Property and Equipment

12 Months Ended

Dec. 31, 2011

Property, Plant and Equipment Disclosure [Text Block]

PROPERTY AND EQUIPMENT

At December 31, 2011, the Company’s subsidiaries owned 52 aircraft in serviceable condition consisting of 21 Boeing 767-200 freighter aircraft leased to external customers, 30 freighter aircraft operated by the Company's airlines and one Boeing 767 passenger aircraft. These 30 freighter aircraft operated by the Company's airlines consisted of 14 Boeing 767-200, two Boeing 767-300, three Boeing 757, four Boeing 727, three McDonnell Douglas DC-8 freighters and four McDonnell Douglas DC-8 combi aircraft. The Company's subsidiaries also leased four Boeing 767-200 aircraft and one Boeing 767-300 aircraft, as of December 31, 2011. Additionally, as of December 31, 2011, the Company had one Boeing 767-200 aircraft, three Boeing 767-300 aircraft and two Boeing 757 aircraft undergoing modification to standard freighter configuration. The combined carrying value of aircraft in modification was $101.7 million at December 31, 2011.

Property and equipment, to be held and used, consisted of the following (in thousands):



	December 31, 2011			December 31, 2010
Aircraft and flight equipment	$	1,012,000		$	928,784
Support equipment	51,297			50,424
Vehicles and other equipment	1,589			1,604
Leasehold improvements	714			714
	1,065,600			981,526
Accumulated depreciation	(316,687		)	(322,770		)
Property and equipment, net	$	748,913		$	658,756

There were no aircraft or flight equipment held under capital leases as of December 31, 2011, compared to $22.2 million as of December 31, 2010. Accumulated depreciation and amortization included $10.8 million as of December 31, 2010, for property held under capital leases. Rent and lease expense for five aircraft and facilities under operating lease agreements totaled $21.2 million for 2011.

Stagnant economic growth and higher fuel prices precipitated BAX/Schenker's decision to phase-out its North American air network (see note B) and diminished the demand for the Company's Boeing 727 and DC-8 freighter aircraft. These aircraft are less fuel efficient and generally require higher maintenance costs to maintain acceptable levels of reliability compared to more modern aircraft. As a result of these conditions and BAX/Schenker's decision in July 2011 to phase-out its North American air network, the Company decided to retire the Boeing 727 and DC-8 freighter fleets. The Company has begun to market the aircraft engines, parts and airframes to other operators and aircraft parts dealers. During the third quarter of 2011, the Company recorded a pre-tax impairment charge totaling $22.1 million to reduce the carrying values of its Boeing 727 and DC-8 freighters, engines and related parts to their estimated fair value. The Company determined the fair values of these aircraft with the assistance of an independent appraiser using comparable market sales (level 2 fair value inputs). The carrying value of the Boeing 727 and DC-8 freighter aircraft available for sale totaled $9.8 million as of December 31, 2011. Additionally, as of December 31, 2011, the carrying value of the Boeing 727 and DC-8 freighter aircraft to be held and used during 2012 totaled $2.7 million.

Cash flows generated from the removal of aircraft from the Company's in-service fleet and sales of other property and equipment totaled $11.1 million and $32.0 million for the years ended December 31, 2011 and 2010, respectively. During the fourth quarter of 2011, the Company received $10.7 million from BAX/Schenker for the reimbursement of capitalized maintenance costs for aircraft removed from service. In May 2010, DHL paid the Company $29.7 million for the carrying value of the five Boeing 767 non-standard freighter aircraft and 26 DC-9 aircraft previously put to DHL under the terms of the DHL ACMI agreement. Gains or losses from the sale of aircraft and spare engines are recorded in other operating expenses on the statement of operations.

CAM owned aircraft with a carrying value of $316.4 million and $263.2 million that were under leases to external customers as of December 31, 2011 and December 31, 2010, respectively. Minimum future lease payments for aircraft and equipment leased to external customers as of December 31, 2011 is scheduled to be $68.3 million, $55.7 million, $55.7 million, $55.7 million and $47.8 million for each of the next five years ending December 31, 2016.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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