Note 5 - Segment Reporting

The Company’s three reporting segments consisted of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. The Company sold ExpressJet on January 22, 2019. The segment information for ExpressJet reflects the period of time ExpressJet was operating as a subsidiary of the Company. The Company concluded that the sale of ExpressJet did not meet the criteria for a discontinued operation.

The Company’s chief operating decision maker analyzes the profitability of operating new aircraft financed through the issuance of debt, including the Company’s E175 fleet, separately from the profitability of the Company’s capital deployed for ownership and financing of such aircraft. The SkyWest Leasing segment includes applicable revenue earned under the applicable fixed-fee contracts attributed to the ownership of new aircraft acquired through the issuance of debt and the respective depreciation and interest expense of such aircraft. The SkyWest Airlines segment includes revenue earned under the applicable fixed-fee contracts attributed to operating such aircraft and the respective operating costs. The SkyWest Leasing segment includes the activity of leasing regional jet aircraft and spare engines to third parties. The SkyWest Leasing segment’s total assets and capital expenditures include new aircraft acquired through the issuance of debt and assets leased to third parties.

The following represents the Company’s segment data for the three-month periods ended March 31, 2019 and 2018 (in thousands):


	Three months ended March 31, 2019
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)	$	585,768	$	24,050	$	113,876	$	723,694
Operating expense		545,901		28,690		52,684		627,275
Depreciation and amortization expense		40,053		971		48,962		89,986
Special Items		18,508		3,361		—		21,869
Interest expense		3,818		—		28,689		32,507
Segment profit (loss) (2)		36,049		(4,640)		32,503		63,912
Total assets (as of March 31, 2019)		2,738,248		—		3,806,284		6,544,532
Capital expenditures (including non-cash)		68,650		—		345,929		414,579


	Three months ended March 31, 2018
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)	$	556,294	$	161,081	$	66,025	$	783,400
Operating expense		498,875		166,824		29,526		695,225
Depreciation and amortization expense		37,487		11,161		28,937		77,585
Interest expense		4,476		827		20,931		26,234
Segment profit (loss) (2)		52,943		(6,570)		15,568		61,941
Identifiable intangible assets, other than goodwill		—		3,672		—		3,672
Total assets (as of March 31, 2018)		2,184,306		581,722		2,834,159		5,600,187
Capital expenditures (including non-cash)		36,283		1,338		230,167		267,788

(1)

Prorate revenue, Airport customer service and other revenues is primarily reflected in the SkyWest Airlines segment.

(2)

Segment profit (loss) is equal to operating income less interest expense.