Segment Reporting

12 Months Ended

Dec. 31, 2015

Segment Reporting

Segment Reporting

(2) Segment Reporting

Generally accepted accounting principles require disclosures related to components of a company for which separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker when deciding how to allocate resources and in assessing performance.

The Company’s three operating segments consist of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expense incurred by the Company is allocated to the operating expenses of SkyWest Airlines and ExpressJet.

During the fourth quarter of 2015, due to the increase in acquired E175 aircraft and the related aircraft debt financing, the Company’s chief operating decision maker started to analyze the flight operations of the Company’s E175 aircraft separately from the acquisition, ownership and financing costs and related revenue.  Because of this change, the “SkyWest Leasing” segment includes revenue attributed to the Company’s E175 ownership cost earned under the applicable fixed-fee flying contracts, and the depreciation and interest expense of the Company’s E175 aircraft.  The “SkyWest Leasing” segment’s total assets and capital expenditures include the acquired E175 aircraft.  The “SkyWest Leasing” segment additionally includes the activity of two CRJ200 aircraft leased to a third party.

As a result of the change in segmentation, prior periods have been recast to conform to the current presentation. The Company reclassified $15.0million of operating revenue, $8.5million of depreciation expense, $5.0million of interest expense, $1.6million of segment profit, $527.0million of total assets and $535.5million of capital expenditures (including non-cash) from the “SkyWest Airlines” segment to the “SkyWest Leasing” segment for the year ended December 31, 2014 to reflect the respective E175 activity in the “SkyWest Leasing” segment for 2014.

During the fourth quarter of 2015, the Company resolved a contract matter with one of its major partners that resulted in a $7.9 million reduction to revenue.  This reduction is reflected in the SkyWest Leasing segment as this amount related to an aircraft financing matter for the year ended December 31, 2015.

The following represents the Company’s segment data for the years ended December 31, 2015, 2014 and 2013 (in thousands).

		Year Ended December 31, 2015
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	1,848,363	$	1,169,923	$	77,277	$	3,095,563
Operating expense		1,630,200		1,192,070		38,778		2,861,048
Depreciation and amortization expense		141,189		86,382		36,936		264,507
Interest expense		36,141		12,091		27,618		75,850
Segment profit (loss) (1)		182,022		(34,238)		10,881		158,665
Identifiable intangible assets, other than goodwill		—		10,499		—		10,499
Total assets		2,319,295		1,332,995		1,150,596		4,802,886
Capital expenditures (including non-cash)		30,897		24,679		659,513		715,089

		Year Ended December 31, 2014
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	1,873,675	$	1,346,859	$	16,913	$	3,237,447
Operating expense		1,758,145		1,446,050		8,404		3,212,599
Depreciation and amortization expense		162,699		88,459		8,484		259,642
Interest expense		39,452		18,754		7,789		65,995
Segment profit (loss) (1)		76,078		(117,945)		720		(41,147)
Identifiable intangible assets, other than goodwill		—		12,748		—		12,748
Total assets		2,492,828		1,390,129		526,971		4,409,928
Capital expenditures (including non-cash)		137,678		23,790		535,455		696,923

		Year Ended December 31, 2013
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	1,827,568	$	1,466,341	$	3,816	$	3,297,725
Operating expense		1,644,129		1,494,302		6,183		3,144,614
Depreciation and amortization expense		155,667		89,338		—		245,005
Interest expense		43,920		21,034		3,704		68,658
Segment profit (loss) (1)		139,519		(48,995)		(6,071)		84,453
Identifiable intangible assets, other than goodwill		—		14,998		—		14,998
Total assets		2,532,431		1,700,788		—		4,233,219
Capital expenditures (including non-cash)		103,387		38,657		—		142,044

(1) Segment profit is operating income less interest expense