SkyWest Airlines 2011 Annual Report Download - page 81

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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2011
(1) Nature of Operations and Summary of Significant Accounting Policies (Continued)
investment in Trip Linhas Aereas (‘‘Trip’’) and Mekong Aviation Joint Stock Company (‘‘Air Mekong’’)
(see note 8), net of tax, for the periods indicated (in thousands):
Year Ended December 31,
2011 2010 2009
Net Income (Loss) .......................... $(27,335) $96,350 $83,658
Proportionate share of other companies foreign
currency translation adjustment, net of tax ....... (295) 637 972
Unrealized appreciation (depreciation) on marketable
securities, net of tax ....................... 534 (745) 3,774
Comprehensive income (loss) .................. $(27,096) $96,242 $88,404
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for receivables and accounts
payable approximate fair values because of the immediate or short-term maturity of these financial
instruments. Marketable securities are reported at fair value based on market quoted prices in the
consolidated balance sheets. However, due to recent events in credit markets, the auction events for
some of these instruments held by the Company failed during the year ended December 31, 2011.
Therefore, quoted prices in active markets are no longer available and the Company has estimated the
fair values of these securities utilizing a discounted cash flow analysis as of December 31, 2011. These
analyses consider, among other items, the collateralization underlying the security investments, the
creditworthiness of the counterparty, the timing of expected future cash flows, and the expectation of
the next time the security is expected to have a successful auction. The fair value of the Company’s
long-term debt is estimated based on current rates offered to the Company for similar debt and
approximates $1,952.5 million as of December 31, 2011, as compared to the carrying amount of
$1,815.4 million as of December 31, 2011. The Company’s fair value of long-term debt as of
December 31, 2010 was $1,926.6 million as compared to the carrying amount of $1,898.0 million as of
December 31, 2010.
Segment Reporting
Generally accepted accounting principles require disclosures related to components of a company
for which separate financial information is available to and evaluated regularly by the company’s chief
operating decision maker when deciding how to allocate resources and in assessing performance. The
Company’s two operating segments consist of its two subsidiaries, SkyWest Airlines and ExpressJet.
Information pertaining to the Company’s reportable segments is presented in Note 3, Segment
Reporting.
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