Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | SKYWEST INC | |
Entity Central Index Key | 793,733 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 52,045,770 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | [1] |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 251,447 | $ 181,792 | |
Marketable securities | 394,080 | 503,503 | |
Income tax receivable | 8,596 | 5,316 | |
Receivables, net | 61,327 | 42,731 | |
Inventories, net | 117,217 | 119,755 | |
Prepaid aircraft rents | 89,731 | 115,098 | |
Other current assets | 30,225 | 26,938 | |
Total current assets | 952,623 | 995,133 | |
PROPERTY AND EQUIPMENT: | |||
Aircraft and rotable spares | 5,583,624 | 5,335,870 | |
Deposits on aircraft | 49,000 | 49,000 | |
Buildings and ground equipment | 275,926 | 265,608 | |
Total property and equipment, gross | 5,908,550 | 5,650,478 | |
Less-accumulated depreciation and amortization | (1,533,346) | (1,467,475) | |
Total property and equipment, net | 4,375,204 | 4,183,003 | |
OTHER ASSETS | |||
Long-term prepaid assets | 203,178 | 230,923 | |
Other assets | 69,182 | 65,341 | |
Total other assets | 272,360 | 296,264 | |
Total assets | 5,600,187 | 5,474,400 | |
CURRENT LIABILITIES: | |||
Current maturities of long-term debt | 335,429 | 309,678 | |
Accounts payable | 290,140 | 288,904 | |
Accrued salaries, wages and benefits | 145,137 | 154,367 | |
Taxes other than income taxes | 16,570 | 19,228 | |
Other current liabilities | 50,542 | 48,648 | |
Total current liabilities | 837,818 | 820,825 | |
OTHER LONG TERM LIABILITIES | 62,363 | 58,662 | |
LONG TERM DEBT, net of current maturities | 2,440,771 | 2,377,346 | |
DEFERRED INCOME TAXES PAYABLE | 434,683 | 419,020 | |
DEFERRED AIRCRAFT CREDITS | 37,415 | 44,225 | |
COMMITMENTS AND CONTINGENCIES (Note 6) | |||
STOCKHOLDERS' EQUITY: | |||
Preferred stock, 5,000,000 shares authorized; none issued | |||
Common stock, no par value, 120,000,000 shares authorized; 81,104,752 and 80,398,104 shares issued, respectively | 679,768 | 672,593 | |
Retained earnings | 1,566,114 | 1,516,957 | |
Treasury stock, at cost, 29,058,982 and 28,643,535 shares, respectively | (458,645) | (435,178) | |
Accumulated other comprehensive loss | (100) | (50) | |
Total stockholders' equity | 1,787,137 | 1,754,322 | |
Total liabilities and stockholders' equity | $ 5,600,187 | $ 5,474,400 | |
[1] | 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. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
CONDENSED 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 | 81,104,752 | 80,398,104 |
Treasury stock, at cost, shares | 29,058,982 | 28,643,535 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
OPERATING REVENUES: | |||
Total operating revenues | $ 783,400 | $ 747,166 | [1] |
OPERATING EXPENSES: | |||
Salaries, wages and benefits | 306,719 | 297,667 | [1] |
Depreciation and amortization | 77,585 | 70,114 | [1] |
Other operating expenses | 68,389 | 62,675 | [1] |
Total operating expenses | 695,225 | 670,871 | [1] |
OPERATING INCOME | 88,175 | 76,295 | [1] |
OTHER INCOME (EXPENSE): | |||
Interest income | 1,705 | 660 | [1] |
Interest expense | (26,234) | (24,549) | [1] |
Other income | 3,558 | ||
Total other expense, net | (20,971) | (23,889) | [1] |
INCOME BEFORE INCOME TAXES | 67,204 | 52,406 | [1] |
PROVISION FOR INCOME TAXES | 12,842 | 17,620 | [1] |
NET INCOME | $ 54,362 | $ 34,786 | [1] |
BASIC EARNINGS PER SHARE (in dollars per share) | $ 1.05 | $ 0.67 | [1] |
DILUTED EARNINGS PER SHARE (in dollars per share) | $ 1.03 | $ 0.65 | [1] |
Weighted average common shares: | |||
Basic (in shares) | 51,921 | 51,820 | [1] |
Diluted (in shares) | 53,033 | 53,202 | [1] |
COMPREHENSIVE INCOME: | |||
Net income | $ 54,362 | $ 34,786 | [1] |
Net unrealized appreciation (depreciation) on marketable securities, net of taxes | (50) | 39 | [1] |
TOTAL COMPREHENSIVE INCOME | 54,312 | 34,825 | [1] |
Flying agreements | |||
OPERATING REVENUES: | |||
Total operating revenues | 767,964 | 734,529 | [1] |
Airport customer service and other | |||
OPERATING REVENUES: | |||
Total operating revenues | 15,436 | 12,637 | [1] |
Aircraft maintenance, materials and repairs | |||
OPERATING EXPENSES: | |||
Total operating expenses | 141,606 | 132,325 | [1] |
Aircraft rentals | |||
OPERATING REVENUES: | |||
Total operating revenues | 189,068 | 198,463 | |
OPERATING EXPENSES: | |||
Total operating expenses | 44,680 | 57,709 | [1] |
Airport related expenses | |||
OPERATING EXPENSES: | |||
Other operating expenses | 31,948 | ||
Total operating expenses | 29,307 | 31,948 | [1] |
Aircraft fuel | |||
OPERATING EXPENSES: | |||
Other operating expenses | 18,433 | ||
Total operating expenses | $ 26,939 | $ 18,433 | [1] |
[1] | 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. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ 165,895 | $ 143,940 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of marketable securities | (387,572) | (455,990) | |
Sales of marketable securities | 496,945 | 383,163 | |
Proceeds from the sale of aircraft, property and equipment | 36,512 | ||
Acquisition of property and equipment: | |||
Aircraft and rotable spare parts | (198,777) | (220,916) | |
Buildings and ground equipment | (9,305) | (479) | |
Aircraft deposits applied towards acquired aircraft | 11,228 | ||
Increase in other assets | (1,364) | (2,425) | |
NET CASH USED IN INVESTING ACTIVITIES | (100,073) | (248,907) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of long-term debt | 101,317 | 157,983 | |
Principal payments on long-term debt | (71,587) | (88,104) | |
Net proceeds from issuance of common stock | 2,320 | 1,481 | |
Purchase of treasury stock and employee income tax paid on equity awards | (23,467) | (13,671) | |
Increase in debt issuance cost | (610) | (1,452) | |
Payment of cash dividends | (4,140) | (2,588) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,833 | 53,649 | |
Increase (decrease) in cash and cash equivalents | 69,655 | (51,318) | |
Cash and cash equivalents at beginning of period | 181,792 | [1] | 155,009 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 251,447 | 103,691 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Acquisition of rotable spare parts | 574 | 1,704 | |
Debt assumed on aircraft acquired off lease | 59,132 | ||
Cash paid during the period for: | |||
Interest, net of capitalized amounts | 26,481 | 24,039 | |
Income taxes | $ 486 | $ 478 | |
[1] | 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. |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Consolidated Financial Statements | |
Condensed Consolidated Financial Statements | Note 1 — Condensed Consolidated Financial Statements Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”) and its operating subsidiaries, SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines, Inc. (“ExpressJet”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will likely differ, and may differ materially, from those estimates and assumptions. The Company reclassified certain prior period amounts to conform to the current period presentation . Recent Accounting Pronouncements Standards Effective in Future Years and Not Yet Adopted In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2016‑02, “Leases (Topic 842)” (“Topic 842”). Topic 842 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. Topic 842 will be effective beginning in the first quarter of 2019. Early adoption of Topic 842 is permitted. Topic 842 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 has not completed its assessment, but the adoption of Topic 842 will have a significant impact on its consolidated balance sheets. However, the Company does not expect the adoption to have a significant impact on the recognition, measurement or presentation of lease expenses within the condensed consolidated statements of operations and comprehensive income or the condensed consolidated statements of cash flows. See Note 6, “Commitments and Contingencies,” about the Company’s undiscounted future lease payments and the timing of those payments. Recently Adopted Standards In May 2014, the FASB issued Accounting Standards Update No. 2014‑09, “Revenue from Contracts with Customers, (Topic 606)” (“Topic 606”). Under Topic 606, 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 adopted this standard as of January 1, 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, in addition to the aircraft lease, the individual flights are distinct services and the flight services promised in a capacity purchase 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 Topic 606 did not have a material impact on recorded amounts when applied to the opening balance sheet as of January 1, 2018. The adoption of Topic 606 only affects the Company’s consolidated balance sheets and statements of comprehensive income (loss) classification, with no impact on the Company’s operating income (loss), net income (loss), earnings (loss) per share or cash flows, however the principal versus agent considerations under Topic 606 resulted 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). This classification change resulted in a reduction to total revenue and a reduction to operating expenses by the same amount, resulting in no change to operating income. Additionally, under the nonrefundable up-front fees and contract costs considerations of Topic 606, reimbursements from the Company’s major airline partners for up-front contract costs will be deferred and amortized over the contract term. The related up-front costs to obtain the contract will also be capitalized and amortized over the contract term. As the amount of the up-front reimbursement is determined from the Company’s actual costs to fulfill the contract, this change is not expected to impact the Company’s operating income (loss) as the amount of deferred revenue and the amount of capitalized costs and will be recognized over the same period. This change also resulted in a deferred revenue liability and a capitalized contract cost on the balance sheet of the same amount. Prior to the Company’s adoption of Topic 606, the Company segregated its revenue into two categories: “Passenger revenue” and “Ground handling and other revenue.” “Passenger revenue” included revenue from fixed-fee contracts, prorate flying agreements and airport customer service agreements for flights operated by the Company. “Ground handling and other revenue” included revenue from airport customer service agreements for flights operated by third parties and other revenue. Under the disaggregated revenue disclosure considerations in Topic 606, the Company segregated its revenue into the following categories: “Flying agreements revenue” and “Airport customer service and other revenue.” “Flying agreements revenue” includes revenue from fixed-fee contracts, prorate flying agreements and other revenue generated from flying the Company’s aircraft, primarily lease revenue for the use of the aircraft. “Airport customer service and other revenue” includes revenue from airport customer services agreements. This change reclassifies amounts previously reported as “Passenger revenue” and “Ground handling and other revenue”. Additionally, in connection with the Company’s adoption of Topic 606, the Company renamed the operating expense “Ground handling services” to “Airport-related expenses.” Certain airport-related expenses, such as landing fees and airport facility rents, were previously reported as “Other operating expenses” and have been reclassified as “Airport-related expenses.” 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. The Company adopted this standard in the first quarter of 2018 and modified the presentation to include changes in restricted cash in the Company’s Consolidated Statement of Cash Flows, which had an immaterial impact. Impact of Recently Adopted Standards The Company recast certain prior period amounts to conform with the adoption of Topic 606, as shown in the tables below (in thousands): Three Months Ended March 31, 2017 Income Statement: Previously Reported Adjustments Current Presentation OPERATING REVENUES: Flying agreements (1) $ $ (10,882) $ 734,529 Airport customer service and other (2) (7,367) 12,637 Total operating revenues $ $ (18,249) $ 747,166 OPERATING EXPENSES: Salaries, wages and benefits $ 300,039 $ (2,372) $ 297,667 Aircraft fuel 34,310 (15,877) 18,433 Airport-related expenses (3) 19,535 12,413 31,948 Other operating expenses 75,088 (12,413) 62,675 Total operating expenses 689,120 (18,249) 670,871 1. In previously reported periods, this line item was presented as passenger revenue. 2. In previously reported periods, this line item was presented as ground handling and other. 3. In previously reported periods, this line item was presented as ground handling services. Balance Sheet: Previously Reported December 31, 2017 Adjustments Current Presentation December 31, 2017 ASSETS: Other long-term assets $ $ $ LIABILITIES: Other long-term liabilities $ $ $ The $16.1 million adjustment to other long-term assets and other long-term liabilities reflects the amount of capitalized up-front contract costs and the amount of deferred revenue for up-front reimbursements as of December 31, 2017. The $16.1 million capitalized contract costs and deferred revenue is expected to be amortized over the applicable remaining contract term. For the three months ended March 31, 2018 and 2017, the Company recognized $0.4 million and $0.3 million, respectively, of revenue associated with the amortization of the up-front contract reimbursements. As of March 31, 2018, the Company had $61.3 million in accounts receivables of which $48.8 million related to flying agreements. As of December 31, 2017, the Company had $42.7 million in accounts receivables of which $33.9 million related to flying agreements. |
Flying Agreement and Airport Cu
Flying Agreement and Airport Customer Service and Other Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Flying Agreement and Airport Customer Service and Other Revenue | |
Flying Agreement and Airport Customer Service and Other Revenue | Note 2 — Flying Agreements and Airport Customer Service and Other Revenue The Company recognizes flying agreement and airport customer service and other revenues when the service is provided under its code-share agreements. Under the Company’s fixed-fee arrangements (referred to as “fixed-fee arrangements,” “fixed-fee contracts” or “capacity purchase agreements”) with Delta Air Lines, Inc. (“Delta”), United Airlines, Inc. (“United”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner”), the major airline partner generally pays the Company a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) or block hour (measured from takeoff to landing, including taxi time) incurred, and an amount per aircraft in service each month with additional incentives based on flight completion and on-time performance. The major airline partner also directly reimburses the Company for certain direct expenses incurred under the fixed-fee arrangement, such as airport landing fees and airport rents. Under the fixed-fee arrangements, revenue is earned when each flight is completed and is reflected in flying agreements revenue. The transaction price for the fixed-fee agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term. For the three months ended March 31, 2018, fixed-fee arrangements represented approximately 85.7% of the Company’s flying agreements revenue. Under the Company’s revenue-sharing arrangements (referred to as a “revenue-sharing” or “prorate” arrangement), the major airline partner and the Company negotiate a passenger fare proration formula, pursuant to which the Company receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on a Company airline and the other portion of their trip on the major airline partner. Revenue is recognized under the Company’s prorate flying agreements when each flight is completed based upon the portion of the prorate passenger fare the Company anticipates that it will receive for each completed flight. The transaction price for the prorate agreements is determined from the proration formula derived from each passenger ticket amount on each completed flight over the agreement term. For the three months ended March 31, 2018, prorate flying arrangements represented approximately 14.3% of the Company’s flying agreements revenue. Airport customer service and other revenue primarily consists of ground handling functions, such as gate and ramp agent services at applicable airports where the Company provides such services. The transaction price for airport customer service agreements is determined from an agreed-upon rate by location applied to the applicable number of flights handled by the Company over the agreement term. 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 table represents the Company’s flying agreements revenue by type for the three-month periods ended March 31, 2018 and 2017 (in thousands): For the three months ended March 31, 2018 2017 Capacity purchase agreements revenue: flight operations $ 469,025 $ 445,719 Capacity purchase agreements revenue: aircraft lease revenue 189,068 198,463 Prorate agreements revenue 109,871 90,347 Flying agreements revenue $ 767,964 $ 734,529 A portion of the Company’s compensation under its fixed-fee agreements 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. The consideration associated with the use of the aircraft under the Company’s fixed-fee agreements is deemed to be lease revenue, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The lease revenue associated with the Company’s fixed-fee agreements is reflected as flying agreements revenue 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. The Company’s fixed-fee and prorate agreements include weekly provisional cash payments from the respective major airline partner based on a projected level of flying each month. The Company and each major airline partner subsequently reconcile these payments to the actual completed flight activity on a monthly or quarterly basis. In the event a flying agreement includes a mid-term rate reset to adjust rates prospectively and the contractual rates under the Company’s flying agreements have not been finalized at quarterly or annual financial statement dates, the Company applies the variable constraint guidance under Topic 606, where the Company records revenue to the extend it believes that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are measured and determined on a monthly, quarterly or semi‑annual basis. At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly, subject to the variable constraint guidance under Topic 606. The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner: Delta Connection Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) • • • • 60 27 36 22 • ExpressJet Delta Connection Agreement (fixed-fee arrangement) • • 31 6 • SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) • 34 • United Express Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) • • • 65 20 65 • ExpressJet United ERJ Agreement (fixed-fee arrangement) • • 3 97 • SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) • 20 • American Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines American Agreement (fixed-fee arrangement) • • 10 37 • SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) • 7 • ExpressJet American Agreement (fixed-fee arrangement) • 12 • Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) • • 3 25 • In addition to the contractual arrangements described above, SkyWest Airlines has entered into agreements with Alaska and Delta to place additional Embraer E175 dual-class regional jet aircraft (which are typically configured with 76 seats) (“E175”) or E175 SC dual-class regional jet aircraft (which are typically configured with 70 seats) (“E175 SC”) into service for those major airline partners. As of March 31, 2018, the Company anticipated placing an additional ten E175 aircraft with Alaska and 27 E175 or E175 SC aircraft with Delta. The delivery dates for the new E175/E175 SC aircraft are expected to take place by the end of 2018 or early 2019 with the exception of three E175 aircraft with Alaska that have been deferred until 2021. Final delivery dates may be adjusted based on various factors. When an aircraft is scheduled to be removed from a fixed-fee arrangement, the Company may, as practical under the circumstances, negotiate an extension with the respective major airline partner, negotiate the placement of the aircraft with another major airline partner, return the aircraft to the lessor if the aircraft is leased and the lease is expiring, place owned aircraft for sale, or pursue other uses for the aircraft, including placing the aircraft in a prorate arrangement. The Company’s operating revenues could be impacted by a number of factors, including changes to the Company’s code-share agreements with its major airline partners, contract modifications resulting from contract renegotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and settlement of reimbursement disputes with the Company’s major airline partners. |
Share-Based Compensation and St
Share-Based Compensation and Stock Repurchases | 3 Months Ended |
Mar. 31, 2018 | |
Share-Based Compensation and Stock Repurchases | |
Share-Based Compensation and Stock Repurchases | Note 3 — Share-Based Compensation and Stock Repurchases During the three months ended March 31, 2018, the Company granted 15,165 fully-vested shares of common stock to the Company’s directors at a grant date fair value of $53.40. Additionally, during the three months ended March 31, 2018, the Company granted 114,856 restricted stock units and 89,982 performance shares to certain employees of the Company and its subsidiaries under the SkyWest, Inc. 2010 Long-Term Incentive Plan. Both the restricted stock units and performance shares have a three-year vesting period, during which the recipient must remain employed with the Company or one of the Company’s subsidiaries. The number of performance shares awardable in 2018 ranges from 0% to 200% of the original amount granted depending on the Company’s performance over the three-year vesting period against the pre-established targets. Upon vesting, each restricted stock unit and performance share will be replaced with one share of common stock. The fair value of the restricted stock units and performance shares on the date of grant was $53.40 per share. During the three months ended March 31, 2018, the Company did not grant any options to purchase shares of common stock. The Company accounts for forfeitures of restricted stock units and performance share grants in 2018 when forfeitures occur. The estimated fair value of the stock options, restricted stock units and performance shares is amortized over the applicable vesting periods. During the three months ended March 31, 2018 and 2017, the Company recorded pre-tax share-based compensation expense of $4.9 million and $3.5 million, respectively. The Company repurchased 177,580 shares of its common stock for $10.0 million during the three months ended March 31, 2018. Additionally, during the three months ended March 31, 2018, the Company paid $13.5 million for the income tax obligation on vested employee equity awards and issued the net, after-tax shares to employees. The Company repurchased 281,000 shares of its common stock for $10.0 million during the three months ended March 31, 2017. Additionally, during the three months ended March 31, 2017, the Company paid $3.8 million for the income tax obligation on vested employee equity awards and issued the net, after-tax shares to employees. |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Net Income Per Common Share | |
Net Income Per Common Share | Note 4 — Net Income Per Common Share Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. During the three months ended March 31, 2018, 372,600 performance shares (at target performance) were excluded from the computation of Diluted EPS since the Company had not achieved the minimum target thresholds as of March 31, 2018. During the three months ended March 31, 2017, 451,000 restricted stock units and performance shares (at target performance) were excluded from the computation of Diluted EPS since the Company had not achieved the minimum target thresholds as of March 31, 2017. The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows: Three Months Ended March 31, 2018 2017 Numerator: Net Income $ 54,362 $ 34,786 Denominator: Weighted average number of common shares outstanding 51,921 51,820 Effect of outstanding share-based awards 1,112 1,382 Weighted average number of shares for diluted net income per common share 53,033 53,202 Basic earnings per share $ 1.05 $ 0.67 Diluted earnings per share $ 1.03 $ 0.65 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting | |
Segment Reporting | Note 5 - Segment Reporting The Company’s three reporting segments consist of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expenses incurred by the Company are allocated to the operating expenses of SkyWest Airlines and ExpressJet. The Company’s chief operating decision maker analyzes the profitability of operating the E175 aircraft (including operating costs and associated revenue) separately from the profitability of the Company’s ownership, financing costs and associated revenue of the Company’s E175 aircraft (including depreciation expense, interest expense and associated revenue). The SkyWest Leasing segment includes revenue attributed to the Company’s E175 aircraft ownership cost earned under the applicable fixed-fee contracts and the depreciation and interest expense of the Company’s E175 aircraft. The SkyWest Leasing segment’s total assets and capital expenditures include the acquired E175 aircraft. The SkyWest Leasing segment additionally includes the 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) 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 6 — Commitments and Contingencies As of March 31, 2018, the Company leased aircraft, airport facilities, office space, and other property and equipment under non-cancelable operating leases which are generally on a long-term, triple net lease basis pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases, or the property may be purchased rather than leased. The following table summarizes future minimum rental payments primarily related to aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2018 (in thousands): March through December 2018 $ 85,825 2019 85,563 2020 101,523 2021 93,118 2022 75,178 Thereafter 159,347 $ 600,554 As of March 31, 2018, the Company had a firm purchase commitment for 37 E175/E175 SC aircraft from Embraer, S.A. with scheduled delivery dates through the end of 2018 or early 2019 with the exception of three E175 aircraft that have been deferred until 2021. The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands): Total Mar - 2018 2019 2020 2021 2022 Thereafter Operating lease payments for aircraft and facility obligations $ 600,554 $ 85,825 $ 85,563 $ 101,523 $ 93,118 $ 75,178 $ 159,347 Firm aircraft and spare engine commitments 979,269 861,041 21,200 10,600 86,428 — — Interest commitments(1) 538,046 81,995 98,247 84,169 71,193 59,263 143,179 Principal maturities on long-term debt 2,801,208 250,739 340,546 311,261 299,704 289,786 1,309,172 Total commitments and obligations $ 4,919,077 $ 1,279,600 $ 545,556 $ 507,553 $ 550,443 $ 424,227 $ 1,611,698 (1) At March 31, 2018, the Company had variable rate notes representing 2.2% of its total long-term debt. Actual interest commitments will change based on the actual variable interest. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 7 — Fair Value Measurements The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined the fair value of these assets based on the following three levels of inputs: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions. As of March 31, 2018 and 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 March 31, 2018 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 225,199 $ — $ 225,199 $ — Commercial paper 158,638 — 158,638 — Trading Securities 10,243 10,243 — — $ 394,080 $ 10,243 $ 383,837 $ — Cash, Cash Equivalents 251,447 251,447 — — Total Assets Measured at Fair Value $ 645,527 $ 261,690 $ 383,837 $ — Fair Value Measurements as of December 31, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 344,251 $ — $ 344,251 $ — Commercial paper — — $ $ — $ $ — Cash, Cash Equivalents — — Total Assets Measured at Fair Value $ 685,295 $ $ 503,503 $ — The Company’s “Marketable Securities” classified as Level 1 Trading Securities were valued using active market valuations for the securities. The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities. The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2018. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period. As of March 31, 2018 and December 31, 2017, the Company classified $394.1 million and $503.5 million of marketable securities, respectively, as short-term since it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year. As of March 31, 2018 and December 31, 2017, the cost of the Company’s total cash and cash equivalents and available for sale securities was $645.7 million and $685.5 million, respectively. As of March 31, 2018 and December 31, 2017, the fair value of the Company’s total cash and cash equivalents and available for sale securities was $645.5 million and $685.3 million, respectively. The fair value of the Company’s long-term debt classified as Level 2 debt was estimated using discounted cash flow analyses, based on the Company’s current estimated incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt and was estimated to be $2.79 billion as of March 31, 2018 and $2.70 billion as of December 31, 2017, as compared to the carrying amount of $2.80 billion as of March 31, 2018 and $2.71 billion as of December 31, 2017. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt | |
Long-Term Debt | Note 8 — Long-Term Debt Long-term debt consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 Current portion of long-term debt $ 339,058 $ 313,243 Current portion of unamortized debt issue cost, net (3,629) (3,565) Current portion of long-term debt, net of debt issue costs $ 335,429 $ 309,678 Long-term debt, net of current maturities $ 2,462,150 $ 2,399,107 Long-term portion of unamortized debt issue cost, net (21,379) (21,761) Long-term debt, net of current maturities and debt issue costs $ 2,440,771 $ 2,377,346 Total long-term debt (including current portion) $ 2,801,208 $ 2,712,350 Total unamortized debt issue cost, net (25,008) (25,326) Total long-term debt, net of debt issue costs $ 2,776,200 $ 2,687,024 During the three months ended March 31, 2018, the Company took delivery of five E175 aircraft and purchased nine previously-leased aircraft, which the Company financed through $160.4 million of long-term debt. The debt associated with the five E175 aircraft has a twelve-year term, is due in quarterly installments with a fixed annual interest rate ranging from 4.6% to 4.7% and is secured by the E175 aircraft. The debt associated with the nine previously-leased aircraft has a term ranging from three to four years, is due in semi-annual installments with a fixed annual interest rate of 6.45% and is secured by the previously-leased aircraft. As of March 31, 2018 and December 31, 2017, the Company had $87.9 million and $87.4 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 9 — Income Taxes The Company’s effective tax rate for the three months ended March 31, 2018 was 19.1%. The Company’s effective tax rate for the three months ended March 31, 2018 varied from the federal statutory rate of 21.0% primarily due to a $4.3 million discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2018 pursuant to ASU 2016‑09, partially offset by the provision for state income taxes and the impact of non-deductible crew per diem meal expenses. In connection with the Tax Cuts and Jobs Act of 2017 (“Tax Act”) enacted in December 2017, the Company recorded a provisional amount of income tax benefit of $246.8 million related to the remeasurement of deferred tax balances for the year ended December 31, 2017. In accordance with relevant SEC guidance, the effects of the Tax Act may be adjusted within a one-year measurement period from the enactment date for the items that were previously reported as provisional, or where a provisional estimate could not be made. The income tax provision for the three-months ended March 31, 2018 did not reflect any adjustments to the provisional amounts as of December 31, 2017. The Company is still analyzing the impacts of the Tax Act on $13.9 million of alternative minimum tax credits that may be refundable and has not recorded a provisional amount as of March 31, 2018. The Company will continue to assess forthcoming guidance and accounting interpretations on the effects of the Tax Act and expects to complete its analysis within the measurement period in accordance with SEC guidance. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2018 | |
Legal Matters | |
Legal Matters | Note 10 — Legal Matters The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2018, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations. |
Condensed Consolidated Financ16
Condensed Consolidated Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Condensed Consolidated Financial Statements | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”) and its operating subsidiaries, SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines, Inc. (“ExpressJet”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will likely differ, and may differ materially, from those estimates and assumptions. The Company reclassified certain prior period amounts to conform to the current period presentation . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standards Effective in Future Years and Not Yet Adopted In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2016‑02, “Leases (Topic 842)” (“Topic 842”). Topic 842 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. Topic 842 will be effective beginning in the first quarter of 2019. Early adoption of Topic 842 is permitted. Topic 842 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 has not completed its assessment, but the adoption of Topic 842 will have a significant impact on its consolidated balance sheets. However, the Company does not expect the adoption to have a significant impact on the recognition, measurement or presentation of lease expenses within the condensed consolidated statements of operations and comprehensive income or the condensed consolidated statements of cash flows. See Note 6, “Commitments and Contingencies,” about the Company’s undiscounted future lease payments and the timing of those payments. Recently Adopted Standards In May 2014, the FASB issued Accounting Standards Update No. 2014‑09, “Revenue from Contracts with Customers, (Topic 606)” (“Topic 606”). Under Topic 606, 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 adopted this standard as of January 1, 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, in addition to the aircraft lease, the individual flights are distinct services and the flight services promised in a capacity purchase 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 Topic 606 did not have a material impact on recorded amounts when applied to the opening balance sheet as of January 1, 2018. The adoption of Topic 606 only affects the Company’s consolidated balance sheets and statements of comprehensive income (loss) classification, with no impact on the Company’s operating income (loss), net income (loss), earnings (loss) per share or cash flows, however the principal versus agent considerations under Topic 606 resulted 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). This classification change resulted in a reduction to total revenue and a reduction to operating expenses by the same amount, resulting in no change to operating income. Additionally, under the nonrefundable up-front fees and contract costs considerations of Topic 606, reimbursements from the Company’s major airline partners for up-front contract costs will be deferred and amortized over the contract term. The related up-front costs to obtain the contract will also be capitalized and amortized over the contract term. As the amount of the up-front reimbursement is determined from the Company’s actual costs to fulfill the contract, this change is not expected to impact the Company’s operating income (loss) as the amount of deferred revenue and the amount of capitalized costs and will be recognized over the same period. This change also resulted in a deferred revenue liability and a capitalized contract cost on the balance sheet of the same amount. Prior to the Company’s adoption of Topic 606, the Company segregated its revenue into two categories: “Passenger revenue” and “Ground handling and other revenue.” “Passenger revenue” included revenue from fixed-fee contracts, prorate flying agreements and airport customer service agreements for flights operated by the Company. “Ground handling and other revenue” included revenue from airport customer service agreements for flights operated by third parties and other revenue. Under the disaggregated revenue disclosure considerations in Topic 606, the Company segregated its revenue into the following categories: “Flying agreements revenue” and “Airport customer service and other revenue.” “Flying agreements revenue” includes revenue from fixed-fee contracts, prorate flying agreements and other revenue generated from flying the Company’s aircraft, primarily lease revenue for the use of the aircraft. “Airport customer service and other revenue” includes revenue from airport customer services agreements. This change reclassifies amounts previously reported as “Passenger revenue” and “Ground handling and other revenue”. Additionally, in connection with the Company’s adoption of Topic 606, the Company renamed the operating expense “Ground handling services” to “Airport-related expenses.” Certain airport-related expenses, such as landing fees and airport facility rents, were previously reported as “Other operating expenses” and have been reclassified as “Airport-related expenses.” 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. The Company adopted this standard in the first quarter of 2018 and modified the presentation to include changes in restricted cash in the Company’s Consolidated Statement of Cash Flows, which had an immaterial impact. Impact of Recently Adopted Standards The Company recast certain prior period amounts to conform with the adoption of Topic 606, as shown in the tables below (in thousands): Three Months Ended March 31, 2017 Income Statement: Previously Reported Adjustments Current Presentation OPERATING REVENUES: Flying agreements (1) $ $ (10,882) $ 734,529 Airport customer service and other (2) (7,367) 12,637 Total operating revenues $ $ (18,249) $ 747,166 OPERATING EXPENSES: Salaries, wages and benefits $ 300,039 $ (2,372) $ 297,667 Aircraft fuel 34,310 (15,877) 18,433 Airport-related expenses (3) 19,535 12,413 31,948 Other operating expenses 75,088 (12,413) 62,675 Total operating expenses 689,120 (18,249) 670,871 1. In previously reported periods, this line item was presented as passenger revenue. 2. In previously reported periods, this line item was presented as ground handling and other. 3. In previously reported periods, this line item was presented as ground handling services. Balance Sheet: Previously Reported December 31, 2017 Adjustments Current Presentation December 31, 2017 ASSETS: Other long-term assets $ $ $ LIABILITIES: Other long-term liabilities $ $ $ The $16.1 million adjustment to other long-term assets and other long-term liabilities reflects the amount of capitalized up-front contract costs and the amount of deferred revenue for up-front reimbursements as of December 31, 2017. The $16.1 million capitalized contract costs and deferred revenue is expected to be amortized over the applicable remaining contract term. For the three months ended March 31, 2018 and 2017, the Company recognized $0.4 million and $0.3 million, respectively, of revenue associated with the amortization of the up-front contract reimbursements. As of March 31, 2018, the Company had $61.3 million in accounts receivables of which $48.8 million related to flying agreements. As of December 31, 2017, the Company had $42.7 million in accounts receivables of which $33.9 million related to flying agreements. |
Condensed Consolidated Financ17
Condensed Consolidated Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
ASU 2014-09 | |
Nature of Operations and Summary of Significant Accounting Policies [Line Items] | |
Schedule of impact on financial statements, adoption of Topic 606 | The Company recast certain prior period amounts to conform with the adoption of Topic 606, as shown in the tables below (in thousands): Three Months Ended March 31, 2017 Income Statement: Previously Reported Adjustments Current Presentation OPERATING REVENUES: Flying agreements (1) $ $ (10,882) $ 734,529 Airport customer service and other (2) (7,367) 12,637 Total operating revenues $ $ (18,249) $ 747,166 OPERATING EXPENSES: Salaries, wages and benefits $ 300,039 $ (2,372) $ 297,667 Aircraft fuel 34,310 (15,877) 18,433 Airport-related expenses (3) 19,535 12,413 31,948 Other operating expenses 75,088 (12,413) 62,675 Total operating expenses 689,120 (18,249) 670,871 1. In previously reported periods, this line item was presented as passenger revenue. 2. In previously reported periods, this line item was presented as ground handling and other. 3. In previously reported periods, this line item was presented as ground handling services. Balance Sheet: Previously Reported December 31, 2017 Adjustments Current Presentation December 31, 2017 ASSETS: Other long-term assets $ $ $ LIABILITIES: Other long-term liabilities $ $ $ |
Flying Agreement and Airport 18
Flying Agreement and Airport Customer Service and Other Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Flying Agreement and Airport Customer Service and Other Revenue | |
Schedule of flying agreement revenue data | The following table represents the Company’s flying agreements revenue by type for the three-month periods ended March 31, 2018 and 2017 (in thousands): For the three months ended March 31, 2018 2017 Capacity purchase agreements revenue: flight operations $ 469,025 $ 445,719 Capacity purchase agreements revenue: aircraft lease revenue 189,068 198,463 Prorate agreements revenue 109,871 90,347 Flying agreements revenue $ 767,964 $ 734,529 |
Schedule of details of agreements with other airlines | Delta Connection Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) • • • • 60 27 36 22 • ExpressJet Delta Connection Agreement (fixed-fee arrangement) • • 31 6 • SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) • 34 • United Express Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) • • • 65 20 65 • ExpressJet United ERJ Agreement (fixed-fee arrangement) • • 3 97 • SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) • 20 • American Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines American Agreement (fixed-fee arrangement) • • 10 37 • SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) • 7 • ExpressJet American Agreement (fixed-fee arrangement) • 12 • Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) • • 3 25 • |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net Income Per Common Share | |
Schedule of net income per common share | The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows: Three Months Ended March 31, 2018 2017 Numerator: Net Income $ 54,362 $ 34,786 Denominator: Weighted average number of common shares outstanding 51,921 51,820 Effect of outstanding share-based awards 1,112 1,382 Weighted average number of shares for diluted net income per common share 53,033 53,202 Basic earnings per share $ 1.05 $ 0.67 Diluted earnings per share $ 1.03 $ 0.65 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting | |
Schedule of Company's segment data | 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) 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. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table summarizes future minimum rental payments primarily related to aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2018 (in thousands): March through December 2018 $ 85,825 2019 85,563 2020 101,523 2021 93,118 2022 75,178 Thereafter 159,347 $ 600,554 |
Summary of commitments and obligations | The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands): Total Mar - 2018 2019 2020 2021 2022 Thereafter Operating lease payments for aircraft and facility obligations $ 600,554 $ 85,825 $ 85,563 $ 101,523 $ 93,118 $ 75,178 $ 159,347 Firm aircraft and spare engine commitments 979,269 861,041 21,200 10,600 86,428 — — Interest commitments(1) 538,046 81,995 98,247 84,169 71,193 59,263 143,179 Principal maturities on long-term debt 2,801,208 250,739 340,546 311,261 299,704 289,786 1,309,172 Total commitments and obligations $ 4,919,077 $ 1,279,600 $ 545,556 $ 507,553 $ 550,443 $ 424,227 $ 1,611,698 At March 31, 2018, the Company had variable rate notes representing 2.2% of its total long-term debt. Actual interest commitments will change based on the actual variable interest |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Schedule of assets measured at fair value on a recurring basis | Assets measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements as of March 31, 2018 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 225,199 $ — $ 225,199 $ — Commercial paper 158,638 — 158,638 — Trading Securities 10,243 10,243 — — $ 394,080 $ 10,243 $ 383,837 $ — Cash, Cash Equivalents 251,447 251,447 — — Total Assets Measured at Fair Value $ 645,527 $ 261,690 $ 383,837 $ — Fair Value Measurements as of December 31, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 344,251 $ — $ 344,251 $ — Commercial paper — — $ $ — $ $ — Cash, Cash Equivalents — — Total Assets Measured at Fair Value $ 685,295 $ $ 503,503 $ — |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt | |
Schedule of long-term debt | Long-term debt consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands): March 31, 2018 December 31, 2017 Current portion of long-term debt $ 339,058 $ 313,243 Current portion of unamortized debt issue cost, net (3,629) (3,565) Current portion of long-term debt, net of debt issue costs $ 335,429 $ 309,678 Long-term debt, net of current maturities $ 2,462,150 $ 2,399,107 Long-term portion of unamortized debt issue cost, net (21,379) (21,761) Long-term debt, net of current maturities and debt issue costs $ 2,440,771 $ 2,377,346 Total long-term debt (including current portion) $ 2,801,208 $ 2,712,350 Total unamortized debt issue cost, net (25,008) (25,326) Total long-term debt, net of debt issue costs $ 2,776,200 $ 2,687,024 |
Condensed Consolidated Financ24
Condensed Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounts receivable | $ 61,327 | $ 42,731 | [1] | ||
Income Statement: | |||||
Total operating revenues | 783,400 | $ 747,166 | [1] | ||
Salaries, wages and benefits | 306,719 | 297,667 | [1] | ||
Other operating expenses | 68,389 | 62,675 | [1] | ||
Total operating expenses | 695,225 | 670,871 | [1] | ||
ASSETS | |||||
Other long-term assets | 69,182 | 65,341 | [1] | ||
LIABILITIES: | |||||
Other long-term liabilities | 62,363 | 58,662 | [1] | ||
Previously Reported | ASU 2014-09 | |||||
Income Statement: | |||||
Salaries, wages and benefits | 300,039 | ||||
Other operating expenses | 75,088 | ||||
Total operating expenses | 689,120 | ||||
ASSETS | |||||
Other long-term assets | 49,220 | ||||
LIABILITIES: | |||||
Other long-term liabilities | 42,541 | ||||
Adjustments | ASU 2014-09 | |||||
Income Statement: | |||||
Total operating revenues | 765,415 | (18,249) | |||
Salaries, wages and benefits | (2,372) | ||||
Other operating expenses | (12,413) | ||||
Total operating expenses | (18,249) | ||||
ASSETS | |||||
Other long-term assets | 16,121 | ||||
LIABILITIES: | |||||
Other long-term liabilities | 16,121 | ||||
Flying agreements | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Accounts receivable | 48,800 | $ 33,900 | |||
Income Statement: | |||||
Total operating revenues | 767,964 | 734,529 | [1] | ||
Flying agreements | Previously Reported | ASU 2014-09 | |||||
Income Statement: | |||||
Total operating revenues | 745,411 | ||||
Flying agreements | Adjustments | ASU 2014-09 | |||||
Income Statement: | |||||
Total operating revenues | (10,882) | ||||
Airport customer service and other | |||||
Income Statement: | |||||
Total operating revenues | 15,436 | 12,637 | [1] | ||
Airport customer service and other | Previously Reported | ASU 2014-09 | |||||
Income Statement: | |||||
Total operating revenues | 20,004 | ||||
Airport customer service and other | Adjustments | ASU 2014-09 | |||||
Income Statement: | |||||
Total operating revenues | (7,367) | ||||
Aircraft fuel | |||||
Income Statement: | |||||
Other operating expenses | 18,433 | ||||
Total operating expenses | 26,939 | 18,433 | [1] | ||
Aircraft fuel | Previously Reported | ASU 2014-09 | |||||
Income Statement: | |||||
Other operating expenses | 34,310 | ||||
Aircraft fuel | Adjustments | ASU 2014-09 | |||||
Income Statement: | |||||
Other operating expenses | (15,877) | ||||
Airport related expenses | |||||
Income Statement: | |||||
Other operating expenses | 31,948 | ||||
Total operating expenses | 29,307 | 31,948 | [1] | ||
Airport related expenses | Previously Reported | ASU 2014-09 | |||||
Income Statement: | |||||
Other operating expenses | 19,535 | ||||
Airport related expenses | Adjustments | ASU 2014-09 | |||||
Income Statement: | |||||
Other operating expenses | 12,413 | ||||
Up-front contract reimbursements | |||||
Income Statement: | |||||
Total operating revenues | $ 400 | $ 300 | |||
[1] | 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. |
Flying Agreement and Airport 25
Flying Agreement and Airport Customer Service and Other Revenue (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)aircraftitem | Mar. 31, 2017USD ($) | ||
Agreements with other airlines | |||
Percentage of ASMs flown under fixed-fee arrangements | 85.70% | ||
Percentage of ASMs flown under pro-rate arrangements | 14.30% | ||
Revenues [Abstract] | |||
Operating revenues | $ | $ 783,400 | $ 747,166 | [1] |
Sky West Airlines Inc | Delta Connection Prorate Agreement | |||
Revenues [Abstract] | |||
Term of agreement | 30 days | ||
Sky West Airlines Inc | United Express Prorate Agreement | |||
Revenues [Abstract] | |||
Term of agreement | 120 days | ||
Sky West Airlines Inc | American Capacity Purchase Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 7 | ||
Sky West Airlines Inc | American Prorate Agreement | |||
Revenues [Abstract] | |||
Term of agreement | 120 days | ||
CRJ 200 | Sky West Airlines Inc | Delta Connection Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 60 | ||
CRJ 200 | Sky West Airlines Inc | Delta Connection Prorate Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 34 | ||
CRJ 200 | Sky West Airlines Inc | United Express Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 65 | ||
CRJ 200 | Sky West Airlines Inc | United Express Prorate Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 20 | ||
CRJ 200 | Sky West Airlines Inc | American Capacity Purchase Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 10 | ||
CRJ 200 | Sky West Airlines Inc | Alaska Capacity Purchase Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 3 | ||
CRJ 700 | Sky West Airlines Inc | Delta Connection Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 27 | ||
CRJ 700 | Sky West Airlines Inc | United Express Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 20 | ||
CRJ 700 | Sky West Airlines Inc | American Capacity Purchase Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 37 | ||
CRJ 700 | ExpressJet | Delta Connection Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 31 | ||
CRJ 700 | ExpressJet | American Capacity Purchase Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 12 | ||
CRJ 900 | Sky West Airlines Inc | Delta Connection Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 36 | ||
CRJ 900 | ExpressJet | Delta Connection Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 6 | ||
E 175 | |||
Revenues [Abstract] | |||
Number of seats on aircraft | item | 76 | ||
E 175 | Sky West Airlines Inc | Delta Connection Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 22 | ||
E 175 | Sky West Airlines Inc | United Express Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 65 | ||
E 175 | Sky West Airlines Inc | Alaska Capacity Purchase Agreement | |||
Revenues [Abstract] | |||
Number of aircraft | 25 | ||
E 175 | Alaska | |||
Revenues [Abstract] | |||
Number of additional aircraft placed into service | 10 | ||
Number of additional aircraft placed into service, deferred | 3 | ||
E 175 | Delta | |||
Revenues [Abstract] | |||
Number of additional aircraft placed into service | 27 | ||
E175 SC | |||
Revenues [Abstract] | |||
Number of seats on aircraft | item | 70 | ||
ERJ 145 | ExpressJet | United Express Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 97 | ||
ERJ 135 | ExpressJet | United Express Agreements | |||
Revenues [Abstract] | |||
Number of aircraft | 3 | ||
Flying agreements | |||
Revenues [Abstract] | |||
Operating revenues | $ | $ 767,964 | 734,529 | [1] |
Flight operations | |||
Revenues [Abstract] | |||
Operating revenues | $ | 469,025 | 445,719 | |
Aircraft rentals | |||
Revenues [Abstract] | |||
Operating revenues | $ | 189,068 | 198,463 | |
Prorate agreements | |||
Revenues [Abstract] | |||
Operating revenues | $ | $ 109,871 | $ 90,347 | |
[1] | 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. |
Share-Based Compensation and 26
Share-Based Compensation and Stock Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-Based Compensation | ||
Upon vesting, each restricted stock unit and performance share replaced with common stock | 1.00% | |
Common stock repurchased (in shares) | 177,580 | 281,000 |
Common stock repurchased, value | $ 10 | $ 10 |
Payment of income tax obligation on employee equity awards | $ 13.5 | 3.8 |
Employee stock option | ||
Share-Based Compensation | ||
Options granted (in shares) | 0 | |
Restricted stock units | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ 53.40 | |
Restricted stock units | Long Term Incentive Plan 2010 | ||
Share-Based Compensation | ||
Granted (in shares) | 114,856 | |
Vesting period | 3 years | |
Performance share units | Long Term Incentive Plan 2010 | ||
Share-Based Compensation | ||
Granted (in shares) | 89,982 | |
Vesting period | 3 years | |
Performance share units | Minimum | Long Term Incentive Plan 2010 | ||
Share-Based Compensation | ||
Percentage number of performance shares awarded | 0.00% | |
Performance share units | Maximum | Long Term Incentive Plan 2010 | ||
Share-Based Compensation | ||
Percentage number of performance shares awarded | 200.00% | |
Director | ||
Share-Based Compensation | ||
Granted (in shares) | 15,165 | |
Granted (in dollars per share) | $ 53.40 | |
Accounting Standards Update 2017-09 | ||
Share-Based Compensation | ||
Stock based compensation expense | $ 4.9 | $ 3.5 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net Income Per Common Share | |||
Number of outstanding options not included in computation of Diluted EPS (in shares) | 372,600 | 451,000 | |
Numerator | |||
Net income | $ 54,362 | $ 34,786 | [1] |
Denominator | |||
Weighted average number of common shares outstanding | 51,921,000 | 51,820,000 | [1] |
Effect of outstanding share-based awards | 1,112,000 | 1,382,000 | |
Weighted average number of shares for diluted net income per common share | 53,033,000 | 53,202,000 | [1] |
Basic earnings per-share (in dollars per share) | $ 1.05 | $ 0.67 | [1] |
Diluted earnings per-share (in dollars per share) | $ 1.03 | $ 0.65 | [1] |
[1] | 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. |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018USD ($)segmentaircraft | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | [1] | ||
Segment Reporting | |||||
Number of operating segments | segment | 3 | ||||
Operating revenues | $ 783,400 | $ 747,166 | [1] | ||
Operating expenses | 695,225 | 670,871 | [1] | ||
Depreciation and amortization expense | 77,585 | 70,114 | [1] | ||
Interest expense | 26,234 | 24,549 | [1] | ||
Segment profit (loss) | 67,204 | 52,406 | [1] | ||
Identifiable intangible assets, other than goodwill | 3,672 | 7,686 | |||
Total assets | 5,600,187 | 5,142,689 | $ 5,474,400 | ||
Capital expenditures (including non-cash) | 267,788 | 223,099 | |||
Segments | |||||
Segment Reporting | |||||
Segment profit (loss) | 61,941 | 51,746 | |||
SkyWest Airlines | |||||
Segment Reporting | |||||
Operating revenues | 556,294 | 464,916 | |||
Operating expenses | 498,875 | 417,330 | |||
Depreciation and amortization expense | 37,487 | 31,817 | |||
Interest expense | 4,476 | 5,799 | |||
Total assets | 2,184,306 | 2,238,740 | |||
Capital expenditures (including non-cash) | 36,283 | 33,431 | |||
SkyWest Airlines | Segments | |||||
Segment Reporting | |||||
Segment profit (loss) | 52,943 | 41,787 | |||
ExpressJet Airlines Inc | |||||
Segment Reporting | |||||
Operating revenues | 161,081 | 228,447 | |||
Operating expenses | 166,824 | 229,282 | |||
Depreciation and amortization expense | 11,161 | 14,525 | |||
Interest expense | 827 | 1,114 | |||
Identifiable intangible assets, other than goodwill | 3,672 | 7,686 | |||
Total assets | 581,722 | 565,839 | |||
Capital expenditures (including non-cash) | 1,338 | 5,654 | |||
ExpressJet Airlines Inc | Segments | |||||
Segment Reporting | |||||
Segment profit (loss) | (6,570) | (1,949) | |||
SkyWest Leasing | |||||
Segment Reporting | |||||
Operating revenues | 66,025 | 53,803 | |||
Operating expenses | 29,526 | 24,259 | |||
Depreciation and amortization expense | 28,937 | 23,772 | |||
Interest expense | 20,931 | 17,636 | |||
Total assets | 2,834,159 | 2,338,110 | |||
Capital expenditures (including non-cash) | $ 230,167 | 184,014 | |||
SkyWest Leasing | CRJ 200 | |||||
Segment Reporting | |||||
Number of aircraft | aircraft | 4 | ||||
SkyWest Leasing | Segments | |||||
Segment Reporting | |||||
Segment profit (loss) | $ 15,568 | $ 11,908 | |||
[1] | 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. |
Commitments and Contingencies29
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)aircraft | |
Future minimum rental payments required under operating leases | |
March through December 2018 | $ 85,825 |
2,019 | 85,563 |
2,020 | 101,523 |
2,021 | 93,118 |
2,022 | 75,178 |
Thereafter | 159,347 |
Total future lease obligations | $ 600,554 |
E 175 | |
Future minimum rental payments required under operating leases | |
Number of aircraft under firm purchase commitment | aircraft | 37 |
E 175 | Alaska | |
Future minimum rental payments required under operating leases | |
Number of additional aircraft placed into service, deferred | aircraft | 3 |
Commitments and Contingencies -
Commitments and Contingencies - Commitments and Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Operating lease payments for aircraft and facility obligations | ||
Total | $ 600,554 | |
March - 2018 | 85,825 | |
2,019 | 85,563 | |
2,020 | 101,523 | |
2,021 | 93,118 | |
2,022 | 75,178 | |
Therafter | 159,347 | |
Firm aircraft and spare engine commitments | ||
Total | 979,269 | |
March - 2018 | 861,041 | |
2,019 | 21,200 | |
2,020 | 10,600 | |
2,021 | 86,428 | |
Interest commitments | ||
Total | 538,046 | |
March - 2018 | 81,995 | |
2,019 | 98,247 | |
2,020 | 84,169 | |
2,021 | 71,193 | |
2,022 | 59,263 | |
Therafter | 143,179 | |
Principal maturities on long-term debt | ||
Total | 2,801,208 | $ 2,712,350 |
March - 2018 | 250,739 | |
2,019 | 340,546 | |
2,020 | 311,261 | |
2,021 | 299,704 | |
2,022 | 289,786 | |
Thereafter | 1,309,172 | |
Total commitments and obligations | ||
Total | 4,919,077 | |
March - 2018 | 1,279,600 | |
2,019 | 545,556 | |
2,020 | 507,553 | |
2,021 | 550,443 | |
2,022 | 424,227 | |
Therafter | $ 1,611,698 | |
Variable interest rate (as percent) | 2.20% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurements | |||
Marketable securities | $ 394,080 | $ 503,503 | [1] |
Fair Value of Financial Instruments | |||
Carrying amount of long-term debt | 2,776,200 | 2,687,024 | |
Recurring | |||
Fair Value Measurements | |||
Trading Securities | 10,243 | ||
Marketable securities | 394,080 | 503,503 | |
Cash, Cash Equivalents and Restricted Cash | 251,447 | 181,792 | |
Total Assets Measured at Fair Value | 645,527 | 685,295 | |
Cost of cash and cash equivalents and available for sale securities | 645,700 | 685,500 | |
Fair value of cash and cash equivalents and available for sale securities | 645,500 | 685,300 | |
Recurring | Bonds and bond funds | |||
Fair Value Measurements | |||
Marketable securities | 225,199 | 344,251 | |
Recurring | Commercial paper | |||
Fair Value Measurements | |||
Marketable securities | 158,638 | 159,252 | |
Recurring | Level 1 | |||
Fair Value Measurements | |||
Trading Securities | 10,243 | ||
Marketable securities | 10,243 | ||
Cash, Cash Equivalents and Restricted Cash | 251,447 | 181,792 | |
Total Assets Measured at Fair Value | 261,690 | 181,792 | |
Recurring | Level 2 | |||
Fair Value Measurements | |||
Marketable securities | 383,837 | 503,503 | |
Total Assets Measured at Fair Value | 383,837 | 503,503 | |
Fair Value of Financial Instruments | |||
Fair value of long-term debt | 2,790,000 | 2,700,000 | |
Carrying amount of long-term debt | 2,800,000 | 2,710,000 | |
Recurring | Level 2 | Bonds and bond funds | |||
Fair Value Measurements | |||
Marketable securities | 225,199 | 344,251 | |
Recurring | Level 2 | Commercial paper | |||
Fair Value Measurements | |||
Marketable securities | $ 158,638 | $ 159,252 | |
[1] | 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. |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)aircraft | Dec. 31, 2017USD ($) | ||
Debt Instrument [Line Items] | |||
Current portion long-term debt | $ 339,058 | $ 313,243 | |
Less current portion of unamortized debt issue cost, net | (3,629) | (3,565) | |
Current portion of long-term debt, net of debt issue costs | 335,429 | 309,678 | [1] |
Long-term debt, net of current maturities | 2,462,150 | 2,399,107 | |
Less long-term portion of unamortized debt issue cost, net | (21,379) | (21,761) | |
Long-term debt, net of current maturities and debt issue costs | 2,440,771 | 2,377,346 | [1] |
Total long-term debt (including current portion) | 2,801,208 | 2,712,350 | |
Total unamortized debt issue cost, net | (25,008) | (25,326) | |
Total | 2,776,200 | 2,687,024 | |
Debt issued to purchase of aircraft | 160,400 | ||
Letter of credit | |||
Debt Instrument [Line Items] | |||
Amount outstanding | $ 87,900 | $ 87,400 | |
E 175 | |||
Debt Instrument [Line Items] | |||
Number of aircraft delivered | aircraft | 5 | ||
Debt instrument, term | 12 years | ||
Purchased, previously-leased aircraft | |||
Debt Instrument [Line Items] | |||
Number of aircraft purchased | aircraft | 9 | ||
Interest rate (as a percent) | 6.45% | ||
Minimum | E 175 | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 4.60% | ||
Minimum | Purchased, previously-leased aircraft | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 3 years | ||
Maximum | E 175 | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 4.70% | ||
Maximum | Purchased, previously-leased aircraft | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 4 years | ||
[1] | 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. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Effective tax rate (as a percent) | 19.10% | |
Statutory Federal income tax rate (as a percent) | 21.00% | |
Revaluation of net deferred tax liabilities for the Tax Act | $ 246.8 | |
Alternative minimum tax credits | $ 13.9 | |
Accounting Standards Update 2016-09 | ||
Discrete tax benefit | $ 4.3 |