SkyWest Airlines 2015 Annual Report Download - page 53

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• ExpressJet’s aircraft rental expenses decreased $21.0 million, or 23.3%, during the 2015 year, compared to
the 2014 year, primarily due to the termination of aircraft leases on CRJ200 aircraft since 2014.
• ExpressJet’s ground handling services expenses decreased $19.2 million, or 50.7%, during the 2015 year,
compared to the 2014 year, primarily due to a decrease in scheduled production and reduced fleet size.
• ExpressJet’s other airline expenses decreased $25.4 million, or 18.1%, during the 2015 year, compared to
the 2014 year, primarily due to a decrease in scheduled production subsequent to 2014.
• ExpressJet airlines 2014 expenses included special items of $12.9 million for impairment charges to
write-down certain ERJ145 long-lived assets, including spare engines and capitalized aircraft
improvements, to their estimated fair value and accrued obligations on leased aircraft and related costs.
ExpressJet also had $4.8 million in special charges associated with the write-down of its paint facility
located in Saltillo, Mexico that was sold in 2014.
SkyWest Leasing segment Profit. SkyWest Leasing profit increased $10.2 million during the year
ended December 31, 2015, compared to the year ended December 31, 2014, primarily due to the additional
E175 aircraft revenue attributed to the ownership costs of the E175 aircraft earned under the applicable fixed-
fee flying contract and profitability offset by the E175 aircraft depreciation and interest expense. During the
fourth quarter of 2015, we resolved a contract matter with one of our major partners that resulted in a $7.9
million reduction to revenue. This reduction is reflected in the SkyWest Leasing segment as this amount related
to an aircraft financing matter for the year ended December 31, 2015.
Our Business Segments 2014 compared to 2013:
For the year ended December 31, 2014, 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.