SkyWest Airlines 2015 Annual Report Download - page 82

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78
In February 2016, the Atlantic Southeast Pilots and the ExpressJet Delaware Pilots ratified a two-year contract
extension to their respective labor agreements.
(6) Fair Value Measurements
The Company holds certain assets that are required to be measured at fair value in accordance with United
States GAAP. The Company determined fair value of these assets based on the following three levels of inputs:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data for substantially the
full term of the assets or liabilities. Some of the Company’s marketable securities
primarily utilize broker quotes in a non-active market for valuation of these
securities.
Level 3—Unobservable inputs that are supported by little or no market activity and that are
significant to the fair value of the assets or liabilities, therefore requiring an entity to
develop its own assumptions.
As of December 31, 2015, the Company held certain assets that are required to be measured at fair value on a
recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands):
Fair Value Measurements as of December 31, 2015
Total Level 1 Level 2 Level 3
Marketable Securities
Bonds ............................................... $ 286,637 $ — $ 286,637 $ —
Commercial paper .................................... 31 — 31 —
Asset backed securities ................................... $ 286,668 $ — $ 286,668 $ —
Cash, Cash Equivalents and Restricted Cash ................. 211,251 211,251 — —
Other Assets(a) ......................................... 2,321(a) — — 2,321
Total Assets Measured at Fair Value ........................ $ 500,240 $ 211,251 $ 286,668 $ 2,321
Fair Value Measurements as of December 31, 2014
Total
Level 1
Level 2 Level 3
Marketable Securities
Bonds ............................................... $ 410,163 $ — $ 410,163 $ —
Commercial paper .................................... 5,110 — 5,110 —
Asset backed securities ................................ 415,273 — 415,273 —
Cash, Cash Equivalents and Restricted Cash ................. 143,857 143,857 — —
Other Assets(a) ......................................... 2,309 — — 2,309
Total Assets Measured at Fair Value ........................ $ 561,439 $ 143,857 $ 415,273 $ 2,309
(a) Auction rate securities included in long-term “Other assets” in the Consolidated Balance Sheet
Based on market conditions, the Company uses a discounted cash flow valuation methodology for auction rate
securities. Accordingly, for purposes of the foregoing consolidated financial statements, these securities were categorized
as Level 3 securities. The Company’s “Marketable Securities” classified as Level 2 primarily utilize broker quotes in a
non-active market for valuation of these securities.
No significant transfers between Level 1, Level 2 and Level 3 occurred during the year ended December 31,
2015. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end
of the reporting period.