SkyWest Airlines 2009 Annual Report Download - page 84

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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2009
(6) Fair Value Measurements (Continued)
all of its auction rate security instruments. Any future fluctuations in fair value related to these
instruments that the Company deems to be temporary, including any recoveries of previous write
downs, would be recorded to accumulated other comprehensive income. If the Company determines
that any future valuation adjustment was other than temporary, a charge would be recorded to earnings
as appropriate.
As of December 31, 2009, the Company held certain assets that are required to be measured at
fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized
below (in thousands):
Fair Value Measurements as of
December 31, 2009
Total Level 1 Level 2 Level 3
Cash, Cash Equivalents and Restricted
Cash ........................... $ 87,144 $87,144 $ — $ —
Marketable Securities ................ 645,301 — 645,301 —
Other Assets ....................... 4,259 — — 4,259
Total Assets Measured at Fair Value ..... $736,704 $87,144 $645,301 $4,259
Based on market conditions, the Company uses a discounted cash flow valuation methodology for
auction rate securities. Accordingly, for purposes of the foregoing consolidated financial statements,
these securities were categorized as Level 3 securities.
The following table presents the Company’s assets measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) at December 31, 2009 (in thousands):
Fair Value Measurements Using Significant Unobservable Inputs
(Level 3)
Auction Rate
Securities
Balance at January 1, 2009 ................................. $4,686
Total realized and unrealized gains or (losses)
Included in earnings .................................... —
Included in other comprehensive income ..................... (427)
Transferred out .......................................... —
Settlements ............................................. —
Balance at December 31, 2009 ............................... $4,259
(7) Investment Securities
The Company reviews investment securities on an ongoing basis for the presence of
other-than-temporary-impairment (‘‘OTTI’’) with formal reviews performed quarterly. OTTI losses on
individual equity investment securities are recognized as a realized loss through earnings when fair
value is significantly below cost, the decline in fair value has existed for an extended period of time,
80