SkyWest Airlines 2015 Annual Report Download - page 75

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71
presentation. The classification error had no effect on the consolidated statements of comprehensive income (loss),
stockholders’ equity, or cash flows for the year ended December 31, 2014.
(2) Segment Reporting
Generally accepted accounting principles require disclosures related to components of a company for which
separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker
when deciding how to allocate resources and in assessing performance.
The Company’s three operating segments consist of the operations of SkyWest Airlines, ExpressJet and
SkyWest Leasing activities. Corporate overhead expense incurred by the Company 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, the Company’s chief operating decision maker started to analyze the flight operations of the Company’s 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 the Company’s E175 ownership cost earned under the
applicable fixed-fee flying contracts, and the depreciation and interest expense of the Company’s E175 aircraft. The
“SkyWest Leasing” segment’s total assets and capital expenditures include the acquired E175 aircraft. The “SkyWest
Leasing” segment additionally includes the activity of 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.
The Company reclassified $15.0 million of operating revenue, $8.5 million of depreciation expense, $5.0 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.
During the fourth quarter of 2015, the Company resolved a contract matter with one of its 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.
The following represents the Company’s segment data for the years ended December 31, 2015, 2014 and 2013
(in thousands).
Year Ended December 31, 2015
SkyWest
Airlines ExpressJet SkyWest Leasing
Consolidated
Operating revenues ....................... $ 1,848,363 $ 1,169,923 $ 77,277 $ 3,095,563
Operating expense ........................ 1,630,200 1,192,070 38,778 2,861,048
Depreciation and amortization expense ....... 141,189 86,382 36,936 264,507
Interest expense .......................... 36,141 12,091 27,618 75,850
Segment profit (loss) (1) ................... 182,022 (34,238) 10,881 158,665
Identifiable intangible assets, other than
goodwill . . . . . . . . . . . . . ................... — 10,499 — 10,499
Total assets .............................. 2,319,295 1,332,995 1,150,596 4,802,886
Capital expenditures (including non-cash) .... 30,897 24,679 659,513 715,089