Frontier Airlines 2005 Annual Report Download - page 66

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lease return costs, $1.3 million to reflect the write off of purchased route costs on markets that were abandoned and $0.2 million due to
the retirement of one owned Saab 340 aircraft. In 2003 this charge consisted of $2.1 million to reflect deterioration of the market value
for Saab turboprop aircraft and related spare parts and a reduction of $0.3 million to reflect the estimated liability for Saab 340 aircraft
lease return costs.
Other expenses increased 57.7%, or $17.4 million, to $47.5 million in 2004 from $30.1 million in 2003, due to an increase in
bad debt reserves (primarily attributable to obligations owed to us by US Airways), increased pilot training costs, and higher
crew-related and administrative expenses to support the growing regional jet operations. The unit cost increased to 1.0¢ in 2004
compared to 0.8¢ in 2003.
Interest expense increased 24.9% or $5.7 million, to $28.5 million in 2004 from $22.8 million in 2003 primarily due to
interest on debt related to the purchase of additional aircraft since the beginning of 2003. The weighted average interest rate was
unchanged at 5.2%. The unit cost remained unchanged at 0.6¢.
We incurred income tax expense of $24.5 million during 2004, compared to $24.0 million in 2003. The effective tax rates for
2004 and 2003 were 38.7% and 39.9%, respectively, which were higher than the statutory rate due to state income taxes and
non-deductible meals and entertainment expense, primarily for our flight crews.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 27, 2006 Powered by Morningstar® Document Research℠