Net Income Per Common Share

9 Months Ended

Sep. 30, 2023

Net Income Per Common Share

Net Income Per Common Share

(5) 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				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
PSP1 and Treasury Loan Warrants (1)		—		582		194		388
PSP2 Warrants (2)		—		125		83		125
PSP3 Warrants (3)		78		78		78		78
Employee Stock Awards		—		308		20		124
Total antidilutive securities		78		1,093		375		715

(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 U.S. 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 (“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 (“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 nine months ended September 30, 2023 and 2022, 422,000 and 334,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for the nine months ended September 30, 2023 and 2022, respectively.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Numerator:
Net income	$	23,478	$	48,372	$	16,826	$	120,057
Denominator:
Basic earnings per share weighted average shares		41,826		50,593		45,018		50,531
Dilutive effect of employee stock awards and warrants		754		43		522		105
Diluted earnings per share weighted average shares		42,580		50,636		45,540		50,636
Basic earnings per share	$	0.56	$	0.96	$	0.37	$	2.38
Diluted earnings per share	$	0.55	$	0.96	$	0.37	$	2.37