SkyWest Airlines 2007 Annual Report Download - page 47

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workers’ compensation policy and classified it accordingly in the consolidated balance sheets as of December 31, 2007 and
2006, respectively.
Marketable Securities
The Company’ s investments in marketable debt and equity securities are deemed by management to be available for
sale and are reported at fair market value with the net unrealized appreciation or depreciation reported as a component of
accumulated other comprehensive loss in stockholders’ equity. At the time of sale, any realized appreciation or depreciation,
calculated by the specific identification method, is recognized in gain (loss) on sale of marketable securities. The Company’ s
position in marketable securities as of December 31, 2007 and 2006 was as follows (in thousands):
2007 2006
Investment Types Cost Market Value Cost Market Value
Commercial paper..................................................................... $14,974 $14,983 $32,000 $32,000
Bond and bond funds................................................................ 507,147 505,706 187,016 184,769
Asset backed securities ............................................................. 2,208 2,236 3,333 3,307
524,329 522,925 222,349 220,076
Unrealized loss.......................................................................... (1,404) — (2,273) —
Total.......................................................................................... $522,925 $522,925 $220,076 $220,076
Marketable securities had the following maturities as of December 31, 2007 (in thousands):
Maturities Amount
Year 2008 ......................................................................................................................... $172,966
Years 2009 through 2012 ................................................................................................. 51,954
Years 2013 through 2017 ................................................................................................. 12,408
Thereafter ......................................................................................................................... 285,597
The Company has classified all marketable securities as short-term since it has the intent to maintain a liquid
portfolio and the ability to redeem the securities within one year.
Inventories
Inventories include expendable parts, fuel and supplies and are valued at cost (FIFO basis) less an allowance for
obsolescence based on historical results and management’ s expectations of future operations. Expendable inventory parts are
charged to expense as used. An obsolescence allowance for flight equipment expendable parts is accrued based on estimated
lives of the corresponding fleet types and salvage values. The inventory allowance as of December 31, 2007 and 2006 was
$4.7 million and $3.6 million, respectively. These allowances are based on management estimates, which are subject to
change.
Property and Equipment
Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values
using the straight-line method as follows:
Assets
Depreciable
Life
Residual
Value
Aircraft and rotable spares.................................................................. 10-18 years 0-30%
Ground equipment.............................................................................. 5-7 years 0%
Office equipment................................................................................ 5-7 years 0%
Leasehold improvements....................................................................
15 years
or life of
the lease 0%
Buildings ............................................................................................ 20-39.5 years 0%