SkyWest Airlines 2010 Annual Report Download - page 88

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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2010
(3) Long-term Debt (Continued)
As of December 31, 2010 and 2009, SkyWest Airlines had a $25 million line of credit. As of
December 31, 2010 and 2009 SkyWest Airlines had no amount outstanding under the facility. The
facility expires on March 31, 2011 and has a fixed interest rate of 4.50%.
As of December 31, 2010, the Company had $58.0 million in letters of credit and surety bonds
outstanding with various banks and surety institutions.
During 2010, the Company issued $81.7 million of long-term debt related to the purchase of four
new CRJ 700s.
Certain of the Company’s long-term debt arrangements contain limitations on, among other things,
the sale or lease of assets and ratio of long-term debt to tangible net worth. As of December 31, 2010,
the Company was in compliance with all debt covenants. Management believes that in the absence of
unusual circumstances, the working capital available to the Company will be sufficient to meet the
present financial requirements, including expansion, capital expenditures, lease payments and debt
service obligations for at least the next 12 months.
(4) Note Receivable
On October 16, 2009, SkyWest Airlines extended to United a secured term loan in the amount of
$80 million. The term loan bears interest at a rate of 11%, with a ten-year amortization period. The
loan was secured by certain ground equipment and certain airport slot rights held by United. On
August 11, 2010, United repaid the $80 million term loan together with accrued interest.
SkyWest Airlines also agreed to defer certain amounts otherwise payable to SkyWest Airlines
under the existing United Express Agreement for a maximum period of 30 days. The maximum deferral
amount is $49 million and any amounts deferred accrue a deferral fee of 8%, payable weekly. As of
December 31, 2010, $49 million was deferred for 30 days. United’s right to defer such payments
continues through October 16, 2019, subject to certain conditions. As of December 31, 2010, the
Company had classified $49.0 million as current and has identified the deferred amount as
‘‘Receivables, net’’ in its consolidated balance sheet.
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