SkyWest Airlines 2002 Annual Report Download - page 16

CRJs at fixed prices (subject to cost escalations) and the delivery schedules are exercisable at various
dates through April 2008.
Ground Facilities
Employees of SkyWest perform substantially all routine airframe and engine maintenance and
periodic inspection of equipment. Maintenance is performed primarily at facilities in Palm Springs,
California; Salt Lake City, Utah; and Fresno, California. SkyWest owns a 56,600 square foot
maintenance facility in Palm Springs, California and leases a 90,000 square foot aircraft maintenance
and training facility at the Salt Lake City International Airport under an operating lease arrangement
over a 36-year term. The Salt Lake City facility consists of a 40,000 square foot maintenance hangar
and 50,000 square feet of training and other facilities. The Company also leases a 90,000 square foot
maintenance hanger and 15,000 square foot office facility in Fresno, California. During July 2002, the
Company entered into a new lease agreement for a 28,000 square foot maintenance hanger in Tucson
Arizona. SkyWest completed construction on an additional aircraft maintenance and training facility in
Salt Lake City during November 2001. This facility is 131,300 square feet, consisting of a 58,400 square
foot maintenance hangar and 72,900 square feet of training and office space. In January 2002, the
Company entered into a sale-lease-back agreement with the Salt Lake Airport Authority. Under the
sale-lease-back agreement, the Company received approximately $18 million in cash in exchange for the
newly constructed facility and entered into a 26 year operating lease arrangement. The sales price was
equal to the construction costs resulting in no gain or loss.
SkyWest leases ticket counters, check-in and boarding and other facilities in the passenger terminal
areas in the majority of the airports it serves and staffs these facilities with SkyWest personnel. Delta
and United provide ticket handling and/or ground support services for SkyWest in 53 of the 91 airports
SkyWest serves.
The Company’s corporate headquarters are located in a 63,000 square foot building and a newly
constructed 55,000 square foot building in St. George, Utah. The newly constructed facility is adjacent
to the original corporate headquarters and includes office space for maintenance management and
flight operations, including pilot, dispatch and flight attendant management. Both facilities are owned
by the Company and were initially funded with cash generated from operations and subsequently
refinanced with third-party debt. Management deems the Company’s current facilities as being suitable
and necessary to support existing operations and believes the Company’s facilities will be adequate for
the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to certain legal actions, which it considers routine to its business activities.
As of December 31, 2002, management believes, after consultation with legal counsel, that the ultimate
outcome of such legal matters will not have a material adverse effect on the Company’s financial
position, liquidity or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of the year
ended December 31, 2002.
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