Segment Reporting

12 Months Ended

Dec. 31, 2019

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.

Prior to the Company’s sale of ExpressJet on January 22, 2019, the Company’s three reporting segments consisted of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. The segment information presented for ExpressJet reflects the period of time prior to the sale, when 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. Following the sale of ExpressJet, the Company has two reportable segments: SkyWest Airlines and SkyWest Leasing.

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 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 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 Leasing segment also 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 years ended December 31, 2019, 2018 and 2017 (in thousands).

		Year Ended December 31, 2019
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	2,478,681	$	24,050	$	469,232	$	2,971,963
Operating expense		2,214,632		28,690		216,383		2,459,705
Depreciation and amortization expense		168,246		971		198,881		368,098
Special items		18,508		3,361		—		21,869
Interest expense		13,525		—		114,230		127,755
Segment profit (loss) (1)		250,524		(4,640)		138,619		384,503
Total assets		2,728,964		—		3,928,165		6,657,129
Capital expenditures (including non-cash)		270,191		—		576,279		846,470

		Year Ended December 31, 2018
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	2,346,251	$	564,202	$	311,226	$	3,221,679
Operating expense		2,022,560		577,608		147,231		2,747,399
Depreciation and amortization expense		155,511		37,290		141,788		334,589
Interest expense		17,021		2,340		101,048		120,409
Segment profit (loss) (1)		306,670		(15,746)		62,947		353,871
Total assets		2,531,707		279,303		3,502,202		6,313,212
Capital expenditures (including non-cash)		149,731		10,137		996,408		1,156,276

		Year Ended December 31, 2017
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	2,092,368	$	790,282	$	239,942	$	3,122,592
Operating expense		1,807,540		818,683		108,170		2,734,393
Depreciation and amortization expense		134,563		51,982		106,223		292,768
Interest expense		21,544		4,127		79,254		104,925
Segment profit (loss) (1)		263,284		(32,528)		52,518		283,274
Identifiable intangible assets, other than goodwill		—		4,896		—		4,896
Total assets		2,245,051		599,122		2,630,227		5,474,400
Capital expenditures (including non-cash)		124,955		14,278		550,165		689,398

(1) Segment profit is operating income less interest expense