Frontier Airlines 2007 Annual Report Download - page 75

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements—an
amendment of Accounting Research Bulletin No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the
parent and to the non-controlling interest, changes in a parent's ownership interest, and the valuation of retained non-controlling equity
investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and
distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS 160 is effective for fiscal years
beginning after December 15, 2008. The Company has not yet completed its assessment of the impact of this statement on its
consolidated financial statements.
3. AIRCRAFT AND OTHER EQUIPMENT
At December 31, 2007, the Company had a total fleet of 225 aircraft (219 in operations and three leased and three subleased
to an airline in Mexico), including 17 ERJ-135 aircraft, 15 ERJ-140 aircraft, 68 ERJ-145 aircraft, 76 ERJ-170 aircraft, 25 ERJ-175
aircraft and 24 CRJ-200 aircraft. The Company owns 15 ERJ-135 aircraft, 11 ERJ-140 aircraft, 30 ERJ-145 aircraft, 56 ERJ-170
aircraft, 22 ERJ-175 aircraft, and leases the other 91 aircraft under operating lease agreements.
Aircraft and other equipment consist of the following as of December 31:
2007 2006
Aircraft $ 2,498,306 $ 1,994,907
Flight equipment 104,475 87,625
Furniture and equipment 6,808 5,718
Leasehold improvements 14,585 11,115
Total aircraft and other equipment 2,624,174 2,099,365
Less accumulated depreciation and amortization (315,448) (209,648)
Aircraft and other equipment—net $ 2,308,726 $ 1,889,717
Aircraft, other equipment and slot depreciation and amortization expense for the years ended December 31, 2007, 2006 and
2005 was $106,594, $92,228 and $64,877, respectively.
4. INTANGIBLE AND OTHER ASSETS
Intangible and other assets consist of the following as of December 31:
2007 2005
Prepaid aircraft rent $ 32,077 $ 29,062
Aircraft deposits 65,382 71,571
Deferred warrant charge, net (see Note 10) — 6,470
Debt issue costs, net 22,271 17,560
Commuter slots, net 46,664 47,052
Other 30,946 20,570
$ 197,340 $ 192,285
The Company purchased commuter slots at Ronald Reagan Washington National Airport (“DCA”) and New
York LaGuardia Airport (“LGA”) in 2005 from US Airways. The licensing agreement with the Company and US Airways for the
LGA commuter slots expired on December 31, 2006, but we maintain a security interest in the LGA slots if US Airways fails to
perform under the current licensing agreement. The LGA commuter slots were amortized over a 15 month life ending December 31,
2006, and the DCA commuter slots are amortized on a straight line basis over a 25 year expected life to an estimated residual value.
Amortization was approximately $3,671 in 2006 and $388 in 2007. The Company assigned the right of use for these commuter slots to
US Airways which will continue to be operated by US Airways Express carriers until the expiration or termination of the amended
and restated Chautauqua Jet Service Agreement (“JSA”) dated as of April 26, 2005 between US Airways and Chautauqua or the
Republic JSA, whichever is later, at an agreed rate. Prior to the expiration of the agreement to license the commuter slots, US Airways
has the right to repurchase all, but not less than all, of the DCA commuter slots at a predetermined price.
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Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠