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Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission. These filings are available to investors at our website or online from the Commission. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove erroneous, actual results may vary materially from the results that were anticipated or projected.The company does not intend to update these forward-looking statements before its next required filing with the SEC. I will now turn the call over to Don Breeding, our interim Chief Executive Officer. Don Breeding Welcome, everyone. Thank you for joining us this morning. I’ll just start off by mentioning that we had a rather tough quarter, the first quarter due to some extremely unusual weather patterns that existed across most of our system. This resulted in a number of cancellation and delays, which impacted us both financially and operationally. I do want to thank our employees for taking care of our passengers during this very difficult time. They did an outstanding job in doing the best they could to assure that we handle them in a professional way. The integration process also put an extra strain on our people and they are dealing with that in a very professional way. Mentioning the integration process, I’ll just say that we are on timeline and we’re within our budget at this point in bringing together the corporations of Colgan, Mesaba and Pinnacle. This integration should result in a great benefit to our shareholders, our customers and our employees. We did six additional Q400 aircraft in the quarter and this strengthens our relationship with United. We now operate 28 of the Q400s for United Express. As you all know, we are searching for a new CEO, who will move in and I can go back home once he is here. This process is going well we have some excellent candidates and we should have our CEO in place in June.
So, I will now turn the call over to our Chief Financial Officer, Peter Hunt, who will lead us through the review of our first quarter financial results. Peter?Peter Hunt Thanks, Don and good morning, everyone. Thanks again for joining us today. This morning we did report first quarter diluted EPS excluding special items of a $0.01 and this was down $0.08 year over year. Our results were negatively affected, as Don mentioned, by weather. Not only did we lose revenue in all three airlines related to increased cancelled flight because of weather, but we also had higher operating performance penalties than we did in the first quarter of 2010. Our performance penalties were $2.1 million in the quarter and that’s an increase of over $1 million year over year. Additionally, we were affected this quarter by the implementation of our new pilot contract with ALPA. It brings our pilot wages up to the industry average, so we have a competitive contract, but it also represents an increase in cost, primarily at Pinnacle but also at Colgan and slightly at Mesaba. For the quarter, we incurred an additional $2 million or $2.1 million of cost related to this ALPA contract and that’s essentially for about half a quarter, because the terms of the new contract when into effect in the middle of February. On top of those items that affected our results, we also recorded several special items that reduced our GAAP income and in fact, turned our GAAP income into a loss; total of $5.8 million in special items, $2 million of that total relates to the implementation of our new contract ALPA. We recorded $1.4 million of non-cash accruals to adjust an accrued vacation balances to the new rates that will be paid under the contract. And, in addition, we paid $600,000 to ALPA for their share of costs associated with the implementation plan that we have and the combination of our pilots groups into an integrated seniority list.
Secondly, as part of that $5.8 million, we recorded $800,000 under our integration plan, primarily related to severance and stay bonuses. We’re really at the just the beginning of the implementation program and we do expect additional integration costs as the year progresses and I’ll go over that later.Read the rest of this transcript for free on seekingalpha.com