Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting

Segment Reporting

(3) 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 capacity purchase contracts attributed to operating such aircraft and the respective operating costs. The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase 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, 2021, 2020, and 2019 (in thousands).

	Year ended December 31, 2021
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	2,192,432	$	521,059	$	2,713,491
Operating expense		2,177,524		260,100		2,437,624
Depreciation and amortization expense		210,281		229,917		440,198
Special items		84,592		—		84,592
Interest expense		13,360		109,762		123,122
Segment profit (2)		1,548		151,197		152,745
Total assets		2,957,745		4,168,202		7,125,947
Capital expenditures (including non-cash)		128,712		438,325		567,037

	Year ended December 31, 2020
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	1,636,762	$	490,344	$	2,127,106
Operating expense		1,716,808		301,496		2,018,304
Depreciation and amortization expense		221,216		253,743		474,959
Interest expense		12,381		110,792		123,173
Segment profit (loss) (2)		(92,427)		78,056		(14,371)
Total assets		2,804,259		4,083,363		6,887,622
Capital expenditures (including non-cash)		124,825		335,658		460,483

	Year ended December 31, 2019
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)	$	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) (2)		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

(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.