SkyWest Airlines 2011 Annual Report Download - page 55

summarizes the amount of fuel and engine overhaul expenses which are included in our total airline
expenses for the periods indicated (dollar amounts in thousands).
For the year ended December 31,
2011 2010 $ Change % Change
Total airline expense ........................ $3,694,201 $2,649,836 $1,044,365 39.4%
Less: Fuel expense .......................... 592,871 340,074 252,797 74.3%
Less: Engine overhaul reimbursement from major
partners ................................ 173,072 106,241 66,831 62.9%
Less: CRJ 200 engine overhauls reimbursed at fixed
hourly rate .............................. 77,582 75,706 1,876 2.5%
Total airline expense excluding fuel and engine
overhauls and CRJ 200 engine overhauls
reimbursed at fixed hourly rate ............... $2,850,676 $2,127,815 $ 722,861 34.0%
Excluding fuel and engine overhaul costs and CRJ200 engine overhauls reimbursed at fixed hourly
rates, our total airline expenses increased $722.9 million, or 34.0%, during the year ended
December 31, 2011, compared to the year ended December 31, 2010. The percentage increase in total
airline expenses, excluding fuel and engine overhauls, was more than the percentage increase in
passenger revenues, excluding fuel and engine overhaul reimbursements from major partners due
primarily to the factors described above.
Interest Income. Interest income decreased $6.1 million, or 42.7%, during the year ended
December 31, 2011, compared to the year ended December 31, 2010. The decrease in interest income
was due primarily to the retirement of a secured term loan that United repaid on August 11, 2010,
which had an interest rate of 11%.
Other, net. Other expenses, net increased $14.0 million during the year ended December 31, 2011,
compared to the year ended December 31, 2010. Other expense primarily consist of earnings and losses
from our investments in TRIP and Air Mekong, which we account for under the equity method of
accounting. The increase in other expense was due primarily to our recognition of our portion of the
losses incurred by Trip and Air Mekong.
Purchase Accounting Gain (Adjustment). In connection with our preparation of the 2010 tax
return, our management identified an adjustment to the ExpressJet acquisition accounting that resulted
in an increase to the acquired deferred tax liabilities of $5.7 million. The adjustment is reflected on our
consolidated statement of operations for the year ended December 31, 2011 under the caption
‘‘Purchase accounting gain (adjustment).’’
Net Income (loss). Primarily due to factors described above, we incurred a net loss of
$27.3 million, or $0.52 per diluted share, for the year ended December 31, 2011, compared to net
income of $96.4 million, or $1.70 per diluted share, for the year ended December 31, 2010.
2010 Compared to 2009
For the year ended December 31, 2010, we had two reportable segments which are the basis of our
internal financial reporting: SkyWest Airlines and ExpressJet. On November 12, 2010, we completed
the ExpressJet Merger. Our 2010 operating revenues, airline expenses and segment profit contain
50 days of ExpressJet Delaware’s operating results. Therefore, the 2010 ExpressJet amounts represent
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