Segment Reporting

6 Months Ended

Jun. 30, 2016

Segment Reporting

Segment Reporting

Note 5 - Segment Reporting

The Company’s three reporting segments consist of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expenses incurred by the Company are allocated to the operating expenses of SkyWest Airlines and ExpressJet.

During the fourth quarter of 2015, due to the increase in E175 aircraft acquisitions and the related aircraft debt financing, the Company’s chief operating decision maker started to analyze the flight operations of the Company’s E175 aircraft (includes operating costs and revenue associated with the operating costs) separately from the acquisition, ownership, financing costs and related revenue of the Company’s E175 aircraft (includes depreciation expense, interest expense and revenue associated with the Company’s ownership cost in the E175 aircraft).  Because of this change, the “SkyWest Leasing” segment includes revenue attributed to the Company’s E175 aircraft ownership cost earned under the applicable fixed-fee contracts, and the depreciation and interest expense of the Company’s E175 aircraft.  The “SkyWest Leasing” segment’s total assets and capital expenditures include the acquired E175 aircraft.  The “SkyWest Leasing” segment additionally includes the activity of two CRJ200 aircraft leased to a third party. As a result of the change in segmentation, results for prior periods have been recast to conform to the current presentation.

The following represents the Company’s segment data for the three-month periods ended June 30, 2016 and 2015 (in thousands).

	Three months ended  June 30, 2016
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	504,107	$	266,241	$	30,990	$	801,338
Operating expense		428,142		274,856		14,203		717,201
Depreciation and amortization expense		34,585		21,460		13,842		69,887
Interest expense		6,754		1,617		9,916		18,287
Segment profit (loss) (1)		69,211		(10,232)		6,871		65,850
Identifiable intangible assets, other than goodwill		—		9,374		—		9,374
Total assets		2,160,421		1,418,365		1,418,099		4,996,885
Capital expenditures (including non-cash)		7,927		2,002		212,745		222,674

	Three months ended  June 30, 2015
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	463,987	$	305,092	$	19,338	$	788,417
Operating expense		404,341		305,590		8,554		718,485
Depreciation and amortization expense		34,784		21,681		8,194		64,659
Interest expense		9,151		2,477		6,453		18,081
Segment profit (loss) (1)		50,495		(2,975)		4,331		51,851
Identifiable intangible assets, other than goodwill		—		11,623		—		11,623
Total assets		2,389,519		1,428,819		996,928		4,815,266
Capital expenditures (including non-cash)		7,473		6,052		237,496		251,021

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

The following represents the Company’s segment data for the six-month periods ended June 30, 2016 and 2015 (in thousands).

	Six months ended June 30, 2016
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	970,403	$	534,048	$	58,963	$	1,563,414
Operating expense		842,226		548,475		26,767		1,417,468
Depreciation and amortization expense		68,916		42,727		26,045		137,688
Interest expense		13,413		3,740		18,859		36,012
Segment profit (loss) (1)		114,764		(18,167)		13,337		109,934
Identifiable intangible assets, other than goodwill		—		9,374		—		9,374
Total assets		2,160,421		1,418,365		1,418,099		4,996,885
Capital expenditures (including non-cash)		21,885		7,050		293,025		321,960

	Six months ended June 30, 2015
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	901,702	$	613,649	$	33,464	$	1,548,815
Operating expense		804,309		624,841		15,657		1,444,807
Depreciation and amortization expense		72,472		43,343		14,535		130,350
Interest expense		18,872		6,833		10,841		36,546
Segment profit (loss) (1)		78,521		(18,025)		6,966		67,462
Identifiable intangible assets, other than goodwill		—		11,623		—		11,623
Total assets		2,389,519		1,428,819		996,928		4,815,266
Capital expenditures (including non-cash)		23,565		13,150		483,444		520,159

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