SkyWest Airlines 2013 Annual Report Download - page 58

2012 Compared to 2011
Our Business Segments
For the year ended December 31, 2012, we had two reportable segments which are the basis of our
internal financial reporting: SkyWest Airlines and ExpressJet.
2012 2011 $ Change % Change
Amount Amount Amount Percent
Operating Revenues:
SkyWest Airlines operating revenue ............ $1,930,149 $2,002,830 $ (72,681) (3.6)%
ExpressJet operating revenues ................ 1,593,527 1,640,837 (47,310) (2.9)%
Other operating revenues .................... 10,696 11,256 (560) (5.0)%
Total Operating Revenues ..................... $3,534,372 $3,654,923 $(120,551) (3.3)%
Airline Expenses:
SkyWest airlines expense .................... $1,824,084 $1,944,816 $(120,732) (6.2)%
ExpressJet airlines expense ................... 1,611,982 1,739,623 (127,641) (7.3)%
Other airline expense ....................... 9,699 9,762 (63) (0.6)%
Total Airline Expense(1) ...................... $3,445,765 $3,694,201 $(248,436) (6.7)%
Segment profit (loss):
SkyWest Airlines segment profit ............... $ 106,065 $ 58,014 $ 48,051 82.8%
ExpressJet segment (loss) .................... (18,455) (98,786) 80,331 (81.3)%
Other profit ............................. 997 1,494 (497) (33.3)%
Total Segment Profit (Loss) .................... $ 88,607 $ (39,278) $ 127,885 (325.6)%
Interest Income ............................ 7,928 8,236 (308) (3.7)%
Purchase Accounting Gain (adjustment) ........... —(5,711) 5,711 100.0%
Other .................................... (10,639) (13,417) 2,778 (20.7)%
Consolidated Income (Loss) Before Taxes .......... $ 85,896 $ (50,170) $ 136,066 (271.2)%
(1) Total Airline Expense includes operating expense and interest expense
SkyWest Airlines Segment Profit. SkyWest Airlines segment profit increased $48.1 million, or
82.8%, during the year ended December 31, 2012, compared to the year ended December 31, 2011.
The increase in SkyWest Airlines’ profit was due primarily to the following factors:
• CRJ200 engine overhaul expense incurred under the SkyWest Airlines Fixed-Rate Engine
Contracts decreased $22.6 million. The decrease in CRJ200 engine overhaul expense was
primarily due to a reduction in the number of scheduled engine maintenance events.
• Non-pass-through operating revenue increased by $46.2 million. The increase in non-pass
through operating revenue, was primarily due to an increase in block hour production, receipt of
higher incentive payments and favorable compensation negotiations with our major partners.
• SkyWest Airlines salaries, wages and employee benefits increased $24.4 million primarily due to
increased block hour production.
ExpressJet Segment Loss. ExpressJet segment loss decreased $80.3 million, or 81.3%, during the
year ended December 31, 2012, compared to the year ended December 31, 2011. The decrease in
ExpressJet’s loss was due primarily to the following factors:
• Non-pass-through operating revenue increased by $33.2 million. The increase in
non-pass-through operating revenue was primarily due to an increase in block hour production,
our receipt of higher incentive payments and favorable compensation negotiations with our
major partners.
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