Segment Reporting

9 Months Ended

Sep. 30, 2021

Segment Reporting

Segment Reporting

(6) Segment Reporting

The Company’s two reporting segments consist of the operations of SkyWest Airlines and SkyWest Leasing activities.

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 September 30, 2021, and 2020 (in thousands):

	Three months ended September 30, 2021
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	614,377	$	130,406	$	744,783
Operating expense		633,169		64,564		697,733
Depreciation and amortization expense		53,401		56,196		109,597
Special items - impairment charges		84,592		—		84,592
Interest expense		2,138		26,842		28,980
Segment profit (loss) (2)		(20,930)		39,000		18,070
Total assets (as of September 30, 2021)		2,989,600		3,950,902		6,940,502
Capital expenditures (including non-cash)		26,622		136,677		163,299

	Three months ended September 30, 2020
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	337,975	$	119,518	$	457,493
Operating expense		303,141		79,799		382,940
Depreciation and amortization expense		59,659		61,808		121,467
Interest expense		2,868		27,282		30,150
Segment profit (2)		31,966		12,437		44,403
Total assets (as of September 30, 2020)		2,836,069		3,922,525		6,758,594
Capital expenditures (including non-cash)		4,937		—		4,937

(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.

The following represents the Company’s segment data for the nine-month periods ended September 30, 2021, and 2020 (in thousands):

	Nine months ended September 30, 2021
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	1,548,422	$	387,906	$	1,936,328
Operating expense		1,498,227		195,186		1,693,413
Depreciation and amortization expense		156,878		172,211		329,089
Special items - impairment charges		84,592		—		84,592
Interest expense		11,486		82,788		94,274
Segment profit (2)		38,709		109,932		148,641
Total assets (as of September 30, 2021)		2,989,600		3,950,902		6,940,502
Capital expenditures (including non-cash)		83,650		163,596		247,246
	Nine months ended September 30, 2020
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	1,172,625	$	364,844	$	1,537,469
Operating expense		1,173,152		227,846		1,400,998
Depreciation and amortization expense		170,855		193,958		364,813
Interest expense		8,847		82,433		91,280
Segment profit (loss) (2)		(9,374)		54,565		45,191
Total assets (as of September 30, 2020)		2,836,069		3,922,525		6,758,594
Capital expenditures (including non-cash)		73,063		115,258		188,321

(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