SkyWest Airlines 2015 Annual Report Download - page 50

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Summary of other income (expense) items and provision for income taxes:
Other Income (expense), net. Other income (expense) for the 2014 year includes a gain of $24.9 million
resulting from the sale of our ownership in TRIP stock, offset by losses from the sale of assets during 2014. Other
income (expense) for the year ended December 31, 2014 primarily consisted of $10.1 million associated with our sale of
stock in Mekong Aviation Joint Stock Company, an airline operating in Vietnam (“Air Mekong”), and recognition of
maintenance deposit we collected associated with the aircraft sub-leases we terminated with Air Mekong.
Provision for income taxes. The income tax provision for the 2014 year included a valuation allowance of
$6.0 million for previously generated state net operating loss benefits specific to ExpressJet that we anticipate to expire,
$2.0 million of foreign income tax associated with our sale of ownership in TRIP stock, and the write-off of $2.4 million
of tax assets associated with the sale of our paint facility located in Saltillo, Mexico during 2014. These discrete income
tax provision items were partially offset by the income tax benefit associated with our loss before income tax of
$16.3 million for 2014.
Net Income (loss). Primarily due to factors described above, we generated a net loss of $24.2 million, or $(0.47)
per diluted share, for the year ended December 31, 2014, compared to net income of $59.0 million, or $1.12 per diluted
share, for the year ended December 31, 2013.
Our Business Segments 2015 compared to 2014:
For the year ended December 31, 2015, we had three reportable segments which are the basis of our internal
financial reporting: Our segment disclosure relates to components of our business for which separate financial
information is available to, and regularly evaluated by our chief operating decision maker. Our operating segment
consists of SkyWest Airlines, ExpressJet and SkyWest Leasing. Corporate overhead expense is allocated to the operating
expenses of SkyWest Airlines and ExpressJet.
During the fourth quarter of 2015, due to the increase in acquired E175 aircraft and the related aircraft debt
financing, our chief operating decision maker started to analyze the flight operations of our E175 aircraft separately from
the acquisition, ownership and financing costs and related revenue. Because of this change, the “SkyWest Leasing”
segment includes revenue attributed to our E175 ownership cost earned under the applicable fixed-fee flying contracts,
and the depreciation and interest expense of our E175 aircraft. The “SkyWest Leasing” segment’s total assets and
capital expenditures include the acquired E175 aircraft. The “SkyWest Leasing” segment additionally includes the
income from two CRJ200 aircraft leased to a third party.
As a result of the change in segmentation, prior periods have been recast to conform to the current presentation.
We reclassified $15.0 million of operating revenue, $8.5 million of depreciation expense, $4.9 million of interest
expense, $1.6 million of segment profit, $527.0 million of total assets and $535.5 million of capital expenditures
(including non-cash) from the “SkyWest Airlines” segment to the “SkyWest Leasing” segment for the year ended
December 31, 2014 to reflect the respective E175 activity in the “SkyWest Leasing” segment for 2014.