Net Income Per Common Share

6 Months Ended

Jun. 30, 2022

(4) Net Income Per Common Share

Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
PSP1 and Treasury Loan Warrants ⁽¹⁾		582		—		291		—
PSP2 Warrants ⁽²⁾		125		—		125		—
PSP3 Warrants ⁽³⁾		78		78		78		39
Restricted Stock Units		65		—		32		—
Total antidilutive securities		850		78		526		39

(1)

Pursuant to the payroll support program established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“PSP1”) and Loan and Guarantee Agreement with the U.S. Department of the Treasury (“U.S. Treasury”), SkyWest issued to Treasury warrants to purchase shares of SkyWest common stock for an exercise price of $28.38 per share.

(2)	Pursuant to the payroll support program established under the Consolidated Appropriations Act, 2021 (the “2021 Appropriations Act”) (“PSP2”), SkyWest issued to U.S. Treasury warrants to purchase shares of SkyWest common stock for an exercise price of $40.41 per share.

(3)	Pursuant to the payroll support program established under the American Rescue Plan Act of 2021 (the “American Rescue Plan Act”) (“PSP3”), SkyWest issued to U.S. Treasury warrants to purchase shares of SkyWest common stock for an exercise price of $57.47 per share.

Additionally, during the six months ended June 30, 2022, 350,000 performance shares (at target performance) were excluded from the computation of Diluted EPS since the Company had not achieved the minimum target thresholds as of June 30, 2022. During the six months ended June 30, 2021, 295,000 performance shares (at target performance)

were excluded from the computation of Diluted EPS since the Company had not achieved the minimum target thresholds as of June 30, 2021.

The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Numerator:
Net income	$	53,951	$	61,994	$	71,685	$	97,894
Denominator:
Basic earnings per share weighted average shares		50,522		50,346		50,501		50,316
Dilutive effect of employee stock awards and warrants		44		379		136		411
Diluted earnings per share weighted average shares		50,566		50,725		50,637		50,727

Basic earnings per share	$	1.07	$	1.23	$	1.42	$	1.95
Diluted earnings per share	$	1.07	$	1.22	$	1.42	$	1.93