SkyWest Airlines 2006 Annual Report Download - page 48

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At December31, 2006, our total capital mixwas41.3% equity and 58.7% debt, compared to 39.1%
equity and60.9% debt at December 31, 2005. The increase in the total capital mix during 2006 was
primarily due to the completion of apublicoffering of 4,000,000 sharesof common stock at a price of $26.05
per share on April 17, 2006. We received approximately $95.4 million in net proceeds from theoffering which
were used to pay off two revolving lines of credit, to provide working capital and for general corporate
purposes.
During 2005, SkyWest Airlinesincreasedan existing $10.0million line-of-creditfacility, with abank,
to $40.0 million. As of December 31, 2006, SkyWestAirlines hadnoborrowings outstandingunder the
facility. The facility expires on January 31, 2007 andbears interest at a rate equal to prime less 0.25%.
Additionally, during 2005, SkyWest Airlines entered into another borrowing facility with afinancing
company andborrowed $60.0 million. As of December 31, 2006, SkyWestAirlines had repaid the
borrowings underthe facility andthe facility was terminated.
As of December31, 2006, we had $33.6 million in letters of credit andsurety bonds outstanding with
various banks and suretyinstitutions.
As of December 31,2006 and2005, we classified$16.4 million and $24.8million, respectively, as
restricted cash, related to ourworkers compensation policies and the purchase of ASA.
SignificantCommitments and Obligations
General
Thefollowing table summarizes our commitments and obligations as noted for each of thenext five
years and thereafter (in thousands):
Total2007 2008 2009 2010 2011Thereafter
Firm aircraft commitments..............$363,500 $363,500 $—$—$—$ — $ —
Operating leasepayments for aircraft and
facility obligations...................3,457,576 295,045 285,647 299,830 293,441 289,5901,994,023
Principalmaturities on long-termdebt .....1,784,131 108,505 113,034 117,890 122,970 125,9461,195,786
Total commitments andobligations.......$5,605,207 $ 767,050 $398,681 $417,720 $416,411 $415,536$3,189,809
Purchase Commitments and Options
On November 21,2006, we announced that SkyWest, through SkyWest Airlines or ASA, had been
selected by Delta to operate 12 CRJ700s previously operated by Comair. Deliveries of these aircraft began
in January 2007and are scheduled to be completed by April2007. On December 21,2006 we announced
that SkyWest Airlines wasselected by Midwest Airlines to enter into theAirline Services Agreement.
Under theterms of the Airline ServicesAgreement, SkyWest Airlines has agreed to operate up to 25
additional CRJ200s. The initial15aircraft arescheduled for deliverybeginning in April 2007. Our total
firm aircraft orders and commitments, as of December 31, 2006, consisted of orders for eightnew
CRJ900s, and commitments to place into service eleven CRJ200sthroughthird-party arrangements and to
sublease 12 CRJ700’s from Delta. Total expenditures forthese aircraft and related flight equipment,
including amounts for contractual price escalationsare estimated to be approximately $363.5 million.
Additionally, our agreement with Bombardier includes options foranother 38 aircraft that can be delivered
in either 70 or 90-seat configurations. Delivery datesfor theseaircraftremainsubject to final
determination as agreed upon by us and ourmajor partners.
SkyWest Airlines hasnot historically funded asubstantial portion of its aircraft acquisitions with
working capital. Rather, it has generally funded its aircraft acquisitions through a combination of operating
leases anddebt financing.At the timeof each aircraft acquisition, we evaluate the financing alternatives
available, and select one or more of these methods to fund the acquisition. In theevent that alternative