Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | SKYWEST INC | |
Entity Central Index Key | 793733 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,675,834 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $91,108 | $132,275 |
Marketable securities | 377,645 | 415,273 |
Restricted cash | 11,582 | 11,582 |
Receivables, net | 71,816 | 83,099 |
Inventories, net | 139,316 | 137,452 |
Prepaid aircraft rents | 444,328 | 397,850 |
Deferred tax assets | 127,430 | 94,385 |
Other current assets | 21,450 | 19,087 |
Total current assets | 1,284,675 | 1,291,003 |
PROPERTY AND EQUIPMENT: | ||
Aircraft and rotable spares | 4,836,689 | 4,608,663 |
Deposits on aircraft | 40,000 | 40,000 |
Buildings and ground equipment | 272,819 | 274,900 |
Total property and equipment, gross | 5,149,508 | 4,923,563 |
Less-accumulated depreciation and amortization | -1,930,108 | -1,902,375 |
Total property and equipment, net | 3,219,400 | 3,021,188 |
OTHER ASSETS | ||
Intangible assets, net | 12,186 | 12,748 |
Other assets | 97,247 | 84,989 |
Total other assets | 109,433 | 97,737 |
Total assets | 4,613,508 | 4,409,928 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 232,460 | 211,821 |
Accounts payable | 270,617 | 270,097 |
Accrued salaries, wages and benefits | 133,699 | 138,902 |
Taxes other than income taxes | 15,219 | 17,457 |
Other current liabilities | 45,070 | 46,078 |
Total current liabilities | 697,065 | 684,355 |
OTHER LONG-TERM LIABILITIES | 48,825 | 49,625 |
LONG-TERM DEBT, net of current maturities | 1,676,906 | 1,533,990 |
DEFERRED INCOME TAXES PAYABLE | 710,317 | 669,385 |
DEFERRED AIRCRAFT CREDITS | 69,841 | 72,227 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, 5,000,000 shares authorized; none issued | ||
Common stock, no par value, 120,000,000 shares authorized; 78,423,463 and 77,951,411 shares issued, respectively | 628,875 | 626,521 |
Retained earnings | 1,173,031 | 1,165,478 |
Treasury stock, at cost, 26,765,386 and 26,765,386 shares, respectively | -391,364 | -391,364 |
Accumulated other comprehensive income (loss) | 12 | -289 |
Total stockholders' equity | 1,410,554 | 1,400,346 |
Total liabilities and stockholders' equity | $4,613,508 | $4,409,928 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0 | $0 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 78,423,463 | 77,951,411 |
Treasury stock, at cost, shares | 26,765,386 | 26,765,386 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
OPERATING REVENUES: | ||
Passenger | $742,498 | $755,639 |
Ground handling and other | 17,900 | 16,747 |
Total operating revenues | 760,398 | 772,386 |
OPERATING EXPENSES: | ||
Salaries, wages and benefits | 302,845 | 317,642 |
Aircraft maintenance, materials and repairs | 158,257 | 178,262 |
Aircraft rentals | 70,412 | 80,335 |
Depreciation and amortization | 65,691 | 62,316 |
Aircraft fuel | 27,300 | 47,225 |
Ground handling services | 23,973 | 37,018 |
Other operating expenses, net | 77,845 | 77,362 |
Total operating expenses | 726,323 | 800,160 |
OPERATING INCOME (LOSS) | 34,075 | -27,774 |
OTHER INCOME (EXPENSE): | ||
Interest income | 640 | 548 |
Interest expense | -18,465 | -15,676 |
Other, net | -273 | |
Total other expense, net | -17,825 | -15,401 |
INCOME (LOSS) BEFORE INCOME TAXES | 16,250 | -43,175 |
PROVISION (BENEFIT) FOR INCOME TAXES | 6,630 | -20,288 |
NET INCOME (LOSS) | 9,620 | -22,887 |
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share) | $0.19 | ($0.44) |
DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share) | $0.18 | ($0.44) |
Weighted average common shares: | ||
Basic (in shares) | 51,457 | 51,467 |
Diluted (in shares) | 52,392 | 51,467 |
Dividends declared per share (in dollars per share) | $0.04 | $0.04 |
COMPREHENSIVE INCOME (LOSS): | ||
Net Income (Loss) | 9,620 | -22,887 |
Net unrealized appreciation marketable securities, net of tax | 301 | 23 |
TOTAL COMPREHENSIVE INCOME (LOSS) | $9,921 | ($22,864) |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $35,206 | ($34,295) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | -109,900 | -53,440 |
Sales of marketable securities | 147,830 | 92,772 |
Proceeds from the sale of equipment | 2,966 | |
Acquisition of property and equipment: | ||
Aircraft and rotable spare parts | -258,795 | -66,728 |
Buildings and ground equipment | -6,905 | -3,892 |
Increase in other assets | -13,934 | -14,257 |
NET CASH USED IN INVESTING ACTIVITIES | -238,738 | -45,545 |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ||
Principal payments on long-term debt | -39,528 | -32,932 |
Proceeds from issuance of long-term debt | 203,083 | 29,281 |
Net proceeds from issuance of common stock | 2,730 | 1,854 |
Tax deficiency from exercise of commons stock | -1,873 | -1,266 |
Purchase of treasury stock | -3,076 | |
Payment of cash dividends | -2,047 | -2,054 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 162,365 | -8,193 |
Decrease in cash and cash equivalents | -41,167 | -88,033 |
Cash and cash equivalents at beginning of period | 132,275 | 170,636 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 91,108 | 82,603 |
Cash paid during the period for: | ||
Interest, net of capitalized amounts | 15,281 | 13,122 |
Income taxes | $573 | $451 |
Condensed_Consolidated_Financi
Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2015 | |
Condensed Consolidated Financial Statements | |
Condensed Consolidated Financial Statements | |
Note A — Condensed Consolidated Financial Statements | |
Basis of Presentation | |
The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”) and its operating subsidiaries, SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines Inc. (“ExpressJet”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. The Company suggests that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will differ and may differ materially from those estimates and assumptions. | |
On November 17, 2011, the Company’s wholly-owned subsidiaries, Atlantic Southeast Airlines, Inc. and ExpressJet Airlines, Inc., consolidated their operations under a single operating certificate, and on December 31, 2012, Atlantic Southeast Airlines, Inc. and ExpressJet Airlines, Inc. were merged, with the surviving corporation named ExpressJet Airlines, Inc. (the “ExpressJet Combination”). In the following condensed consolidated financial statements, “Atlantic Southeast” refers to Atlantic Southeast Airlines, Inc. for periods prior to the ExpressJet Combination, “ExpressJet Delaware” refers to ExpressJet Airlines, Inc., a Delaware corporation, for periods prior to the ExpressJet Combination, and “ExpressJet” refers to ExpressJet Airlines, Inc., the Utah corporation resulting from the combination of Atlantic Southeast and ExpressJet Delaware, for periods subsequent to the ExpressJet Combination. At the time of the ExpressJet Combination, Atlantic Southeast had been a code-share partner with Delta in Atlanta since 1984 and a code-share partner with United since February 2010. As of March 31, 2015, ExpressJet operated as a Delta Connection carrier in Atlanta and Detroit, a United Express carrier in Chicago (O’Hare), Washington, D.C. (Dulles International Airport), Cleveland, Newark, Houston and Denver, and an American carrier in Dallas. | |
Passenger_and_Ground_Handling_
Passenger and Ground Handling Revenue | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Passenger and Ground Handling Revenues | |||||||||||
Passenger and Ground Handling Revenues | |||||||||||
Note B — Passenger and Ground Handling Revenue | |||||||||||
The Company recognizes passenger and ground handling revenues when the service is provided under its code-share agreements. Ground handling revenue primarily consists of customer service functions such as gate and ramp agent services, at applicable airports where the Company provides such services to other airlines. Under the Company’s fixed-fee arrangements (referred to as “fixed-fee arrangements, “contract flying” or “capacity purchase agreements”) with Delta Airlines Inc. (“Delta”), United Airlines Inc. (“United”), US Airways Group, Inc. (“US Airways”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”), the major airline generally pays the Company a fixed-fee for each departure, flight or block time incurred, and an amount per aircraft in service each month with additional incentives based on completion of flights and on-time performance. The major airline partner also directly reimburses the Company for certain direct expenses incurred under the fixed-fee arrangement such as fuel expense and landing fee expenses. Under the fixed-fee arrangements, revenue is earned when each flight is completed. | |||||||||||
Under a revenue-sharing arrangement (referred to as a “revenue-sharing” or “pro-rate” arrangements), the major airline and regional airline negotiate a passenger fare proration formula, pursuant to which the regional airline receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on the regional airline and the other portion of their trip on the major airline. Revenue is recognized under the Company’s pro-rate flying agreements when each flight is completed based upon the portion of the pro-rate passenger fare the Company anticipates that it will receive for each completed flight. | |||||||||||
Other ancillary revenues commonly associated with airlines such as baggage fee revenue, ticket change fee revenue and the marketing component of the sale of mileage credits are retained by the Company’s major airline partners on flights that the Company operates under its code-share agreements. | |||||||||||
In the event that the contractual rates under the Company’s flying agreements have not been finalized at quarterly or annual financial statement dates, the Company records revenues based on the lower of prior period’s approved rates, as adjusted to reflect any contract negotiations, and the Company’s estimate of rates that will be implemented in accordance with revenue recognition guidelines. In the event the Company has a reimbursement dispute with a major partner, the Company evaluates the dispute under its established revenue recognition criteria and, provided the revenue recognition criteria have been met, the Company recognizes revenue based on management’s estimate of the resolution of the dispute. | |||||||||||
In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are measured and determined on a monthly, quarterly or semi-annual basis. At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly. | |||||||||||
The following table summarizes the significant provisions of each code share agreement the Company has with each major partner: | |||||||||||
Delta Connection Agreements | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Performance | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Incentive | ||||||||
contract | by major partner | Structure | |||||||||
SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) | CRJ 200—48 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | No financial performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 700—19 | |||||||||||
CRJ 900—32 | The final aircraft expires in 2022 | Engine Maintenance | |||||||||
The average remaining term of the aircraft under contract is 4.5 years | Landing fees, Station Rents, Deice | ||||||||||
Upon expiration, aircraft may be renewed or extended | Insurance | ||||||||||
ExpressJet Delta Connection Agreement (fixed-fee arrangement) | CRJ 200—59 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | Performance based financial incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 700—41 | |||||||||||
CRJ 900—28 | The final aircraft expires in 2022 | Engine Maintenance | |||||||||
The average remaining term of the aircraft under contract is 3.9 years | Landing fees, Station Rents, Deice Insurance | ||||||||||
Upon expiration, aircraft may be renewed or extended | |||||||||||
SkyWest Airlines Pro-rate Agreement (revenue-sharing arrangement) | EMB 120—2 | Terminates with 30-day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
CRJ 200—13 | |||||||||||
United Express Agreements | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Performance | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Incentive | ||||||||
contract | by major partner | Structure | |||||||||
SkyWest Airlines United Express Agreements (fixed-fee arrangement) | CRJ 200—49 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 700—70 | |||||||||||
E175—29 | The final aircraft expires in 2026 | Landing fees, Station Rents, Deice | |||||||||
EMB 120—4 | |||||||||||
The average remaining term of the aircraft under contract is 4.0 years | Insurance | ||||||||||
Upon expiration, aircraft may be renewed or extended | |||||||||||
ExpressJet United ERJ Agreement (fixed-fee arrangement) | ERJ 135—7 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | Performance based incentives or penalties | Rate per block hour, per departure and per aircraft under contract | ||||||
ERJ 145—202 | |||||||||||
The final aircraft expires in 2017 | Engine Maintenance | ||||||||||
The average remaining term of the aircraft under contract is 1.7 years | Landing fees, Station Rents, Deice | ||||||||||
Upon expiration, aircraft may be renewed or extended | Insurance | ||||||||||
SkyWest Airlines United Express Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—23 | Terminates with 120-day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
EMB 120—6 | |||||||||||
Alaska Capacity Purchase Agreement | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Incentive | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Structure | ||||||||
contract | by major partner | ||||||||||
SkyWest Airlines Alaska Agreement (fixed-fee arrangement) | CRJ 700—9 | Terminates 2018 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
US Airways Agreements | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Incentive | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Structure | ||||||||
contract | by major partner | ||||||||||
SkyWest Airlines US Airways Agreement (fixed-fee arrangement) | CRJ 200—10 | Terminates by the end of 2015 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 900—4 | |||||||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
SkyWest Airlines US Airways Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—1 | Terminates with 120- day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
American Agreements | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Incentive | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Structure | ||||||||
contract | by major partner | ||||||||||
SkyWest Airlines American Agreement (fixed-fee arrangement) | CRJ 200—12 | Terminates 2016 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
SkyWest Airlines American Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—5 | Terminates with 120- day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
ExpressJet American Agreement (fixed-fee arrangement) | CRJ 200—11 | Terminates 2017 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
ERJ 145—6 | |||||||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
ExpressJet American Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—3 | Terminates with 120- day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
Other Revenue Items | |||||||||||
The Company’s passenger and ground handling revenues could be impacted by a number of factors, including changes to the Company’s code-share agreements with Delta, United, Alaska, American or US Airways, contract modifications resulting from contract re-negotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and settlement of reimbursement disputes with the Company’s major partners. | |||||||||||
ShareBased_Compensation
Share-Based Compensation | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Share-Based Compensation | |||||
Share-Based Compensation | |||||
Note C — Share-Based Compensation | |||||
The fair value of stock options granted by the Company has been estimated as of the grant date using the Black-Scholes option pricing model. The Company uses historical data to estimate option exercises and employee termination in the option pricing model. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. The expected volatilities are based on the historical volatility of the Company’s traded stock and other factors. During the three months ended March 31, 2015, the Company granted options to purchase 237,240 shares of common stock under the SkyWest, Inc. 2010 Long-Term Incentive Plan (the “2010 Incentive Plan”). The following table shows the assumptions used and weighted average fair value for stock option grants during the three months ended March 31, 2015. | |||||
Expected annual dividend rate | 1.18 | % | |||
Risk-free interest rate | 1.62 | % | |||
Average expected life (years) | 5.7 | ||||
Expected volatility of common stock | 0.401 | ||||
Forfeiture rate | 0.0 | % | |||
Weighted average fair value of option grants | $ | 4.75 | |||
During the three months ended March 31, 2015, the Company granted 386,401 restricted stock units and 202,505 performance restricted stock units to the Company’s employees under the 2010 Incentive Plan. Both the restricted stock and performance restricted stock units have a three-year vesting period, during which the recipient must remain employed with the Company or one of the Company’s subsidiaries. In addition to the three-year vesting period, certain profit metrics of the Company must be met before the recipient will receive any shares of stock attributable to the performance restricted stock units. Upon vesting, a restricted stock unit and a performance restricted stock unit will be replaced with a share of common stock. Additionally, during the three months ended March 31, 2015, the Company granted 31,088 fully-vested shares of common stock to the Company’s directors. The fair value of the shares of restricted stock on the date of grant was $13.51 per share. | |||||
The Company records share-based compensation expense only for those options and restricted and performance restricted stock units that are expected to vest. The estimated fair value of the stock options and restricted stock units is amortized over the applicable vesting periods. During the three months ended March 31, 2015 and 2014, the Company recorded pre-tax share-based compensation expense of $1.5 million and $1.7 million, respectively. | |||||
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net Income (Loss) Per Common Share | ||||||||
Net Income (Loss) Per Common Share | ||||||||
Note D — Net Income (Loss) Per Common Share | ||||||||
Basic net income (loss) per common share (“Basic EPS”) excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income (loss) per common share. During the three months ended March 31, 2015 and 2014, options to acquire 1,560,000 and 2,945,000 shares of common stock, respectively, were excluded from the computation of Diluted EPS as their impact was anti-dilutive. | ||||||||
The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows: | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator | ||||||||
Net Income (Loss) | $ | 9,620 | $ | (22,887 | ) | |||
Denominator | ||||||||
Weighted average number of common shares outstanding | 51,457 | 51,467 | ||||||
Effect of outstanding share-based awards | 935 | — | ||||||
Weighted average number of shares for diluted earnings (loss) per common share | 52,392 | 51,467 | ||||||
Basic earnings (loss) per share | $ | 0.19 | $ | (0.44 | ) | |||
Diluted earnings (loss) per share | $ | 0.18 | $ | (0.44 | ) | |||
Segment_Reporting
Segment Reporting | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Segment Reporting | ||||||||||||||
Segment Reporting | ||||||||||||||
Note E — 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 (“CODM”) when deciding how to allocate resources and in assessing performance. | ||||||||||||||
The Company’s two operating segments consist of the operations of its two operating subsidiaries, SkyWest Airlines and ExpressJet. The following represents the Company’s segment data for the three months ended March 31, 2015 and 2014 (in thousands). | ||||||||||||||
Three months ended March 31,2015 | ||||||||||||||
SkyWest | ExpressJet | Corporate/ | Consolidated | |||||||||||
Airlines | Consolidating | |||||||||||||
Operating revenues | $ | 448,069 | $ | 308,557 | $ | 3,772 | $ | 760,398 | ||||||
Operating expense | 406,019 | 319,251 | 1,053 | 726,323 | ||||||||||
Depreciation and amortization expense | 43,767 | 21,662 | 262 | 65,691 | ||||||||||
Interest expense | 14,024 | 4,441 | — | 18,465 | ||||||||||
Segment profit (loss) (1) | 28,026 | (15,135 | ) | 2,719 | 15,610 | |||||||||
Identifiable intangible assets, other than goodwill, net | — | 12,186 | — | 12,186 | ||||||||||
Total assets | 3,191,465 | 1,422,043 | — | 4,613,508 | ||||||||||
Capital expenditures (including non-cash) | 262,040 | 7,098 | — | 269,138 | ||||||||||
Three months ended March 31,2014 | ||||||||||||||
SkyWest | ExpressJet | Corporate/ | Consolidated | |||||||||||
Airlines | Consolidating | |||||||||||||
Operating revenues | $ | 447,041 | $ | 324,870 | $ | 475 | $ | 772,386 | ||||||
Operating expense | 425,643 | 374,425 | 92 | 800,160 | ||||||||||
Depreciation and amortization expense | 40,001 | 22,315 | — | 62,316 | ||||||||||
Interest expense | 10,026 | 4,875 | 775 | 15,676 | ||||||||||
Segment profit (loss)(1) | 11,372 | (54,430 | ) | (392 | ) | (43,450 | ) | |||||||
Identifiable intangible assets, other than goodwill, net | — | 14,436 | — | 14,436 | ||||||||||
Total assets | 2,535,901 | 1,666,126 | — | 4,202,027 | ||||||||||
Capital expenditures (including non-cash) | 66,232 | 7,292 | — | 73,524 | ||||||||||
-1 | Segment profit (loss) is equal to operating income (loss) less interest expense | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | |||||
Note F — Commitments and Contingencies | |||||
As of March 31, 2015, the Company leased 534 aircraft, as well as airport facilities, office space, and various other property and equipment under non-cancelable operating leases which are generally on a long-term net rent basis where the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases. The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of March 31, 2015 (in thousands): | |||||
April through December 2015 | $ | 199,108 | |||
2016 | 270,706 | ||||
2017 | 201,467 | ||||
2018 | 156,437 | ||||
2019 | 119,618 | ||||
Thereafter | 453,545 | ||||
$ | 1,400,881 | ||||
During the three months ended March 31, 2015, the Company took delivery of nine Embraer E175 dual-class jet aircraft (“E175s”) and financed the aircraft through the issuance of $203.1 million of long-term debt. The debt associated with the E175 aircraft delivered during the three months ended March 31, 2015 has a twelve year term with a fixed annual interest rate ranging from 3.5% to 3.7% and is secured by the E175 aircraft. | |||||
As of March 31, 2015 and December 31, 2014, the Company had $2.9 and $3.8 million, respectively, for future lease obligations associated with EMB120 aircraft removed from service. The lease payments for the EMB120s will continue through June 2016. | |||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Note G — Fair Value Measurements | ||||||||||||||
The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined fair value of these assets based on the following three levels of inputs: | ||||||||||||||
Level 1 | — | Quoted prices in active markets for identical assets or liabilities. | ||||||||||||
Level 2 | — | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities. | ||||||||||||
Level 3 | — | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions. | ||||||||||||
As of March 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands): | ||||||||||||||
Fair Value Measurements as of March 31, 2015 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
Marketable Securities | ||||||||||||||
Bonds and bond funds | $ | 377,558 | $ | — | $ | 377,558 | $ | — | ||||||
Asset backed securities | 87 | — | 87 | — | ||||||||||
377,645 | — | 377,645 | — | |||||||||||
Cash, Cash Equivalents and Restricted Cash | 102,690 | 102,690 | — | |||||||||||
Other Assets | 2,308 | — | — | (a) 2,308 | ||||||||||
Total Assets Measured at Fair Value | $ | 482,643 | $ | 102,690 | $ | 377,645 | $ | 2,308 | ||||||
Fair Value Measurements as of December 31, 2014 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
Marketable Securities | ||||||||||||||
Bonds and bond funds | $ | 410,163 | $ | — | $ | 410,163 | $ | — | ||||||
Asset backed securities | 5,110 | — | 5,110 | — | ||||||||||
415,273 | — | 415,273 | — | |||||||||||
Cash, Cash Equivalents and Restricted Cash | 143,857 | 143,857 | — | — | ||||||||||
Other Assets | 2,309 | — | — | (a) 2,309 | ||||||||||
Total Assets Measured at Fair Value | $ | 561,439 | $ | 143,857 | $ | 415,273 | $ | 2,309 | ||||||
(a) | Comprises of auction rate securities which is reflected in long-term “Other assets” in the Company’s unaudited condensed consolidated balance sheets | |||||||||||||
Based on market conditions, the Company uses a discounted cash flow valuation methodology for auction rate securities. Accordingly, for purposes of the foregoing condensed consolidated financial statements, these securities were categorized as Level 3 securities. The Company’s “Marketable Securities” classified as Level 2 primarily utilize broker quotes in a non-active market for valuation of these securities. | ||||||||||||||
The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2015. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period. | ||||||||||||||
The following table presents the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2015 (in thousands): | ||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ||||||||||||||
(Level 3) | ||||||||||||||
Auction Rate | ||||||||||||||
Securities | ||||||||||||||
Balance at December 31, 2014 | $ | 2,309 | ||||||||||||
Total realized and unrealized gains or (losses) | ||||||||||||||
Included in earnings | — | |||||||||||||
Included in other comprehensive income | (1 | ) | ||||||||||||
Transferred out | — | |||||||||||||
Settlements | — | |||||||||||||
Balance at March 31, 2015 | $ | 2,308 | ||||||||||||
The fair value of the Company’s long-term debt classified as Level 2 was estimated using discounted cash flow analyses, based on the Company’s current estimated incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt and was estimated to be $1,962.9 million as of March 31, 2015, as compared to the carrying amount of $1,909.4 million as of March 31, 2015. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt and approximated $1,813.1 million as of December 31, 2014, as compared to the carrying amount of $1,745.8 million as of December 31, 2014. | ||||||||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | |
Note H — Income Taxes | |
The Company’s estimated annual effective tax rate for the three months ended March 31, 2015 varied from the federal statutory rate of 35% primarily due to the provision for state income taxes and certain operating expenses with limited tax deductibility, which primarily relates to a portion of crew per diem amounts, relative to the Company’s estimated pre-tax income for the year ending December 31, 2015. | |
Legal_Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2015 | |
Legal Matters | |
Legal Matters | |
Note I — Legal Matters | |
The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2015, management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncement | 3 Months Ended |
Mar. 31, 2015 | |
Recent Accounting Pronouncement | |
Recent Accounting Pronouncements | |
Note J — Recent Accounting Pronouncements | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” Under ASU No. 2014-09, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received for that specific good or service. On April 1, 2015, the FASB proposed deterring the effective date by one year to December 31, 2017 for reporting periods beginning after that date. The FASB also proposed permitting early adoption of the standard, but not before the original effect date of December 15, 2016. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. The Company’s management is currently evaluating the impact the adoption of ASU No. 2014-09 will have on the Company’s consolidated financial statements. | |
In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. The Company’s management is currently evaluating the impact the adoption of this standard will have on the Company’s consolidated financial statements. | |
Passenger_and_Ground_Handling_1
Passenger and Ground Handling Revenue (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Delta Connection Agreements | |||||||||||
Agreements with other airlines | |||||||||||
Schedule of details of agreements with other airlines | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Performance | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Incentive | ||||||||
contract | by major partner | Structure | |||||||||
SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) | CRJ 200—48 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | No financial performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 700—19 | |||||||||||
CRJ 900—32 | The final aircraft expires in 2022 | Engine Maintenance | |||||||||
The average remaining term of the aircraft under contract is 4.5 years | Landing fees, Station Rents, Deice | ||||||||||
Upon expiration, aircraft may be renewed or extended | Insurance | ||||||||||
ExpressJet Delta Connection Agreement (fixed-fee arrangement) | CRJ 200—59 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | Performance based financial incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 700—41 | |||||||||||
CRJ 900—28 | The final aircraft expires in 2022 | Engine Maintenance | |||||||||
The average remaining term of the aircraft under contract is 3.9 years | Landing fees, Station Rents, Deice Insurance | ||||||||||
Upon expiration, aircraft may be renewed or extended | |||||||||||
SkyWest Airlines Pro-rate Agreement (revenue-sharing arrangement) | EMB 120—2 | Terminates with 30-day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
CRJ 200—13 | |||||||||||
United Express Agreements | |||||||||||
Agreements with other airlines | |||||||||||
Schedule of details of agreements with other airlines | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Performance | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Incentive | ||||||||
contract | by major partner | Structure | |||||||||
SkyWest Airlines United Express Agreements (fixed-fee arrangement) | CRJ 200—49 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 700—70 | |||||||||||
E175—29 | The final aircraft expires in 2026 | Landing fees, Station Rents, Deice | |||||||||
EMB 120—4 | |||||||||||
The average remaining term of the aircraft under contract is 4.0 years | Insurance | ||||||||||
Upon expiration, aircraft may be renewed or extended | |||||||||||
ExpressJet United ERJ Agreement (fixed-fee arrangement) | ERJ 135—7 | The contract expires on an individual aircraft basis with expirations commencing in 2015 | Fuel | Performance based incentives or penalties | Rate per block hour, per departure and per aircraft under contract | ||||||
ERJ 145—202 | |||||||||||
The final aircraft expires in 2017 | Engine Maintenance | ||||||||||
The average remaining term of the aircraft under contract is 1.7 years | Landing fees, Station Rents, Deice | ||||||||||
Upon expiration, aircraft may be renewed or extended | Insurance | ||||||||||
SkyWest Airlines United Express Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—23 | Terminates with 120-day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
EMB 120—6 | |||||||||||
Alaska Capacity Purchase Agreement | |||||||||||
Agreements with other airlines | |||||||||||
Schedule of details of agreements with other airlines | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Incentive | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Structure | ||||||||
contract | by major partner | ||||||||||
SkyWest Airlines Alaska Agreement (fixed-fee arrangement) | CRJ 700—9 | Terminates 2018 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
US Airways Express Agreement | |||||||||||
Agreements with other airlines | |||||||||||
Schedule of details of agreements with other airlines | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Incentive | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Structure | ||||||||
contract | by major partner | ||||||||||
SkyWest Airlines US Airways Agreement (fixed-fee arrangement) | CRJ 200—10 | Terminates by the end of 2015 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
CRJ 900—4 | |||||||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
SkyWest Airlines US Airways Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—1 | Terminates with 120- day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
American Agreements | |||||||||||
Agreements with other airlines | |||||||||||
Schedule of details of agreements with other airlines | |||||||||||
Agreement | Number of | Term / Termination | Pass-through costs | Incentive | Payment Structure | ||||||
aircraft under | Dates | or costs paid directly | Structure | ||||||||
contract | by major partner | ||||||||||
SkyWest Airlines American Agreement (fixed-fee arrangement) | CRJ 200—12 | Terminates 2016 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
SkyWest Airlines American Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—5 | Terminates with 120- day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
ExpressJet American Agreement (fixed-fee arrangement) | CRJ 200—11 | Terminates 2017 | Fuel | Performance based incentives | Rate per block hour, per departure and per aircraft under contract | ||||||
ERJ 145—6 | |||||||||||
Upon expiration, aircraft may be renewed or extended | Landing fees, Station Rents, Deice | ||||||||||
Insurance | |||||||||||
ExpressJet American Pro-rate Agreement (revenue-sharing arrangement) | CRJ 200—3 | Terminates with 120- day notice | None | None | Pro-rata sharing of the passenger fare revenue | ||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Share-Based Compensation | |||||
Schedule of assumptions used and weighted average fair value for stock option grants | |||||
Expected annual dividend rate | 1.18 | % | |||
Risk-free interest rate | 1.62 | % | |||
Average expected life (years) | 5.7 | ||||
Expected volatility of common stock | 0.401 | ||||
Forfeiture rate | 0.0 | % | |||
Weighted average fair value of option grants | $ | 4.75 | |||
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net Income (Loss) Per Common Share | ||||||||
Schedule of net income (loss) per common share | ||||||||
The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows: | ||||||||
Three months ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator | ||||||||
Net Income (Loss) | $ | 9,620 | $ | (22,887 | ) | |||
Denominator | ||||||||
Weighted average number of common shares outstanding | 51,457 | 51,467 | ||||||
Effect of outstanding share-based awards | 935 | — | ||||||
Weighted average number of shares for diluted earnings (loss) per common share | 52,392 | 51,467 | ||||||
Basic earnings (loss) per share | $ | 0.19 | $ | (0.44 | ) | |||
Diluted earnings (loss) per share | $ | 0.18 | $ | (0.44 | ) | |||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Segment Reporting | ||||||||||||||
Schedule of Company's segment data | The following represents the Company’s segment data for the three months ended March 31, 2015 and 2014 (in thousands). | |||||||||||||
Three months ended March 31,2015 | ||||||||||||||
SkyWest | ExpressJet | Corporate/ | Consolidated | |||||||||||
Airlines | Consolidating | |||||||||||||
Operating revenues | $ | 448,069 | $ | 308,557 | $ | 3,772 | $ | 760,398 | ||||||
Operating expense | 406,019 | 319,251 | 1,053 | 726,323 | ||||||||||
Depreciation and amortization expense | 43,767 | 21,662 | 262 | 65,691 | ||||||||||
Interest expense | 14,024 | 4,441 | — | 18,465 | ||||||||||
Segment profit (loss) (1) | 28,026 | (15,135 | ) | 2,719 | 15,610 | |||||||||
Identifiable intangible assets, other than goodwill, net | — | 12,186 | — | 12,186 | ||||||||||
Total assets | 3,191,465 | 1,422,043 | — | 4,613,508 | ||||||||||
Capital expenditures (including non-cash) | 262,040 | 7,098 | — | 269,138 | ||||||||||
Three months ended March 31,2014 | ||||||||||||||
SkyWest | ExpressJet | Corporate/ | Consolidated | |||||||||||
Airlines | Consolidating | |||||||||||||
Operating revenues | $ | 447,041 | $ | 324,870 | $ | 475 | $ | 772,386 | ||||||
Operating expense | 425,643 | 374,425 | 92 | 800,160 | ||||||||||
Depreciation and amortization expense | 40,001 | 22,315 | — | 62,316 | ||||||||||
Interest expense | 10,026 | 4,875 | 775 | 15,676 | ||||||||||
Segment profit (loss)(1) | 11,372 | (54,430 | ) | (392 | ) | (43,450 | ) | |||||||
Identifiable intangible assets, other than goodwill, net | — | 14,436 | — | 14,436 | ||||||||||
Total assets | 2,535,901 | 1,666,126 | — | 4,202,027 | ||||||||||
Capital expenditures (including non-cash) | 66,232 | 7,292 | — | 73,524 | ||||||||||
-1 | Segment profit (loss) is equal to operating income (loss) less interest expense | |||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Commitments and Contingencies | |||||
Schedule of Future Minimum Rental Payments for Operating Leases | The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms in excess of one year as of March 31, 2015 (in thousands): | ||||
April through December 2015 | $ | 199,108 | |||
2016 | 270,706 | ||||
2017 | 201,467 | ||||
2018 | 156,437 | ||||
2019 | 119,618 | ||||
Thereafter | 453,545 | ||||
$ | 1,400,881 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Schedule of assets measured at fair value on a recurring basis | ||||||||||||||
As of March 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands): | ||||||||||||||
Fair Value Measurements as of March 31, 2015 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
Marketable Securities | ||||||||||||||
Bonds and bond funds | $ | 377,558 | $ | — | $ | 377,558 | $ | — | ||||||
Asset backed securities | 87 | — | 87 | — | ||||||||||
377,645 | — | 377,645 | — | |||||||||||
Cash, Cash Equivalents and Restricted Cash | 102,690 | 102,690 | — | |||||||||||
Other Assets | 2,308 | — | — | (a) 2,308 | ||||||||||
Total Assets Measured at Fair Value | $ | 482,643 | $ | 102,690 | $ | 377,645 | $ | 2,308 | ||||||
Fair Value Measurements as of December 31, 2014 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
Marketable Securities | ||||||||||||||
Bonds and bond funds | $ | 410,163 | $ | — | $ | 410,163 | $ | — | ||||||
Asset backed securities | 5,110 | — | 5,110 | — | ||||||||||
415,273 | — | 415,273 | — | |||||||||||
Cash, Cash Equivalents and Restricted Cash | 143,857 | 143,857 | — | — | ||||||||||
Other Assets | 2,309 | — | — | (a) 2,309 | ||||||||||
Total Assets Measured at Fair Value | $ | 561,439 | $ | 143,857 | $ | 415,273 | $ | 2,309 | ||||||
(a) | Comprises of auction rate securities which is reflected in long-term “Other assets” in the Company’s unaudited condensed consolidated balance sheets | |||||||||||||
Schedule of fair value measurements using significant unobservable inputs | ||||||||||||||
The following table presents the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2015 (in thousands): | ||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ||||||||||||||
(Level 3) | ||||||||||||||
Auction Rate | ||||||||||||||
Securities | ||||||||||||||
Balance at December 31, 2014 | $ | 2,309 | ||||||||||||
Total realized and unrealized gains or (losses) | ||||||||||||||
Included in earnings | — | |||||||||||||
Included in other comprehensive income | (1 | ) | ||||||||||||
Transferred out | — | |||||||||||||
Settlements | — | |||||||||||||
Balance at March 31, 2015 | $ | 2,308 | ||||||||||||
Passenger_and_Ground_Handling_2
Passenger and Ground Handling Revenue (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Delta Connection Agreements | Sky West Airlines Inc | |
Agreements with other airlines | |
Term of agreement | 4 years 6 months |
Delta Connection Agreements | ExpressJet | |
Agreements with other airlines | |
Term of agreement | 3 years 10 months 24 days |
Delta Connection Agreements | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 48 |
Delta Connection Agreements | CRJ 200 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 59 |
Delta Connection Agreements | CRJ 700 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 19 |
Delta Connection Agreements | CRJ 700 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 41 |
Delta Connection Agreements | CRJ 900 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 32 |
Delta Connection Agreements | CRJ 900 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 28 |
United Express Agreements | Sky West Airlines Inc | |
Agreements with other airlines | |
Term of agreement | 4 years |
United Express Agreements | ExpressJet | |
Agreements with other airlines | |
Term of agreement | 1 year 8 months 12 days |
United Express Agreements | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 49 |
United Express Agreements | CRJ 700 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 70 |
United Express Agreements | E175 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 29 |
United Express Agreements | EMB 120 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 4 |
United Express Agreements | ERJ 145 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 202 |
United Express Agreements | ERJ135 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 7 |
Prorate Agreement | Sky West Airlines Inc | |
Agreements with other airlines | |
Notice period for termination of agreement | 30 days |
Prorate Agreement | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 13 |
Prorate Agreement | EMB 120 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 2 |
United Express Prorate Agreement | Sky West Airlines Inc | |
Agreements with other airlines | |
Notice period for termination of agreement | 120 days |
United Express Prorate Agreement | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 23 |
United Express Prorate Agreement | EMB 120 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 6 |
Alaska Capacity Purchase Agreement | CRJ 700 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 9 |
US Airways Express Agreement | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 10 |
US Airways Express Agreement | CRJ 900 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 4 |
US Airways Express Prorate Agreement | Sky West Airlines Inc | |
Agreements with other airlines | |
Notice period for termination of agreement | 120 days |
US Airways Express Prorate Agreement | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 1 |
American Capacity Purchase Agreement | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 12 |
American Capacity Purchase Agreement | CRJ 200 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 11 |
American Capacity Purchase Agreement | ERJ 145 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 6 |
American Prorate Agreement | Sky West Airlines Inc | |
Agreements with other airlines | |
Notice period for termination of agreement | 120 days |
American Prorate Agreement | ExpressJet | |
Agreements with other airlines | |
Term of agreement | 120 days |
American Prorate Agreement | CRJ 200 | Sky West Airlines Inc | |
Agreements with other airlines | |
Number of aircraft under contract | 5 |
American Prorate Agreement | CRJ 200 | ExpressJet | |
Agreements with other airlines | |
Number of aircraft under contract | 3 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-Based Compensation | ||
Stock based compensation expense | $1.50 | $1.70 |
Employee Stock Option | ||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||
Expected annual dividend rate (as a percent) | 1.18% | |
Risk-free interest rate (as a percent) | 1.62% | |
Average expected life | 6 years | |
Expected volatility of common stock (as a percent) | 0.40% | |
Forfeiture rate (as a percent) | 0.00% | |
Weighted average fair value of option grants | $4.75 | |
Restricted Stock Units (RSUs) | Director | ||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||
Granted (in shares) | 31,088 | |
Performance Restricted Stock Units | ||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||
Vesting period | 3 years | |
Long Term Incentive Plan 2010 | Employee Stock Option | ||
Stock Compensation | ||
Options granted (in shares) | 237,240 | |
Long Term Incentive Plan 2010 | Restricted Stock Units (RSUs) | ||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||
Granted (in shares) | 386,401 | |
Vesting period | 3 years | |
Granted (in dollars per share) | $13.51 | |
Long Term Incentive Plan 2010 | Performance Restricted Stock Units | ||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||
Granted (in shares) | 202,505 |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Income (Loss) Per Common Share | ||
Number of outstanding options not included in computation of Diluted EPS (in shares) | 1,560,000 | 2,945,000 |
Numerator | ||
Net Income (loss) | $9,620 | ($22,887) |
Denominator | ||
Weighted average number of common shares outstanding | 51,457,000 | 51,467,000 |
Effect of outstanding share-based awards | 935,000 | |
Weighted average number of shares for diluted net income per common share | 52,392,000 | 51,467,000 |
Basic earnings (loss) per share (in dollars per share) | $0.19 | ($0.44) |
Diluted earnings (loss) per share (in dollars per share) | $0.18 | ($0.44) |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | ||
segment | |||||
Segment Reporting | |||||
Operating segments number | 2 | ||||
Number of operating subsidiaries representing operating segments | 2 | ||||
Segment Reporting | |||||
Operating revenues | $760,398 | $772,386 | |||
Operating expense | 726,323 | 800,160 | |||
Depreciation and amortization expense | 65,691 | 62,316 | |||
Interest expense | 18,465 | 15,676 | |||
Segment profit (loss) | 15,610 | [1] | -43,450 | [1] | |
Identifiable intangible assets, other than goodwill, net | 12,186 | 14,436 | 12,748 | ||
Total assets | 4,613,508 | 4,202,027 | 4,409,928 | ||
Capital expenditures (including non - cash) | 269,138 | 73,524 | |||
Corporate/Consolidating | |||||
Segment Reporting | |||||
Operating revenues | 3,772 | 475 | |||
Operating expense | 1,053 | 92 | |||
Depreciation and amortization expense | 262 | ||||
Interest expense | 775 | ||||
Segment profit (loss) | 2,719 | [1] | -392 | [1] | |
SkyWest Airlines | |||||
Segment Reporting | |||||
Operating revenues | 448,069 | 447,041 | |||
Operating expense | 406,019 | 425,643 | |||
Depreciation and amortization expense | 43,767 | 40,001 | |||
Interest expense | 14,024 | 10,026 | |||
Segment profit (loss) | 28,026 | [1] | 11,372 | [1] | |
Total assets | 3,191,465 | 2,535,901 | |||
Capital expenditures (including non - cash) | 262,040 | 66,232 | |||
Express Jet Airlines Inc | |||||
Segment Reporting | |||||
Operating revenues | 308,557 | 324,870 | |||
Operating expense | 319,251 | 374,425 | |||
Depreciation and amortization expense | 21,662 | 22,315 | |||
Interest expense | 4,441 | 4,875 | |||
Segment profit (loss) | -15,135 | [1] | -54,430 | [1] | |
Identifiable intangible assets, other than goodwill, net | 12,186 | 14,436 | |||
Total assets | 1,422,043 | 1,666,126 | |||
Capital expenditures (including non - cash) | $7,098 | $7,292 | |||
[1] | Segment profit (loss) is equal to operating income (loss) less interest expense |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
aircraft | ||
Commitments and Contingencies | ||
Number of aircraft leased by the entity | 534 | |
Future minimum rental payments required under operating leases | ||
April through December 2015 | $199,108,000 | |
2016 | 270,706,000 | |
2017 | 201,467,000 | |
2018 | 156,437,000 | |
2019 | 119,618,000 | |
Thereafter | 453,545,000 | |
Total future lease obligations | 1,400,881,000 | |
E175 | ||
Supply Commitment [Line Items] | ||
Number of aircraft delivered | 9 | |
Interim debt amount | 203,100,000 | |
Debt Instrument, Term | 12 years | |
E175 | Minimum | ||
Supply Commitment [Line Items] | ||
Interest rate (as a percent) | 3.50% | |
E175 | Maximum | ||
Supply Commitment [Line Items] | ||
Interest rate (as a percent) | 3.70% | |
EMB 120 | ||
Future minimum rental payments required under operating leases | ||
Total future lease obligations | $2,900,000 | $3,800,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | ||
Fair Value Measurements | ||||
Marketable securities | $377,645,000 | $415,273,000 | ||
Auction Rate Securities | ||||
Changes in assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) | ||||
Balance at the beginning of the period | 2,309,000 | |||
Total realized and unrealized gains or (losses) Included in other comprehensive income | -1,000 | |||
Balance at the end of the period | 2,308,000 | |||
Recurring | Fair value | ||||
Fair Value Measurements | ||||
Marketable securities | 415,273,000 | 377,645,000 | ||
Cash, Cash Equivalents and Restricted Cash | 102,690,000 | 143,857,000 | ||
Other Assets | 2,308,000 | 2,309,000 | ||
Total Assets Measured at Fair Value | 482,643,000 | 561,439,000 | ||
Recurring | Fair value | Bonds and bond funds | ||||
Fair Value Measurements | ||||
Marketable securities | 377,558,000 | 410,163,000 | ||
Recurring | Fair value | Asset-backed Securities | ||||
Fair Value Measurements | ||||
Marketable securities | 87,000 | 5,110,000 | ||
Recurring | Level 1 | ||||
Fair Value Measurements | ||||
Cash, Cash Equivalents and Restricted Cash | 102,690,000 | 143,857,000 | ||
Total Assets Measured at Fair Value | 102,690,000 | 143,857,000 | ||
Recurring | Level 2 | ||||
Fair Value Measurements | ||||
Marketable securities | 415,273,000 | 377,645,000 | ||
Total Assets Measured at Fair Value | 377,645,000 | 415,273,000 | ||
Fair Value of Financial Instruments | ||||
Fair value of long-term debt | 1,962,900,000 | 1,813,100,000 | ||
Carrying amount of long-term debt | 1,909,400,000 | 1,745,800,000 | ||
Recurring | Level 2 | Bonds and bond funds | ||||
Fair Value Measurements | ||||
Marketable securities | 377,558,000 | 410,163,000 | ||
Recurring | Level 2 | Asset-backed Securities | ||||
Fair Value Measurements | ||||
Marketable securities | 87,000 | 5,110,000 | ||
Recurring | Level 3 | ||||
Fair Value Measurements | ||||
Other Assets | 2,308,000 | 2,309,000 | [1] | |
Total Assets Measured at Fair Value | $2,308,000 | $2,309,000 | ||
[1] | Comprises of auction rate securities which is reflected in long-term bOther assetsb in the Companybs unaudited condensed consolidated balance sheets |
Income_Taxes_Details
Income Taxes (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Statutory Federal income tax rate (as a percent) | 35.00% |