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Long-term Debt

12 Months Ended

Dec. 31, 2020

(4) Long-term Debt

Long-term debt consisted of the following as of December 31, 2020 and 2019 (in thousands):


	December 31,		December 31,
	2020		2019
Notes payable to a financing company, due in semi-annual installments, with a fixed interest rate of 3.25% through 2021, secured by aircraft	$	6,205	$	18,412
Notes payable to banks, due in semi-annual installments plus interest at 6.24% to 6.51% through 2021, secured by aircraft		7,608		22,557
Notes payable to banks, due in monthly or semi-annual installments, plus interest at 2.68% to 6.86% through 2029, secured by aircraft		424,407		438,878
Notes payable to banks, due in quarterly installments, plus interest at 2.33% to 5.08% through 2032, secured by aircraft		2,618,777		2,537,676
Notes payable to bank, due in monthly installments interest based on LIBOR plus interest spread at 2.65% through 2021		13,795		—
Notes payable to US Government, interest due quarterly based on LIBOR plus interest spread currently at 3.22% through 2025, secured by parts and engines		60,000		—
Notes payable to US Government, interest due quarterly at 1.00% through 2025 and based on SOFR plus spread from 2025 through 2030, unsecured		105,210		—
Long-term debt	$	3,236,002	$	3,017,523
Current portion of long-term debt		(406,005)		(367,954)
Less long-term portion of unamortized debt issue cost, net		(28,459)		(20,580)
Long-term debt, net of current maturities and debt issue costs	$	2,801,538	$	2,628,989

Current portion of long-term debt		406,005		367,954
Less current portion of unamortized debt issue cost, net		(3,847)		(3,828)
Current portion of long-term debt, net of debt issue costs	$	402,158	$	364,126

During 2020, the Company took delivery of six new E175 aircraft that the Company financed through $107.7 million of long-term debt. The debt associated with the six E175 aircraft has a 12-year term, is due in quarterly installments with fixed annual interest rates of 2.3% to 3.45% and is secured by the E175 aircraft.

During 2020, the Company took delivery of 21 used CRJ700 aircraft that the Company financed through $133.5 million of long-term debt. The debt associated with the 10 of the CRJ700 aircraft has a 7.5-year term, is due in quarterly installments with fixed annual interest rates of 3.5% and is secured by the CRJ700 aircraft. The debt associated with 11 of the CRJ700 aircraft has a 5-year term, is due in monthly installments with fixed annual interest rates of 4.0% and is secured by the CRJ700 aircraft.

During 2020, in connection with the CARES Act payroll support program, the Company issued to Treasury a promissory note for an aggregate principal amount of $105.2 million and issued warrants to purchase 370,720 shares of the Company’s common stock. The Company has recorded the value of the promissory note and warrants on a relative fair value basis as $105.2 million of long-term debt and $5.0 million in common stock, respectively. These warrants have an exercise price of $28.38 per share and a five-year term from the date of issuance.

Additionally, during 2020, in connection with the CARES Act, the Company entered into the Treasury Loan Agreement with Treasury which permits the Company to borrow up to $573 million. Subsequently, on October 28, 2020, the Company entered into an amendment to the Treasury Loan Agreement that permits the Company to borrow up to $725 million in the aggregate. As of December 31, 2020, the Company has drawn $60 million under the agreement and issued warrants to purchase 211,416 shares of the Company’s common stock. The Treasury Loan Agreement is secured by aircraft engines and aircraft parts. The Company may, at its option, borrow additional amounts in up to two subsequent borrowings until May 28, 2021. The proceeds will be used for certain general corporate purposes and

operating expenses in accordance with the terms and conditions of the Treasury Loan Agreement and the applicable provisions of the CARES Act. The Company has recorded the value of the promissory note and warrants on a relative fair value basis as $60 million of long-term debt and $3.2 million in common stock, respectively. These warrants have an exercise price of $28.38 per share and a five-year term from the date of issuance.

As of December 31, 2020, and 2019, the Company had $3.07 billion and $3.02 billion, respectively, of long-term debt obligations primarily related to the acquisition of aircraft and certain spare engines. The average effective interest rate on the debt related to those long-term debt obligations at December 31, 2020 and 2019, was approximately 4.0% and 4.2%, respectively.

During the year ended December 31, 2019, the Company used $30.1 million in cash to extinguish $30.1 million in debt early. These payments did not result in a pre-tax gain or loss in the consolidated statements of comprehensive income (loss).

The aggregate amounts of principal maturities of long-term debt as of December 31, 2020 were as follows (in thousands):


2021	$	406,005
2022		407,554
2023		418,048
2024		372,322
2025		447,251
Thereafter		1,184,822
	$	3,236,002

As of December 31, 2020 and 2019, SkyWest Airlines had a $75 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of December 31, 2020, the Company obtained waivers for the line of credit agreement that permitted the Company to receive funding under the CARES Act and waived compliance with minimum profitability covenants through June 30, 2021. As of December 31, 2020 and 2019, SkyWest Airlines had no amount outstanding under the line of credit facility. However, at December 31, 2020 and 2019 the Company had $35.5 million and $8.8 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $39.5 million and $66.2 million, respectively. The facility expires on September 1, 2021 and has a variable interest rate of LIBOR plus 2.5% at December 31, 2020.

As of December 31, 2020 and 2019, the Company had $61.1 million and $61.7 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions in addition to the letters of credit outstanding under the line of credit.