Frontier Airlines 2005 Annual Report Download - page 59

Wages and Benefits
This expense includes not only wages and salaries, but also expenses associated with various employee benefit plans,
employee incentives and payroll taxes. These expenses will fluctuate based primarily on our level of operations and changes in wage
rates for contract and non-contract employees.
Aircraft Fuel
Fuel expense includes the cost of aircraft fuel, including fuel taxes and into-plane fees.
Passenger Fees and Commissions
This expense includes the costs of travel agent commissions, computer reservation system fees and certain fees paid to US
Airways for aircraft ground and passenger handling and use of the US Airways aircraft facilities and services with respect to turboprop
pro-rate revenue sharing flights on behalf of US Airways. These expenses are not borne by us under any of the fixed-fee agreements.
Landing Fees
This expense consists of fees charged by airports for each aircraft landing.
Aircraft and Engine Rent
This expense consists of the costs of leasing aircraft and spare engines. The leased aircraft and spare engines are operated
under long-term operating leases with third parties. The lease payments associated with future aircraft deliveries are subject to market
conditions for interest rates and contractual price increases for the aircraft. Aircraft rent is reduced by the amortization of integration
funding credits received from the aircraft manufacturer for parts and training. The credits are amortized on a straight-line basis over
the term of the respective lease of the aircraft. Under our fixed-fee agreements we generally are reimbursed for our actual costs.
Maintenance and Repair
Maintenance and repair expenses include all parts, materials, tooling and spares required to maintain our aircraft. We have
entered into long-term maintenance "power-by-the-hour" service contracts with third-party maintenance providers under which we are
charged fixed rates for each flight hour accumulated by our engines and some of the major airframe components. The effect of such
contracts is to reduce the volatility of aircraft maintenance expense over the term of the contract.
Insurance and Taxes
This expense includes the costs of passenger liability insurance, aircraft hull insurance, war risk insurance and all other
insurance policies, other than employee welfare insurance. Additionally, this expense includes personal and real property taxes,
including aircraft property taxes. Under our current fixed-fee agreements, we are reimbursed for the actual costs of passenger liability
insurance, war risk insurance, aircraft hull insurance and property taxes, subject to certain restrictions. Under our US Airways and
United fixed-fee agreements, we are reimbursed for the actual costs of such items other than aircraft hull insurance, which is
reimbursed at agreed upon rates.
Depreciation and Amortization
This expense includes the depreciation of all fixed assets, including aircraft, and the amortization of the commuter slots that we
own. Goodwill and intangibles are required to be evaluated for impairment on an annual basis to determine if the intangibles are
properly impaired. If we determine the goodwill and intangibles are impaired, we are required to write-off the amount of goodwill
and intangibles that are impaired. As of December 31, 2005 and 2004, goodwill and intangibles were $64.0 million and $13.0 million
respectively, net of amortization.
Other
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 27, 2006 Powered by Morningstar® Document Research℠