What changed in this filing

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Item 1. Financial Statements

2025-04-25 compared with 2024-11-01 · 189 added, 258 removed, 351 unchanged (56% of the section changed)

4 unchanged sentences

(Dollars in thousands)

September 30,

CURRENT ASSETS:

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Deposits on aircraft

Buildings and ground equipment

Buildings, ground equipment and other

Total property and equipment, gross

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AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (continued)

(Dollars in thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY

September 30,

CURRENT LIABILITIES:

Current maturities of long-term debt

Accounts payable

Accounts payable and accrued liabilities

Accrued salaries, wages and benefits

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Common stock, no par value, 120,000,000 shares authorized;

83,601,235 and 82,840,372 shares issued as of September 30, 2024, and December 31, 2023, respectively

84,250,565 and 83,638,680 shares issued as of March 31, 2025, and December 31, 2024, respectively

Retained earnings

Treasury stock, at cost, 43,262,997 and 42,615,347 shares as of September 30, 2024, and December 31, 2023, respectively

Treasury stock, at cost, 43,691,380 and 43,310,324 shares as of March 31, 2025, and December 31, 2024, respectively

( 1,003,574 )

Accumulated other comprehensive income

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars and Shares in Thousands, Except per Share Amounts)

(In thousands, except per share amounts)

Three months ended

Nine months ended

September 30,

OPERATING REVENUES:

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Depreciation and amortization

Aircraft fuel

Airport-related expenses

Aircraft rentals

Aircraft fuel

Other operating expenses

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Interest expense

Other income (loss), net

Other expense, net

Total other expense, net

INCOME BEFORE INCOME TAXES

PROVISION (BENEFIT) FOR INCOME TAXES

PROVISION FOR INCOME TAXES

BASIC EARNINGS PER SHARE

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COMPREHENSIVE INCOME:

Net unrealized appreciation on marketable securities, net of taxes

Net unrealized depreciation on marketable securities, net of taxes

TOTAL COMPREHENSIVE INCOME

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Comprehensive

Income (Loss)

Balance at December 31, 2024

Employee income tax paid on stock awards

Vested employee stock awards

Employee income tax paid on vested equity awards

Sale of common stock under employee stock purchase plan

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Balance at March 31, 2025

Stock based compensation expense

Treasury stock purchases

Net unrealized depreciation on marketable securities, net of tax of $ 212

Balance at June 30, 2024

Sale of common stock under employee stock purchase plan

Issuance of common stock upon warrant exercise, net

Stock based compensation expense

Treasury stock purchases

Net unrealized appreciation on marketable securities, net of tax of $ 283

Balance at September 30, 2024

See accompanying notes to condensed consolidated financial statements.

SKYWEST, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(In Thousands)

( 1,003,574 )

Treasury Stock

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Balance at December 31, 2023

Employee income tax paid on stock awards

Vested employee stock awards

Employee income tax paid on vested equity awards

Sale of common stock under employee stock purchase plan

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Treasury stock purchases

Net unrealized appreciation on marketable securities, net of tax of $ 476

Net unrealized depreciation on marketable securities, net of tax of $ 56

Balance at March 31, 2024

Stock based compensation expense

Treasury stock purchases

Net unrealized appreciation on marketable securities, net of tax of $ 488

Balance at June 30, 2023

Sale of common stock under employee stock purchase plan

Stock based compensation expense

Treasury stock purchases

Net unrealized appreciation on marketable securities, net of tax of $ 201

Balance at September 30, 2023

See accompanying notes to condensed consolidated financial statements.

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(In Thousands)

Nine months ended

September 30,

Three months ended

NET CASH PROVIDED BY OPERATING ACTIVITIES

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Purchases of marketable securities

( 1,212,208 )

Sales of marketable securities

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Deposits on aircraft

Aircraft deposits applied towards acquired aircraft

Decrease (increase) in other assets

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

Decrease (increase) in other assets, net

NET CASH USED IN INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt

Principal payments on long-term debt

Payment of debt issuance cost

Net proceeds from issuance of common stock

Employee income tax paid on vested equity awards

Purchase of treasury stock and excise tax

Purchase of treasury stock

NET CASH USED IN FINANCING ACTIVITIES

Increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

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Acquisition of property and equipment

Derecognition of right of use assets

Derecognition of operating lease liabilities

Cash paid during the period for:

Cash paid (refunded) during the period for:

Interest, net of capitalized amounts

Income taxes, net of refunds

See accompanying notes to condensed consolidated financial statements.

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(“SkyWest Airlines”), its leasing subsidiary SkyWest Leasing, Inc.

(“SkyWest Leasing”) and its charter service subsidiary SkyWest Charter, LLC (“SWC”) 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.

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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, 2024.

The results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

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.

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Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “Segment Reporting (Accounting Standard Codification (“ASC”) Topic 280) – Improvements to Reportable Segment Disclosures,” which 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.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years 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.

In December 2023, the FASB issued ASU No.

In December 2023, the Financial Accounting Standards Board (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.

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

In March 2024, the FASB issued ASU 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.

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

(2) Operating Revenues

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 fixed-fee arrangements (referred to as “capacity purchase” agreements) with United Airlines, Inc.

Under the Company’s fixed-fee agreements (referred to as “capacity purchase” agreements) with United Airlines, Inc.

(“United”), Delta Air Lines, Inc.

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(“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, on-time performance or other performance metrics.

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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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, 2024 and 2023, capacity purchase agreements represented approximately 86.8 % and 87.2 % of the Company’s flying agreements revenue, respectively.

For the three months ended March 31, 2025 and 2024, capacity purchase agreements represented approximately 85.7 % and 87.0 % of the Company’s flying agreements revenue, respectively.

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 two 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.

Under the Company’s charter operations, SWC, the Company negotiates a fare for the charter flight with the customer.

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

For the nine months ended September 30, 2024 and 2023, prorate flying agreements and SWC revenue represented approximately 13.2 % and 12.8 % of the Company’s flying agreements revenue, respectively.

The following table represents the Company’s flying agreements revenue by type for the three and nine months ended September 30, 2024 and 2023 (in thousands):

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31, 2025 and 2024, prorate agreements and SWC revenue represented approximately 14.3 % and 13.0 % of the Company’s flying agreements revenue, respectively.

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

For the three months ended March 31,

Capacity purchase agreements flight operations revenue (non-lease component)

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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.

During the nine months ended September 30, 2024, the Company recognized $ 24.5 million of previously deferred revenue associated with the non-lease fixed monthly payments under certain agreements and decreased unbilled revenue by $ 0.9 million under certain other agreements,

compared to deferring revenue of $ 111.9 million and decreasing unbilled revenue by $ 8.7 million during the nine months ended September 30, 2023.

During the three months ended March 31, 2025, the Company recognized $ 9.5 million of previously deferred revenue associated with the non-lease fixed monthly payments under certain agreements and increased unbilled revenue by $ 0.1 million under certain other agreements, compared to recognizing $ 0.7 million of previously deferred revenue and decreasing unbilled revenue by $ 0.3 million during the three months ended March 31, 2024.

A portion of the Company’s compensation under its capacity purchase agreements is designed to reimburse the Company for certain aircraft ownership costs.

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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 nine months ended September 30, 2024, whereas the Company deferred recognizing lease revenue of $ 59.3 million during the nine months ended September 30, 2023, under the straight-line basis.

The Company recognized $ 2.2 million of previously deferred lease revenue and increased unbilled lease revenue by $ 1.1 million during the three months ended March 31, 2025, whereas the Company recognized $ 0.5 million of deferred lease revenue during the three months ended March 31, 2024, 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 September 30, 2024 was $ 348.6 million, including $ 59.6 million in other current liabilities and $ 289.0 million in other long-term liabilities.

The Company’s unbilled revenue balance was $ 6.4 million as of September 30, 2024, including $ 1.1 million in other current assets and $ 5.3 million in other long-term assets.

The Company’s total deferred revenue balance as of March 31, 2025 was $ 325.9 million, including $ 73.0 million in other current liabilities and $ 252.9 million in other long-term liabilities.

The Company’s unbilled revenue balance was $ 16.4 million as of March 31, 2025, including $ 1.1 million in other current assets and $ 15.3 million in other long-term assets.

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

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In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria.

The incentives are defined in the agreements and are measured and determined on a monthly, quarterly or semi-annual basis.

The incentives are defined in the agreements and are measured and determined on a monthly or annual basis.

At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly, subject to the variable constraint guidance under ASC Topic 606.

As of September 30, 2024, the Company had 484 aircraft in scheduled service or under contract pursuant to code-share agreements.

As of March 31, 2025, the Company had 488 aircraft in scheduled service or under contract pursuant to code-share agreements.

The Company’s fleet includes Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”), Canadair CRJ700 regional jet aircraft (“CRJ700”), including a 50 -seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” and Canadair CRJ200 regional jet aircraft (“CRJ200”).

The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines:

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United Express Agreements

(capacity purchase agreement)

Individual aircraft have scheduled expiration dates from 2024 to 2029

(capacity purchase agreements)

CRJ700/CRJ550

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

United Express Prorate Agreement

Terminable with 120-days’ notice

Terminable with 120-day notice

Total under United Express Agreements

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(capacity purchase agreement)

Individual aircraft have scheduled expiration dates from 2025 to 2034

Individual aircraft have scheduled removal dates under the agreement between 2026 and 2034

Delta Connection Prorate Agreement

Terminable with 30-days’ notice

CRJ700/CRJ550

Terminable with 30-day notice

Total under Delta Connection Agreements

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(capacity purchase agreement)

Individual aircraft have scheduled expiration dates from 2025 to 2032

Individual aircraft have scheduled removal dates under the agreement between 2027 and 2032

Total under American Agreement

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(capacity purchase agreement)

Individual aircraft have scheduled expiration dates from 2030 to 2034

Individual aircraft have scheduled removal dates under the agreement between 2030 and 2034

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

The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes.

** Includes CRJ550 aircraft, a 50 -seat configuration of the CRJ700 aircraft.

In addition to the contractual arrangements described above, as of September 30, 2024, SkyWest Airlines reached agreements to place the following E175 aircraft under a capacity purchase agreement with the respective major airline partners:

United Airlines

Alaska Airlines

The Company also entered into multiple agreements with United in September and October 2024 to place a total of 40 used CRJ550s under multi-year contracts.

Pursuant to these agreements, the Company is in the process of acquiring 11 used CRJ550s and will convert 29 of its CRJ700s to CRJ550s.

The aircraft are anticipated to be placed into service between the fourth quarter of 2024 and the end of 2026.

One of such CRJ550 aircraft was acquired during the three months ended September 30, 2024.

Final delivery and in-service dates for aircraft to be placed under contract are subject to change and may be adjusted based on various factors.

In addition to the contractual agreements described above, as of March 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 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.

The Company anticipates financing the aircraft through debt.

● In April 2025, United increased the number of CRJ550s to be placed under the Company’s capacity purchase agreement to 50 aircraft, 12 of which were in service at March 31, 2025.

The remaining 38 aircraft are anticipated to be placed into service in 2025 through the end of 2026.

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

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.

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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 three and nine months ended September 30, 2024 and 2023 (in thousands):

For the three months ended September 30,

For the nine months ended September 30,

Operating lease revenue

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

For the three months ended March 31,

Operating lease fixed revenue

Operating lease variable 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, 2024 (in thousands):

October 2024 through December 2024

April 2025 through December 2025

Total future minimum rental income under operating leases

Of the Company’s $ 5.4 billion of net property and equipment as of September 30, 2024, $ 202.4 million of regional jet aircraft and spare engines were leased to third parties under operating leases.

Of the Company’s $ 5.6 billion of property and equipment, net of accumulated depreciation, as of March 31, 2025, $ 195.2 million of regional jet aircraft and spare engines were leased to third parties under operating leases.

The Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default.

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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 resolution of unresolved items with the Company’s major airline partners.

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, 2024, the Company had gross receivables of $ 112.9 million in current assets and gross receivables of $ 202.4 million in other long-term assets.

The Company has an allowance for credit losses associated with its accounts receivable, notes receivable and third-party debt guarantees.

The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance or guarantee.

As of March 31, 2025, the Company had gross receivables of $ 139.5 million in current assets and gross receivables of $ 208.0 million in other long-term assets.

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 guarantees.

During the nine months ended September 30, 2024, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities.

The following table summarizes the changes in allowance for credit losses:

During the three months ended March 31, 2025, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities.

The following table summarizes the changes in allowance for credit losses (in thousands):

Allowance for Credit Losses

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Write-offs charged against allowance

Balance at September 30, 2024

Balance at March 31, 2025

(3) Capital Transactions

Stock-Based Compensation

During the nine months ended September 30, 2024, the Company granted 50,577 restricted stock units and 118,021 performance shares to certain employees of the Company under the SkyWest, Inc.

2019 Long-Term Incentive Plan.

During the three months ended March 31, 2025, the Company granted 25,359 restricted stock units and 59,165 performance shares to certain employees of the Company under the SkyWest, Inc.

Amended and Restated 2019 Long-Term Incentive Plan.

Both the restricted stock units and performance shares have a three-year vesting period, during which the recipient must remain employed with the Company.

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The weighted average fair value of these restricted stock units and performance shares on their date of grant was $ 118.96 per share.

Additionally, during the nine months ended September 30, 2024, the Company granted 14,179 fully vested shares of common stock and 2,632 fully vested restricted stock units to the Company’s directors at a weighted average grant date fair value of $ 61.13 .

During the nine months ended September 30, 2024, the Company did no t grant any options to purchase shares of common stock to employees.

During the three months ended March 31, 2025, the Company did no t grant any options to purchase shares of common stock to employees.

The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur.

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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, 2024 and 2023, the Company recorded pre-tax stock-based compensation expense of $ 15.1 million and $ 12.9 million, respectively.

In 2020 and 2021, the Company issued to U.S.

Department of the Treasury (“U.S.

Treasury”) warrants to purchase shares of the Company’s common stock pursuant to the three Payroll Support Program Agreements and a loan agreement with U.S.

The warrants have a five-year term from the date of issuance.

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 706,909 warrants in August 2024.

The Company settled the exercise through a net share issuance of 443,756 shares of common stock to the holder.

As of September 30, 2024, the Company had an aggregate of 78,317 warrants issued and outstanding, each with an exercise price of $ 57.47 , under the Payroll Support Program Agreements.

During the three months ended March 31, 2025 and 2024, the Company recorded pre-tax stock-based compensation expense of $ 4.7 million and $ 5.5 million, respectively.

( 4) Stock Repurchase

The Company’s Board of Directors adopted a stock repurchase program in May 2023, which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices.

Under the May 2023 repurchase program, the Company’s Board of Directors authorized up to $ 250.0 million for the repurchase of the Company’s common stock, superseding a prior Board authorization.

At September 30, 2024, $ 52.5 million remains available under the May 2023 authorization.

During the nine months ended September 30, 2024, the Company repurchased 0.5 million shares of common stock for $ 38.4 million at a weighted average price per share of $ 72.30 .

The Company also recorded $ 0.3 million of excise tax related to the stock repurchases as Treasury Stock in the Company’s Stockholders Equity for the nine months ended September 30, 2024.

During the nine months ended September 30, 2023, the Company repurchased 9.6 million shares of common stock for $ 244.1 million at a weighted average price per share of $ 25.44 and recorded $ 2.4 million of excise tax related to the stock repurchases as Treasury Stock in the Company’s Stockholders Equity.

The Company’s Board of Directors (the “Board”) adopted a stock repurchase program in May 2023, which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices.

Under the May 2023 repurchase program, the Board authorized up to $ 250.0 million for the repurchase of the Company’s common stock, superseding a prior Board authorization.

At March 31, 2025, $ 33.9 million remained available under the May 2023 authorization.

During the three months ended March 31, 2025, the Company repurchased 140,658 shares of common stock for $ 13.7 million at a weighted average price per share of $ 97.27 .

During the three months ended March 31, 2024, the Company repurchased 136,261 shares of common stock for $ 8.7 million at a weighted average price per share of $ 64.21 .

(5) Net Income Per Common Share

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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.

Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Treasury Warrants (1)

Employee Stock Awards

Total antidilutive securities

(1) Warrants originally issued to U.S.

Treasury to purchase shares of SkyWest common stock issued pursuant to the three Payroll Support Program Agreements and a loan agreement with the U.S.

Additionally, during the nine months ended September 30, 2024 and 2023, 336,000 and 422,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares for the nine months ended September 30, 2024 and 2023, respectively.

The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data):

During the three months ended March 31, 2025 and 2024, 268,000 and 452,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares as of March 31, 2025 and 2024, respectively.

The calculation of the weighted average number of common shares outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data):

Three Months Ended

Nine Months Ended

September 30,

Basic earnings per share weighted average shares

Dilutive effect of employee stock awards and warrants

Dilution due to employee equity awards and warrants

Diluted earnings per share weighted average shares

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(6) 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.

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.

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 and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs.

The SkyWest Airlines and SWC segment also includes revenue and operating expenses attributed to

other flying agreements and airport services agreements.

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.

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.

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

The following represents the Company’s segment data for the three-month periods ended September 30, 2024 and 2023 (in thousands):

Three months ended September 30, 2024

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

The chief operating decision maker uses the segment profit or loss measure when assessing performance of the segment and monitors budget versus actual results to allocate resources for each segment predominantly in the annual budget and forecasting process.

The following represents the Company’s segment data for the three-month periods ended March 31, 2025 and 2024 (in thousands).

As required by the adoption of ASC 2023-07, “Segment Reporting (ASC Topic 280) – Improvements to Reportable Segment Disclosures,” the Company recast the segment disclosures for the three months ended March 31, 2024 to conform to the current year presentation.

Three months ended March 31, 2025

SkyWest Airlines

Operating revenues

Operating expense

Depreciation and amortization expense

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Interest expense

Other segment items (1)

Segment profit (2)

Total assets (as of September 30, 2024)

Capital expenditures (including non-cash)

Three months ended September 30, 2023

SkyWest Airlines

Operating revenues (1)

Operating expense

Depreciation and amortization expense

Interest expense

Segment profit (loss) (2)

Total assets (as of September 30, 2023)

Total assets (as of March 31, 2025)

Capital expenditures (including non-cash)

(1) Prorate revenue and airport customer service revenue are reflected in the SkyWest Airlines and SWC segment.

(2) Segment profit (loss) is equal to operating income less interest expense.

The following represents the Company’s segment data for the nine-month periods ended September 30, 2024 and 2023 (in thousands):

Nine months ended September 30, 2024

Three months ended March 31, 2024

SkyWest Airlines

Operating revenues

Operating expense

Depreciation and amortization expense

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Interest expense

Other segment items (1)

Segment profit (2)

Total assets (as of September 30, 2024)

Capital expenditures (including non-cash)

Nine months ended September 30, 2023

SkyWest Airlines

Operating revenues (1)

Operating expense

Depreciation and amortization expense

Interest expense

Segment profit (loss) (2)

Total assets (as of September 30, 2023)

Total assets (as of March 31, 2024)

Capital expenditures (including non-cash)

(1) Prorate revenue and airport customer service revenue are reflected in the SkyWest Airlines and SWC segment.

(2) Segment profit (loss) is equal to operating income less interest expense .

(1) Other segment items include aircraft fuel;

airport related expenses;

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

aircraft rentals;

interest income and other expense, net.

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

As a result of adopting ASC 2023-07 in 2024, the Company included interest income and other income in the recast segment profit for each segment for the three months ended March 31, 2024 and 2025.

(7) Leases, Commitments, Guarantees and Contingencies

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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 September 30, 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 five to six years .

As of March 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 four to five years .

Airport facilities

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The remaining lease terms for facility space vary from one month to 31 years .

The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance.

As of September 30, 2024, the Company’s right-of-use assets were $ 85.3 million, the Company’s current maturities of operating lease liabilities were $ 18.5 million, and the Company’s noncurrent lease liabilities were $ 66.8 million.

During the nine months ended September 30, 2024, the Company paid $ 16.7 million under operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of September 30, 2024:

The Company’s

operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance.

As of March 31, 2025, the Company’s right-of-use assets were $ 83.7 million, the Company’s current maturities of operating lease liabilities were $ 20.4 million, and the Company’s noncurrent lease liabilities were $ 63.3 million.

During the three months ended March 31, 2025, the Company paid $ 8.3 million under operating leases reflected as a reduction from operating cash flows.

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

Weighted-average remaining lease term for operating leases

Weighted-average discount rate for operating leases

The Company’s lease costs for the three and nine months ended September 30, 2024 and 2023 included the following components (in thousands):

For the three months ended September 30,

For the nine months ended September 30,

The Company’s lease costs for the three months ended March 31, 2025 and 2024 included the following components (in thousands):

For the three months ended March 31,

Operating lease cost

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Total lease cost

As of September 30, 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 March 31, 2025, the Company leased aircraft, airport facilities, office space and other property and equipment under non-cancelable operating leases, which are generally on a long-term, triple-net lease basis pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property.

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

The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of September 30, 2024 (in thousands):

October 2024 through December 2024

Total future minimum operating lease payments

As of September 30, 2024, the Company had a firm purchase commitment for 20 E175 aircraft from Embraer with anticipated delivery dates through 2026.

Additionally, the Company has a purchase agreement to acquire 11 used CRJ550 aircraft with anticipated closing dates into 2025.

One of such CRJ550 aircraft was acquired during the three months ended September 30, 2024.

The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2025 (in thousands):

April 2025 through December 2025

As of March 31, 2025, the Company had a firm purchase commitment for 16 E175 aircraft from Embraer with anticipated delivery dates through 2026.

Additionally, the Company had a purchase agreement to acquire 12 used CRJ900 airframes with anticipated closing dates in 2025.

The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands):

Oct- Dec 2024

Apr - Dec 2025

Operating lease payments for aircraft and facility obligations

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Total commitments and obligations

(1) At September 30, 2024, the Company’s long-term debt had fixed interest rates.

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

At September 30, 2024, the Company had not acquired any airframes or engines under the master equipment purchase agreement.

The Company estimates the purchase obligation will be between $ 90.0 million and $ 100.0 million and anticipates closing on individual airframes and engines between the fourth quarter of 2024 and the end of 2025.

(1) At March 31, 2025, the Company’s long-term debt had fixed interest rates.

In addition to the table 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.

At March 31, 2025, the Company estimated the remaining financing obligation under the agreement will be between $ 60.0 million and $ 70.0 million and anticipated closing on the remaining financings during 2025.

In 2022, the Company agreed to guarantee $ 19.8 million of debt for a 14 CFR Part 135 air carrier.

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In exchange for providing the guarantee, the Company received 6.5 % of the guaranteed amount as consideration, payable in the estimated value of common stock of the Part 135 air carrier, all of which was sold in 2023.

The balance of the debt under the guarantee was $ 14.4 million as of September 30, 2024.

The balance of the debt under the guarantee was $ 13.7 million as of March 31, 2025.

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

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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 $ 11.2 million as of September 30, 2024.

The balance of the debt under the guarantee was $ 10.3 million as of March 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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Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

As of September 30, 2024, and December 31, 2023, the Company held certain assets that are required to be measured at fair value on a recurring basis.

As of March 31, 2025, and December 31, 2024, the Company held certain assets that are required to be measured at fair value on a recurring basis.

Assets measured at fair value on a recurring basis are summarized below (in thousands):

Fair Value Measurements as of September 30, 2024

Fair Value Measurements as of March 31, 2025

Marketable Securities

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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 11 “Investments in Other Companies” regarding the Company’s investments in other companies, for the nine months ended September 30, 2024.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the nine months ended September 30, 2024.

See Note 10 “Investments in Other Companies” regarding the Company’s investments in other companies for the three months ended March 31, 2025.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 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.

As of September 30, 2024, and December 31, 2023, the Company classified $ 658.4 million and $ 686.9 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 .

At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other income (loss), net.

As of September 30, 2024, and December 31, 2023, the cost of the Company’s marketable securities was $ 657.9 million and $ 686.5 million, respectively.

(9) Assets Held for Sale

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.

At December 31, 2023, the Company presented the $ 54.3 million of assets held for sale at 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 changed its plan to sell the 14 CRJ700 aircraft 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, for the nine months ended September 30, 2024, the Company recorded a $ 4.2 million gain (pre-tax) as an offset to other operating expenses primarily due to the elimination of the estimated costs to sell the assets.

As of March 31, 2025, and December 31, 2024, the Company classified $ 571.9 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 .

At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other expense, net.

As of March 31, 2025, and December 31, 2024, the cost of the Company’s marketable securities was $ 571.8 million and $ 574.0 million, respectively.

(9) Long-term Debt

Long-term debt consisted of the following as of September 30, 2024, and December 31, 2023 (in thousands):

September 30, 2024

Long-term debt consisted of the following as of March 31, 2025, and December 31, 2024 (in thousands):

March 31, 2025

December 31, 2024

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Total long-term debt, net of debt issue costs

As of September 30, 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 spare engines and $ 200.6 million of unsecured debt payable to U.S.

The average effective interest rate on the Company’s debt was approximately 4.1 % at September 30, 2024.

As of September 30, 2024 and December 31, 2023, the Company had $ 47.1 million and $ 49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of September 30, 2024, SkyWest Airlines had a $ 100.0 million line of credit.

As of March 31, 2025, the Company had $ 2.6 billion of total long-term debt, which consisted of $ 2.4 billion of debt used to finance aircraft and spare engines and $ 200.6 million of unsecured debt payable to the U.S.

Department of the Treasury.

The average effective interest rate on the Company’s debt was approximately 4.3 % at March 31, 2025.

As of both March 31, 2025 and December 31, 2024, the Company had $ 47.1 million in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of March 31, 2025, SkyWest Airlines had a $ 100.0 million line of credit.

The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets.

As of September 30, 2024, SkyWest Airlines had no amounts outstanding under the facility.

However, at September 30, 2024, SkyWest Airlines had $ 24.9 million in letters of credit issued under the facility, which reduced the amount available under the facility to $ 75.1 million.

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

However, at March 31, 2025, SkyWest Airlines had $ 25.0 million in letters of credit issued under the facility, which reduced the amount available under the facility to $ 75.0 million.

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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The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt.

Debt is primarily classified as Level 2 within the fair value hierarchy.

The carrying value and fair value of the Company’s long-term debt as of September 30, 2024 and December 31, 2023, were as follows (in thousands):

September 30, 2024

The fair value of debt is estimated using inputs classified as Level 2 within the fair value hierarchy.

The carrying value and fair value of the Company’s long-term debt as of March 31, 2025 and December 31, 2024, were as follows (in thousands):

March 31, 2025

December 31, 2024

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During 2019, the Company created a joint venture with Regional One, Inc.

and, as of September 30, 2024, has invested a total of $ 26.6 million for an ownership interest in Aero Engines, LLC.

(“Regional One”) and, as of March 31, 2025, has invested a total of $ 26.6 million for a 75 % ownership interest in Aero Engines, LLC.

(“Aero Engines”).

The primary purpose of Aero Engines is to lease engines to third parties.

The Company accounts for its investment in Aero Engines under the equity method.

Aero Engines requires unanimous approval from the Company and Regional One for all material transactions.

Although the Company determined Aero Engines is a variable interest entity, Aero Engines has no primary beneficiary as no one party has power over Aero Engines.

Accordingly, the Company accounts for its investment in Aero Engines under the equity method.

The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value.

Aero Engines had no debt outstanding as of September 30, 2024.

As of September 30, 2024, the Company’s investment balance in Aero Engines was $ 23.2 million and has been recorded in “Other Assets” on the Company’s consolidated balance sheet.

The Company’s portion of income generated by Aero Engines for the nine months ended September 30, 2024, was $ 1.5 million, which is recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income.

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

As of March 31, 2025, the Company’s investment balance in Aero Engines was $ 24.5 million and has been recorded in “Other Assets” on the

Company’s consolidated balance sheet.

The Company’s portion of income generated by Aero Engines for the three months ended March 31, 2025, was $ 0.6 million, which is recorded in “Other expense, 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 September 30, 2024 and holds one of five seats, or 20 % , on Contour’s board of directors.

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

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

The Company accounts for its investment in Contour under the equity method where the investment is reported at cost and adjusted each period for the Company’s share of Contour’s income or loss, recorded on a one quarter lag.

For the nine months ended September 30, 2024, the Company recorded a loss of $ 0.6 million, its portion of loss generated by Contour, which was recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income.

As of September 30, 2024, the Company’s investment balance in Contour of $ 24.4 million was recorded in “Other Assets” on the Company’s consolidated balance sheet.

At September 30, 2024, the Company had $ 12.2 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement.

For the three months ended March 31, 2025, the Company recorded income of $ 0.9 million, its portion of income generated by Contour, which was recorded in “Other expense, net” on the Company’s consolidated statements of comprehensive income.

As of March 31, 2025, the Company’s investment balance in Contour of $ 22.3 million was recorded in “Other Assets” on the Company’s consolidated balance sheet.

At March 31, 2025, the Company had $ 11.1 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement.

The notes are secured by aircraft and collectible within four years .

The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Fair Value Method Investments

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

In 2022, the Company acquired 1,000,000 shares of common stock of Eve Holding, Inc.

(“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.

Fair Value Method Investment

In 2021, the Company entered into a strategic partnership with Eve Holding, Inc.

(“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.

The Company also received a put option from an Eve shareholder for the 1,000,000 shares of common stock of Eve payable in aircraft parts credits.

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

During the nine months ended September 30, 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.

At September 30, 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 common 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 .

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

Eve Level 3 Investments:

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.

At March 31, 2025, the Company’s only remaining investment in Eve was the warrant to acquire 1,500,000 shares of common stock of Eve.

The warrant was classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investment”).

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

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

Eve Level 3 Investment:

Balance at December 31, 2024

Exercise of put option for aircraft parts credits

Realized gain on exercise of put option

Unrealized loss

Balance at September 30, 2024

During the nine months ended September 30, 2024, the Company recorded a net loss of $ 6.6 million in “Other income (loss) , net” on the Company’s consolidated statements of comprehensive income, 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 $ 8.6 million related to the Eve Investments.

As of September 30, 2024, the fair value of the Eve Investments, which only consisted of the warrant, was $ 4.9 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

Balance at March 31, 2025

During the three months ended March 31, 2025, the Company recorded an unrealized loss of $ 3.2 million in “Other expense, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments.

During the three months ended March 31, 2024, the Company recorded unrealized losses of $ 3.5 million in “Other expense, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments.

As of March 31, 2025 and December 31, 2024 the fair value of the Eve Investments, which only consisted of the warrant, was $ 5.0 million and $ 8.2 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

(11) Income Taxes

The Company’s effective tax rate for the nine months ended September 30, 2024 was 24.4 %.

The Company’s effective tax rate for the nine months ended September 30, 2024 varied from the federal statutory rate of 21.0 % primarily due to the provision for state income taxes and the impact of non-deductible expenses.

This was partially offset by a discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the nine months ended September 30, 2024, a discrete tax benefit from the release of previously recorded uncertain tax position liability and a discrete tax benefit from a release of the valuation allowance on state net operating losses anticipated to be utilized prior to expiration.

The Company’s effective tax rate for the nine months ended September 30, 2023 was ( 6.0 )%.

The Company’s effective tax rate for the nine months ended September 30, 2023 varied from the federal statutory rate of 21.0 % p rimarily due to a benefit from the release of $ 7.6 million of a previously recorded uncertain tax position liability and a benefit from a partial release of the valuation allowance on state net operating losses anticipated to be utilized prior to

These benefits were partially offset by the provision for state income taxes, the impact of non-deductible expenses and a discrete tax expense on employee equity transactions that occurred during the nine months ended September 30, 2023.

The Company’s effective tax rate for the three months ended March 31, 2025 was 16.7 %.

The Company’s effective tax rate for the three months ended March 31, 2025 varied from the federal statutory rate of 21.0 % primarily due to a discrete tax benefit from additional tax deductions generated from employee equity awards that vested during the three months ended March 31, 2025, offset by the provision for state income taxes and the impact of non-deductible expenses.

The Company’s effective tax rate for the three months ended March 31, 2024 was 24.8 %.

The Company’s effective tax rate for the three months ended March 31, 2024 varied from the federal statutory rate of 21.0 % p rimarily due to the provision for state income taxes and the impact of non-deductible expenses .

(12) Legal Matters

The Company is subject to certain legal actions which it considers routine to its business activities.

As of September 30, 2024, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

As of March 31, 2025, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

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-Q

Item 1. Financial Statements