Segment Reporting

3 Months Ended

Mar. 31, 2020

Segment Reporting

Segment Reporting

Note 6 — Segment Reporting

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.

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 capacity purchase agreements attributed to operating such aircraft and the respective operating costs. The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase agreements 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 three-month periods ended March 31, 2020 and 2019 (in thousands):

	Three months ended March 31, 2020
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)	$	606,842	$	—	$	123,094	$	729,936
Operating expense		594,141		—		69,474		663,615
Depreciation and amortization expense		51,775		—		59,933		111,708
Interest expense		2,541		—		27,663		30,204
Segment profit (2)		10,160		—		25,957		36,117
Total assets (as of March 31, 2020)		2,650,094		—		4,011,317		6,661,411
Capital expenditures (including non-cash)		38,879		—		72,245		111,124

	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

(1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines segment.

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