SkyWest Airlines 2012 Annual Report Download - page 78
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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2012
(1) Nature of Operations and Summary of Significant Accounting Policies (Continued)
identification method, is recognized in other income and expense. The Company’s position in
marketable securities as of December 31, 2012 and 2011 was as follows (in thousands):
2012 2011
Investment Types Cost Market Value Cost Market Value
Commercial paper ............. $ 3,510 $ 3,514 $ 4,555 $ 4,557
Bond and bond funds .......... 555,603 556,133 496,170 496,310
Asset backed securities ......... 296 314 456 478
559,409 559,961 501,181 501,345
Unrealized appreciation ......... 552 — 164 —
Total ....................... $559,961 $559,961 $501,345 $501,345
Marketable securities had the following maturities as of December 31, 2012 (in thousands):
Maturities Amount
Year 2013 ............................................... $327,942
Years 2014 through 2017 .................................... 160,116
Years 2018 through 2022 .................................... 4,060
Thereafter ............................................... 67,843
As of December 31, 2012, the Company had classified $556.1 million of 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. The Company has classified approximately $3.8 million of investments as non-current
and has identified them as ‘‘Other assets’’ in the Company’s consolidated balance sheet as of
December 31, 2012 (see Note 7).
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, 2012 and 2011 was $9.2 million and
$8.2 million, respectively. These allowances are based on management estimates, which are subject to
change.
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