Segment Reporting

6 Months Ended

Jun. 30, 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 June 30, 2021 and 2020 (in thousands):

	Three months ended June 30, 2021
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	527,595	$	129,395	$	656,990
Operating expense		477,188		64,779		541,967
Depreciation and amortization expense		53,151		56,744		109,895
Interest expense		6,219		27,721		33,940
Segment profit (2)		44,188		36,895		81,083
Total assets (as of June 30, 2021)		3,089,404		3,902,359		6,991,763
Capital expenditures (including non-cash)		21,822		4,617		26,439

	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

(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, 2021 and 2020 (in thousands):

	Six months ended June 30, 2021
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	934,045	$	257,500	$	1,191,545
Operating expense		865,058		130,622		995,680
Depreciation and amortization expense		103,477		116,015		219,492
Interest expense		9,348		55,946		65,294
Segment profit (2)		59,639		70,932		130,571
Total assets (as of June 30, 2021)		3,089,404		3,902,359		6,991,763
Capital expenditures (including non-cash)		57,028		26,919		83,947

	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

(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