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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1996
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
(801) 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 20, 1996, was approximately $129,231,000.
As of June 20, 1996, there were 10,047,208 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, 1996, 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 1996 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/
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SKYWEST, INC.
FISCAL 1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
Page
----
No.
- ---
Item 1. Business.......................................................................... 1
Item 2. Properties........................................................................ 5
Item 3. Legal Proceedings................................................................. 6
Item 4. Submission of Matters to a Vote of Security Holders............................... 6
PART II
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters..................................................... 6
Item 6. Selected Financial Data........................................................... 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................. 6
Item 8. Financial Statements and Supplementary Data....................................... 7
Item 9. Changes in and Disagreements on Accounting and Financial Disclosure............... 7
PART III
Item 10. Directors and Executive Officers of the Registrant................................ 7
Item 11. Executive Compensation............................................................ 7
Item 12. Security Ownership of Certain Beneficial
Owners and Management........................................................... 7
Item 13. Certain Relationships and Related Transactions.................................... 7
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K............................................................. 7
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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 provides passenger and air freight service and completes
over 550 daily flights to 48 cities in twelve western states. Pursuant to a
joint marketing and code sharing agreement with Delta Airlines, Inc. ("Delta"),
Skywest operates as a Delta Connection in SkyWest's markets. Management believes
that during calendar year 1995, approximately 48% of SkyWest's passengers were
interline passengers connecting with flights offered by Delta. In October 1995,
the Company entered into a marketing and code sharing agreement with Continental
Airlines, Inc. ("Continental") which allows SkyWest to operate as a Continental
Connection in markets which operate in and out of Los Angeles. Since inception,
approximately one percent of SkyWest's passengers were interline passengers
connecting with flights offered by Continental. With principal hubs located at
the Los Angeles and Salt Lake City International Airports, SkyWest offers a
convenient and frequent flight schedule designed to maximize connecting and
origin-destination traffic. SkyWest currently operates a fleet of 55 turbo-prop
aircraft and 10 regional jet aircraft.
Founded in 1972, the Company has experienced significant growth. During the past
five fiscal years, consolidated operating revenues have increased from $125.3
million in fiscal 1992 to $251.7 million in fiscal 1996. Total passengers
carried by SkyWest have increased from approximately 1,318,000 to approximately
2,340,000 over the same period. In fiscal 1996, the Company achieved record
levels of passengers carried, record consolidated operating revenues of $251.7
million, and net income of $4.4 million or $.42 per share. Included in the
fiscal 1996 net income is a pretax charge of approximately $6.2 million related
to the Company's fleet restructuring and transition plan wherein Metroliner
long-term operating leases are being terminated early and are being replaced
with Brasilia aircraft. Absent these expenses, net income would have been
approximately $8.2 million or $.80 per share.
The Company, through two wholly-owned subsidiaries, is also engaged in various
other transportation related businesses. Scenic Airlines, Inc. (formerly
Aviation Services West, Inc.) ("Scenic") provides air tours and general aviation
services to the scenic regions of northern Arizona and southern Utah and
operates 55 aircraft. National Parks Transportation, Inc. ("NPT") provides car
rental services through a fleet of Avis vehicles located at five airports served
by SkyWest. In fiscal 1996, Scenic and NPT together accounted for approximately
16.0% and 8.9% of the Company's consolidated operating revenues and net income,
respectively. Effective June 15, 1993, the Company through its wholly-owned
subsidiary, Aviation Services West, Inc. ("ASW") consummated an agreement to
acquire from an entity then known as Scenic Airlines, Inc. ("Scenic Airlines")
the flight tour operations of Scenic Airlines. Subsequent to the acquisition,
ASW changed its name to Scenic Airlines, Inc. and has continued the flight tour
operations acquired from Scenic Airlines as well as the flight tour business
conducted by ASW prior to the acquisition.
JOINT MARKETING AND CODE SHARING AGREEMENTS
Since April 1987, SkyWest has operated as a Delta Connection in SkyWest's
markets pursuant to the terms of a joint marketing and code sharing agreement
with Delta. On July 1, 1990, the Company and Delta entered into a revised Delta
Connection Agreement (the "Delta Connection Agreement") under which the Company
coordinates with Delta to facilitate interline connections at the Los Angeles
and Salt Lake City International Airports. At these two airports combined, Delta
presently has more passenger enplanements and flight departures than any other
carrier. 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. The Company's
code sharing arrangement allocates to the Company a portion of the passenger
fare on a formula or other basis, subject to periodic adjustments. The Company
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 is subject to termination in various circumstances,
including upon 180 days' advance notice by either party for any or no reason.
Delta currently owns 15.5% 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.
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Since October 1995, SkyWest has operated as a Continental Connection, in
Southern California markets which utilize Los Angeles as a connecting hub,
pursuant to the terms of a marketing and code sharing agreement (the
"Continental Connection Agreement") with Continental. The benefits under this
agreement are similar to those described under the Delta Connection Agreement.
The Continental Connection Agreement terminates October 24, 1997, however it is
cancellable by either party with generally 90 days written notice for any or no
reason.
ROUTES
The Company's flight schedules are structured to facilitate the connection of
its passengers with flights of Delta and Continental at the airports it serves.
The following table shows selected information about the cities served by
SkyWest as of June 20, 1996.
Served
State and City Since (1)
- -------------- ---------
Arizona:
Phoenix.............................................................1979 (2)
Yuma................................................................1979
Tucson..............................................................1995
California:
San Diego...........................................................1968
Palm Springs........................................................1970
Los Angeles.........................................................1977
Imperial............................................................1979
Burbank.............................................................1980
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
Colorado:
Grand Junction......................................................1983
Colorado Springs....................................................1995
Idaho:
Pocatello...........................................................1980
Idaho Falls.........................................................1982
Twin Falls..........................................................1983
Boise...............................................................1988
Sun Valley..........................................................1990
Lewiston............................................................1996
Montana:
West Yellowstone....................................................1986 (2)
Helena..............................................................1988
Bozeman.............................................................1988
Billings............................................................1988
Butte...............................................................1988
New Mexico:
Albuquerque.........................................................1995
Served
State and City Since (1)
- -------------- ---------
2
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Nevada:
Las Vegas...........................................................1974
Elko................................................................1982
Reno................................................................1982
Oregon:
Eugene..............................................................1995
Portland............................................................1995
South Dakota:
Rapid City..........................................................1994
Utah:
Cedar City..........................................................1972
Salt Lake City......................................................1972
St. George..........................................................1972
Vernal..............................................................1982
Washington:
Pasco...............................................................1996
Wyoming:
Jackson Hole........................................................1986
Casper..............................................................1994
Cody................................................................1995
Gillette............................................................1995
(1) Refers to the calendar year service was initiated.
(2) Service is provided on a seasonal basis.
SEASONALITY
The Company's operations are favorably affected by increased travel usually
occurring in the summer months and are unfavorably affected by inclement weather
which occasionally results in cancelled flights principally during the winter
months. The business related to the flight tour operations of Scenic is seasonal
in nature. A large percentage of Scenic's passengers are tourists visiting the
Las Vegas and Grand Canyon areas during the summer months. During the first
calendar quarter, the operations of Scenic are generally reduced as a result of
decreased traffic.
RECENT COMMON STOCK TRANSACTIONS
On June 21, 1993, the Company completed a public offering of 1,875,000 shares of
common stock which generated net proceeds of $28,802,000 after deducting
underwriting commissions and other expenses. On July 7, 1993, the underwriters
executed an over allotment option for 219,250 shares of common stock which
generated net proceeds of $3,412,000 after deducting underwriting commissions.
On February 16, 1994, the Company completed another public offering of 1,150,000
shares of common stock which generated net proceeds of $33,456,000 after
deducting underwriting commissions and other expenses. A portion of the proceeds
were used to fund the acquisition of Scenic Airlines, to pay off certain
long-term debt and to facilitate the acquisition of the Canadair Regional Jets.
The balance is being used for general corporate purposes.
On November 23, 1994, the Company's Board of Directors approved the purchase of
up to 1,150,000 shares of the Company's outstanding common stock. The total
shares were purchased during the year ended March 31, 1995 at an average price
of $13.98. On February 7, 1995, the Company's Board of Directors approved the
purchase of up to 500,000 shares of the Company's outstanding common stock. On
February 6, 1996, the Company's Board of Directors approved the purchase of up
to an additional 500,000 shares of the Company's outstanding stock. During the
year ended March 31, 1996, 324,600 shares were purchased at an average price of
$12.92.
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GOVERNMENT REGULATION
All interstate air carriers, including SkyWest and Scenic, are subject to
regulation by the FAA. 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 flight training and retraining programs.
The Company believes it is operating in material 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. The Company 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 International Airport. Competition in the southern
California markets, which are serviced by SkyWest from its hub in Los Angeles,
is particularly intense, with a large number of carriers in these markets. In
its markets served from the Los Angeles International Airport, SkyWest's
principal competitors include Mesa Airlines, Inc. (operating as "Mesa Airlines"
and "United Express"), Wings West, Inc. (operating as "American Eagle"), and
Trans States, Inc. (operating as "USAir Express" and "Trans World Express"). The
Company also faces indirect low-fare competition from carriers such as Southwest
Airlines and Shuttle by United.
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 20, 1996, the Company employed 2,169 full-time equivalent employees
consisting of 793 pilots and flight attendants, 246 maintenance personnel, 872
customer service personnel, 60 reservation and marketing personnel, and 198
employees engaged in accounting, administration 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.
The Company has never experienced any work stoppages and considers its
relationship with its employees to be very good.
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ITEM 2. PROPERTIES
FLIGHT EQUIPMENT
As of June 20, 1996, 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......................... 16 22 30 450 300 3.9
Metroliner....................... - 17 19 300 275 9.3
Canadair Regional Jet............ - 10 50 600 530 1.6
SkyWest's aircraft are primarily turbo-prop, 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. Although the Metroliner aircraft has been a
principal factor in the Company's historical growth, it does not provide the
operating efficiencies and customer acceptance offered by the Brasilia aircraft.
Management has effected a plan to eliminate these Metroliner aircraft by the end
of fiscal 1997. As a result, the Company's turboprop fleet will consist entirely
of Brasilia aircraft. Passenger comfort features of the Brasilia 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. The Company operates ten of these aircraft on stage lengths up to
600 miles. During fiscal 1996, the Company acquired seven Brasilia aircraft and
terminated eight Metroliner long-term operating leases. Subsequent to March 31,
1996, the Company acquired three Brasilia aircraft and terminated one Metroliner
long-term operating lease. As part of the effort to upgrade its fleet of
aircraft, the Company has agreed to acquire 12 Brasilia aircraft and related
parts inventory and support equipment at an aggregate cost of approximately
$96.0 million, including cost escalation provisions as of June 20, 1995. The
Company is scheduled to take delivery of these aircraft during the remainder of
fiscal 1997.
The Company has also secured options to purchase an additional 10 Brasilia
aircraft at fixed prices (subject to cost escalation and delivery schedules).
These options are exercisable through fiscal 1999. Options to acquire an
additional ten Canadair Regional Jets have been secured which are exercisable at
any time with no expiration. Any decision to acquire additional aircraft will
depend upon the Company's future operations, competitive forces, financial
resources and other factors.
GROUND FACILITIES
Employees of the Company perform substantially all routine airframe and engine
maintenance and periodic inspection of equipment. Maintenance is performed
primarily at facilities in Palm Springs, California and Salt Lake City, Utah.
The Company 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 to support the Company's growing hub operations. The facility
was constructed and is owned by the Salt Lake City Airport Authority. The
Company is leasing the facility under an operating lease arrangement over a
36-year term.
The Company 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 Company personnel. Delta provides ticket handling
and/or ground support services for the Company in 12 of the 48 airports it
serves.
The Company owns a new terminal and hangar facility in Page, Arizona consisting
of 11,500 square feet of office and terminal space and 22,000 square feet of
maintenance hangar space. The Company also owns a new terminal and hangar
facility in Las Vegas, Nevada consisting of 39,500 square feet of office and
terminal space and 28,500 square feet of maintenance hangar space.
The Company's corporate headquarters are located in a 63,000 square foot
building in St. George, Utah. Management deems the Company's facilities as being
suitable and necessary to support exisiting operations and facilities are
adequate for the foreseeable future.
5
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ITEM 3. LEGAL PROCEEDINGS
The Company is a party to routine legal proceedings incident to its business. In
the opinion of management, none of such proceedings are expected to have a
material adverse effect on the Company.
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 1996.
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 20, 1996, there were
approximately 1,085 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 1996 Fiscal 1995
----------- -----------
Quarter High Low High Low
------- ---- ----- ---- ----
First $23.50 $14.13 $40.25 $20.50
Second 25.38 17.00 29.75 22.00
Third 19.75 12.88 22.50 12.50
Fourth 14.75 12.38 15.75 11.38
The transfer agent for the Company's Common Stock is Zions First National Bank,
Salt Lake City, Utah.
In fiscal 1996, the Board of Directors declared an annual dividend of $.08 per
share and a special dividend of $.17 per share. In fiscal 1995, the Board of
Directors declared an annual dividend of $.08 per share and a special dividend
of $.20 per share.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference to
page 1 of the Company's Annual Report to Shareholders for the fiscal year ended
March 31, 1996, 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 OPERATION
The information required by this item is incorporated herein by reference to
pages 10 through 14 of the Company's Annual Report to Shareholders for the
fiscal year ended March 31, 1996, furnished herewith to the Commission as
Exhibit 13.1 to this report on Form 10-K.
6
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company included on pages 15
through 27 of the Company's Annual Report to Shareholders for the fiscal year
ended March 31, 1996, furnished herewith to the Commission as Exhibit 13.1 to
this report on Form 10-K, are incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
All items in Part III are incorporated by reference to the Company's Proxy
Statement for its 1996 annual stockholders meeting to be held August 13, 1996,
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 Officers" and
"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"
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, 1996, are
incorporated herein by reference in Item 8 of the Form 10-K.
- Report of independent public accountants
- Consolidated balance sheets as of March 31, 1996 and 1995
- Consolidated statements of income for the years ended March
31, 1996, 1995 and 1994
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- Consolidated statements of stockholders' equity for the
years ended March 31, 1996, 1995 and 1994
- Consolidated statements of cash flows for the years ended
March 31, 1996, 1995 and 1994
- 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 a report on Form 8-K during the quarter
ended March 31, 1996.
(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)
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)
10.3 Stock Option agreement dated January 28,
1987 between Delta Air Lines, Inc. and
SkyWest, Inc................................................................... (2)
10.4 Purchase Agreement No. 382 COI/85 dated
December 27, 1985 between EMBRAER-Empresa
Brasileira de Aeronautica S.A. and
SkyWest Airlines, Inc., as amended by a
Letter Supplement dated December 30,
1985 and an Amendment dated January 30, 1986................................... (1)
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Incorporated by Filed
Number Exhibit Reference Herewith
- ------ ------- --------- --------
10.5 Aircraft Lease dated December 29,
1986 between EFA Leasing Company and
SkyWest Airlines, Inc. (N2698C)................................................ (3)
10.6 Aircraft Lease dated December 29, 1986
between EFA Leasing Company and SkyWest
Airlines, Inc. (N26974)........................................................ (3)
10.7 Aircraft Lease dated December 29, 1986
between EFA Leasing Company and SkyWest
Airlines, Inc. (N2699Y)........................................................ (3)
10.10 Aircraft Lease dated October 31, 1988
between CIT Group/Capital Financing, Inc.
and SkyWest Airlines, Inc. (N2720B,
N27220, N2724S)................................................................ (4)
10.11 Aircraft Lease dated December 12, 1988
between Heleasco Fourteen, Inc. and
SkyWest Airlines, Inc. (N27240, N2726N,
N2725D)........................................................................ (4)
10.12 Aircraft Lease dated April 10, 1989 between
Wilmington Trust Company, and SkyWest
Airlines, Inc. (N27297, N27278, N2730P)........................................ (5)
10.13 Lease Agreement dated December 1,1989 between
Salt Lake City Corporation and SkyWest Airlines,
Inc............................................................................ (7)
10.14 Purchase Agreement No. DSP/AJV-30B/93 dated
March 30, 1993, between EMBRAER-Empresa
Brasileira de Aeronautica S.A. and
SkyWest Airlines, Inc., as amended by a
Letter of Supplement dated May 17, 1993........................................ (8)
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)
10.18 Marketing and Code Sharing Agreement dated
October 24, 1996 between Continental Airlines,
Inc. and SkyWest Airlines, Inc................................................ X
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Incorporated by Filed
Number Exhibit Reference Herewith
- ------ ------- --------- --------
11.0 Computation of earnings per share................................................. X
13.1 Certain portions of the Annual Report to Shareholders
for the year ended March 31, 1996, are incorporated
by reference into this report on Form 10-K........................................ X
22.1 Subsidiaries of the Registrant................................................... (1)
24.1 Consent of independent public accountants......................................... 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.
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(d) Financial Statement Schedule.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To SkyWest, Inc.:
We have audited in accordance with generally accepted auditing standards, 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 24, 1996. 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 24, 1996
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SKYWEST, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MARCH 31, 1996, 1995 AND 1994
Additions
Balance at Charged To Balance
Beginning Costs and at End
Description of Year Expenses Deductions of Year
----------- ------- -------- ----------- -------
Year Ended March 31, 1996:
Allowance for obsolescence $ 180,000 $ - $ - $ 180,000
Allowance for doubtful
accounts receivable 215,262 150,150 (144,067) 221,345
--------- --------- --------- ---------
$ 395,262 $ 150,150 $(144,067) $ 401,345
========= ========= ========= =========
Year Ended March 31, 1995:
Allowance for obsolescence $ 180,000 $ - $ - $ 180,000
Allowance for doubtful
accounts receivable 143,926 72,246 (910) 215,262
--------- --------- --------- ---------
$ 323,926 $ 72,246 $ (910) $ 395,262
========= ========= ========= =========
Year Ended March 31, 1994:
Allowance for obsolescence $ 180,000 $ - $ - $ 180,000
Allowance for doubtful
accounts receivable 142,830 32,572 (31,476) 143,926
--------- --------- --------- ---------
$ 322,830 $ 32,572 $ (31,476) $ 323,926
========= ========= ========= =========
12
15
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 24, 1996
- ----------------------------- Chief Executive Officer
Jerry C. Atkin
/s/ Sidney J. Atkin Vice Chairman of the Board June 24, 1996
- ----------------------------- and Director
Sidney J. Atkin
/s/ Bradford R. Rich Executive Vice President - Finance June 24, 1996
- ----------------------------- Chief Financial Officer and Treasurer
Bradford R. Rich (principal financial and
accounting officer)
/s/ J. Ralph Atkin Director June 24, 1996
- -----------------------------
J. Ralph Atkin
/s/ Mervin J. Cox Director June 24, 1996
- -----------------------------
Mervyn K. Cox
/s/ Ian M. Cumming Director June 24, 1996
- -----------------------------
Ian M. Cumming
Director
- -----------------------------
Steven F. Udvar-Hazy
Director
- -----------------------------
W. Martin Braham
Director
- -----------------------------
Henry J. Eyring
Director
- -----------------------------
Hyrum W. Smith
13