(2) 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.

The Company’s three reporting segments consisted of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expenses incurred by the Company were allocated to the operating expenses of SkyWest Airlines and ExpressJet. The Company sold ExpressJet in January 2019. The Company concluded the sale of ExpressJet did not meet the significant shift criteria for a discontinued operation under Discontinued Operations, Accounting Standards Codification 205-20, primarily as the Company continued to provide regional airline service through SkyWest Airlines in similar geographic regions, without a removal of a major airline partner, and with similar sized regional aircraft, upon the sale of 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 activity of four CRJ200 aircraft leased to a third-party.

The following represents the Company’s segment data for the years ended December 31, 2018, 2017 and 2016 (in thousands).


		Year Ended December 31, 2018
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	2,346,251	$	564,202	$	311,226	$	3,221,679
Operating expense		2,022,560		577,608		147,231		2,747,399
Depreciation and amortization expense		155,511		37,290		141,788		334,589
Interest expense		17,021		2,340		101,048		120,409
Segment profit (loss) (1)		306,670		(15,746)		62,947		353,871
Total assets		2,531,707		279,303		3,502,202		6,313,212
Capital expenditures (including non-cash)		149,731		10,137		996,408		1,156,276


		Year Ended December 31, 2017
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	2,092,368	$	790,282	$	239,942	$	3,122,592
Operating expense		1,807,540		818,683		108,170		2,734,393
Depreciation and amortization expense		134,563		51,982		106,223		292,768
Interest expense		21,544		4,127		79,254		104,925
Segment profit (loss) (1)		263,284		(32,528)		52,518		283,274
Identifiable intangible assets, other than goodwill		—		4,896		—		4,896
Total assets		2,245,051		599,122		2,630,227		5,474,400
Capital expenditures (including non-cash)		124,955		14,278		550,165		689,398


		Year Ended December 31, 2016
		SkyWest
		Airlines		ExpressJet		SkyWest Leasing		Consolidated
Operating revenues	$	1,878,725	$	1,043,977	$	141,000	$	3,063,702
Operating expense		1,829,520		1,338,718		68,148		3,236,386
Depreciation and amortization expense		139,159		83,935		61,875		284,969
Special items		184,295		281,354		—		465,649
Interest expense		26,211		6,773		45,193		78,177
Segment profit (loss) (1)		22,994		(301,514)		27,659		(250,861)
Identifiable intangible assets, other than goodwill		—		8,249		—		8,249
Total assets		2,250,276		582,890		2,174,800		5,007,966
Capital expenditures (including non-cash)		57,761		15,396		1,085,844		1,159,001

(1)

Segment profit is operating income less interest expense