SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
Incorporated under the laws of | ||
(I.R.S. Employer ID No.) |
(
(Address of principal executive offices and telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered |
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Accelerated filer ◻ | ||
Non-accelerated filer ◻ | Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Class | Outstanding at October 28, 2022 | |
Common stock, no par value |
SKYWEST, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
3 | |||
3 | |||
5 | |||
6 | |||
8 | |||
9 | |||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||
38 | |||
39 | |||
39 | |||
39 | |||
40 | |||
41 | |||
Exhibit 31.1 | Certification of Chief Executive Officer | ||
Exhibit 31.2 | Certification of Chief Financial Officer | ||
Exhibit 32.1 | Certification of Chief Executive Officer | ||
Exhibit 32.2 | Certification of Chief Financial Officer |
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SKYWEST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
ASSETS
September 30, |
| December 31, | ||||
| 2022 |
| 2021 | |||
(unaudited) | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Marketable securities |
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Receivables, net |
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Inventories, net |
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Other current assets |
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Total current assets |
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PROPERTY AND EQUIPMENT: | ||||||
Aircraft and rotable spares |
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Deposits on aircraft |
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Buildings and ground equipment |
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Total property and equipment, gross |
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Less-accumulated depreciation and amortization |
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Total property and equipment, net |
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OTHER ASSETS: | ||||||
Operating lease right-of-use assets | | | ||||
Long-term receivables and other assets |
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Total other assets |
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Total assets | $ | | $ | |
See accompanying notes to condensed consolidated financial statements.
3
SKYWEST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY
September 30, |
| December 31, | |||
2022 |
| 2021 | |||
(unaudited) | |||||
CURRENT LIABILITIES: | |||||
Current maturities of long-term debt | $ | | $ | | |
Accounts payable |
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Accrued salaries, wages and benefits |
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Current maturities of operating lease liabilities |
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Taxes other than income taxes |
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Other current liabilities |
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Total current liabilities |
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LONG-TERM DEBT, net of current maturities |
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DEFERRED INCOME TAXES PAYABLE |
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NONCURRENT OPERATING LEASE LIABILITIES |
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OTHER LONG-TERM LIABILITIES |
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COMMITMENTS AND CONTINGENCIES (Note 7) | |||||
STOCKHOLDERS’ EQUITY: | |||||
Preferred stock, |
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Common stock, |
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Retained earnings |
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Treasury stock, at cost, |
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Accumulated other comprehensive loss | ( | — | |||
Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | |
See accompanying notes to condensed consolidated financial statements.
4
SKYWEST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(Dollars and Shares in Thousands, Except per Share Amounts)
Three months ended | Nine months ended | ||||||||||||
September 30, | September 30, | ||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 |
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OPERATING REVENUES: | |||||||||||||
Flying agreements | $ | | $ | | $ | | $ | | |||||
Lease, airport services and other |
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Total operating revenues |
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OPERATING EXPENSES: | |||||||||||||
Salaries, wages and benefits |
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Aircraft maintenance, materials and repairs |
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Depreciation and amortization |
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Aircraft fuel |
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Airport-related expenses |
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Aircraft rentals |
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Special items - impairment charges | — | | — | | |||||||||
Payroll support grant | — | ( | — | ( | |||||||||
Other operating expenses |
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Total operating expenses |
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OPERATING INCOME |
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OTHER INCOME (EXPENSE): | |||||||||||||
Interest income |
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Interest expense |
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Other income (expense), net |
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Total other expense, net |
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INCOME BEFORE INCOME TAXES |
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PROVISION FOR INCOME TAXES |
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NET INCOME | $ | | $ | | $ | | $ | | |||||
BASIC EARNINGS PER SHARE | $ | | $ | | $ | | $ | | |||||
DILUTED EARNINGS PER SHARE | $ | | $ | | $ | | $ | | |||||
Weighted average common shares: | |||||||||||||
Basic |
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Diluted |
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COMPREHENSIVE INCOME: | |||||||||||||
Net income | $ | | $ | | $ | | $ | | |||||
Net unrealized depreciation on marketable securities, net of taxes |
| ( |
| — |
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TOTAL COMPREHENSIVE INCOME | $ | | $ | | $ | | $ | |
See accompanying notes to condensed consolidated financial statements
5
SKYWEST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(UNAUDITED)
(In Thousands)
Accumulated | ||||||||||||||||||||
Other | ||||||||||||||||||||
Common Stock | Retained | Treasury Stock | Comprehensive | |||||||||||||||||
Shares | Amount | Earnings | Shares | Amount | Loss | Total | ||||||||||||||
Balance at December 31, 2021 |
| | $ | | $ | |
| ( | $ | ( | $ | — | $ | | ||||||
Net income |
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Exercise of common stock options and vested employee stock awards |
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Employee income tax paid on vested equity awards | — | — | — | ( | ( | — | ( | |||||||||||||
Sale of common stock under employee stock purchase plan |
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Stock based compensation expense | — | | — | — | — | — | | |||||||||||||
Balance at March 31, 2022 |
| | $ | | $ | |
| ( | $ | ( | $ | — | $ | | ||||||
Net income |
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Stock based compensation expense |
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Net unrealized depreciation on marketable securities, net of tax of $ | — | — | — | — | — | ( | ( | |||||||||||||
Balance at June 30, 2022 |
| | $ | | $ | |
| ( | $ | ( | $ | ( | $ | | ||||||
Net income |
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Exercise of common stock options and vested employee stock awards |
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Employee income tax paid on vested equity awards | — | — | — | ( | ( | — | ( | |||||||||||||
Sale of common stock under employee stock purchase plan |
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Stock based compensation expense |
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Net unrealized depreciation on marketable securities, net of tax of $ | — | — | — | — | — | ( | ( | |||||||||||||
Balance at September 30, 2022 |
| | $ | | $ | |
| ( | $ | ( | $ | ( | $ | |
See accompanying notes to condensed consolidated financial statements.
6
SKYWEST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(UNAUDITED)
(In Thousands)
Common Stock | Retained | Treasury Stock | ||||||||||||||
Shares | Amount | Earnings | Shares | Amount | Total | |||||||||||
Balance at December 31, 2020 |
| | $ | | $ | |
| ( | $ | ( | $ | | ||||
Net income |
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Exercise of common stock options and vested employee stock awards |
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Employee income tax paid on vested equity awards | — | — | — | ( | ( | ( | ||||||||||
Sale of common stock under employee stock purchase plan |
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Stock based compensation expense | — | | — | — | — | | ||||||||||
Warrants issued to U.S. Treasury |
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Balance at March 31, 2021 |
| | $ | | $ | |
| ( | $ | ( | $ | | ||||
Net income |
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Stock based compensation expense |
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Warrants issued to U.S. Treasury |
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Balance at June 30, 2021 |
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| ( | $ | ( | $ | | ||||
Net income |
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Sale of common stock under employee stock purchase plan |
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Stock based compensation expense |
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Balance at September 30, 2021 |
| | $ | | $ | |
| ( | $ | ( | $ | |
See accompanying notes to condensed consolidated financial statements.
7
SKYWEST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In Thousands)
Nine months ended | ||||||
September 30, | ||||||
| 2022 |
| 2021 | |||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ | | $ | | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of marketable securities |
| ( |
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Sales of marketable securities |
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Acquisition of property and equipment: | ||||||
Aircraft and rotable spare parts |
| ( |
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Buildings and ground equipment |
| ( |
| ( | ||
Proceeds from the sale of property and equipment |
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Deposits on aircraft | ( | ( | ||||
Aircraft deposits applied towards acquired aircraft | | | ||||
Increase in other assets |
| ( |
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NET CASH USED IN INVESTING ACTIVITIES |
| ( |
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from issuance of long-term debt |
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Principal payments on long-term debt |
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Net proceeds from issuance of common stock |
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Employee income tax paid on vested equity awards | ( | ( | ||||
Payment of debt issuance cost | ( | ( | ||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
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Increase (decrease) in cash and cash equivalents |
| ( |
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Cash and cash equivalents at beginning of period |
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CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | | $ | | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||
Non-cash investing and financing activities: | ||||||
Acquisition of property and equipment | $ | | $ | | ||
Warrants issued to U.S. Treasury | $ | — | $ | | ||
Cash paid during the period for: | ||||||
Interest, net of capitalized amounts | $ | | $ | | ||
Income taxes | $ | | $ | |
See accompanying notes to condensed consolidated financial statements.
8
SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(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 and nine months ended September 30, 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.
(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 nine months ended September 30, 2022 and 2021, capacity purchase agreements represented approximately
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 nine months ended September 30, 2022 and 2021, prorate flying agreements represented approximately
9
The following table represents the Company’s flying agreements revenue by type for the three and nine months ended September 30, 2022 and 2021 (in thousands):
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||||
Capacity purchase agreements revenue: flight operations | $ | | $ | | $ | | $ | | ||||
Capacity purchase agreements revenue: aircraft lease and fixed revenue |
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Prorate agreements revenue |
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Flying agreements revenue | $ | | $ | | $ | | $ | |
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 nine months ended September 30, 2022, the Company recognized $
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 September 30, 2022, the Company had
10
United Express Agreements | ||||||
Agreement |
| Aircraft type |
| Number of |
| Term / Termination Dates |
United Express Agreements (Capacity purchase agreement) | • E175 • CRJ 700 • CRJ 200 | • Individual aircraft have scheduled removal dates from 2024 to 2029 | ||||
United Express Prorate Agreement (Prorate agreement) | • CRJ 200 | • Terminable with | ||||
Total under United Express Agreements |
Delta Connection Agreements | ||||||
Agreement |
| Aircraft type |
| Number of |
| Term / Termination Dates |
Delta Connection Agreement (Capacity purchase agreement) | • E175 • CRJ 900 • CRJ 700 • CRJ 200 | • Individual aircraft have scheduled removal dates from 2022 to 2032 | ||||
Delta Connection Prorate Agreement (Prorate agreement) | • CRJ 200 | • Terminable with | ||||
Total under Delta Connection Agreements |
American Capacity Purchase Agreement | ||||||
Agreement |
| Aircraft type |
| Number of |
| Term / Termination Dates |
American Agreement (Capacity purchase agreement) | • E175 • CRJ 700 | • Individual aircraft have scheduled removal dates from 2022 to 2032 | ||||
Total under American Agreement |
Alaska Capacity Purchase Agreement | ||||||
Agreement |
| Aircraft type |
| Number of |
| Term / Termination Dates |
Alaska Agreement (Capacity purchase agreement) | • E175 | • Individual aircraft have scheduled removal dates from 2030 to 2034 |
In addition to the contractual arrangements described above, as of September 30, 2022, SkyWest Airlines has a capacity purchase agreement with Delta to place
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.
11
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||
| 2022 |
| 2021 | 2022 |
| 2021 | ||||||
Operating lease revenue | $ | | $ | | $ | | $ | | ||||
Airport customer service and other revenue | | | | | ||||||||
Lease, airport services and other | $ | | $ | | $ | | $ | |
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 September 30, 2022 (in thousands):
October 2022 through December 2022 |
| $ | |
2023 |
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2024 |
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2025 |
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2026 |
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Thereafter |
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$ |
Of the Company’s $
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 September 30, 2022, the Company had gross receivables of $
(3) Stock-Based Compensation
During the nine months ended September 30, 2022, the Company granted
12
will be replaced with
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. Stock-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics. During the nine months ended September 30, 2022 and 2021, the Company recorded pre-tax stock-based compensation expense of $
(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.
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2022 | 2021 |
| 2022 | 2021 | ||||||||
PSP1 and Treasury Loan Warrants (1) | | — | | — | ||||||||
PSP2 Warrants (2) | | — | | — | ||||||||
PSP3 Warrants (3) | | | | | ||||||||
Employee Stock Awards | | — | | — | ||||||||
Total antidilutive securities |
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(1) | Pursuant to the payroll support program established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“PSP1”) and Loan and Guarantee Agreement with the U.S. Department of the Treasury (“U.S. Treasury”), SkyWest issued to Treasury warrants to purchase shares of SkyWest common stock for an exercise price of $ |
(2) | Pursuant to the payroll support program established under the Consolidated Appropriations Act, 2021 (the “2021 Appropriations Act”) (“PSP2”), SkyWest issued to U.S. Treasury warrants to purchase shares of SkyWest common stock for an exercise price of $ |
(3) | Pursuant to the payroll support program established under the American Rescue Plan Act of 2021 (the “American Rescue Plan Act”) (“PSP3”), SkyWest issued to U.S. Treasury warrants to purchase shares of SkyWest common stock for an exercise price of $ |
Additionally, during the nine months ended September 30, 2022,
13
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 | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2022 | 2021 |
| 2022 | 2021 | ||||||||
Numerator: |
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Net income | $ | | $ | | $ | | $ | | ||||
Denominator: | ||||||||||||
Basic earnings per share weighted average shares |
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Dilutive effect of employee stock awards and warrants |
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Diluted earnings per share weighted average shares |
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Basic earnings per share | $ | | $ | | $ | | $ | | ||||
Diluted earnings per share | $ | | $ | | $ | | $ | |
(5) Segment Reporting
The Company’s
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 and other activities. 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 September 30, 2022 and 2021 (in thousands):
Three months ended September 30, 2022 | |||||||||
SkyWest | SkyWest | ||||||||
| Airlines |
| Leasing |
| Consolidated | ||||
Operating revenues (1) | $ | |