SKYWEST INC - FORM 8-K - EX-99.1

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8-K - 8-K - SKYWEST INC	a18-9946_18k.htm

Exhibit 99.1

SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share amounts)

(Unaudited)

Previously Reported Year Ended December 31, 2017				As Adjusted Year Ended December 31, 2017
OPERATING REVENUES:				OPERATING REVENUES:
Passenger	$	3,126,708		Flying agreements	$	3,078,297
Ground handling and other	77,560			Airport customer service and other	44,295
Total operating revenues	3,204,268			Total operating revenues	3,122,592
OPERATING EXPENSES:				OPERATING EXPENSES:
Salaries, wages and benefits	1,196,227			Salaries, wages and benefits	1,192,067
Aircraft maintenance, materials and repairs	579,463			Aircraft maintenance, materials and repairs	579,463
Depreciation and amortization	292,768			Depreciation and amortization	292,768
Aircraft rentals	215,807			Aircraft rentals	215,807
Aircraft fuel	162,653			Aircraft fuel	85,136
Ground handling services	69,848			Airport-related expenses	118,374
Other operating expenses	299,303			Other operating expenses	250,778
Total operating expenses	2,816,069			Total operating expenses	2,734,393
OPERATING INCOME	388,199			OPERATING INCOME	388,199

OTHER INCOME (EXPENSE):				OTHER INCOME (EXPENSE):
Interest income	4,509			Interest income	4,509
Interest expense	(104,925		)	Interest expense	(104,925		)
Other, net	400			Other, net	400
Total other expense, net	(100,016		)	Total other expense, net	(100,016		)
INCOME BEFORE INCOME TAXES	288,183			INCOME BEFORE INCOME TAXES	288,183
PROVISION (BENEFIT) FOR INCOME TAXES	(140,724		)	PROVISION (BENEFIT) FOR INCOME TAXES	(140,724		)
NET INCOME	$	428,907		NET INCOME	$	428,907

BASIC EARNINGS PER SHARE	$	8.28		BASIC EARNINGS PER SHARE	$	8.28
DILUTED EARNINGS PER SHARE	$	8.08		DILUTED EARNINGS PER SHARE	$	8.08
Weighted average common shares:				Weighted average common shares:
Basic	51,804			Basic	51,804
Diluted	53,100			Diluted	53,100

COMPREHENSIVE INCOME:				COMPREHENSIVE INCOME:
Net income	$	428,907		Net income	$	428,907
Net unrealized appreciation on marketable securities, net of taxes	21			Net unrealized appreciation on marketable securities, net of taxes	21
TOTAL COMPREHENSIVE INCOME	$	428,928		TOTAL COMPREHENSIVE INCOME	$	428,928

SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

Previously Reported Year Ended December 31, 2016				As Adjusted Year Ended December 31, 2016
OPERATING REVENUES:				OPERATING REVENUES:
Passenger	$	3,051,414		Flying agreements	$	3,010,738
Ground handling and other	69,792			Airport customer service and other	52,964
Total operating revenues	3,121,206			Total operating revenues	3,063,702
OPERATING EXPENSES:				OPERATING EXPENSES:
Salaries, wages and benefits	1,211,380			Salaries, wages and benefits	1,205,459
Aircraft maintenance, materials and repairs	569,306			Aircraft maintenance, materials and repairs	569,306
Depreciation and amortization	284,969			Depreciation and amortization	284,969
Aircraft rentals	262,602			Aircraft rentals	262,602
Aircraft fuel	122,284			Aircraft fuel	70,701
Ground handling services	72,659			Airport-related expenses	122,141
Special items	465,649			Special items	465,649
Other operating expenses	305,041			Other operating expenses	255,559
Total operating expenses	3,293,890			Total operating expenses	3,236,386
OPERATING INCOME (LOSS)	(172,684		)	OPERATING INCOME (LOSS)	(172,684		)
OTHER INCOME (EXPENSE):				OTHER INCOME (EXPENSE):
Interest income	2,143			Interest income	2,143
Interest expense	(78,177		)	Interest expense	(78,177		)
Other, net	(94		)	Other, net	(94		)
Total other expense, net	(76,128		)	Total other expense, net	(76,128		)
INCOME (LOSS) BEFORE INCOME TAXES	(248,812		)	INCOME (LOSS) BEFORE INCOME TAXES	(248,812		)
PROVISION (BENEFIT) FOR INCOME TAXES	(87,226		)	PROVISION (BENEFIT) FOR INCOME TAXES	(87,226		)
NET INCOME (LOSS)	$	(161,586	)	NET INCOME (LOSS)	$	(161,586	)

BASIC EARNINGS (LOSS) PER SHARE	$	(3.14	)	BASIC EARNINGS (LOSS) PER SHARE	$	(3.14	)
DILUTED EARNINGS (LOSS) PER SHARE	$	(3.14	)	DILUTED EARNINGS (LOSS) PER SHARE	$	(3.14	)
Weighted average common shares:				Weighted average common shares:
Basic	51,505			Basic	51,505
Diluted	51,505			Diluted	51,505

COMPREHENSIVE INCOME (LOSS):				COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	(161,586	)	Net income (loss)	$	(161,586	)
Net unrealized appreciation on marketable securities, net of taxes	189			Net unrealized appreciation on marketable securities, net of taxes	189
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(161,397	)	TOTAL COMPREHENSIVE INCOME (LOSS)	$	(161,397	)

The following tables retrospectively adjust the Company’s previously issued consolidated financial statements for the impact of Topic 606 on a quarterly basis for each of the quarters in the years ended December 31, 2017 and 2016, as well as other classification changes described in this Current Report on Form 8-K. Additionally, the changes had no impact on the Company’s operating income or net income. These recast results were derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

	Three Months Ended
	March 31, 2017						June 30, 2017						September 30, 2017						December 31, 2017
(in thousands)	Previously Reported			As Adjusted			Previously Reported			As Adjusted			Previously Reported			As Adjusted			Previously Reported			As Adjusted
Income Statement:
OPERATING REVENUES:
Flying agreements (1)	$	745,411		$	734,529		$	791,341		$	781,724		$	812,295		$	800,965		$	777,661		$	761,079
Airport customer service and other (2)	20,004			12,637			18,418			9,788			19,641			11,708			19,497			10,162
Total operating revenues	$	765,415		$	747,166		$	809,759		$	791,512		$	831,936		$	812,673		$	797,158		$	771,241

OPERATING EXPENSES:
Salaries, wages and benefits	$	300,039		$	297,667		$	295,929		$	294,795		$	303,997		$	304,014		$	296,262		$	295,591
Aircraft fuel	34,310			18,433			37,183			20,071			42,071			22,791			49,089			23,841
Airport-related expenses (3)	19,535			31,948			15,902			28,949			16,693			30,209			17,718			27,268
Other operating expenses	75,088			62,675			75,174			62,126			78,948			65,432			70,092			60,544
Total operating expenses	689,120			670,871			703,163			684,916			719,567			700,304			704,219			678,302

Pre-tax income margin	6.8		%	7.0		%	10.0		%	10.2		%	10.4		%	10.7		%	8.6		%	8.8		%

	Three Months Ended
	March 31, 2016						June 30, 2016						September 30, 2016						December 31, 2016
(in thousands)	Previously Reported			As Adjusted			Previously Reported			As Adjusted			Previously Reported			As Adjusted			Previously Reported			As Adjusted
Income Statement:
OPERATING REVENUES:
Flying agreements (1)	$	744,390		$	734,499		$	784,813		$	774,255		$	781,475		$	770,773		$	740,736		$	731,211
Airport customer service and other (2)	17,685			16,970			16,525			13,509			18,301			12,938			17,280			9,546
Total operating revenues	$	762,075		$	751,469		$	801,338		$	787,764		$	799,776		$	783,711		$	758,016		$	740,757

OPERATING EXPENSES:
Salaries, wages and benefits	$	305,557		$	305,105		$	304,228		$	304,078		$	305,958		$	303,374		$	295,637		$	292,902
Aircraft fuel	25,332			15,179			32,306			18,881			33,189			19,708			31,457			16,933
Airport-related expenses (3)	20,984			32,130			16,743			30,266			16,498			29,709			18,434			30,036
Other operating expenses	74,609			63,462			79,181			65,659			77,215			64,004			74,037			62,435
Total operating expenses	700,266			689,660			717,201			703,627			713,942			697,877			1,162,480			1,145,221

Pre-tax income (loss) margin	5.8		%	5.9		%	8.3		%	8.4		%	8.3		%	8.5		%	(56.2		)%	(57.5		)%

(1) In previously reported periods, this line item was presented as passenger revenue.

(2) In previously reported periods, this line item was presented as ground handling and other.

(3) In previously reported periods, this line item was presented as ground handling services.

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