (end of period)
    
    
    3,554
    
    
    
    3,605
    
    
    
    (1
    )%
 
 (1)
    
    Revenue passenger miles represents the number of miles flown by revenue passengers.(2)
    
    Passenger load factor equals revenue passenger miles divided by available seat miles. Liquidity and Capital Resources
 th th th
  28




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
   Contractual obligations
 Payments Due by PeriodTotal
    
    2006 (1)
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterContractual obligations:Sr. convertible notes
    
    $
    121,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    121,000Interest payments on
long-term debt
    
    
    72,751
    
    
    
    
    
    
    
    3,933
    
    
    
    3,933
    
    
    
    3,933
    
    
    
    3,933
    
    
    
    57,019Operating leases
    
    
    3,054,220
    
    
    
    71,129
    
    
    
    279,592
    
    
    
    277,824
    
    
    
    276,245
    
    
    
    276,235
    
    
    
    1,873,195Additional aircraft
deposits (2)
    
    
    21,700
    
    
    
    
    
    
    
    21,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase obligations (3)
    
    
    5,841
    
    
    
    493
    
    
    
    1,778
    
    
    
    1,355
    
    
    
    1,219
    
    
    
    564
    
    
    
    432Total contractual cash
obligations
    
    $
    3,275,512
    
    
    $
    71,622
    
    
    $
    307,003
    
    
    $
    283,112
    
    
    $
    281,397
    
    
    $
    280,732
    
    
    $
    2,051,646
 
 (1)
    
    Contractual obligations for the remainder of 2006.(2)
    
    Disputed additional aircraft deposits that the Company believes are due in November 2007.
Northwest has demanded them to be paid by November 13, 2006.(3)
    
    Amounts represent noncancelable commitments to purchase goods and services, including certain
aircraft parts and information technology.    29




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
     Operating activities.
 Investing activities.
  30




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
 Financing activities
 Deferred tax asset.
 Critical Accounting Policies and Estimates
  Provisions for losses on subleases.
   Post-retirement health plan.
 Allowance for doubtful accounts.
 31




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
     Recent Accounting Pronouncement
 Forward Looking Statements
  32




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosure about Market Risk
  Aircraft fuel.
 Interest rates.
 Senior Convertible Notes.
 
 Item 4. Controls and Procedures
   33




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##### Table of Contents



Part II. Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  34




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##### Table of Contents



Item 6. Exhibits
  ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation of the registrant (Incorporated by
reference to the Companys Registration Statement Form S-1 (Registration No. 333-83359), as
amended (the S-1) initially filed on February 25, 2002)3.1.1
    
    Second Amended and Restated Certificate of Incorporation of the registrant (Incorporated by
reference to the S-1)3.2
    
    Certificate of Designations for Series A preferred stock of the registrant (Incorporated by
reference to the S-1)3.3
    
    Bylaws of the registrant (Incorporated by reference to the S-1)3.3.1
    
    Amended and Restated Bylaws, dated January 14, 2003, of the registrant (Incorporated by
reference to the S-1)4.1
    
    Specimen Stock Certificate (Incorporated by reference to the S-1)4.2
    
    Rights Agreement between the registrant and EquiServe Trust Company, N.A., as Rights Agent
(Incorporated by reference to the S-1)4.3
    
    Indenture, 3.25% Senior Convertible Notes due 2025, dated as of February 8, 2005, by and
between Pinnacle Airlines Corp. and Deutsche Bank Trust Company (Incorporated by reference to
Exhibits 99.2 and 99.3 to the Registrants Current Report on Form 8-K filed on February 8,
2005)4.4
    
    Registration Rights Agreement made pursuant to the Purchase Agreement dated February 3,
2005, dated as of February 8, 2005, by and among Pinnacle Airlines Corp., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Raymond James & Associates, Inc. (Incorporated by
reference to Exhibits 99.2 and 99.3 to the Registrants Current Report on Form 8-K filed on
February 8, 2005)10.1
    
    Loan Agreement dated as of June 16, 2005 between Pinnacle Airlines, Inc. and First Tennessee
Bank National Association (Incorporated by reference to the Registrants Current Report on
Form 8-K filed on June 23, 2005)10.2
    
    Sublease Agreement between Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
(Incorporated by reference to the S-1)10.2.1
    
    First Amendment to Sublease Agreement between Pinnacle Airlines, Inc. and Northwest
Airlines, Inc. (Incorporated by reference to the S-1)10.2#
    
    Guaranty Agreement between Pinnacle Airlines, Inc. and First Tennessee Bank National
Association (Incorporated by reference to the Registrants Current Report on Form 8-K filed
on June 23, 2005)10.3
    
    Engine Lease Agreement between Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
(Incorporated by reference to the S-1)10.3.1
    
    First Amendment to Engine Lease Agreement between Pinnacle Airlines, Inc. and Northwest
Airlines, Inc. (Incorporated by reference to the S-1)10.3#
    
    Revolving Credit Note dated as of June 16, 2005 between Pinnacle Airlines, Inc. and First
Tennessee Bank National Association (Incorporated by reference to the Registrants Current
Report on Form 8-K filed on June 23, 2005)10.4#
    
    Security Agreement dated as of June 16, 2005 between Pinnacle Airlines, Inc. and First
Tennessee Bank National Association (Incorporated by reference to the Registrants Current
Report on Form 8-K filed on June 23, 2005)10.5#
    
    Negative Pledge Agreement dated as of June 16, 2005 between Pinnacle Airlines, Inc. and
First Tennessee Bank National Association (Incorporated by reference to the Registrants
Current Report on Form 8-K filed on June 23, 2005)
 35




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##### Table of Contents



ExhibitNumber
    
    Description10.6#
    
    Negative Pledge Agreement dated as of June 16, 2005 between Pinnacle Airlines Corp. and
First Tennessee Bank National Association (Incorporated by reference to the Registrants
Current Report on Form 8-K filed on June 23, 2005)10.8
    
    Pinnacle Airlines Corp. 2003 Stock Incentive Plan10.9
    
    Non-Qualified Stock Option Agreement for options granted under the Pinnacle Airlines Corp.
2003 Stock Incentive Plan (Incorporated by reference to the S-1)10.10
    
    Pinnacle Airlines, Inc. Annual Management Bonus Plan (Incorporated by reference to the S-1)10.11
    
    Amended and Restated Sublease Agreement dated as of January 14, 2003 between Pinnacle
Airlines, Inc. and Northwest Airlines, Inc. (SBN Facilities) (Incorporated by reference to
the S-1)10.12
    
    Sublease Agreement dated as of August 1, 2002 between Pinnacle Airlines, Inc. and Northwest
Airlines, Inc. (TYS Facilities) (Incorporated by reference to the S-1)10.13
    
    Amended and Restated Facilities Use Agreement between Pinnacle Airlines, Inc. and Northwest
Airlines, Inc. (DTW Facilities) (Incorporated by reference to the S-1)10.14
    
    Amended and Restated Facilities Use Agreement between Pinnacle Airlines, Inc. and Northwest
Airlines, Inc. (MEM Facilities) (Incorporated by reference to the S-1)10.15
    
    Amended and Restated Facilities Use Agreement between Pinnacle Airlines, Inc. and Northwest
Airlines, Inc. (MSP Facilities) (Incorporated by reference to the S-1)10.16
    
    Intentionally omitted10.17
    
    Intentionally omitted10.18
    
    Lease Guaranty issued by the registrant to Northwest Airlines, Inc. (Incorporated by
reference to the S-1)10.19
    
    Sublease Guaranty issued by the registrant to Northwest Airlines, Inc. (Incorporated by
reference to the S-1)10.20
    
    Airline Services Agreement dated as of March 1, 2002 among the registrant, Pinnacle
Airlines, Inc. and Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.21
    
    Airline Services Agreement dated as of January 14, 2003 among the registrant, Pinnacle
Airlines, Inc. and Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.21.1
    
    Amendment No. 1 dated as of September 11, 2003 to the Airline Services Agreement dated as
of January 14, 2003 among the registrant, Pinnacle Airlines, Inc. and Northwest Airlines,
Inc. (Incorporated by reference to the S-1)10.21.2
    
    Amendment No. 2 dated as of November 26, 2003 to the Airline Services Agreement dated as
of January 14, 2003 among the registrant, Pinnacle Airlines, Inc. and Northwest Airlines,
Inc. (Incorporated by reference to the S-1)10.22
    
    Amended and Restated Ground Handling Agreement between Pinnacle Airlines, Inc. and
Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.23
    
    Amended and Restated Information Technology Services Agreement between Pinnacle Airlines,
Inc. and Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.24
    
    Amended and Restated Family Assistance Services Agreement between Pinnacle Airlines, Inc.
and Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.25
    
    Amended and Restated Manufacturer Benefits Agreement between Pinnacle Airlines, Inc. and
Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.26
    
    Form of Amended and Restated Preferential Hiring Agreement between Pinnacle Airlines, Inc.
and Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.27
    
    Purchase Agreement, Senior Convertible Notes due 2025, dated as of February 3, 2005, by and
among, Pinnacle Airlines Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Raymond James & Associates, Inc. (Incorporated by reference to the Registrants Current
Report on Form 8-K filed on February 8, 2005)10.28
    
    Amended and Restated Management Compensation Agreement between Pinnacle Airlines, Inc. and
Philip H. Trenary (Incorporated by reference to the Registrants Current Report on Form 8-K
filed on August 12, 2005)
 36




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##### Table of Contents



ExhibitNumber
    
    Description10.29
    
    Amended and Restated Management Compensation Agreement between Pinnacle Airlines, Inc. and
Peter D. Hunt (Incorporated by reference to the Registrants Current Report on Form 8-K filed
on August 12, 2005)10.30
    
    Amended and Restated Management Compensation Agreement between Pinnacle Airlines, Inc. and
Douglas W. Shockey (Incorporated by reference to the Registrants Current Report on Form 8-K
filed on August 12, 2005)10.31
    
    Form of Indemnity Agreement between Pinnacle Airlines Corp. and its directors and officers
(Incorporated by reference to the Registrants Current Report on Form 8-K filed on January
26, 2006)10.99.1#
    
    Promissory Note issued by Pinnacle Airlines, Inc. to Northwest Airlines, Inc.
(Incorporated by reference to the S-1)10.99.2#
    
    Guarantee of Promissory Note issued by registrant to Northwest Airlines, Inc.
(Incorporated by reference to the S-1)10.99.3#
    
    Revolving Credit Facility dated as of January 14, 2003 between Pinnacle Airlines, Inc.
and Northwest Airlines, Inc. (Incorporated by reference to the S-1)10.99.4#
    
    First Amendment dated as of February 5, 2003 to Revolving Credit Facility dated as of
January 14, 2003 between Pinnacle Airlines, Inc. and Northwest Airlines, Inc. (Incorporated
by reference to the S-1)10.99.5#
    
    Second Amendment dated as of November 28, 2003 to Revolving Credit Facility dated as of
January 14, 2003 between Pinnacle Airlines, Inc. and Northwest Airlines, Inc. (Incorporated
by reference to the S-1)10.99.6#
    
    Third Amendment dated as of December 13, 2004 to Revolving Credit Facility dated as of
January 14, 2003 between Pinnacle Airlines, Inc. and Northwest Airlines, Inc. (Incorporated
by reference to the Registrants Current Report on Form 8-K filed on February 8, 2005)10.99.7#
    
    Fourth Amendment dated as of February 8, 2005 to Revolving Credit Facility dated as of
January 14, 2003 between Pinnacle Airlines, Inc. and Northwest Airlines, Inc. (Incorporated
by reference to the Registrants Current Report on Form 8-K filed on February 8, 2005)10.99.8#
    
    Guaranty dated as of January 14, 2003 issued by registrant to Northwest Airlines, Inc.
(Incorporated by reference to the S-1)21.1
    
    List of Subsidiaries (Incorporated by reference to the S-1)31.1*
    
    Certification of Chief Executive Officer31.2*
    
    Certification of Chief Financial Officer32*
    
    Certifications of CEO and CFO
 
 *
    
    Filed herewith
    
    Management contract or compensatory plan or arrangement#
    
    Cancelled agreement referenced in this Form 10-Q
 37




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##### Table of Contents



SIGNATURES
  By:
    
    /s/ Philip H. TrenaryPhilip H. TrenaryDate: November 9, 2006
    
    
    
    President and Chief Executive OfficerBy:
    
    /s/ Peter D. HuntPeter D. HuntDate: November 9, 2006
    
    
    
    Vice President and Chief Financial Officer
 38