SkyWest Airlines 2003 Annual Report Download - page 44

Segment Reporting
The Company has adopted SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information. This statement
requires disclosures related to components of a company for which separate financial information is available that is evaluated
regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance.
Management believes that the Company has only one operating segment in accordance with SFAS No. 131 because the
Company’s business consists of scheduled airline passenger service.
New Accounting Standard:
In January 2003, the FASB issued Interpretation No. 46, or (FIN 46), Consolidation of Variable Interest Entities, which requires
the consolidation of variable interest entities. It is management’s belief that the majority of the Company’s leased aircraft is
owned and leased through trusts whose sole purpose is to purchase, finance and lease these aircraft to the Company; therefore,
they meet the criteria of a variable interest entity. However, since these are single owner trusts in which the Company does not
participate, the Company is not at risk for losses and is not considered the primary beneficiary. As a result, based on the current
rules, the Company is not required to consolidate any of these lessors or any other entities in applying FIN 46. Management
believes that the Company’s maximum exposure under these leases is the remaining lease payments, which are reflected in the
future minimum lease payments table in Note 4 to the Company’s Consolidated Financial Statements as of December 31, 2003.
(2) Long-term Debt
Long-term debt consisted of the following as of December 31, 2003 and 2002 (in thousands):
2003 2002
Notes payable to banks, due in semi-annual installments plus
interest based on six-month LIBOR plus 1.30% to 1.375% at
December 31, 2003 through 2019, secured by aircraft $ 120,330 $ -
Notes payable to banks, due in semi-annual installments plus
interest at 6.09% through 2020, secured by aircraft 103,350
Notes payable to banks, due in semi-annual installments plus
interest based on six-month LIBOR plus 1.40% at
December 31, 2003 through 2019, secured by aircraft 85,168 -
Notes payable to banks, due in semi-annual installments plus
interest at 6.06% to 6.45% through 2018, secured by aircraft 61,206 63,722
Notes payable to banks, due in quarterly installments plus
Interest based on three-month LIBOR plus 0.75% at
December 31, 2003 through 2019, secured by aircraft 59,424 -
Notes payable to banks, due in semi-annual installments plus
interest at 3.72% to 3.86%, net of the benefits of interest
rate subsidies through the Brazilian Export financing
Program, through 2011, secured by aircraft 18,160 20,339
Note payable to bank, due in semi-annual installments plus
interest at 7.18% through 2012, secured by aircraft 14,298 15,080
Note payable to bank, due in semi-annual installments plus
interest based on six- month LIBOR plus 0.60% at
December 31, 2003 through 2016, secured by aircraft 13,876 14,482
Notes payable to bank, due in monthly installments plus
interest based on one-month LIBOR through 2012, secured by building 8,319 8,772
Notes payable to banks, due in monthly installments including
interest at 6.70% to 7.37% through 2006, secured by aircraft 7,528 11,490
Other notes payable, secured by aircraft 1,991 4,026
493,650 137,911
Less current maturities (30,877) (12,532)
$ 462,773 $ 125,379
At December 31, 2003, the three-month and six-month LIBOR rates were 1.157% and 1.219%, respectively.
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