Back to GetFilings.com
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
For the fiscal year ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission File No. 0-14719
SKYWEST, INC.
Incorporated under the Laws of Utah 87-0292166
(IRS Employer ID No.)
444 South River Road
St. George, Utah 84790
(435) 634-3000
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
Indicate by check mark whether the registrant (1) has filed all
documents and reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or such shorter
period that the Registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
--- ---
The aggregate market value of Common Stock held by non-affiliates
(based upon the closing sale price of the Common Stock on the NASDAQ National
Market System) on June 7, 2000, was approximately $715,130,301.
As of June 7, 2000, there were 24,781,659 shares of Common Stock
outstanding.
Documents Incorporated by Reference
Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended March 31, 2000, are incorporated by reference in Part II as
specified.
Portions of the Registrant's Proxy Statement to be used in connection
with the solicitation of proxies to be voted at the Registrant's 2000 Annual
Meeting of Shareholders, to be filed with the Commission, are incorporated by
reference in Part III as specified.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in the definitive proxy statement
incorporated by reference in Part III of this Form 10-K, or any amendment to
this Form 10-K. /X/
2
SKYWEST, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
PART I
Page No.
--------
Item 1. Business............................................................................................3
Item 2. Properties..........................................................................................8
Item 3. Legal Proceedings...................................................................................9
Item 4. Submission of Matters to a Vote of Security Holders.................................................9
PART II
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters......................................................................10
Item 6. Selected Financial Data............................................................................10
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............................................................10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.........................................10
Item 8. Financial Statements and Supplementary Data........................................................10
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure................................11
PART III
Item 10. Directors and Executive Officers of the Registrant.................................................11
Item 11. Executive Compensation.............................................................................11
Item 12. Security Ownership of Certain Beneficial
Owners and Management............................................................................11
Item 13. Certain Relationships and Related Transactions.....................................................11
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K..............................................................................12
3
PART I
ITEM 1. BUSINESS
GENERAL
SkyWest, Inc. (the "Company"), through its wholly owned subsidiary, SkyWest
Airlines, Inc. ("SkyWest"), operates one of the larger regional airlines in the
United States. SkyWest offers scheduled passenger and air freight service with
approximately 1,000 daily departures to 63 cities in 13 western states and
Canada. Pursuant to a joint marketing and code sharing agreement with Delta
Airlines, Inc. ("Delta"), SkyWest operates as a Delta Connection in certain
SkyWest markets. Effective October 1, 1997, SkyWest entered into a new
code-sharing agreement ("United Express Agreement") with United Airlines, Inc.
("United") and began operating as United Express in Los Angeles, California. On
January 19, 1998, SkyWest executed an addendum to the United Express Agreement
to provide service as United Express in San Francisco, California, which began
June 1, 1998. On February 9, 1998, SkyWest executed another addendum to the
United Express Agreement to provide service as United Express in United's
Portland and Seattle/Tacoma markets and in additional Los Angeles markets, which
began April 23, 1998. As of April 30, 2000, 47 percent of SkyWest's traffic was
carried under the Delta code, and 53 percent was carried under the United code.
Additionally, 22.5 percent of SkyWest's flights operated under the Delta code
and 77.5 percent operated under the United code. With principal hubs located at
Los Angeles, Salt Lake City, San Francisco, Portland and Seattle/Tacoma, SkyWest
offers a convenient and frequent flight schedule designed to maximize connecting
and origin-destination traffic for its major code-sharing partners. As of March
31, 2000, SkyWest operated a fleet of 92 turboprop aircraft and 11 regional jet
aircraft.
Since being founded in 1972, the Company has experienced significant growth.
During the past five fiscal years, consolidated operating revenues have
increased at a compounded annual growth rate of 20.8 percent, from $212.5
million in fiscal 1996 to $474.8 million in fiscal 2000. Total passengers
carried by SkyWest have increased from approximately 2,340,000 to approximately
5,500,000 over the same period. In fiscal 2000, the Company experienced growth
in available seat miles, revenue passenger miles, passengers carried and load
factors. The Company recorded consolidated operating revenues of $474.8 million
and net income increased 36.5 percent to $57.1 million or $2.29 per diluted
share.
Subsequent to March 31, 2000, the Company entered into an agreement to sell all
of the outstanding shares of its wholly owned subsidiary National Parks
Transportation, Inc. ("NPT"). NPT provides car rental services through a fleet
of Avis vehicles located at six airports. NPT had revenues of $2.1 million
during fiscal year 2000 and $3.3 million of net book value on related vehicles
as of March 31, 2000. A closing date of August 17, 2000 has been set for
consummation of the agreement. During fiscal 1999, the Company sold the
operations of its wholly owned subsidiary, Scenic Airlines, Inc. ("Scenic").
Scenic provided air tours and general aviation services to the scenic regions of
Northern Arizona and Southern Utah. The Scenic operations have been reflected as
"Discontinued Operations" in the Company's consolidated financial statements
incorporated herein by reference. The revenues of Scenic amounted to $28.0
million for fiscal 1999.
JOINT MARKETING AND CODE SHARING AGREEMENTS
Since April 1987, SkyWest has operated as Delta Connection in certain SkyWest
markets pursuant to the terms of a joint marketing and code sharing agreement
with Delta. On July 1, 1990, SkyWest and Delta entered into a revised Delta
Connection Agreement (the "Delta Connection Agreement"), modified on April 1,
1997 and May 24,1999, under which SkyWest coordinates with Delta to facilitate
interline connections at Salt Lake City International Airport. The primary
benefit of this affiliation is the use of the Delta designation code (DL) in
listing flights in the Official Airline Guide and in the computerized
reservation systems used throughout the industry. SkyWest's code sharing
arrangement allocates to SkyWest, on certain flights, a portion of the passenger
fare on a formula or other basis,
3
4
subject to periodic adjustments. This code sharing agreement also provides for
negotiated minimum payments per flight departure and incentives related to
passenger volumes and levels of customer service, on certain flights. SkyWest
also participates in cooperative advertising and marketing activities with
Delta, including Delta's Frequent Flyer Program, the Delta Meeting Network and
Delta Dream Vacations.
The Company believes the arrangement created between SkyWest and Delta is
similar to those which exist between other major and regional airlines. The
Delta Connection Agreement terminates June 30, 2010, and is subject to earlier
termination in various circumstances, including upon 180 days' advance notice by
either party for any or no reason. As of March 31, 2000, Delta owned 12.6
percent of the Company's outstanding common stock. Pursuant to a Stock Option
Agreement between Delta and the Company, Delta holds preemptive rights and
registration rights (two demand rights and unlimited "piggy-back" rights) with
respect to the Common Stock owned by Delta, as well as the right to designate
one nominee for the Company's Board of Directors, so long as Delta owns at least
ten percent of all Common Stock. Effective April 1, 1997, W. Martin Braham,
Delta's designated Board member resigned from the Board, at Delta's request. All
Delta designated board members of other regional airlines with similar
arrangements also resigned. However, so long as Delta is the owner of 10% or
more of the Company's outstanding Common Stock, Delta has the right to include a
designee of Delta reasonably acceptable to the Company on the slate of nominees
for election of directors nominated by the Company's Board of Directors and to
use its best efforts to assure the election of the designee to the Board of
Directors. Delta has not designated a nominee to replace Mr. Braham and the
Company does not otherwise intend to nominate a replacement for the vacancy
created by Mr. Braham's resignation.
Effective October 1, 1997, SkyWest began operating as a United Express carrier
in Los Angeles, under a United Express Agreement. The benefits under this
agreement are similar to those described under the Delta Connection and
Continental Connection agreements. This agreement terminates on September 30,
2002, however, may be terminated earlier based on certain provisions in the
agreement. United may also terminate the agreement for convenience upon 180 days
written notice. The amendment agreements executed on January 19, 1998 and
February 9, 1998, terminate on May 31, 2008, however, may be terminated earlier
based on certain provisions in the agreements. The additional flights in Los
Angeles covered in the February 9, 1998 agreement terminate on the same day as
those in the agreement dated October 1, 1997. United may also terminate these
agreements for convenience upon 180 days written notice. On United Express
routes, United controls scheduling, ticketing, pricing and seat inventories with
SkyWest receiving from United negotiated minimum payments per flight departure
and incentives related to passenger and volumes and levels of customer service.
By entering these agreements with United, it has enabled SkyWest to reduce
reliance on any single major airline and to enhance and stabilize operating
results through a mix of SkyWest-controlled flying and contract flying as
previously described.
MARKETS AND ROUTES
SkyWest's flight schedules are structured to facilitate the connection of its
passengers with flights of Delta and United at the airports it serves. The
following table shows selected information about the cities served by SkyWest as
of June 7, 2000.
4
5
Served
State and City Since(1)
- -------------- --------
Arizona:
Yuma................................................................1979
California:
San Diego...........................................................1968
Palm Springs........................................................1970
Los Angeles.........................................................1977
Imperial............................................................1979
Ontario.............................................................1981
Santa Maria.........................................................1982
Santa Barbara.......................................................1983
Bakersfield.........................................................1983
Fresno..............................................................1985
Sacramento..........................................................1986
San Francisco.......................................................1995
San Jose............................................................1986
San Luis Obispo.....................................................1986
Orange County.......................................................1986
Monterey............................................................1987
Cresent City........................................................1998
Eureka..............................................................1998
Redding.............................................................1998
Chico...............................................................1998
Santa Rosa..........................................................1998
Modesto.............................................................1998
Merced..............................................................1998
Visalia.............................................................1998
Inyokern............................................................1998
Oxnard..............................................................1998
Carlsbad............................................................1998
Colorado:
Grand Junction......................................................1983
Colorado Springs....................................................1995
Idaho:
Pocatello...........................................................1980
Idaho Falls.........................................................1982
Twin Falls..........................................................1983
Boise...............................................................1988
Sun Valley..........................................................1990
5
6
Served
State and City Since(1)
- -------------- --------
Montana:
West Yellowstone....................................................1986 (2)
Helena..............................................................1988 (2)
Bozeman.............................................................1988
Billings............................................................1988
Butte...............................................................1988
Missoula............................................................1998
Nebraska:
Omaha.............................................................. 1998
New Mexico:
Albuquerque.........................................................1995
Nevada:
Las Vegas...........................................................1974
Elko................................................................1982
Reno................................................................1982
Oregon:
Eugene..............................................................1995
Portland............................................................1995
Redmond.............................................................1998
Medford.............................................................1998
South Dakota:
Rapid City..........................................................1994
Utah:
Cedar City..........................................................1972
Salt Lake City......................................................1972
St. George..........................................................1972
Washington:
Pasco...............................................................1996
Yakima..............................................................1998
Bellingham..........................................................1998
Seattle.............................................................1998
Spokane.............................................................1999
Wyoming:
Jackson Hole........................................................1986
Casper..............................................................1994
Cody................................................................1995
Canada:
Vancouver B.C.......................................................1997
Calgary.............................................................1999
(1) Refers to the calendar year service was initiated.
(2) Service is provided on a seasonal basis.
6
7
GOVERNMENT REGULATION
All interstate air carriers, including SkyWest, are subject to regulation by the
FAA and the Department of Transportation ("DOT") and other governmental
agencies. The FAA requires operating, air worthiness and other certificates; FAA
approval of personnel who may engage in flight, maintenance or operation
activities; record keeping procedures in accordance with FAA requirements; and
FAA approval of initial and recurrent flight training programs. SkyWest operates
under a FAR Part 121 certificate. Regulations promulgated by the DOT primarily
relate to economic aspects of air service. SkyWest also operates under a
Canadian Foreign Air Operator Certificate issued by the Minister of Transport
Canada.
The Company believes it is operating in compliance with FAA regulations and
holds all necessary operating and air worthiness certificates and licenses. The
Company's flight operations, maintenance programs, record keeping and training
programs are conducted under FAA approved procedures. The Company does not
operate at any airports where landing slots are restricted.
All air carriers are required to comply with federal law and regulations
pertaining to noise abatement and engine emissions. All air carriers are also
subject to certain provisions of the Federal Communications Act of 1934, as
amended, because of their extensive use of radio and other communication
facilities. Management believes that the Company is in compliance in all
material respects with these laws and regulations.
COMPETITION
The airline industry is highly competitive. SkyWest not only competes with other
regional airlines, some of which are owned by or are operated as code sharing
partners of major airlines, but also faces competition from major airlines on
certain routes. SkyWest is the dominant regional airline operating out of the
Salt Lake City and San Francisco International Airports. Competition in the
southern California markets, which are serviced by SkyWest from its hub in Los
Angeles, is particularly intense. SkyWest's principal competitor is Wings West,
Inc. (operating as "American Eagle"). In its Pacific Northwest markets,
SkyWest's principal competitor is Horizon Air Industries, Inc. (operating as
"Horizon Airlines"). SkyWest also faces indirect low-fare competition from
carriers such as Southwest Airlines.
The Company believes that the principal competitive factors affecting decisions
by travelers in SkyWest's markets are the frequency, convenience and reliability
of flights and, to a lesser extent, the level of fares.
EMPLOYEES
As of June 7, 2000, the Company employed 3,565 full-time equivalent employees
consisting of 1,468 pilots and flight attendants, 1,399 customer service
personnel, 442 maintenance personnel, and 256 employees engaged in accounting,
administration, marketing and other functions. The Company's employees are not
represented by any union. The Company is aware, however, that collective
bargaining group organization efforts among its employees occur from time to
time and are expected to continue in the future. During August 1999, the
question of whether or not to join the Airline Pilots Association ("ALPA") was
submitted to our pilots, who voted against joining the association by a narrow
margin. Under governing rules, our pilots may again vote on this issue as early
as August 2000. If unionization efforts are successful, we may be subjected to
risks of work interruption or stoppage and/or incur additional expenses
associated with union representation of our employees. The Company has never
experienced any work stoppages and considers its relationship with its employees
to be very good.
SEASONALITY
As is common in the airline industry, SkyWest's operations are favorably
affected by increased travel, historically occurring in the summer months, and
are unfavorably affected by decreased business travel during the months from
November through January and by inclement weather which occasionally results in
cancelled flights, principally during the winter months. However, SkyWest does
expect some mitigation of the historical seasonal trends due to an increase in
the portion of its operations in contract flying.
7
8
FORWARD-LOOKING STATEMENTS
This form 10-K contains various forward-looking statements and information that
are based on management's beliefs, as well as assumptions made by and
information currently available to management. When used in this document, the
words "anticipate," "estimate," "project," "expect," and similar expressions are
intended to identify forward-looking statements. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated, projected or expected. Among the
key factors that may have a direct bearing on the Company's operating results
include, among other things, changes in SkyWest's code-sharing relationships,
fluctuations in the economy and the demand for air travel, the degree and nature
of competition and SkyWest's ability to expand services in new and existing
markets and to maintain profit margins in the face of pricing pressures.
ITEM 2. PROPERTIES
FLIGHT EQUIPMENT
As of June 7, 2000, SkyWest owned or leased the following types of aircraft:
Number of Scheduled Average
Aircraft Flight Cruising Average
------------------- Passenger Range Speed Age
Type of Aircraft Owned Leased Capacity (miles) (MPH) (years)
- ---------------- ----- ------ ---------- ----------- --------- ---------
Brasilia......................... 21 71 30 300 300 5.7
Canadair Regional Jet............ 1 11 50 850 530 5.0
SkyWest's aircraft are turboprop and jet pressurized aircraft designed to
operate more economically over short-haul routes with lower passenger load
factors than larger jet aircraft. These factors make it economically feasible
for SkyWest to provide high frequency service in markets with relatively low
volumes of passenger traffic. Passenger comfort features of these aircraft
include stand-up headroom, a lavatory, overhead baggage compartments and flight
attendant service. Fiscal year 1995 marked the introduction of the Canadair
Regional Jet ("CRJs"). SkyWest currently operates 12 of these aircraft on stage
lengths up to 850 miles.
SkyWest acquired five Brasilia aircraft under operating lease arrangements
during fiscal 2000 at a cost of approximately $40 million. During fiscal 1999,
SkyWest entered into an agreement to acquire 25 CRJs and related spares parts
inventory and support equipment together with options on 25 additional aircraft.
SkyWest entered into agreements to acquire an additional 30 CRJs and secured
options for an additional 85 aircraft in fiscal 2000. This brings the total firm
order to 55 jet aircraft at an aggregate cost of approximately $1.2 billion and
110 options. Of the 110 options to acquire additional CRJs, 55 are at fixed
prices (subject to cost escalations), have delivery schedules and are
exercisable through July 2003. The remaining 55 options are at fixed prices
(subject to cost escalations), do not have delivery schedules and do not carry
an expiration date. During fiscal 2000, SkyWest also entered into a conditional
agreement for 40 additional CRJs at an aggregate cost of $880 million and
secured options on an additional 80 CRJs. The conditional agreement is subject
to the final resolution of the scope clause negotiations between United and
their pilot union and expires June 30, 2000. The options are exercisable in
blocks of five aircraft and expire 18 months before the estimated delivery of
the optioned aircraft in each block.
8
9
GROUND FACILITIES
Employees of SkyWest perform substantially all routine airframe and engine
maintenance and periodic inspection of equipment. Maintenance is performed
primarily at facilities in Palm Springs, California, Salt Lake City, Utah, and
Fresno, California. SkyWest owns a 56,600 square foot maintenance facility in
Palm Springs, California and leases a 90,000 square foot aircraft maintenance
and training facility at the Salt Lake International Airport. The facility
consists of a 40,000 square foot maintenance hangar and 50,000 square feet of
training and other facilities. The facility was constructed and is owned by the
Salt Lake City Airport Authority. SkyWest is leasing the facility under an
operating lease arrangement over a 36-year term. The Company also leases a
90,000 square foot maintenance hanger and 15,000 square foot office facility in
Fresno, California. SkyWest has plans to begin construction on an additional
aircraft maintenance and training facility in Salt Lake City, Utah during
September 2000. It is estimated that the facility will be completed and
operational by July 2001. The facility is 131,500 square feet consisting of a
58,400 square foot maintenance hangar and 72,900 square feet of training and
office space. It is anticipated that the facility will be owned by the Salt Lake
City Airport Authority and will be leased to SkyWest under a long-term lease
arrangement.
SkyWest leases ticket counters, check-in, and boarding and other facilities in
the passenger terminal areas in the majority of the airports it serves and
staffs these facilities with SkyWest personnel. Delta and United provide ticket
handling and/or ground support services for SkyWest in 32 of the 63 airports it
serves.
The Company's corporate headquarters are located in a 63,000 square foot
building in St. George, Utah. SkyWest is in the planning phase for an additional
building adjacent to its current corporate headquarters in St. George, Utah. It
is estimated that the facility will be completed and operational by early 2001.
The facility will consist of approximately 55,000 square feet and will include
office space for maintenance management and flight operations including pilot
management, dispatch and flight attendant management. The facility will be owned
by SkyWest and will be internally funded with cash generated from operations.
Management deems the Company's current and planned facilities as being suitable
and necessary to support existing operations and believes the Company's
facilities will be adequate for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to certain legal actions which it considers routine to
its business activities. As of March 31, 2000, management believes, after the
consultation with legal counsel, that the ultimate outcome of such legal matters
will not have a material adverse effect on the Company's financial position,
liquidity or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal year 2000.
9
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is traded over-the-counter and quoted in the NASDAQ
National Market System under the symbol "SKYW." At June 7, 2000, there were
approximately 997 stockholders of record. Securities held of record do not
include shares held in securities position listings. The following table sets
forth the range of high and low closing sales prices for the Company's Common
Stock.
Fiscal 2000 Fiscal 1999
----------- -----------
Quarter High Low High Low
------- ---- --- ---- -----
First $ 30.25 $ 21.50 $ 29.75 $ 17.69
Second 27.63 20.13 34.00 15.00
Third 29.00 21.44 32.69 16.06
Fourth 39.13 27.50 38.00 25.13
The transfer agent for the Company's Common Stock is Zions First National Bank,
Salt Lake City, Utah. During fiscal 2000, the Board of Directors declared
regular quarterly dividends of $.03 for the first three quarters and $.04 for
the fourth quarter.
On May 9, 2000, the Company's Board of Directors declared a regular quarterly
cash dividend of $.04 per share payable to stockholders of record on June 30,
2000, distributable July 14, 2000.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference to
page 16 of the Company's Annual Report to Shareholders for the fiscal year ended
March 31, 2000, furnished herewith to the Commission as Exhibit 13.1 to this
report on Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is incorporated herein by reference to
pages 17 through 21 of the Company's Annual Report to Shareholders for the
fiscal year ended March 31, 2000, furnished herewith to the Commission as
Exhibit 13.1 to this report on Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is incorporated herein by reference to
pages 20 and 21 of the Company's Annual Report to Shareholders for the fiscal
year ended March 31, 2000, furnished herewith to the Commission as Exhibit 13.1
to this report on Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company included on pages 22
through 35 of the Company's Annual Report to Shareholders for the fiscal year
ended March 31, 2000, furnished herewith to the Commission as Exhibit 13.1 to
this report on Form 10-K, are incorporated herein by reference.
10
11
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
All items in Part III are incorporated herein by reference to the Company's
Proxy Statement for its 2000 annual stockholders meeting to be held August 8,
2000, to be filed with the Commission.
Headings in
Proxy Statement
---------------------------
ITEM 10. Directors and Executive Officers "Election of Directors" and
of the Registrant. "Executive Officers"
ITEM 11. Executive Compensation. "Executive Compensation" and
"Report of the Compensation Committee"
ITEM 12. Security Ownership of Certain Beneficial "Election of Directors" and
Owners and Management. "Security Ownership of Certain
Beneficial Owners and
Management"
ITEM 13. Certain Relationships and Related Transactions. "Certain Relationships and
Related Transactions"
11
12
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents Filed:
1. Financial Statements. The following consolidated financial
statements of SkyWest, Inc., included in the Annual Report to
Shareholders for the year ended March 31, 2000, are
incorporated herein by reference in Item 8 of this report on
Form 10-K.
- Report of independent public accountants
- Consolidated balance sheets as of March 31, 2000 and 1999
- Consolidated statements of income for the years ended
March 31, 2000, 1999 and 1998
- Consolidated statements of stockholders' equity for the
years ended March 31, 2000, 1999 and 1998
- Consolidated statements of cash flows for the years ended
March 31, 2000, 1999 and 1998
- Notes to consolidated financial statements
2. Financial Statement Schedules. The following consolidated
financial statement schedule of SkyWest, Inc. is included in
Item 14(d) hereof.
- Report of independent public accountants on financial
statement schedule
- Schedule II -- Valuation and qualifying accounts
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are not required under the related
instructions or are not applicable, and therefore have been
omitted.
(b) Reports on Form 8-K.
The Company did not file any Reports on Form 8-K during the quarter
ended March 31, 2000.
(c) Exhibits.
Incorporated by Filed
Number Exhibit Reference Herewith
- ------ ------------------------------------ --------- --------
3.1 Restated Articles of Incorporation.............................................(1)
3.2 Amended By-Laws................................................................(6)
4.1 Articles IV and VI of Restated Articles of Incorporation describing
the Common Shares and shareholders rights (included in
Exhibit 3.1)...................................................................(1)
12
13
Incorporated by Filed
Number Exhibit Reference Herewith
- ------ ------------------------------------ --------- --------
4.2 Article II of the Amended By-Laws defining the
rights of Common Shareholders (included in
Exhibit 3.2)...................................................................(6)
10.1 SkyWest, Inc. Amended and Combined Incentive and
Non-Statutory Stock Option Plan................................................(6)
10.2 Delta Connection agreement dated January 13, 1987
between Delta Air Lines, Inc. and SkyWest
Airlines, Inc..................................................................(2)
10.7 United Express Agreement dated October 1, 1997 and subsequent
amendments dated January 15, 1998 and February 9,
1998..........................................................................(13)
10.3 Stock Option agreement dated January 28,
1987 between Delta Air Lines, Inc. and
SkyWest, Inc...................................................................(2)
10.13 Lease Agreement dated December 1,1989 between
Salt Lake City Corporation and SkyWest Airlines,
Inc............................................................................(7)
10.15 Purchase Agreement dated July 23,1993 between
Bombardier Regional Aircraft Division and
SkyWest Airlines, Inc..........................................................(9)
10.16 Purchase agreement No. DSP/AJV-042/95 dated
June 9, 1995 between Embraer - Empresa
Brasileira de Aeronautica S.A. and
SkyWest Airlines, Inc.........................................................(10)
10.17 SkyWest, Inc. 1995 Employee
Stock Purchase Plan...........................................................(10)
10.19 Purchase agreement No. GCT-008/98 dated
March 26, 1998 between Embraer-Empresa
Brasileira de Aeronautica S.A. and SkyWest Airlines, Inc......................(11)
10.20 Purchase agreement No. PA-0428 dated January 15, 1999
between Bombardier, Inc. and SkyWest Airlines, Inc ...........................(12)
13.1 Certain portions of the Annual Report to Shareholders
for the year ended March 31, 2000, are incorporated
by reference into this report on Form 10-K.........................................................X
13
14
Incorporated by Filed
Number Exhibit Reference Herewith
- ------ ------------------------------------ --------- --------
22.1 Subsidiaries of the Registrant.................................................(1)
23.1 Consent of independent public accountants........................................................X
27.1 Financial Data Schedule..........................................................................X
(1) Incorporated by reference to Registration Statement on Form S-1, File No. 33-5823.
(2) Incorporated by reference to Registrant's 10-Q filed for the quarter ended December 31, 1986.
(3) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1987.
(4) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1989.
(5) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1990.
(6) Incorporated by reference to Registration Statement on Form S-8, File No. 33-41285.
(7) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1992.
(8) Incorporated by reference to Registration Statement on Form S-2, File No. 33-61958.
(9) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1994.
(10) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1995.
(11) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1998.
(12) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1999.
(13) Incorporated by reference to Registrant's Forms 8-K filed on January 21, 1998 and February 11, 1998.
14
15
(d) Financial Statement Schedule.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To SkyWest, Inc.:
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in SkyWest, Inc.'s
Annual Report to Shareholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated May 19, 2000. Our audit was made for the
purpose of forming an opinion on the basic financial statements taken as a
whole. The schedule listed in Item 14 (a)(2) is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Salt Lake City, Utah
May 19, 2000
15
16
SKYWEST, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended March 31, 2000, 1999 and 1998
Additions
Balance at Charged To Balance
Beginning Costs and at End
Description of Year Expenses Deductions of Year
- ----------------------------- ---------- ---------- ---------- -------
Year Ended March 31, 2000:
Engine overhaul accrual $ 7,167,309 $ 4,133,632 $ (1,411,927) $ 9,889,014
Allowance for obsolescence 380,000 100,000 - 480,000
Allowance for doubtful
accounts receivable 202,674 - (143,702) 58,972
------------ ----------- ------------- -------------
$ 7,749,983 $ 4,233,632 $ (1,555,629) $ 10,427,986
=========== =========== ============ ============
Year Ended March 31, 1999:
Engine overhaul accrual $ 5,540,786 $ 3,637,054 $ (2,010,531) $ 7,167,309
Allowance for obsolescence 180,000 200,000 - 380,000
Allowance for doubtful
accounts receivable 123,768 100,000 ( 21,094) 202,674
------------ ------------ ------------- ------------
$ 5,844,554 $ 3,937,054 $ (2,031,625) $ 7,749,983
============ ============ ============ ============
Year Ended March 31, 1998:
Engine overhaul accrual $ 4,773,305 $ 3,537,528 $ (2,770,047) $ 5,540,786
Allowance for obsolescence 280,000 - (100,000) 180,000
Allowance for doubtful
accounts receivable 103,978 77,728 (57,938) 123,768
------------ ----------- ------------ ------------
$ 5,157,283 $ 3,615,256 $ (2,927,985) $ 5,844,554
============ ============ ============ ============
16
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SKYWEST, INC.
By /s/ Jerry C. Atkin
------------------------------------------
Jerry C. Atkin
Chairman, President and Chief Executive Officer
Pursuant to the requirement of the Securities Act of 1934, this report has been
signed below by the following persons in the capacities and on the dates
indicated.
Names Capacities Date
- --------------------------- ------------ ------
/s/ Jerry C. Atkin Chairman of the Board, President and June 27, 2000
- --------------------------- Chief Executive Officer
Jerry C. Atkin
/s/ Sidney J. Atkin Vice Chairman of the Board June 27, 2000
- --------------------------- and Director
Sidney J. Atkin
Executive Vice President,
/s/ Bradford R. Rich Chief Financial Officer and Treasurer June 27, 2000
- --------------------------- (principal financial and
Bradford R. Rich accounting officer)
/s/ J. Ralph Atkin Director June 27, 2000
- ---------------------------
J. Ralph Atkin
/s/ Mervyn K. Cox Director June 27, 2000
- ---------------------------
Mervyn K. Cox
Director
- ---------------------------
Ian M. Cumming
/s/ Steven F. Udvar-Hazy Director June 27, 2000
- ---------------------------
Steven F. Udvar-Hazy
/s/ Henry J. Eyring Director June 27, 2000
- ---------------------------
Henry J. Eyring
- --------------------------- Director
Hyrum W. Smith
- --------------------------- Director
Robert G. Sarver
17
18
Index to Exhibits
Incorporated by Filed
Number Exhibits Reference Herewith
- ------ --------------------------------------------------------- --------- --------
3.1 Restated Articles of Incorporation.............................................(1)
3.2 Amended By-Laws................................................................(6)
4.1 Articles IV and VI of Restated Articles of Incorporation describing
the Common Shares and shareholders rights (included in
Exhibit 3.1)...................................................................(1)
4.2 Article II of the Amended By-Laws defining the
rights of Common Shareholders (included in
Exhibit 3.2)...................................................................(6)
10.1 SkyWest, Inc. Amended and Combined Incentive and
Non-Statutory Stock Option Plan................................................(6)
10.2 Delta Connection agreement dated January 13, 1987
between Delta Air Lines, Inc. and SkyWest
Airlines, Inc..................................................................(2)
10.7 United Express Agreement dated October 1, 1997 and subsequent
amendments dated January 15, 1998 and February 9,
1998..........................................................................(13)
10.3 Stock Option agreement dated January 28,
1987 between Delta Air Lines, Inc. and
SkyWest, Inc...................................................................(2)
10.13 Lease Agreement dated December 1,1989 between
Salt Lake City Corporation and SkyWest Airlines,
Inc............................................................................(7)
10.15 Purchase Agreement dated July 23,1993 between
Bombardier Regional Aircraft Division and
SkyWest Airlines, Inc..........................................................(9)
10.16 Purchase agreement No. DSP/AJV-042/95 dated
June 9, 1995 between Embraer - Empresa
Brasileira de Aeronautica S.A. and
SkyWest Airlines, Inc.........................................................(10)
10.17 SkyWest, Inc. 1995 Employee
Stock Purchase Plan...........................................................(10)
10.19 Purchase agreement No. GCT-008/98 dated
March 26, 1998 between Embraer-Empresa
Brasileira de Aeronautica S.A. and SkyWest Airlines, Inc......................(11)
10.20 Purchase agreement No. PA-0428 dated January 15, 1999
between Bombardier, Inc. and SkyWest Airlines, Inc ...........................(12)
13.1 Certain portions of the Annual Report to Shareholders
for the year ended March 31, 2000, are incorporated
by reference into this report on Form 10-K......................................................X
22.1 Subsidiaries of the Registrant.................................................(1)
23.1 Consent of independent public accountants.......................................................X
27.1 Financial Data Schedule.........................................................................X
(1) Incorporated by reference to Registration Statement on Form S-1, File No. 33-5823.
(2) Incorporated by reference to Registrant's 10-Q filed for the quarter ended December 31, 1986.
(3) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1987.
(4) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1989.
(5) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1990.
(6) Incorporated by reference to Registration Statement on Form S-8, File No. 33-41285.
(7) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1992.
(8) Incorporated by reference to Registration Statement on Form S-2, File No. 33-61958.
(9) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1994.
(10) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1995.
(11) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1998.
(12) Incorporated by reference to Registrant's Form 10-K filed for the year ended March 31, 1999.
(13) Incorporated by reference to Registrant's Forms 8-K filed on January 21, 1998 and February 11, 1998.