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.

The Company’s chief operating decision maker analyzes the profitability of operating the E175 aircraft (including operating costs and associated revenue) separately from the profitability of the Company’s ownership, financing costs and associated revenue of the Company’s E175 aircraft (including depreciation expense, interest expense and associated revenue). 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 ownership and activity of four CRJ200 aircraft leased to a third party.

The following represents the Company’s segment data for the three-month periods ended September 30, 2017 and 2016 (in thousands):


	Three months ended September 30, 2017
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	578,109	$	191,516	$	62,311	$	831,936
Operating expense		491,115		200,492		27,960		719,567
Depreciation and amortization expense		34,049		12,573		27,473		74,095
Interest expense		5,276		1,017		20,808		27,101
Segment profit (loss) (1)		81,718		(9,993)		13,543		85,268
Identifiable intangible assets, other than goodwill		—		6,121		—		6,121
Total assets (as of September 30, 2017)		2,088,048		721,939		2,579,459		5,389,446
Capital expenditures (including non-cash)		27,118		2,259		24,122		53,499


	Three months ended September 30, 2016
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	502,600	$	260,362	$	36,814	$	799,776
Operating expense		436,504		261,003		16,435		713,942
Depreciation and amortization expense		34,942		20,726		16,075		71,743
Interest expense		6,584		1,597		11,684		19,865
Segment profit (loss) (1)		59,512		(2,238)		8,695		65,969
Identifiable intangible assets, other than goodwill		—		8,811		—		8,811
Total assets (as of September 30, 2016)		2,174,376		1,268,096		1,692,706		5,135,178
Capital expenditures (including non-cash)		15,385		3,296		290,420		309,101

(1)

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, 2017 and 2016 (in thousands):


	Nine months ended September 30, 2017
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	1,598,812	$	632,199	$	176,099	$	2,407,110
Operating expense		1,387,125		645,055		79,671		2,111,851
Depreciation and amortization expense		98,396		38,808		78,211		215,415
Interest expense		16,811		3,219		58,683		78,713
Segment profit (loss) (1)		194,876		(16,075)		37,745		216,546
Identifiable intangible assets, other than goodwill		—		6,121		—		6,121
Total assets (as of September 30, 2017)		2,088,048		721,939		2,579,459		5,389,446
Capital expenditures (including non-cash)		85,895		12,414		474,091		572,400


	Nine months ended September 30, 2016
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues	$	1,473,003	$	794,410	$	95,777	$	2,363,190
Operating expense		1,278,730		809,478		43,202		2,131,410
Depreciation and amortization expense		103,858		63,453		42,120		209,431
Interest expense		19,997		5,337		30,542		55,876
Segment profit (loss) (1)		174,276		(20,405)		22,033		175,904
Identifiable intangible assets, other than goodwill		—		8,811		—		8,811
Total assets (as of September 30, 2016)		2,174,376		1,268,096		1,692,706		5,135,178
Capital expenditures (including non-cash)		37,270		10,346		583,445		631,061