SkyWest Airlines 2007 Annual Report Download - page 36

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The cost per ASM for other expenses, primarily consisting of landing fees, station rentals, computer reservation
system fees and hull and liability insurance, decreased 4.8% to 2.0¢ for the year ended December 31, 2006, from 2.1¢ for the
year ended December 31, 2005. The primary reason for the decrease was the operating efficiencies obtained from increased
stage lengths flown by our regional jets.
Interest expense increased to approximately $118.0 million during the year ended December 31, 2006, from
approximately $53.3 million during the year ended December 31, 2005. The increase in interest expense was primarily due to
the acquisition of ASA’ s aircraft in September 2005 which are primarily financed with long-term debt.
Liquidity and Capital Resources
We had working capital of $811.9 million and a current ratio of 3.0:1 at December 31, 2007, compared to working
capital of $687.0 million and a current ratio of 2.7:1 at December 31, 2006. The increase was principally caused by cash
generated from operations during 2007. The principal sources of cash during the year ended December 31, 2007 were
$396.0 million provided by operating activities, $177.8 million of proceeds from the issuance of long-term debt, $29.0 from
the sale of common stock in connection with the exercise of stock options under our stock option and employee stock
purchase plans, $11.7 million from returns on aircraft deposits and $11.3 million from proceeds from the sale of property and
equipment. We invested $302.4 million in marketable securities, invested $298.5 million in flight equipment, made principal
payments on long-term debt of $111.0 million, repurchased $126.0 million of outstanding shares of our common stock,
invested $37.5 million in buildings and ground equipment, paid $8.1 million in cash dividends, invested $2.8 million in other
assets, and paid $32.3 million in deposits for aircraft. These factors resulted in a $292.7 million decrease in cash and cash
equivalents during the year ended December 31, 2007.
Our position in marketable securities, consisting primarily of bonds, bond funds and commercial paper, increased to
$522.9 million at December 31, 2007, compared to $220.1 million at December 31, 2006. The increase in marketable
securities was due primarily to cash generated from operations in 2007 that were invested in marketable securities.
At December 31, 2007, our total capital mix was 41.8% equity and 58.2% debt, compared to 41.3% equity and
58.7% debt at December 31, 2006.
As of December 31, 2007, SkyWest Airlines has a $25 million line of credit. As of December 31, 2007 and 2006,
SkyWest Airlines had no amount outstanding under the facility. The facility expires on March 31, 2008 and has a fixed
interest rate of 6.75%.
As of December 31, 2007, we had $35.5 million in letters of credit and surety bonds outstanding with various banks
and surety institutions.
As of December 31, 2007 and 2006, we classified $14.7 million and $16.4 million, respectively, as restricted cash,
related to our workers compensation policies.
Significant Commitments and Obligations
General
The following table summarizes our commitments and obligations as noted for each of the next five years and
thereafter (in thousands):
Total 2008 2009 2010 2011 2012 Thereafter
Firm aircraft commitments .......................... $557,830 $127,580 $332,239 $98,011 $— $— $—
Operating lease payments for aircraft and
facility obligations .................................... 3,329,699 304,948 315,357 302,479 292,604 293,171 1,821,140
Principal maturities on long-term debt ........ 1,850,950 118,202 123,395 128,831 132,188 178,035 1,170,299
Total commitments and obligations............. $5,738,479 $550,730 $770,991 $529,321 $424,792 $471,206 $2,991,439
Purchase Commitments and Options
On November 21, 2006, we announced that SkyWest Airlines had been selected by Delta to operate 12 new
CRJ700s previously operated by Comair Inc. Ten of the 12 CRJ700s were delivered by December 31, 2007 and the