PNCL » Topics » Property and Equipment

These excerpts taken from the PNCL 10-K filed Mar 17, 2008.
Property and Equipment

Property and equipment, consisting primarily of aircraft, aircraft rotable spare parts and other property, are stated at cost, net of accumulated depreciation.  Expenditures for major renewals, modifications and improvements are capitalized to extend the useful life of the asset.  Property and equipment are depreciated to estimated residual values using the straight-line method over the estimated useful lives of the assets.  Depreciation of owned aircraft and aircraft rotable spares is determined by allocating the cost, net of estimated residual value, over the asset’s estimated useful life.  Depreciation of leased aircraft is determined by allocating the cost, net of estimated residual value, over the shorter of the asset’s useful life or the remaining lease terms of related aircraft.  Modifications that significantly enhance the operating performance and/or extend the useful lives of property and equipment are capitalized and amortized over the lesser of the remaining life of the asset or the lease term, as applicable.

 
The depreciation of property and equipment over their estimated useful lives, and the determination of any salvage values, requires management to make judgments about future events. Because the Company utilizes many of its assets over relatively long periods, periodic evaluations are performed to determine whether adjustments to the estimated service lives or salvage values are necessary to ensure these estimates properly match the economic use of the asset. This evaluation may result in changes in the estimated lives and residual values used to depreciate the aircraft and other equipment. These estimates affect the amount of depreciation expense recognized in a period and, ultimately, any gain or loss on the disposal of the asset.

Estimated useful lives and residual values for the Company’s property and equipment are as follows:

   
Depreciable Life
(in years)
 
Residual Value
Owned Aircraft
       
     Regional jets
 
25
 
10%
     Turboprops
 
15-25
 
8%
Aircraft rotables
       
     Regional jets
 
15-25 (1)
 
25%
     Turboprops
 
15-25
 
8%
Ground and shop equipment
 
10
 
0%
Office equipment
 
5-10
 
0%
Software and computer equipment
 
  3-5
 
0%
Leasehold improvements
 
2-19
 
0%
Vehicles
 
  5
 
0%

 
(1)  Depreciation is determined by allocating the cost, net of estimated residual value, over the shorter of the asset’s useful life or the remaining lease terms of related aircraft, as applicable.

Property and
Equipment



Property
and equipment, consisting primarily of aircraft, aircraft rotable spare parts
and other property, are stated at cost, net of accumulated depreciation.
 Expenditures for major renewals, modifications and improvements are
capitalized to extend the useful life of the asset.  Property and equipment
are depreciated to estimated residual values using the straight-line method over
the estimated useful lives of the assets.  Depreciation of owned aircraft
and aircraft rotable spares is determined by allocating the cost, net of
estimated residual value, over the asset’s estimated useful life. 
Depreciation of leased aircraft is determined by allocating the cost, net of
estimated residual value, over the shorter of the asset’s useful life or the
remaining lease terms of related aircraft.  Modifications that
significantly enhance the operating performance and/or extend the useful lives
of property and equipment are capitalized and amortized over the lesser of the
remaining life of the asset or the lease term, as applicable.



 


The
depreciation of property and equipment over their estimated useful lives, and
the determination of any salvage values, requires management to make judgments
about future events. Because the Company utilizes many of its assets over
relatively long periods, periodic evaluations are performed to determine whether
adjustments to the estimated service lives or salvage values are necessary to
ensure these estimates properly match the economic use of the asset. This
evaluation may result in changes in the estimated lives and residual values used
to depreciate the aircraft and other equipment. These estimates affect the
amount of depreciation expense recognized in a period and, ultimately, any gain
or loss on the disposal of the asset.




Estimated
useful lives and residual values for the Company’s property and equipment are as
follows:

























































































   
Depreciable
Life

(in
years)

 
Residual
Value


Owned
Aircraft

       

     Regional
jets

 
25

 
10%


     Turboprops

 
15-25

 
8%


Aircraft
rotables

       

     Regional
jets

 
15-25
(1)

 
25%


     Turboprops

 
15-25

 
8%


Ground
and shop equipment

 
10

 
0%


Office
equipment

 
5-10

 
0%


Software
and computer equipment

 
  3-5

 
0%


Leasehold
improvements

 
2-19

 
0%


Vehicles

 
  5

 
0%












 


(1)  Depreciation
is determined by allocating the cost, net of estimated residual value,
over the shorter of the asset’s useful life or the remaining lease terms
of related aircraft, as applicable.





EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 17, 2008
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