Nature of Operations and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Nature of Operations and Summary of Significant Accounting Policies

Schedule of details of aircraft and agreements with other airlines

As of December 31, 2013, the Company had a combined fleet of 757 aircraft consisting of the following:



United	92	242	9	70	—	36	449
Delta	125	—	—	60	60	9	254
American	23	—	—	—	—	—	23
US Airways	11	—	—	—	4	—	15
Alaska	—	—	—	7	—	—	7
Subleased to an un-affiliated entity	2	—	—	—	—	—	2
Unassigned	7	—	—	—	—	—	7


Total	260	242	9	137	64	45	757

Schedule of the Company's position in marketable securities

The Company's position in marketable securities as of December 31, 2013 and 2012 was as follows (in thousands):

	2013				2012

Investment Types	Cost		Market Value		Cost		Market Value
Commercial paper	$	—	$	—	$	3,510	$	3,514
Bond and bond funds		489,071		489,294		555,603		556,133
Asset backed securities		182		190		296		314


		489,253		489,484		559,409		559,961
Unrealized appreciation		231		—		552		—


Total		489,484		489,484	$	559,961	$	559,961

Schedule of maturities of marketable securities

Marketable securities had the following maturities as of December 31, 2013 (in thousands):

Maturities	Amount

Year 2014	$	304,353
Years 2015 through 2018		182,873
Years 2019 through 2023		—
Thereafter		2,258

Schedule of property and equipment

Assets	Depreciable Life	Residual Value

Aircraft and rotable spares	10 - 18 years	0 - 30%
Ground equipment	5 - 10 years	0%
Office equipment	5 - 7 years	0%
Leasehold improvements	15 years or life of the lease	0%
Buildings	20 - 39.5 years	0%

Net income with per share data and comprehensive income

Schedule of net income (loss) per common share

The calculation of the weighted average number of common shares outstanding for Basic EPS and Diluted EPS are as follows for the years ended December 31, 2013, 2012and 2011 (in thousands):

	Year Ended December 31,

	2013		2012		2011
Numerator:
Net Income (Loss)	$	58,956	$	51,157	$	(27,335	)
Denominator:
Denominator for basic earnings per-share weighted average shares		51,688		51,090		52,201
Dilution due to stock options and restricted stock		734		656		—


Denominator for diluted earnings per-share weighted average shares		52,422		51,746		52,201
Basic earnings (loss) per-share	$	1.14	$	1.00	$	(0.52	)
Diluted earnings (loss) per-share	$	1.12	$	0.99	$	(0.52	)

Schedule of comprehensive income (loss)

Also, comprehensive income (loss) consisted of net income (loss) plus changes in unrealized appreciation (depreciation) on marketable securities and unrealized gain (loss) on foreign currency translation adjustment related to the Company's equity investment in Trip Linhas Aereas, a regional airline operating in Brazil ("Trip") and Mekong Aviation Joint Stock Company, an airline operating in Vietnam ("Air Mekong") (see note 8), net of tax, for the periods indicated (in thousands):

	Year Ended December 31,

	2013			2012			2011
Net Income (Loss)	$	58,956			51,157		$	(27,335	)
Proportionate share of other companies foreign currency translation adjustment, net of tax		66			(251	)		(295	)
Unrealized appreciation (depreciation) on marketable securities, net of tax		(13	)		316			534


Comprehensive income (loss)	$	59,009		$	51,222		$	(27,096	)

Delta Connection Agreements

Agreements with other airlines

Schedule of details of agreements with other airlines

Agreement	Number of aircraft under contract	Term / Termination Dates	Pass through costs or costs paid directly by major partner	Performance Incentive Structure	Payment Structure

SkyWest Airlines Delta Connection Agreement	• CRJ 200 - 41 • CRJ700 - 19 • CRJ 900 - 32	• The contract expires on an individual aircraft basis beginning in 2014 • The final aircraft expires in 2022 • The average remaining term of the aircraft under contract is 5.8 years • Upon expiration, aircraft may be renewed or extended	• Fuel • Engine Maintenance • Landing fees, Station Rents, Deice • Insurance	• No financial performance based incentives	• Rate per block hour, per departure and per aircraft under contract
ExpressJet Delta Connection Agreement	• CRJ 200 - 76 • CRJ700 - 41 • CRJ 900 - 28	• The contract expires on an individual aircraft basis beginning in 2014 • The final aircraft expires in 2022 • The average remaining term of the aircraft under contract is 4.4 years • Upon expiration, aircraft may be renewed or extended	• Fuel • Engine Maintenance • Landing fees, Station Rents, Deice Insurance	• Performance based financial incentives	• Rate per block hour, per departure and per aircraft under contract
SkyWest Airlines Prorate Agreement	• EMB 120 - 9 • CRJ200 - 8	• Terminate with 120 days notice	• None	• None	• Pro-rata sharing of the passenger fare revenue

United Express Agreements

Agreements with other airlines

Schedule of details of agreements with other airlines

Agreement	Number of aircraft under contract	Term / Termination Dates	Pass through costs or costs paid directly by major partner	Performance Incentive Structure	Payment Structure

SkyWest Airlines United Express Agreement	• CRJ 200 - 61 • CRJ700 - 70 • EMB 120 - 9	• The contract expires on an individual aircraft basis beginning in 2014 • The final aircraft expires in 2024 • The average remaining term of the aircraft under contract is 3.8 years • Upon expiration, aircraft may be renewed or extended	• Fuel • Landing fees, Station Rents, Deice • Insurance	• Performance based incentives	• Rate per block hour, per departure and per aircraft under contract
Atlantic Southeast United Express Agreement	• CRJ 200 - 14	• Terminates 2015 • Upon expiration, aircraft may be renewed or extended	• Fuel • Landing fees, Station Rents, Deice • Insurance	• Performance based incentives	• Rate per block hour, per departure and per aircraft under contract
ExpressJet Delaware United Express Agreement	• EMB 145 - 22	• Terminates 2015 • Upon expiration, aircraft may be renewed or extended	• Fuel • Landing fees, Station Rents, Deice • Insurance	• Performance based incentives	• Rate per block hour, per departure and per aircraft under contract
ExpressJet Delaware United Express Agreement	• EMB 135 - 9 • EMB 145 - 220	• The contract expires on an individual aircraft basis beginning in 2014 • The final aircraft expires in 2020 • The average remaining term of the aircraft under contract is 4.3 years • Upon expiration, aircraft may be renewed or extended	• Fuel • Engine Maintenance • Landing fees, Station Rents, Deice • Insurance	• Performance based incentives or penalties	• Rate per block hour, per departure and per aircraft under contract
SkyWest Airlines United Express Prorate Agreement	• CRJ200 - 17 • EMB 120 - 27	• Terminate with 120 days notice	• None	• None	• Pro-rata sharing of the passenger fare revenue

Alaska Capacity Purchase Agreement

Agreements with other airlines

Schedule of details of agreements with other airlines

Agreement

Number of
aircraft under
contract

Term / Termination
Dates

Pass through costs
or costs paid
directly by major
partner

Incentive Structure

Payment Structure

SkyWest Airlines Capacity Purchase Agreement

•

CRJ 700 - 7

•

Terminates 2018

•

Upon expiration, aircraft may be renewed or extended

•

Fuel

•

Landing fees, Station Rents, Deice

•

Insurance

•

Performance based incentives

•

Rate per block hour, per departure and per aircraft under contract

US Airways Express Agreement

Agreements with other airlines

Schedule of details of agreements with other airlines

Agreement

Number of
aircraft under
contract

Term / Termination
Dates

Pass through costs
or costs paid
directly by major
partner

Incentive Structure

Payment Structure

SkyWest Airlines US Airways Express Agreement

•

CRJ200 - 10

•

CRJ900 - 4

•

Terminates 2015

•

Upon expiration, aircraft may be renewed or extended

•

Fuel

•

Landing fees, Station Rents, Deice

•

Insurance

•

Performance based incentives

•

Rate per block hour, per departure and per aircraft under contract

SkyWest Airlines US Airways Express Prorate Agreement

•

CRJ200 - 1

•

Terminate with 120 days notice

•

None

•

None

•

Pro-rata sharing of the passenger fare revenue

American Agreement

Agreements with other airlines

Schedule of details of agreements with other airlines

Agreement

Number of
aircraft under
contract

Term / Termination
Dates

Pass through costs
or costs paid
directly by major
partner

Incentive Structure

Payment Structure

SkyWest Airlines American Capacity Purchase Agreement

•

CRJ200 - 12

•

Terminate 2016

•

Upon expiration, aircraft may be renewed or extended

•

Fuel

•

Landing fees, Station Rents, Deice

•

Insurance

•

Performance based incentives

•

Rate per block hour, per departure and per aircraft under contract

ExpressJet American Capacity Purchase Agreement

•

CRJ200 - 11

•

Terminates 2017

•

Upon expiration, aircraft may be renewed or extended

•

Fuel

•

Landing fees, Station Rents, Deice

•

Insurance

•

Performance based incentives

•

Rate per block hour, per departure and per aircraft under contract