Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-14719 | |
Entity Registrant Name | SKYWEST INC | |
Entity Incorporation, State or Country Code | UT | |
Entity Tax Identification Number | 87-0292166 | |
Entity Address, Address Line One | 444 South River Road | |
Entity Address, City or Town | St. George | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84790 | |
City Area Code | 435 | |
Local Phone Number | 634-3000 | |
Title of 12(b) Security | Common Stock, No Par Value | |
Trading Symbol | SKYW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,521,792 | |
Entity Central Index Key | 0000793733 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 246,001 | $ 258,421 |
Marketable securities | 610,450 | 601,989 |
Receivables, net | 68,039 | 65,348 |
Inventories, net | 110,041 | 104,093 |
Other current assets | 37,438 | 38,742 |
Total current assets | 1,071,969 | 1,068,593 |
PROPERTY AND EQUIPMENT: | ||
Aircraft and rotable spares | 7,960,911 | 7,848,100 |
Deposits on aircraft | 129,514 | 124,964 |
Buildings and ground equipment | 263,999 | 256,595 |
Total property and equipment, gross | 8,354,424 | 8,229,659 |
Less-accumulated depreciation and amortization | (2,825,603) | (2,731,060) |
Total property and equipment, net | 5,528,821 | 5,498,599 |
OTHER ASSETS: | ||
Operating lease right-of-use assets | 223,856 | 238,516 |
Long-term receivables and other assets | 324,312 | 320,239 |
Total other assets | 548,168 | 558,755 |
Total assets | 7,148,958 | 7,125,947 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 410,124 | 391,798 |
Accounts payable | 412,757 | 496,333 |
Accrued salaries, wages and benefits | 157,211 | 150,583 |
Current maturities of operating lease liabilities | 78,930 | 78,886 |
Taxes other than income taxes | 26,669 | 28,869 |
Other current liabilities | 56,597 | 48,152 |
Total current liabilities | 1,142,288 | 1,194,621 |
LONG-TERM DEBT, net of current maturities | 2,791,274 | 2,717,420 |
DEFERRED INCOME TAXES PAYABLE | 669,026 | 663,236 |
NONCURRENT OPERATING LEASE LIABILITIES | 147,994 | 158,274 |
OTHER LONG-TERM LIABILITIES | 108,661 | 124,882 |
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; 82,514,936 and 82,335,970 shares issued as of March 31, 2022, and December 31, 2021, respectively | 727,900 | 722,310 |
Retained earnings | 2,181,650 | 2,163,916 |
Treasury stock, at cost, 31,993,144 and 31,956,047 shares as of March 31, 2022, and December 31, 2021, respectively | (619,835) | (618,712) |
Total stockholders' equity | 2,289,715 | 2,267,514 |
Total liabilities and stockholders' equity | $ 7,148,958 | $ 7,125,947 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
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 | 82,514,936 | 82,335,970 |
Treasury stock, at cost, shares | 31,993,144 | 31,956,047 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
OPERATING REVENUES: | ||
Total operating revenues | $ 735,152 | $ 534,555 |
OPERATING EXPENSES: | ||
Salaries, wages and benefits | 300,058 | 219,842 |
Aircraft maintenance, materials and repairs | 148,413 | 203,827 |
Depreciation and amortization | 102,745 | 109,597 |
Aircraft fuel | 25,090 | 19,194 |
Airport-related expenses | 19,205 | 24,448 |
Aircraft rentals | 15,996 | 15,490 |
Payroll support grant | (193,173) | |
Other operating expenses | 71,597 | 54,488 |
Total operating expenses | 683,104 | 453,713 |
OPERATING INCOME | 52,048 | 80,842 |
OTHER INCOME (EXPENSE): | ||
Interest income | 425 | 284 |
Interest expense | (28,592) | (31,354) |
Other income, net | 880 | 216 |
Total other expense, net | (27,287) | (30,854) |
INCOME BEFORE INCOME TAXES | 24,761 | 49,988 |
PROVISION FOR INCOME TAXES | 7,027 | 14,088 |
NET INCOME | $ 17,734 | $ 35,900 |
BASIC EARNINGS PER SHARE (in dollars per share) | $ 0.35 | $ 0.71 |
DILUTED EARNINGS PER SHARE (in dollars per share) | $ 0.35 | $ 0.71 |
Weighted average common shares: | ||
Basic (in shares) | 50,480 | 50,286 |
Diluted (in shares) | 50,708 | 50,727 |
COMPREHENSIVE INCOME: | ||
Net income | $ 17,734 | $ 35,900 |
TOTAL COMPREHENSIVE INCOME | 17,734 | 35,900 |
Flying agreements | ||
OPERATING REVENUES: | ||
Total operating revenues | 708,063 | 511,191 |
Lease, airport services and other | ||
OPERATING REVENUES: | ||
Total operating revenues | $ 27,089 | $ 23,364 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Treasury Stock | Total |
Balance at Dec. 31, 2020 | $ 704,675 | $ 2,052,006 | $ (617,136) | $ 2,139,545 |
Balance (in shares) at Dec. 31, 2020 | 82,095 | (31,914) | ||
Increase (Decrease) in Stockholders' Equity | ||||
Net income | 35,900 | 35,900 | ||
Exercise of common stock options and vested employee stock awards | $ 606 | 606 | ||
Exercise of common stock options and vested employee stock awards (in shares) | 177 | |||
Employee income tax paid on vested equity awards | $ (1,573) | (1,573) | ||
Employee income tax paid on vested equity awards (in shares) | (42) | |||
Sale of common stock under employee stock purchase plan | $ 1,139 | 1,139 | ||
Sale of common stock under employee stock purchase plan (in shares) | 30 | |||
Stock based compensation expense | $ 2,613 | 2,613 | ||
Warrants issued to U.S. Treasury | 3,291 | 3,291 | ||
Balance at Mar. 31, 2021 | $ 712,324 | 2,087,906 | $ (618,709) | 2,181,521 |
Balance (in shares) at Mar. 31, 2021 | 82,302 | (31,956) | ||
Balance at Dec. 31, 2021 | $ 722,310 | 2,163,916 | $ (618,712) | 2,267,514 |
Balance (in shares) at Dec. 31, 2021 | 82,336 | (31,956) | ||
Increase (Decrease) in Stockholders' Equity | ||||
Net income | 17,734 | 17,734 | ||
Exercise of common stock options and vested employee stock awards | $ 27 | 27 | ||
Exercise of common stock options and vested employee stock awards (in shares) | 139 | |||
Employee income tax paid on vested equity awards | $ (1,123) | (1,123) | ||
Employee income tax paid on vested equity awards (in shares) | (37) | |||
Sale of common stock under employee stock purchase plan | $ 1,487 | 1,487 | ||
Sale of common stock under employee stock purchase plan (in shares) | 40 | |||
Stock based compensation expense | $ 4,076 | 4,076 | ||
Balance at Mar. 31, 2022 | $ 727,900 | $ 2,181,650 | $ (619,835) | $ 2,289,715 |
Balance (in shares) at Mar. 31, 2022 | 82,515 | (31,993) |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ 20,508 | $ 231,593 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (595,325) | (332,865) |
Sales of marketable securities | 586,864 | 337,612 |
Acquisition of property and equipment: | ||
Aircraft and rotable spare parts | (111,782) | (51,904) |
Buildings and ground equipment | (2,236) | (4,224) |
Proceeds from the sale of property and equipment | 2,749 | 2,150 |
Deposits on aircraft | (28,031) | (5,000) |
Aircraft deposits applied towards acquired aircraft | 23,481 | |
Increase in other assets | (387) | (67,176) |
NET CASH USED IN INVESTING ACTIVITIES | (124,667) | (121,407) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of long-term debt | 185,740 | 39,931 |
Principal payments on long-term debt | (93,979) | (135,007) |
Net proceeds from issuance of common stock | 1,514 | 1,745 |
Employee income tax paid on vested equity awards | (1,123) | (1,573) |
Payment of debt issuance cost | (413) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 91,739 | (94,904) |
Increase (decrease) in cash and cash equivalents | (12,420) | 15,282 |
Cash and cash equivalents at beginning of period | 258,421 | 215,723 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 246,001 | 231,005 |
Non-cash investing and financing activities: | ||
Acquisition of property and equipment | 13,567 | 1,380 |
Warrants issued to U.S. Treasury | 3,291 | |
Cash paid during the period for: | ||
Interest, net of capitalized amounts | 29,840 | 31,646 |
Income taxes | $ 116 | $ 157 |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2022 | |
Condensed Consolidated Financial Statements | |
Condensed Consolidated Financial Statements | ( 1) Condensed Consolidated Financial Statements Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”) and its operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”) and its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) 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, 2021. Due in part to the uncertain rate of recovery from the global COVID-19 pandemic and workforce shortages, in addition to other factors, the results of operations for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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 could differ materially from those estimates and assumptions. |
Flying Agreements Revenue and L
Flying Agreements Revenue and Lease, Airport Services and Other Revenues | 3 Months Ended |
Mar. 31, 2022 | |
Flying Agreements Revenue and Lease, Airport Services and Other Revenues | |
Flying Agreements Revenue and Lease, Airport Services and Other Revenues | (2) Flying Agreements Revenue and Lease, Airport Services and Other Revenues The Company recognizes flying agreements revenue and lease, airport services and other revenues when the service is provided under the applicable agreement. Under the Company’s fixed-fee arrangements (referred to as “capacity purchase agreements”) with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), 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 pays for or reimburses the Company for certain direct expenses incurred under the capacity purchase agreement, such as fuel, airport landing fees and airport rents. Under the capacity purchase agreements, the Company’s performance obligation is met when each flight is completed, measured in completed block hours, and is reflected in flying agreements revenue. The transaction price for the capacity purchase 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, 2022 and 2021, capacity purchase agreements represented approximately 88.8% and 86.6% of the Company’s flying agreements revenue, respectively. Under the Company’s prorate arrangements (also referred to as a “prorate” or “revenue-sharing” agreement), 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. Under the Company’s prorate flying agreements, the performance obligation is met, and revenue is recognized 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, 2022 and 2021, prorate flying agreements represented approximately The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2022 and 2021 (in thousands): For the three months ended March 31, 2022 2021 Capacity purchase agreements revenue: flight operations $ 348,474 $ 211,052 Capacity purchase agreements revenue: aircraft lease and fixed revenue 280,419 231,491 Prorate agreements revenue 79,170 68,648 Flying agreements revenue $ 708,063 $ 511,191 A portion of the Company’s compensation under its capacity purchase agreements is designed to reimburse the Company for certain aircraft ownership costs. The consideration for aircraft ownership costs 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 received for the use of the aircraft under the Company’s capacity purchase agreements is reflected as 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 capacity purchase agreements is accounted for as an operating lease and is reflected as flying agreements revenue on the Company’s consolidated statements of comprehensive income. The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income since the use of the aircraft is not a separate activity of the total service provided. Under the Company’s capacity purchase agreements, the Company is paid a fixed amount per month per aircraft over the contract term. The Company recognizes revenue attributed to the fixed monthly payments proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours the Company anticipates completing over the remaining contract term. Due to the lower number of block hours completed during the COVID-19 pandemic compared to historical levels, the amount of cash collected for the fixed amount per aircraft exceeded the revenue recognized based on block hours completed. Accordingly, the Company deferred recognizing revenue on fixed monthly cash payments the Company received under its capacity purchase agreements beginning in 2020. Based on the number of completed block hours during the three months ended March 31, 2022, the Company recognized $7.5 million of previously deferred revenue and $3.6 million of unbilled revenue, compared to deferring revenue of $21.2 million during the three months ended March 31, 2021. The Company’s deferred revenue balance was $96.4 million as of March 31, 2022, including $33.0 million in other current liabilities and $63.4 million in other long-term liabilities. The Company’s deferred revenue balance was $103.9 million as of December 31, 2021, including $24.5 million in other current liabilities and $79.4 million in other long-term liabilities. The Company’s unbilled revenue balance was $12.0 million as of March 31, 2022, and $8.4 million as of December 31, 2021, and was included in other long-term assets. The Company’s deferred revenue and unbilled revenue balance will be recognized based on the number of block hours completed during each period relative to the estimated number of block hours the Company anticipates completing over the remaining contract term. The Company’s capacity purchase 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. As of March 31, 2022, the Company had 513 aircraft in scheduled service or under contract under code-share agreements. The following table summarizes the significant provisions of each code-share agreement SkyWest Airlines has with each major airline partner: United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates United Express Agreements (Capacity purchase agreement) • E175 • CRJ 700 • CRJ 200 90 19 70 • Individual aircraft have scheduled removal dates from 2024 to 2029 United Express Prorate Agreement (Prorate agreement) • CRJ 200 41 • Terminable with 120-day notice Total under United Express Agreements 220 Delta Connection Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates Delta Connection Agreement (Capacity purchase agreement) • E175 • CRJ 900 • CRJ 700 • CRJ 200 71 44 5 9 • Individual aircraft have scheduled removal dates from 2022 to 2031 Delta Connection Prorate Agreement (Prorate agreement) • CRJ 200 20 • Terminable with 30-day notice Total under Delta Connection Agreements 149 American Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates American Agreement (Capacity purchase agreement) • E175 • CRJ 700 18 90 • Individual aircraft have scheduled removal dates from 2024 to 2032 Total under American Agreements 108 Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates Alaska Agreement (Capacity purchase agreement) • E175 36 • Individual aircraft have scheduled removal dates from 2030 to 2034 In addition to the contractual arrangements described above, as of March 31, 2022, SkyWest Airlines has a capacity purchase agreement with American to place two Embraer E175 dual-class regional jet aircraft (“E175”) into service. The delivery dates for the two new E175 aircraft are currently scheduled for the third quarter of 2022. SkyWest Airlines also has an agreement with American to place 11 used Canadair CRJ700 regional jet aircraft (“CRJ700”) under a multi-year capacity purchase agreement in 2023. SkyWest Airlines has a capacity purchase agreement with Alaska to place an additional seven E175 aircraft into service. The delivery dates for the seven new E175 aircraft are currently scheduled for 2022 and the first half of 2023. SkyWest Airlines has a capacity purchase agreement with Delta to place 16 E175 aircraft into service. The delivery dates for the 16 new E175 aircraft are currently scheduled for 2022. Final delivery and in-service dates for aircraft to be placed under contract may be adjusted based on various factors. When an aircraft is scheduled to be removed from a capacity purchase 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. Other uses for the aircraft may include placing the aircraft in a prorate agreement, leasing the aircraft to a third party or parting out the aircraft to use the engines and parts as spare inventory or to lease the engines to a third party. Lease, airport services and other revenues primarily consists of revenue generated from aircraft and spare engines leased to third parties and airport customer services, such as gate and ramp agent services at applicable airports where the Company has agreements with third parties. The following table represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2022 and 2021 (in thousands): For the three months ended March 31, 2022 2021 Operating lease revenue $ 16,555 $ 14,950 Airport customer service and other revenue 10,534 8,414 Lease, airport services and other $ 27,089 $ 23,364 The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2022 (in thousands): April 2022 through December 2022 $ 34,054 2023 44,677 2024 42,593 2025 39,145 2026 34,516 Thereafter 120,636 $ 315,621 Of the Company’s $5.5 billion of property and equipment, net as of March 31, 2022, $246.9 million of regional jet aircraft and spare engines was leased to third parties under operating leases. The Company mitigates the residual asset risks of these assets by leasing aircraft and engine types that can be operated by the Company in the event of a default. Additionally, the operating leases typically have specified lease return condition requirements paid by the lessee to the Company and the Company typically maintains inspection rights under the leases. 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. The Company’s operating revenues could be impacted by several factors, including changes to the Company’s code-share agreements with its major airline partners, changes in flight schedules, 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. 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. Allowance for credit losses The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance. As of March 31, 2022, the Company had gross receivables of $89.4 million in current assets and gross receivables of $232.1 million in other long-term assets. The Company has established credit loss reserves based on publicly available historic default rates issued by a third party for companies with similar credit ratings, factoring in the term of the respective accounts receivable or notes receivable. During the three months ended March 31, 2022, there were no significant changes in the outstanding accounts receivable or notes receivable or the credit ratings of the entities. The Company’s credit loss reserve was $42.1 million at March 31, 2022, compared to $42.0 million at December 31, 2021. The $0.1 million increase in the credit loss reserve for the three months ended March 31, 2022, was reflected as an increase to the credit loss expense. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Compensation | |
Share-Based Compensation | (3) Share-Based Compensation During the three months ended March 31, 2022, the Company granted 66,680 restricted stock units and 221,942 performance shares to certain employees of the Company under the SkyWest, Inc. 2019 Long-Term Incentive Plan. Both the restricted stock units and performance shares have a three-year vesting per share The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur. The estimated fair value of the restricted stock units and performance shares is amortized over the applicable vesting periods. Share-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics. During the three months ended March 31, 2022 and 2021, the Company recorded pre-tax share-based compensation expense of $4.1 million and $2.6 million, respectively. |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Mar. 31, 2022 | |
Net Income Per Common Share | |
Net Income Per Common Share | (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, 2022, 361,000 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, 2022. During the three months ended March 31, 2021, 295,000 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, 2021. During the three months ended March 31, 2022, warrants to purchase 125,000 and 78,000 shares of common stock at $40.41 and $57.47 per share, respectively, were excluded from the computation of Diluted EPS since the warrants' exercise prices were greater than the average market price of the common shares during the quarter ended March 31, 2022. 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, 2022 2021 Numerator: Net income $ 17,734 $ 35,900 Denominator: Basic earnings per share weighted average shares 50,480 50,286 Dilution due to stock options and restricted stock units 228 441 Diluted earnings per share weighted average shares 50,708 50,727 Basic earnings per share $ 0.35 $ 0.71 Diluted earnings per share $ 0.35 $ 0.71 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting | |
Segment Reporting | (5) Segment Reporting The Company’s two reporting segments consist of the operations of SkyWest Airlines and SkyWest Leasing activities. The Company’s chief operating decision maker analyzes the profitability of operating new aircraft financed through the issuance of debt, including the Company’s E175 fleet, separately from the profitability of the Company’s capital deployed for ownership and financing of such aircraft. The SkyWest Airlines segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs. The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase agreements attributed to the ownership of new aircraft acquired through the issuance of debt and the respective depreciation and interest expense of such aircraft. The SkyWest Leasing segment also includes the activity of leasing regional jet aircraft and spare engines to third parties. The SkyWest Leasing segment’s total assets and capital expenditures include new aircraft acquired through the issuance of debt and assets leased to third parties. The following represents the Company’s segment data for the three-month periods ended March 31, 2022 and 2021 (in thousands): Three months ended March 31, 2022 SkyWest SkyWest Airlines Leasing Consolidated Operating revenues (1) $ 603,048 $ 132,104 $ 735,152 Operating expense 621,028 62,076 683,104 Depreciation and amortization expense 47,694 55,051 102,745 Interest expense 1,789 26,803 28,592 Segment profit (loss) (2) (19,769) 43,225 23,456 Total assets (as of March 31, 2022) 2,953,902 4,195,056 7,148,958 Capital expenditures (including non-cash) 32,696 94,889 127,585 Three months ended March 31, 2021 SkyWest SkyWest Airlines Leasing Consolidated Operating revenues (1) $ 406,450 $ 128,105 $ 534,555 Operating expense 387,870 65,843 453,713 Depreciation and amortization expense 50,326 59,271 109,597 Interest expense 3,129 28,225 31,354 Segment profit (2) 15,451 34,037 49,488 Total assets (as of March 31, 2021) 2,924,598 3,970,087 6,894,685 Capital expenditures (including non-cash) 35,206 22,302 57,508 (1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines segment. (2) Segment profit (loss) is equal to operating income less interest expense. |
Leases, Commitments and Conting
Leases, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Leases, Commitments and Contingencies | |
Leases, Commitments and Contingencies | (6) — Leases, Commitments and Contingencies The Company leases property and equipment under operating leases. For leases with durations longer than 12 months, the Company recorded the related operating lease right-of-use asset and operating lease liability at the present value of lease payments over the term. The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement. Aircraft As of March 31, 2022, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company had 43 aircraft under long-term lease agreements with remaining terms ranging from two years to eight years . Airport facilities The Company has operating leases for facility space including airport terminals, office space, cargo warehouses and maintenance facilities. The Company generally leases this space from government agencies that control the use of the various airports. The remaining lease terms for facility space vary from one month to 34 years. The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance. Leases As of March 31, 2022, the Company’s right-of-use assets were $223.9 million, the Company’s current maturities of operating lease liabilities were $78.9 million, and the Company’s noncurrent lease liabilities were $148.0 million. During the three months ended March 31, 2022, the Company paid $14.7 million in operating leases reflected as a reduction from operating cash flows. The table below presents lease related terms and discount rates as of March 31, 2022. As of March 31, 2022 Weighted-average remaining lease term for operating leases 6.2 years Weighted-average discount rate for operating leases 6.0% The Company’s lease costs for the three months ended March 31, 2022 and 2021 included the following components (in thousands): For the three months ended March 31, 2022 2021 Operating lease cost $ 21,841 $ 22,127 Variable and short-term lease cost 1,018 1,224 Sublease income (1,803) (1,335) Total lease cost $ 21,056 $ 22,016 As of March 31, 2022, 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 may 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 leased aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2022 (in thousands): April 2022 through December 2022 $ 66,742 2023 76,049 2024 32,144 2025 17,568 2026 15,491 Thereafter 72,827 $ 280,821 As of March 31, 2022, the Company had a firm purchase commitment for 25 E175 aircraft from Embraer, S.A. (“Embraer”) with anticipated delivery dates through the first half of 2023. The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands): Total Apr - Dec 2022 2023 2024 2025 2026 Thereafter Operating lease payments for aircraft and facility obligations $ 280,821 $ 66,742 $ 76,049 $ 32,144 $ 17,568 $ 15,491 $ 72,827 Firm aircraft and spare engine commitments 679,789 653,270 26,519 — — — — Interest commitments (1) 485,584 87,784 103,072 86,121 68,249 51,641 88,717 Principal maturities on long-term debt 3,232,430 315,901 422,380 418,088 485,348 429,621 1,161,092 Total commitments and obligations $ 4,678,624 $ 1,123,697 $ 628,020 $ 536,353 $ 571,165 $ 496,753 $ 1,322,636 (1) At March 31, 2022, the Company’s long-term debt had fixed interest rates. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | (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, 2022, and December 31, 2021, 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, 2022 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 170,918 $ — $ 170,918 $ — Commercial paper 439,532 — 439,532 — $ 610,450 $ — $ 610,450 $ — Cash and Cash Equivalents 246,001 246,001 — — Total Assets Measured at Fair Value $ 856,451 $ 246,001 $ 610,450 $ — Fair Value Measurements as of December 31, 2021 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 54,673 $ — $ 54,673 $ — Commercial paper 547,316 — 547,316 — $ 601,989 $ — $ 601,989 $ — Cash and Cash Equivalents 258,421 258,421 — — Total Assets Measured at Fair Value $ 860,410 $ 258,421 $ 601,989 $ — 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, 2022. 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, 2022, and December 31, 2021, the Company classified $610.5 million and $602.0 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, 2022, and December 31, 2021, the cost of the Company’s total cash and cash equivalents and marketable securities was $856.4 million and $860.4 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 $3.2 billion as of March 31, 2022, and $3.2 billion as of December 31, 2021, as compared to the carrying amount of $3.2 billion as of March 31, 2022, and $3.1 billion as of December 31, 2021. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Long-term Debt | |
Long-term Debt | (8) Long-term Debt Long-term debt consisted of the following as of March 31, 2022, and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Current portion of long-term debt $ 413,703 $ 395,371 Current portion of unamortized debt issue cost, net (3,579) (3,573) Current portion of long-term debt, net of debt issue costs $ 410,124 $ 391,798 Long-term debt, net of current maturities $ 2,818,727 $ 2,745,567 Long-term portion of unamortized debt issue cost, net (27,453) (28,147) Long-term debt, net of current maturities and debt issue costs $ 2,791,274 $ 2,717,420 Total long-term debt (including current portion) $ 3,232,430 $ 3,140,938 Total unamortized debt issue cost, net (31,032) (31,720) Total long-term debt, net of debt issue costs $ 3,201,398 $ 3,109,218 During the three months ended March 31, 2022, the Company took delivery of four new E175 aircraft that the Company financed through $82.8 million of long-term debt. The debt associated with the E175 aircraft has 5-year 10-year During the three months ended March 31, 2022, the Company executed a promissory note for $102.9 million. The promissory note has a three-year term, is due in monthly installments with a fixed annual interest rate of 3.6% and is secured by spare engines. As of both March 31, 2022, and December 31, 2021, the Company had $61.4 million in letters of credit and surety bonds outstanding with various banks and surety institutions. As of March 31, 2022, SkyWest Airlines had a $100 million line of credit with an expiration date of March 25, 2025. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of March 31, 2022, SkyWest Airlines had no amount outstanding under the facility. However, at March 31, 2022, SkyWest Airlines had $31.4 million in letters of credit issued under the facility, which reduced the amount available under the facility to $68.6 million. |
Investment in Other Companies
Investment in Other Companies | 3 Months Ended |
Mar. 31, 2022 | |
Investment in Other Companies | |
Investment in Other Companies | (9) — Investment in Other Companies During 2019, the Company created a joint venture with Regional One, Inc. (“Regional One”) by investing $22.3 million for a 75% ownership interest in Aero Engines, LLC. (“Aero Engines”). The Company invested an additional $1.0 million into Aero Engines in 2020 and $3.3 million during the first quarter of 2022 and retained a 75% ownership interest. The primary purpose of Aero Engines is to lease engines to third parties. Aero Engines requires unanimous approval from the Company and Regional One for its engine purchases, dispositions, lease agreements with third parties and all other material transactions. The Company determined Aero Engines is a variable interest entity as the Company has a 75% ownership interest in Aero Engines and all material decisions require unanimous approval from the Company and Regional One, resulting in disproportionate ownership rights relative to voting rights. As unanimous approval is required for all Aero Engines’ material activities. Aero Engines has no primary beneficiary. The Company accounts for its investment in Aero Engines under the equity method. The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value. Aero Engines had no debt outstanding as of March 31, 2022. As of March 31, 2022, the Company’s investment balance in Aero Engines was $23.9 million. The Company’s investment in Aero Engines has been recorded in “Other Assets” on the Company’s consolidated balance sheet. The Company’s portion of earnings generated by Aero Engines for the three months ended March 31, 2022, was $0.4 million, which is recorded in “Other Income (Expense)” on the Company’s consolidated statements of comprehensive income. In 2021, the Company entered into a strategic partnership with Eve UAM, LLC (“Eve”), to develop a network of deployment for Eve’s electric vertical takeoff and landing (“eVTOL”) aircraft. The Company signed a non-binding letter of intent to purchase 100 eVTOL aircraft. As part of the partnership, the Company anticipates it will acquire an equity interest in Eve in May 2022, upon completion of certain events by Eve. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes | |
Income Taxes | (10) Income Taxes The Company’s effective tax rate for the three months ended March 31, 2022 was 28.4%. The Company’s effective tax rate for the three months ended March 31, 2022 varied from the federal statutory rate of 21.0% primarily due to the provision for state income taxes, the impact of non-deductible expenses, and a discrete tax expense on employee equity transactions that occurred during the three months ended March 31, 2022. The Company’s effective tax rate for the three months ended March 31, 2021 was 28.2%. The Company’s effective tax rate for the three months ended March 31, 2021 varied from the federal statutory rate of 21.0% primarily due to the provision for state income taxes and the impact of non-deductible expenses. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2022 | |
Legal Matters | |
Legal Matters | (11) Legal Matters The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2022, 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 Financ_2
Condensed Consolidated Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
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 subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”) and its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) 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, 2021. Due in part to the uncertain rate of recovery from the global COVID-19 pandemic and workforce shortages, in addition to other factors, the results of operations for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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 could differ materially from those estimates and assumptions. |
Flying Agreements Revenue and_2
Flying Agreements Revenue and Lease, Airport Services and Other Revenues (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Agreements with other airlines | |
Schedule of revenue by type | The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2022 and 2021 (in thousands): For the three months ended March 31, 2022 2021 Capacity purchase agreements revenue: flight operations $ 348,474 $ 211,052 Capacity purchase agreements revenue: aircraft lease and fixed revenue 280,419 231,491 Prorate agreements revenue 79,170 68,648 Flying agreements revenue $ 708,063 $ 511,191 |
Schedule of aircraft and agreements with major airline partners | United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates United Express Agreements (Capacity purchase agreement) • E175 • CRJ 700 • CRJ 200 90 19 70 • Individual aircraft have scheduled removal dates from 2024 to 2029 United Express Prorate Agreement (Prorate agreement) • CRJ 200 41 • Terminable with 120-day notice Total under United Express Agreements 220 Delta Connection Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates Delta Connection Agreement (Capacity purchase agreement) • E175 • CRJ 900 • CRJ 700 • CRJ 200 71 44 5 9 • Individual aircraft have scheduled removal dates from 2022 to 2031 Delta Connection Prorate Agreement (Prorate agreement) • CRJ 200 20 • Terminable with 30-day notice Total under Delta Connection Agreements 149 American Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates American Agreement (Capacity purchase agreement) • E175 • CRJ 700 18 90 • Individual aircraft have scheduled removal dates from 2024 to 2032 Total under American Agreements 108 Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates Alaska Agreement (Capacity purchase agreement) • E175 36 • Individual aircraft have scheduled removal dates from 2030 to 2034 |
Schedule of future minimum rental payments for operating leases | The following table summarizes future minimum rental payments primarily related to leased aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2022 (in thousands): April 2022 through December 2022 $ 66,742 2023 76,049 2024 32,144 2025 17,568 2026 15,491 Thereafter 72,827 $ 280,821 |
Airport customer service and other | |
Agreements with other airlines | |
Schedule of revenue by type | The following table represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2022 and 2021 (in thousands): For the three months ended March 31, 2022 2021 Operating lease revenue $ 16,555 $ 14,950 Airport customer service and other revenue 10,534 8,414 Lease, airport services and other $ 27,089 $ 23,364 |
Aircraft | |
Agreements with other airlines | |
Schedule of future minimum rental payments for operating leases | For the three months ended March 31, 2022 2021 Operating lease revenue $ 16,555 $ 14,950 Airport customer service and other revenue 10,534 8,414 Lease, airport services and other $ 27,089 $ 23,364 The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2022 (in thousands): April 2022 through December 2022 $ 34,054 2023 44,677 2024 42,593 2025 39,145 2026 34,516 Thereafter 120,636 $ 315,621 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Net Income Per Common Share | |
Schedule of Basic EPS and Diluted EPS | 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, 2022 2021 Numerator: Net income $ 17,734 $ 35,900 Denominator: Basic earnings per share weighted average shares 50,480 50,286 Dilution due to stock options and restricted stock units 228 441 Diluted earnings per share weighted average shares 50,708 50,727 Basic earnings per share $ 0.35 $ 0.71 Diluted earnings per share $ 0.35 $ 0.71 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting | |
Schedule of Company's segment data | The following represents the Company’s segment data for the three-month periods ended March 31, 2022 and 2021 (in thousands): Three months ended March 31, 2022 SkyWest SkyWest Airlines Leasing Consolidated Operating revenues (1) $ 603,048 $ 132,104 $ 735,152 Operating expense 621,028 62,076 683,104 Depreciation and amortization expense 47,694 55,051 102,745 Interest expense 1,789 26,803 28,592 Segment profit (loss) (2) (19,769) 43,225 23,456 Total assets (as of March 31, 2022) 2,953,902 4,195,056 7,148,958 Capital expenditures (including non-cash) 32,696 94,889 127,585 Three months ended March 31, 2021 SkyWest SkyWest Airlines Leasing Consolidated Operating revenues (1) $ 406,450 $ 128,105 $ 534,555 Operating expense 387,870 65,843 453,713 Depreciation and amortization expense 50,326 59,271 109,597 Interest expense 3,129 28,225 31,354 Segment profit (2) 15,451 34,037 49,488 Total assets (as of March 31, 2021) 2,924,598 3,970,087 6,894,685 Capital expenditures (including non-cash) 35,206 22,302 57,508 (1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines segment. (2) Segment profit (loss) is equal to operating income less interest expense. |
Leases, Commitments and Conti_2
Leases, Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases, Commitments and Contingencies | |
Summary of related terms and discount rates | As of March 31, 2022 Weighted-average remaining lease term for operating leases 6.2 years Weighted-average discount rate for operating leases 6.0% |
Summary of lease costs | The Company’s lease costs for the three months ended March 31, 2022 and 2021 included the following components (in thousands): For the three months ended March 31, 2022 2021 Operating lease cost $ 21,841 $ 22,127 Variable and short-term lease cost 1,018 1,224 Sublease income (1,803) (1,335) Total lease cost $ 21,056 $ 22,016 |
Schedule of future minimum rental payments for operating leases | The following table summarizes future minimum rental payments primarily related to leased aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2022 (in thousands): April 2022 through December 2022 $ 66,742 2023 76,049 2024 32,144 2025 17,568 2026 15,491 Thereafter 72,827 $ 280,821 |
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 Apr - Dec 2022 2023 2024 2025 2026 Thereafter Operating lease payments for aircraft and facility obligations $ 280,821 $ 66,742 $ 76,049 $ 32,144 $ 17,568 $ 15,491 $ 72,827 Firm aircraft and spare engine commitments 679,789 653,270 26,519 — — — — Interest commitments (1) 485,584 87,784 103,072 86,121 68,249 51,641 88,717 Principal maturities on long-term debt 3,232,430 315,901 422,380 418,088 485,348 429,621 1,161,092 Total commitments and obligations $ 4,678,624 $ 1,123,697 $ 628,020 $ 536,353 $ 571,165 $ 496,753 $ 1,322,636 (1) At March 31, 2022, the Company’s long-term debt had fixed interest rates. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2022 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 170,918 $ — $ 170,918 $ — Commercial paper 439,532 — 439,532 — $ 610,450 $ — $ 610,450 $ — Cash and Cash Equivalents 246,001 246,001 — — Total Assets Measured at Fair Value $ 856,451 $ 246,001 $ 610,450 $ — Fair Value Measurements as of December 31, 2021 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 54,673 $ — $ 54,673 $ — Commercial paper 547,316 — 547,316 — $ 601,989 $ — $ 601,989 $ — Cash and Cash Equivalents 258,421 258,421 — — Total Assets Measured at Fair Value $ 860,410 $ 258,421 $ 601,989 $ — |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Long-term Debt | |
Schedule of long-term debt | Long-term debt consisted of the following as of March 31, 2022, and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Current portion of long-term debt $ 413,703 $ 395,371 Current portion of unamortized debt issue cost, net (3,579) (3,573) Current portion of long-term debt, net of debt issue costs $ 410,124 $ 391,798 Long-term debt, net of current maturities $ 2,818,727 $ 2,745,567 Long-term portion of unamortized debt issue cost, net (27,453) (28,147) Long-term debt, net of current maturities and debt issue costs $ 2,791,274 $ 2,717,420 Total long-term debt (including current portion) $ 3,232,430 $ 3,140,938 Total unamortized debt issue cost, net (31,032) (31,720) Total long-term debt, net of debt issue costs $ 3,201,398 $ 3,109,218 |
Flying Agreements Revenue and_3
Flying Agreements Revenue and Lease, Airport Services and Other Revenues (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)aircraft | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Agreements with other airlines | |||
Percentage of ASMs flown under fixed-fee arrangements | 88.80% | 86.60% | |
Percentage of ASMs flown under pro-rate arrangements | 11.20% | 13.40% | |
Rental income under operating leases | |||
Operating lease revenue | $ 16,555 | $ 14,950 | |
Total operating revenues | 735,152 | 534,555 | |
Future minimum rental income | |||
April 2022 through December 2022 | 34,054 | ||
2023 | 44,677 | ||
2024 | 42,593 | ||
2025 | 39,145 | ||
2026 | 34,516 | ||
Thereafter | 120,636 | ||
Total | 315,621 | ||
Deferred revenue recognized | 7,500 | ||
Unbilled revenue recognized | 3,600 | ||
Deferred revenue | 96,400 | 21,200 | $ 103,900 |
Deferred revenue in other current liabilities | 33,000 | 24,500 | |
Deferred revenue in other long-term liabilities | 63,400 | 79,400 | |
Property and equipment and related assets | 5,528,821 | 5,498,599 | |
Gross receivables current | 89,400 | ||
Gross receivables Non-current | 232,100 | ||
Credit loss reserve | 42,100 | 42,000 | |
Increase in credit loss reserves | 100 | ||
Other Noncurrent Assets | |||
Future minimum rental income | |||
Unbilled revenue | $ 12,000 | $ 8,400 | |
Aircraft in schedule service or under contract | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 513 | ||
United | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 220 | ||
Delta | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 149 | ||
American | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 108 | ||
Jet aircraft and spare engines leased to third parties | |||
Future minimum rental income | |||
Property and equipment and related assets | $ 246,900 | ||
CRJ 200 | United | United Express Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 70 | ||
CRJ 200 | United | United Express Prorate Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 41 | ||
Agreement term | 120 days | ||
CRJ 200 | Delta | Delta Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 9 | ||
CRJ 200 | Delta | Delta Connection Prorate Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 20 | ||
Agreement term | 30 days | ||
CRJ 700 | United | United Express Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 19 | ||
CRJ 700 | Delta | Delta Connection Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 5 | ||
CRJ 700 | American | |||
Future minimum rental income | |||
Number of aircraft under purchase agreement | aircraft | 11 | ||
CRJ 700 | American | American Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 90 | ||
CRJ 900 | Delta | Delta Connection Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 44 | ||
E175 | |||
Future minimum rental income | |||
Number of aircraft under purchase agreement | aircraft | 25 | ||
E175 | Sky West Airlines Inc. | Delta Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft under purchase agreement | aircraft | 16 | ||
Number of aircraft to be placed by 2022 | aircraft | 16 | ||
E175 | Sky West Airlines Inc. | Alaska Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 36 | ||
Number of aircraft under purchase agreement | aircraft | 7 | ||
E175 | United | United Express Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 90 | ||
E175 | Delta | Delta Connection Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 71 | ||
E175 | American | |||
Future minimum rental income | |||
Number of aircraft under purchase agreement | aircraft | 2 | ||
E175 | American | American Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 18 | ||
Flying agreements | |||
Rental income under operating leases | |||
Total operating revenues | $ 708,063 | 511,191 | |
Flight operations | |||
Rental income under operating leases | |||
Total operating revenues | 348,474 | 211,052 | |
Aircraft lease and fixed revenue | |||
Rental income under operating leases | |||
Total operating revenues | 280,419 | 231,491 | |
Prorate agreements | |||
Rental income under operating leases | |||
Total operating revenues | 79,170 | 68,648 | |
Airport customer service and other revenue | |||
Rental income under operating leases | |||
Total operating revenues | 10,534 | 8,414 | |
Lease, airport services and other. | |||
Rental income under operating leases | |||
Total operating revenues | $ 27,089 | $ 23,364 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)item$ / sharesshares | Mar. 31, 2021USD ($) | |
Share-Based Compensation | ||
Upon vesting, each restricted stock unit and performance share replaced with common stock | 1 | |
Stock based compensation expense | $ | $ 4.1 | $ 2.6 |
Restricted Stock Units (RSUs) | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ / shares | $ 32.86 | |
Restricted Stock Units (RSUs) | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Granted (in shares) | 66,680 | |
Vesting period | 3 years | |
Performance stock units | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ / shares | $ 32.86 | |
Performance stock units | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Granted (in shares) | 221,942 | |
Vesting period | 3 years | |
Number of performance period | item | 3 | |
Performance period | 1 year | |
Performance stock units | Minimum | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Award percentage | 0.00% | |
Performance stock units | Maximum | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Award percentage | 250.00% | |
Director | ||
Share-Based Compensation | ||
Granted (in shares) | 24,423 | |
Granted (in dollars per share) | $ / shares | $ 32.86 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Number of outstanding units not included in computation of Diluted EPS (in shares) | 361,000 | 295,000 |
Numerator: | ||
Net income (loss) | $ 17,734 | $ 35,900 |
Denominator: | ||
Basic earnings per share weighted average shares | 50,480,000 | 50,286,000 |
Dilution due to stock options and restricted stock units | 228,000 | 441,000 |
Diluted earnings per share weighted average shares | 50,708,000 | 50,727,000 |
Basic earnings per share (in dollars per share) | $ 0.35 | $ 0.71 |
Diluted earnings per share (in dollars per share) | $ 0.35 | $ 0.71 |
Tranche One | ||
Warrants to purchase shares | 125,000 | |
Warrants exercise price | $ 40.41 | |
Tranche Two | ||
Warrants to purchase shares | 78,000 | |
Warrants exercise price | $ 57.47 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Segment Reporting | |||
Number of reporting segments | segment | 2 | ||
Operating revenues | $ 735,152 | $ 534,555 | |
Operating expense | 683,104 | 453,713 | |
Depreciation and amortization expense | 102,745 | 109,597 | |
Interest expense | 28,592 | 31,354 | |
Segment profit (loss) | 23,456 | 49,488 | |
Total assets (as of March 31) | 7,148,958 | 6,894,685 | $ 7,125,947 |
Capital expenditures (including non-cash) | 127,585 | 57,508 | |
SkyWest Airlines | |||
Segment Reporting | |||
Operating revenues | 603,048 | 406,450 | |
Operating expense | 621,028 | 387,870 | |
Depreciation and amortization expense | 47,694 | 50,326 | |
Interest expense | 1,789 | 3,129 | |
Segment profit (loss) | (19,769) | 15,451 | |
Total assets (as of March 31) | 2,953,902 | 2,924,598 | |
Capital expenditures (including non-cash) | 32,696 | 35,206 | |
SkyWest Leasing | |||
Segment Reporting | |||
Operating revenues | 132,104 | 128,105 | |
Operating expense | 62,076 | 65,843 | |
Depreciation and amortization expense | 55,051 | 59,271 | |
Interest expense | 26,803 | 28,225 | |
Segment profit (loss) | 43,225 | 34,037 | |
Total assets (as of March 31) | 4,195,056 | 3,970,087 | |
Capital expenditures (including non-cash) | $ 94,889 | $ 22,302 |
Leases, Commitments and Conti_3
Leases, Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)aircraft | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 223,856 | $ 238,516 | |
Current maturities of lease liabilities | 78,930 | 78,886 | |
Noncurrent operating leases | 147,994 | $ 158,274 | |
Operating leases | $ 14,700 | ||
Weighted-average remaining lease term for operating leases | 6 years 2 months 12 days | ||
Weighted-average discount rate for operating leases | 6.00% | ||
Lease costs | |||
Operating lease cost | $ 21,841 | $ 22,127 | |
Variable and short-term lease cost | 1,018 | 1,224 | |
Sublease income | (1,803) | (1,335) | |
Total lease cost | $ 21,056 | $ 22,016 | |
Aircraft | |||
Lessee, Lease, Description [Line Items] | |||
Number of aircraft acquired | aircraft | 43 | ||
Aircraft | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 2 years | ||
Aircraft | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 8 years | ||
Airport Facilities | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 month | ||
Airport Facilities | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 34 years |
Leases, Commitments and Conti_4
Leases, Commitments and Contingencies - Operating Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($)aircraft | |
Future minimum rental payments required under operating leases | |
April 2022 through December 2022 | $ 66,742 |
2023 | 76,049 |
2024 | 32,144 |
2025 | 17,568 |
2026 | 15,491 |
Thereafter | 72,827 |
Total | $ 280,821 |
E175 | |
Future minimum rental payments required under operating leases | |
Number of aircraft under purchase agreement | aircraft | 25 |
Leases, Commitments and Conti_5
Leases, Commitments and Contingencies - Commitments and Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Operating lease payments for aircraft and facility obligations | ||
Apr - Dec 2022 | $ 66,742 | |
2023 | 76,049 | |
2024 | 32,144 | |
2025 | 17,568 | |
2026 | 15,491 | |
Thereafter | 72,827 | |
Total | 280,821 | |
Firm aircraft and spare engine commitments | ||
Apr - Dec 2022 | 653,270 | |
2023 | 26,519 | |
Total | 679,789 | |
Interest commitments | ||
Apr - Dec 2022 | 87,784 | |
2023 | 103,072 | |
2024 | 86,121 | |
2025 | 68,249 | |
2026 | 51,641 | |
Thereafter | 88,717 | |
Total | 485,584 | |
Principal maturities on long-term debt | ||
Apr - Dec 2022 | 315,901 | |
2023 | 422,380 | |
2024 | 418,088 | |
2025 | 485,348 | |
2026 | 429,621 | |
Thereafter | 1,161,092 | |
Total long-term debt | 3,232,430 | $ 3,140,938 |
Total commitments and obligations | ||
Apr - Dec 2022 | 1,123,697 | |
2023 | 628,020 | |
2024 | 536,353 | |
2025 | 571,165 | |
2026 | 496,753 | |
Thereafter | 1,322,636 | |
Total | $ 4,678,624 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Marketable securities | $ 610,450 | $ 601,989 |
Carrying amount of long-term debt | 3,201,398 | 3,109,218 |
Recurring | Estimate of Fair Value Measurement | ||
Fair Value Measurements | ||
Marketable securities | 610,450 | 601,989 |
Cash and cash equivalents | 246,001 | 258,421 |
Total Assets Measured at Fair Value | 856,451 | 860,410 |
Cost of cash and cash equivalents and available for sale securities | 856,400 | 860,400 |
Recurring | Estimate of Fair Value Measurement | Corporate Bond Securities | ||
Fair Value Measurements | ||
Marketable securities | 170,918 | 54,673 |
Recurring | Estimate of Fair Value Measurement | Commercial Paper | ||
Fair Value Measurements | ||
Marketable securities | 439,532 | 547,316 |
Recurring | Level 1 | ||
Fair Value Measurements | ||
Cash and cash equivalents | 246,001 | 258,421 |
Total Assets Measured at Fair Value | 246,001 | 258,421 |
Recurring | Level 2 | ||
Fair Value Measurements | ||
Marketable securities | 610,450 | 601,989 |
Total Assets Measured at Fair Value | 610,450 | 601,989 |
Fair value of long-term debt | 3,200,000 | 3,200,000 |
Carrying amount of long-term debt | 3,200,000 | 3,100,000 |
Recurring | Level 2 | Corporate Bond Securities | ||
Fair Value Measurements | ||
Marketable securities | 170,918 | 54,673 |
Recurring | Level 2 | Commercial Paper | ||
Fair Value Measurements | ||
Marketable securities | $ 439,532 | $ 547,316 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)aircraft | Dec. 31, 2021USD ($) | |
Debt Instrument [Line Items] | ||
Current portion long-term debt | $ 413,703 | $ 395,371 |
Current portion of unamortized debt issue cost, net | (3,579) | (3,573) |
Current portion of long-term debt, net of debt issue costs | 410,124 | 391,798 |
Long-term debt, net of current maturities | 2,818,727 | 2,745,567 |
Long-term portion of unamortized debt issue cost, net | (27,453) | (28,147) |
Long-term debt, net of current maturities and debt issue costs | 2,791,274 | 2,717,420 |
Total long-term debt (including current portion) | 3,232,430 | 3,140,938 |
Total unamortized debt issue cost, net | (31,032) | (31,720) |
Total long-term debt, net of debt issue costs | 3,201,398 | 3,109,218 |
Long-term debt | 3,201,398 | $ 3,109,218 |
Amount outstanding | 0 | |
Maximum borrowing capacity | 100,000 | |
Current borrowing capacity | 68,600 | |
Letters of credit and surety bonds | ||
Debt Instrument [Line Items] | ||
Letters of credit and surety bonds outstanding with various banks and surety institutions | 61,400 | |
Letters of credit | ||
Debt Instrument [Line Items] | ||
Amount outstanding | $ 31,400 | |
Promissory note | ||
Debt Instrument [Line Items] | ||
Debt instrument, term | 3 years | |
Interest rate (as a percent) | 3.60% | |
Principal amount | $ 102,900 | |
E175 | ||
Debt Instrument [Line Items] | ||
Number of aircraft delivered | aircraft | 4 | |
Purchase of aircraft financed through long-term debt | $ 82,800 | |
Minimum | E175 | ||
Debt Instrument [Line Items] | ||
Debt instrument, term | 5 years | |
Maximum | E175 | ||
Debt Instrument [Line Items] | ||
Debt instrument, term | 10 years |
Investment in Other Companies (
Investment in Other Companies (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022USD ($) | Dec. 31, 2022aircraft | Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($) | |
Long-term debt | $ 3,201,398 | $ 3,109,218 | ||
Eve UAM, LLC ("Eve") | Strategic partnership | Electric vertical takeoff and landing ("eVTOL") aircraft | Forecast | ||||
Non-binding letter of intent to purchase number of aircraft | aircraft | 100 | |||
Aero Engines, LLC. | ||||
Payments to acquire interest in joint venture | $ 22,300 | |||
Investment ownership (as a percent) | 75.00% | 75.00% | ||
Additional interest in Joint venture | $ 3,300 | $ 1,000 | ||
Long-term debt | 0 | |||
Investment balance in Aero Engines | 23,900 | |||
Aero Engines, LLC. | Other Nonoperating Income. | ||||
Company's portion of loss generated by Aero Engines | $ 400 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Taxes | ||
Effective tax rate (as a percent) | 28.40% | 28.20% |
Statutory Federal income tax rate (as a percent) | 21.00% | 21.00% |