SkyWest Airlines 2010 Annual Report Download - page 65

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17 years. Future minimum lease payments due under all long-term operating leases were approximately
$2.7 billion at December 31, 2010. Assuming a 6.2% discount rate, which is the average rate used to
approximate the implicit rates within the applicable aircraft leases, the present value of these lease
obligations would have been equal to approximately $2.0 billion at December 31, 2010.
Long-term Debt Obligations
As of December 31, 2010, we had $1,898.0 million of long term debt obligations, primarily related
to the acquisition of Brasilia turboprop, CRJ200, CRJ700 and CRJ900 aircraft. The average effective
interest rate on the debt related to the Brasilia turboprop and CRJ aircraft was approximately 4.4% at
December 31, 2010.
Guarantees
We have guaranteed the obligations of SkyWest Airlines under the SkyWest Airlines Delta
Connection Agreement and the obligations of Atlantic Southeast under the Atlantic Southeast Delta
Connection Agreement and SkyWest and Atlantic Southeast have guaranteed the obligations of
ExpressJet under the Continental CPA.
New Accounting Standards
In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value
Measurements, an amendment to Accounting Standards Codification Topic 820, Fair Value Measurements
and Disclosures. This amendment requires an entity to: (i) disclose separately the amounts of significant
transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the
transfers, (ii) disclose separately the reasons for any transfers in and out of Level 3, and (iii) present
separate information for Level 3 activity pertaining to gross purchases, sales, issuances, and settlements.
ASU No. 2010-06 is effective for us for interim and annual reporting periods beginning after
December 15, 2009, with one new disclosure effective after December 15, 2010. We adopted this
guidance beginning with the interim period ended March 31, 2010. See Note 7 of the notes to our
consolidated financial statements set forth in Item 8 of this Report.
On September 23, 2009, the Financial Accounting Standards Board (‘‘FASB’’) ratified Accounting
Standards Update (‘‘ASU’’) No. 2009-13 (formerly referred to as Emerging Issues Task Force Issue
No. 08-1), Revenue Arrangements with Multiple Deliverables. ASU No. 2009-13 requires the allocation of
consideration among separately identified deliverables contained within an arrangement, based on their
related selling prices. ASU No. 2009-13 will be effective for annual reporting periods beginning
January 1, 2011; however, it will be effective only for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company
has been evaluating the impact of ASU No. 2009-13 on its financial position, results of operations, cash
flows, and disclosures. Based on our research to date, we do not believe the adoption of ASU
No. 2009-13 will have a significant impact on our current accounting practices; however, we do expect
to be required to provide additional financial disclosures due to the full adoption of the standard
beginning in the first quarter of 2011.
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