SkyWest Airlines 2014 Annual Report Download - page 86

SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2014
(1) Nature of Operations and Summary of Significant Accounting Policies (Continued)
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 was approximately $1,813.1 million as of December 31, 2014, as compared to the
carrying amount of $1,745.8 million as of December 31, 2014. The Company’s fair value of long-term
debt as of December 31, 2013 was $1,509.2 million as compared to the carrying amount of
$1,470.6 million as of December 31, 2013.
Segment Reporting
Generally accepted accounting principles require disclosures related to components of a company
for which separate financial information is available to, and regularly evaluated by, the Company’s chief
operating decision maker (‘‘CODM’’)when deciding how to allocate resources and in assessing
performance. The Company’s two operating segments consist of the operations conducted by its two
subsidiaries, SkyWest Airlines and ExpressJet. Information pertaining to the Company’s reportable
segments is presented in Note 2, Segment Reporting.
Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15. This standard
provides guidance on determining when and how to disclose going-concern uncertainties in the financial
statements. The new standard requires management to perform interim and annual assessments of an
entity’s ability to continue as a going concern within one year of the date the financial statements are
issued. This ASU is effective for fiscal years, and interim periods within those years, beginning on or
after December 15, 2016, with early adoption permitted. The Company is evaluating the new guidance
and plans to provide additional information about its expected impact at a future date.
In June 2014, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards
Update 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a
Performance Target Could Be Achieved After the Requisite Service Period (‘‘ASU 2014-12’’). The
FASB issued ASU 2014-12 to provide explicit guidance for share-based awards which allow for an
employee to vest in an award upon achievement of a performance condition met after completion of a
requisite service period regardless of whether the employee is rendering service on the date the
performance target is achieved. ASU 2014-12 provides that the performance target should not be
reflected in estimating the grant-date fair value of the award, but rather compensation cost should be
recognized in the period in which it becomes probable that the performance target will be achieved and
recognized prospectively over the remaining requisite service period. ASU 2014-12 is effective for fiscal
years and interim periods within those years beginning after December 15, 2015. The Company does
not believe the implementation of ASU 2014-12 will have a material impact on the Company’s
consolidated financial statements.
In May 2014, the FASB issued ASU No. 2014-09, ‘‘Revenue from Contracts with Customers’’
(ASU No. 2014-09). Under ASU No. 2014-09, revenue is recognized at the time a good or service is
transferred to a customer for the amount of consideration received for that specific good or service.
ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including
interim reporting periods, and early adoption is not permitted. Entities may use a full retrospective
81