##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended March 31, 2005                                               
|          
|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 no. 1-7134


Mercury Air Group, Inc.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 11-1800515                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|5456 McConnell Avenue                                              |  | 90066                                   
|Los Angeles, CA(Address of principal executive offices)            |  | (Zip Code)                              

Registrants telephone number, including area code:


(310) 827-2737


þ o


o þ




|                              |  |                             
|----------------------------- |  | ----------------------------
|                              |  | Number of Shares Outstanding
|Title                         |  | as of May 25, 2005          
|                              |  |                             
|Common Stock, $0.01 Par Value |  | 3,056,355                   









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##### 



TABLE OF CONTENTS


|             |  |                                                                                           |    |      |    | 
|------------ |  | ----------------------------------------------------------------------------------------- | -- | ---- | -- | 
|             |  |                                                                                           |    | Page |   
|             |  |                                                                                           |    |      |   
|PART I      
|Item 1.      |  | Financial Statements                                                                      |    |      | 2  | 
|Item 2.      |  | Managements Discussion and Analysis of Financial Condition
    and Results of Operations |    |      | 18 | 
|Item 3.      |  | Quantitative and Qualitative Disclosures About Market Risk                                |    |      | 28 | 
|Item 4.      |  | Controls and Procedures                                                                   |    |      | 28 | 
|PART II     
|Item 1.      |  | Legal Proceedings                                                                         |    |      | 29 | 
|Item 2.      |  | Unregistered Sales of Equity Securities and Use of Proceeds                               |    |      | 30 | 
|Item 3.      |  | Default Upon Senior Securities                                                            |    |      | 31 | 
|Item 4.      |  | Submission of Matters to a Vote of Security Holders                                       |    |      | 31 | 
|Item 5.      |  | Other Information                                                                         |    |      | 32 | 
|Item 6.      |  | Exhibits                                                                                  |    |      | 32 | 
|Signatures   |  |                                                                                           | 38 |     
|Exhibit 31.1 |  |                                                                                           |    |      |    | 
|Exhibit 31.2 |  |                                                                                           |    |      |    | 
|Exhibit 32.1 |  |                                                                                           |    |      |    | 
|Exhibit 32.2 |  |                                                                                           |    |      |    | 

1



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##### 



PART I  FINANCIAL INFORMATION




|        |                     
|------- | --------------------
|Item 1. | Financial Statements

MERCURY AIR GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          |  |        |        |         | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ------ | ------ | -------- |  | ------ | ------ | ------- | 
|                                                                                                                                                                                              |                                                                                                                                                                        | March 31,                                                                              |        |        | June 30, | 
|                                                                                                                                                                                              |                                                                                                                                                                        | 2005                                                                                   |        |        | 2004     | 
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | (Unaudited)                                                                            |        |        |         
|                                                                                                                                                                                              |                                                                                                                                                                        | (Dollars in thousands)                                                                 |       
|ASSETS                                                                                                                                                                                       
|CURRENT ASSETS:                                                                                                                                                                               |                                                                                                                                                                        |                                                                                        |        |        |          |  |        |       
|                                                                                                                                                                                              | Cash and cash equivalents                                                                                                                                              |                                                                                        | $      | 275    |          |  | $      | 4,690  |        
|                                                                                                                                                                                              | Restricted cash                                                                                                                                                        |                                                                                        |        |        |          |  |        | 15,414 |        
|                                                                                                                                                                                              | Trade accounts receivable, net of allowance for doubtful
    accounts of $2,808 and $1,556 at March 31, 2005 and
    June 30, 2004, respectively                       |                                                                                        |        | 59,757 |          |  |        | 50,974 |        
|                                                                                                                                                                                              | Inventories                                                                                                                                                            |                                                                                        |        | 3,330  |          |  |        | 1,165  |        
|                                                                                                                                                                                              | Prepaid expenses and other current assets                                                                                                                              |                                                                                        |        | 4,579  |          |  |        | 5,696  |        
|                                                                                                                                                                                              | Deferred income taxes                                                                                                                                                  |                                                                                        |        | 1,451  |          |  |        | 1,451  |        
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | TOTAL CURRENT ASSETS                                                                   |        |        | 69,392   |  |        |        | 79,390  | 
|PROPERTY, EQUIPMENT AND LEASEHOLDS, net of accumulated
    depreciation and amortization of $25,531 and $24,836 at
    March 31, 2005 and June 30, 2004, respectively                         |                                                                                                                                                                        |                                                                                        | 7,461  |        |          |  | 10,349 |       
|NOTES RECEIVABLE, net of allowance for doubtful accounts of $921
    and $1,025 at March 31, 2005 and June 30, 2004,
    respectively                                                         |                                                                                                                                                                        |                                                                                        | 1,300  |        |          |  | 521    |       
|DEFERRED INCOME TAXES                                                                                                                                                                         |                                                                                                                                                                        |                                                                                        | 611    |        |          |  | 611    |       
|GOODWILL                                                                                                                                                                                      |                                                                                                                                                                        |                                                                                        | 4,411  |        |          |  | 4,389  |       
|OTHER INTANGIBLE ASSETS, NET                                                                                                                                                                  |                                                                                                                                                                        |                                                                                        | 550    |        |          |  | 700    |       
|RESTRICTED CASH                                                                                                                                                                               |                                                                                                                                                                        |                                                                                        | 8,450  |        |          |  | 8,989  |       
|OTHER ASSETS, NET                                                                                                                                                                             |                                                                                                                                                                        |                                                                                        | 1,127  |        |          |  | 1,008  |       
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | TOTAL ASSETS                                                                           |        | $      | 93,302   |  |        | $      | 105,957 | 
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                             
|LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND
    STOCKHOLDERS EQUITY                                                                                                             
|CURRENT LIABILITIES:                                                                                                                                                                          |                                                                                                                                                                        |                                                                                        |        |        |          |  |        |       
|                                                                                                                                                                                              | Accounts payable                                                                                                                                                       |                                                                                        | $      | 37,204 |          |  | $      | 33,552 |        
|                                                                                                                                                                                              | Accrued expenses and other current liabilities                                                                                                                         |                                                                                        |        | 8,918  |          |  |        | 11,825 |        
|                                                                                                                                                                                              | Current portion of long-term debt                                                                                                                                      |                                                                                        |        | 1,178  |          |  |        | 139    |        
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | TOTAL CURRENT LIABILITIES                                                              |        |        | 47,300   |  |        |        | 45,516  | 
|LONG-TERM DEBT                                                                                                                                                                                |                                                                                                                                                                        |                                                                                        | 20,716 |        |          |  | 17,790 |       
|DEFERRED GAIN                                                                                                                                                                                 |                                                                                                                                                                        |                                                                                        | 9,474  |        |          |  | 8,130  |       
|OTHER LONG-TERM LIABILITIES                                                                                                                                                                   |                                                                                                                                                                        |                                                                                        | 837    |        |          |  | 669    |       
|DEFERRED RENT                                                                                                                                                                                 |                                                                                                                                                                        |                                                                                        | 628    |        |          |  | 1,257  |       
|MINORITY INTEREST                                                                                                                                                                             |                                                                                                                                                                        |                                                                                        |        |        |          |  | 182    |       
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | TOTAL LIABILITIES                                                                      |        |        | 78,955   |  |        |        | 73,544  | 
|COMMITMENTS AND CONTINGENCIES (Note 4)                                                                                                                                                        |                                                                                                                                                                        |                                                                                        |        |        |          |  |        |       
|MANDATORILY REDEEMABLE PREFERRED STOCK:
    Series A  $0.01 par value;
    1,000,000 shares authorized; 462,627 shares
    outstanding at March 31, 2005 and June 30, 2004,
    respectively |                                                                                                                                                                        |                                                                                        | 478    |        |          |  | 518    |       
|STOCKHOLDERS EQUITY:                                                                                                                                                                         |                                                                                                                                                                        |                                                                                        |        |        |          |  |        |       
|                                                                                                                                                                                              | Preferred stock  $0.01 par value; authorized
    2,000,000 shares; no shares outstanding                                                                              |                                                                                        |        |        |          |  |        |        |        
|                                                                                                                                                                                              | Common stock  $0.01 par value; authorized
    18,000,000 shares; 3,056,355 and 2,954,819 shares
    outstanding at March 31, 2005 and June 30, 2004,
    respectively |                                                                                        |        | 31     |          |  |        | 30     |        
|                                                                                                                                                                                              | Additional paid-in capital                                                                                                                                             |                                                                                        |        | 21,443 |          |  |        | 20,737 |        
|                                                                                                                                                                                              | Retained earnings (accumulated deficit)                                                                                                                                |                                                                                        |        | (4,822 | )        |  |        | 14,596 |        
|                                                                                                                                                                                              | Accumulated other comprehensive income (loss)                                                                                                                          |                                                                                        |        | 176    |          |  |        | (46    | )      
|                                                                                                                                                                                              | Treasury stock, 12,500 and 24,500 shares at March 31,
    2005 and June 30, 2004, respectively                                                                         |                                                                                        |        | (61    | )        |  |        | (120   | )      
|                                                                                                                                                                                              | Notes receivable from officers                                                                                                                                         |                                                                                        |        | (2,898 | )        |  |        | (3,302 | )      
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | TOTAL STOCKHOLDERS EQUITY                                                             |        |        | 13,869   |  |        |        | 31,895  | 
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 
|                                                                                                                                                                                              |                                                                                                                                                                        | TOTAL LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND
    STOCKHOLDERS EQUITY |        | $      | 93,302   |  |        | $      | 105,957 | 
|                                                                                                                                                                                              |                                                                                                                                                                        |                                                                                        |        |        |          | 



2



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##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |        |         |  
|------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ------ | ------- | ------------------ | - | ------ | ------- | ------- | - | ------ | ------- | ------- | - | ------ | ------ | ------- | -
|                                           |                                                                                                                                                                             | Nine Months Ended                                      |        |         | Three Months Ended |  
|                                           |                                                                                                                                                                             | March 31,                                              |        |         | March 31,          |  
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |  
|                                           |                                                                                                                                                                             | 2005                                                   |        |         | 2004               |   |        | 2005    |         |   | 2004   |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | (Unaudited)                                            |        |         | (Unaudited)        |  
|                                           |                                                                                                                                                                             | (Dollars in thousands, except per share data)          |       
|Sales and revenues:                        |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |       
|                                           | Sales                                                                                                                                                                       |                                                        | $      | 388,998 |                    |   | $      | 228,195 |         |   | $      | 142,903 |         |   | $      | 88,304 |        
|                                           | Service revenues                                                                                                                                                            |                                                        |        | 48,284  |                    |   |        | 46,795  |         |   |        | 15,356  |         |   |        | 15,477 |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | Total sales and revenues                               |        |         | 437,282            |   |        |         | 274,990 |   |        |         | 158,259 |   |        |        | 103,781 |  
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|Costs and expenses:                        |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |       
|                                           | Cost of sales                                                                                                                                                               |                                                        |        | 378,566 |                    |   |        | 219,871 |         |   |        | 139,176 |         |   |        | 85,572 |        
|                                           | Operating expenses                                                                                                                                                          |                                                        |        | 45,375  |                    |   |        | 45,048  |         |   |        | 14,897  |         |   |        | 15,477 |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | Total costs and expenses                               |        |         | 423,941            |   |        |         | 264,919 |   |        |         | 154,073 |   |        |        | 101,049 |  
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | Gross margin (excluding depreciation and amortization) |        |         | 13,341             |   |        |         | 10,071  |   |        |         | 4,186   |   |        |        | 2,732   |  
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|Expenses (income):                         |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |       
|                                           | Selling, general and administrative                                                                                                                                         |                                                        |        | 11,736  |                    |   |        | 7,838   |         |   |        | 4,708   |         |   |        | 2,798  |        
|                                           | Provision (recovery) for bad debts                                                                                                                                          |                                                        |        | 1,514   |                    |   |        | 305     |         |   |        | 1,150   |         |   |        | 329    |        
|                                           | Depreciation and amortization                                                                                                                                               |                                                        |        | 1,855   |                    |   |        | 2,169   |         |   |        | 601     |         |   |        | 743    |        
|                                           | Interest and other expense                                                                                                                                                  |                                                        |        | 1,057   |                    |   |        | 784     |         |   |        | 286     |         |   |        | 257    |        
|                                           | Hambro settlement costs                                                                                                                                                     |                                                        |        |         |                    |   |        | 1,799   |         |   |        |         |         |   |        |        |        
|                                           | Interest and other income                                                                                                                                                   |                                                        |        | (306    | )                  |   |        | (272    | )       |   |        | (65     | )       |   |        | (31    | )      
|                                           | Asset impairment loss                                                                                                                                                       |                                                        |        | 626     |                    |   |        |         |         |   |        |         |         |   |        |        |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | Total expenses (income)                                |        |         | 16,482             |   |        |         | 12,623  |   |        |         | 6,680   |   |        |        | 4,096   |  
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           | Loss from continuing operations before minority interest and
    income taxes                                                                                               |                                                        |        | (3,141  | )                  |   |        | (2,552  | )       |   |        | (2,494  | )       |   |        | (1,364 | )      
|                                           | Minority interest                                                                                                                                                           |                                                        |        | 406     |                    |   |        |         |         |   |        | (68     | )       |   |        |        |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           | Loss from continuing operations before income taxes                                                                                                                         |                                                        |        | (2,735  | )                  |   |        | (2,552  | )       |   |        | (2,562  | )       |   |        | (1,364 | )      
|                                           | Income tax (benefit) expense                                                                                                                                                |                                                        |        | (716    | )                  |   |        | 43      |         |   |        | (691    | )       |   |        | (196   | )      
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           | Loss from continuing operations, net of taxes                                                                                                                               |                                                        |        | (2,019  | )                  |   |        | (2,595  | )       |   |        | (1,871  | )       |   |        | (1,168 | )      
|                                           | Discontinued operations:                                                                                                                                                    |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |        |        
|                                           | Loss from discontinued operation, net of income tax (benefit) of
    ($359) and ($108) for the nine months and three months ended
    March 31, 2005 and 2004, respectively |                                                        |        |         |                    |   |        | (1,043  | )       |   |        |         |         |   |        | (651   | )      
|                                           | Gain on sale of discontinued operations, net of income tax
    provision of $14                                                                                             |                                                        |        | 22      |                    |   |        |         |         |   |        |         |         |   |        |        |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|Net loss                                   |                                                                                                                                                                             |                                                        | (1,997 | )       |                    |   | (3,638 | )       |         |   | (1,871 | )       |         |   | (1,819 | )     
|Accrued preferred stock dividends          |                                                                                                                                                                             |                                                        | 29     |         |                    |   | 28     |         |         |   | 9      |         |         |   | 9      |       
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|Net loss applicable to common stockholders |                                                                                                                                                                             | $                                                      | (2,026 | )       |                    | $ | (3,666 | )       |         | $ | (1,880 | )       |         | $ | (1,828 | )     
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|Income (loss) per common share:            |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |       
|Basic:                                     |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |       
|                                           | From continuing operations, net of taxes                                                                                                                                    |                                                        | $      | (0.71   | )                  |   | $      | (0.84   | )       |   | $      | (0.62   | )       |   | $      | (0.41  | )      
|                                           | From discontinued operations, net of taxes                                                                                                                                  |                                                        |        |         |                    |   |        | (0.34   | )       |   |        |         |         |   |        | (0.22  | )      
|                                           | From sale of discontinued operations, net of taxes                                                                                                                          |                                                        |        | 0.01    |                    |   |        |         |         |   |        |         |         |   |        |        |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | Net loss per share                                     |        | $       | (0.70              | ) |        | $       | (1.18   | ) |        | $       | (0.62   | ) |        | $      | (0.63   | )
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|Diluted:                                   |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |         |         |   |        |       
|                                           | From continuing operations, net of taxes                                                                                                                                    |                                                        | $      | (0.71   | )                  |   | $      | (0.84   | )       |   | $      | (0.62   | )       |   | $      | (0.41  | )      
|                                           | From discontinued operations, net of taxes                                                                                                                                  |                                                        |        |         |                    |   |        | (0.34   | )       |   |        |         |         |   |        | (0.22  | )      
|                                           | From sale of discontinued operations, net of taxes                                                                                                                          |                                                        |        | 0.01    |                    |   |        |         |         |   |        |         |         |   |        |        |        
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        
|                                           |                                                                                                                                                                             | Net loss per share                                     |        | $       | (0.70              | ) |        | $       | (1.18   | ) |        | $       | (0.62   | ) |        | $      | (0.63   | )
|                                           |                                                                                                                                                                             |                                                        |        |         |                    |   |        |         |         |   |        |        



3



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##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                               |                                                            |                                                        |                                                     |         |         |         |       |        |         |        |  
|---------------------------------------------- | ---------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------------------- | ------- | ------- | ------- | ----- | ------ | ------- | ------ | -
|                                               |                                                            | Nine Months Ended                                      |                                                    
|                                               |                                                            | March 31,                                              |                                                    
|                                               |                                                            |                                                        |                                                    
|                                               |                                                            | 2005                                                   |                                                     |         | 2004    |        
|                                               |                                                            |                                                        |                                                     |         |         |        
|                                               |                                                            | (Unaudited)                                            |                                                    
|                                               |                                                            | (Dollars in thousands)                                 |                                                    
|CASH FLOWS FROM OPERATING ACTIVITIES:          |                                                            |                                                        |                                                     |         |         |         |       |       
|                                               | Net loss                                                   |                                                        | $                                                   | (1,997  | )       |         | $     | (3,638 | )      
|                                               | Adjustments to derive cash flow from operating activities: |                                                        |                                                     |         |         |         |       |        |        
|                                               |                                                            | Provision for bad debts                                |                                                     |         | 1,514   |         |       |        | 421     |       
|                                               |                                                            | Depreciation and amortization                          |                                                     |         | 1,855   |         |       |        | 6,405   |       
|                                               |                                                            | Deferred income taxes                                  |                                                     |         |         |         |       |        | 350     |       
|                                               |                                                            | Deferred rent                                          |                                                     |         | (304    | )       |       |        | (471    | )     
|                                               |                                                            | Executive loan amortization                            |                                                     |         | 265     |         |       |        | 290     |       
|                                               |                                                            | Minority interest                                      |                                                     |         | (182    | )       |       |        | 2       |       
|                                               |                                                            | Other non-cash items                                   |                                                     |         | 76      |         |       |        |         |       
|                                               |                                                            | Asset impairment loss                                  |                                                     |         | 626     |         |       |        |         |       
|                                               |                                                            | Hambro settlement costs                                |                                                     |         |         |         |       |        | 1,799   |       
|                                               |                                                            | Interest added to senior subordinated note             |                                                     |         |         |         |       |        | 120     |       
|                                               |                                                            | Amortization of senior subordinated note discount      |                                                     |         |         |         |       |        | 132     |       
|                                               |                                                            | Amortization of loan fees included in interest expense |                                                     |         |         |         |       |        | 381     |       
|                                               |                                                            | Loss on retirement of assets                           |                                                     |         |         |         |       |        | 25      |       
|                                               |                                                            | Write-down of note receivable from officer             |                                                     |         | 96      |         |       |        | 105     |       
|                                               | Changes in operating assets and liabilities:               |                                                        |                                                     |         |         |         |       |        |        
|                                               |                                                            | Trade and other accounts receivable                    |                                                     |         | (11,095 | )       |       |        | (12,622 | )     
|                                               |                                                            | Inventories                                            |                                                     |         | (2,165  | )       |       |        | 555     |       
|                                               |                                                            | Prepaid expenses and other current assets              |                                                     |         | 259     |         |       |        | (3,776  | )     
|                                               |                                                            | Accounts payable                                       |                                                     |         | 3,652   |         |       |        | 3,682   |       
|                                               |                                                            | Accrued expenses and other current liabilities         |                                                     |         | (3,027  | )       |       |        | 6,567   |       
|                                               |                                                            |                                                        |                                                     |         |         |        
|                                               |                                                            |                                                        | Net cash provided by (used in) operating activities |         |         | (10,427 | )     |        |         | 327    |  
|                                               |                                                            |                                                        |                                                     |         |         |        
|CASH FLOWS FROM INVESTING ACTIVITIES:          |                                                            |                                                        |                                                     |         |         |         |       |       
|                                               | Decrease in restricted cash                                |                                                        |                                                     | 16,032  |         |         |       |        |        
|                                               | Decrease (increase) in other assets                        |                                                        |                                                     | (232    | )       |         |       | (202   | )      
|                                               | Decrease in notes receivable                               |                                                        |                                                     | 780     |         |         |       | 781    |        
|                                               | Proceeds from sale of property                             |                                                        |                                                     | 2       |         |         |       | 9      |        
|                                               | Additions to property, equipment and leaseholds            |                                                        |                                                     | (1,517  | )       |         |       | (4,697 | )      
|                                               |                                                            |                                                        |                                                     |         |         |        
|                                               |                                                            |                                                        | Net cash provided by (used in) investing activities |         |         | 15,065  |       |        |         | (4,109 | )
|                                               |                                                            |                                                        |                                                     |         |         |        
|CASH FLOWS FROM FINANCING ACTIVITIES:          |                                                            |                                                        |                                                     |         |         |         |       |       
|                                               | Net addition (reduction) of debt instruments               |                                                        |                                                     | 7,485   |         |         |       | 2,734  |        
|                                               | Repurchase of common stock                                 |                                                        |                                                     | (848    | )       |         |       |        |        
|                                               | Payment of dividends                                       |                                                        |                                                     | (17,491 | )       |         |       |        |        
|                                               | Proceeds from exercise of stock options and warrants       |                                                        |                                                     | 1,687   |         |         |       | 14     |        
|                                               |                                                            |                                                        |                                                     |         |         |        
|                                               |                                                            |                                                        | Net cash provided by (used in) financing activities |         |         | (9,167  | )     |        |         | 2,748  |  
|                                               |                                                            |                                                        |                                                     |         |         |        
|Effect of exchange rate changes                |                                                            |                                                        | 114                                                 |         |         |         | 54    |       
|                                               |                                                            |                                                        |                                                     |         |         |        
|NET DECREASE IN CASH AND CASH EQUIVALENTS      |                                                            |                                                        | (4,415                                              | )       |         |         | (980  | )     
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |                                                            |                                                        | 4,690                                               |         |         |         | 2,802 |       
|                                               |                                                            |                                                        |                                                     |         |         |        
|CASH AND CASH EQUIVALENTS, END OF PERIOD       |                                                            | $                                                      | 275                                                 |         |         | $       | 1,822 |       
|                                               |                                                            |                                                        |                                                     |         |         |        
|CASH PAID DURING THE PERIOD FOR:               |                                                            |                                                        |                                                     |         |         |         |       |       
|                                               | Interest                                                   |                                                        | $                                                   | 633     |         |         | $     | 5,398  |        
|                                               | Income taxes                                               |                                                        | $                                                   | 3,385   |         |         | $     | 884    |        





4



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                                                      |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |   |  |   |     |     |  |   |         |        |        |  
|----------------------------------------------------- | --------------------------------------- | ------------------------------------- | --------- | - | ---------- | - | ------- | ------- | ----- | ---------- | -------- | ----------- | ---- | -------- | ------------- | -------- | ----- | - | ------ | ------ |  | - | ----- | - |  | - | --- | --- |  | - | ------- | ------ | ------ | -
|                                                      |                                         |                                       |           |   |            |   |         |         |       |            |          | Accumulated |      |          |              
|                                                      |                                         | Common Stock                          |           |   |            |   |         |         | Notes |            |          |             |      | Other    |               |          |      
|                                                      |                                         |                                       |           |   | Additional |   |         |         |       | Receivable |          |             |      |          | Comprehensive |          |       |  
|                                                      |                                         | Number of                             |           |   |            |   | Paid-In |         |       | Retained   |          |             | From |          |               | Treasury |       |   | Income |        |  |  
|                                                      |                                         | Shares                                |           |   | Amount     |   |         | Capital |       |            | Earnings |             |      | Officers |               |          | Stock |   |        | (Loss) |  |   | Total |  
|                                                      |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |  
|                                                      |                                         | (In thousands, except per share data) |          
|Balances, June 30, 2004                               |                                         |                                       | 2,954,819 |   |            | $ | 30      |         |       | $          | 20,737   |             |      | $        | 14,596        |          |       | $ | (3,302 | )      |  | $ | (120  | ) |  | $ | (46 | )   |  | $ | 31,895  |       
|Comprehensive loss:                                   |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |   |  |   |     |     |  |   |         |       
|                                                      | Net loss                                |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               | (1,997   | )     |   |        |        |  |   |       |   |  |   |     |     |  |   |         | (1,997 | )     
|                                                      | Foreign currency translation adjustment |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |   |  |   |     | 222 |  |   |         | 222    |       
|                                                      |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |  
|                                                      |                                         | Comprehensive loss                    |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |   |  |   |     |     |  |   |         |        | (1,775 | )
|Cash dividend per common share of $5.70 (See Note 13) |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          | (17,421       | )        |       |   |        |        |  |   |       |   |  |   |     |     |  |   | (17,421 | )     
|Accrual of preferred stock dividends                  |                                         |                                       |           |   |            |   |         |         |       |            | (30      | )           |      |          |               |          |       |   |        |        |  |   |       |   |  |   |     |     |  |   | (30     | )     
|Repurchase of common stock                            |                                         |                                       | (150,000  | ) |            |   | (2      | )       |       |            | (808     | )           |      |          |               |          |       |   | 265    |        |  |   |       |   |  |   |     |     |  |   | (545    | )     
|Repurchase of vested executive stock                  |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   | (38   | ) |  |   |     |     |  |   | (38     | )     
|Exercise of options/warrants                          |                                         |                                       | 279,036   |   |            |   | 3       |         |       |            | 1,684    |             |      |          |               |          |       |   |        |        |  |   |       |   |  |   |     |     |  |   | 1,687   |       
|Write off officer note                                |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   | 139    |        |  |   | (43   | ) |  |   |     |     |  |   | 96      |       
|Retirement of repurchased executive stock             |                                         |                                       | (27,500   | ) |            |   |         |         |       |            | (140     | )           |      |          |               |          |       |   |        |        |  |   | 140   |   |  |   |     |     |  |   |         |       
|                                                      |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |  
|Balances, March 31, 2005                              |                                         |                                       | 3,056,355 |   |            | $ | 31      |         |       | $          | 21,443   |             |      | $        | (4,822        | )        |       | $ | (2,898 | )      |  | $ | (61   | ) |  | $ | 176 |     |  | $ | 13,869  |       
|                                                      |                                         |                                       |           |   |            |   |         |         |       |            |          |             |      |          |               |          |       |   |        |        |  |   |       |  



5



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2005


(Unaudited)




|         |        
|-------- | -------
|Note 1  | General



| |         
| | --------
| | Business









| |                        
| | -----------------------
| | Risks and Uncertainties





6



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                      
| | ---------------------
| | Basis of Presentation





| |                  
| | -----------------
| | Reclassifications





| |                              
| | -----------------------------
| | New Accounting Pronouncements



7



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##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 2  Stock-Based Employee Compensation





|                                                                                                                         |  |                                       |        |   |                    |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------- | ------ | - | ------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                         |  | Nine Months Ended                     |        |   | Three Months Ended |  
|                                                                                                                         |  | March 31,                             |        |   | March 31,          |  
|                                                                                                                         |  |                                       |        |   |                    |  
|                                                                                                                         |  | 2005                                  |        |   | 2004               |   |        | 2005 |  |   | 2004   |  
|                                                                                                                         |  |                                       |        |   |                    |   |        |      |  |   |        |  
|                                                                                                                         |  | (In thousands, except per share data) |       
|Net loss, as reported                                                                                                    |  | $                                     | (1,997 | ) |                    | $ | (3,638 | )    |  | $ | (1,871 | ) |  | $ | (1,819 | )
|Add stock-based employee compensation expense included in net
    loss, net of tax                                       |  |                                       | (68    | ) |                    |   | 185    |      |  |   | (164   | ) |  |   | 62     |  
|Less total stock based employee compensation determined under
    the fair value based method for all awards, net of tax |  |                                       | 9      |   |                    |   | (79    | )    |  |   | 20     |   |  |   | (20    | )
|                                                                                                                         |  |                                       |        |   |                    |   |        |      |  |   |        |  
|Pro forma net loss                                                                                                       |  | $                                     | (2,056 | ) |                    | $ | (3,532 | )    |  | $ | (2,015 | ) |  | $ | (1,777 | )
|                                                                                                                         |  |                                       |        |   |                    |   |        |      |  |   |        |  
|Basic net loss per share  as reported                                                                                   |  | $                                     | (0.70  | ) |                    | $ | (1.18  | )    |  | $ | (0.62  | ) |  | $ | (0.63  | )
|Basic net loss per share  pro forma                                                                                     |  | $                                     | (0.72  | ) |                    | $ | (1.14  | )    |  | $ | (0.67  | ) |  | $ | (0.62  | )
|Diluted net loss per share  as reported                                                                                 |  | $                                     | (0.70  | ) |                    | $ | (1.18  | )    |  | $ | (0.62  | ) |  | $ | (0.63  | )
|Diluted net loss per share  pro forma                                                                                   |  | $                                     | (0.72  | ) |                    | $ | (1.14  | )    |  | $ | (0.67  | ) |  | $ | (0.62  | )



|         |             
|-------- | ------------
|Note 3  | Income Taxes









|         |                              
|-------- | -----------------------------
|Note 4  | Commitments and Contingencies



8



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












9



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|         |                
|-------- | ---------------
|Note 5  | Restricted Cash





10



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |     
|-------- | ----
|Note 6  | Debt





.






|         |                                
|-------- | -------------------------------
|Note 7  | Impairment of Long-Lived Assets



11



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|         |                            
|-------- | ---------------------------
|Note 8  | Net Income (Loss) Per Share



|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |       |   |   |           |       |   |   |           |       |  
|-------------------------------------------------------------------------- | -------------------------------------------------- | ---------------------------------------------------------- | --------- | ----- | ---------------------------- | - | --------- | ----- | - | - | --------- | ----- | - | ----- | --------- | ----- | ------- | - | --------- | ----- | - | - | --------- | ----- | - | - | --------- | ----- | - | - | --------- | ----- | -
|                                                                           |                                                    | Nine Months Ended March 31,                                |           |       | Three Months Ended March 31, |  
|                                                                           |                                                    |                                                            |           |       |                              |  
|                                                                           |                                                    | 2005                                                       |           |       | 2004                         |   |           | 2005  |   |   | 2004      |      
|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |      
|                                                                           |                                                    | Basic                                                      |           |       | Diluted                      |   |           | Basic |   |   | Diluted   |       |   | Basic |           |       | Diluted |   |           | Basic |   |   | Diluted   |      
|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |      
|                                                                           |                                                    | (In thousands, except number of shares and per share data) |          
|Weighted average number of common shares outstanding during the
    period |                                                    |                                                            | 2,900,631 |       |                              |   | 2,900,631 |       |   |   | 3,113,858 |       |   |       | 3,113,858 |       |         |   | 3,028,063 |       |   |   | 3,028,063 |       |   |   | 2,895,472 |       |   |   | 2,895,472 |      
|Loss from continuing operations, net of taxes                              |                                                    | $                                                          | (2,019    | )     |                              | $ | (2,019    | )     |   | $ | (2,595    | )     |   | $     | (2,595    | )     |         | $ | (1,871    | )     |   | $ | (1,871    | )     |   | $ | (1,168    | )     |   | $ | (1,168    | )    
|Preferred stock dividends                                                  |                                                    |                                                            | (29       | )     |                              |   | (29       | )     |   |   | (28       | )     |   |       | (28       | )     |         |   | (9        | )     |   |   | (9        | )     |   |   | (9        | )     |   |   | (9        | )    
|Loss from discontinued operations, net of taxes                            |                                                    |                                                            |           |       |                              |   |           |       |   |   | (1,043    | )     |   |       | (1,043    | )     |         |   |           |       |   |   |           |       |   |   | (651      | )     |   |   | (651      | )    
|Gain on sale of discontinued operations, net of taxes                      |                                                    |                                                            | 22        |       |                              |   | 22        |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |       |   |   |           |       |   |   |           |      
|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |      
|Adjusted net loss applicable to common stockholders                        |                                                    | $                                                          | (2,026    | )     |                              | $ | (2,026    | )     |   | $ | (3,666    | )     |   | $     | (3,666    | )     |         | $ | (1,880    | )     |   | $ | (1,880    | )     |   | $ | (1,828    | )     |   | $ | (1,828    | )    
|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |      
|Income (loss) per share:                                                   |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |       |   |   |           |       |   |   |           |      
|                                                                           | From continuing operations, net of taxes           |                                                            | $         | (0.71 | )                            |   | $         | (0.71 | ) |   | $         | (0.84 | ) |       | $         | (0.84 | )       |   | $         | (0.62 | ) |   | $         | (0.62 | ) |   | $         | (0.41 | ) |   | $         | (0.41 | )
|                                                                           | From discontinued operations, net of taxes         |                                                            |           |       |                              |   |           |       |   |   |           | (0.34 | ) |       |           | (0.34 | )       |   |           |       |   |   |           |       |   |   |           | (0.22 | ) |   |           | (0.22 | )
|                                                                           | From sale of discontinued operations, net of taxes |                                                            |           | 0.01  |                              |   |           | 0.01  |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |       |   |   |           |       |   |   |           |       |  
|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |      
|                                                                           | Net loss per share                                 |                                                            | $         | (0.70 | )                            |   | $         | (0.70 | ) |   | $         | (1.18 | ) |       | $         | (1.18 | )       |   | $         | (0.62 | ) |   | $         | (0.62 | ) |   | $         | (0.63 | ) |   | $         | (0.63 | )
|                                                                           |                                                    |                                                            |           |       |                              |   |           |       |   |   |           |       |   |       |           |       |         |   |           |       |   |   |           |      



|         |                  
|-------- | -----------------
|Note 9  | Segment Reporting



12



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                 |  |                |         |  |           |   |        |           |  |       |            |  |  |            |        |   |  |   |         | 
|-------------------------------- |  | -------------- | ------- |  | --------- | - | ------ | --------- |  | ----- | ---------- |  |  | ---------- | ------ | - |  | - | ------- | 
|                                 |  |                |         |  |           |   |        |           |  | Total |           
|                                 |  |                |         |  |           |   |        | Corporate |  |       | Continuing | 
|                                 |  | MercFuel       |         |  | Air Cargo |   |        | Maytag    |  |       | and Other  |  |  | Operations |       
|                                 |  |                |         |  |           |   |        |           |  |       |            |  |  |            |       
|                                 |  | (In thousands) |        
|Quarter Ended March 31, 2005     |  |                |         |  |           |   |        |           |  |       |            |  |  |            |        |   |  |   |         | 
|Revenues                         |  | $              | 142,730 |  |           | $ | 10,000 |           |  | $     | 5,322      |  |  | $          | 207    |   |  | $ | 158,259 | 
|Gross margin                     |  |                | 2,410   |  |           |   | 589    |           |  |       | 1,303      |  |  |            | (116   | ) |  |   | 4,186   | 
|Depreciation and amortization    |  |                | 130     |  |           |   | 383    |           |  |       | 52         |  |  |            | 36     |   |  |   | 601     | 
|Capital expenditures             |  |                | 2       |  |           |   | 16     |           |  |       | 12         |  |  |            | 362    |   |  |   | 392     | 
|Goodwill                         |  |                |         |  |           |   | 1,274  |           |  |       | 3,137      |  |  |            |        |   |  |   | 4,411   | 
|Segment assets                   |  |                | 53,297  |  |           |   | 11,575 |           |  |       | 8,912      |  |  |            | 19,518 |   |  |   | 93,302  | 
|Quarter Ended March 31, 2004     |  |                |         |  |           |   |        |           |  |       |            |  |  |            |        |   |  |   |         | 
|Revenues                         |  | $              | 88,305  |  |           | $ | 9,729  |           |  | $     | 5,747      |  |  |            |        |   |  | $ | 103,781 | 
|Gross margin                     |  |                | 1,506   |  |           |   | 60     |           |  |       | 1,166      |  |  |            |        |   |  |   | 2,732   | 
|Depreciation and amortization    |  |                | 118     |  |           |   | 484    |           |  |       | 89         |  |  | $          | 52     |   |  |   | 743     | 
|Capital expenditures             |  |                | 6       |  |           |   | 9      |           |  |       | 37         |  |  |            | 7      |   |  |   | 59      | 
|Goodwill                         |  |                |         |  |           |   | 1,252  |           |  |       | 3,137      |  |  |            |        |   |  |   | 4,389   | 
|Segment assets                   |  |                | 36,899  |  |           |   | 16,458 |           |  |       | 10,337     |  |  |            | 20,717 |   |  |   | 84,411  | 
|Nine Months Ended March 31, 2005 |  |                |         |  |           |   |        |           |  |       |            |  |  |            |        |   |  |   |         | 
|Revenues                         |  | $              | 388,501 |  |           | $ | 32,578 |           |  | $     | 15,665     |  |  | $          | 538    |   |  | $ | 437,282 | 
|Gross margin                     |  |                | 6,601   |  |           |   | 3,348  |           |  |       | 3,832      |  |  |            | (440   | ) |  |   | 13,341  | 
|Depreciation and amortization    |  |                | 388     |  |           |   | 1,163  |           |  |       | 186        |  |  | $          | 118    |   |  |   | 1,855   | 
|Capital expenditures             |  |                | 979     |  |           |   | 96     |           |  |       | 13         |  |  |            | 429    |   |  |   | 1,517   | 
|Goodwill                         |  |                |         |  |           |   | 1,274  |           |  |       | 3,137      |  |  |            |        |   |  |   | 4,411   | 
|Segment assets                   |  |                | 53,297  |  |           |   | 11,575 |           |  |       | 8,912      |  |  |            | 19,518 |   |  |   | 93,302  | 
|Nine Months Ended March 31, 2004 |  |                |         |  |           |   |        |           |  |       |            |  |  |            |        |   |  |   |         | 
|Revenues                         |  | $              | 228,195 |  |           | $ | 29,306 |           |  | $     | 17,489     |  |  |            |        |   |  | $ | 274,990 | 
|Gross margin                     |  |                | 4,806   |  |           |   | 1,356  |           |  |       | 3,909      |  |  |            |        |   |  |   | 10,071  | 
|Depreciation and amortization    |  |                | 352     |  |           |   | 1,401  |           |  |       | 249        |  |  | $          | 167    |   |  |   | 2,169   | 
|Capital expenditures             |  |                | 645     |  |           |   | 47     |           |  |       | 143        |  |  |            | 28     |   |  |   | 863     | 
|Goodwill                         |  |                |         |  |           |   | 1,252  |           |  |       | 3,137      |  |  |            |        |   |  |   | 4,389   | 
|Segment assets                   |  |                | 36,899  |  |           |   | 16,458 |           |  |       | 10,337     |  |  |            | 20,717 |   |  |   | 84,411  | 



13



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##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|          |                            
|--------- | ---------------------------
|Note 10  | Comprehensive Income (Loss)



|                                        |  |                   |        |   |                    |   |        |      |  |   |        |   |  |   |        |  
|--------------------------------------- |  | ----------------- | ------ | - | ------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                        |  | Nine Months Ended |        |   | Three Months Ended |  
|                                        |  | March 31,         |        |   | March 31,          |  
|                                        |  |                   |        |   |                    |  
|                                        |  | 2005              |        |   | 2004               |   |        | 2005 |  |   | 2004   |  
|                                        |  |                   |        |   |                    |   |        |      |  |   |        |  
|                                        |  | (In thousands)    |       
|Net loss                                |  | $                 | (1,997 | ) |                    | $ | (3,638 | )    |  | $ | (1,871 | ) |  | $ | (1,819 | )
|Foreign currency translation adjustment |  |                   | 222    |   |                    |   | 92     |      |  |   | (17    | ) |  |   | (56    | )
|                                        |  |                   |        |   |                    |   |        |      |  |   |        |  
|Comprehensive loss                      |  | $                 | (1,775 | ) |                    | $ | (3,546 | )    |  | $ | (1,888 | ) |  | $ | (1,875 | )
|                                        |  |                   |        |   |                    |   |        |      |  |   |        |  



|          |                           
|--------- | --------------------------
|Note 11  | Related Party Transactions









14



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|          |                        
|--------- | -----------------------
|Note 12  | Discontinued Operations









15



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                               |  |                   |        |   |                    |   |        |  
|------------------------------ |  | ----------------- | ------ | - | ------------------ | - | ------ | -
|                               |  | Nine Months Ended |        |   | Three Months Ended |  
|                               |  |                   |        |   |                    |  
|                               |  | March 31, 2004    |       
|                               |  |                   |       
|                               |  | (In thousands)    |       
|Total sales and revenue        |  | $                 | 69,687 |   |                    | $ | 23,704 |  
|Gross margin                   |  | $                 | 8,392  |   |                    | $ | 2,104  |  
|Loss before income tax benefit |  | $                 | (1,402 | ) |                    | $ | (759   | )
|Income tax expense (benefit)   |  |                   | (359   | ) |                    | $ | (108   | )
|                               |  |                   |        |   |                    |  
|Net loss                       |  | $                 | (1,043 | ) |                    | $ | (651   | )
|                               |  |                   |        |   |                    |  



|          |              
|--------- | -------------
|Note 13  | Cash Dividend



Note 14  Purchase Commitments






|          |                  
|--------- | -----------------
|Note 15  | Subsequent Events





16



---



##### 



MERCURY AIR GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




th th


17



---



##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations











18



---



##### 













|                 |  |                             |         |            |                              |  |       |                  |            |   |          |  |  |            |       |   |          |   |            |        |  |  |          |   |  |   |         |  |  |  |       |  
|---------------- |  | --------------------------- | ------- | ---------- | ---------------------------- |  | ----- | ---------------- | ---------- | - | -------- |  |  | ---------- | ----- | - | -------- | - | ---------- | ------ |  |  | -------- | - |  | - | ------- |  |  |  | ----- | -
|                 |  | Nine Months Ended March 31, |         |            | Three Months Ended March 31, | 
|($ in thousands) |  |                             |         |            |                              | 
|                 |  | 2005                        |         |            | 2004                         |  |       | 2005             |            |   | 2004     | 
|                 |  |                             |         |            |                              |  |       |                  |            |   |          | 
|                 |  |                             |         | % of Total |                              |  |       |                  | % of Total |   |          |  |  | % of Total |       |   |          |   | % of Total |       
|                 |  | Amount                      |         |            | Revenues                     |  |       | Amount           |            |   | Revenues |  |  | Amount     |       |   | Revenues |   |            | Amount |  |  | Revenues |  
|                 |  |                             |         |            |                              |  |       |                  |            |   |          |  |  |            |       |   |          |   |            |        |  |  |          |  
|                 |  |                             |         |            |                              |  |       | ($ in thousands) |            |   |          |  |  |            |      
|Revenues:        |  |                             |         |            |                              |  |       |                  |            |   |          |  |  |            |       |   |          |   |            |        |  |  |          |   |  |   |         |  |  |  |       |  
|MercFuel         |  | $                           | 388,501 |            |                              |  | 88.8  | %                |            | $ | 228,195  |  |  |            | 83.0  | % |          | $ | 142,730    |        |  |  | 90.2     | % |  | $ | 88,305  |  |  |  | 85.1  | %
|Air Cargo        |  |                             | 32,578  |            |                              |  | 7.5   |                  |            |   | 29,306   |  |  |            | 10.6  |   |          |   | 10,000     |        |  |  | 6.3      |   |  |   | 9,729   |  |  |  | 9.4   |  
|Maytag           |  |                             | 15,665  |            |                              |  | 3.6   |                  |            |   | 17,489   |  |  |            | 6.4   |   |          |   | 5,322      |        |  |  | 3.4      |   |  |   | 5,747   |  |  |  | 5.5   |  
|Other            |  |                             | 538     |            |                              |  | 0.1   |                  |            |   |          |  |  |            |       |   |          |   | 207        |        |  |  | 0.1      |   |  |   |         |  |  |  |       |  
|                 |  |                             |         |            |                              |  |       |                  |            |   |          |  |  |            |       |   |          |   |            |        |  |  |          |  
|Total revenues   |  | $                           | 437,282 |            |                              |  | 100.0 | %                |            | $ | 274,990  |  |  |            | 100.0 | % |          | $ | 158,259    |        |  |  | 100.0    | % |  | $ | 103,781 |  |  |  | 100.0 | %
|                 |  |                             |         |            |                              |  |       |                  |            |   |          |  |  |            |       |   |          |   |            |        |  |  |          |  

|                   |  |        |        |           |          |  |       |        |           |   |          |  |  |           |      |   |          |   |           |        |  |  |          |   |  |   |       |  |  |  |      |  
|------------------ |  | ------ | ------ | --------- | -------- |  | ----- | ------ | --------- | - | -------- |  |  | --------- | ---- | - | -------- | - | --------- | ------ |  |  | -------- | - |  | - | ----- |  |  |  | ---- | -
|                   |  |        |        | % of Unit |          |  |       |        | % of Unit |   |          |  |  | % of Unit |      |   |          |   | % of Unit |       
|                   |  | Amount |        |           | Revenues |  |       | Amount |           |   | Revenues |  |  | Amount    |      |   | Revenues |   |           | Amount |  |  | Revenues |  
|                   |  |        |        |           |          |  |       |        |           |   |          |  |  |           |      |   |          |   |           |        |  |  |          |  
|Gross margin(1):   |  |        |        |           |          |  |       |        |           |   |          |  |  |           |      |   |          |   |           |        |  |  |          |   |  |   |       |  |  |  |      |  
|MercFuel           |  | $      | 6,601  |           |          |  | 1.7   | %      |           | $ | 4,806    |  |  |           | 2.1  | % |          | $ | 2,410     |        |  |  | 1.7      | % |  | $ | 1,506 |  |  |  | 1.7  | %
|Air Cargo          |  |        | 3,348  |           |          |  | 10.3  |        |           |   | 1,356    |  |  |           | 4.6  |   |          |   | 589       |        |  |  | 5.9      |   |  |   | 60    |  |  |  | 0.6  |  
|Maytag             |  |        | 3,832  |           |          |  | 24.5  |        |           |   | 3,909    |  |  |           | 22.4 |   |          |   | 1,303     |        |  |  | 24.5     |   |  |   | 1,166 |  |  |  | 20.3 |  
|Other              |  |        | (440   | )         |          |  | (81.8 | )      |           |   |          |  |  |           |      |   |          |   | (116      | )      |  |  | (56.0    | ) |  |   |       |  |  |  |      |  
|                   |  |        |        |           |          |  |       |        |           |   |          |  |  |           |      |   |          |   |           |        |  |  |          |  
|Total gross margin |  | $      | 13,341 |           |          |  | 3.1   | %      |           | $ | 10,071   |  |  |           | 3.7  | % |          | $ | 4,186     |        |  |  | 2.6      | % |  | $ | 2,732 |  |  |  | 2.6  | %
|                   |  |        |        |           |          |  |       |        |           |   |          |  |  |           |      |   |          |   |           |        |  |  |          |  

19



---



##### 



|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |    |  |   |        |   |  |  |      |   
|----------------------------------------------------------------------------------- |  | --------------------------- | ------ | ---------- | ---------------------------- |  | ---- | ------ | ---------- | - | -------- | - |  | ---------- | ---- | -- | -------- | - | ---------- | ------ |  |  | -------- | -- |  | - | ------ | - |  |  | ---- | --
|                                                                                    |  | Nine Months Ended March 31, |        |            | Three Months Ended March 31, | 
|                                                                                    |  |                             |        |            |                              | 
|                                                                                    |  | 2005                        |        |            | 2004                         |  |      | 2005   |            |   | 2004     |  
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |  
|                                                                                    |  |                             |        | % of Total |                              |  |      |        | % of Total |   |          |   |  | % of Total |      |    |          |   | % of Total |       
|                                                                                    |  | Amount                      |        |            | Revenues                     |  |      | Amount |            |   | Revenues |   |  | Amount     |      |    | Revenues |   |            | Amount |  |  | Revenues |   
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   
|Expenses (Income):                                                                  |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |    |  |   |        |   |  |  |      |   
|Selling, general and administrative expenses                                        |  | $                           | 11,736 |            |                              |  | 2.7  | %      |            | $ | 7,838    |   |  |            | 2.9  | %  |          | $ | 4,708      |        |  |  | 3.0      | %  |  | $ | 2,798  |   |  |  | 2.7  | % 
|Provision for bad debts                                                             |  |                             | 1,514  |            |                              |  | 0.4  |        |            |   | 305      |   |  |            | 0.1  |    |          |   | 1,150      |        |  |  | 0.7      |    |  |   | 329    |   |  |  | 0.3  |   
|Depreciation and amortization                                                       |  |                             | 1,855  |            |                              |  | 0.4  |        |            |   | 2,169    |   |  |            | 0.8  |    |          |   | 601        |        |  |  | 0.4      |    |  |   | 743    |   |  |  | 0.7  |   
|Interest expense and other                                                          |  |                             | 751    |            |                              |  | 0.2  |        |            |   | 512      |   |  |            | 0.2  |    |          |   | 221        |        |  |  | 0.1      |    |  |   | 226    |   |  |  | 0.2  |   
|Hambro settlement costs                                                             |  |                             |        |            |                              |  |      |        |            |   | 1,799    |   |  |            | 0.6  |    |          |   |            |        |  |  |          |    |  |   |        |   |  |  |      |   
|Asset impairment loss                                                               |  |                             | 626    |            |                              |  | 0.1  |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |    |  |   |        |   |  |  |      |   
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   
|Total expenses (income)                                                             |  |                             | 16,482 |            |                              |  | 3.8  |        |            |   | 12,623   |   |  |            | 4.6  |    |          |   | 6,680      |        |  |  | 4.2      |    |  |   | 4,096  |   |  |  | 3.9  |   
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   
|Loss from continuing operations before minority interest and
    income tax expense |  |                             | (3,141 | )          |                              |  | (0.7 | )      |            |   | (2,552   | ) |  |            | (0.9 | )  |          |   | (2,494     | )      |  |  | (1.6     | )  |  |   | (1,364 | ) |  |  | (1.3 | ) 
|Minority interest                                                                   |  |                             | 406    |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   | (68        | )      |  |  |          |    |  |   |        |   |  |  |      |   
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   
|Loss from continuing operations before income tax benefit                           |  |                             | (2,735 | )          |                              |  | (0.7 | )      |            |   | (2,552   | ) |  |            | (0.9 | )  |          |   | (2,562     | )      |  |  | (1.6     | )  |  |   | (1,364 | ) |  |  | (1.3 | ) 
|Income tax benefit                                                                  |  |                             | (716   | )          |                              |  | (0.2 | )      |            |   | 43       |   |  |            | (0.0 | )  |          |   | (691       | )      |  |  | (0.4     | )  |  |   | (196   | ) |  |  | (0.2 | ) 
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   
|Loss from continuing operations                                                     |  |                             | (2,019 | )          |                              |  | (0.5 | )      |            |   | (2,595   | ) |  |            | (0.9 | )  |          |   | (1,871     | )      |  |  | (1.2     | )  |  |   | (1,168 | ) |  |  | (1.1 | ) 
|Loss from discontinued operations, net of taxes                                     |  |                             |        |            |                              |  |      |        |            |   | (1,043   | ) |  |            | (0.4 | )  |          |   |            |        |  |  |          |    |  |   | (651   | ) |  |  | (0.7 | ) 
|Gain on sale of discontinued operations, net of taxes                               |  |                             | 22     |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |    |  |   |        |   |  |  |      |   
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   
|Net loss                                                                            |  | $                           | (1,997 | )          |                              |  | (0.5 | )%     |            | $ | (3,638   | ) |  |            | (1.3 | )% |          | $ | (1,871     | )      |  |  | (1.2     | )% |  | $ | (1,819 | ) |  |  | (1.8 | )%
|                                                                                    |  |                             |        |            |                              |  |      |        |            |   |          |   |  |            |      |    |          |   |            |        |  |  |          |   






|    |                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Gross margin as used here and throughout Managements
    Discussion includes certain selling, general and administrative
    costs which are charged directly to the operating units, but
    excludes depreciation and amortization expenses and selling,
    general and administrative expenses.

Three Months Ended March 31, 2005 Compared to
March 31, 2004




20



---



##### 







|                                   |                           |                    |   |         |      |  |   |        | 
|---------------------------------- | ------------------------- | ------------------ | - | ------- | ---- |  | - | ------ | 
|                                   |                           | Three Months Ended |  
|                                   |                           | March 31,          |  
|                                   |                           |                    |  
|                                   |                           | 2005               |   |         | 2004 | 
|                                   |                           |                    |   |         |      | 
|Commercial Sales                   |                           |                    |   |         |      |  |   |       
|                                   | Revenue ($000)            |                    | $ | 106,143 |      |  | $ | 66,871 | 
|                                   | Volume (thousand gallons) |                    |   | 70,134  |      |  |   | 60,643 | 
|Corporate Aviation/ Fractional Jet |                           |                    |   |         |      |  |   |       
|                                   | Revenue ($000)            |                    | $ | 36,587  |      |  | $ | 21,434 | 
|                                   | Volume (thousand gallons) |                    |   | 14,488  |      |  |   | 11,750 | 
|MercFuel Total                     |                           |                    |   |         |      |  |   |       
|                                   | Revenue ($000)            |                    | $ | 142,730 |      |  | $ | 88,305 | 
|                                   | Volume (thousand gallons) |                    |   | 84,622  |      |  |   | 72,393 | 
|                                   | Gross margin ($000)       |                    | $ | 2,410   |      |  | $ | 1,506  | 







21



---



##### 





|                    |                                    |                    |   |       |        |  |   |       |       | 
|------------------- | ---------------------------------- | ------------------ | - | ----- | ------ |  | - | ----- | ----- | 
|                    |                                    | Three Months Ended |  
|                    |                                    | March 31,          |  
|                    |                                    |                    |  
|                    |                                    | 2005               |   |       | 2004   | 
|                    |                                    |                    |   |       |        | 
|Revenue ($000)      |                                    |                    |   |       |        |  |   |      
|                    | Cargo handling                     |                    | $ | 6,895 |        |  | $ | 6,124 |      
|                    | Cargo logistics services           |                    |   | 1,863 |        |  |   | 2,470 |      
|                    | Cargo general sales agent services |                    |   | 1,242 |        |  |   | 1,135 |      
|                    |                                    |                    |   |       |        | 
|                    |                                    | Air Cargo total    |   | $     | 10,000 |  |   | $     | 9,729 | 
|                    |                                    |                    |   |       |        | 
|Gross margin ($000) |                                    |                    |   |       |        |  |   |      
|                    | Cargo handling                     |                    | $ | 522   |        |  | $ | 63    |      
|                    | Cargo logistics services           |                    |   | 464   |        |  |   | 489   |      
|                    | Cargo general sales agent services |                    |   | 39    |        |  |   | (73   | )    
|                    | Cargo administrative               |                    |   | (436  | )      |  |   | (419  | )    
|                    |                                    |                    |   |       |        | 
|                    |                                    | Air Cargo total    |   | $     | 589    |  |   | $     | 60    | 
|                    |                                    |                    |   |       |        | 











22



---



##### 





|               |              |                    |   |       |       |  |   |       |       | 
|-------------- | ------------ | ------------------ | - | ----- | ----- |  | - | ----- | ----- | 
|               |              | Three Months Ended |  
|               |              | March 31,          |  
|               |              |                    |  
|               |              | 2005               |   |       | 2004  | 
|               |              |                    |   |       |       | 
|Revenue ($000) |              |                    |   |       |       |  |   |      
|               | Refueling    |                    | $ | 1,555 |       |  | $ | 2,056 |      
|               | Air Terminal |                    |   | 2,402 |       |  |   | 1,906 |      
|               | BOS          |                    |   | 1,066 |       |  |   | 1,495 |      
|               | Weather Data |                    |   | 293   |       |  |   | 281   |      
|               | Other        |                    |   | 6     |       |  |   | 9     |      
|               |              |                    |   |       |       | 
|               |              | Total Maytag       |   | $     | 5,322 |  |   | $     | 5,747 | 
|               |              |                    |   |       |       | 















Nine Months Ended March 31, 2005 Compared to
March 31, 2004




23



---



##### 







|                                   |                           |                   |   |         |      |  |   |         | 
|---------------------------------- | ------------------------- | ----------------- | - | ------- | ---- |  | - | ------- | 
|                                   |                           | Nine Months Ended |  
|                                   |                           | March 31,         |  
|                                   |                           |                   |  
|                                   |                           | 2005              |   |         | 2004 | 
|                                   |                           |                   |   |         |      | 
|Commercial Sales                   |                           |                   |   |         |      |  |   |        
|                                   | Revenue ($000)            |                   | $ | 296,721 |      |  | $ | 179,427 | 
|                                   | Volume (thousand gallons) |                   |   | 202,486 |      |  |   | 178,971 | 
|Corporate Aviation/ Fractional Jet |                           |                   |   |         |      |  |   |        
|                                   | Revenue ($000)            |                   | $ | 91,780  |      |  | $ | 48,768  | 
|                                   | Volume (thousand gallons) |                   |   | 38,715  |      |  |   | 28,536  | 
|MercFuel Total                     |                           |                   |   |         |      |  |   |        
|                                   | Revenue ($000)            |                   | $ | 388,501 |      |  | $ | 228,195 | 
|                                   | Volume (thousand gallons) |                   |   | 241,201 |      |  |   | 207,507 | 
|                                   | Gross margin ($000)       |                   | $ | 6,601   |      |  | $ | 4,806   | 





24



---



##### 









|                    |                                    |                   |   |        |        |  |   |        |        | 
|------------------- | ---------------------------------- | ----------------- | - | ------ | ------ |  | - | ------ | ------ | 
|                    |                                    | Nine Months Ended |  
|                    |                                    | March 31,         |  
|                    |                                    |                   |  
|                    |                                    | 2005              |   |        | 2004   | 
|                    |                                    |                   |   |        |        | 
|Revenue ($000)      |                                    |                   |   |        |        |  |   |       
|                    | Cargo handling                     |                   | $ | 21,711 |        |  | $ | 19,252 |       
|                    | Cargo logistics services           |                   |   | 7,210  |        |  |   | 6,631  |       
|                    | Cargo general sales agent services |                   |   | 3,657  |        |  |   | 3,423  |       
|                    |                                    |                   |   |        |        | 
|                    |                                    | Air Cargo total   |   | $      | 32,578 |  |   | $      | 29,306 | 
|                    |                                    |                   |   |        |        | 
|Gross margin ($000) |                                    |                   |   |        |        |  |   |       
|                    | Cargo handling                     |                   | $ | 2,635  |        |  | $ | 1,526  |       
|                    | Cargo logistics services           |                   |   | 1,794  |        |  |   | 1,362  |       
|                    | Cargo general sales agent services |                   |   | 158    |        |  |   | (157   | )     
|                    | Cargo administrative               |                   |   | (1,239 | )      |  |   | (1,375 | )     
|                    |                                    |                   |   |        |        | 
|                    |                                    | Air Cargo total   |   | $      | 3,348  |  |   | $      | 1,356  | 
|                    |                                    |                   |   |        |        | 







25



---



##### 







|               |              |                   |   |       |        |  |   |       |        | 
|-------------- | ------------ | ----------------- | - | ----- | ------ |  | - | ----- | ------ | 
|               |              | Nine Months Ended |  
|               |              | December 31,      |  
|               |              |                   |  
|               |              | 2005              |   |       | 2004   | 
|               |              |                   |   |       |        | 
|Revenue ($000) |              |                   |   |       |        |  |   |      
|               | Refueling    |                   | $ | 5,033 |        |  | $ | 6,352 |       
|               | Air Terminal |                   |   | 6,177 |        |  |   | 5,773 |       
|               | BOS          |                   |   | 3,554 |        |  |   | 4,479 |       
|               | Weather Data |                   |   | 881   |        |  |   | 855   |       
|               | Other        |                   |   | 20    |        |  |   | 30    |       
|               |              |                   |   |       |        | 
|               |              | Total Maytag      |   | $     | 15,665 |  |   | $     | 17,489 | 
|               |              |                   |   |       |        | 















26



---



##### 











Liquidity and Capital Resources












27



---



##### 











Critical Accounting Policies






|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk





|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures




28



---



##### 





Changes in Internal Control over Financial Reporting







PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings











29



---



##### 















|        |                                                                
|------- | ---------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity Securities and Use of
    Proceeds

(a) None


(b) None


30



---



##### 



(c) Issuer Purchases of Equity Securities:


|                                               |  |            |       |  |                |   |                     |                        |  |                    |                       |  |  |  |     | 
|---------------------------------------------- |  | ---------- | ----- |  | -------------- | - | ------------------- | ---------------------- |  | ------------------ | --------------------- |  |  |  | --- | 
|                                               |  |            |       |  |                |   |                     | (d) Maximum Number (or | 
|                                               |  | (a) Total  |       |  |                |   | (c) Total Number of |                        |  | Approximate Dollar |                      
|                                               |  | Number of  |       |  | (b) Average    |   |                     | Shares (or Units)      |  |                    | Value) of Shares (or  | 
|                                               |  | Shares     |       |  | Price          |   |                     | Purchased as Part of   |  |                    | Units) that May Yet   | 
|                                               |  | (or Units) |       |  | Paid per Share |   |                     | Publicly Announced     |  |                    | be Purchased Under    | 
|Period                                         |  | Purchased  |       |  | (or Unit)      |   |                     | Plans or Programs      |  |                    | the Plans or Programs | 
|                                               |  |            |       |  |                |   |                     |                        |  |                    |                       | 
|Month #1 January 1, 2005 to January 31, 2005   |  |            | 3,750 |  |                |   | 4.90                |                        |  |                    | N/A                   |  |  |  | N/A | 
|Month #2 February 1, 2005 to February 28, 2005 |  |            | 0     |  |                |   | N/A                 |                        |  |                    | N/A                   |  |  |  | N/A | 
|Month #3 March 1, 2005 to March 31, 2005       |  |            |       |  |                |   |                     |                        |  |                    | N/A                   |  |  |  | N/A | 
|                                               |  |            |       |  |                |   |                     |                        |  |                    |                       | 
|Total                                          |  |            | 3,750 |  |                | $ | 4.90                |                        |  |                    |                       |  |  |  |     | 
|                                               |  |            |       |  |                |   |                     |                        |  |                    |                       | 





|        |                               
|------- | ------------------------------
|Item 3. | Default Upon Senior Securities





|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders





|                    |  |     |           |  |          |  |        | 
|------------------- |  | --- | --------- |  | -------- |  | ------ | 
|Name                |  | For |           |  | Withheld | 
|                    |  |     |           |  |          | 
|Joseph A. Czyzyk    |  |     | 2,620,224 |  |          |  | 61,090 | 
|Frederick H. Kopko  |  |     | 2,646,702 |  |          |  | 34,612 | 
|Gary J. Feracota    |  |     | 2,646,951 |  |          |  | 34,363 | 
|Michael J. Janowiak |  |     | 2,651,143 |  |          |  | 30,171 | 
|Angelo Pusateri     |  |     | 2,646,951 |  |          |  | 34,363 | 

31



---



##### 





|        |                  
|------- | -----------------
|Item 5. | Other Information



|        |         
|------- | --------
|Item 6. | Exhibits

|        |   |             |  |                                                                                                                                                                                                                                                                                                                                          
|------- | - | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|No.     |   | Description
|        |   |            
|        | 2 | .1          |  | Stock Purchase Agreement Dated as of October 28, 2003. By
    and Among Allied Capital Corporation, Mercury Air Centers, Inc.
    and Mercury Air Group, Inc.(28)                                                                                                                                                                        
|       
|        | 2 | .2          |  | Amendment to Stock Purchase Agreement by and Among Allied
    Capital Corporation, Mercury Air Centers, Inc. and Mercury Air
    Group, Inc. dated as of December 10, 2003.(31)                                                                                                                                                          
|       
|        | 2 | .3          |  | Amendment to Stock Purchase Agreement by and Among Allied
    Capital Corporation, Mercury Air Centers, Inc. and Mercury Air
    Group, Inc. dated as of January 14, 2004.(31)                                                                                                                                                           
|       
|        | 2 | .4          |  | Amendment to Stock Purchase Agreement by and Among Allied
    Capital Corporation, Mercury Air Centers, Inc. and Mercury Air
    Group, Inc. dated as of February 13, 2004. (32)                                                                                                                                                         
|       
|        | 2 | .5          |  | Settlement Statement dated as of April 12, 2004.(33)                                                                                                                                                                                                                                                                                     
|       
|        | 2 | .6          |  | Closing Escrow Agreement dated as of April 5, 2004 among
    Allied and Wachovia Bank National, as escrow agent. (33)                                                                                                                                                                                                                    
|       
|        | 3 | .1          |  | Certificate of Incorporation.(17)                                                                                                                                                                                                                                                                                                        
|       
|        | 3 | .2          |  | Amended and Restated Bylaws of Mercury Air Group, Inc. adopted
    December 7, 2002.(25)                                                                                                                                                                                                                                                 
|       
|        | 3 | .3          |  | Certificate of Designations of Series A 8% Cumulative
    Convertible Preferred Stock.(27)                                                                                                                                                                                                                                               
|       
|        | 4 | .1          |  | Loan Agreement between California Economic Development Financing
    Authority and Mercury Air Group, Inc. relating to $19,000,000
    California Economic Development Financing Authority Variable
    Rate Demand Airport Facilities Revenue Bonds, Series 1998
    (Mercury Air Group, Inc. Project) dated as of April 1,
    1998.(2)
|       
|        | 4 | .2          |  | Securities Purchase Agreement dated September 10, 1999 by
    and among Mercury Air Group, Inc. and J.H. Whitney Mezzanine
    Fund, L.P.(12)                                                                                                                                                                                            
|       
|        | 4 | .3          |  | Amendment No. 1 dated as of September 30, 2000 by and
    between J.H. Whitney Mezzanine, L.P. and Mercury Air Group, Inc.
    to the Securities Agreement.(16)                                                                                                                                                                          
|       
|        | 4 | .4          |  | Waiver and Consent Agreement dated as of December 29, 2000
    among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund,
    L.P.(17)                                                                                                                                                                                               
|       
|        | 4 | .5          |  | Waiver and Consent Agreement dated as of July 2, 2001 among
    Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P.(18)                                                                                                                                                                                                        
|       
|        | 4 | .6          |  | Waiver Agreement dated as of September 25, 2001 among
    Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P.(18)                                                                                                                                                                                                              
|       
|        | 4 | .7          |  | Amendment No. 2 dated as of September 30, 2001 by and
    between J.H. Whitney Mezzanine Fund, L.P. and Mercury Air Group,
    Inc. to the Securities Purchase Agreement.(19)                                                                                                                                                            
|       
|        | 4 | .8          |  | Waiver Agreement dated as of November 26, 2001 among
    Mercury Air Group, Inc. and J.H. Whitney Mezzanine, L.P.(21)                                                                                                                                                                                                                    
|       
|        | 4 | .9          |  | Waiver Agreement dated as of December 21, 2001 among
    Mercury Air Group, Inc. and J.H. Whitney Mezzanine, L.P.(21)                                                                                                                                                                                                                    
|       
|        | 4 | .10         |  | Waiver Agreement dated as of June 26, 2002 among Mercury
    Air Group, Inc. and J.H. Whitney Mezzanine, L.P.(24)                                                                                                                                                                                                                        
|       
|        | 4 | .11         |  | Amendment No. 3 to Securities Purchase Agreement by and
    between Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund,
    L.P. dated as of December 30, 2002.(26)                                                                                                                                                                 
|       
|        | 4 | .12         |  | Amended and Restated J.H. Whitney Mezzanine Fund, L.P. Warrant
    dated September 10, 1999.(26)                                                                                                                                                                                                                                         
|       
|        | 4 | .13         |  | Amended and Restated J.H. Whitney Mezzanine Fund, L.P. Senior
    Subordinated Promissory Note dated September 10, 1999.(26)                                                                                                                                                                                                             
|       
|        | 4 | .14         |  | Security Agreement by and between Mercury Air Group, Inc. and
    each of its subsidiaries hereto as Obligors and J.H. Whitney
    Mezzanine Fund, L.P. as the Lenders, dated as of
    December 30, 2002.(26)                                                                                                                           

32



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                     
|------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 4  | .15         |  | Subordination Agreement among J.H. Whitney Mezzanine Fund, L.P.
    Foothill Capital Corporation, as Agent and Mercury Air Group,
    Inc. and certain of its subsidiaries signatory thereto, dated as
    of December 30, 2002.(26)
|       
|        | 4  | .16         |  | Loan and Security Agreement by and among Foothill Capital
    Corporation and Mercury Air Group, Inc. and certain subsidiaries
    signatory thereto, dated as of December 30, 2002.(26)                                            
|       
|        | 4  | .17         |  | First Amendment to Loan and Security Agreement by and among
    Foothill Capital Corporation and Mercury Air Group, Inc. and
    certain of its subsidiaries, dated March 12, 2003.(30)                                             
|       
|        | 4  | .18         |  | Second Amendment to Loan and Security Agreement by and among
    Foothill Capital Corporation and Mercury Air Group, Inc. and
    certain of its subsidiaries, dated March 31, 2003.(30)                                            
|       
|        | 4  | .19         |  | Third Amendment to Loan and Security Agreement by and among
    Foothill Capital Corporation and Mercury Air Group, Inc. and
    certain of its subsidiaries, dated July 16, 2003.(30)                                              
|       
|        | 4  | .20         |  | Fourth Amendment to Loan and Security Agreement by and among
    Foothill Capital Corporation and Mercury Air Group, Inc. and
    certain of its subsidiaries, dated August 1, 2003.(30)                                            
|       
|        | 4  | .21         |  | Amendment No. 4 to Securities Purchase Agreement by and
    between Mercury Air Group, Inc. and Allied Capital Corporation,
    as Assignee of J.H. Whitney Mezzanine Fund, L.P. dated as of
    October 28, 2003(28)               
|       
|        | 4  | .22         |  | Assignment of Note dated as of October 28, 2003 between
    Allied Capital Corporation and J.H. Whitney Mezzanine Fund,
    L.P.(28)                                                                                                
|       
|        | 4  | .23         |  | Second Amended and Restated Allied Capital Corporation
    12% Senior Subordinated Promissory Note dated
    September 10, 1999(28)                                                                                                 
|       
|        | 4  | .24         |  | Second Amended and Restated Allied Capital Corporation Warrant
    dated October 28, 2003(28)                                                                                                                                       
|       
|        | 4  | .25         |  | Securities Purchase Agreement dated as of October 28, 2003
    by and among J.H. Whitney Mezzanine Fund, L.P. and J.H. Whitney
    Mezzanine Debt Fund, L.P., Allied Capital Corporation and
    Mercury Air Group, Inc.(28)        
|       
|        | 4  | .26         |  | Second Amended and Restated J.H. Whitney Mezzanine Fund, L.P.
    Warrant dated October 28, 2003(28)                                                                                                                                
|       
|        | 4  | .27         |  | Fifth Amendment to Security and Loan Agreement and Forbearance
    Agreement dated as of December 5, 2003 by and among Wells
    Fargo Foothill, Mercury Air Group, Inc. and certain of its
    subsidiaries.(31)                   
|       
|        | 4  | .28         |  | Amendment letter to Forbearance Term and New Covenant Default
    dated as of February 16, 2004. (32)                                                                                                                               
|       
|        | 10 | .1          |  | Mercury Air Group, Inc.s 1990 Long-Term Incentive Plan.(4)*                                                                                                                                                                        
|       
|        | 10 | .2          |  | Mercury Air Group, Inc.s 1990 Directors Stock Option
    Plan.(1)*                                                                                                                                                                 
|       
|        | 10 | .3          |  | Memorandum Dated September 15, 1997 regarding Summary of
    Officer Life Insurance Policies with Benefits Payable to
    Officers or Their Designated Beneficiaries.(8)*                                                           
|       
|        | 10 | .4          |  | Non-Qualified Stock Option Agreement dated March 21, 1996,
    by and between Frederick H. Kopko and Mercury Air Group, Inc.(6)*                                                                                                    
|       
|        | 10 | .5          |  | Mercury Air Group, Inc.s 1998 Long-Term Incentive
    Plan.(10)*                                                                                                                                                                   
|       
|        | 10 | .6          |  | Mercury Air Group, Inc.s 1998 Directors Stock Option
    Plan.(10)*                                                                                                                                                                
|       
|        | 10 | .7          |  | Revolving Credit and Term Loan Agreement dated as of
    March 2, 1999 by and among Mercury Air Group, Inc., The
    Banks listed on Schedule 1 thereto, and The Fleet National
    Bank f/k/a BankBoston, N.A., as Agent.(11)      
|       
|        | 10 | .8          |  | First Amendment to Revolving Credit and Term Loan Agreement
    dated as of September 10, 1999.(14)                                                                                                                                 
|       
|        | 10 | .9          |  | Second Amendment to Revolving Credit and Term Loan Agreement
    dated as of March 31, 2000.(14)                                                                                                                                    
|       
|        | 10 | .10         |  | Third Amendment, Waiver and Consent to Revolving Credit and Term
    Loan Agreement dated as of August 11, 2000.(14)                                                                                                                

33



---



##### 



|        |    |             |  |                                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .11         |  | The Companys 401(k) Plan consisting of CNA Trust
    Corporation. Regional Prototype Defined Contribution Plan and
    Trust and Adoption Agreement.(14)*                                                                                                                              
|       
|        | 10 | .12         |  | Employment Agreement dated July 31, 2000 between the
    Company and Dr. Philip J. Fagan.(15)*                                                                                                                                                                                          
|       
|        | 10 | .13         |  | Fourth Amendment to Revolving Credit and Term Loan Agreement
    dated as of November 14, 2000.(16)                                                                                                                                                                                     
|       
|        | 10 | .14         |  | Amendment No. 1 to Mercury Air Group, Inc. 1998 Long-Term
    Incentive Option Plan as of August 22, 2000.(16)*                                                                                                                                                                         
|       
|        | 10 | .15         |  | Amendment No. 1 to Mercury Air Group, Inc.
    1998 Directors Stock Option Plan as of August 22,
    2000.(16)*                                                                                                                                                                         
|       
|        | 10 | .16         |  | Limited Waiver letter Agreement to Revolving Credit and Term
    Loan Agreement dated as of September 21, 2001.(18)                                                                                                                                                                     
|       
|        | 10 | .17         |  | Fifth Amendment to Revolving Credit and Term loan Agreement
    dated as of September 21, 2001.(18)                                                                                                                                                                                     
|       
|        | 10 | .18         |  | Limited Consent letter Agreement to Revolving Credit and Term
    Loan Agreement dated as of September 30, 2001.(19)                                                                                                                                                                    
|       
|        | 10 | .19         |  | Limited waiver and Consent to Revolving Credit and Term Loan
    Agreement dated as of December 31, 2001.(21)                                                                                                                                                                           
|       
|        | 10 | .20         |  | 2002 Management Stock Purchase Plan.(22)                                                                                                                                                                                                                                                
|       
|        | 10 | .21         |  | Amended and Restated Employment Agreement dated May 22,
    2002 between Mercury Air Group, Inc. and Joseph A. Czyzyk.(22)*                                                                                                                                                             
|       
|        | 10 | .22         |  | Employment Agreement dated May 22, 2002 between Mercury Air
    Group, Inc. and Wayne J. Lovett.(22)*                                                                                                                                                                                   
|       
|        | 10 | .23         |  | Employment Agreement dated May 22, 2002 between Mercury Air
    Group, Inc. and John Enticknap. (22)*                                                                                                                                                                                   
|       
|        | 10 | .24         |  | Employment Agreement dated May 22, 2002 between Mercury Air
    Group, Inc. and Mark Coleman.(22)*                                                                                                                                                                                      
|       
|        | 10 | .25         |  | Employment Agreement dated May 22, 2002 between Mercury Air
    Group, Inc. and Steven S. Antonoff. (22)*                                                                                                                                                                               
|       
|        | 10 | .26         |  | Employment Agreement dated May 22, 2002 between Mercury Air
    Group, Inc. and Robert Schlax.(22)*                                                                                                                                                                                     
|       
|        | 10 | .27         |  | Limited waiver and Consent to Revolving Credit and Term Loan
    Agreement dated as of June 27, 2002.(24)                                                                                                                                                                               
|       
|        | 10 | .28         |  | Sale-Leaseback agreement made by and between CFK Realty
    Partners, LLC and Mercury Air Group, Inc. dated
    December 15, 2001.(24)                                                                                                                                                  
|       
|        | 10 | .29         |  | Amendment to Sale-Leaseback agreement made by and between CFK
    Realty Partners, LLC and Mercury Air Group, Inc.(24)                                                                                                                                                                  
|       
|        | 10 | .30         |  | Promissory Note dated July 1, 2004 by CFK Realty Partners,
    LLC in favor of Mercury Air Group, Inc. (24)                                                                                                                                                                             
|       
|        | 10 | .31         |  | Limited Waiver and Consent to Revolving Credit and Term Loan
    Agreement dated as June 27, 2002.(24)                                                                                                                                                                                  
|       
|        | 10 | .32         |  | Amendment No. 1 to Amended and Restated Employment
    Agreement dated May 22, 2002 between Mercury Air Group,
    Inc. and Joseph A. Czyzyk.*(24)                                                                                                                                      
|       
|        | 10 | .34         |  | Settlement Agreement dated December 12, 2003 by and
    among(i) J O Hambro Capital Management Group Limited,
    (ii) J O Hambro Capital Management Limited,
    (iii) American Opportunity Trust PLC, (iv) The
    Trident North Atlantic Fund, and(v) Mercury Air Group,
    Inc.(29)
|       
|        | 10 | .35         |  | Settlement Agreement by and between: 1) David H. Murdock as
    trustee of the David H. Murdock Living Trust dated May 28,
    1996, as amended, d/b/a Pacific Holding Company and using
    nominee PCS001 and 2) Mercury Air Group, Inc. dated
    July 16, 2004.(34)                 

34



---



##### 



|        |    |             |  |                                                                                                                                                                                  
|------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No.     |    | Description
|        |    |            
|       
|        | 10 | .36         |  | Loan Agreement dated as of July 29, 2004 by and among Bank
    of America N.A., Mercury Air Group, Inc. and certain
    subsidiaries.(35)                                        
|       
|        | 10 | .37         |  | First Amendment to Loan Agreement by and among Bank of America,
    N.A., Mercury Air Group, Inc. and certain subsidiaries.(37)                                                  
|       
|        | 10 | .38         |  | Letter of Credit and Reimbursement Agreement as of
    November 1, 2004 between Mercury Air Group, Inc. and Bank
    of America.(38)                                             
|       
|        | 10 | .39         |  | Amended and Restated Lease entered into as of November 10,
    2004 and effective as of July 1, 2004 by and between CFK
    Realty Partners, LLC. and Mercury Air Group, Inc.(39)
|       
|        | 10 | .40         |  | Amendment No. 2 to Amended and Restated Employment
    Agreement by and between Mercury Air Group, Inc. and Joseph A.
    Czyzyk.*(39)                                           
|       
|        | 10 | .41         |  | Agreement entered into on November 10, 2004 and effective
    on October 28, 2004 by and between Mercury Air Group, Inc.
    and Dr. Philip J. Fagan.(39)                        
|       
|        | 10 | .42         |  | Severance Agreement and General and Special Release between
    Mercury Air Group, Inc., and Robert Schlax entered into on
    January 17, 2005.(40)                             
|       
|        | 10 | .43         |  | Second Amendment to Loan Agreement dated January 31, 2005
    by and among Bank of America, N.A., Mercury Air Group, Inc. and
    certain subsidiaries.(41)                      
|       
|        | 10 | .44         |  | Third Amendment to Loan Agreement dated April 6, 2005 by
    and among Bank of America, N.A., Mercury Air Group, Inc. and
    certain subsidiaries.(42)                          
|       
|        | 31 | .1          |  | Section 302 Certification of Chief Executive Officer                                                                                                                             
|       
|        | 31 | .2          |  | Section 302 Certification of Chief Financial Officer                                                                                                                             
|       
|        | 32 | .1          |  | Section 906 Certification of Chief Executive Officer                                                                                                                             
|       
|        | 32 | .2          |  | Section 906 Certification of Chief Financial Officer                                                                                                                             
|       
|        | 99 | .1          |  | Amended and Restated Partnership Agreement dated as of
    July 30, 2004 of CK Partners by and among Frederick H.
    Kopko, Jr. and Joseph A. Czyzyk.(36)                       






| |   |                                                                       
| | - | ----------------------------------------------------------------------
| | * | Denotes managements contract or compensation plan or
    arrangement.



| |     |                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Such document was previously filed as Appendix A to the
    Companys Proxy Statement for the December 10, 1993
    Annual Meeting of Stockholders and is incorporated herein by
    reference.
|
| | (2) | All such documents were previously filed as Exhibits to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 1998 and are incorporated herein by
    reference. 
|
| | (3) | All such documents were previously filed as Exhibits to the
    Companys Registration Statement No. 33-39044 on
    Form S-2 and are incorporated herein by reference.                        
|
| | (4) | Such document was previously filed as Appendix A to the
    Companys Proxy Statement for the December 2, 1992
    Annual Meeting of Stockholders.                                             
|
| | (5) | All such documents were previously filed as Exhibits to the
    Companys Registration Statement No. 33-65085 on
    Form S-1 and are incorporated herein by reference.                        
|
| | (6) | All such documents were previously filed as Exhibits to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 1996 and are incorporated herein by
    reference. 
|
| | (7) | All such documents were previously filed as Exhibits to the
    Companys Report on Form 8-K filed September 13,
    1996 and are incorporated herein by reference.                            
|
| | (8) | Such document was previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 1997 and is incorporated herein by reference.                 
|
| | (9) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 1998 and are incorporated herein by
    reference.      



|     |                                                                                                                                                                                               
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Such document was previously filed as Appendix A to the
    Companys Proxy Statement for the December 3, 1998
    Annual Meeting of Stockholders and is incorporated herein by
    reference.

35



---



##### 





|     |                                                                                                                                                                                                     
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 1999 and are incorporated herein by
    reference.    
|    
|(12) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 1999 and are incorporated herein by
    reference.           
|    
|(13) | Such document was previously filed as an Exhibit to the
    Companys current Report on Form 8-K on
    August 11, 2000 and is incorporated herein by reference.                                    
|    
|(14) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 2000 and is incorporated herein by reference.                
|    
|(15) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2000 and are incorporated
    herein by reference.
|    
|(16) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended December 31, 2000 and are incorporated herein
    by reference. 
|    
|(17) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2001 and are incorporated herein by
    reference.    
|    
|(18) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 2001 and are incorporated herein by
    reference.           
|    
|(19) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2001 and are incorporated
    herein by reference.
|    
|(20) | Such document was previously filed as Appendix A to the
    Companys Proxy Statement for the November 7, 2001
    Annual Meeting of Stockholders and is incorporated herein by
    reference.      
|    
|(21) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended December 31, 2001 and are incorporated herein
    by reference. 
|    
|(22) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on June 5,
    2002 and is incorporated herein by reference.                                       
|    
|(23) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on July 11,
    2002 and is incorporated herein by reference.                                      
|    
|(24) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 2002 and are incorporated herein by
    reference.           
|    
|(25) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    December 7, 2002 and is incorporated herein by reference.                                   
|    
|(26) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    December 30, 2002 and is incorporated herein by reference.                                  
|    
|(27) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2003 and are incorporated herein by
    reference.    
|    
|(28) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    October 28, 2003 and is incorporated herein by reference.                                   
|    
|(29) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    December 12, 2003 and is incorporated herein by reference.                                  
|    
|(30) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 2003 and are incorporated herein by
    reference.           
|    
|(31) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended December 30, 2003 and are incorporated herein
    by reference. 
|    
|(32) | All such documents were previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2004 and are incorporated herein by
    reference.    
|    
|(33) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K filed on
    April 22, 2004 and dated April 12, 2004 and is
    incorporated herein by reference.  

36



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##### 





|     |                                                                                                                                                                                               
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(34) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on July 16,
    2004 and is incorporated herein by reference.                                
|    
|(35) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on July 30,
    2004 and is incorporated herein by reference.                                
|    
|(36) | All such documents were previously filed as an Exhibit to the
    Companys Annual Report on Form 10-K for the year
    ended June 30, 2004 and are incorporated herein by
    reference.     
|    
|(37) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    October 27, 2004 and is incorporated herein by reference.                             
|    
|(38) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    November 1, 2004 and incorporated herein by reference.                                
|    
|(39) | Such document was previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004 and are incorporated
    herein by reference.
|    
|(40) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on
    January 17, 2005 and incorporated herein by reference.                                
|    
|(41) | Such document was previously filed as an Exhibit to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended December 31, 2004 and are incorporated herein
    by reference. 
|    
|(42) | Such document was previously filed as an Exhibit to the
    Companys Current Report on Form 8-K on April 8,
    2005 and incorporated herein by reference.                                   

37



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##### 






SIGNATURES






| |                              
| | -----------------------------
| | MERCURY AIR GROUP, INC.      
| | Registrant                   
|
| | /s/ Joseph Czyzyk            
| |                              
| | Joseph Czyzyk                
| | Chief Executive Officer      
|
| | /s/ Kent Rosenthal           
| |                              
| | Kent Rosenthal               
| | Chief Financial Officer      
| | (Principal Financial Officer)



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