Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 16, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | SKYWEST INC | ||
Entity Central Index Key | 793,733 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,816,989,866 | ||
Entity Common Stock, Shares Outstanding | 51,784,012 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 181,792 | $ 146,766 |
Marketable securities | 503,503 | 409,898 |
Restricted cash | 8,243 | |
Income tax receivable | 5,316 | 6,989 |
Receivables, net | 42,731 | 46,916 |
Inventories, net | 119,755 | 118,509 |
Prepaid aircraft rents | 115,098 | 162,360 |
Other current assets | 26,938 | 18,111 |
Total current assets | 995,133 | 917,792 |
PROPERTY AND EQUIPMENT: | ||
Aircraft and rotable spares | 5,335,870 | 4,839,501 |
Deposits on aircraft | 49,000 | 38,800 |
Buildings and ground equipment | 265,608 | 261,704 |
Total property and equipment, gross | 5,650,478 | 5,140,005 |
Less-accumulated depreciation and amortization | (1,467,475) | (1,318,308) |
Total property and equipment, net | 4,183,003 | 3,821,697 |
OTHER ASSETS | ||
Long-term prepaid assets | 230,923 | 218,505 |
Other long-term assets | 49,220 | 49,972 |
Total other assets | 280,143 | 268,477 |
Total assets | 5,458,279 | 5,007,966 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 309,678 | 305,460 |
Accounts payable | 288,904 | 241,215 |
Accrued salaries, wages and benefits | 154,367 | 139,885 |
Taxes other than income taxes | 19,228 | 15,618 |
Other current liabilities | 48,648 | 45,087 |
Total current liabilities | 820,825 | 747,265 |
OTHER LONG TERM LIABILITIES | 42,541 | 50,844 |
LONG TERM DEBT, net of current maturities | 2,377,346 | 2,240,051 |
DEFERRED INCOME TAXES PAYABLE | 419,020 | 565,404 |
DEFERRED AIRCRAFT CREDITS | 44,225 | 53,459 |
COMMITMENTS AND CONTINGENCIES (Note 5) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, 5,000,000 shares authorized; none issued | ||
Common stock, no par value, 120,000,000 shares authorized; 80,398,104 and 79,781,305 shares issued, respectively | 672,593 | 657,353 |
Retained earnings | 1,516,957 | 1,103,751 |
Treasury stock, at cost, 28,643,535 and 28,015,386 shares, respectively | (435,178) | (410,090) |
Accumulated other comprehensive loss | (50) | (71) |
Total stockholders' equity | 1,754,322 | 1,350,943 |
Total liabilities and stockholders' equity | $ 5,458,279 | $ 5,007,966 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 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 | 80,398,104 | 79,781,305 |
Treasury stock, at cost, shares | 28,643,535 | 28,015,386 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING REVENUES: | |||
Passenger | $ 3,126,708 | $ 3,051,414 | $ 3,030,023 |
Ground handling and other | 77,560 | 69,792 | 65,540 |
Total operating revenues | 3,204,268 | 3,121,206 | 3,095,563 |
OPERATING EXPENSES: | |||
Salaries, wages and benefits | 1,196,227 | 1,211,380 | 1,203,312 |
Aircraft maintenance, materials and repairs | 579,463 | 569,306 | 604,863 |
Depreciation and amortization | 292,768 | 284,969 | 264,507 |
Aircraft rentals | 215,807 | 262,602 | 273,696 |
Aircraft fuel | 162,653 | 122,284 | 118,124 |
Ground handling services | 69,848 | 72,659 | 82,694 |
Special items | 465,649 | ||
Other operating expenses | 299,303 | 305,041 | 313,852 |
Total operating expenses | 2,816,069 | 3,293,890 | 2,861,048 |
OPERATING INCOME (LOSS) | 388,199 | (172,684) | 234,515 |
OTHER INCOME (EXPENSE): | |||
Interest income | 4,509 | 2,143 | 1,997 |
Interest expense | (104,925) | (78,177) | (75,850) |
Other, net | 400 | (94) | 33,660 |
Total other expense, net | (100,016) | (76,128) | (40,193) |
INCOME (LOSS) BEFORE INCOME TAXES | 288,183 | (248,812) | 194,322 |
PROVISION (BENEFIT) FOR INCOME TAXES | (140,724) | (87,226) | 76,505 |
NET INCOME (LOSS) | $ 428,907 | $ (161,586) | $ 117,817 |
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 8.28 | $ (3.14) | $ 2.31 |
DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 8.08 | $ (3.14) | $ 2.27 |
Weighted average common shares: | |||
Basic (in shares) | 51,804 | 51,505 | 51,077 |
Diluted (in shares) | 53,100 | 51,505 | 51,825 |
COMPREHENSIVE INCOME (LOSS): | |||
Net income (loss) | $ 428,907 | $ (161,586) | $ 117,817 |
Net unrealized appreciation on marketable securities, net of taxes | 21 | 189 | 29 |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ 428,928 | $ (161,397) | $ 117,846 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2014 | $ 626,521 | $ 1,165,478 | $ (391,364) | $ (289) | $ 1,400,346 |
Balance (in shares) at Dec. 31, 2014 | 77,951 | (26,765) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 117,817 | 117,817 | |||
Net unrealized appreciation on marketable securities net of tax | 29 | 29 | |||
Exercise of common stock options and vested restricted stock units | $ 8,490 | 8,490 | |||
Exercise of common stock options and vested restricted stock units (in shares) | 815 | ||||
Sale of common stock under employee stock purchase plan | $ 3,430 | 3,430 | |||
Sale of common stock under employee stock purchase plan (in shares) | 254 | ||||
Stock based compensation expense related to the issuance of stock options and restricted stock units | $ 5,368 | 5,368 | |||
Tax deficiency from exercise of common stock options | (2,166) | (2,166) | |||
Treasury stock purchases | $ (18,726) | (18,726) | |||
Treasury stock purchases (in shares) | (1,250) | ||||
Cash dividends declared (per share) | (8,153) | (8,153) | |||
Balance at Dec. 31, 2015 | $ 641,643 | 1,275,142 | $ (410,090) | (260) | 1,506,435 |
Balance (in shares) at Dec. 31, 2015 | 79,020 | (28,015) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (161,586) | (161,586) | |||
Net unrealized appreciation on marketable securities net of tax | 189 | 189 | |||
Exercise of common stock options and vested restricted stock units | $ 4,979 | 4,979 | |||
Exercise of common stock options and vested restricted stock units (in shares) | 609 | ||||
Sale of common stock under employee stock purchase plan | $ 3,163 | 3,163 | |||
Sale of common stock under employee stock purchase plan (in shares) | 152 | ||||
Stock based compensation expense related to the issuance of stock options and restricted stock units | $ 7,568 | 7,568 | |||
Cash dividends declared (per share) | (9,805) | (9,805) | |||
Balance at Dec. 31, 2016 | $ 657,353 | 1,103,751 | $ (410,090) | (71) | 1,350,943 |
Balance (in shares) at Dec. 31, 2016 | 79,781 | (28,015) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 428,907 | 428,907 | |||
Net unrealized appreciation on marketable securities net of tax | 21 | 21 | |||
Exercise of common stock options and vested restricted stock units | $ 1,658 | 1,658 | |||
Exercise of common stock options and vested restricted stock units (in shares) | 529 | ||||
Treasury shares withheld for the payment of taxes | $ (5,080) | (5,080) | |||
Treasury shares withheld for the payment of taxes (in shares) | (145) | ||||
Sale of common stock under employee stock purchase plan (in shares) | 88 | ||||
Stock based compensation expense related to the issuance of stock options and restricted stock units | $ 3,002 | 3,002 | |||
Impact of adoption of Accounting Standards Update (ASU) 2016-09 (See Note 1) | 867 | 867 | |||
Tax deficiency from exercise of common stock options | 10,580 | 10,580 | |||
Treasury stock purchases | $ (20,008) | (20,008) | |||
Treasury stock purchases (in shares) | (484) | ||||
Cash dividends declared (per share) | (16,568) | (16,568) | |||
Balance at Dec. 31, 2017 | $ 672,593 | $ 1,516,957 | $ (435,178) | $ (50) | $ 1,754,322 |
Balance (in shares) at Dec. 31, 2017 | 80,398 | (28,644) |
CONSOLIDATED STATEMENTS OF STO6
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||
Net unrealized depreciation on marketable securities, tax | $ 7 | $ 98 | $ 18 |
Cash dividends declared (in dollars per share) | $ 0.32 | $ 0.19 | $ 0.16 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 428,907 | $ (161,586) | $ 117,817 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 292,768 | 284,969 | 264,507 |
Stock based compensation expense | 10,580 | 7,568 | 5,368 |
Gain from early extinguishment of debt | (1,279) | (33,660) | |
Special items | 465,649 | ||
Net increase (decrease) in deferred income taxes | (145,517) | (83,441) | 73,844 |
Changes in operating assets and liabilities: | |||
Decrease (increase) in restricted cash | 8,243 | (27) | 3,366 |
Decrease in receivables | 4,201 | 15,260 | 21,076 |
Decrease (increase) in income tax receivable | 1,673 | (4,118) | (92) |
Increase in inventories | (1,246) | (1,986) | (2,860) |
Decrease (increase) in other current assets | 26,017 | 37,569 | (28,598) |
Decrease in deferred aircraft credits | (8,520) | (8,108) | (8,635) |
Increase (decrease) in accounts payable and accrued aircraft rents | 46,934 | (47,563) | 9,690 |
Increase (decrease) in other current liabilities | 20,084 | 3,758 | (4,498) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 684,124 | 506,665 | 417,325 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of marketable securities | (1,533,867) | (2,511,388) | (1,170,439) |
Sales of marketable securities | 1,440,283 | 2,388,168 | 1,299,069 |
Proceeds from the sale of aircraft, property and equipment | 51,994 | 3,008 | 10,308 |
Proceeds from settlement of residual value guarantee aircraft agreements | 90,000 | ||
Acquisition of property and equipment: | |||
Aircraft and rotable spare parts | (661,176) | (1,138,963) | (710,871) |
Deposits on aircraft | (46,733) | (650) | |
Buildings and ground equipment | (27,467) | (14,350) | (10,405) |
Return of deposits applied towards acquired aircraft | 36,533 | 1,850 | |
Decrease (increase) in other assets | (10,904) | 7,097 | 10,772 |
NET CASH USED IN INVESTING ACTIVITIES | (751,337) | (1,177,078) | (569,716) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of long-term debt | 471,677 | 926,069 | 591,881 |
Principal payments on long-term debt | (330,258) | (302,158) | (354,277) |
Proceeds from issuance of common stock | 4,660 | 8,142 | 9,754 |
Purchase of treasury stock | (20,008) | (18,726) | |
Employee income tax paid on equity awards | (5,080) | ||
Decrease (increase) in debt issuance cost | (3,737) | (8,653) | 2,779 |
Payment of cash dividends | (15,015) | (9,256) | (8,260) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 102,239 | 614,144 | 223,151 |
Increase (decrease) in cash and cash equivalents | 35,026 | (56,269) | 70,760 |
Cash and cash equivalents at beginning of period | 146,766 | 203,035 | 132,275 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 181,792 | 146,766 | 203,035 |
Non-cash investing activities: | |||
Acquisition of rotable spare parts | 755 | 5,688 | |
Cash paid during the period for: | |||
Interest, net of capitalized amounts | 105,639 | 76,589 | 80,657 |
Income taxes | $ 5,010 | $ 1,212 | $ 5,104 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Nature of Operations and Summary of Significant Accounting Policies | (1) Nature of Operations and Summary of Significant Accounting Policies SkyWest, Inc. (the “Company”), through its subsidiaries, SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines, Inc. (“ExpressJet”), operates the largest regional airlines in the United States. As of December 31, 2017, SkyWest Airlines and ExpressJet offered scheduled passenger service under code-share agreements with United, Delta, American and Alaska with approximately 2,980 total daily departures to different destinations in the United States, Canada, Mexico and the Caribbean. Additionally, the Company provides airport customer service and ground handling services for other airlines throughout its system. As of December 31, 2017, the Company had 595 aircraft in scheduled service out of a combined fleet of 623 aircraft consisting of the following: CRJ200 CRJ700 CRJ900 ERJ135 ERJ145 E175 Total United 81 20 — 3 109 65 278 Delta 94 60 52 — — 19 225 American 16 49 — — — — 65 Alaska 4 — — — — 23 27 Aircraft in scheduled service 195 129 52 3 109 107 595 Subleased to an un-affiliated entity 4 — — — — — 4 Other* 9 7 — — 8 — 24 Total Fleet 208 136 52 3 117 107 623 * As of December 31, 2017, these aircraft have been removed from service and are in the process of being returned under the applicable leasing arrangement or are aircraft transitioning between code-share agreements with the Company’s major airline partners. During the year ended December 31, 2017, the Company sold eleven owned Embraer Brasilia EMB120 (“EMB120”) 30-seat turboprop aircraft at net book value. For the year ended December 31, 2017, approximately 46.7% of the Company’s aircraft in scheduled service operated for United, approximately 37.8% was operated for Delta, approximately 10.9% was operated for American and approximately 4.6% was operated for Alaska. SkyWest Airlines has been a code-share partner with Delta since 1987, United since 1997, Alaska since 2011 and American since 2012. As of December 31, 2017, SkyWest Airlines operated as a Delta Connection carrier primarily in Salt Lake City and Minneapolis, a United Express carrier primarily in Los Angeles, San Francisco, Denver, Houston, Chicago and the Pacific Northwest, an American carrier primarily in Chicago, Los Angeles and Phoenix and an Alaska carrier primarily in the Pacific Northwest. As of December 31, 2017, ExpressJet operated as a Delta Connection carrier primarily in Atlanta and Detroit, a United Express carrier primarily in Chicago (O’Hare), Cleveland, Newark and Houston and an American carrier primarily in Dallas. The Company’s subsidiaries operate the following aircraft manufactured by Bombardier Aerospace (“Bombardier”) and Embraer S.A. (“Embraer”): Bombardier CRJ200 regional jets (“CRJ200s”), Bombardier CRJ700 regional jets (“CRJ700s”), Bombardier CRJ900 regional jets (“CRJ900s”), Embraer ERJ145 Regional Jets (“ERJ145s”) and Embraer E175 dual-class regional jet aircraft (which are typically configured with 76 seats) (“E175s”). Additionally, the Company has ordered 30 E175 aircraft from Embraer configured with 70 seats (“E175 SC”). Basis of Presentation The Company’s consolidated financial statements include the accounts of the Company and the SkyWest Airlines, ExpressJet and SkyWest Leasing segments, with all inter‑company transactions and balances having been eliminated. In preparing the accompanying consolidated financial statements, the Company has reviewed, as determined necessary by the Company’s management, events that have occurred after December 31, 2017, through the filing date of the Company’s annual report with the U.S. Securities and Exchange Commission. The Company reclassified certain prior period amounts to conform to the current period presentation (see Recent Accounting Pronouncements). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company classified $8.2 million of cash as restricted cash collateralizing letters of credit under the Company’s workers’ compensation insurance policy and classified it accordingly in the consolidated balance sheets as of December 31, 2016. The Company had no restricted cash as of December 31, 2017, as the Company satisfied the workers’ compensation insurance policy requirement with a letter of credit. Marketable Securities The Company’s investments in marketable debt and equity securities are deemed by management to be available-for-sale and are reported at fair market value with the net unrealized appreciation reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other income and expense. The Company’s position in marketable securities as of December 31, 2017 and 2016 was as follows (in thousands): Gross unrealized Gross unrealized At December 31, 2017 Amortized Cost holding gains holding losses Fair market value Total cash and cash equivalents $ 181,792 $ — $ — $ 181,792 Marketable securities: Bond and bond funds $ 344,479 $ — $ (228) $ 344,251 Commercial Paper 159,252 — — 159,252 Total marketable securities $ 503,731 $ — $ (228) $ 503,503 Total assets measured at fair value $ 685,523 $ — $ (228) $ 685,295 Gross unrealized Gross unrealized At December 31, 2016 Amortized Cost holding gains holding losses Fair market value Total cash and cash equivalents $ 146,766 $ — $ — $ 146,766 Marketable securities: Bond and bond funds $ 410,001 $ — $ (116) $ 409,885 Commercial Paper 13 — — 13 Total marketable securities $ 410,014 $ — $ (116) $ 409,898 Total assets measured at fair value $ 556,780 $ — $ (116) $ 556,664 As of December 31, 2017 and 2016, the Company had classified $503.5 million and $409.9 million of marketable securities, respectively, as short‑term since it had the ability to redeem the securities within one year. Inventories Inventories include expendable parts, fuel and supplies and are valued at cost (FIFO basis) less an allowance for obsolescence based on historical results, excess parts and management’s expectations of future operations. Expendable inventory parts are charged to expense as used. An obsolescence allowance for flight equipment expendable parts is accrued based on estimated lives of the corresponding fleet types and salvage values. The inventory allowance as of December 31, 2017 and 2016 was $17.1 million and $40.5 million, respectively. The inventory allowance decreased in 2017 due to the disposal of excess inventory that had a valuation allowance as of December 31, 2016. These allowances are based on management estimates. 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 impact of this change increased depreciation expense by an additional $1.4 million for 2017. Impairment of Long-Lived Assets As of December 31, 2017, the Company had approximately $4.2 billion of property and equipment and related assets. Additionally, as of December 31, 2017, the Company had approximately $4.9 million in intangible assets. In accounting for these long‑lived and intangible assets, the Company makes estimates about the expected useful lives of the assets, the expected residual values of certain of these assets, and the potential for impairment based on the fair value of the assets and the cash flows they generate. On September 7, 2005, the Company acquired all of the issued and outstanding capital stock of Atlantic Southeast and recorded an intangible asset for specifically identifiable contracts of approximately $33.7 million relating to the acquisition. The Company anticipates the intangible asset will be fully amortized by the end of 2018. As of December 31, 2017 and 2016, the Company had $28.9 million and $25.5 million in accumulated amortization expense, attributable to the acquisition, respectively. Factors indicating potential impairment include, but are not limited to, significant decreases in the market value of the long‑lived assets, a significant change in the condition of the long‑lived assets and operating cash flow losses associated with the use of the long‑lived assets. On a periodic basis, the Company evaluates whether impairment indicators are present. When considering whether or not impairment of long‑lived assets exists, the Company groups similar assets together at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and compare the undiscounted cash flows for each asset group to the net carrying amount of the assets supporting the asset group. Asset groupings are done at the fleet or contract level. The Company did not recognize any impairment charges of long-lived assets during the year ended December 31, 2017. In 2016, the Company impaired certain long-lived assets relating to the CRJ200 aircraft and ERJ145 aircraft type specific assets. See Note 8, Special Items , for the impairment charges recorded during the year ended December 31, 2016. Capitalized Interest Interest is capitalized on aircraft purchase deposits as a portion of the cost of the asset and is depreciated over the estimated useful life of the asset. During the years ended December 31, 2017, 2016 and 2015, the Company capitalized interest costs of approximately $1.4 million, $1.5 million, and $2.2 million, respectively. Maintenance The Company operates under a U.S. Federal Aviation Administration approved continuous inspection and maintenance program. The Company uses the direct expense method of accounting for its regional jet engine overhauls wherein the expense is recorded when the overhaul event occurs. The Company has engine services agreements with third-party vendors to provide long-term engine services covering the scheduled and unscheduled repairs for certain of its CRJ200 aircraft, CRJ700 aircraft, ERJ145 aircraft and E175 aircraft. Under the terms of the agreements, the Company pays a fixed dollar amount per engine hour flown on a monthly basis and the third-party vendors will assume the responsibility to repair the engines at no additional cost to the Company, subject to certain specified exclusions. Maintenance costs under these contracts are recognized when the engine hour is flown pursuant to the terms of each contract. The costs of maintenance for airframe and avionics components, landing gear and other recurring maintenance are expensed as incurred. Passenger and Ground Handling Revenues 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, United, American and Alaska (each, a “major airline partner”), the major airline partner 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 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 expense and certain airport related expenses. Under the fixed-fee arrangements, revenue is earned when each flight is completed. Under the Company’s fixed-fee agreements with Delta, United, American and Alaska, the compensation structure generally consists of a combination of agreed‑upon rates for operating flights and direct reimbursement for other certain costs associated with operating the aircraft. A portion of the Company’s contract flying compensation is designed to reimburse the Company for certain aircraft ownership costs. The aircraft compensation structure varies by agreement, but is intended to cover either the Company’s aircraft principal and interest debt service costs, its aircraft depreciation and interest expense or its aircraft lease expense costs while the aircraft is under contract. Under the Company’s ExpressJet United Express ERJ Agreement and certain aircraft operating under fixed-fee contracts with Delta, the major airline partner provides the aircraft to the Company for a nominal amount. The Company has concluded that a component of its revenue under these agreements is rental income, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The amounts deemed to be rental income under the agreements for the years ended December 31, 2017, 2016 and 2015 were $572.7 million, $516.0 million and $504.9 million, respectively. These amounts are reflected as passenger revenues on the Company’s consolidated statements of comprehensive income (loss). The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income (loss) since the use of the aircraft is not a separate activity of the total service provided. In the event that the contractual rates under the 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 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 for incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are being measured and determined on a monthly, quarterly or semi-annual basis. At the end of each period, the Company calculates the incentives achieved during that period and recognizes revenue accordingly. The Company’s passenger revenues from fixed-fee agreements could be impacted by a number of factors, including changes to the Company’s code‑share agreements with Delta, United, Alaska or American, 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 airline partners. Under a Revenue Sharing Arrangement (referred to as a “revenue-sharing” or “prorate” arrangement), 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 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. 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. The following 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 Aircraft Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) CRJ 200 CRJ 700 CRJ 900 E175 70 27 36 19 Individual aircraft have scheduled removal dates under the agreement between 2018 and 2027 The average remaining term of the aircraft under contract is 2.9 years ExpressJet Delta Connection Agreement (fixed-fee arrangement) CRJ 700 CRJ 900 33 16 Individual aircraft have scheduled removal dates under the agreement during 2018 SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) CRJ 200 24 Terminable with 30-day notice United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) CRJ 200 CRJ 700 E175 57 20 65 Individual aircraft have scheduled removal dates under the agreement between 2018 and 2029 The average remaining term of the aircraft under contract is 5.1 years ExpressJet United ERJ Agreement (fixed-fee arrangement) ERJ145 ERJ135 109 3 Agreement expires in 2022 The average remaining term of the aircraft under contract is 4.8 years SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) CRJ 200 24 Terminable with 120-day notice American Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates SkyWest Airlines American Agreement (fixed-fee arrangement) CRJ 200 CRJ 700 10 37 CRJ200 aircraft are scheduled to expire in 2018 and the CRJ700 aircraft are scheduled to expire in 2019 SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) CRJ 200 6 Terminable with 120-day notice ExpressJet American Agreement (fixed-fee arrangement) CRJ 700 12 CRJ700 aircraft are scheduled to expire in 2019 Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) CRJ 200 E175 4 23 CRJ200 aircraft are scheduled to expire in 2018 E175 aircraft have scheduled removal dates under the agreement between 2027 and 2029 In addition to the contractual arrangements described above, SkyWest Airlines has entered into agreements with Alaska and Delta to place additional E175/E175 SC aircraft into service for those major airline partners. As of December 31, 2017, the Company anticipated placing an additional 12 E175 aircraft with Alaska and 30 E175 SC aircraft with Delta. The delivery dates for the new E175/E175 SC aircraft are currently scheduled to take place by the end of 2018 or early 2019. Final delivery dates may adjust based on various factors. ExpressJet initiated the wind down of its flying agreement with Delta during 2017 and expected to be complete by the end of 2018. As of December 31, 2017, ExpressJet operated 49 CRJ700s/900s under its Delta flying agreement. Of the 49 aircraft, ExpressJet anticipates returning 19 leased aircraft to Delta and removing 30 CRJ700 aircraft from service with Delta during 2018. ExpressJet is pursuing placement of the 30 CRJ700 aircraft with other partners, of which eight aircraft are scheduled to be placed under an agreement with American following the removal from service with Delta. Deferred Aircraft Credits The Company accounts for incentives provided by aircraft manufacturers as deferred credits. The deferred credits related to leased aircraft are amortized on a straight‑line basis as a reduction to rent expense over the lease term. Credits related to owned aircraft reduce the purchase price of the aircraft, which has the effect of amortizing the credits on a straight‑line basis as a reduction in depreciation expense over the life of the related aircraft. The incentives are credits that may be used to purchase spare parts and pay for training and other expenses. Income Taxes The Company recognizes a net liability or asset for the deferred tax consequences of all temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that are expected to result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. 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 year ended December 31, 2017, 284,000 performance shares (at target performance) were excluded in the computation of Diluted EPS since the Company had not achieved the minimum target thresholds as of December 31, 2017. During the year ended December 31, 2016, 2,077,000 shares reserved for the issuance upon the exercise of outstanding options, performance shares and restricted stock units were excluded from the computation of Diluted EPS due to the net loss in 2016 and 505,000 shares reserved for outstanding options were excluded from the Diluted EPS calculation for the year ended December 31, 2015 as the respective exercise price exceeded the weighted average fair market value of the Company’s stock for 2015. The calculation of the weighted average number of common shares outstanding for Basic EPS and Diluted EPS are as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands): Year Ended December 31, 2017 2016 2015 Numerator: Net Income (Loss) $ 428,907 $ (161,586) $ 117,817 Denominator: Denominator for basic earnings per-share weighted average shares 51,804 51,505 51,077 Dilution due to stock options and restricted stock units 1,296 — 748 Denominator for diluted earnings per-share weighted average shares 53,100 51,505 51,825 Basic earnings (loss) per-share $ 8.28 $ (3.14) $ 2.31 Diluted earnings (loss) per-share $ 8.08 $ (3.14) $ 2.27 Comprehensive Income (Loss) Comprehensive income (loss) includes charges and credits to stockholders’ equity that are not the result of transactions with the Company’s shareholders, including changes in unrealized appreciation on marketable securities. Fair Value of Financial Instruments The carrying amounts reported in the consolidated balance sheets for receivables and accounts payable approximate fair values because of the immediate or short‑term maturity of these financial instruments. Marketable securities are reported at fair value based on market quoted prices in the consolidated balance sheets. If quoted prices in active markets are no longer available, the Company has estimated the fair values of these securities utilizing a discounted cash flow analysis as of December 31, 2017. These analyses consider, among other items, the collateralization underlying the security investments, the creditworthiness of the counterparty, the timing of expected future cash flows, and the expectation of the next time the security is expected to have a successful auction. 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 approximately $2,698.4 million as of December 31, 2017, as compared to the carrying amount of $2,712.4 million as of December 31, 2017. The Company’s fair value of long‑term debt as of December 31, 2016 was $2,566.5 million as compared to the carrying amount of $2,570.9 million as of December 31, 2016. Segment Reporting Generally accepted accounting principles require disclosures related to components of a company for which separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker when deciding how to allocate resources and in assessing performance. The Company’s three operating segments consist of the operations conducted by SkyWest Airlines, ExpressJet and SkyWest Leasing. Information pertaining to the Company’s reportable segments is presented in Note 2, Segment Reporting . Recent Accounting Pronouncements Standards Effective in Future Years and Not Yet Adopted 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 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’s adoption of the standard as of January 1, 2018, will be first presented in the first quarter of 2018, utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented. Under the new standard, the Company concluded that individual flights are distinct services and these flight services promised in a CPA agreement represent a series of services that should be accounted for as a single performance obligation, recognized over time as the flights are completed. The adoption of ASU No. 2014‑09 did not have a material impact on recorded amounts when applied to the opening balance sheet as of January 1, 2018 and is not expected to impact the amount or timing of the future amounts of net income, however the principal versus agent considerations under ASU No. 2014-09 will result in the Company recording directly reimbursed fuel expense under its fixed-fee contracts as a reduction to the applicable operating expense (net) rather than revenue (gross). The Company’s analysis of information necessary to recast prior period results is still preliminary and additional impacts could still result when the standard is first applied to revenue transactions during the first quarter of 2018. 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 anticipates adopting this standard in the first quarter of 2018 that will modify the presentation of changes in restricted cash in the Company’s 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 net deferred tax assets and liabilities are to be classified as non-current. As permitted under ASU 2015‑17, the Company adopted this guidance for the quarter ended March 31, 2017. The Company adopted ASU 2015‑17 retrospectively. Upon adoption, approximately $129.3 million of formerly recorded 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, accounting principles generally accepted in the United States of America (“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. The adoption of this standard resulted in the recognition in of $0.9 million of previously unrecognized excess tax benefits in net deferred tax liabilities and an increase to retained earnings on the consolidated balance sheet as of the beginning of the current year, and the recognition of $5.4 million of excess tax benefits in the income tax provision for the year ended December 31, 2017. The adoption of ASU No. 2016‑09 did not have a material impact on the statement of cash flows presentation. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting | |
Segment Reporting | (2) Segment Reporting Generally accepted accounting principles require disclosures related to components of a company for which separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker when deciding how to allocate resources and in assessing performance. The Company’s three 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 years ended December 31, 2017, 2016 and 2015 (in thousands). Year Ended December 31, 2017 SkyWest Airlines ExpressJet SkyWest Leasing Consolidated Operating revenues $ 2,173,384 $ 790,942 $ 239,942 $ 3,204,268 Operating expense 1,888,556 819,343 108,170 2,816,069 Depreciation and amortization expense 134,563 51,982 106,223 292,768 Interest expense 21,544 4,127 79,254 104,925 Segment profit (loss) (1) 263,284 (32,528) 52,518 283,274 Identifiable intangible assets, other than goodwill — 4,896 — 4,896 Total assets 2,228,930 599,122 2,630,227 5,458,279 Capital expenditures (including non-cash) 124,955 14,278 550,165 689,398 Year Ended December 31, 2016 SkyWest Airlines ExpressJet SkyWest Leasing Consolidated Operating revenues $ 1,935,378 $ 1,044,828 $ 141,000 $ 3,121,206 Operating expense 1,886,173 1,339,569 68,148 3,293,890 Depreciation and amortization expense 139,159 83,935 61,875 284,969 Special items 184,295 281,354 — 465,649 Interest expense 26,211 6,773 45,193 78,177 Segment profit (loss) (1) 22,994 (301,514) 27,659 (250,861) Identifiable intangible assets, other than goodwill — 8,249 — 8,249 Total assets 2,250,276 582,890 2,174,800 5,007,966 Capital expenditures (including non-cash) 57,761 15,396 1,085,844 1,159,001 Year Ended December 31, 2015 SkyWest Airlines ExpressJet SkyWest Leasing Consolidated Operating revenues $ $ $ $ 3,095,563 Operating expense 38,778 2,861,048 Depreciation and amortization expense 264,507 Interest expense 75,850 Segment profit (loss) (1) 182,022 (34,238) 10,881 158,665 Identifiable intangible assets, other than goodwill — — 10,499 Total assets 4,781,984 Capital expenditures (including non-cash) 715,089 (1) Segment profit is operating income less interest expense |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | (3) Long‑term Debt Long‑term debt consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Notes payable to banks, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.91% to 3.43% through 2020, secured by aircraft $ 34,905 $ Notes payable to a financing company, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.85% to 3.25% through 2021, secured by aircraft 97,612 Notes payable to banks, due in semi-annual installments plus interest at 6.06% to 6.51% through 2021, secured by aircraft 63,090 Notes payable to a financing company, due in semi-annual installments plus interest at 5.78% to 6.23% through 2017, secured by aircraft — Notes payable to banks, due in monthly installments plus interest of 2.68% to 6.86% through 2025, secured by aircraft 372,157 Notes payable to banks, due in monthly installments, plus interest at 4.16% to 6.05% through 2029, secured by aircraft 49,001 Notes payable to banks, due in monthly installments, plus interest at 3.44% through 2019, secured by aircraft — Notes payable to banks, due in quarterly installments, plus interest at 3.39% to 4.73% through 2029, secured by aircraft 2,085,822 Notes payable to banks, due in monthly installments, plus interest based on LIBOR at 3.54% through 2017, secured by aircraft — Notes payable to banks due in monthly installments, interest at 3.30% through 2019, secured by spare engines 9,763 Long-term debt $ 2,712,350 $ Current portion of long-term debt (313,243) (308,945) Less long-term portion of unamortized debt issue cost, net (21,761) (21,908) Long-term debt, net of current maturities and debt issue costs $ 2,377,346 $ 2,240,051 Current portion of long-term debt 313,243 308,945 Less current portion of unamortized debt issue cost, net (3,565) (3,485) Current portion of long-term debt, net of debt issue costs $ 309,678 $ 305,460 During the year ended December 31, 2017, the Company acquired 21 new E175 aircraft. Approximately 85% of the aircraft purchase price was financed through the issuance of debt and 15% of the aircraft purchase price was paid with cash. As of December 31, 2017 and 2016, the Company had $2.7 billion and $2.6 billion, respectively, of long‑term debt obligations primarily related to the acquisition of aircraft and certain spare engines. The average effective interest rate on the debt related to those long-term debt obligations at December 31, 2017 and 2016, was approximately 3.9% and 3.8%, respectively. During the year ended December 31, 2016, the Company used $16.5 million in cash to extinguish $18.4 million in debt early. The payment resulted in a pre-tax gain of $1.3 million, reflected as other income in the consolidated statements of comprehensive income (loss). During the year ended December 31, 2015, the Company used $110.8 million in cash to pay off $145.4 million in debt. The payment resulted in a pre-tax gain of $33.7 million, reflected as other income in the consolidated statements of comprehensive income (loss). The Company did not extinguish any debt early during 2017. The aggregate amounts of principal maturities of long‑term debt as of December 31, 2017 were as follows (in thousands): 2018 $ 313,243 2019 2020 2021 2022 Thereafter $ 2,712,350 As of December 31, 2017 and 2016, SkyWest Airlines had a $75 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of December 31, 2017 and 2016, SkyWest Airlines had no amount outstanding under the facility. However, at December 31, 2017 and 2016 the Company had $14.8 million and $6.5 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $60.2 million and $68.5 million, respectively. The facility expires on June 1, 2018 and has a variable interest rate of LIBOR plus 2.5% (4.1% at December 31, 2017). As of December 31, 2017 and 2016, the Company had $87.4 million and $87.7 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | (4) Income Taxes The provision (benefit) for income taxes includes the following components (in thousands): Year ended December 31, 2017 2016 2015 Current tax provision (benefit): Federal $ 5,853 $ (3,801) $ 3,801 State 180 111 1,035 6,033 (3,690) 4,836 Deferred tax provision (benefit): Federal (166,890) (77,430) 66,430 State 20,133 (6,106) 5,239 (146,757) (83,536) 71,669 Provision (benefit) for income taxes $ (140,724) $ (87,226) $ 76,505 The following is a reconciliation between a federal income tax rate of 35% of income (loss) before income taxes and the effective tax rate which is derived by dividing the provision (benefit) for income taxes by income (loss) before for income taxes (in thousands): Year ended December 31, 2017 2016 2015 Computed provision (benefit) for income taxes at the statutory rate $ 100,864 $ (87,084) $ 68,013 Increase (decrease) in income taxes resulting from: State income tax provision (benefit), net of federal income tax benefit 7,778 (5,768) 5,416 Non-deductible expenses 3,230 3,552 3,641 Valuation allowance changes affecting the provision for income taxes 505 751 (899) Excess tax benefits from share-based compensation (5,377) — — Revaluation of net deferred taxes for the Tax Act (246,845) — — Other, net (879) 1,323 334 Provision (benefit) for income taxes $ (140,724) $ (87,226) $ 76,505 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was enacted. The Tax Act makes broad and complex changes to the U.S. tax code that may affect our income tax accounting at December 31, 2017 and future periods, including, but not limited to reducing the U.S. federal corporate tax rate from the previous rate of 35% to 21% , requiring companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. The SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification 740 (“ASC 740”). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. In connection with our initial analysis of the impact of the Tax Act and consistent with the requirement to record a provisional estimate when applicable, the Company made a reasonable estimate of the effects of the Tax Act and recorded a discrete net income tax benefit at December 31, 2017 of approximately $246.8 million. This provisional estimate primarily consists of a net benefit for the corporate rate reduction due to the revaluing of the Company’s net deferred tax liabilities, including certain state related effects, as a result of the reduction in the federal corporate tax rates. The Company made certain estimates in evaluating the Tax Act impact on state income taxes and other deferred tax items. The Company is continuing to gather information and analyze aspects of the Tax Act, which could potentially affect the estimated impact on the deferred tax balances. These estimates may be affected as the Company gains a more thorough understanding of the Tax Act, including the deductibility of purchased assets, state tax treatment, and amounts related to employee compensation. The impact of the Tax Act may differ from our estimates, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Tax Act. The Company will continue to update the provisional estimates as information is obtained, such as state impacts regarding decoupling from the Tax Act provisions, realization of deferred amounts, and accounting method elections that may be made by the Company. For the years ended December 31, 2017, 2016 and 2015 the Company recorded a $0.5 million, $0.8 million and $0.9 million valuation allowance, respectively against certain deferred tax assets primarily associated with ExpressJet state net operating losses with a limited carry forward period. The increase of the valuation allowance was based on changes in state tax laws and the Company's income tax projections which increased the amount of deferred tax assets that are anticipated to expire before the deferred tax assets may be utilized. The Company recorded a $5.4 million benefit from share-based compensation in 2017 relating to ASU 2016-09 which, beginning in 2017, requires excess tax benefits and deficiencies to be recognized in the income tax provision during the period stock options are exercised and when stock awards vest. The significant components of the Company’s net deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): As of December 31, 2017 2016 Deferred tax assets: Intangible asset $ (206) $ 4,983 Accrued benefits 31,651 48,482 Net operating loss carryforward 122,648 286,389 AMT credit carryforward 23,443 17,589 Deferred aircraft credits 53,870 60,415 Accrued reserves and other 26,853 47,906 Total deferred tax assets 258,259 465,764 Valuation allowance (10,642) (8,877) Deferred tax liabilities: Accelerated depreciation (666,637) (1,022,291) Total deferred tax liabilities (666,637) (1,022,291) Net deferred tax liability $ (419,020) $ (565,404) The Company’s deferred tax liabilities were primarily generated through accelerated depreciation, combined with shorter depreciable tax lives, allowed under the IRS tax code for purchased aircraft and support equipment compared to the Company’s depreciation policy under GAAP for such assets using the straight-line method (see note 1 Nature of Operations and Summary of Significant Accounting Policies). The Company's valuation allowance is related to certain deferred tax assets with a limited carry forward period where the Company does not anticipate utilizing these deferred tax assets prior to the lapse of the carry forward period. At December 31, 2017 and 2016, the Company had federal net operating losses of approximately $491.4 million and $763.9 million and state net operating losses of approximately $302.5 million and $469.2 million, respectively. The estimated effective tax rate applicable to the federal and state net operating losses at December 31, 2017 was 21.0% and 3.36%, respectively. The Company anticipated that the federal and state net operating losses will start to expire in 2034 and 2018, respectively. The Company has recorded a valuation allowance for state net operating losses the Company anticipates will expire before the benefit will be realized due to the limited carry forward periods. As of December 31, 2017 and 2016, the Company also had an alternative minimum tax credit of approximately $23.4 million and $17.6 million, respectively, which does not expire. Under the new the Tax Act, the alternative minimum tax credit is anticipated to be realized by the Company either by offsetting regular tax due or as a refundable credit over the next four years . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | (5) Commitments and Contingencies Lease Obligations The Company leases 319 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 following table summarizes future minimum rental payments required under operating leases that have non‑cancelable lease terms as of December 31, 2017 (in thousands): 2018 $ 142,157 2019 104,297 2020 121,119 2021 112,657 2022 75,981 Thereafter 160,621 $ 716,832 The majority of the Company’s leased aircraft are owned and leased through trusts whose sole purpose is to purchase, finance and lease these aircraft to the Company (“Leveraged Lease Agreements”); therefore, they meet the criteria of a variable interest entity. However, since these are single owner trusts in which the Company does not participate, the Company is not considered at risk for losses and is not considered the primary beneficiary. As a result, the Company has not consolidated any of these trusts or any other entities in applying the accounting guidance. The Company’s management believes that the Company’s maximum exposure under these leases is the remaining lease payments. Total rental expense for non-cancelable aircraft operating leases was approximately $215.8 million, $262.6 million and $273.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. The minimum rental expense for airport station rents was approximately $30.3 million, $31.4 million and $35.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. Self‑insurance The Company self‑insures a portion of its potential losses from claims related to workers’ compensation, environmental issues, property damage, medical insurance for employees and general liability. Losses are accrued based on an estimate of the ultimate aggregate liability for claims incurred, using standard industry practices and the Company’s actual experience. Actual results could differ from these estimates. Legal Matters The Company is subject to certain legal actions which it considers routine to its business activities. As of December 31, 2017, 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. Concentration Risk and Significant Customers The Company requires no collateral from its major airline partners or customers, but monitors the financial condition of its major airline partners. Under the majority of the Company’s code-share agreements, the Company receives weekly payments from its major code-share partners that approximate a significant percentage of the compensation earned for such period. Additionally, the Company provides certain customer service functions at multiple airports for various airlines and the Company maintains an allowance for doubtful accounts receivable based upon expected collectability of all accounts receivable. The Company’s allowance for doubtful accounts totaled $157,000 and $173,000 as of December 31, 2017 and 2016, respectively. For the years ended December 31, 2017, 2016 and 2015, the Company’s contractual relationships with Delta and United combined accounted for approximately 78.8%, 85.4% and 86.9%, respectively of the Company’s total revenues. Employees Under Collective Bargaining Agreements As of December 31, 2017, the Company had approximately 16,300 full‑time equivalent employees. Approximately 22.0% of these employees were represented by unions, including the following employee groups. Notwithstanding the completion of the ExpressJet Combination, ExpressJet’s employee groups continue to be represented by those unions who provided representation prior to the ExpressJet Combination. Accordingly, the following table refers to ExpressJet’s employee groups based upon their union affiliations prior to the ExpressJet Combination. Approximate Number of Active Employees Status of Employee Group Represented Representatives Agreement Atlantic Southeast Pilots Air Line Pilots Association International Amendable February 2018 Atlantic Southeast Flight Attendants International Association of Machinists and Aerospace Workers Currently Amendable Atlantic Southeast Flight Controllers Transport Workers Union of America Currently Amendable Atlantic Southeast Mechanics International Brotherhood of Teamsters Currently Amendable Atlantic Southeast Stock Clerks International Brotherhood of Teamsters Currently Amendable ExpressJet Delaware Pilots Air Line Pilots Association International Amendable February 2018 ExpressJet Delaware Flight Attendants International Association of Machinists and Aerospace Workers Currently Amendable ExpressJet Delaware Mechanics International Brotherhood of Teamsters Amendable January 2019 ExpressJet Delaware Dispatchers Transport Workers Union of America Currently Amendable ExpressJet Delaware Stock Clerks International Brotherhood of Teamsters Currently Amendable In January 2018, the ExpressJet Delaware Mechanics ratified a one-year contract extension to their labor agreement. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | (6) 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 December 31, 2017, 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 December 31, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — — $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — 13 — $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — The Company’s “Marketable Securities” classified as Level 2 primarily utilize broker quotes in a non‑active market for valuation of these securities. No significant transfers between Level 1, Level 2 and Level 3 occurred during the year ended December 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. |
Investment in Other Companies
Investment in Other Companies | 12 Months Ended |
Dec. 31, 2017 | |
Investment in Other Companies | |
Investment in Other Companies | (7) Investment in Other Companies In 2014, the Company completed the sale of its 20% interest in Brazilian airline, TRIP Linhas Aéreas (“TRIP”), to TRIP Investments Ltd. (“TRIP Investimentos”). As part of the sale transaction, the Company also received options to acquire a minority interest in TRIP Investimentos. The options have an initial exercise price per share equal to the price paid by TRIP Investimentos to acquire TRIP shares from the Company subject to annual escalations. The options are scheduled to expire in 2018. The options were recorded as an asset at a nominal amount in 2014. |
Special Items
Special Items | 12 Months Ended |
Dec. 31, 2017 | |
Special Items | |
Special Items | (8) Special Items The following table summarizes the components of the Company's special items, for the year ended December 31, 2017, 2016 and 2015 (in thousands): Year ended December 31, 2017 2016 2015 Special items: CRJ200 aircraft related items 1 $ — $ 424,466 $ — ERJ145 aircraft related items 2 — 41,183 — Total special items $ — $ 465,649 $ — (1) Consists primarily of inventory valuation charges and impairment charges to write-down CRJ200 aircraft including related long-lived assets to their estimated fair value. The estimated fair value of the long-lived assets, including the aircraft and fixed asset spare parts inventory, was based on third-party appraisals on the assets. These values were estimated based on listed market values or recent third-party market transactions for similar assets. Additionally, the Company estimated the fair value of certain long-lived prepaid lease assets using the net present value of estimated current CRJ200 lease rates. All fair values are considered to be Level 3 within the fair value hierarchy. Of the special items $184.3 million related to SkyWest Airlines and $240.2 million related to ExpressJet. These charges are net of $90 million in cash proceeds and other considerations from the Bombardier termination agreement. These special items are reflected in the SkyWest Airlines and ExpressJet operating expenses under Note 2 Segment Reporting. (2) The ERJ145 aircraft related items recorded in the 2016 special charge consist primarily of inventory valuation charges and impairment charges to write-down certain ERJ145 long-lived assets, which primarily consisted of spare engines and ERJ145 spare aircraft parts, to their estimated fair value of $41.2 million. The estimated fair value of the long-lived assets was based on third-party appraisals and valuations for similar assets which is considered an unobservable input (Level 3) under the fair value hierarchy. These special items are reflected in the ExpressJet operating expenses under Note 2 Segment Reporting . |
Capital Transactions
Capital Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Capital Transactions | |
Capital Transactions | (9) Capital Transactions Preferred Stock The Company is authorized to issue 5,000,000 shares of preferred stock in one or more series without shareholder approval. No shares of preferred stock are presently outstanding. The Company’s Board of Directors is authorized, without any further action by the shareholders of the Company, to (i) divide the preferred stock into series; (ii) designate each such series; (iii) fix and determine dividend rights; (iv) determine the price, terms and conditions on which shares of preferred stock may be redeemed; (v) determine the amount payable to holders of preferred stock in the event of voluntary or involuntary liquidation; (vi) determine any sinking fund provisions; and (vii) establish any conversion privileges. Stock Compensation On May 4, 2010, the Company’s shareholders approved the adoption of the SkyWest, Inc. 2010 Long‑Term Incentive Plan, which provides for the issuance of up to 5,150,000 shares of common stock to the Company’s directors, employees, consultants and advisors (the “2010 Incentive Plan”). The 2010 Incentive Plan provides for awards in the form of options to acquire shares of common stock, stock appreciation rights, restricted stock grants, restricted stock units and performance awards. The 2010 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”), which is authorized to designate option grants as either incentive stock options for income tax purposes (“ISO”) or non-statutory stock options ISOs are granted at not less than 100% of the market value of the underlying common stock on the date of grant. Non‑statutory stock options are granted at a price as determined by the Compensation Committee. Stock Options The fair value of stock options awarded under the Company’s stock option plans 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 year ended December 31, 2017, the Company did not grant any options to purchase shares of common stock. The Company granted 206,021 and 267,433 stock options to employees under the 2010 Incentive Plan during the years ended December 31, 2016 and 2015, respectively. Stock options granted in 2015 and 2016 vest in three equal installments over a three-year period. The following table shows the assumptions used and weighted average fair value for grants in the years ended December 31, 2016 and 2015. 2016 2015 Expected annual dividend rate 1.08 % 1.18 % Risk-free interest rate 1.15 % 1.62 % Average expected life (years) 5.7 5.7 Expected volatility of common stock 0.412 0.401 Forfeiture rate % % Weighted average fair value of option grants $ 5.27 $ 4.75 The Company recorded share‑based compensation expense only for those options that are expected to vest. The estimated fair value of the stock options is amortized over the vesting period of the respective stock option grants. Options are exercisable for a period as defined by the Compensation Committee on the date granted; however, no stock option will be exercisable before six months have elapsed from the date of grant and no stock option shall be exercisable after seven years from the date of grant. The following table summarizes the stock option activity for all of the Company’s plans for the years ended December 31, 2017, 2016 and 2015: 2017 2016 2015 Weighted Weighted Average Aggregate Weighted Weighted Average Remaining Intrinsic Average Average Number of Exercise Contractual Value Number of Exercise Number of Exercise Options Price Term ($000) Options Price Options Price Outstanding at beginning of year 819,981 $ 13.58 4.4 years $ 18,756.9 1,064,429 $ 13.64 2,888,074 $ 16.46 Granted — — 206,021 14.90 267,433 Exercised (356,209) 13.36 (351,296) 14.17 (544,917) Cancelled (5,669) 14.33 (99,173) 14.90 (1,546,161) Outstanding at end of year 458,103 13.73 4.0 years $ 18,034.1 819,981 13.58 1,064,429 Exercisable at December 31, 2017 254,192 13.17 3.4 years $ 10,150.8 Exercisable at December 31, 2016 263,851 13.76 2.8 years $ 5,985.5 The total intrinsic value of options to acquire shares of the Company’s common stock that were exercised during the years ended December 31, 2017, 2016 and 2015 was $9,940,000, $4,250,000 and $1,800,000, respectively. The following table summarizes the status of the Company’s non‑vested stock options as of December 31, 2017: Weighted-Average Number of Grant-Date Shares Fair Value Non-vested shares at beginning of year 556,130 $ 4.86 Granted — — Vested (346,550) 4.67 Cancelled (5,669) 5.14 Non-vested shares at end of year $ 5.17 The following table summarizes information about the Company’s stock options outstanding at December 31, 2017: Options Outstanding Options Exercisable Weighted Average Number Remaining Weighted Average Number Weighted Average Range of Exercise Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price $8.00 to $12.99 3.1 years $ 12.06 $ $13.00 to $14.99 4.2 years $15.00 to $19.00 4.8 years $8.00 to $19.00 4.0 years $ $ Restricted Stock Units During the year ended December 31, 2017, the Company granted 160,137 restricted stock units to certain of the Company’s employees under the 2010 Incentive Plan. The restricted stock units granted during the year ended December 31, 2017 have a three‑year cliff-vesting period, during which the recipient must remain employed with the Company or its subsidiaries. The weighted average fair value of the restricted stock units at the date of grants made during the year ended December 31, 2017 was $35.81 per share. The following table summarizes the activity of restricted stock units granted to certain Company employees for the years ended December 31, 2017, 2016 and 2015: During the year ended December 31, 2016, the Company granted 380,358 shares of restricted stock units to certain Company’s employees under the 2010 Incentive Plan. The restricted stock units granted during the year ended December 31, 2016 have a three‑year vesting period, during which the recipient must remain employed with the Company or its subsidiaries. The weighted average fair value of the restricted stock units the date of grants made during the year ended December 31, 2016 was $14.81 per share. The following table summarizes the activity of restricted stock units granted to certain Company employees as of December 31, 2016, 2015 and 2014: Weighted-Average Grant-Date Fair Number of Shares Value Non-vested shares outstanding at December 31, 2014 723,176 $ 12.70 Granted 408,163 13.57 Vested (215,856) 13.06 Cancelled (106,184) 13.52 Non-vested shares outstanding at December 31, 2015 809,299 $ 13.13 Granted 384,148 14.81 Vested (215,146) 13.29 Cancelled (51,370) 13.72 Non-vested shares outstanding at December 31, 2016 926,931 $ 13.65 Granted 160,137 35.81 Vested (230,903) 12.01 Cancelled (40,575) 15.78 Non-vested shares outstanding at December 31, 2017 815,590 $ 18.35 Performance Stock Units During the year ended December 31, 2017, the Compensation Committee granted performance share units, which are performance based restricted stock units, to certain Company employees with three-year performance-based financial metrics that the Company must meet before those awards may be earned and the performance period is measured for the three years ending December 31, 2019. The Compensation Committee will determine the achievement of performance results and corresponding vesting of performance shares for each year’s grant in 2015, 2016 and 2017. At the end of each performance period, the number of shares awarded can range from 0% to 200% of the original granted amount for performance share units granted in 2017 and can range from 0% to 150% of the original granted amount for performance shares granted in 2015 and 2016, depending on the performance against the pre-established targets. The following table summarizes the activity of performance share units granted at target as of December 31, 2017. Weighted-Average Grant-Date Fair Number of Shares Value Non-vested shares outstanding at December 31, 2014 — $ — Granted 13.61 Vested — — Cancelled (19,754) 13.51 Non-vested shares outstanding at December 31, 2015 202,829 $ 13.62 Granted 14.89 Vested — — Cancelled (22,413) 14.16 Non-vested shares outstanding at December 31, 2016 363,993 $ 14.23 Granted 35.81 Vested — — Cancelled (14,732) 15.00 Non-vested shares outstanding at December 31, 2017 $ 19.70 During the years ended December 31, 2017, 2016 and 2015 the Company granted fully‑vested shares of common stock to the Company’s directors in the amounts of 22,617, 42,624 and 36,950 shares, respectively, with a weighted average grant‑date fair value of $35.81, $14.78, and $14.05, respectively. During the year ended December 31, 2017, 2016 and 2015, the Company recorded equity‑based compensation expense of $10.6 million, $7.6 million and $5.4 million, respectively. As of December 31, 2017, the Company had $10.6 million of total unrecognized compensation cost related to non‑vested stock options, non‑vested restricted stock grants and non-vested performance stock units. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. The Company expects to recognize this cost over a weighted average period of 1.7 years. Taxes The Company’s treatment of stock option grants of non‑qualified options, restricted stock units and performance shares results in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised or the restrictions lapse. |
Retirement Plans and Employee S
Retirement Plans and Employee Stock Purchase Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Plans and Employee Stock Purchase Plans | |
Retirement Plans and Employee Stock Purchase Plans | (10) Retirement Plans and Employee Stock Purchase Plans SkyWest Retirement Plan The Company sponsors the SkyWest, Inc. Employees’ Retirement Plan (the “SkyWest Plan”). Employees who have completed 90 days of service and are at least 18 years of age are eligible for participation in the SkyWest Plan. Employees may elect to make contributions to the SkyWest Plan. Generally, the Company matches 100% of such contributions up to levels ranging from 2% to 7% of compensation, based on position and years of service. Additionally, a discretionary contribution may be made by the Company. The Company’s combined contributions to the SkyWest Plan were $26.1 million, $23.2 million and $20.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. ExpressJet and Atlantic Southeast Retirement Plans ExpressJet (formerly Atlantic Southeast) sponsors the Atlantic Southeast Airlines, Inc. Investment Savings Plan (the “Atlantic Southeast Plan”). Employees who have completed 90 days of service and are 18 years of age are eligible for participation in the Atlantic Southeast Plan. Employees may elect to make contributions to the Atlantic Southeast Plan, ExpressJet will match up to 8% of each participant’s total compensation, based on years of service and other provisions included in the Atlantic Southeast Plan. Additionally, participants are 100% vested in their elective deferrals and rollover amounts and from 10% to 100% vested in company matching contributions based on length of service. ExpressJet additionally sponsors the ExpressJet Airlines, Inc. 401(k) Savings Plan (the “ExpressJet Retirement Plan”). Substantially all of ExpressJet’s domestic employees were covered by this plan at the time the Company acquired ExpressJet in 2010. Effective January 1, 2009, the ExpressJet Retirement Plan was amended such that certain matching payment amounts have been reduced or eliminated depending on the terms of the collective bargaining unit or work group, as applicable. ExpressJet’s contribution to the Atlantic Southeast and the ExpressJet Retirement Plans was $17.8 million, $21.0 million and $24.0 million for the years ended December 31, 2017, 2016 and 2015, respectively. Employee Stock Purchase Plans In May 2009, the Company’s Board of Directors approved the SkyWest, Inc. 2009 Employee Stock Purchase Plan (the “2009 Stock Purchase Plan”). All employees who have completed 90 days of employment with the Company or one of its subsidiaries are eligible to participate in the 2009 Stock Purchase Plan, except employees who own five percent or more of the Company’s common stock. The 2009 Stock Purchase Plan enables employees to purchase shares of the Company’s common stock at a five percent discount, through payroll deductions. Employees can contribute up to 15% of their base pay, not to exceed $25,000 each calendar year, for the purchase of shares. Shares are purchased semi-annually at a five percent discount based on the end of the period price. Employees can terminate their participation in the 2009 Stock Purchase Plan at any time upon written notice. The following table summarizes purchases made under the 2009 Employee Stock Purchase Plans during the years ended December 31, 2017, 2016 and 2015: Year ended December 31, 2017 2016 2015 Number of shares purchased 88,362 151,531 254,098 Average price of shares purchased $ 33.96 $ 20.87 $ 13.50 The 2009 Stock Purchase Plan is a non‑compensatory plan under the accounting guidance. Therefore, no compensation expense was recorded for the years ended December 31, 2017, 2016 and 2015. |
Stock Repurchase
Stock Repurchase | 12 Months Ended |
Dec. 31, 2017 | |
Stock Repurchase | |
Stock Repurchase | (11) Stock Repurchase The Company’s Board of Directors has adopted a stock repurchase program which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices. The Company’s stock repurchase program authorizes the repurchase of up to $100.0 million of the Company’s common stock, over a three year period commencing on February 9, 2017, of which $80.0 million remained available at December 31, 2017. During the years ended December 31, 2017 and 2015, the Company repurchased 0.5 million and 1.3 million shares of common stock for approximately $20.0 million and $18.7 million, respectively at a weighted average price per share of $41.36 and $14.98, respectively. The Company did not repurchase any shares of its common stock during the year ended December 31, 2016. Additionally, during the year ended December 31, 2017, the Company paid $5.1 million for a net settlement of the income tax obligation on employee equity awards. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related-Party Transactions | |
Related-Party Transactions | (12) Related‑Party Transactions During the year ended December 31, 2017, the Company purchased $198,000 of spare aircraft parts from an entity affiliated with a director of the Company. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | (13) Quarterly Financial Data (Unaudited) Unaudited summarized financial data by quarter for 2017 and 2016 is as follows (in thousands, except per share data): Year ended December 31, 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Year Operating revenues $ 765,415 $ 809,759 $ 831,936 $ 797,158 $ Operating income 76,295 106,596 112,369 92,939 388,199 Net income(1) 34,786 50,477 53,716 289,928 428,907 Net income per common share: Basic 5.60 8.28 Diluted 5.46 8.08 Weighted average common shares: Basic: 51,820 51,751 51,833 51,811 51,804 Diluted: 53,202 52,977 53,080 53,140 53,100 Year ended December 31, 2016 First Second Third Fourth Quarter Quarter Quarter Quarter Year Operating revenues $ 762,075 $ 801,338 $ 799,776 $ $ Operating income (loss) 61,809 84,137 85,834 (172,684) Net income (loss)(2) 27,092 40,244 41,322 (161,586) Net income (loss) per common share: Basic Diluted Weighted average common shares: Basic: 51,218 51,418 51,627 Diluted: 52,014 52,194 52,471 (1) Net income for 2017 included a $246.8 million benefit related to the revaluation of the Company’s deferred tax liability and other tax liabilities in accordance with the Tax Act. (2) Operating loss for the fourth quarter of 2016 included a special charge of $465.6 million related to an impairment on the Company’s 50-seat aircraft. |
SCHEDULE II_VALUATION AND QUALI
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | SKYWEST, INC. AND SUBSIDIARIES SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2017, 2016 and 2015 (Dollars in thousands) Additions Balance at Charged to Beginning Costs and Balance at Description of Year Expenses Deductions End of Year Year ended December 31, 2017: Allowance for inventory obsolescence(1) $ 40,497 — (23,399) $ 17,098 Allowance for doubtful accounts receivable 173 — (16) 157 $ 40,670 — (23,415) $ 17,255 Year ended December 31, 2016: Allowance for inventory obsolescence(2) $ 13,933 26,564 — $ 40,497 Allowance for doubtful accounts receivable 187 — (14) 173 $ 14,120 26,564 (14) $ 40,670 Year ended December 31, 2015: Allowance for inventory obsolescence $ 11,588 2,345 — $ 13,933 Allowance for doubtful accounts receivable 326 — (139) 187 $ 11,914 2,345 (139) $ 14,120 (1) The deductions in 2017 related to the disposal of excess and obsolete inventory in 2017. (2) The increase in the inventory obsolescence related to additional excess inventory identified as part of the impairment analysis of the 50-seat aircraft. See note 8, Special items , for additional detail on the impairment. |
Nature of Operations and Summ22
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The Company’s consolidated financial statements include the accounts of the Company and the SkyWest Airlines, ExpressJet and SkyWest Leasing segments, with all inter‑company transactions and balances having been eliminated. In preparing the accompanying consolidated financial statements, the Company has reviewed, as determined necessary by the Company’s management, events that have occurred after December 31, 2017, through the filing date of the Company’s annual report with the U.S. Securities and Exchange Commission. The Company reclassified certain prior period amounts to conform to the current period presentation (see Recent Accounting Pronouncements). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company classified $8.2 million of cash as restricted cash collateralizing letters of credit under the Company’s workers’ compensation insurance policy and classified it accordingly in the consolidated balance sheets as of December 31, 2016. The Company had no restricted cash as of December 31, 2017, as the Company satisfied the workers’ compensation insurance policy requirement with a letter of credit. |
Marketable Securities | Marketable Securities The Company’s investments in marketable debt and equity securities are deemed by management to be available-for-sale and are reported at fair market value with the net unrealized appreciation reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other income and expense. The Company’s position in marketable securities as of December 31, 2017 and 2016 was as follows (in thousands): Gross unrealized Gross unrealized At December 31, 2017 Amortized Cost holding gains holding losses Fair market value Total cash and cash equivalents $ 181,792 $ — $ — $ 181,792 Marketable securities: Bond and bond funds $ 344,479 $ — $ (228) $ 344,251 Commercial Paper 159,252 — — 159,252 Total marketable securities $ 503,731 $ — $ (228) $ 503,503 Total assets measured at fair value $ 685,523 $ — $ (228) $ 685,295 Gross unrealized Gross unrealized At December 31, 2016 Amortized Cost holding gains holding losses Fair market value Total cash and cash equivalents $ 146,766 $ — $ — $ 146,766 Marketable securities: Bond and bond funds $ 410,001 $ — $ (116) $ 409,885 Commercial Paper 13 — — 13 Total marketable securities $ 410,014 $ — $ (116) $ 409,898 Total assets measured at fair value $ 556,780 $ — $ (116) $ 556,664 As of December 31, 2017 and 2016, the Company had classified $503.5 million and $409.9 million of marketable securities, respectively, as short‑term since it had the ability to redeem the securities within one year. |
Inventories | Inventories Inventories include expendable parts, fuel and supplies and are valued at cost (FIFO basis) less an allowance for obsolescence based on historical results, excess parts and management’s expectations of future operations. Expendable inventory parts are charged to expense as used. An obsolescence allowance for flight equipment expendable parts is accrued based on estimated lives of the corresponding fleet types and salvage values. The inventory allowance as of December 31, 2017 and 2016 was $17.1 million and $40.5 million, respectively. The inventory allowance decreased in 2017 due to the disposal of excess inventory that had a valuation allowance as of December 31, 2016. These allowances are based on management estimates. |
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 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets As of December 31, 2017, the Company had approximately $4.2 billion of property and equipment and related assets. Additionally, as of December 31, 2017, the Company had approximately $4.9 million in intangible assets. In accounting for these long‑lived and intangible assets, the Company makes estimates about the expected useful lives of the assets, the expected residual values of certain of these assets, and the potential for impairment based on the fair value of the assets and the cash flows they generate. On September 7, 2005, the Company acquired all of the issued and outstanding capital stock of Atlantic Southeast and recorded an intangible asset for specifically identifiable contracts of approximately $33.7 million relating to the acquisition. The Company anticipates the intangible asset will be fully amortized by the end of 2018. As of December 31, 2017 and 2016, the Company had $28.9 million and $25.5 million in accumulated amortization expense, attributable to the acquisition, respectively. Factors indicating potential impairment include, but are not limited to, significant decreases in the market value of the long‑lived assets, a significant change in the condition of the long‑lived assets and operating cash flow losses associated with the use of the long‑lived assets. On a periodic basis, the Company evaluates whether impairment indicators are present. When considering whether or not impairment of long‑lived assets exists, the Company groups similar assets together at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and compare the undiscounted cash flows for each asset group to the net carrying amount of the assets supporting the asset group. Asset groupings are done at the fleet or contract level. The Company did not recognize any impairment charges of long-lived assets during the year ended December 31, 2017. In 2016, the Company impaired certain long-lived assets relating to the CRJ200 aircraft and ERJ145 aircraft type specific assets. See Note 8, Special Items , for the impairment charges recorded during the year ended December 31, 2016. |
Capitalized Interest | Capitalized Interest Interest is capitalized on aircraft purchase deposits as a portion of the cost of the asset and is depreciated over the estimated useful life of the asset. During the years ended December 31, 2017, 2016 and 2015, the Company capitalized interest costs of approximately $1.4 million, $1.5 million, and $2.2 million, respectively. |
Maintenance | Maintenance The Company operates under a U.S. Federal Aviation Administration approved continuous inspection and maintenance program. The Company uses the direct expense method of accounting for its regional jet engine overhauls wherein the expense is recorded when the overhaul event occurs. The Company has engine services agreements with third-party vendors to provide long-term engine services covering the scheduled and unscheduled repairs for certain of its CRJ200 aircraft, CRJ700 aircraft, ERJ145 aircraft and E175 aircraft. Under the terms of the agreements, the Company pays a fixed dollar amount per engine hour flown on a monthly basis and the third-party vendors will assume the responsibility to repair the engines at no additional cost to the Company, subject to certain specified exclusions. Maintenance costs under these contracts are recognized when the engine hour is flown pursuant to the terms of each contract. The costs of maintenance for airframe and avionics components, landing gear and other recurring maintenance are expensed as incurred. |
Passenger and Ground Handling Revenues | Passenger and Ground Handling Revenues 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, United, American and Alaska (each, a “major airline partner”), the major airline partner 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 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 expense and certain airport related expenses. Under the fixed-fee arrangements, revenue is earned when each flight is completed. Under the Company’s fixed-fee agreements with Delta, United, American and Alaska, the compensation structure generally consists of a combination of agreed‑upon rates for operating flights and direct reimbursement for other certain costs associated with operating the aircraft. A portion of the Company’s contract flying compensation is designed to reimburse the Company for certain aircraft ownership costs. The aircraft compensation structure varies by agreement, but is intended to cover either the Company’s aircraft principal and interest debt service costs, its aircraft depreciation and interest expense or its aircraft lease expense costs while the aircraft is under contract. Under the Company’s ExpressJet United Express ERJ Agreement and certain aircraft operating under fixed-fee contracts with Delta, the major airline partner provides the aircraft to the Company for a nominal amount. The Company has concluded that a component of its revenue under these agreements is rental income, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The amounts deemed to be rental income under the agreements for the years ended December 31, 2017, 2016 and 2015 were $572.7 million, $516.0 million and $504.9 million, respectively. These amounts are reflected as passenger revenues on the Company’s consolidated statements of comprehensive income (loss). The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income (loss) since the use of the aircraft is not a separate activity of the total service provided. In the event that the contractual rates under the 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 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 for incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are being measured and determined on a monthly, quarterly or semi-annual basis. At the end of each period, the Company calculates the incentives achieved during that period and recognizes revenue accordingly. The Company’s passenger revenues from fixed-fee agreements could be impacted by a number of factors, including changes to the Company’s code‑share agreements with Delta, United, Alaska or American, 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 airline partners. Under a Revenue Sharing Arrangement (referred to as a “revenue-sharing” or “prorate” arrangement), 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 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. 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. The following 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 Aircraft Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) CRJ 200 CRJ 700 CRJ 900 E175 70 27 36 19 Individual aircraft have scheduled removal dates under the agreement between 2018 and 2027 The average remaining term of the aircraft under contract is 2.9 years ExpressJet Delta Connection Agreement (fixed-fee arrangement) CRJ 700 CRJ 900 33 16 Individual aircraft have scheduled removal dates under the agreement during 2018 SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) CRJ 200 24 Terminable with 30-day notice United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) CRJ 200 CRJ 700 E175 57 20 65 Individual aircraft have scheduled removal dates under the agreement between 2018 and 2029 The average remaining term of the aircraft under contract is 5.1 years ExpressJet United ERJ Agreement (fixed-fee arrangement) ERJ145 ERJ135 109 3 Agreement expires in 2022 The average remaining term of the aircraft under contract is 4.8 years SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) CRJ 200 24 Terminable with 120-day notice American Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates SkyWest Airlines American Agreement (fixed-fee arrangement) CRJ 200 CRJ 700 10 37 CRJ200 aircraft are scheduled to expire in 2018 and the CRJ700 aircraft are scheduled to expire in 2019 SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) CRJ 200 6 Terminable with 120-day notice ExpressJet American Agreement (fixed-fee arrangement) CRJ 700 12 CRJ700 aircraft are scheduled to expire in 2019 Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) CRJ 200 E175 4 23 CRJ200 aircraft are scheduled to expire in 2018 E175 aircraft have scheduled removal dates under the agreement between 2027 and 2029 In addition to the contractual arrangements described above, SkyWest Airlines has entered into agreements with Alaska and Delta to place additional E175/E175 SC aircraft into service for those major airline partners. As of December 31, 2017, the Company anticipated placing an additional 12 E175 aircraft with Alaska and 30 E175 SC aircraft with Delta. The delivery dates for the new E175/E175 SC aircraft are currently scheduled to take place by the end of 2018 or early 2019. Final delivery dates may adjust based on various factors. ExpressJet initiated the wind down of its flying agreement with Delta during 2017 and expected to be complete by the end of 2018. As of December 31, 2017, ExpressJet operated 49 CRJ700s/900s under its Delta flying agreement. Of the 49 aircraft, ExpressJet anticipates returning 19 leased aircraft to Delta and removing 30 CRJ700 aircraft from service with Delta during 2018. ExpressJet is pursuing placement of the 30 CRJ700 aircraft with other partners, of which eight aircraft are scheduled to be placed under an agreement with American following the removal from service with Delta. |
Deferred Aircraft Credits | Deferred Aircraft Credits The Company accounts for incentives provided by aircraft manufacturers as deferred credits. The deferred credits related to leased aircraft are amortized on a straight‑line basis as a reduction to rent expense over the lease term. Credits related to owned aircraft reduce the purchase price of the aircraft, which has the effect of amortizing the credits on a straight‑line basis as a reduction in depreciation expense over the life of the related aircraft. The incentives are credits that may be used to purchase spare parts and pay for training and other expenses |
Income Taxes | Income Taxes The Company recognizes a net liability or asset for the deferred tax consequences of all temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that are expected to result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. |
Net Income (Loss) Per Common Share | 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 year ended December 31, 2017, 284,000 performance shares (at target performance) were excluded in the computation of Diluted EPS since the Company had not achieved the minimum target thresholds as of December 31, 2017. During the year ended December 31, 2016, 2,077,000 shares reserved for the issuance upon the exercise of outstanding options, performance shares and restricted stock units were excluded from the computation of Diluted EPS due to the net loss in 2016 and 505,000 shares reserved for outstanding options were excluded from the Diluted EPS calculation for the year ended December 31, 2015 as the respective exercise price exceeded the weighted average fair market value of the Company’s stock for 2015. The calculation of the weighted average number of common shares outstanding for Basic EPS and Diluted EPS are as follows for the years ended December 31, 2017, 2016 and 2015 (in thousands): Year Ended December 31, 2017 2016 2015 Numerator: Net Income (Loss) $ 428,907 $ (161,586) $ 117,817 Denominator: Denominator for basic earnings per-share weighted average shares 51,804 51,505 51,077 Dilution due to stock options and restricted stock units 1,296 — 748 Denominator for diluted earnings per-share weighted average shares 53,100 51,505 51,825 Basic earnings (loss) per-share $ 8.28 $ (3.14) $ 2.31 Diluted earnings (loss) per-share $ 8.08 $ (3.14) $ 2.27 |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes charges and credits to stockholders’ equity that are not the result of transactions with the Company’s shareholders, including changes in unrealized appreciation on marketable securities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reported in the consolidated balance sheets for receivables and accounts payable approximate fair values because of the immediate or short‑term maturity of these financial instruments. Marketable securities are reported at fair value based on market quoted prices in the consolidated balance sheets. If quoted prices in active markets are no longer available, the Company has estimated the fair values of these securities utilizing a discounted cash flow analysis as of December 31, 2017. These analyses consider, among other items, the collateralization underlying the security investments, the creditworthiness of the counterparty, the timing of expected future cash flows, and the expectation of the next time the security is expected to have a successful auction. 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 approximately $2,698.4 million as of December 31, 2017, as compared to the carrying amount of $2,712.4 million as of December 31, 2017. The Company’s fair value of long‑term debt as of December 31, 2016 was $2,566.5 million as compared to the carrying amount of $2,570.9 million as of December 31, 2016. |
Segment Reporting | Segment Reporting Generally accepted accounting principles require disclosures related to components of a company for which separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker when deciding how to allocate resources and in assessing performance. The Company’s three operating segments consist of the operations conducted by SkyWest Airlines, ExpressJet and SkyWest Leasing. Information pertaining to the Company’s reportable segments is presented in Note 2, Segment Reporting . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standards Effective in Future Years and Not Yet Adopted 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 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’s adoption of the standard as of January 1, 2018, will be first presented in the first quarter of 2018, utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented. Under the new standard, the Company concluded that individual flights are distinct services and these flight services promised in a CPA agreement represent a series of services that should be accounted for as a single performance obligation, recognized over time as the flights are completed. The adoption of ASU No. 2014‑09 did not have a material impact on recorded amounts when applied to the opening balance sheet as of January 1, 2018 and is not expected to impact the amount or timing of the future amounts of net income, however the principal versus agent considerations under ASU No. 2014-09 will result in the Company recording directly reimbursed fuel expense under its fixed-fee contracts as a reduction to the applicable operating expense (net) rather than revenue (gross). The Company’s analysis of information necessary to recast prior period results is still preliminary and additional impacts could still result when the standard is first applied to revenue transactions during the first quarter of 2018. 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 anticipates adopting this standard in the first quarter of 2018 that will modify the presentation of changes in restricted cash in the Company’s 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 net deferred tax assets and liabilities are to be classified as non-current. As permitted under ASU 2015‑17, the Company adopted this guidance for the quarter ended March 31, 2017. The Company adopted ASU 2015‑17 retrospectively. Upon adoption, approximately $129.3 million of formerly recorded 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, accounting principles generally accepted in the United States of America (“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. The adoption of this standard resulted in the recognition in of $0.9 million of previously unrecognized excess tax benefits in net deferred tax liabilities and an increase to retained earnings on the consolidated balance sheet as of the beginning of the current year, and the recognition of $5.4 million of excess tax benefits in the income tax provision for the year ended December 31, 2017. The adoption of ASU No. 2016‑09 did not have a material impact on the statement of cash flows presentation. |
Nature of Operations and Summ23
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |
Schedule of the Company's position in marketable securities | The Company’s position in marketable securities as of December 31, 2017 and 2016 was as follows (in thousands): Gross unrealized Gross unrealized At December 31, 2017 Amortized Cost holding gains holding losses Fair market value Total cash and cash equivalents $ 181,792 $ — $ — $ 181,792 Marketable securities: Bond and bond funds $ 344,479 $ — $ (228) $ 344,251 Commercial Paper 159,252 — — 159,252 Total marketable securities $ 503,731 $ — $ (228) $ 503,503 Total assets measured at fair value $ 685,523 $ — $ (228) $ 685,295 Gross unrealized Gross unrealized At December 31, 2016 Amortized Cost holding gains holding losses Fair market value Total cash and cash equivalents $ 146,766 $ — $ — $ 146,766 Marketable securities: Bond and bond funds $ 410,001 $ — $ (116) $ 409,885 Commercial Paper 13 — — 13 Total marketable securities $ 410,014 $ — $ (116) $ 409,898 Total assets measured at fair value $ 556,780 $ — $ (116) $ 556,664 |
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 |
Schedule of net income (loss) per common share | Year Ended December 31, 2017 2016 2015 Numerator: Net Income (Loss) $ 428,907 $ (161,586) $ 117,817 Denominator: Denominator for basic earnings per-share weighted average shares 51,804 51,505 51,077 Dilution due to stock options and restricted stock units 1,296 — 748 Denominator for diluted earnings per-share weighted average shares 53,100 51,505 51,825 Basic earnings (loss) per-share $ 8.28 $ (3.14) $ 2.31 Diluted earnings (loss) per-share $ 8.08 $ (3.14) $ 2.27 |
Delta Connection Agreements | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |
Schedule of details of aircraft and agreements with other airlines | Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) CRJ 200 CRJ 700 CRJ 900 E175 70 27 36 19 Individual aircraft have scheduled removal dates under the agreement between 2018 and 2027 The average remaining term of the aircraft under contract is 2.9 years ExpressJet Delta Connection Agreement (fixed-fee arrangement) CRJ 700 CRJ 900 33 16 Individual aircraft have scheduled removal dates under the agreement during 2018 SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) CRJ 200 24 Terminable with 30-day notice |
United Express Agreements | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |
Schedule of details of aircraft and agreements with other airlines | Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) CRJ 200 CRJ 700 E175 57 20 65 Individual aircraft have scheduled removal dates under the agreement between 2018 and 2029 The average remaining term of the aircraft under contract is 5.1 years ExpressJet United ERJ Agreement (fixed-fee arrangement) ERJ145 ERJ135 109 3 Agreement expires in 2022 The average remaining term of the aircraft under contract is 4.8 years SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) CRJ 200 24 Terminable with 120-day notice |
American Agreements | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |
Schedule of details of aircraft and agreements with other airlines | Agreement Aircraft type Number of Aircraft Term / Termination Dates SkyWest Airlines American Agreement (fixed-fee arrangement) CRJ 200 CRJ 700 10 37 CRJ200 aircraft are scheduled to expire in 2018 and the CRJ700 aircraft are scheduled to expire in 2019 SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) CRJ 200 6 Terminable with 120-day notice ExpressJet American Agreement (fixed-fee arrangement) CRJ 700 12 CRJ700 aircraft are scheduled to expire in 2019 |
Alaska Capacity Purchase Agreement | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |
Schedule of details of aircraft and agreements with other airlines | Agreement Aircraft type Number of Aircraft Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) CRJ 200 E175 4 23 CRJ200 aircraft are scheduled to expire in 2018 E175 aircraft have scheduled removal dates under the agreement between 2027 and 2029 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting | |
Schedule of Company's segment data | The following represents the Company’s segment data for the years ended December 31, 2017, 2016 and 2015 (in thousands). Year Ended December 31, 2017 SkyWest Airlines ExpressJet SkyWest Leasing Consolidated Operating revenues $ 2,173,384 $ 790,942 $ 239,942 $ 3,204,268 Operating expense 1,888,556 819,343 108,170 2,816,069 Depreciation and amortization expense 134,563 51,982 106,223 292,768 Interest expense 21,544 4,127 79,254 104,925 Segment profit (loss) (1) 263,284 (32,528) 52,518 283,274 Identifiable intangible assets, other than goodwill — 4,896 — 4,896 Total assets 2,228,930 599,122 2,630,227 5,458,279 Capital expenditures (including non-cash) 124,955 14,278 550,165 689,398 Year Ended December 31, 2016 SkyWest Airlines ExpressJet SkyWest Leasing Consolidated Operating revenues $ 1,935,378 $ 1,044,828 $ 141,000 $ 3,121,206 Operating expense 1,886,173 1,339,569 68,148 3,293,890 Depreciation and amortization expense 139,159 83,935 61,875 284,969 Special items 184,295 281,354 — 465,649 Interest expense 26,211 6,773 45,193 78,177 Segment profit (loss) (1) 22,994 (301,514) 27,659 (250,861) Identifiable intangible assets, other than goodwill — 8,249 — 8,249 Total assets 2,250,276 582,890 2,174,800 5,007,966 Capital expenditures (including non-cash) 57,761 15,396 1,085,844 1,159,001 Year Ended December 31, 2015 SkyWest Airlines ExpressJet SkyWest Leasing Consolidated Operating revenues $ $ $ $ 3,095,563 Operating expense 38,778 2,861,048 Depreciation and amortization expense 264,507 Interest expense 75,850 Segment profit (loss) (1) 182,022 (34,238) 10,881 158,665 Identifiable intangible assets, other than goodwill — — 10,499 Total assets 4,781,984 Capital expenditures (including non-cash) 715,089 Segment profit is operating income less interest expense |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt | |
Schedule of long-term debt | Long‑term debt consisted of the following as of December 31, 2017 and 2016 (in thousands): December 31, December 31, 2017 2016 Notes payable to banks, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.91% to 3.43% through 2020, secured by aircraft $ 34,905 $ Notes payable to a financing company, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.85% to 3.25% through 2021, secured by aircraft 97,612 Notes payable to banks, due in semi-annual installments plus interest at 6.06% to 6.51% through 2021, secured by aircraft 63,090 Notes payable to a financing company, due in semi-annual installments plus interest at 5.78% to 6.23% through 2017, secured by aircraft — Notes payable to banks, due in monthly installments plus interest of 2.68% to 6.86% through 2025, secured by aircraft 372,157 Notes payable to banks, due in monthly installments, plus interest at 4.16% to 6.05% through 2029, secured by aircraft 49,001 Notes payable to banks, due in monthly installments, plus interest at 3.44% through 2019, secured by aircraft — Notes payable to banks, due in quarterly installments, plus interest at 3.39% to 4.73% through 2029, secured by aircraft 2,085,822 Notes payable to banks, due in monthly installments, plus interest based on LIBOR at 3.54% through 2017, secured by aircraft — Notes payable to banks due in monthly installments, interest at 3.30% through 2019, secured by spare engines 9,763 Long-term debt $ 2,712,350 $ Current portion of long-term debt (313,243) (308,945) Less long-term portion of unamortized debt issue cost, net (21,761) (21,908) Long-term debt, net of current maturities and debt issue costs $ 2,377,346 $ 2,240,051 Current portion of long-term debt 313,243 308,945 Less current portion of unamortized debt issue cost, net (3,565) (3,485) Current portion of long-term debt, net of debt issue costs $ 309,678 $ 305,460 |
Schedule of maturities of long-term debt | The aggregate amounts of principal maturities of long‑term debt as of December 31, 2017 were as follows (in thousands): 2018 $ 313,243 2019 2020 2021 2022 Thereafter $ 2,712,350 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of components of provision (benefit) for income taxes | The provision (benefit) for income taxes includes the following components (in thousands): Year ended December 31, 2017 2016 2015 Current tax provision (benefit): Federal $ 5,853 $ (3,801) $ 3,801 State 180 111 1,035 6,033 (3,690) 4,836 Deferred tax provision (benefit): Federal (166,890) (77,430) 66,430 State 20,133 (6,106) 5,239 (146,757) (83,536) 71,669 Provision (benefit) for income taxes $ (140,724) $ (87,226) $ 76,505 |
Schedule of income tax rate reconciliation | The following is a reconciliation between a federal income tax rate of 35% of income (loss) before income taxes and the effective tax rate which is derived by dividing the provision (benefit) for income taxes by income (loss) before for income taxes (in thousands): Year ended December 31, 2017 2016 2015 Computed provision (benefit) for income taxes at the statutory rate $ 100,864 $ (87,084) $ 68,013 Increase (decrease) in income taxes resulting from: State income tax provision (benefit), net of federal income tax benefit 7,778 (5,768) 5,416 Non-deductible expenses 3,230 3,552 3,641 Valuation allowance changes affecting the provision for income taxes 505 751 (899) Excess tax benefits from share-based compensation (5,377) — — Revaluation of net deferred taxes for the Tax Act (246,845) — — Other, net (879) 1,323 334 Provision (benefit) for income taxes $ (140,724) $ (87,226) $ 76,505 |
Schedule of components of the net deferred tax assets and liabilities | The significant components of the Company’s net deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (in thousands): As of December 31, 2017 2016 Deferred tax assets: Intangible asset $ (206) $ 4,983 Accrued benefits 31,651 48,482 Net operating loss carryforward 122,648 286,389 AMT credit carryforward 23,443 17,589 Deferred aircraft credits 53,870 60,415 Accrued reserves and other 26,853 47,906 Total deferred tax assets 258,259 465,764 Valuation allowance (10,642) (8,877) Deferred tax liabilities: Accelerated depreciation (666,637) (1,022,291) Total deferred tax liabilities (666,637) (1,022,291) Net deferred tax liability $ (419,020) $ (565,404) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 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 have non‑cancelable lease terms as of December 31, 2017 (in thousands): 2018 $ 142,157 2019 104,297 2020 121,119 2021 112,657 2022 75,981 Thereafter 160,621 $ 716,832 |
Schedule of Employees Under Collective Bargaining Agreements | Approximate Number of Active Employees Status of Employee Group Represented Representatives Agreement Atlantic Southeast Pilots Air Line Pilots Association International Amendable February 2018 Atlantic Southeast Flight Attendants International Association of Machinists and Aerospace Workers Currently Amendable Atlantic Southeast Flight Controllers Transport Workers Union of America Currently Amendable Atlantic Southeast Mechanics International Brotherhood of Teamsters Currently Amendable Atlantic Southeast Stock Clerks International Brotherhood of Teamsters Currently Amendable ExpressJet Delaware Pilots Air Line Pilots Association International Amendable February 2018 ExpressJet Delaware Flight Attendants International Association of Machinists and Aerospace Workers Currently Amendable ExpressJet Delaware Mechanics International Brotherhood of Teamsters Amendable January 2019 ExpressJet Delaware Dispatchers Transport Workers Union of America Currently Amendable ExpressJet Delaware Stock Clerks International Brotherhood of Teamsters Currently Amendable |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Schedule of assets measured at fair value on a recurring basis | As of December 31, 2017, 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 December 31, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — — $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — 13 — $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — |
Special Items (Tables)
Special Items (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Special Items | |
Summary of the components of special items | The following table summarizes the components of the Company's special items, for the year ended December 31, 2017, 2016 and 2015 (in thousands): Year ended December 31, 2017 2016 2015 Special items: CRJ200 aircraft related items 1 $ — $ 424,466 $ — ERJ145 aircraft related items 2 — 41,183 — Total special items $ — $ 465,649 $ — (1) Consists primarily of inventory valuation charges and impairment charges to write-down CRJ200 aircraft including related long-lived assets to their estimated fair value. The estimated fair value of the long-lived assets, including the aircraft and fixed asset spare parts inventory, was based on third-party appraisals on the assets. These values were estimated based on listed market values or recent third-party market transactions for similar assets. Additionally, the Company estimated the fair value of certain long-lived prepaid lease assets using the net present value of estimated current CRJ200 lease rates. All fair values are considered to be Level 3 within the fair value hierarchy. Of the special items $184.3 million related to SkyWest Airlines and $240.2 million related to ExpressJet. These charges are net of $90 million in cash proceeds and other considerations from the Bombardier termination agreement. These special items are reflected in the SkyWest Airlines and ExpressJet operating expenses under Note 2 Segment Reporting. (2) The ERJ145 aircraft related items recorded in the 2016 special charge consist primarily of inventory valuation charges and impairment charges to write-down certain ERJ145 long-lived assets, which primarily consisted of spare engines and ERJ145 spare aircraft parts, to their estimated fair value of $41.2 million. The estimated fair value of the long-lived assets was based on third-party appraisals and valuations for similar assets which is considered an unobservable input (Level 3) under the fair value hierarchy. These special items are reflected in the ExpressJet operating expenses under Note 2 Segment Reporting . |
Capital Transactions (Tables)
Capital Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of assumptions used and weighted average fair value for stock option grants | 2016 2015 Expected annual dividend rate 1.08 % 1.18 % Risk-free interest rate 1.15 % 1.62 % Average expected life (years) 5.7 5.7 Expected volatility of common stock 0.412 0.401 Forfeiture rate % % Weighted average fair value of option grants $ 5.27 $ 4.75 |
Schedule of restricted stock activity | During the year ended December 31, 2016, the Company granted 380,358 shares of restricted stock units to certain Company’s employees under the 2010 Incentive Plan. The restricted stock units granted during the year ended December 31, 2016 have a three‑year vesting period, during which the recipient must remain employed with the Company or its subsidiaries. The weighted average fair value of the restricted stock units the date of grants made during the year ended December 31, 2016 was $14.81 per share. The following table summarizes the activity of restricted stock units granted to certain Company employees as of December 31, 2016, 2015 and 2014: Weighted-Average Grant-Date Fair Number of Shares Value Non-vested shares outstanding at December 31, 2014 723,176 $ 12.70 Granted 408,163 13.57 Vested (215,856) 13.06 Cancelled (106,184) 13.52 Non-vested shares outstanding at December 31, 2015 809,299 $ 13.13 Granted 384,148 14.81 Vested (215,146) 13.29 Cancelled (51,370) 13.72 Non-vested shares outstanding at December 31, 2016 926,931 $ 13.65 Granted 160,137 35.81 Vested (230,903) 12.01 Cancelled (40,575) 15.78 Non-vested shares outstanding at December 31, 2017 815,590 $ 18.35 |
Schedule of stock option activity | 2017 2016 2015 Weighted Weighted Average Aggregate Weighted Weighted Average Remaining Intrinsic Average Average Number of Exercise Contractual Value Number of Exercise Number of Exercise Options Price Term ($000) Options Price Options Price Outstanding at beginning of year 819,981 $ 13.58 4.4 years $ 18,756.9 1,064,429 $ 13.64 2,888,074 $ 16.46 Granted — — 206,021 14.90 267,433 Exercised (356,209) 13.36 (351,296) 14.17 (544,917) Cancelled (5,669) 14.33 (99,173) 14.90 (1,546,161) Outstanding at end of year 458,103 13.73 4.0 years $ 18,034.1 819,981 13.58 1,064,429 Exercisable at December 31, 2017 254,192 13.17 3.4 years $ 10,150.8 Exercisable at December 31, 2016 263,851 13.76 2.8 years $ 5,985.5 |
Schedule of non-vested stock options | The following table summarizes the status of the Company’s non‑vested stock options as of December 31, 2017: Weighted-Average Number of Grant-Date Shares Fair Value Non-vested shares at beginning of year 556,130 $ 4.86 Granted — — Vested (346,550) 4.67 Cancelled (5,669) 5.14 Non-vested shares at end of year $ 5.17 |
Schedule of stock options outstanding | The following table summarizes information about the Company’s stock options outstanding at December 31, 2017: Options Outstanding Options Exercisable Weighted Average Number Remaining Weighted Average Number Weighted Average Range of Exercise Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price $8.00 to $12.99 3.1 years $ 12.06 $ $13.00 to $14.99 4.2 years $15.00 to $19.00 4.8 years $8.00 to $19.00 4.0 years $ $ |
Performance share units | |
Schedule of non-vested stock options | The following table summarizes the activity of performance share units granted at target as of December 31, 2017. Weighted-Average Grant-Date Fair Number of Shares Value Non-vested shares outstanding at December 31, 2014 — $ — Granted 13.61 Vested — — Cancelled (19,754) 13.51 Non-vested shares outstanding at December 31, 2015 202,829 $ 13.62 Granted 14.89 Vested — — Cancelled (22,413) 14.16 Non-vested shares outstanding at December 31, 2016 363,993 $ 14.23 Granted 35.81 Vested — — Cancelled (14,732) 15.00 Non-vested shares outstanding at December 31, 2017 $ 19.70 |
Retirement Plans and Employee31
Retirement Plans and Employee Stock Purchase Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Plans and Employee Stock Purchase Plans | |
Schedule of purchases made under the 2009 Employee Stock Purchase Plans | Year ended December 31, 2017 2016 2015 Number of shares purchased 88,362 151,531 254,098 Average price of shares purchased $ 33.96 $ 20.87 $ 13.50 |
Quarterly Financial Data (Una32
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data (Unaudited) | |
Schedule of Quarterly Financial Data (Unaudited) | Year ended December 31, 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Year Operating revenues $ 765,415 $ 809,759 $ 831,936 $ 797,158 $ Operating income 76,295 106,596 112,369 92,939 388,199 Net income(1) 34,786 50,477 53,716 289,928 428,907 Net income per common share: Basic 5.60 8.28 Diluted 5.46 8.08 Weighted average common shares: Basic: 51,820 51,751 51,833 51,811 51,804 Diluted: 53,202 52,977 53,080 53,140 53,100 Year ended December 31, 2016 First Second Third Fourth Quarter Quarter Quarter Quarter Year Operating revenues $ 762,075 $ 801,338 $ 799,776 $ $ Operating income (loss) 61,809 84,137 85,834 (172,684) Net income (loss)(2) 27,092 40,244 41,322 (161,586) Net income (loss) per common share: Basic Diluted Weighted average common shares: Basic: 51,218 51,418 51,627 Diluted: 52,014 52,194 52,471 (1) Net income for 2017 included a $246.8 million benefit related to the revaluation of the Company’s deferred tax liability and other tax liabilities in accordance with the Tax Act. Operating loss for the fourth quarter of 2016 included a special charge of $465.6 million related to an impairment on the Company’s 50-seat aircraft |
Nature of Operations and Summ33
Nature of Operations and Summary of Significant Accounting Policies - Aircraft Fleet (Details) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016item | Dec. 31, 2017itemaircraft | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of daily departures to different destinations | item | 2,980 | |
Number of aircraft held by entity | 623 | |
Number of seats on aircraft | item | 50 | |
CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 208 | |
CRJ 700 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 136 | |
CRJ 900 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 52 | |
ERJ 135 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 3 | |
ERJ 145 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 117 | |
E 175 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 107 | |
Number of seats on aircraft | item | 76 | |
E175 SC | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of seats on aircraft | item | 70 | |
Number of aircraft ordered | 30 | |
EMB 120 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft removed from service | 11 | |
Number of seats on aircraft | item | 30 | |
United | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 278 | |
Percentage of aggregate capacity operated | 46.70% | |
United | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 81 | |
United | CRJ 700 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 20 | |
United | ERJ 135 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 3 | |
United | ERJ 145 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 109 | |
United | E 175 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 65 | |
Delta | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 225 | |
Percentage of aggregate capacity operated | 37.80% | |
Delta | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 94 | |
Delta | CRJ 700 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 60 | |
Delta | CRJ 900 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 52 | |
Delta | E 175 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 19 | |
American | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 65 | |
Percentage of aggregate capacity operated | 10.90% | |
American | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 16 | |
American | CRJ 700 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 49 | |
Alaska | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 27 | |
Percentage of aggregate capacity operated | 4.60% | |
Alaska | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 4 | |
Alaska | E 175 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 23 | |
Aircraft in scheduled service | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 595 | |
Aircraft in scheduled service | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 195 | |
Aircraft in scheduled service | CRJ 700 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 129 | |
Aircraft in scheduled service | CRJ 900 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 52 | |
Aircraft in scheduled service | ERJ 135 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 3 | |
Aircraft in scheduled service | ERJ 145 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 109 | |
Aircraft in scheduled service | E 175 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 107 | |
Subleased to an un-affiliated entity | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 4 | |
Subleased to an un-affiliated entity | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 4 | |
Other | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 24 | |
Other | CRJ 200 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 9 | |
Other | CRJ 700 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 7 | |
Other | ERJ 145 | ||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | ||
Number of aircraft held by entity | 8 |
Nature of Operations and Summ34
Nature of Operations and Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Nature of Operations and Summary of Significant Accounting Policies | |
Restricted cash | $ 8,243 |
Nature of Operations and Summ35
Nature of Operations and Summary of Significant Accounting Policies - Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Marketable Securities | ||||
Total cash and cash equivalents | $ 181,792 | $ 146,766 | $ 203,035 | $ 132,275 |
Amortized Cost | 503,731 | 410,014 | ||
Gross unrealized holding losses | (228) | (116) | ||
Marketable securities | 503,503 | 409,898 | ||
Total Assets Measured at Fair Value - Amortized cost | 685,523 | 556,780 | ||
Total cash and cash equivalents and available for sale securities, fair market value | $ 685,295 | 556,664 | ||
Marketable Securities | ||||
Maximum period for redemption | 1 year | |||
Bonds and bond funds | ||||
Marketable Securities | ||||
Amortized Cost | $ 344,479 | 410,001 | ||
Gross unrealized holding losses | (228) | (116) | ||
Marketable securities | 344,251 | 409,885 | ||
Commercial paper | ||||
Marketable Securities | ||||
Amortized Cost | 159,252 | 13 | ||
Marketable securities | $ 159,252 | $ 13 |
Nature of Operations and Summ36
Nature of Operations and Summary of Significant Accounting Policies - Inventories (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2016USD ($)item | Dec. 31, 2017USD ($) | |
Inventories | ||
Inventory allowance | $ | $ 40.5 | $ 17.1 |
Number of seats on aircraft | item | 50 |
Nature of Operations and Summ37
Nature of Operations and Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and Equipment | ||
Increased depreciation expense | $ 1.4 | |
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 | Minimum | ||
Property and Equipment | ||
Residual Value (as a percent) | 0.00% | 0.00% |
Used Aircraft, rotable spares, and spare engines | Maximum | ||
Property and Equipment | ||
Depreciable Life | 18 years | 18 years |
Residual Value (as a percent) | 20.00% | 30.00% |
Ground equipment | ||
Property and Equipment | ||
Residual Value (as a percent) | 0.00% | |
Ground equipment | Maximum | ||
Property and Equipment | ||
Depreciable Life | 10 years | |
Office equipment | ||
Property and Equipment | ||
Residual Value (as a percent) | 0.00% | |
Office equipment | Maximum | ||
Property and Equipment | ||
Depreciable Life | 7 years | |
Leasehold improvements | ||
Property and Equipment | ||
Residual Value (as a percent) | 0.00% | |
Leasehold improvements | Maximum | ||
Property and Equipment | ||
Depreciable Life | 15 years | |
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 |
Nature of Operations and Summ38
Nature of Operations and Summary of Significant Accounting Policies - Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 07, 2005 | |
Impairment of Long Lived and Intangible Assets | ||||
Property and equipment and related assets | $ 5,650,478 | $ 5,140,005 | ||
Intangible assets | 4,896 | 8,249 | $ 10,499 | |
Impairment of long-lived assets | 0 | |||
Proceeds from settlement of residual value guarantee aircraft agreements | 90,000 | |||
Atlantic Southeast Airlines Inc. | ||||
Impairment of Long Lived and Intangible Assets | ||||
Intangible assets related to acquisition of Atlantic Southeast | $ 33,700 | |||
Accumulated amortization expense | $ 28,900 | $ 25,500 |
Nature of Operations and Summ39
Nature of Operations and Summary of Significant Accounting Policies - Capitalized Interest (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capitalized Interest | |||
Capitalized interest costs | $ 1.4 | $ 1.5 | $ 2.2 |
Nature of Operations and Summ40
Nature of Operations and Summary of Significant Accounting Policies - Passenger and Ground Handling Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
ExpressJet United Express ERJ Agreement and ExpressJet American ERJ145 Agreement | |||
Other Revenue Items | |||
Deemed rental income under code-share agreement | $ 572.7 | $ 516 | $ 504.9 |
Nature of Operations and Summ41
Nature of Operations and Summary of Significant Accounting Policies - Agreements (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016item | Dec. 31, 2018aircraft | Dec. 31, 2017agreementaircraftitem | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 623 | ||
Number of seats on aircraft | item | 50 | ||
CRJ 200 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 208 | ||
CRJ 700 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 136 | ||
CRJ 700 | Forecast | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft removed from service | 8 | ||
CRJ 900 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 52 | ||
CRJ 700s/900s | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft operated | agreement | 49 | ||
CRJ 700s/900s | Forecast | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of leased aircraft returned | 19 | ||
Number of aircraft removed from service | 30 | ||
E 175 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 107 | ||
Number of seats on aircraft | item | 76 | ||
E 175 | Forecast | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of additional aircraft placed into service | 12 | ||
E175 SC | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of seats on aircraft | item | 70 | ||
E175 SC | Forecast | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of additional aircraft placed into service | 30 | ||
ERJ 135 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 3 | ||
ERJ 145 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 117 | ||
EMB 120 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft removed from service | 11 | ||
Number of seats on aircraft | item | 30 | ||
Delta Connection Agreements | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 70 | ||
Delta Connection Agreements | CRJ 700 | ExpressJet | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 33 | ||
Delta Connection Agreements | CRJ 900 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 36 | ||
Delta Connection Agreements | CRJ 900 | ExpressJet | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 16 | ||
Delta Connection Agreements | E 175 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 19 | ||
Term of agreement | 2 years 10 months 24 days | ||
Delta Connection Prorate Agreements | CRJ 200 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 24 | ||
Term of agreement | 30 days | ||
Delta Connection Prorate Agreements | CRJ 700 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 27 | ||
United Express Agreements | CRJ 200 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 57 | ||
United Express Agreements | CRJ 700 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 20 | ||
United Express Agreements | E 175 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 65 | ||
Term of agreement | 5 years 1 month 6 days | ||
United ERJ Agreements | ERJ 135 | ExpressJet | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 3 | ||
Term of agreement | 4 years 9 months 18 days | ||
United ERJ Agreements | ERJ 145 | ExpressJet | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 109 | ||
United Express Prorate Agreement | CRJ 200 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 24 | ||
Term of agreement | 120 days | ||
American Agreements | CRJ 200 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 10 | ||
American Agreements | CRJ 700 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 37 | ||
American Capacity Purchase Agreement | CRJ 700 | ExpressJet | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 12 | ||
American Prorate Agreement | CRJ 200 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 6 | ||
Term of agreement | 120 days | ||
Alaska Capacity Purchase Agreement | CRJ 200 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 4 | ||
Alaska Capacity Purchase Agreement | E 175 | Sky West Airlines Inc | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft | 23 | ||
American | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 65 | ||
American | CRJ 200 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 16 | ||
American | CRJ 700 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 49 | ||
Aircraft in scheduled service | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 595 | ||
Aircraft in scheduled service | CRJ 200 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 195 | ||
Aircraft in scheduled service | CRJ 700 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 129 | ||
Aircraft in scheduled service | CRJ 900 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 52 | ||
Aircraft in scheduled service | E 175 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 107 | ||
Aircraft in scheduled service | ERJ 135 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 3 | ||
Aircraft in scheduled service | ERJ 145 | |||
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |||
Number of aircraft held by entity | 109 |
Nature of Operations and Summ42
Nature of Operations and Summary of Significant Accounting Policies - Net Income (Loss) Per Share and Fair Value (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2017USD ($)segment$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Net Income (loss) Per Common Share | |||||||||||
Number of outstanding options not included in computation of Diluted EPS (in shares) | 284,000 | 2,077,000 | 505,000,000 | ||||||||
Numerator | |||||||||||
Net income (loss) | $ | $ 289,928 | $ 53,716 | $ 50,477 | $ 34,786 | $ (270,244) | $ 41,322 | $ 40,244 | $ 27,092 | $ 428,907 | $ (161,586) | $ 117,817 |
Denominator | |||||||||||
Denominator for basic earnings per-share weighted average shares | 51,811,000 | 51,833,000 | 51,751,000 | 51,820,000 | 51,757,000 | 51,627,000 | 51,418,000 | 51,218,000 | 51,804,000 | 51,505,000 | 51,077,000 |
Dilution due to stock options and restricted stock units (in shares) | 1,296,000 | 748,000 | |||||||||
Weighted average number of shares for diluted net income per common share | 53,140,000 | 53,080,000 | 52,977,000 | 53,202,000 | 51,757,000 | 52,471,000 | 52,194,000 | 52,014,000 | 53,100,000 | 51,505,000 | 51,825,000 |
Basic earnings per-share (in dollars per share) | $ / shares | $ 5.60 | $ 1.04 | $ 0.98 | $ 0.67 | $ (5.22) | $ 0.80 | $ 0.78 | $ 0.53 | $ 8.28 | $ (3.14) | $ 2.31 |
Diluted earnings per-share (in dollars per share) | $ / shares | $ 5.46 | $ 1.01 | $ 0.95 | $ 0.65 | $ (5.22) | $ 0.79 | $ 0.77 | $ 0.52 | $ 8.08 | $ (3.14) | $ 2.27 |
Fair Value of Financial Instruments | |||||||||||
Fair value of long-term debt | $ | $ 2,698,400 | $ 2,566,500 | $ 2,698,400 | $ 2,566,500 | |||||||
Total long-term debt | $ | $ 2,712,350 | $ 2,570,904 | $ 2,712,350 | $ 2,570,904 | |||||||
Segment Reporting | |||||||||||
Number of operating segments | segment | 3 |
Nature of Operations and Summ43
Nature of Operations and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Long-term deferred income taxes payable | $ 419,020 | $ 565,404 |
Retained Earnings (Accumulated Deficit) | 1,516,957 | 1,103,751 |
Accounting Standards Update 2016-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net deferred tax liabilities | 900 | |
Retained Earnings (Accumulated Deficit) | 900 | |
Income tax benefit | $ 5,400 | |
Scenario, adjustment | Accounting Standards Update 2015-07 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net deferred tax liabilities | 129,300 | |
Long-term deferred income taxes payable | $ (129,300) |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segmentaircraft | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting | |||||||||||
Number of operating segments | segment | 3 | ||||||||||
Operating revenues | $ 797,158 | $ 831,936 | $ 809,759 | $ 765,415 | $ 758,017 | $ 799,776 | $ 801,338 | $ 762,075 | $ 3,204,268 | $ 3,121,206 | $ 3,095,563 |
Operating expense | 2,816,069 | 3,293,890 | 2,861,048 | ||||||||
Depreciation and amortization expense | 292,768 | 284,969 | 264,507 | ||||||||
Special items | 465,600 | 465,649 | |||||||||
Interest expense | 104,925 | 78,177 | 75,850 | ||||||||
Segment profit (loss) | 283,274 | (250,861) | 158,665 | ||||||||
Identifiable intangible assets, other than goodwill | 4,896 | 8,249 | 4,896 | 8,249 | 10,499 | ||||||
Total assets | 5,458,279 | 5,007,966 | 5,458,279 | 5,007,966 | 4,781,984 | ||||||
Capital expenditures (including non-cash) | $ 689,398 | 1,159,001 | 715,089 | ||||||||
CRJ 200 | |||||||||||
Segment Reporting | |||||||||||
Number of aircraft lease to third party | aircraft | 4 | ||||||||||
Special items | 424,466 | ||||||||||
SkyWest Airlines | |||||||||||
Segment Reporting | |||||||||||
Operating revenues | $ 2,173,384 | 1,935,378 | 1,848,363 | ||||||||
Operating expense | 1,888,556 | 1,886,173 | 1,630,200 | ||||||||
Depreciation and amortization expense | 134,563 | 139,159 | 141,189 | ||||||||
Special items | 184,295 | ||||||||||
Interest expense | 21,544 | 26,211 | 36,141 | ||||||||
Segment profit (loss) | 263,284 | 22,994 | 182,022 | ||||||||
Total assets | 2,228,930 | 2,250,276 | 2,228,930 | 2,250,276 | 2,300,388 | ||||||
Capital expenditures (including non-cash) | 124,955 | 57,761 | 30,897 | ||||||||
ExpressJet Airlines Inc | |||||||||||
Segment Reporting | |||||||||||
Operating revenues | 790,942 | 1,044,828 | 1,169,923 | ||||||||
Operating expense | 819,343 | 1,339,569 | 1,192,070 | ||||||||
Depreciation and amortization expense | 51,982 | 83,935 | 86,382 | ||||||||
Special items | 281,354 | ||||||||||
Interest expense | 4,127 | 6,773 | 12,091 | ||||||||
Segment profit (loss) | (32,528) | (301,514) | (34,238) | ||||||||
Identifiable intangible assets, other than goodwill | 4,896 | 8,249 | 4,896 | 8,249 | 10,499 | ||||||
Total assets | 599,122 | 582,890 | 599,122 | 582,890 | 1,331,000 | ||||||
Capital expenditures (including non-cash) | 14,278 | 15,396 | 24,679 | ||||||||
ExpressJet Airlines Inc | CRJ 200 | |||||||||||
Segment Reporting | |||||||||||
Special items | 240,200 | ||||||||||
SkyWest Leasing | |||||||||||
Segment Reporting | |||||||||||
Operating revenues | 239,942 | 141,000 | 77,277 | ||||||||
Operating expense | 108,170 | 68,148 | 38,778 | ||||||||
Depreciation and amortization expense | 106,223 | 61,875 | 36,936 | ||||||||
Interest expense | 79,254 | 45,193 | 27,618 | ||||||||
Segment profit (loss) | 52,518 | 27,659 | 10,881 | ||||||||
Total assets | $ 2,630,227 | $ 2,174,800 | 2,630,227 | 2,174,800 | 1,150,596 | ||||||
Capital expenditures (including non-cash) | $ 550,165 | $ 1,085,844 | $ 659,513 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)aircraft | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 2,712,350 | $ 2,570,904 | |
Current portion of long-term debt | (313,243) | (308,945) | |
Less long-term portion of unamortized debt issue cost, net | (21,761) | (21,908) | |
Long-term debt, net of current maturities and debt issue costs | 2,377,346 | 2,240,051 | |
Current portion of long-term debt | 313,243 | 308,945 | |
Less current portion of unamortized debt issue cost, net | (3,565) | (3,485) | |
Current portion of long-term debt, net of debt issue costs | $ 309,678 | $ 305,460 | |
Effective interest rate (as a percent) | 3.90% | 3.80% | |
Aggregate amounts of principal maturities of long-term debt | |||
2,018 | $ 313,243 | ||
2,019 | 315,753 | ||
2,020 | 284,998 | ||
2,021 | 272,470 | ||
2,022 | 280,360 | ||
Thereafter | 1,245,526 | ||
Repayment of debt in cash | $ 16,500 | $ 110,800 | |
Total repayment of debt | 18,400 | 145,400 | |
Pre-tax gain | 1,279 | $ 33,660 | |
Letters of credit | 14,800 | 6,500 | |
Current borrowing capacity | 60,200 | 68,500 | |
Letters of credit and surety bonds outstanding with various banks and surety institutions | $ 87,400 | 87,700 | |
E 175 | |||
Debt Instrument [Line Items] | |||
Number of new aircraft acquired | aircraft | 21 | ||
Purchase price portion financed through debt issuance (as a percent) | 85.00% | ||
Purchase price portion paid with cash (as a percent) | 15.00% | ||
Notes payable to banks, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.91% to 3.43% through 2020, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 34,905 | 63,408 | |
Notes payable to banks, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.91% to 3.43% through 2020, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 2.91% | ||
Notes payable to banks, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.91% to 3.43% through 2020, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 3.43% | ||
Notes payable to a financing company, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.85% to 3.25% through 2021, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 97,612 | 146,266 | |
Notes payable to a financing company, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.85% to 3.25% through 2021, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 2.85% | ||
Notes payable to a financing company, due in semi-annual installments, variable interest based on LIBOR, or with interest rates ranging from 2.85% to 3.25% through 2021, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 3.25% | ||
Notes payable to banks, due in semi-annual installments plus interest at 6.06% to 6.51% through 2021, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 63,090 | 86,052 | |
Notes payable to banks, due in semi-annual installments plus interest at 6.06% to 6.51% through 2021, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 6.06% | ||
Notes payable to banks, due in semi-annual installments plus interest at 6.06% to 6.51% through 2021, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 6.51% | ||
Notes payable to a financing company, due in semi-annual installments plus interest at 5.78% to 6.23% through 2017, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 8,854 | ||
Notes payable to a financing company, due in semi-annual installments plus interest at 5.78% to 6.23% through 2017, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 5.78% | ||
Notes payable to a financing company, due in semi-annual installments plus interest at 5.78% to 6.23% through 2017, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 6.23% | ||
Notes payable to banks, due in monthly installments plus interest of 2.68% to 6.86% through 2025, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 372,157 | 426,389 | |
Notes payable to banks, due in monthly installments plus interest of 2.68% to 6.86% through 2025, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 2.68% | ||
Notes payable to banks, due in monthly installments plus interest of 2.68% to 6.86% through 2025, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 6.86% | ||
Notes payable to banks, due in monthly installments, plus interest at 4.16% to 6.05% through 2029, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 49,001 | 8,998 | |
Notes payable to banks, due in monthly installments, plus interest at 4.16% to 6.05% through 2029, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 4.16% | ||
Notes payable to banks, due in monthly installments, plus interest at 4.16% to 6.05% through 2029, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 6.05% | ||
Notes payable to banks, due in monthly installments, plus interest at 3.44% through 2019, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 3.44% | ||
Total long-term debt | 3,280 | ||
Notes payable to banks, due in quarterly installments plus interest at 3.39% to 4.73% through 2029, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Total long-term debt | $ 2,085,822 | 1,806,981 | |
Notes payable to banks, due in quarterly installments plus interest at 3.39% to 4.73% through 2029, secured by aircraft | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 3.39% | ||
Notes payable to banks, due in quarterly installments plus interest at 3.39% to 4.73% through 2029, secured by aircraft | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 4.73% | ||
Notes payable to banks, due in monthly installments, plus interest based on LIBOR at 3.54% through 2017, secured by aircraft | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 3.54% | ||
Total long-term debt | 4,666 | ||
Notes payable to banks due in monthly installments, interest based on LIBOR interest at 3.30% through 2019, secured by spare engines | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 3.30% | ||
Total long-term debt | $ 9,763 | 16,010 | |
Line of credit | |||
Debt Instrument [Line Items] | |||
Effective interest rate (as a percent) | 4.10% | ||
Aggregate amounts of principal maturities of long-term debt | |||
Maximum borrowing capacity | $ 75,000 | 75,000 | |
Amount outstanding | $ 0 | $ 0 | |
LIBOR | Line of credit | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.50% |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax provision (benefit): | |||
Federal | $ 5,853 | $ (3,801) | $ 3,801 |
State | 180 | 111 | 1,035 |
Total current payable | 6,033 | (3,690) | 4,836 |
Deferred tax provision (benefit): | |||
Federal | (166,890) | (77,430) | 66,430 |
State | 20,133 | (6,106) | 5,239 |
Total deferred payable | (146,757) | (83,536) | 71,669 |
Provision (benefit) for income taxes | $ (140,724) | $ (87,226) | $ 76,505 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statutory Federal income tax rate (as a percent) | 35.00% | |||
Reconciliation between the statutory federal income tax rate of 35% and the effective rate which is derived by dividing the provision for income taxes by income (loss) before income taxes | ||||
Computed provision (benefit) for income taxes at the statutory rate | $ 100,864 | $ (87,084) | $ 68,013 | |
State income tax provision (benefit), net of federal income tax benefit | 7,778 | (5,768) | 5,416 | |
Non-deductible expenses | 3,230 | 3,552 | 3,641 | |
Valuation allowance changes affecting the provision for income taxes | 505 | 751 | (899) | |
Excess tax benefits from share based compensation | (5,377) | |||
Revaluation of net deferred tax liabilities for the Tax Act | (246,845) | |||
Other, net | (879) | 1,323 | 334 | |
Provision (benefit) for income taxes | (140,724) | (87,226) | $ 76,505 | |
Deferred tax assets: | ||||
Intangible Asset | (206) | 4,983 | ||
Accrued benefits | 31,651 | 48,482 | ||
Net operating loss carryforward | 122,648 | 286,389 | ||
AMT credit carryforward | 23,443 | 17,589 | ||
Deferred aircraft credits | 53,870 | 60,415 | ||
Accrued reserves and other | 26,853 | 47,906 | ||
Total deferred tax assets | 258,259 | 465,764 | ||
Valuation allowance | (10,642) | (8,877) | ||
Deferred tax liabilities: | ||||
Accelerated depreciation | (666,637) | (1,022,291) | ||
Total deferred tax liabilities | (666,637) | (1,022,291) | ||
Net deferred tax liability | $ (419,020) | $ (565,404) | ||
Forecast | ||||
Statutory Federal income tax rate (as a percent) | 21.00% |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Losses and Tax Rates (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Net operating losses | ||
Statutory Federal income tax rate (as a percent) | 35.00% | |
Alternative minimum tax credit without expiration | $ 23,443 | $ 17,589 |
Tax credit recovery period | 4 years | |
Federal | ||
Net operating losses | ||
Operating loss carryforward | $ 491,400 | 763,900 |
Estimated effective tax rate on net operating losses | 3.36 | |
State | ||
Net operating losses | ||
Operating loss carryforward | $ 302,500 | $ 469,200 |
Estimated effective tax rate on net operating losses | 21 |
Commitments and Contingencies49
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)aircraft | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Future minimum rental payments required under operating leases | |||
2,018 | $ 142,157 | ||
2,019 | 104,297 | ||
2,020 | 121,119 | ||
2,021 | 112,657 | ||
2,022 | 75,981 | ||
Thereafter | 160,621 | ||
Total future lease obligations | $ 716,832 | ||
Number of aircraft leased by the entity | aircraft | 319 | ||
Minimum rental expense for airport station rents | $ 30,300 | $ 31,400 | $ 35,100 |
Commitments and Contingencies -
Commitments and Contingencies - Concentration Risks and Employees Under Collective Bargaining Agreements (Details) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Dec. 31, 2017USD ($)employee | Dec. 31, 2016USD ($) | Dec. 31, 2015 | |
Concentration Risk and Significant Customers | ||||
Allowance for doubtful accounts | $ | $ 157,000 | $ 173,000 | ||
ExpressJet Delaware Mechanics | Subsequent event | ||||
Concentration Risk and Significant Customers | ||||
Labor agreement, contract extension term (in years) | 1 year | |||
Revenue from rights, concentration risk | Customer concentration risk | Delta, United, and Continental Combined | ||||
Concentration Risk and Significant Customers | ||||
Concentration risk (as a percent) | 78.80% | 85.40% | 86.90% | |
Full-time equivalent number of employees | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 16,300 | |||
Full-time equivalent number of employees | Unionized employees | ||||
Concentration Risk and Significant Customers | ||||
Concentration risk (as a percent) | 22.00% | |||
Full-time equivalent number of employees | Unionized employees | Atlantic Southeast Pilots | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 669 | |||
Full-time equivalent number of employees | Unionized employees | Atlantic Southeast Flight Attendants | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 552 | |||
Full-time equivalent number of employees | Unionized employees | Atlantic Southeast Flight Controllers | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 25 | |||
Full-time equivalent number of employees | Unionized employees | Atlantic Southeast Mechanics | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 102 | |||
Full-time equivalent number of employees | Unionized employees | Atlantic Southeast Stock Clerks | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 29 | |||
Full-time equivalent number of employees | Unionized employees | ExpressJet Delaware Pilots | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 1,111 | |||
Full-time equivalent number of employees | Unionized employees | ExpressJet Delaware Flight Attendants | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 618 | |||
Full-time equivalent number of employees | Unionized employees | ExpressJet Delaware Mechanics | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 418 | |||
Full-time equivalent number of employees | Unionized employees | ExpressJet Delaware Dispatchers | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 22 | |||
Full-time equivalent number of employees | Unionized employees | ExpressJet Delaware Stock Clerks | ||||
Concentration Risk and Significant Customers | ||||
Number of employees | 42 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Marketable securities | $ 503,503 | $ 409,898 |
Total Assets Measured at Fair Value | 685,523 | 556,780 |
Recurring | Fair value | ||
Fair Value Measurements | ||
Marketable securities | 503,503 | 409,898 |
Cash, Cash Equivalents and Restricted Cash | 181,792 | 155,009 |
Total Assets Measured at Fair Value | 685,295 | 564,907 |
Recurring | Fair value | Bonds and bond funds | ||
Fair Value Measurements | ||
Marketable securities | 344,251 | 409,885 |
Recurring | Fair value | Commercial paper | ||
Fair Value Measurements | ||
Marketable securities | 159,252 | 13 |
Recurring | Level 1 | ||
Fair Value Measurements | ||
Cash, Cash Equivalents and Restricted Cash | 181,792 | 155,009 |
Total Assets Measured at Fair Value | 181,792 | 155,009 |
Recurring | Level 2 | ||
Fair Value Measurements | ||
Marketable securities | 503,503 | 409,898 |
Total Assets Measured at Fair Value | 503,503 | 409,898 |
Recurring | Level 2 | Bonds and bond funds | ||
Fair Value Measurements | ||
Marketable securities | 344,251 | 409,885 |
Recurring | Level 2 | Commercial paper | ||
Fair Value Measurements | ||
Marketable securities | $ 159,252 | $ 13 |
Investment in Other Companies (
Investment in Other Companies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Trip Linhas Aereas | |
Investments in other companies | |
Annual rate of return used to calculate the put option price (as a percent) | 20.00% |
Special Items (Details)
Special Items (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total Special items | $ 465,600 | $ 465,649 | |
Proceeds from settlement of residual value guarantee aircraft agreements | 90,000 | ||
CRJ 200 | |||
Total Special items | 424,466 | ||
ERJ 145 | |||
Total Special items | 41,183 | ||
Estimated fair value | $ 41,200 | 41,200 | |
SkyWest Airlines | |||
Total Special items | 184,295 | ||
Proceeds from settlement of residual value guarantee aircraft agreements | $ 90,000 | ||
ExpressJet Airlines Inc | |||
Total Special items | $ 281,354 | ||
ExpressJet Airlines Inc | CRJ 200 | |||
Total Special items | $ 240,200 |
Capital Transactions - Preferre
Capital Transactions - Preferred Stock (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred Stock | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock outstanding (in shares) | 0 |
Capital Transactions - Stock Co
Capital Transactions - Stock Compensation (Details) - USD ($) | May 04, 2010 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Performance period | 90 days | |||||
Compensation expenses | ||||||
Stock based compensation expense | $ 10,580,000 | $ 7,568,000 | $ 5,368,000 | |||
Director | ||||||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Granted (in shares) | 22,617 | 42,624 | 36,950 | |||
Granted (in dollars per share) | $ 35.81 | $ 14.78 | $ 14.05 | |||
Number of shares | ||||||
Granted (in shares) | 22,617 | 42,624 | 36,950 | |||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 35.81 | $ 14.78 | $ 14.05 | |||
Maximum | ||||||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Award percentage | 200.00% | 150.00% | ||||
Minimum | ||||||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Award percentage | 0.00% | 0.00% | ||||
Stock options and restricted stock | ||||||
Compensation expenses | ||||||
Total unrecognized compensation cost | $ 10,600,000 | |||||
Unrecognized compensation cost recognized over a weighted average period (in years) | 1 year 8 months 12 days | |||||
Employee stock option | ||||||
Share-Based Compensation | ||||||
Options outstanding (in shares) | 819,981 | 1,064,429 | 2,888,074 | 458,103 | 819,981 | |
Compensation expenses | ||||||
Period from grant date after which stock options become exercisable, minimum (in months) | 6 months | |||||
Period from grant date within which incentive stock options are exercisable, maximum (in years) | 7 years | |||||
Number of Options | ||||||
Outstanding at the beginning of the period (in shares) | 819,981 | 1,064,429 | 2,888,074 | |||
Granted (in shares) | 206,021 | 267,433 | ||||
Exercised (in shares) | (356,209) | (351,296) | (544,917) | |||
Cancelled (in shares) | (5,669) | (99,173) | (1,546,161) | |||
Outstanding at the end of the period (in shares) | 458,103 | 819,981 | 1,064,429 | |||
Exercisable (in shares) | 254,192 | 263,851 | ||||
Weighted Average Exercise Price | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ 13.58 | $ 13.64 | $ 16.46 | |||
Granted (in dollars per share) | 14.90 | 13.63 | ||||
Exercised (in dollars per share) | 13.36 | 14.17 | 14.68 | |||
Cancelled (in dollars per share) | 14.33 | 14.90 | 18.53 | |||
Outstanding at the end of the period (in dollars per share) | $ 13.73 | $ 13.58 | $ 13.64 | |||
Exercisable (in dollars per share) | $ 13.17 | $ 13.76 | ||||
Weighted Average Remaining Contractual Term | ||||||
Outstanding, Weighted Average Remaining Contractual Term (in years) | 4 years | 4 years 4 months 24 days | ||||
Exercisable, Weighted Average Remaining Contractual Term (in years) | 3 years 4 months 24 days | 2 years 9 months 18 days | ||||
Aggregate Intrinsic Value | ||||||
Average intrinsic value of shares outstanding | $ 18,034,100 | $ 18,756,900 | ||||
Average intrinsic value of shares exercisable | $ 10,150,800 | $ 5,985,500 | ||||
Total intrinsic value of options exercised | $ 9,940,000 | $ 4,250,000 | $ 1,800,000 | |||
Non-vested stock options | ||||||
Non-vested shares at beginning of year (in shares) | 556,130 | |||||
Granted (in shares) | 206,021 | 267,433 | ||||
Vested (in shares) | (346,550) | |||||
Cancelled (in shares) | (5,669) | |||||
Non-vested shares at end of year (in shares) | 203,911 | 556,130 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Non-vested shares at beginning of year (in dollars per share) | $ 4.86 | |||||
Vested (in dollars per share) | 4.67 | |||||
Cancelled (in dollars per share) | 5.14 | |||||
Non-vested shares at end of year (in dollars per share) | $ 5.17 | $ 4.86 | ||||
Performance share units | ||||||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Granted (in shares) | 119,315 | 183,577 | 222,583 | |||
Granted (in dollars per share) | $ 35.81 | $ 14.89 | $ 13.61 | |||
Performance period | 3 years | |||||
Number of shares | ||||||
Nonvested shares at the beginning of the period (in shares) | 363,993 | 202,829 | ||||
Granted (in shares) | 119,315 | 183,577 | 222,583 | |||
Cancelled (in shares) | (14,732) | (22,413) | (19,754) | |||
Nonvested shares at the end of the period (in shares) | 468,576 | 363,993 | 202,829 | |||
Weighted Average Grant-Date Fair Value | ||||||
Nonvested shares at the beginning of the period (in dollars per share) | $ 14.23 | $ 13.62 | ||||
Granted (in dollars per share) | 35.81 | 14.89 | $ 13.61 | |||
Cancelled (in dollars per share) | 15 | 14.16 | 13.51 | |||
Nonvested shares at the end of the period (in dollars per share) | $ 19.70 | $ 14.23 | $ 13.62 | |||
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) | 160,137 | 384,148 | 408,163 | |||
Granted (in dollars per share) | $ 35.81 | $ 14.81 | $ 13.57 | |||
Number of shares | ||||||
Nonvested shares at the beginning of the period (in shares) | 926,931 | 809,299 | 723,176 | |||
Granted (in shares) | 160,137 | 384,148 | 408,163 | |||
Vested (in shares) | (230,903) | (215,146) | (215,856) | |||
Cancelled (in shares) | (40,575) | (51,370) | (106,184) | |||
Nonvested shares at the end of the period (in shares) | 815,590 | 926,931 | 809,299 | |||
Weighted Average Grant-Date Fair Value | ||||||
Nonvested shares at the beginning of the period (in dollars per share) | $ 13.65 | $ 13.13 | $ 12.70 | |||
Granted (in dollars per share) | 35.81 | 14.81 | 13.57 | |||
Vested (in dollars per share) | 12.01 | 13.29 | 13.06 | |||
Cancelled (in dollars per share) | 15.78 | 13.72 | 13.52 | |||
Nonvested shares at the end of the period (in dollars per share) | $ 18.35 | $ 13.65 | $ 13.13 | |||
Long Term Incentive Plan 2010 | ||||||
Share-Based Compensation | ||||||
Number of shares authorized | 5,150,000 | |||||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Vesting period | 3 years | 3 years | ||||
Long Term Incentive Plan 2010 | Employee stock option | ||||||
Share-Based Compensation | ||||||
Minimum incentive stock option exercise price, expressed as a percentage of common stock grant date market value | 100.00% | |||||
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) | 1.08% | 1.18% | ||||
Risk-free interest rate (as a percent) | 1.15% | 1.62% | ||||
Average expected life (years) | 5 years 8 months 12 days | 5 years 8 months 12 days | ||||
Expected volatility of common stock (as a percent) | 0.412% | 0.401% | ||||
Forfeiture rate (as a percent) | 0.00% | 0.00% | ||||
Weighted average fair value of option grants | $ 5.27 | $ 4.75 | ||||
Number of Options | ||||||
Granted (in shares) | 206,021 | 267,433 | ||||
Non-vested stock options | ||||||
Granted (in shares) | 206,021 | 267,433 | ||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 5.27 | $ 4.75 | ||||
Long Term Incentive Plan 2010 | 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 | |||||
Granted (in dollars per share) | $ 35.81 | |||||
Weighted Average Grant-Date Fair Value | ||||||
Granted (in dollars per share) | $ 35.81 | |||||
Long Term Incentive Plan 2010 | Restricted stock units | Director | ||||||
Assumptions used to determine value of the shares purchased under the stock purchase plan using Black-Scholes option pricing model | ||||||
Granted (in shares) | 160,137 | |||||
Number of shares | ||||||
Granted (in shares) | 160,137 |
Capital Transactions - Informat
Capital Transactions - Information About Stock Options Outstanding (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
$8.00 to $12.99 | |
Stock options, exercise price | |
Exercise price range, low end of range (in dollars per share) | $ 8 |
Exercise price range, high end of range (in dollars per share) | $ 12.99 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 79,990 |
Options outstanding, Weighted Average Remaining Contractual Life | 3 years 1 month 6 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 12.06 |
Options Exercisable | |
Number of options Exercisable (in shares) | shares | 79,990 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 12.06 |
$13.00 to $14.99 | |
Stock options, exercise price | |
Exercise price range, low end of range (in dollars per share) | 13 |
Exercise price range, high end of range (in dollars per share) | $ 14.99 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 371,480 |
Options outstanding, Weighted Average Remaining Contractual Life | 4 years 2 months 12 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 14.02 |
Options Exercisable | |
Number of options Exercisable (in shares) | shares | 173,481 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 13.67 |
$15.00 to $19.00 | |
Stock options, exercise price | |
Exercise price range, low end of range (in dollars per share) | 15 |
Exercise price range, high end of range (in dollars per share) | $ 19 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 6,633 |
Options outstanding, Weighted Average Remaining Contractual Life | 4 years 9 months 18 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 17.77 |
Options Exercisable | |
Number of options Exercisable (in shares) | shares | 721 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 15.03 |
$8.00 to $19.00 | |
Stock options, exercise price | |
Exercise price range, low end of range (in dollars per share) | 8 |
Exercise price range, high end of range (in dollars per share) | $ 19 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 458,103 |
Options outstanding, Weighted Average Remaining Contractual Life | 4 years |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 13.73 |
Options Exercisable | |
Number of options Exercisable (in shares) | shares | 254,192 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 13.17 |
Retirement Plans and Employee57
Retirement Plans and Employee Stock Purchase Plans - Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SkyWest Plan | |||
Retirement Plans | |||
Service period required to be completed to be eligible to participate in plan | 90 days | ||
Required age for an employee to be eligible to participate in plan | 18 years | ||
Percentage of employer matching contribution based on length of service | 100.00% | ||
Minimum benefit plan percentage of participants compensation eligible for employer matching contribution based on position and years of service | 2.00% | ||
Maximum benefit plan percentage of participants compensation eligible for employer matching contribution based on position and years of service | 7.00% | ||
Company's combined contributions | $ 26.1 | $ 23.2 | $ 20.4 |
Atlantic Southeast and the ExpressJet Plans | |||
Retirement Plans | |||
Service period required to be completed to be eligible to participate in plan | 90 days | ||
Required age for an employee to be eligible to participate in plan | 18 years | ||
Company's combined contributions | $ 17.8 | $ 21 | $ 24 |
Maximum percentage of participant's total compensation eligible for employer matching contribution | 8.00% | ||
Atlantic Southeast Plan | |||
Retirement Plans | |||
Percentage of vesting for plan participants' elective deferrals and rollover amounts | 100.00% | ||
Atlantic Southeast Plan | Minimum | |||
Retirement Plans | |||
Percentage of vesting of company matching contribution based on length of service | 10.00% | ||
Atlantic Southeast Plan | Maximum | |||
Retirement Plans | |||
Percentage of vesting of company matching contribution based on length of service | 100.00% |
Retirement Plans and Employee58
Retirement Plans and Employee Stock Purchase Plans - Employee Stock Purchase Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Stock Purchase Plans | |||
Service period required to be completed for an employee to be eligible to participate in plan, minimum | 90 days | ||
Ownership interest in Company common stock to disqualify employee from participation in plan, maximum (as a percent) | 5.00% | ||
Maximum percentage of base salary which can be contributed by the employees | 15.00% | ||
Maximum amount of base salary which can be contributed annually by the employees | $ 25,000 | ||
Discount rate at which common stock can be purchased by the plan participant (as a percent) | 5.00% | ||
Summary of purchases made under the 2010 and 1995 Employee Stock Purchase Plans | |||
Number of shares purchased | 88,362 | 151,531 | 254,098 |
Average price of shares purchased (in dollars per share) | $ 33.96 | $ 20.87 | $ 13.50 |
2009 Stock Purchase Plan | |||
Summary of purchases made under the 2010 and 1995 Employee Stock Purchase Plans | |||
Stock based compensation expense | $ 0 | $ 0 | $ 0 |
Stock Repurchase (Details)
Stock Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Repurchase | ||||
Common stock authorized for repurchase, maximum (in shares) | 100 | |||
Stock repurchase program year | 3 years | |||
Common stock remaining number of shares authorized to repurchase | 80 | |||
Common stock repurchased (in shares) | 0.5 | 0 | 1.3 | |
Common stock repurchased, value | $ 20,000 | $ 18,700 | ||
Weighted average price per share of common stock (in dollars per share) | $ 41.36 | $ 14.98 | ||
Payment of income tax obligation on employee equity awards | $ (5,080) |
Related-Party Transactions (Det
Related-Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Affiliated entity | |
Related Party Transactions | |
Purchase from related party | $ 198,000 |
Quarterly Financial Data (Una61
Quarterly Financial Data (Unaudited) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesitemshares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Quarterly Financial Data (Unaudited) | |||||||||||
Operating revenues | $ 797,158 | $ 831,936 | $ 809,759 | $ 765,415 | $ 758,017 | $ 799,776 | $ 801,338 | $ 762,075 | $ 3,204,268 | $ 3,121,206 | $ 3,095,563 |
Operating income (loss) | 92,939 | 112,369 | 106,596 | 76,295 | (404,464) | 85,834 | 84,137 | 61,809 | 388,199 | (172,684) | 234,515 |
Net income (loss) | $ 289,928 | $ 53,716 | $ 50,477 | $ 34,786 | $ (270,244) | $ 41,322 | $ 40,244 | $ 27,092 | $ 428,907 | $ (161,586) | $ 117,817 |
Net income (loss) per common share: | |||||||||||
Basic (in dollars per share) | $ / shares | $ 5.60 | $ 1.04 | $ 0.98 | $ 0.67 | $ (5.22) | $ 0.80 | $ 0.78 | $ 0.53 | $ 8.28 | $ (3.14) | $ 2.31 |
Diluted (in dollars per share) | $ / shares | $ 5.46 | $ 1.01 | $ 0.95 | $ 0.65 | $ (5.22) | $ 0.79 | $ 0.77 | $ 0.52 | $ 8.08 | $ (3.14) | $ 2.27 |
Weighted average common shares: | |||||||||||
Basic (in shares) | shares | 51,811 | 51,833 | 51,751 | 51,820 | 51,757 | 51,627 | 51,418 | 51,218 | 51,804 | 51,505 | 51,077 |
Diluted (in shares) | shares | 53,140 | 53,080 | 52,977 | 53,202 | 51,757 | 52,471 | 52,194 | 52,014 | 53,100 | 51,505 | 51,825 |
Revaluation of deferred tax liablity | $ 246,800 | ||||||||||
Special Charge | $ 465,600 | $ 465,649 | |||||||||
Number of seats on aircraft | item | 50 |
SCHEDULE II_VALUATION AND QUA62
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
VALUATION AND QUALIFYING ACCOUNTS | ||||
Balance at Beginning of Year | $ 40,670 | $ 14,120 | $ 11,914 | |
Additions Charged to Costs and Expenses | 26,564 | 2,345 | ||
Deductions | (23,415) | (14) | (139) | |
Balance at End of Year | $ 40,670 | 17,255 | 40,670 | 14,120 |
Number of seats on aircraft | item | 50 | |||
Allowance for inventory obsolescence | ||||
VALUATION AND QUALIFYING ACCOUNTS | ||||
Balance at Beginning of Year | 40,497 | 13,933 | 11,588 | |
Additions Charged to Costs and Expenses | 26,564 | 2,345 | ||
Deductions | (23,399) | |||
Balance at End of Year | $ 40,497 | 17,098 | 40,497 | 13,933 |
Allowance for doubtful accounts receivable | ||||
VALUATION AND QUALIFYING ACCOUNTS | ||||
Balance at Beginning of Year | 173 | 187 | 326 | |
Deductions | (16) | (14) | (139) | |
Balance at End of Year | $ 173 | $ 157 | $ 173 | $ 187 |