Note 5 - Segment Reporting

The Company’s three reporting segments consist of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expenses incurred by the Company are allocated to the operating expenses of SkyWest Airlines and ExpressJet.

The Company’s chief operating decision maker analyzes the profitability of operating the E175 aircraft (including operating costs and associated revenue) separately from the profitability of the Company’s ownership, financing costs and associated revenue of the Company’s E175 aircraft (including depreciation expense, interest expense and associated revenue). The SkyWest Leasing segment includes revenue attributed to the Company’s E175 aircraft ownership cost earned under the applicable fixed-fee contracts and the depreciation and interest expense of the Company’s E175 aircraft. The SkyWest Leasing segment’s total assets and capital expenditures include the acquired E175 aircraft. The SkyWest Leasing segment additionally includes the ownership and activity of four CRJ200 aircraft leased to a third party.

The following represents the Company’s segment data for the three-month periods ended March 31, 2018 and 2017 (in thousands):


	Three months ended March 31, 2018
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)	$	556,294	$	161,081	$	66,025	$	783,400
Operating expense		498,875		166,824		29,526		695,225
Depreciation and amortization expense		37,487		11,161		28,937		77,585
Interest expense		4,476		827		20,931		26,234
Segment profit (loss) (2)		52,943		(6,570)		15,568		61,941
Identifiable intangible assets, other than goodwill		—		3,672		—		3,672
Total assets (as of March 31, 2018)		2,184,306		581,722		2,834,159		5,600,187
Capital expenditures (including non-cash)		36,283		1,338		230,167		267,788


	Three months ended March 31, 2017
	SkyWest				SkyWest
	Airlines		ExpressJet		Leasing		Consolidated
Operating revenues (1)(3)	$	464,916	$	228,447	$	53,803	$	747,166
Operating expense (3)		417,330		229,282		24,259		670,871
Depreciation and amortization expense		31,817		14,525		23,772		70,114
Interest expense		5,799		1,114		17,636		24,549
Segment profit (loss) (2) (3)		41,787		(1,949)		11,908		51,746
Identifiable intangible assets, other than goodwill		—		7,686		—		7,686
Total assets (as of March 31, 2017) (3)		2,238,740		565,839		2,338,110		5,142,689
Capital expenditures (including non-cash)		33,431		5,654		184,014		223,099

(1)

Prorate revenue, Airport customer service and other revenue is primarily reflected in the SkyWest Airlines segment.

(2)

Segment profit (loss) is equal to operating income less interest expense.

(3)

Amounts adjusted due to the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). See Note 1 to the financial statements contained in Part I, Item 1 of this report for additional information.