Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | SKYWEST INC | |
Entity Central Index Key | 793,733 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,738,274 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 95,441 | $ 146,766 |
Marketable securities | 482,764 | 409,898 |
Restricted cash | 8,250 | 8,243 |
Receivables, net | 38,558 | 46,916 |
Inventories, net | 119,608 | 118,509 |
Prepaid aircraft rents | 147,289 | 162,360 |
Other current assets | 24,676 | 25,100 |
Total current assets | 916,586 | 917,792 |
PROPERTY AND EQUIPMENT: | ||
Aircraft and rotable spares | 5,002,597 | 4,839,501 |
Deposits on aircraft | 27,572 | 38,800 |
Buildings and ground equipment | 272,800 | 261,704 |
Total property and equipment, gross | 5,302,969 | 5,140,005 |
Less-accumulated depreciation and amortization | (1,374,666) | (1,318,308) |
Total property and equipment, net | 3,928,303 | 3,821,697 |
OTHER ASSETS | ||
Intangible assets, net | 7,686 | 8,249 |
Long-term prepaid assets | 232,090 | 218,505 |
Other assets | 43,691 | 41,723 |
Total other assets | 283,467 | 268,477 |
Total assets | 5,128,356 | 5,007,966 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 293,644 | 305,460 |
Accounts payable | 263,532 | 241,215 |
Accrued salaries, wages and benefits | 133,086 | 139,885 |
Taxes other than income taxes | 15,283 | 15,618 |
Other current liabilities | 44,963 | 45,087 |
Total current liabilities | 750,508 | 747,265 |
OTHER LONG TERM LIABILITIES | 50,387 | 50,844 |
LONG TERM DEBT, net of current maturities | 2,321,271 | 2,240,051 |
DEFERRED INCOME TAXES PAYABLE | 581,203 | 565,404 |
DEFERRED AIRCRAFT CREDITS | 51,172 | 53,459 |
COMMITMENTS AND CONTINGENCIES (Note 6) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, 5,000,000 shares authorized; none issued | ||
Common stock, no par value, 120,000,000 shares authorized; 80,142,697 and 79,781,305 shares issued, respectively | 662,343 | 657,353 |
Retained earnings | 1,135,265 | 1,103,751 |
Treasury stock, at cost, 28,404,423 and 28,015,386 shares, respectively | (423,761) | (410,090) |
Accumulated other comprehensive loss | (32) | (71) |
Total stockholders' equity | 1,373,815 | 1,350,943 |
Total liabilities and stockholders' equity | $ 5,128,356 | $ 5,007,966 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 80,142,697 | 79,781,305 |
Treasury stock, at cost, shares | 28,404,423 | 28,015,386 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING REVENUES: | ||
Passenger | $ 745,411 | $ 744,390 |
Ground handling and other | 20,004 | 17,685 |
Total operating revenues | 765,415 | 762,075 |
OPERATING EXPENSES: | ||
Salaries, wages and benefits | 300,039 | 305,557 |
Aircraft maintenance, materials and repairs | 132,325 | 138,859 |
Depreciation and amortization | 70,114 | 67,801 |
Aircraft rentals | 57,709 | 67,124 |
Aircraft fuel | 34,310 | 25,332 |
Ground handling services | 19,535 | 20,984 |
Other operating expenses | 75,088 | 74,609 |
Total operating expenses | 689,120 | 700,266 |
OPERATING INCOME | 76,295 | 61,809 |
OTHER INCOME (EXPENSE): | ||
Interest income | 660 | 430 |
Interest expense | (24,549) | (17,725) |
Total other expense, net | (23,889) | (17,295) |
INCOME BEFORE INCOME TAXES | 52,406 | 44,514 |
PROVISION FOR INCOME TAXES | 17,620 | 17,422 |
NET INCOME | $ 34,786 | $ 27,092 |
BASIC EARNINGS PER SHARE (in dollars per share) | $ 0.67 | $ 0.53 |
DILUTED EARNINGS PER SHARE (in dollars per share) | $ 0.65 | $ 0.52 |
Weighted average common shares: | ||
Basic (in shares) | 51,820 | 51,218 |
Diluted (in shares) | 53,202 | 52,014 |
COMPREHENSIVE INCOME: | ||
Net income | $ 34,786 | $ 27,092 |
Net unrealized appreciation on marketable securities, net of taxes | 39 | 15 |
TOTAL COMPREHENSIVE INCOME | $ 34,825 | $ 27,107 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ 143,933 | $ 34,544 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (455,990) | (508,562) |
Sales of marketable securities | 383,163 | 608,058 |
Proceeds from the sale of aircraft, property and equipment | 36,512 | |
Acquisition of property and equipment: | ||
Aircraft and rotable spare parts | (220,916) | (94,941) |
Buildings and ground equipment | (479) | (3,460) |
Aircraft deposits applied towards acquired aircraft | 11,228 | |
Increase in other assets | (2,425) | (2,164) |
NET CASH USED IN INVESTING ACTIVITIES | (248,907) | (1,069) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of long-term debt | 157,983 | 68,232 |
Principal payments on long-term debt | (88,104) | (57,196) |
Net proceeds from issuance of common stock | 1,481 | 2,006 |
Purchase of treasury stock | (13,671) | |
Increase in debt issuance cost | (1,452) | (747) |
Payment of cash dividends | (2,588) | (2,040) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 53,649 | 10,255 |
Decrease in cash and cash equivalents | (51,325) | 43,730 |
Cash and cash equivalents at beginning of period | 146,766 | 203,035 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 95,441 | 246,765 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Acquisition of rotable spare parts | 1,704 | |
Cash paid during the period for: | ||
Interest, net of capitalized amounts | 24,039 | 16,547 |
Income taxes | $ 478 | $ 684 |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Consolidated Financial Statements | |
Condensed Consolidated Financial Statements | Note 1 — 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, 2016. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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 likely differ, and may differ materially, from those estimates and assumptions. The Company reclassified certain prior period amounts to conform to the current period presentation . Recent Accounting Pronouncements Standards Effective in Future Years In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014‑09, “Revenue from Contracts with Customers” (“ASU No. 2014‑09”). 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. In July 2015, the FASB deferred the effective date of ASU No. 2014‑09 for annual reporting periods beginning after December 15, 2017. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. The Company continues to assess the potential impacts of ASU No. 2014‑09 on its fixed-fee contracts, prorate flying agreements, ground handling agreements and other revenue transactions. The Company anticipates completing its review of the impact by the second quarter of 2017. Interpretations are on-going and could have a significant impact on the Company’s implementation. The Company believes the principal versus agent considerations may change how the Company presents revenue for certain directly-reimbursed expenses under its fixed-fee contracts, such as fuel expenses. The Company currently does not anticipate the adoption of ASU No. 2014‑09 will have a material impact on its net income. ASU No. 2014‑09 is required to be applied either full retrospective to each prior reporting period presented or modified retrospective with the cumulative effect of initially applying it at the date of initial application. The Company anticipates using the full retrospective method of adoption. In February 2016, the FASB issued Accounting Standards Update 2016‑02, “Leases (Topic 842)” (“ASU No. 2016-02”). ASU No. 2016‑02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016‑02 will be effective beginning in the first quarter of 2019. Early adoption of ASU No. 2016‑02 is permitted. ASU No. 2016‑02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company’s management is currently evaluating the impact the adoption of ASU 2016‑02 is anticipated to have on the Company’s consolidated financial statements. In 2016, the FASB issued Accounting Standards Update 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” and Accounting Standard Update 2016‑18, “Statement of Cash Flows (Topic 230): Restricted Cash” related to the classification of certain cash receipts and cash payments and the presentation of restricted cash within an entity’s statement of cash flows, respectively. These standards are effective for interim and annual reporting periods beginning after December 15, 2017, but early adoption is permitted. The Company does not anticipate these standards to have a material impact on our Consolidated Statement of Cash Flows. Recently Adopted Standards Pursuant to the guidelines of the recently issued Accounting Standards Update 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015‑17”), all deferred tax assets and liabilities are to be classified as non-current. As permitted under the ASU 2015‑17, the Company adopted this guidance for the quarter ended March 31, 2017. The guidance indicates that ASU 2015‑17 may be applied either prospectively or retrospectively. The Company elected to adopt ASU 2015‑17 retrospectively. Upon adoption, approximately $129.3 million of what were formerly recorded as current deferred tax assets as of December 31, 2016 were reclassified to non-current and netted against non-current deferred income taxes payable as of December 31, 2016 in the accompanying financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016‑09, “Compensation—Stock Compensation (Topic 718)” (“ASU No. 2016‑09”). ASU No. 2016‑09 makes several amendments to Topic 718, which simplified the accounting for share-based payment transactions, including the income tax consequences, the calculation of diluted earnings per share, the treatment of forfeitures and the classification on the statement of cash flows. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments requiring the recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. Prior to the adoption of ASU No. 2016‑09, GAAP required tax effects of deductions for share-based payments in excess of compensation cost and tax deficiencies to be recorded in equity. Under ASU No. 2016‑09, the tax effects of awards are treated as discrete income tax expense items in the reporting period in which they occur. The Company adopted ASU No. 2016‑09 as of January 1, 2017. As a result of employee stock awards that vested and stock options that were exercised during the three months ended March 31, 2017, the Company recorded a discrete income tax benefit of $3.0 million for the same period. The discrete income tax benefit and the modification to the diluted earnings per share calculation, which increased the diluted shares outstanding under ASU No. 2016‑09, increased the Company’s earnings per diluted share by $0.05 for the three months ended March 31, 2017. The adoption of ASU No. 2016‑09 did not have a material impact on the statement of cash flows presentation, which the Company adopted prospectively. Property and Equipment Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight‑line method. The Company changed the estimated useful lives and residual values for certain long-lived assets as of January 1, 2017 as follows: Assets Current Depreciable Life Prior Policy Depreciable Life Current Residual Value Prior Policy Residual Value New Aircraft 20 - 22 years 18 years 17.5 - 20 % % Used Aircraft, rotable spares, and spare engines up to 18 years up to 18 years 0 - 20 % 0 - 30 % Ground equipment up to 10 years No Change 0 % No Change Office equipment up to 7 years No Change % No Change Leasehold improvements Shorter of 15 years or lease term No Change % No Change Buildings 20 - 39.5 years No Change % No Change The Company estimates that the impact of this change will increase depreciation expense by an additional $1.8 million on an annualized basis for 2017. |
Passenger and Ground Handling R
Passenger and Ground Handling Revenue | 3 Months Ended |
Mar. 31, 2017 | |
Passenger and Ground Handling Revenues | |
Passenger and Ground Handling Revenue | Note 2 — Passenger and Ground Handling Revenue The Company recognizes passenger and ground handling revenues when the service is provided under its code-share agreements. Under the Company’s fixed-fee arrangements (referred to as “fixed-fee arrangements,” “fixed-fee contracts” or “capacity purchase agreements”) with Delta Air Lines, Inc. (“Delta”), United Airlines, Inc. (“United”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner”), the major airline partner generally pays the Company a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) or block hour (measured from takeoff to landing, including taxi time) incurred, and an amount per aircraft in service each month with additional incentives based on flight completion 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 expenses and landing fee expenses. Under the fixed-fee arrangements, revenue is earned when each flight is completed and is reflected in passenger revenues. For the three months ended March 31, 2017, approximately 95.9% of the Company’s available seat miles (“ASMs”) were flown under fixed-fee arrangements. ASMs are a common industry metric generally used to measure an airline’s passenger carrying capacity. 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 revenue-sharing arrangements (referred to as a “revenue-sharing” or “prorate” arrangement), the major airline partner and the Company negotiate a passenger fare proration formula, pursuant to which the Company receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on a Company airline and the other portion of their trip on the major airline partner. Revenue is recognized under the Company’s prorate flying agreements when each flight is completed based upon the portion of the prorate passenger fare the Company anticipates that it will receive for each completed flight. For the three months ended March 31, 2017, approximately 4.1% of the Company’s ASMs were flown under prorate arrangements. 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 the 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 airline 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 airline partner: Delta Connection Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) • • • • 51 27 36 13 • ExpressJet Delta Connection Agreement (fixed-fee arrangement) • • • 32 35 28 • SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) • 24 • United Express Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) • • • 42 29 60 • ExpressJet United ERJ Agreement (fixed-fee arrangement) • • 5 126 • SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) • 22 • Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) • • 1 20 • American Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines American Agreement (fixed-fee arrangement) • • 22 28 • SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) • 6 • ExpressJet American Agreement (fixed-fee arrangement) • • • 6 6 10 • ExpressJet American Prorate Agreement (revenue-sharing arrangement) • 3 • When an aircraft is scheduled to be removed from a fixed-fee arrangement, the Company may, as practical under the circumstances, negotiate an extension with the respective major airline partner, negotiate the placement of the aircraft with another major airline partner, return the aircraft to the lessor if the aircraft is leased and the lease is expiring, place owned aircraft for sale, or pursue other uses for the aircraft, including placing the aircraft in a prorate arrangement. In addition to the contractual arrangements described above, SkyWest Airlines has entered into agreements with United and Delta to place additional Embraer E175 dual-class regional jet aircraft (“E175”) into service for those major airline partners. As of March 31, 2017, the Company anticipated placing an additional five E175 aircraft with United and six E175 aircraft with Delta. The delivery dates for the new aircraft are expected to take place through the end of 2017. 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 its major airline partners, contract modifications resulting from contract renegotiations, 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 airline partners. |
Share-Based Compensation and St
Share-Based Compensation and Stock Repurchases | 3 Months Ended |
Mar. 31, 2017 | |
Share-Based Compensation and Stock Repurchases | |
Share-Based Compensation and Stock Repurchases | Note 3 — Share-Based Compensation and Stock Repurchases During the three months ended March 31, 2017, the Company granted 22,617 fully-vested shares of common stock to the Company’s directors. Additionally, during the three months ended March 31, 2017, the Company granted 160,137 restricted stock units and 119,315 performance shares to certain employees of the Company and its subsidiaries under the SkyWest, Inc. 2010 Long-Term Incentive Plan. Both the restricted stock units and performance shares 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 performance metrics of the Company must be met before the recipient will receive any shares of stock attributable to the restricted stock units and performance shares. Upon vesting, each restricted stock unit and performance share will be replaced with one share of common stock. The fair value of the restricted stock units and performance shares on the date of grant was $35.81 per share. During the three months ended March 31, 2017, the Company did not grant any options to purchase shares of common stock. With the adoption of ASU No. 2016‑09, the Company will account for forfeitures of restricted stock unit and performance share grants in 2017 when forfeitures occur. The estimated fair value of the stock options, restricted stock units and performance shares is amortized over the applicable vesting periods. During the three months ended March 31, 2017 and 2016, the Company recorded pre-tax share-based compensation expense of $3.5 million and $2.3 million, respectively. The Company repurchased 281,000 shares of its common stock for $10.0 million during the three months ended March 31, 2017. Additionally, during the three months ended March 31, 2017, the Company also repurchased 108,000 shares of its common stock through a net settlement of the income tax obligation on employee equity awards of $3.8 million. The Company did not repurchase any shares of its common stock during the three months ended March 31, 2016. |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Net Income Per Common Share | |
Net Income Per Common Share | Note 4 — Net Income Per Common Share Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income 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 per common share. During the three months ended March 31, 2017 and 2016, options to acquire zero shares and 6,000 shares, 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, 2017 2016 Numerator: Net Income $ 34,786 $ 27,092 Denominator: Weighted average number of common shares outstanding 51,820 51,218 Effect of outstanding share-based awards 1,382 796 Weighted average number of shares for diluted net income per common share 53,202 52,014 Basic earnings per-share $ $ 0.53 Diluted earnings per-share $ 0.65 $ 0.52 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting | |
Segment Reporting | Note 5 - Segment Reporting The Company’s three reporting segments consist of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expenses incurred by the Company are allocated to the operating expenses of SkyWest Airlines and ExpressJet. The Company’s chief operating decision maker analyzes the profitability of operating the E175 aircraft (including operating costs and associated revenue) separately from the profitability of the Company’s ownership, financing costs and associated revenue of the Company’s E175 aircraft (including depreciation expense, interest expense and associated revenue). The SkyWest Leasing segment includes revenue attributed to the Company’s E175 aircraft ownership cost earned under the applicable fixed-fee 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 four CRJ200 aircraft leased to a third party. The following represents the Company’s segment data for the three-month periods ended March 31, 2017 and 2016 (in thousands). Three months ended March 31, 2017 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 482,954 $ 228,658 $ 53,803 $ 765,415 Operating expense 435,368 229,493 24,259 689,120 Depreciation and amortization expense 31,817 14,525 23,772 70,114 Interest expense 5,799 1,114 17,636 24,549 Segment profit (loss) (1) 41,787 (1,949) 11,908 51,746 Identifiable intangible assets, other than goodwill — 7,686 — 7,686 Total assets 2,224,407 565,839 2,338,110 5,128,356 Capital expenditures (including non-cash) 33,431 5,654 184,014 223,099 Three months ended March 31, 2016 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 466,296 $ 267,807 $ 27,972 $ 762,075 Operating expense 414,084 273,619 12,563 700,266 Depreciation and amortization expense 34,331 21,267 12,203 67,801 Interest expense 6,659 2,123 8,943 17,725 Segment profit (loss) (1) 45,553 (7,935) 6,466 44,084 Identifiable intangible assets, other than goodwill — 9,936 — 9,936 Total assets 2,213,958 1,277,361 1,218,935 4,710,254 Capital expenditures (including non-cash) 13,073 5,048 80,280 98,401 (1) Segment profit (loss) is equal to operating income less interest expense |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 6 — Commitments and Contingencies As of March 31, 2017, the Company leased aircraft, airport facilities, office space, and other property and equipment under non-cancelable operating leases which are generally on a long-term, triple net lease basis pursuant to which 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, or the property may be purchased rather than leased. The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2017 (in thousands): March through December 2017 $ 2018 2019 2020 2021 Thereafter $ 888,530 As of March 31, 2017, the Company had a firm purchase commitment for eleven E175 aircraft with scheduled delivery dates throughout 2017. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 7 — Fair Value Measurements The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined the 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, 2017 and December 31, 2016, 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, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 420,812 $ — $ 420,812 $ — Commercial paper 61,952 — 61,952 — Asset backed securities $ 482,764 $ — $ 482,764 $ — Cash, Cash Equivalents and Restricted Cash 103,691 103,691 — — Total Assets Measured at Fair Value $ 586,455 $ 103,691 $ 482,764 $ — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — — Asset backed securities $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — The Company’s “Marketable Securities” classified as Level 2 securities 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, 2017. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period. As of March 31, 2017 and December 31, 2016, the Company classified $482.8 million and $409.9 million of marketable securities, respectively, as short-term since it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year. As of March 31, 2017 and December 31, 2016, the cost of the Company’s total cash and cash equivalents and available for sale securities (excluding restricted cash) was $578.3 million and $556.8 million, respectively. As of March 31, 2017 and December 31, 2016, the fair value of the Company’s total cash and cash equivalents and available for sale securities (excluding restricted cash) was $578.2 million and $556.7 million, respectively. The fair value of the Company’s long-term debt classified as Level 2 debt 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 $2.64 billion as of March 31, 2017 and $2.57 billion as of December 31, 2016, as compared to the carrying amount of $2.64 billion as of March 31, 2017 and $2.57 billion as of December 31, 2016. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | Note 8 — Long-Term Debt Long-term debt consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands). March 31, 2017 December 31, 2016 Current portion long-term debt $ $ Long-term debt net of current maturities Total long-term debt (including current portion) $ $ Unamortized debt issue cost, net Total long-term debt, net of debt issue costs $ $ During the three months ended March 31, 2017, the Company took delivery of seven E175 aircraft, which the Company financed through $158.0 million of long-term debt. The debt associated with the E175 aircraft delivered during the three months ended March 31, 2017 has a twelve-year term, is due in quarterly installments with a fixed annual interest rate ranging from 4.5% to 4.7% and is secured by the E175 aircraft. As of March 31, 2017 and December 31, 2016, the Company had $87.7 million in letters of credit and surety bonds outstanding with various banks and surety institutions. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Income Taxes | Note 9 — Income Taxes The Company’s estimated effective tax rate for the three months ended March 31, 2017 was 33.6%. The Company’s effective tax rate for the three months ended March 31, 2017 varied from the federal statutory rate of 35% primarily due to a $3.0 million discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2017 pursuant to ASU 2016‑09, the provision for state income taxes and the impact of non-deductible crew per diem meal expenses. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2017 | |
Legal Matters | |
Legal Matters | Note 10 — Legal Matters The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2017, the Company’s 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. |
Condensed Consolidated Financ16
Condensed Consolidated Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Consolidated Financial Statements | |
Basis of Presentation | 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, 2016. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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 likely differ, and may differ materially, from those estimates and assumptions. The Company reclassified certain prior period amounts to conform to the current period presentation . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standards Effective in Future Years In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014‑09, “Revenue from Contracts with Customers” (“ASU No. 2014‑09”). 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. In July 2015, the FASB deferred the effective date of ASU No. 2014‑09 for annual reporting periods beginning after December 15, 2017. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. The Company continues to assess the potential impacts of ASU No. 2014‑09 on its fixed-fee contracts, prorate flying agreements, ground handling agreements and other revenue transactions. The Company anticipates completing its review of the impact by the second quarter of 2017. Interpretations are on-going and could have a significant impact on the Company’s implementation. The Company believes the principal versus agent considerations may change how the Company presents revenue for certain directly-reimbursed expenses under its fixed-fee contracts, such as fuel expenses. The Company currently does not anticipate the adoption of ASU No. 2014‑09 will have a material impact on its net income. ASU No. 2014‑09 is required to be applied either full retrospective to each prior reporting period presented or modified retrospective with the cumulative effect of initially applying it at the date of initial application. The Company anticipates using the full retrospective method of adoption. In February 2016, the FASB issued Accounting Standards Update 2016‑02, “Leases (Topic 842)” (“ASU No. 2016-02”). ASU No. 2016‑02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016‑02 will be effective beginning in the first quarter of 2019. Early adoption of ASU No. 2016‑02 is permitted. ASU No. 2016‑02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company’s management is currently evaluating the impact the adoption of ASU 2016‑02 is anticipated to have on the Company’s consolidated financial statements. In 2016, the FASB issued Accounting Standards Update 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” and Accounting Standard Update 2016‑18, “Statement of Cash Flows (Topic 230): Restricted Cash” related to the classification of certain cash receipts and cash payments and the presentation of restricted cash within an entity’s statement of cash flows, respectively. These standards are effective for interim and annual reporting periods beginning after December 15, 2017, but early adoption is permitted. The Company does not anticipate these standards to have a material impact on our Consolidated Statement of Cash Flows. Recently Adopted Standards Pursuant to the guidelines of the recently issued Accounting Standards Update 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015‑17”), all deferred tax assets and liabilities are to be classified as non-current. As permitted under the ASU 2015‑17, the Company adopted this guidance for the quarter ended March 31, 2017. The guidance indicates that ASU 2015‑17 may be applied either prospectively or retrospectively. The Company elected to adopt ASU 2015‑17 retrospectively. Upon adoption, approximately $129.3 million of what were formerly recorded as current deferred tax assets as of December 31, 2016 were reclassified to non-current and netted against non-current deferred income taxes payable as of December 31, 2016 in the accompanying financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016‑09, “Compensation—Stock Compensation (Topic 718)” (“ASU No. 2016‑09”). ASU No. 2016‑09 makes several amendments to Topic 718, which simplified the accounting for share-based payment transactions, including the income tax consequences, the calculation of diluted earnings per share, the treatment of forfeitures and the classification on the statement of cash flows. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments requiring the recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. Prior to the adoption of ASU No. 2016‑09, GAAP required tax effects of deductions for share-based payments in excess of compensation cost and tax deficiencies to be recorded in equity. Under ASU No. 2016‑09, the tax effects of awards are treated as discrete income tax expense items in the reporting period in which they occur. The Company adopted ASU No. 2016‑09 as of January 1, 2017. As a result of employee stock awards that vested and stock options that were exercised during the three months ended March 31, 2017, the Company recorded a discrete income tax benefit of $3.0 million for the same period. The discrete income tax benefit and the modification to the diluted earnings per share calculation, which increased the diluted shares outstanding under ASU No. 2016‑09, increased the Company’s earnings per diluted share by $0.05 for the three months ended March 31, 2017. The adoption of ASU No. 2016‑09 did not have a material impact on the statement of cash flows presentation, which the Company adopted prospectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight‑line method. The Company changed the estimated useful lives and residual values for certain long-lived assets as of January 1, 2017 as follows: Assets Current Depreciable Life Prior Policy Depreciable Life Current Residual Value Prior Policy Residual Value New Aircraft 20 - 22 years 18 years 17.5 - 20 % % Used Aircraft, rotable spares, and spare engines up to 18 years up to 18 years 0 - 20 % 0 - 30 % Ground equipment up to 10 years No Change 0 % No Change Office equipment up to 7 years No Change % No Change Leasehold improvements Shorter of 15 years or lease term No Change % No Change Buildings 20 - 39.5 years No Change % No Change The Company estimates that the impact of this change will increase depreciation expense by an additional $1.8 million on an annualized basis for 2017. |
Condensed Consolidated Financ17
Condensed Consolidated Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Consolidated Financial Statements | |
Schedule of property and equipment | Assets Current Depreciable Life Prior Policy Depreciable Life Current Residual Value Prior Policy Residual Value New Aircraft 20 - 22 years 18 years 17.5 - 20 % % Used Aircraft, rotable spares, and spare engines up to 18 years up to 18 years 0 - 20 % 0 - 30 % Ground equipment up to 10 years No Change 0 % No Change Office equipment up to 7 years No Change % No Change Leasehold improvements Shorter of 15 years or lease term No Change % No Change Buildings 20 - 39.5 years No Change % No Change |
Passenger and Ground Handling18
Passenger and Ground Handling Revenue (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Passenger and Ground Handling Revenues | |
Schedule of details of agreements with other airlines | Delta Connection Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) • • • • 51 27 36 13 • ExpressJet Delta Connection Agreement (fixed-fee arrangement) • • • 32 35 28 • SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) • 24 • United Express Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) • • • 42 29 60 • ExpressJet United ERJ Agreement (fixed-fee arrangement) • • 5 126 • SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) • 22 • Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) • • 1 20 • American Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines American Agreement (fixed-fee arrangement) • • 22 28 • SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) • 6 • ExpressJet American Agreement (fixed-fee arrangement) • • • 6 6 10 • ExpressJet American Prorate Agreement (revenue-sharing arrangement) • 3 • |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Net Income Per Common Share | |
Schedule of net income 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, 2017 2016 Numerator: Net Income $ 34,786 $ 27,092 Denominator: Weighted average number of common shares outstanding 51,820 51,218 Effect of outstanding share-based awards 1,382 796 Weighted average number of shares for diluted net income per common share 53,202 52,014 Basic earnings per-share $ $ 0.53 Diluted earnings per-share $ 0.65 $ 0.52 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting | |
Schedule of Company's segment data | The following represents the Company’s segment data for the three-month periods ended March 31, 2017 and 2016 (in thousands). Three months ended March 31, 2017 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 482,954 $ 228,658 $ 53,803 $ 765,415 Operating expense 435,368 229,493 24,259 689,120 Depreciation and amortization expense 31,817 14,525 23,772 70,114 Interest expense 5,799 1,114 17,636 24,549 Segment profit (loss) (1) 41,787 (1,949) 11,908 51,746 Identifiable intangible assets, other than goodwill — 7,686 — 7,686 Total assets 2,224,407 565,839 2,338,110 5,128,356 Capital expenditures (including non-cash) 33,431 5,654 184,014 223,099 Three months ended March 31, 2016 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 466,296 $ 267,807 $ 27,972 $ 762,075 Operating expense 414,084 273,619 12,563 700,266 Depreciation and amortization expense 34,331 21,267 12,203 67,801 Interest expense 6,659 2,123 8,943 17,725 Segment profit (loss) (1) 45,553 (7,935) 6,466 44,084 Identifiable intangible assets, other than goodwill — 9,936 — 9,936 Total assets 2,213,958 1,277,361 1,218,935 4,710,254 Capital expenditures (including non-cash) 13,073 5,048 80,280 98,401 Segment profit (loss) is equal to operating income less interest expense |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 as of March 31, 2017 (in thousands): March through December 2017 $ 2018 2019 2020 2021 Thereafter $ 888,530 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Schedule of assets measured at fair value on a recurring basis | As of March 31, 2017 and December 31, 2016, 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, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 420,812 $ — $ 420,812 $ — Commercial paper 61,952 — 61,952 — Asset backed securities $ 482,764 $ — $ 482,764 $ — Cash, Cash Equivalents and Restricted Cash 103,691 103,691 — — Total Assets Measured at Fair Value $ 586,455 $ 103,691 $ 482,764 $ — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — — Asset backed securities $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Debt | |
Schedule of long-term debt | Long-term debt consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands). March 31, 2017 December 31, 2016 Current portion long-term debt $ $ Long-term debt net of current maturities Total long-term debt (including current portion) $ $ Unamortized debt issue cost, net Total long-term debt, net of debt issue costs $ $ |
Condensed Consolidated Financ24
Condensed Consolidated Financial Statements - Recent Accounting Pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Recent Accounting Pronouncements | |||
Long-term deferred income taxes payable | $ 581,203 | $ 565,404 | |
Diluted earnings per-share (in dollars per share) | $ 0.65 | $ 0.52 | |
Adjustment | Accounting Standards Update 2015-17 | |||
Recent Accounting Pronouncements | |||
Deferred tax assets, current | (129,300) | ||
Long-term deferred income taxes payable | $ (129,300) | ||
Scenario, adjustment | Accounting Standards Update 2016-09 | |||
Recent Accounting Pronouncements | |||
Income tax benefit | $ 3,000 | ||
Diluted earnings per-share (in dollars per share) | $ 0.05 |
Condensed Consolidated Financ25
Condensed Consolidated Financial Statements - Property and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Forecast | |||
Property and Equipment | |||
Depreciation | $ 1.8 | ||
New aircraft | |||
Property and Equipment | |||
Depreciable Life | 18 years | ||
Residual Value (as a percent) | 30.00% | ||
New aircraft | Minimum | |||
Property and Equipment | |||
Depreciable Life | 20 years | ||
Residual Value (as a percent) | 17.50% | ||
New aircraft | Maximum | |||
Property and Equipment | |||
Depreciable Life | 22 years | ||
Residual Value (as a percent) | 20.00% | ||
Used Aircraft, rotable spares, and spare engines | |||
Property and Equipment | |||
Depreciable Life | 18 years | 18 years | |
Used Aircraft, rotable spares, and spare engines | Minimum | |||
Property and Equipment | |||
Residual Value (as a percent) | 0.00% | 0.00% | |
Used Aircraft, rotable spares, and spare engines | Maximum | |||
Property and Equipment | |||
Residual Value (as a percent) | 20.00% | 30.00% | |
Ground equipment | |||
Property and Equipment | |||
Depreciable Life | 10 years | ||
Residual Value (as a percent) | 0.00% | ||
Office equipment | |||
Property and Equipment | |||
Depreciable Life | 7 years | ||
Residual Value (as a percent) | 0.00% | ||
Leasehold improvements | |||
Property and Equipment | |||
Depreciable Life | 15 years | ||
Residual Value (as a percent) | 0.00% | ||
Buildings | |||
Property and Equipment | |||
Residual Value (as a percent) | 0.00% | ||
Buildings | Minimum | |||
Property and Equipment | |||
Depreciable Life | 20 years | ||
Buildings | Maximum | |||
Property and Equipment | |||
Depreciable Life | 39 years 6 months |
Passenger and Ground Handling26
Passenger and Ground Handling Revenue (Details) - aircraft | 3 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Dec. 31, 2017 | |
Agreements with other airlines | ||
Percentage of ASMs flown under fixed-fee arrangements | 95.90% | |
Percentage of ASMs flown under pro-rate arrangements | 4.10% | |
Sky West Airlines Inc | Delta Connection Prorate Agreement | ||
Agreements with other airlines | ||
Term of agreement | 30 days | |
Sky West Airlines Inc | United Express Prorate Agreement | ||
Agreements with other airlines | ||
Term of agreement | 120 days | |
Sky West Airlines Inc | American Prorate Agreement | ||
Agreements with other airlines | ||
Term of agreement | 120 days | |
ExpressJet | American Prorate Agreement | ||
Agreements with other airlines | ||
Term of agreement | 120 days | |
CRJ 200 | Sky West Airlines Inc | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 51 | |
CRJ 200 | Sky West Airlines Inc | Delta Connection Prorate Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 24 | |
CRJ 200 | Sky West Airlines Inc | United Express Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 42 | |
CRJ 200 | Sky West Airlines Inc | Alaska Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 22 | |
CRJ 200 | Sky West Airlines Inc | American Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 22 | |
CRJ 200 | Sky West Airlines Inc | American Prorate Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 6 | |
CRJ 200 | ExpressJet | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 32 | |
CRJ 200 | ExpressJet | American Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 6 | |
CRJ 200 | ExpressJet | American Prorate Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 3 | |
CRJ 700 | Sky West Airlines Inc | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 27 | |
CRJ 700 | Sky West Airlines Inc | United Express Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 29 | |
CRJ 700 | Sky West Airlines Inc | Alaska Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 1 | |
CRJ 700 | Sky West Airlines Inc | American Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 28 | |
CRJ 700 | ExpressJet | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 35 | |
CRJ 700 | ExpressJet | American Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 10 | |
CRJ 900 | Sky West Airlines Inc | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 36 | |
CRJ 900 | ExpressJet | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 28 | |
E 175 | Forecast | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 6 | |
E 175 | Forecast | United Express Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 5 | |
E 175 | Sky West Airlines Inc | Delta Connection Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 13 | |
E 175 | Sky West Airlines Inc | United Express Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 60 | |
E 175 | Sky West Airlines Inc | Alaska Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 20 | |
ERJ 145 | ExpressJet | United Express Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 126 | |
ERJ 145 | ExpressJet | American Capacity Purchase Agreement | ||
Agreements with other airlines | ||
Number of aircraft under contract | 6 | |
ERJ 135 | ExpressJet | United Express Agreements | ||
Agreements with other airlines | ||
Number of aircraft under contract | 5 |
Share-Based Compensation and 27
Share-Based Compensation and Stock Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-Based Compensation | ||
Upon vesting, each restricted stock unit and performance share replaced with common stock | 1.00% | |
Common stock repurchased (in shares) | 281,000 | 0 |
Common stock repurchased, value | $ 10 | |
Employee stock option | ||
Share-Based Compensation | ||
Common stock repurchased (in shares) | 108,000 | |
Common stock repurchased, value | $ 3.8 | |
Options granted (in shares) | 0 | |
Restricted Stock Units (RSUs) | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ 35.81 | |
Restricted Stock Units (RSUs) | Long Term Incentive Plan 2010 | ||
Share-Based Compensation | ||
Granted (in shares) | 160,137 | |
Vesting period | 3 years | |
Performance share units | Long Term Incentive Plan 2010 | ||
Share-Based Compensation | ||
Granted (in shares) | 119,315 | |
Vesting period | 3 years | |
Director | Restricted Stock Units (RSUs) | ||
Share-Based Compensation | ||
Granted (in shares) | 22,617 | |
Accounting Standards Update 2016-09 | ||
Share-Based Compensation | ||
Stock based compensation expense | $ 3.5 | $ 2.3 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net Income Per Common Share | ||
Number of outstanding options not included in computation of Diluted EPS (in shares) | 0 | 6,000 |
Numerator | ||
Net income | $ 34,786 | $ 27,092 |
Denominator | ||
Weighted average number of common shares outstanding | 51,820,000 | 51,218,000 |
Effect of outstanding share-based awards | 1,382,000 | 796,000 |
Weighted average number of shares for diluted net income per common share | 53,202,000 | 52,014,000 |
Basic earnings per-share (in dollars per share) | $ 0.67 | $ 0.53 |
Diluted earnings per-share (in dollars per share) | $ 0.65 | $ 0.52 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)segmentaircraft | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting | |||
Number of operating segments | segment | 3 | ||
Operating revenues | $ 765,415 | $ 762,075 | |
Operating expense | 689,120 | 700,266 | |
Depreciation and amortization expense | 70,114 | 67,801 | |
Interest expense | 24,549 | 17,725 | |
Segment profit (loss) | 52,406 | 44,514 | |
Identifiable intangible assets, other than goodwill | 7,686 | 9,936 | $ 8,249 |
Total assets | 5,128,356 | 4,710,254 | $ 5,007,966 |
Capital expenditures (including non-cash) | 223,099 | 98,401 | |
Segments | |||
Segment Reporting | |||
Segment profit (loss) | 51,746 | 44,084 | |
SkyWest Airlines | |||
Segment Reporting | |||
Operating revenues | 482,954 | 466,296 | |
Operating expense | 435,368 | 414,084 | |
Depreciation and amortization expense | 31,817 | 34,331 | |
Interest expense | 5,799 | 6,659 | |
Total assets | 2,224,407 | 2,213,958 | |
Capital expenditures (including non-cash) | 33,431 | 13,073 | |
SkyWest Airlines | Segments | |||
Segment Reporting | |||
Segment profit (loss) | 41,787 | 45,553 | |
ExpressJet Airlines Inc | |||
Segment Reporting | |||
Operating revenues | 228,658 | 267,807 | |
Operating expense | 229,493 | 273,619 | |
Depreciation and amortization expense | 14,525 | 21,267 | |
Interest expense | 1,114 | 2,123 | |
Identifiable intangible assets, other than goodwill | 7,686 | 9,936 | |
Total assets | 565,839 | 1,277,361 | |
Capital expenditures (including non-cash) | 5,654 | 5,048 | |
ExpressJet Airlines Inc | Segments | |||
Segment Reporting | |||
Segment profit (loss) | (1,949) | (7,935) | |
SkyWest Leasing | |||
Segment Reporting | |||
Operating revenues | 53,803 | 27,972 | |
Operating expense | 24,259 | 12,563 | |
Depreciation and amortization expense | 23,772 | 12,203 | |
Interest expense | 17,636 | 8,943 | |
Total assets | 2,338,110 | 1,218,935 | |
Capital expenditures (including non-cash) | $ 184,014 | 80,280 | |
SkyWest Leasing | CRJ 200 | |||
Segment Reporting | |||
Number of aircraft under contract | aircraft | 4 | ||
SkyWest Leasing | Segments | |||
Segment Reporting | |||
Segment profit (loss) | $ 11,908 | $ 6,466 |
Commitments and Contingencies30
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)aircraft | |
Future minimum rental payments required under operating leases | |
March through December 2017 | $ 124,707 |
2,018 | 156,039 |
2,019 | 123,359 |
2,020 | 135,386 |
2,021 | 112,536 |
Thereafter | 236,503 |
Total future lease obligations | $ 888,530 |
E 175 | |
Future minimum rental payments required under operating leases | |
Number of aircraft under firm purchase commitment | aircraft | 11 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Marketable securities | $ 482,764 | $ 409,898 |
Fair Value of Financial Instruments | ||
Carrying amount of long-term debt | 2,614,915 | 2,545,511 |
Recurring | ||
Fair Value Measurements | ||
Cash, Cash Equivalents and Restricted Cash | 103,691 | 155,009 |
Total Assets Measured at Fair Value | 586,455 | 564,907 |
Cost of cash and cash equivalents and available for sale securities | 578,300 | 556,800 |
Fair value of cash and cash equivalents and available for sale securities | 578,200 | 556,700 |
Recurring | Bonds and bond funds | ||
Fair Value Measurements | ||
Marketable securities | 420,812 | 409,885 |
Recurring | Asset-backed securities | ||
Fair Value Measurements | ||
Marketable securities | 482,764 | 409,898 |
Recurring | Commercial paper | ||
Fair Value Measurements | ||
Marketable securities | 61,952 | 13 |
Recurring | Level 1 | ||
Fair Value Measurements | ||
Cash, Cash Equivalents and Restricted Cash | 103,691 | 155,009 |
Total Assets Measured at Fair Value | 103,691 | 155,009 |
Recurring | Level 2 | ||
Fair Value Measurements | ||
Total Assets Measured at Fair Value | 482,764 | 409,898 |
Fair Value of Financial Instruments | ||
Fair value of long-term debt | 2,640,000 | 2,570,000 |
Carrying amount of long-term debt | 2,640,000 | 2,570,000 |
Recurring | Level 2 | Bonds and bond funds | ||
Fair Value Measurements | ||
Marketable securities | 420,812 | 409,885 |
Recurring | Level 2 | Asset-backed securities | ||
Fair Value Measurements | ||
Marketable securities | 482,764 | 409,898 |
Recurring | Level 2 | Commercial paper | ||
Fair Value Measurements | ||
Marketable securities | $ 61,952 | $ 13 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)aircraft | Dec. 31, 2016USD ($) | |
Long-term Debt | ||
Current portion long-term debt | $ 297,119 | $ 308,945 |
Long-term debt, net of current maturities | 2,343,678 | 2,261,959 |
Total long-term debt | 2,640,797 | 2,570,904 |
Unamortized debt issue cost, net | (25,882) | (25,393) |
Total long-term debt, net of debt issue costs | 2,614,915 | 2,545,511 |
Letter of credit | ||
Long-term Debt | ||
Amount outstanding | $ 87,700 | $ 87,700 |
E 175 | ||
Long-term Debt | ||
Number of aircraft delivered | aircraft | 7 | |
Debt issued to purchase of aircraft | $ 158,000 | |
Debt instrument, term | 12 years | |
Minimum | E 175 | ||
Long-term Debt | ||
Interest rate (as a percent) | 4.50% | |
Maximum | E 175 | ||
Long-term Debt | ||
Interest rate (as a percent) | 4.70% |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Effective tax rate (as a percent) | 33.60% |
Statutory Federal income tax rate (as a percent) | 35.00% |
Scenario, adjustment | Accounting Standards Update 2016-09 | |
Income tax benefit | $ 3 |