SKYWEST INC Fair Value Disclosure
(7) Fair Value Measurements
The Company holds certain assets that are required to be measured at fair value in accordance with 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, 2025 and 2024, 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, 2025 | ||||||||||||
| Total | | Level 1 | | Level 2 | | Level 3 | |||||
Marketable Securities | ||||||||||||
Bonds and bond funds | $ | 487,699 | $ | — | $ | 487,699 | $ | — | ||||
Commercial paper |
| 96,537 |
| — |
| 96,537 |
| — | ||||
584,236 | — | 584,236 | — | |||||||||
Investments in Other Companies | 4,253 | 4,253 | — | — | ||||||||
Cash and Cash Equivalents | 122,673 | 122,673 | — | — | ||||||||
Total Assets Measured at Fair Value | $ | 711,162 | $ | 126,926 | $ | 584,236 | $ | — | ||||
Fair Value Measurements as of December 31, 2024 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Marketable Securities | | | | | | | | | ||||
Bonds and bond funds | $ | 462,333 | $ | — | $ | 462,333 | $ | — | ||||
Commercial paper |
| 111,933 |
| — |
| 111,933 |
| — | ||||
574,266 | — | 574,266 | — | |||||||||
Investments in Other Companies | 8,160 | — |
| — |
| 8,160 | ||||||
Cash and Cash Equivalents | 227,362 | 227,362 | — | — | ||||||||
Total Assets Measured at Fair Value | $ | 809,788 | $ | 227,362 | $ | 574,266 | $ | 8,160 | ||||
The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities.
During the year ended December 31, 2025, the Company exercised its warrant to purchase 1,500,000 shares of common stock of Eve Holding, Inc. (“Eve”) through a cashless exercise and received shares of common stock of Eve. See Note 12 “Investments in Other Companies” for additional information regarding the Company’s investment in Eve. The warrant was classified as Level 3 within the fair value hierarchy as of December 31, 2024. The Company’s shares of Eve’s common stock are actively traded and are valued using quoted market prices and are classified as Level 1 within the fair value hierarchy as of December 31, 2025. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.