SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED September 30, 2001
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the transition period from _____________________
Commission file number 0-15495
MESA AIR GROUP, INC. 401(K) PLAN
(Full title of the plan)
Address of the plan
MESA AIR GROUP, INC.
(Name of issuer of the securities held pursuant to the plan)
410 North 44th Street, Suite 700
Phoenix, Arizona 85008
(Address of issuer's principal executive office)
MESA AIR GROUP, INC.
401(k) PLAN
Financial Statements for the Years Ended
September 30, 2001 and 2000, Supplemental
Schedule as of September 30, 2001 and
Independent Auditors' Report
MESA AIR GROUP, INC.
401(k) PLAN
TABLE OF CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
SEPTEMBER 30, 2001 AND 2000:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-6
SUPPLEMENTAL SCHEDULE AS OF SEPTEMBER 30, 2001 -
Schedule of Assets Held for Investment Purposes at End of Year 7
INDEPENDENT AUDITORS' REPORT
Trustee and Plan Participants
Mesa Air Group, Inc. 401(k) Plan
Phoenix, Arizona
We have audited the accompanying statements of net assets available for benefits
of the Mesa Air Group, Inc. 401(k) Plan as of September 30, 2001 and 2000 and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial status of the Plan as of September 30, 2001 and 2000 and
the changes in its financial status for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The schedule is the responsibility of the Plan's management. Such schedule
has been subjected to the auditing procedures applied in our audit of the basic
2001 financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
Deloitte & Touche LLP
Phoenix, Arizona
March 15, 2002
MESA AIR GROUP, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 2001 AND 2000
2001 2000
---- ----
ASSETS
INVESTMENTS:
Investments at fair value $16,722,226 $24,906,500
Participant loans 559,884 562,576
----------- -----------
Total investments 17,282,110 25,469,076
----------- -----------
CONTRIBUTIONS RECEIVABLE:
Employee 20,544 285,471
Employer 118,084
----------- -----------
Total contributions receivable 20,544 403,555
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $17,302,654 $25,872,631
=========== ===========
See notes to financial statements.
-2-
MESA AIR GROUP, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
SEPTEMBER 30, 2001 AND 2000
2001 2000
---- ----
ADDITIONS:
Investment income:
Interest and dividends $ 2,053,752 $ 2,008,890
Net (depreciation) appreciation in fair value of investments (11,330,054) 3,360,520
------------ ------------
Total investment (loss) income (9,276,302) 5,369,410
------------ ------------
Contributions:
Employee 3,092,812 3,028,268
Employer 659,807 1,269,036
------------ ------------
Total contributions 3,752,619 4,297,304
------------ ------------
Total (reductions) additions (5,523,683) 9,666,714
DEDUCTIONS - Benefits paid to participants (3,046,294) (4,269,142)
------------ ------------
NET (DECREASE) INCREASE (8,569,977) 5,397,572
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 25,872,631 20,475,059
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 17,302,654 $ 25,872,631
============ ============
See notes to financial statements.
-3-
MESA AIR GROUP, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2001 AND 2000
1. DESCRIPTION OF THE PLAN
The following description of the Mesa Air Group, Inc. 401(k) Plan (the
"Plan") provides only general information. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
a. General - The Plan is a defined contribution plan sponsored by Mesa
Air Group, Inc. (the "Employer"). Under the provisions of the Plan, as
amended, union and nonunion employees of the Employer and its
affiliates, other than CCAir, Inc., who are 21 years of age and have
completed one year of service, are eligible to participate. The Plan
is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"). Employees may elect to allocate their
contributions and their share of Employer contributions to various
investment options as specified in the Plan.
b. Contributions and Vesting - Various accounts have been established for
pre-tax voluntary employee contributions, forfeitures and earnings or
losses from Plan assets. Accounts in use and their major provisions
are as follows:
- Employee Contribution Account - Salary Reduction
Contribution Accounts have been established for pre-tax
voluntary employee contributions ranging from 1 percent to
15 percent of employee compensation up to the annual
deferral limit set by the Internal Revenue Code ("IRC"). All
such balances are fully vested.
- Employer Contributions Account - Contributions to this
account are at the discretion of the Employer. Employer
contributions match 50 percent of participant contributions
up to 10 percent of compensation. In addition, the Employer
may contribute to the Plan a discretionary amount as
determined by the Employer's Board of Directors as a profit
sharing contribution. Employer discretionary contributions
are allocated to active participants based upon the ratio
that each participant's annual compensation bears to the
total of all active participants' annual compensation.
Forfeitures are reallocated and may be used to reduce
Employer matching contributions.
- Employees are 20 percent vested in Employer contribution
accounts after three years of service. Vesting subsequently
increases 20 percent per year until the participant becomes
fully vested. Participants also become fully vested upon
becoming disabled, reaching age 65, or death, if still
employed by the Employer.
c. Participant Accounts - Each participant's account is credited with the
participant's contribution, the Employer's matching contribution, and
an allocation of the Employer's discretionary contribution and the
Plan's earnings. The Employer's discretionary contribution is
allocated to each participant in the ratio that each such
participant's basic contribution (up to 4 percent) for the Plan year
bears to all basic contributions of all participants. The Plan's
earnings are allocated to
-4-
each participant in the ratio that each such participant's account
balance for each fund bears to the total balance in that fund of all
eligible participants on the date of each such allocation.
d. Investment Options - As of September 30, 2001, participants may direct
employee contributions in 1 percent increments in any of six
investment options offered by Putnam and a fund that invests in Mesa
Air Group, Inc. common stock.
e. Payment of benefits is available upon retirement, death, disability or
termination. Benefits are paid in the form of a lump-sum payment,
installments or a nontransferable annuity. Participants may withdraw
amounts from their account as set forth in the provisions of the Plan
document for certain hardship situations.
f. Participant Loans - Participants may borrow from their accounts a
minimum of $1,000 and a maximum equal to the lesser of $50,000,
reduced by the highest outstanding loan balance during the preceding
12 months, or 50 percent of their vested benefits. Loan terms range
from one through five years unless funds are used to purchase a
primary residence. The loans are secured by the balance in the
participant's account. The loans accrue interest at a fixed rate
determined by the Plan Administrator. The rate will be comparable to
those currently available from commercial institutions. Interest rates
range from 7 percent to 9.25 percent. Principal and interest are
payable through monthly payroll deductions.
g. Plan Termination - Although it has not expressed any intent to do so,
the Employer has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to prior
approval of the Internal Revenue Service and the Department of Labor.
Upon complete discontinuance of contributions under the Plan, all
employees' rights are nonforfeitable.
h. Tax Status - The Internal Revenue Service has determined and informed
the Employer by letter dated December 23, 1998 that the Plan and
related trust are designed in accordance with applicable sections of
the IRC. The Plan has been amended since receiving the determination
letter; however, the Plan Administrator believes the Plan is designed
and is currently being operated in compliance with the applicable
requirements of the IRC.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Plan prepares its financial statements in accordance with accounting
principles generally accepted in the United States of America. Significant
accounting policies are as follows:
a. Basis of Accounting - The accompanying financial statements of the
Plan have been prepared in accordance with accounting principles
generally accepted in the United States of America using the accrual
basis of accounting.
b. Use of Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires the Plan Administrator to make estimates
and assumptions that affect the reported amounts of net assets
available for benefits and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
-5-
c. Investment Valuation - Mutual fund investments and Mesa Air
Group, Inc. common stock are stated at market value based upon quoted
market prices as determined by the Plan Trustee. Participant loans are
valued at cost, which approximates fair value. Purchases and sales are
recorded on a trade-date basis. Dividends are recorded on the
ex-dividend date.
d. Administrative Expenses - All administrative expenses are paid by the
Employer.
e. Payment of Benefits - Benefits are recorded when paid.
3. INVESTMENTS
The following presents investments that represent five percent or more of
the Plan's net assets.
PUTNAM FIDUCIARY TRUST COMPANY 2001 2000
Putnam Money Market Fund $1,788,673 $1,583,661
Putnam Growth and Income Fund 3,542,709 3,797,321
Putnam Global Growth Fund 1,591,984 2,391,972
Putnam Voyager Fund 4,586,299 7,574,009
Putnam New Opportunities 3,304,602 7,725,566
Putnam Income Fund 1,025,826
Mesa Air Group, Inc., Common Stock 881,366
During the years ended September 30, 2001 and 2000, the Plan's investments
(including investments bought and sold, as well as held during the year)
(depreciated) appreciated by ($11,330,054) and $3,360,520, respectively.
4. RELATED-PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Putnam
Fiduciary Trust Company ("Putnam"). Putnam is the Trustee as defined in the
Plan. Additionally, certain Plan investments are shares of Mesa Air Group,
Inc. common stock. Therefore, these transactions qualify as
party-in-interest transactions.
-6-
MESA AIR GROUP INC. 401(k) PLAN
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
SEPTEMBER 30, 2001
COLUMN B COLUMN C COLUMN E
-------- -------- --------
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUER, INCLUDING MATURITY DATE,
BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL, CURRENT
SIMILAR PARTY PAR OR MATURITY VALUE VALUE
Putnam Fiduciary Trust Company Voyager Fund - 281,023 shares $ 4,586,299
Putnam Fiduciary Trust Company Growth and Income Fund - 208,640 shares 3,542,709
Putnam Fiduciary Trust Company New Opportunities - 97,423 shares 3,304,602
Putnam Fiduciary Trust Company Money Market Fund - 1,788,673 shares 1,788,673
Putnam Fiduciary Trust Company Income Fund Portfolio - 155,193 shares 1,025,826
Putnam Fiduciary Trust Company Global Growth Fund - 232,068 shares 1,591,984
Putnam Fiduciary Trust Company Pending Account 767
Mesa Air Group, Inc. Common stock - 270,358 shares 881,366
Participant loans Maturing from 2001 to 2005, with interest
rates ranging from 7.00% to 9.25% 559,884
-----------
Total assets held for investment purposes $17,282,110
===========
-7-