Segment Reporting

6 Months Ended

Jun. 30, 2020

Segment Reporting

Segment Reporting

Note 6 — Segment Reporting

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.

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 June 30, 2020 and 2019 (in thousands):

	Three months ended June 30, 2020
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	227,808	$	122,231	$	350,039
Operating expense		275,869		78,573		354,442
Depreciation and amortization expense		59,421		72,217		131,638
Interest expense		3,438		27,488		30,926
Segment profit (loss) (2)		(51,499)		16,170		(35,329)
Total assets (as of June 30, 2020)		2,789,321		3,984,062		6,773,383
Capital expenditures (including non-cash)		29,247		43,013		72,260

	Three months ended June 30, 2019
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	627,088	$	117,295	$	744,383
Operating expense		545,419		54,871		600,290
Depreciation and amortization expense		40,641		49,507		90,148
Interest expense		3,716		29,054		32,770
Segment profit (2)		77,953		33,370		111,323
Total assets (as of June 30, 2019)		2,738,868		3,841,151		6,580,019
Capital expenditures (including non-cash)		47,975		87,687		135,662

(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 six-month periods ended June 30, 2020 and 2019 (in thousands):

	Six months ended June 30, 2020
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	834,650	$	245,325	$	1,079,975
Operating expense		870,010		148,047		1,018,057
Depreciation and amortization expense		111,197		132,149		243,346
Interest expense		5,979		55,151		61,130
Segment profit (loss) (2)		(41,339)		42,127		788
Total assets (as of June 30, 2020)		2,789,321		3,984,062		6,773,383
Capital expenditures (including non-cash)		68,126		115,258		183,384

	Six months ended June 30, 2019
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)	$	1,212,856	$	24,050	$	231,171	$	1,468,077
Operating expense		1,091,320		28,690		107,555		1,227,565
Depreciation and amortization expense		80,694		971		98,469		180,134
Special Items		18,508		3,361		—		21,869
Interest expense		7,534		—		57,744		65,278
Segment profit (loss) (2)		114,002		(4,640)		65,872		175,234
Total assets (as of June 30, 2019)		2,738,868		—		3,841,151		6,580,019
Capital expenditures (including non-cash)		116,625		—		433,616		550,241

(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.