Segment Reporting

3 Months Ended

Mar. 31, 2021

Segment Reporting

Segment Reporting

(6) Segment Reporting

The Company’s two reporting segments consist of the operations of SkyWest Airlines and SkyWest Leasing activities.

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 March 31, 2021 and 2020 (in thousands):

	Three months ended March 31, 2021
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	406,450	$	128,105	$	534,555
Operating expense		387,870		65,843		453,713
Depreciation and amortization expense		50,326		59,271		109,597
Interest expense		3,129		28,225		31,354
Segment profit (2)		15,451		34,037		49,488
Total assets (as of March 31, 2021)		2,924,598		3,970,087		6,894,685
Capital expenditures (including non-cash)		35,206		22,302		57,508

	Three months ended March 31, 2020
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	606,842	$	123,094	$	729,936
Operating expense		594,141		69,474		663,615
Depreciation and amortization expense		51,775		59,933		111,708
Interest expense		2,541		27,663		30,204
Segment profit (2)		10,160		25,957		36,117
Total assets (as of March 31, 2020)		2,650,094		4,011,317		6,661,411
Capital expenditures (including non-cash)		38,879		72,245		111,124

(1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines segment.

(2) Segment profit is equal to operating income less interest expense.