SkyWest Airlines 2014 Annual Report Download - page 96

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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2014
(6) Fair Value Measurements (Continued)
The following table presents the Company’s assets measured at fair value on a recurring basis
using significant unobservable inputs (Level 3) at December 31, 2014 (in thousands):
Fair Value Measurements Using Significant Unobservable Inputs
(Level 3)
Auction Rate
Securities
Balance at January 1, 2014 ................................. $2,245
Total realized and unrealized gains or (losses)
Included in earnings .................................... —
Included in other comprehensive income ..................... 64
Transferred out .......................................... —
Settlements ............................................. —
Balance at December 31, 2014 ............................... $2,309
(7) Investment in Other Companies
In 2012, the Company sold its 20% interest in TRIP to Trip Investimentos Ltda. (‘‘Trip
Investimentos’’) for $42 million. The purchase price was scheduled to be paid in three installments over
a two-year period and the Company received the final payment in July 2014. Under the terms of the
agreement, Trip Investimentos could not transfer the TRIP shares until the final installment payment
was made to the Company, which prevented the Company from recognizing the gain on the transaction
until the Company received the final payment. Accordingly, the Company recorded the gain from the
sale of its TRIP shares of $24.9 million during the year ended December 31, 2014, which is reflected in
‘‘Other Income’’ in the Consolidated Statements of Comprehensive Income (Loss).
As part of the sale transaction, the Company also received an option to acquire 15.38% of the
ownership in Trip Investimentos. The option has an initial exercise price per share equal to the price
paid by Trip Investimentos to acquire the TRIP shares from the Company. The exercise price escalates
annually at a specified rate and the Company can exercise the option, at its discretion, between the
second and fourth anniversaries of July 2014. The Company recorded the fair value of the option as
additional consideration received in the transaction. The value of the option was recorded at a nominal
amount based on the Company’s assessment of the option’s fair value.
In 2010, the Company invested $7 million for a 30% ownership interest in Mekong Aviation Joint
Stock Company, an airline operating in Vietnam (‘‘Air Mekong’’) and, in 2011, invested an additional
$3 million. In 2013, the Company sold its shares of Air Mekong and recognized a gain of $5 million
during the year ended December 31, 2013, which is reflected in other income in the Consolidated
Statements of Comprehensive Income (Loss). Additionally, in 2013, the Company terminated its
sub-lease of certain aircraft to Air Mekong and recognized $5.1 million of other income during the year
ended December 31, 2013 primarily due to the recognition of collected and realized contingent rent
payments, net of the write-off of certain maintenance deposits.
91