What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-17 compared with 2025-02-13 · 224 added, 173 removed, 762 unchanged (34% of the section changed)

93 unchanged sentences

Treasury stock, at cost, 44,399,241 and 43,310,324 shares as of December 31, 2025 and December 31, 2024, respectively

( 1,074,822 )

Accumulated other comprehensive income

15 unchanged sentences

Depreciation and amortization

Aircraft fuel

Airport-related expenses

Aircraft rentals

Aircraft fuel

Other operating expenses

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Balance at December 31, 2022

Exercise of common stock options and vested employee stock awards

Employee income tax paid on vested equity awards

Sale of common stock under employee stock purchase plan

Stock based compensation expense

Net unrealized depreciation on marketable securities, net of tax of $ 1,224

Balance at December 31, 2022

Exercise of common stock options and vested employee stock awards

Exercise of common stock options and stock issued under the long-term incentive plan

Employee income tax paid on vested equity awards

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Balance at December 31, 2023

Vested employee stock awards

Stock issued under the long-term incentive plan

Employee income tax paid on vested equity awards

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Balance at December 31, 2024

Stock issued under the long-term incentive plan

Employee income tax paid on vested equity awards

Sale of common stock under employee stock purchase plan

Stock based compensation expense

Treasury stock purchases and related excise tax

Net unrealized appreciation on marketable securities, net of tax of $ 36

Balance at December 31, 2025

( 1,074,822 )

See accompanying notes to consolidated financial statements.

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Stock based compensation expense

Decrease in credit loss reserves

Increase (decrease) in credit loss reserves

Gain on disposal of fixed assets

Loss (gain) on investments in other companies

Loss on investments in other companies

Net increase in deferred income taxes

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Aircraft deposits applied towards acquired aircraft

Decrease (increase) in investments and financing activities with third parties and other assets

Decrease (increase) in other assets, net

NET CASH USED IN INVESTING ACTIVITIES

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Purchase of treasury stock and related excise tax

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

NET CASH USED IN FINANCING ACTIVITIES

Increase (decrease) in cash and cash equivalents

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Non-cash investing and financing activities:

Acquisition of property and equipment

Change in accrued capital expenditures for the period

Derecognition of right of use assets

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Interest, net of capitalized amounts

Income taxes, net of refunds

See accompanying notes to consolidated financial statements.

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(1) As of December 31, 2025, other aircraft included:

supplemental spare aircraft supporting the Company’s code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with the Company’s major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.

supplemental spare aircraft supporting the Company’s code-share agreements that may be placed under future code-share or leasing agreements, aircraft scheduled to be placed under a code-share agreement with one of the Company’s major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.

For the year ended December 31, 2025, approximately 44.4 % of the Company’s aircraft in scheduled service was operated for United, approximately 28.1 % was operated for Delta, approximately 18.9 % was operated for American and approximately 8.6 % was operated for Alaska.

SkyWest Airlines has been a code-share partner with Delta since 1987, United since 1997, Alaska since 2011 and American since 2012.

As of December 31, 2024, SkyWest Airlines operated as a Delta Connection carrier primarily in Salt Lake City, Detroit and Minneapolis, a United Express carrier primarily in Los Angeles, San Francisco, Denver, Houston, Chicago and the Pacific Northwest, an American carrier primarily in Chicago, Dallas, Los Angeles and Phoenix and an Alaska carrier primarily in the Pacific Northwest.

As of December 31, 2025, SkyWest Airlines operated as a Delta Connection carrier primarily in Salt Lake City, Detroit, Los Angeles, Minneapolis and the Pacific Northwest, a United Express carrier primarily in Los Angeles, San Francisco, Denver, Houston and Chicago, an American carrier primarily in Chicago, Dallas, Los Angeles and Phoenix and an Alaska carrier primarily in the Pacific Northwest.

SkyWest Airlines operates the following aircraft manufactured by MHI RJ Aviation ULC, formerly known as Bombardier Aerospace (“Bombardier”):

CRJ900s, CRJ700s , including a 50 -seat configuration of the CRJ700, commonly referred to as a “CRJ550,” and CRJ200s, and E175s manufactured by Embraer.

CRJ900s, CRJ700s , including a 50 -seat configuration of the CRJ700, commonly referred to as a “CRJ550,” and CRJ200s, and E175s manufactured by Embraer S.A.

The CRJ700 , CRJ550 , CRJ900 and E175 aircraft, commonly referred to as “dual -class aircraft,” have a first class seat configuration typically configured between 50 to 76 seats.

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As of December 31, 2025 and 2024, the Company had classified $ 584.2 million and $ 574.3 million of marketable securities, respectively, as short-term because it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year .

Inventories include expendable parts, fuel and supplies and are valued at cost (FIFO basis) less an allowance for obsolescence based on historical part turnover, excess parts and management’s expectations of future operations.

Inventories include expendable parts and supplies and are valued at cost (FIFO basis) less an allowance for obsolescence based on historical part turnover, excess parts and management’s expectations of future operations.

Expendable inventory parts are charged to expense as used.

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The Company revises its estimated useful life and residual values assumptions when facts and circumstances occur, particularly as the Company’s CRJ fleet ages.

In the fourth quarter of 2024, the Company extended the CRJ700 contract with American and entered into agreements with United to place 40 CRJ550s under contract.

As a result, the Company extended the estimated useful lives of its CRJ700/CRJ550 fleet an average of three years and revised the residual values of the assets accordingly.

This resulted in a $ 3.0 million decrease in depreciation expense for the month ended December 31, 2024.

The decrease in depreciation related to these CRJ assets is expected to be significantly offset in 2025 by any depreciation expense from new investments in capital expenditures, including the eight E175 aircraft the Company anticipates taking delivery of throughout 2025.

Effective November 1, 2025, the Company extended the estimated useful lives of certain CRJ airframes and CRJ rotable spare parts by five to seven years to align with the Company’s long-term fleet plan and adjusted residual values on its spare engines to reflect current market conditions.

Additionally, at December 31, 2025, the Company extended the useful lives of certain spare engines and E175 rotable spare parts by 7 to 12 years to align with the Company’s long-term fleet plan.

The effect of these changes was not material to the consolidated financial statements.

The following summarizes the Company’s useful life and residual value assumptions as of December 31, 2025:

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The Company recognizes revenue under its flying agreements and under its lease, airport services and other service agreements when the service is provided under the applicable agreement.

Under the Company’s capacity

purchase agreements with United, Delta, American and 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, on-time performance or other performance metrics.

Under the Company’s capacity purchase agreements with United, Delta, American and 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, on-time performance or other performance metrics.

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.

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Under the Company’s prorate agreements, 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 determines that it will receive for each completed flight.

Under the Company’s prorate 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 determines 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.

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Department of Transportation under the Essential Air Service (“EAS”) program, a program created to ensure small communities in the United States maintain a minimum level of scheduled air service.

The EAS contracts are generally between two to three years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract.

The EAS contracts are generally between two and three years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract.

In the event the Company receives upfront consideration for an EAS contract, the Company recognizes the revenue on a per-completed flight basis over the EAS contract term.

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The performance obligation is met and revenue is recognized upon completion of the flight.

For the years ended December 31, 2024, 2023 and 2022, prorate flying agreements and SWC revenue represented approximately 13.4 %, 13.5 %, and 12.0 % of the Company’s flying agreements revenue, respectively.

For the years ended December 31, 2025, 2024 and 2023, prorate agreements and SWC revenue represented approximately 15.7 %, 13.4 %, and 13.5 % of the Company’s flying agreements revenue, respectively.

The following table represents the Company’s flying agreements revenue by type for the years ended December 31, 2025, 2024 and 2023 (in thousands):

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Accordingly, the Company’s revenue recognition will likely vary from the timing of cash receipts under the Company’s capacity purchase agreements.

The Company refers to cash received under its capacity purchase agreements prior to recognizing revenue as “deferred revenue,” and the Company refers to revenue recognized prior to billing its major airline partners under its capacity purchase

agreements as “unbilled revenue” for each reporting period.

In 2024, the Company recognized $ 35.5 million of previously deferred revenue associated with the non-lease fixed monthly payments under certain agreements and increased unbilled revenue by $ 7.9 million under certain other agreements, compared to deferring revenue of $ 151.4 million and decreasing unbilled revenue by $ 12.6 million in 2023, and deferring revenue of $ 18.7 million and recognizing $ 11.5 million of unbilled revenue in 2022.

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 for aircraft ownership costs varies by agreement but is intended to compensate the Company for providing its aircraft under the contract.

The consideration received for the use of the aircraft under the Company’s capacity purchase agreements is accounted for 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.

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The Company recognizes fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed.

The Company recognized $ 1.5 million of previously deferred lease revenue during the year ended December 31, 2024, whereas the Company deferred recognizing lease revenue of $ 78.5 million and $ 22.1 million during the years ended December 31, 2023 and 2022, respectively, for the fixed monthly lease payments under the straight-line basis.

The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements.

The Company’s total deferred revenue balance as of December 31, 2024, was $ 337.5 million, including $ 54.8 million in other current liabilities and $ 282.7 million in other long-term liabilities.

The Company’s unbilled revenue balance as of December 31, 2024, was $ 15.1 million, including $ 1.1 million in other current assets and $ 14.0 million in other long-term assets.

The Company’s total deferred revenue balance as of December 31, 2023, was $ 374.6 million, including $ 61.0 million in other current liabilities and $ 313.6 million in other long-term liabilities.

T he Company’s unbilled revenue balance as of December 31, 2023, was $ 7.3 million, including $ 1.2 million in other current assets and $ 6.1 million in other long-term assets.

The following table summarizes the amount of deferred revenue, recognition of previously deferred revenue and change in unbilled revenue for the fixed monthly non-lease and lease payments received under the Company’s capacity purchase agreements for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year ended December 31,

Non-lease fixed monthly payments:

Deferred recognition of revenue on fixed monthly payments received

Revenue recognized that was deferred in previous period

Increase (decrease) in unbilled revenue

Total non-lease revenue recognized (deferred)

Lease fixed monthly payments:

Deferred recognition of revenue on fixed monthly payments received

Revenue recognized that was deferred in previous period

Increase (decrease) in unbilled revenue

Total lease revenue recognized (deferred)

Total revenue recognized (deferred)

The Company's unbilled revenue and deferred revenue balances were reflected in the following balance sheet line items at December 31, 2025 and 2024 (in thousands):

Unbilled revenue - other current assets

Unbilled revenue - other long-term assets

Total unbilled revenue

Deferred revenue - other current liabilities

Deferred revenue - other long-term liabilities

Total deferred revenue

Net deferred revenue balance

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.

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Aircraft type

Number of Aircraft

Term / Termination Dates

United Express Agreements

(capacity purchase agreement)

Individual aircraft have scheduled

(capacity purchase agreements)

• CRJ700/CRJ550

Individual aircraft have scheduled removal dates under the agreement between 2025 and 2033

The average remaining term of the aircraft under contract is 2.5 years

removal dates under the agreements

between 2026 and 2033

United Express Prorate Agreement

(prorate agreement)

Terminable with 120-day notice

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Aircraft type

Number of Aircraft

Term / Termination Dates

Delta Connection Agreement

Individual aircraft have scheduled

(capacity purchase agreement)

Individual aircraft have scheduled removal dates from 2025 to 2034

The average remaining term of the aircraft under contract is 4.2 years

removal dates under the agreement

between 2026 and 2034

Delta Connection Prorate Agreement

(prorate agreement)

CRJ700/CRJ550

Terminable with 30-day notice

Total under Delta Connection Agreements

American Capacity Purchase Agreement

American Agreements

Aircraft type

Number of Aircraft

Term / Termination Dates

American Agreement

Individual aircraft have scheduled

(capacity purchase agreement)

Individual aircraft have scheduled removal dates from 2025 to 2032

The average remaining term of the aircraft under contract is 4.6 years

Total under American Agreement

Alaska Capacity Purchase Agreement

removal dates under the agreement

between 2027 and 2032

American Prorate Agreement

Terminable with 180-day notice

Total under American Agreements

Alaska Agreement

Aircraft type

Number of Aircraft

Term / Termination Dates

Alaska Agreement

Individual aircraft have scheduled

(capacity purchase agreement)

Individual aircraft have scheduled removal dates from 2030 to 2034

The average remaining term of the aircraft under contract is 6.5 years

removal dates under the agreement

between 2030 and 2034

* The Company’s prorate agreements are based on specific routes, not a specific aircraft count.

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In addition to the contractual agreements described above, as of December 31, 2025, SkyWest Airlines reached agreements with certain major airline partners to place additional aircraft under capacity purchase agreements as summarized below.

The Company is coordinating with its major airline partners to optimize the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change.

● Capacity purchase agreement with United for 15 new E175 aircraft.

Seven new E175 aircraft are currently scheduled for delivery in 2025 and eight new E175 aircraft are scheduled for delivery in 2026.

The Company is coordinating with its major airline partners and aircraft manufacturer regarding the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change.

● Capacity purchase agreement with United for eight new E175 aircraft, which are scheduled for delivery in 2026.

The Company anticipates financing the aircraft through debt.

● Capacity purchase agreement with Alaska for one new E175 aircraft.

The delivery date for the new E175 aircraft is currently scheduled for 2025.

● Capacity purchase agreement with Alaska for one new E175 aircraft, which is scheduled for delivery in 2026.

The Company anticipates financing the aircraft through debt.

● Capacity purchase agreement with United for 30 used CRJ550 aircraft.

Pursuant to these agreements, the Company is in the process of acquiring four used CRJ550s and will convert 26 of its CRJ700s to CRJ550s.

The aircraft are anticipated to be placed into service in 2025 through the end of 2026.

● Capacity purchase agreement with Delta for 16 new E175 aircraft.

10 new E175 aircraft are currently scheduled for delivery in 2027 and six new E175 aircraft are scheduled for delivery in 2028.

The Company anticipates financing the aircraft through debt.

● Capacity purchase agreement with United for 23 used CRJ550 aircraft that are anticipated to be placed into service by the end of 2026.

Pursuant to these agreements, the Company is in the process of converting its owned CRJ700s to CRJ550s.

In January 2026, the Company extended the scheduled contract expirations on 40 E175 aircraft with United and 13 E175 aircraft with Delta.

The termination dates in the table above reflect the January 2026 extensions.

When an aircraft is scheduled for expiration from a capacity purchase agreement, 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 major airline partner when the aircraft is provided by the major airline partner, 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 disassembling aircraft components such as the engines and parts to be used as spare inventory.

Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties and from airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services.

Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties, maintenance services provided to third parties and airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services.

The following table represents the Company’s lease, airport services and other revenues for the years ended December 31, 2025, 2024 and 2023 (in thousands):

For the year ended December 31,

Operating lease revenue

Operating lease revenue relating to variable lease payments

Operating lease fixed revenue

Operating lease variable revenue

Airport customer service and other revenue

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As of December 31, 2024, the Company had gross receivables of $ 125.9 million in current assets and gross receivables of $ 225.2 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, notes receivable or guarantee.

During the year ended December 31, 2024, the Company recorded $ 3.6 million of adjustments to the credit loss reserve.

During the year ended December 31, 2025, the Company increased its credit loss reserve by $ 7.5 million primarily due to the increase in receivables from December 31, 2024 to December 31, 2025 and the Company’s assessment of higher credit risk of certain outstanding receivables.

During the year ended December 31, 2024, the Company recorded $ 3.6 million of adjustments as reductions to the credit loss reserve.

During the year ended December 31, 2023, the Company recorded $ 0.2 million of adjustments to the credit loss reserve and wrote-off $ 18.5 million in receivables that were fully reserved as of December 31, 2022.

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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.

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.

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See Note 9, “Capital Transactions” for further discussion on the warrants issued to Treasury.

Additionally, for the years ended December 31, 2024, 2023 and 2022, 209,000 , 334,000 and 146,000 performance share units (“PSUs”) (at target performance) were excluded from the computation of Diluted EPS since the Company had not achieved the minimum target thresholds for these PSUs as of December 31, 2024, 2023 and 2022, respectively.

Additionally, for the years ended December 31, 2025, 2024 and 2023, 79,000 , 209,000 and 334,000 performance share units (“PSUs”) (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these PSUs as of December 31, 2025, 2024 and 2023, respectively.

The calculation of the weighted average number of common shares outstanding for Basic EPS and Diluted EPS are as follows for the years ended December 31, 2025, 2024 and 2023 (in thousands):

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Segment Reporting

GAAP requires disclosures related to components of a company for which separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker when deciding how to allocate resources and in assessing performance.

resources and in assessing performance.

The Company’s two reportable segments consist of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.

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At December 31, 2025, the Company adopted Accounting Standards Update No.

2023-07, “Segment Reporting (ASC Topic 280) – Improvements to Reportable Segment Disclosures,” issued by the Financial Accounting Standards Board (FASB).

The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation.

As required by the standard, the Company recast prior year segment disclosures to conform to the current year presentation.

2023-09 (“ASU 2023-09”), “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures,” issued by the Financial Accounting Standards Board (FASB).

The standard enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

As required by the standard, the Company recast prior year disclosures to conform to the current year presentation.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

For further details, refer to Note 2, “Segment Reporting.”

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

For further details, refer to Note 4, Income Taxes .

In March 2024, the FASB issued Accounting Standards Update No.

2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (ASC Subtopic 220-40) – Disaggregation of Income Statement Expenses”, which enhances the transparency and comparability of financial statements by requiring companies to disclose more granular information about expense components.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

As clarified in ASU 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the effective date,” the guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

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The Company’s two reportable segments consist of (1) the operations of SkyWest Airlines and SWC and (2) 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 Company’s chief operating decision maker analyzes the profitability of operating aircraft separately from the profitability of the Company’s capital deployed for new aircraft and the related aircraft financings, including the Company’s E175 fleet.

The SkyWest Airlines and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs, and revenue and operating expenses attributed to prorate agreements and airport services agreements.

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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.

Additionally, aircraft removed from SkyWest Airlines’ operations and held for sale are included in the SkyWest Leasing segment.

The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on income before income taxes.

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The following represents the Company’s segment data for the years ended December 31, 2025, 2024, and 2023 (in thousands).

As required by the adoption of ASC 2023-07, the Company recast the 2023 and 2022 segment disclosures to conform to the current year presentation.

As required by the adoption of ASC 2023-07 for the year ended December 31, 2024, the Company recast the 2023 segment disclosures to conform to the 2025 and 2024 presentation.

Year ended December 31, 2025

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Interest expense

Other segment items (1)

Other segment expense (income) items (1)

Segment profit (2)

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Interest expense

Other segment items (1)

Segment profit (loss) (2)

Other segment expense (income) items (1)

Segment profit (2)

Total assets (as of December 31, 2024)

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Interest expense

Other segment items (1)

Other segment expense (income) items (1)

Segment profit (loss) (2)

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Capital expenditures (including non-cash)

(1) Other segment items includes aircraft fuel;

(1) Other segment items include aircraft fuel;

airport related expenses;

aircraft rentals;

other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs;

other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, aircraft rentals, crew per diem and crew hotel costs;

interest income and other income, net.

(2) Segment profit (loss) is equal to income before income taxes.

As a result of adopting ASC 2023-07, the Company included interest income and other income in the recast segment profit (loss) for each segment during the years ended December 31, 2023 and 2022.

As a result of adopting ASC 2023-07, the Company included interest income and other income in the recast segment profit (loss) for each segment during the year ended December 31, 2023.

(3) Long-term Debt

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Notes payable to U.S.

Government, interest due semi-annually at 1.00 % through 2025 and based on SOFR plus 2.0 % from 2025 through 2031, unsecured

Government, interest due semi-annually and based on SOFR plus 2.0 % through 2030, unsecured

Notes payable to U.S.

Government, interest due semi-annually at 1.00 % as of December 31, 2025 and 2024 and based on SOFR plus 2.0 % from 2026 through 2031, unsecured

Long-term debt

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Current portion of long-term debt, net of debt issue costs

As of December 31, 2024 and 2023, the Company had $ 2.7 billion and $ 3.0 billion, respectively, of total long-term debt.

As of December 31, 2025, the Company had $ 2.4 billion of total long-term debt, which consisted of $ 2.2 billion of debt used to finance aircraft and engines and $ 200.6 million of unsecured debt payable to Treasury, of which $ 105.2 million is due in 2030 and $ 95.4 million is due in 2031.

As of December 31, 2025, $ 95.4 million of the unsecured debt payable to Treasury had a fixed annual interest rate of 1.0 % and i s scheduled to increase to the applicable SOFR rate plus 2.0 % during the first six months of 2026.

As of December 31, 2024 the Company had $ 2.7 billion of total long-term debt, which consisted of $ 2.5 billion of debt used to finance aircraft and engines and $ 200.6 million of unsecured debt payable to Treasury.

The average effective interest rate on the Company’s debt was approximately 4.3 % and 4.2 % at December 31, 2025 and 2024, respectively.

During 2024, the Company took delivery of five new E175 aircraft that the Company financed through $ 116.2 million of long-term debt.

The debt associated with the five E175 aircraft has 12-year terms, is due in quarterly installments, and is secured by the E175 aircraft.

During 2025, the Company took delivery of seven new E175 aircraft that the Company financed through $ 165.8 million of long-term debt.

The debt associated with the seven E175 aircraft has 12-year terms, is due in quarterly installments, and is secured by the E175 aircraft.

During 2025, the Company executed a promissory note for $ 43.0 million.

The promissory note has a five -year term, is due in monthly installments, and is secured by aircraft.

The aggregate amounts of principal maturities of long-term debt as of December 31, 2025 were as follows (in thousands):

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As of December 31, 2025 and 2024, SkyWest Airlines had no amounts outstanding under the line of credit facility.

However, at December 31, 2024 and 2023, the Company had $ 24.9 million and $ 29.2 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $ 75.1 million and $ 70.8 million, respectively.

However, at December 31, 2025 and 2024, the Company had $ 24.4 million and $ 24.9 million, respectively, in letters of credit issued under the facility

which reduced the amount available under the facility to $ 75.6 million and $ 75.1 million, respectively.

The line of credit expires March 25, 2028 and has a variable interest rate of 3.5 % plus the one month SOFR rate.

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Provision for income taxes

The following is a reconciliation between a federal income tax rate of 21 % and the effective tax rate which is derived by dividing the provision for income taxes by the income before the provision for income taxes (in thousands):

The following is a reconciliation between the federal income tax rate of 21.0 % and the effective tax rate which is derived by dividing the provision for income taxes by the income before income taxes (in thousands).

As a result of adopting ASU 2023-09, the disaggregated components for the years ended December 31, 2024 and 2023 were recast to conform with the presentation for the 2025 year.

Year ended December 31,

Computed provision for income taxes at the statutory rate

Increase (decrease) in income taxes resulting from:

State income tax provision, net of federal income tax benefit

Non-deductible expenses

Valuation allowance changes affecting the provision for income taxes

Tax expense (benefit) from share-based compensation

Change in unrecognized tax benefit

federal statutory tax rate

Domestic federal reconciling items:

Nontaxable and nondeductible items, net:

Section 162(m) limit on compensation

Other employee non-deductible expenses

Other reconciling items:

Excess tax benefits from stock based compensation

Domestic state and local income taxes, net of federal benefit

Change in prior year unrecognized tax benefits

Provision for income taxes

For the year ended December 31, 2024 and December 31, 2023, the Company released a $ 0.6 million and $ 1.1 million, respectively, valuation allowance related to certain deferred tax assets associated with state net operating losses with a limited carry forward period.

For the year ended December 31, 2022, the Company recorded a $ 1.7 mi llion valuation allowance against certain deferred tax assets associated with state net operating losses with a limited carry forward period.

The decrease in this valuation allowance in 2024 was primarily based on changes in the Company's state income tax projections by jurisdiction which increased the amount of deferred tax assets that are anticipated to be utilized prior to the deferred tax assets expiring.

The Company recorded a $ 0.9 million benefit, a $ 0.9 million expense and $ 0.5 million expense from share-based compensation in 2024, 2023, and 2022, respectively, relating to ASU 2016-09 which requires excess tax benefits and deficiencies to be recognized in the income tax provision during the period stock options are exercised and stock awards vest.

The Company recorded a $ 0.7 million, $ 7.6 million, and $ 7.3 million tax benefit for the release of uncertain tax position under ASC Topic 740 in 2024, 2023 and 2022, respectively.

For the year ended December 31, 2025, the Company's state and local income taxes from California, Colorado, Illinois, and Oregon comprised the majority of the state and local income taxes, net of federal benefit category.

For the years ended December 31, 2024 and 2023, the Company's state and local income taxes from California, Colorado, and Illinois comprised the majority of the state and local income taxes, net of federal benefit category.

The following are the income taxes paid, net of refunds by the Company for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year ended December 31,

Domestic state and local:

Total income taxes paid, net of refunds

The significant components of the Company’s net deferred tax assets and liabilities as of December 31, 2025 and 2024, are as follows (in thousands):

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Net operating loss carryforward

Aircraft credits

Aircraft maintenance contracts

Deferred revenue

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The Company anticipates that the federal and state net operating losses will start to expire in 2035 and 2026, respectively.

The Company has no ongoing federal or state examinations.

The Company has no ongoing federal examination and has one ongoing state examination.

Federal tax years 2022, 2023 and 2024 are open to examination.

Under ASC Topic 740, the accounting guidance related to uncertainty in tax positions requires that the impact of a tax position be recognized in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position.

audit, based on the technical merits of the position.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the year ended December 31, 2025, 2024 and 2023 is as follows (in thousands) :

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Interest and penalties in year-end balance

For the years ended December 31, 2023 and 2022, the Company recorded $ 191,000 , and $ 343,000 , respectively, of interest expense related to uncertain tax positions not offset by the Company's tax attributes.

The Company did not record a similar expense for the year ended December 31, 2024.

For the year ended December 31, 2023, the Company recorded $ 191,000 of interest expense related to uncertain tax positions not offset by the Company's tax attributes.

The Company did not record a similar expense for the years ended December 31, 2025 and 2024.

(5) Commitments and Contingencies

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As of December 31, 2025, the Company had approximately 15,800 employees.

Although no SkyWest Airlines employees are represented by a national union, the majority of SkyWest Airline employees are covered by a written, stable and binding collective bargaining agreement under the Railway Labor Act, entered into between SkyWest Airlines and long-established labor associations, such as the SkyWest Airlines Pilot Association (“SAPA”).

Although no SkyWest Airlines employees are represented by a national union, the majority of SkyWest Airlines’ employees are covered by a written, stable and binding collective bargaining agreement under the Railway Labor Act, entered into between SkyWest Airlines and long-established labor associations, such as the SkyWest Airlines Pilot Association (“SAPA”).

Aircraft and Other Purchase Commitments

As of December 31, 2024, the Company had a purchase commitment to purchase eight new E175 aircraft in 2025 and eight new E175 aircraft in 2026.

As of December 31, 2025, the Company had a purchase commitment to purchase 69 new E175 aircraft from Embraer with anticipated delivery dates through 2032, including a purchase agreement the Company entered into with Embraer during the second quarter of 2025.

Under this commitment, the Company expects to purchase and place into service eight E175 aircraft with United, one E175 aircraft with Alaska and 16 E175 aircraft with Delta.

The remaining purchase commitment delivery positions for 44 E175 aircraft are from 2028 through 2032.

The Company also had a purchase agreement to acquire two used E170 aircraft with anticipated closing dates in 2026.

In addition to the above, in 2024, the Company entered into a master equipment purchase agreement with another airline to acquire certain airframes and engines and lease the assets back to the airline under a five-year term.

The Company accounted for the transaction as a failed sale-leaseback in accordance with ASC 842 as the criteria for a sale were not met.

At December 31, 2025, the Company estimates the remaining financing obligation under the agreement will be between $ 20.0 million and $ 25.0 million and anticipates closing on the remaining financings during 2026.

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In 2023, the Company agreed to guarantee up to $ 12.0 million of debt for an aviation school.

The debt is secured by the school’s aircraft and engines and has a five-year term.

In exchange for providing the guarantee, the Company receives 2.0 % of the guaranteed amount annually as consideration in cash.

The balance of the debt under the guarantee was $ 10.6 million as of December 31, 2024.

The debt was secured by the school’s aircraft and engines and had a five-year term.

In exchange for providing the guarantee, the Company received 2.0 % of the guaranteed amount annually as consideration in cash.

In June 2025, the aviation school fully repaid the debt under the guarantee agreement.

As a result, the Company was no longer a guarantor at December 31, 2025.

The purpose of these guarantees is to help reduce the financing costs of aircraft for the third-parties in an effort to increase the potential number of commercial pilots in the Company’s hiring pipeline.

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The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

As of December 31, 2024, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from four to six years .

These eight aircraft are subleased to a third-party.

During the year ended December 31, 2023, the Company acquired 35 CRJ aircraft under early lease buyout arrangements with the lessors for $ 142.4 million.

The aircraft were in the Company’s operating fleet when the lease buyouts occurred.

As of December 31, 2025, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from three to five years .

The Company is subleasing these eight aircraft to a third party.

Airport facilities

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As of December 31, 2025, the Company’s right-of-use assets were $ 81.9 million, the Company’s current maturities of operating lease liabilities were $ 19.6 million, and the Company’s noncurrent lease liabilities were $ 62.3 million.

During 2024, the Company paid $ 28.9 million under operating leases reflected as a reduction from operating cash flows.

During 2025, the Company paid $ 34.1 million under operating leases reflected as a reduction from operating activities cash flows.

The table below presents lease related terms and discount rates as of December 31, 2025:

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Total lease cost

As of December 31, 2024, 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.

As of December 31, 2025, the Company leased aircraft, airport facilities, office space, and other property and equipment under non-cancelable operating leases, which are generally under long-term agreements pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property.

The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases.

The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of December 31, 2024 (in thousands):

Total future minimum operating lease payments

The following table reconciles future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of December 31, 2025 to the operating lease liabilities recorded on the consolidated balance sheet (in thousands):

2031 and thereafter

Total minimum lease payments

imputed interest

Present value of future lease payments

current maturities of operating lease liabilities

Long-term operating lease liabilities

(7) Fair Value Measurements

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The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities.

See Note 12, “Investments in Other Companies” regarding the Company’s investments in other companies.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the year ended December 31, 2024.

During the year ended December 31, 2025, the Company exercised its warrant to purchase 1,500,000 shares of common stock of Eve Holding, Inc.

(“Eve”) through a cashless exercise and received shares of common stock of Eve.

See Note 12 “Investments in Other Companies” for additional information regarding the Company’s investment in Eve.

The warrant was classified as Level 3 within the fair value hierarchy as of December 31, 2024.

The Company’s shares of Eve’s common stock are actively traded and are valued using quoted market prices and are classified as Level 1 within the fair value hierarchy as of December 31, 2025.

The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

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In 2022, the Company committed to a formal plan to sell 14 CRJ700 aircraft and determined the aircraft met the criteria to be classified as assets held for sale.

In connection with the classification of these assets as held for sale, the Company recorded an impairment loss of $ 51.4 million, which is included in “Other operating expenses” on the Company’s consolidated statements of comprehensive income and in the SkyWest Leasing segment for the year ended December 31, 2022.

During 2023, the Company recorded a $ 2.3 million loss related to changes in the fair value of the 14 aircraft held for sale which is included in “Other operating expenses” on the Company’s consolidated statements of comprehensive income and in the SkyWest Leasing segment for the year ended December 31, 2023.

The Company presented the $ 54.3 million of assets held for sale at the lower of their current carrying value or their fair market value less costs to sell and included the amount in “Other current assets” on the Company’s consolidated balance sheet.

In March 2024, the Company decided not to sell the 14 CRJ700 aircraft based on improved pilot availability and reclassified them as held for use assets in “Aircraft and rotable spares” on the Company’s consolidated balance sheet.

The Company remeasured the fair value of the held for use assets at the time of the reclassification and, as a result, in 2024, the Company recorded a $ 4.2 million gain (pre-tax), as an offset to “Other Operating Expenses” in the Company’s consolidated statement of income, primarily due to the elimination of the estimated costs to sell the assets.

The Company remeasured the fair value of the held for use assets at the time of the reclassification and, as a result, the Company recorded a $ 4.2 million gain (pre-tax), as an offset to “Other Operating Expenses” in the Company’s consolidated statement of income during the year ended December 31, 2024, primarily due to the elimination of the estimated costs to sell the assets.

The fair values were based upon observable and unobservable inputs, including a third-party valuation, market trends and condition of the airframes and engines.

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2019 Long-Term Incentive Plan, which provided for the issuance of up to 4,500,000 shares of common stock to the Company’s directors, employees, consultants and advisors (the “2019 Incentive Plan”).

On May 7, 2024, the Company’s shareholders

approved the amendment and restatement of the 2019 Incentive Plan (“Restated 2019 Incentive Plan”), providing an additional 1,298,000 shares of common stock to be issued.

On May 7, 2024, the Company’s shareholders approved the amendment and restatement of the 2019 Incentive Plan (“Restated 2019 Incentive Plan”), providing an additional 1,298,000 shares of common stock to be issued.

The Restated 2019 Incentive Plan provides for awards in the form of options to acquire shares of common stock, stock appreciation rights, restricted stock grants, restricted stock units and performance awards.

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Stock Options

During the years ended December 31, 2024, 2023 and 2022, the Company did not grant any options to purchase shares of common stock to its employees.

During the years ended December 31, 2025, 2024 and 2023, the Company did no t grant any options to purchase shares of common stock to its employees.

The Company had no outstanding stock options as of December 31, 2025 and 2024.

The following table summarizes the stock option activity for the years ended December 31, 2024, 2023 and 2022.

The following table summarizes the stock option activity for the year ended December 31, 2023.

There was no stock option activity for the years ended December 31, 2025 and 2024.

Outstanding at beginning of year

Outstanding at end of year

Exercisable at December 31, 2024

Exercisable at December 31, 2023

The total intrinsic value of options to acquire shares of the Company’s common stock that were exercised was $ 0.1 million for the years ended December 31, 2023 and 2022.

The Company did not have any option exercises for the year ended December 31, 2024.

The total intrinsic value of options to acquire shares of the Company’s common stock that were exercised was $ 0.1 million for the year ended December 31, 2023.

The Company did not have any option exercises for the years ended December 31, 2025 and 2024.

Restricted Stock Units (“RSUs”)

During the year ended December 31, 2024, the Company granted 50,577 restricted stock units to certain of the Company’s employees under the 2019 Incentive Plan.

During the year ended December 31, 2025, the Company granted 25,359 restricted stock units to certain of the Company’s employees under the Restated 2019 Incentive Plan.

The restricted stock units granted during the year ended December 31, 2025, have a three-year cliff-vesting period, during which the recipient must remain employed with the Company or its subsidiaries.

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During the 2024 year, the Company granted 118,021 PSUs at target performance, all of which were outstanding as of December 31, 2025 and have a potential payout of 236,042 shares, or 200 % of target, if the Company’s performance exceeds the pre-established goals for a maximum payout associated with this grant.

During the 2022 year, the Company granted 225,345 PSUs at target performance, of which 219,054 were outstanding as of December 31, 2024 and have a potential payout of 547,635 shares, or 250 % of target, if the Company’s performance exceeds the pre-established goals for a maximum payout associated with this grant.

During the 2023 year, the Company granted 391,810 PSUs at target performance, all of which were outstanding as of December 31, 2025 and have a potential payout of 979,525 shares, or 250 % of target, if the Company’s performance exceeds the pre-established goals for a maximum payout associated with this grant.

During 2025, the Compensation Committee determined the Company achieved 250 % of target and awarded 328,611 additional shares related to the performance share grant in 2022 based on the Company’s performance for the 2022, 2023 and 2024 performance periods, measured against the pre-established targets for each period.

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Non-vested PSUs outstanding at December 31, 2022

PSUs forfeited from the 2019 grant due to performance

PSUs forfeited below target from the 2020 grant due to performance

Non-vested PSUs outstanding at December 31, 2023

PSUs forfeited from the 2020 grant due to performance

Additional PSUs awarded above target from the 2021 grant due to performance

Non-vested PSUs outstanding at December 31, 2024

Additional PSUs awarded from the 2021 grant due to performance

Additional PSUs awarded above target from the 2022 grant due to performance

Non-vested PSUs outstanding at December 31, 2025

During the year ended December 31, 2025, the Company granted 6,275 fully-vested shares of common stock and 1,255 restricted stock units to the Company’s directors with a weighted average grant-date fair value of $ 97.02 .

During the years ended December 31, 2023 and 2022, the Company granted fully-vested shares of common stock to the Company’s directors in the amounts of 37,534 and 24,423 shares, respectively, with a weighted average grant-date fair value of $ 18.65 and $ 32.86 , respectively.

During the year ended December 31, 2024, the Company granted 14,179 fully-vested shares of common stock and 2,632 restricted stock units to the Company’s directors with a weighted average grant-date fair value of $ 61.13 .

During the year ended December 31, 2023, the Company granted 37,534 fully-vested shares of common stock with a weighted average grant-date fair value of $ 18.65 .

During the years ended December 31, 2025, 2024 and 2023, the Company recorded equity-based compensation expense of $ 18.7 million, $ 19.9 million and $ 17.1 million, respectively.

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The weighted average grant-date fair value of these warrants was estimated using the Black-Scholes option pricing model.

The current holder of the warrants exercised all 785,226 warrants in 2024.

The Company settled the exercise through net share issuances of a total of 481,201 shares of common stock to the holder.

As of December 31, 2024, the Company had no warrants issued and outstanding.

The Company did not issue any warrants for the years ended December 31, 2024 and 2023.

The holder of the warrants exercised all 785,226 warrants in 2024, and the Company settled the exercise through net share issuances of a total of 481,201 shares of common stock to the holder in 2024.

As of December 31, 2025 and 2024, the Company had no warrants issued and outstanding.

The Company did no t issue any warrants for the years ended December 31, 2025 and 2024.

(10) Retirement Plans and Employee Stock Purchase Plans

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Generally, the Company matches 100 % of such contributions up to levels ranging from 2 % to 12 % of compensation, based on position and years of service.

Eligible employees who are SAPA pilots and SWC captains are eligible for non-elective profit sharing contributions ranging from 0 % to 20 %, based on position and years of service.

Eligible employees who are SkyWest Airlines Pilot Association pilots and SWC pilots are eligible for non-elective profit sharing contributions ranging from 0 % to 20 %, based on position and years of service.

Additionally, a discretionary contribution may be made by the Company.

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The Company’s February 2019 stock repurchase program authorized up to $ 250.0 million for the repurchase of the Company’s common stock.

In May 2023, the Company’s Board of Directors authorized up to $ 250.0 million for the repurchase of the Company’s common stock, superseding the February 2019 authorization.

At December 31, 2024, $ 47.6 million remained available under the May 2023 authorization.

During the year ended December 31, 2024, the Company repurchased 0.6 million shares of common stock for $ 43.3 million at a weighted average price per share of $ 74.94 under the May 2023 stock repurchase program.

In May 2023 , the Company’s Board of Directors initially authorized up to $ 250.0 million for the repurchase of the Company’s common stock under the May 2023 repurchase program, superseding the February 2019 authorization .

In May 2025, the Company’s Board of Directors approved a $ 250.0 million increase to the May 2023 repurchase program.

At December 31, 2025, $ 213.1 million remained available under the May 2023 stock repurchase program.

During the year ended December 31, 2025, the Company repurchased 0.8 million shares of common stock for $ 84.5 million at a weighted average price per share of $ 99.61 under the stock repurchase program.

The Company recorded $ 0.4 million of excise tax related to the stock repurchases as Treasury Stock in the Company’s Stockholders Equity for the year ended December 31, 2025.

During the year ended December 31, 2024, the Company repurchased 0.6 million shares of common stock for $ 43.3 million at a weighted average price per share of $ 74.94 under the stock repurchase program.

The Company did not record any excise tax related to the stock repurchases as Treasury Stock in the Company’s Stockholders Equity for the year ended December 31, 2024.

During the year ended December 31, 2023, the Company repurchased 10.6 million shares of common stock for $ 289.1 million at a weighted average price per share of $ 27.30 , of which $ 130.0 million was repurchased under the February 2019 stock repurchase program and $ 159.1 million was repurchased under the May 2023 stock repurchase program.

The Company also recorded $ 2.9 million of excise tax related to the stock repurchases as Treasury Stock in the Company’s Stockholders Equity for the year ended December 31, 2023.

The Company did not have any stock repurchases during the year ended December 31, 2022.

Additionally, during the years ended December 31, 2024, 2023 and 2022, the Company paid $ 6.9 million, $ 0.6 million and $ 1.2 million, respectively, for a net settlement of the income tax obligation on employee equity awards that vested during the applicable periods.

The Company also recorded

$ 2.9 million of excise tax related to the stock repurchases as Treasury Stock in the Company’s Stockholders Equity for the year ended December 31, 2023.

Additionally, during the years ended December 31, 2025, 2024 and 2023, the Company paid $ 27.2 million, $ 6.9 million and $ 0.6 million, respectively, in cash in lieu of issuing shares for the income tax obligation on employee equity awards that vested during the applicable periods.

(12) Investments in Other Companies

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Aero Engines had no debt outstanding as of December 31, 2025.

As of December 31, 2024, the Company’s investment balance in Aero Engines was $ 23.9 million and has been recorded in “Other Assets” on the Company’s consolidated balance sheet.

The Company’s portion of the income generated by Aero Engines for the year ended December 31, 2024, was $ 2.2 million, which is recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income.

During the year ended December 31, 2025, the Company received a $ 12.0 million distribution from Aero Engines, reflected as a reduction to the Company’s investment balance in Aero Engines.

As of December 31, 2025, the Company’s investment balance in Aero Engines was $ 12.8 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

The Company’s portion of the income generated by Aero Engines for the year ended December 31, 2025, was $ 0.9 million, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income.

As of December 31, 2024, the Company’s investment balance in Aero Engines was $ 23.9 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

The Company’s portion of the income generated by Aero Engines for the year ended December 31, 2024, was $ 2.2 million, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income.

In December 2023, the Company invested $ 9.9 million for a 9.9 % ownership interest in Corporate Flight Management, Inc.

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In January 2024, the Company invested an additional $ 15.1 million in Contour.

The Company has a 25 % ownership interest in Contour at December 31, 2024 and holds one of five seats, or 20 % , on Contour’s board of directors.

Additionally, the Company received an option to acquire additional ownership interest in Contour, which had an expiration date of December 31, 2024.

The Company had a 25 % ownership interest in Contour at December 31, 2025 and held one of five seats, or 20 % , on Contour’s board of directors.

Additionally, as part of the initial investment, the Company received an option to acquire additional ownership interest in Contour, which expired on December 31, 2024.

The Contour arrangement also includes an asset provisioning agreement under which the Company will provide CRJ airframes, engines and rotable parts to Contour.

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For the year ended December 31, 2025, the Company recorded income of $ 1.3 million related to its Contour investment, its portion of income generated by Contour, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income.

Additionally, for the year ended December 31, 2024, the Company recorded a loss of $ 3.7 million related to the expiration of a purchase option to acquire an additional ownership interest in Contour.

For the year ended December 31, 2024, the Company recorded income of $ 0.1 million related to its Contour investment, its portion of income generated by Contour, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income.

Additionally, for the year ended December 31, 2024, the Company recorded a loss of $ 3.7 million related to the expiration of the purchase option to acquire an additional ownership interest in Contour.

As of December 31, 2025, the Company’s investment balance in Contour of $ 22.8 million was recorded in “Other Assets” on the Company’s consolidated balance sheet.

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Fair Value Method Investment

In 2021, the Company entered into a strategic partnership with Eve UAM (“Eve”), to develop a network of deployment for Eve’s eVTOL aircraft.

In 2021, the Company entered into a strategic arrangement with Eve, to develop a network of deployment for Eve’s electric vertical takeoff and landing aircraft.

In 2022, the Company acquired 1,000,000 shares of common stock of Eve and a warrant giving the Company the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $ 0.01 per share.

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The intent of the put option was to reduce the Company’s investment risk in Eve.

The Company is restricted from selling the shares underlying the warrant until May 2025, and the warrant expires in May 2032.

The Company was restricted from selling the shares underlying the warrant until May 2025, and the warrant expires in May 2032.

The Company acquired the shares of common stock, warrant and put option (collectively the “Eve Investments”) for $ 10.0 million.

The Company evaluated the Eve Investments under ASC Topic 321, “Investments – Equity Securities” and ASC Topic 815, “Derivatives and Hedging,” and recorded the Eve Investments based on their pro rata share of the consideration paid using the fair value of the Eve Investments on the acquisition date, with subsequent changes in the fair value reported in earnings.

During the year ended December 31, 2023, the Company sold 600,411 shares of common stock of Eve, which concurrently forfeited the 600,411 shares subject to the put option from the Eve shareholder.

During the year ended December 31, 2024, the Company exercised the remainder of the put option and received aircraft parts credits in

exchange for the 399,589 shares of common stock.

During the year ended December 31, 2023, the Company sold 600,411 shares of common stock of Eve for $ 5.0 million, which concurrently forfeited the 600,411 shares subject to the put option from the Eve shareholder.

During the year ended December 31, 2024, the Company exercised the remainder of the put option and received aircraft parts credits of $ 4.0 million in exchange for the 399,589 shares of common stock.

At December 31, 2024, the Company’s only remaining investment in Eve was the warrant to acquire 1,500,000 shares of common stock of Eve.

The shares of common stock of Eve were classified as Level 1 within the fair value hierarchy as Eve stock is actively traded on the New York Stock Exchange, and the value is determined using quoted market prices for the equity security.

The warrant and put option (prior to the exercise of the put option) were classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investments”).

The Company used the Black Scholes Option Pricing Model to determine the estimated fair market value of the Eve Level 3 Investments .

During the year ended December 31, 2025, the Company exercised its warrant to purchase 1,500,000 shares of common stock of Eve.

The Company received 1,497,635 shares of common stock of Eve resulting from a cashless exercise.

The warrant was classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investment”) as of December 31, 2024.

The Company used the Black Scholes Option Pricing Model to determine the estimated fair market value of the Eve Level 3 Investment .

Upon exercise, the Company’s shares of common stock of Eve were classified as Level 1 within the fair value hierarchy as Eve’s common shares are actively traded and are valued using quoted market prices.

The table below shows the reconciliation of the Eve Level 3 Investments (in thousands):

Eve Level 3 Investments:

Balance at December 31, 2021

Unrealized gains

Eve Level 3 Investment:

Balance at December 31, 2022

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Balance at December 31, 2024

Unrealized loss

Exercise of warrant to common stock (level 1)

Balance at December 31, 2025

During the year ended December 31, 2025, the Company sold 431,752 shares of Eve for gross proceeds of $ 2.2 million.

During the year ended December 31, 2025, the Company recorded a loss of $ 1.7 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments, including a realized gain of $ 0.7 million from the sale of Eve common stock and unrealized losses of $ 2.4 million.

During the year ended December 31, 2024, the Company recorded a loss of $ 3.3 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments, including a realized gain of $ 3.4 million from the exercise of the put option, a realized loss of $ 1.4 million from the forfeited shares of Eve common stock and unrealized losses of $ 5.3 million.

During the year ended December 31, 2023, t he Company recorded a loss of $ 1.0 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve investments, including a realized g ain of $ 2.1 million from the sale of the Eve shares, net of the forfeited put options, and unrealized losses of $ 3.1 million.

During the year ended December 31, 2023, t he Company recorded a loss of $ 1.0 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments, including a realized g ain of $ 2.1 million from the sale of the Eve shares, net of the forfeited put options, and unrealized losses of $ 3.1 milli on.

As of December 31, 2025 and 2024, the fair value of the Eve Investments was $ 4.3 million and $ 8.2 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data