SkyWest Airlines 2012 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2012 SkyWest Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 180

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180

SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2012
(6) Commitments and Contingencies (Continued)
breach of contract based on mutual departure, breach of contract based on voluntary payment, and
breach of the duty of good faith and fair dealing. Delta moved for partial dismissal of the State Court
Complaint, which motion was denied in its entirety. Discovery in the State Court lawsuit is not yet
complete.
On October 18, 2011, Delta filed a counterclaim (the ‘‘Counterclaim’’) against SkyWest Airlines
and Atlantic Southeast. The Counterclaim contains claims for unjust enrichment and breach of contract
related to alleged non-revenue positive space flying by SkyWest and Atlantic Southeast employees for
non-Delta related business. Delta’s Counterclaim does not specify an amount of damages, but the
Counterclaim alleges, on information and belief, that Delta’s damages exceed $4.5 million. SkyWest and
Atlantic Southeast filed their reply to the Counterclaim on November 21, 2011, stating the allegations
contained in the Counterclaim stand denied by operation of law and asserting SkyWest’s and Atlantic
Southeast’s affirmative defenses. An estimated loss is accrued if the loss is probable and reasonably
estimable. Because these conditions have not been satisfied, the Company has not recorded a loss in its
consolidated financial statements with respect to the dispute. As of December 31, 2012, a range of
reasonably possible loss is not determinable related to this Counterclaim.
As of December 31, 2012, the Company’s estimated range of reasonably possible loss related to
the dispute was $0 to $25.8 million. SkyWest Airlines and ExpressJet continue to vigorously pursue
their claims set forth in the State Court Complaint and their defenses against Delta’s Counterclaim.
Concentration Risk and Significant Customers
The Company requires no collateral from its major partners or customers but monitors the
financial condition of its major partners. The Company maintains an allowance for doubtful accounts
receivable based upon expected collectability of all accounts receivable. The Company’s allowance for
doubtful accounts totaled $94,000 and $240,000 as of December 31, 2012 and 2011, respectively. For
the years ended December 31, 2012, 2011 and 2010, the Company’s contractual relationships with Delta
and United combined accounted for approximately 94.8%, 97.6% and 94.7%, respectively of the
Company’s total revenues.
Employees Under Collective Bargaining Agreements
As of December 31, 2012, the Company had 18,145 full-time equivalent employees. Approximately
42% of these employees were represented by unions, including the following employee groups.
Notwithstanding the completion of the ExpressJet Combination, ExpressJet’s employee groups continue
to be represented by those unions who provided representation prior to the ExpressJet Combination.
90