American Airlines 2006 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2006 American Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 113

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

79
11. Intangible Assets
The Company had route acquisition costs (including international slots) of $829 million as of December 31, 2006
and 2005 that are considered indefinite life assets under Financial Accounting Standard 142, “Goodwill and Other
Intangible Assets”. The Company’s impairment analysis for route acquisition costs did not result in an impairment
charge in 2006 or 2005.
The following tables provide information relating to the Company’s amortized intangible assets as of December 31
(in millions):
2006
Cost
Accumulated
Amortization
Net Book
Value
Amortized intangible assets:
Airport operating rights $ 517 $ 261 $ 256
Gate lease rights 182 100 82
Total $ 699 $ 361 $ 338
2005
Cost
Accumulated
Amortization
Net Book
Value
Amortized intangible assets:
Airport operating rights $ 517 $ 241 $ 276
Gate lease rights 179 90 89
Total $ 696 $ 331 $ 365
Airport operating and gate lease rights are being amortized on a straight-line basis over 25 years to a zero
residual value. The Company recorded amortization expense related to these intangible assets of approximately
$28 million, $28 million and $29 million for the years ended December 31, 2006, 2005 and 2004, respectively. The
Company expects to record annual amortization expense of approximately $28 million in each of the next five
years related to these intangible assets.