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TableofContents
Regional Carriers Revenue
Ourregionalcarriersincludebothourcontractcarrieragreementswiththird-partyregionalcarriers("contractcarriers")andourwholly-ownedsubsidiary,
Endeavor.InMay2013,Endeavoremergedfrombankruptcyandwebecameitssoleownerpursuanttoaconfirmedplanofreorganization.
Ourcontractcarrieragreementsarestructuredaseither(1)capacitypurchaseagreementswherewepurchasealloraportionofthecontractcarrier'scapacity
andareresponsibleforsellingtheseatinventorywepurchaseor(2)revenueprorationagreements,whicharebasedonafixeddollarorpercentagedivisionof
revenuesforticketssoldtopassengerstravelingonconnectingflightitineraries.WerecordrevenuerelatedtoourcontractcarriersandEndeavorinregional
carrierspassengerrevenueandtherelatedexpensesinregionalcarriersexpense.
Cargo Revenue
Cargorevenueisrecognizedwhenweprovidethetransportation.
Other Revenue
Otherrevenueisprimarilycomprisedof(1)thenon-travelcomponentsofthesaleofmileagecreditsdiscussedabove,(2)baggagefeerevenue,(3)other
miscellaneousservicerevenue,includingticketchangefees,(4)revenuefromancillarybusinesses,suchastheaircraftmaintenanceandrepairandstaffingservices
weprovidetothirdpartiesand(5)salesofnon-jetfuelproductstothirdpartiesbyouroilrefinery.
Long-Lived Assets
Thefollowingtablesummarizesourpropertyandequipment:
December31,
(inmillions,exceptforestimatedusefullife) EstimatedUsefulLife 2015 2014
Flightequipment 20-32years $ 26,057 $ 24,313
Groundpropertyandequipment 3-40years 5,862 5,198
Flightandgroundequipmentundercapitalleases Shorterofleasetermorestimatedusefullife 1,112 1,141
Advancepaymentsforequipment
879 617
Less:accumulateddepreciationandamortization(1)
(10,871) (9,340)
Totalpropertyandequipment,net
$ 23,039 $ 21,929
(1) Includesaccumulatedamortizationforflightandgroundequipmentundercapitalleasesintheamountof$782millionand$767millionatDecember31,2015and2014,respectively.
Werecordpropertyandequipmentatcostanddepreciateoramortizetheseassetsonastraight-linebasistotheirestimatedresidualvaluesovertheirestimated
usefullives.Theestimatedusefullifeforleaseholdimprovementsistheshorterofleasetermorestimatedusefullife.Depreciationandamortizationexpense
relatedtoourpropertyandequipmentwas$1.8billion,$1.7billionand$1.6billionforeachoftheyearsendedDecember31,2015,2014and2013,respectively.
Residualvaluesforownedaircraft,engines,sparepartsandsimulatorsaregenerally5%to10%ofcost.
Wecapitalizecertaininternalandexternalcostsincurredtodevelopandimplementsoftware,andamortizethosecostsoveranestimatedusefullifeofthreeto
sevenyears.Includedinthedepreciationandamortizationexpensediscussedabove,werecorded$148million,$129millionand$110millionforamortizationof
capitalizedsoftwarefortheyearsendedDecember31,2015,2014and2013,respectively.Thenetbookvalueoftheseassetstotaled$420millionand$411
millionatDecember31,2015and2014,respectively.
Werecordimpairmentlossesonflightequipmentandotherlong-livedassetsusedinoperationswheneventsandcircumstancesindicatetheassetsmaybe
impairedandtheestimatedfuturecashflowsgeneratedbythoseassetsarelessthantheircarryingamounts.Factorswhichcouldcauseimpairmentinclude,butare
notlimitedto,(1)adecisiontopermanentlyremoveflightequipmentorotherlong-livedassetsfromoperations,(2)significantchangesintheestimatedusefullife,
(3)significantchangesinprojectedcashflows,(4)permanentandsignificantdeclinesinfleetfairvaluesand(5)changestotheregulatoryenvironment.Forlong-
livedassetsheldforsale,wediscontinuedepreciationandrecordimpairmentlosseswhenthecarryingamountoftheseassetsisgreaterthanthefairvaluelessthe
costtosell.
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