/2H8d 1$&%*'AIRNET SYSTEMS, INC.,'CONDENSED CONSOLIDATED BALANCE SHEETS&'In thousands, except share data^MARCH 31, ^DECEMBER 31, ^2001 ^2000^(Unaudited) 'ASSETS'Current assets:!'Cash and cash equivalents"$ 2,094"$ 1,118 'Accounts receivable: 'Trade, less allowances  "18,861  "16,279/ 'Shareholders, affiliates, and associates  "76  "99 'Inventory and spare parts  "7,391  "6,618 'Taxes refundable  "--  "283'Deferred taxes "314 "314'Deposits and prepaids "1,247 "1,473'Total current assets "29,983 "26,184!'Net property and equipment "87,810 "86,600'Other assets:0'Goodwill, net of accumulated amortization "7,620 "7,7059'Other intangibles, net of accumulated amortization "186 "233+'Investment in partnerships and other "1,814 "1,811'Total assets"$ 127,413"$ 122,533+'LIABILITIES AND SHAREHOLDERS' EQUITY'Current liabilities:'Accounts payable"$ 3,631"$ 4,456' 'Salaries and related liabilities  "3,356  "3,271!'Accrued expenses !"2,748 !"1,873"'Taxes payable ""600 ""--'#'Current portion of notes payable #"33 #"33 %'Total current liabilities %"10,368 %"9,633''Other liabilities '"260 '"--*('Notes payable, less current portion ("25,478 ("22,686)'Deferred tax liability )"11,264 )"11,369+'Shareholders' equity::,'Preferred shares, $.01 par value; 10,000,000 shares7-'authorized; and no shares issued and outstanding -"-- -"--C.'Common shares, $.01 par value; 40,000,000 shares authorized;6/'and 12,753,000 shares issued at March 31, 20010'and December 31, 2000 0"128 0"128!1'Additional paid-in-capital 1"77,613 1"77,7022'Retained earnings 2"23,782 2"22,462-3'Accumulated other comprehensive income 3"(154) 3"--C4'Treasury shares, 1,832,000 and 1,840,000 shares held at cost<5'at March 31, 2001 and December 31, 2000, respectively5"(21,326)5"(21,447)!7'Total shareholders' equity 7"80,043 7"78,8451:'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:"$ 127,413:"$ 122,533?='See notes to condensed consolidated financial statements?'AIRNET SYSTEMS, INC.B@'CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited*B'In thousands, except per share dataC^THREE MONTHS ENDEDC^THREE MONTHS ENDEDD^MARCH 31,D^MARCH 31, E^2001 E^2000G'NET REVENUES,H'Air transportation, net of excise taxI'Bank servicesI"$25,783I"$25,080J'Express services J"8,176 J"8,427"K'Aviation services and other K"363 K"167M'TOTAL NET REVENUES M"34,322 M"33,674O'COSTS AND EXPENSESP'Air transportationQ'Wages and benefits Q"4,877 Q"4,598R'Aircraft fuel R"3,011 R"2,919S'Aircraft maintenance S"2,730 S"2,506+T'Ground couriers and outside services T"6,741 T"6,947U'Depreciation U"3,495 U"3,408V'Other operating V"5,784 V"6,127"W'Aviation services and other W"290 W"284*X'Selling, general and administrative X"4,688 X"3,970Z'TOTAL COSTS AND EXPENSES Z"31,616 Z"30,759\'Income from operations \"2,706 \"2,915]'Interest expense ]"474 ]"626!_'Income before income taxes _"2,232 _"2,289!`'Provision for income taxes `"912 `"915c'NET INCOMEc"$ 1,320c"$ 1,374@f'Net income per common share - basic and assuming dilutionf"$ 0.12f"$ 0.12?i'See notes to condensed consolidated financial statementsk'AIRNET SYSTEMS, INC.Bl'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Unauditedn^THREE MONTHS ENDEDn^THREE MONTHS ENDEDo'In thousandso^MARCH 31,o^MARCH 31, p^2001 p^2000r'OPERATING ACTIVITIES:s'Net incomes"$ 1,320s"$ 1,3746t'Adjustments to reconcile net income to net cash(u'provided by operating activities:v'Depreciation v"3,527 v"3,445"w'Amortization of intangibles w"132 w"131x'Deferred taxes x"-- x"432y'Provision for losses on accounts receivable y"84 y"47$z'Loss on disposition of assets z"14 z"--C{'Cash provided by (used in) operating assets and liabilities:|'Accounts receivable|"(2,642)|"(1,905) }'Inventory and spare parts }"(773) }"(253)~'Prepaid expenses ~"226 ~"156'Accounts payable "(825) "(548)'Accrued expenses "875 "391'Taxes payable "883 "1,002''Salaries and related liabilities "85 "138'Other, net "(2) "790'NET CASH PROVIDED BY OPERATING ACTIVITIES "2,904 "4,100'INVESTING ACTIVITIES:*'Purchases of property and equipment"(4,837)"(3,502)4'Proceeds from sales of property and equipment "85"4,'NET CASH USED IN INVESTING ACTIVITIES"(4,752)"(3,498)'FINANCING ACTIVITIES:7'Proceeds from 1996 Incentive Stock Plan programs "32 "669'Net borrowings under the revolving credit facility "2,800 "500"'Repayment of long-term debt "(8) "(2)"'Purchase of treasury shares "-- "(142)0'NET CASH PROVIDED BY FINANCING ACTIVITIES "2,824 "422'Net increase in cash "976 "1,0247'Cash and cash equivalents at beginning of period "1,118 "1,6671'CASH AND CASH EQUIVALENTS AT END OF PERIOD"$ 2,094"$ 2,691?'See notes to condensed consolidated financial statements