What changed in this filing

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Item 1. Financial Statements

2025-07-25 compared with 2025-04-25 · 198 added, 117 removed, 423 unchanged (43% of the section changed)

46 unchanged sentences

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

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

84,256,840 and 83,638,680 shares issued as of June 30, 2025, and December 31, 2024, respectively

Retained earnings

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

Treasury stock, at cost, 43,886,565 and 43,310,324 shares as of June 30, 2025, and December 31, 2024, respectively

( 1,020,870 )

8 unchanged sentences

Three months ended

Six months ended

OPERATING REVENUES:

14 unchanged sentences

Interest expense

Other expense, net

Other income (expense), net

Total other expense, net

23 unchanged sentences

( 1,003,574 )

Stock grants to Company directors

Stock based compensation expense

Treasury stock purchases

Net unrealized depreciation on marketable securities, net of tax of $ 26

Balance at June 30, 2025

( 1,020,870 )

See accompanying notes to condensed consolidated financial statements.

SKYWEST, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

Treasury Stock

Comprehensive

Income (Loss)

Balance at December 31, 2023

6 unchanged sentences

Balance at March 31, 2024

Stock grants to Company directors

Stock based compensation expense

Treasury stock purchases

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

Balance at June 30, 2024

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(In Thousands)

Three months ended

Six months ended

NET CASH PROVIDED BY OPERATING ACTIVITIES

10 unchanged sentences

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

2 unchanged sentences

NET CASH USED IN FINANCING ACTIVITIES

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

3 unchanged sentences

Acquisition of property and equipment

Cash paid (refunded) during the period for:

Cash paid during the period for:

Interest, net of capitalized amounts

14 unchanged sentences

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

The results of operations for the three and six months ended June 30, 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.

20 unchanged sentences

The transaction price for the capacity purchase agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term.

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

For the six months ended June 30, 2025 and 2024, capacity purchase agreements represented approximately 85.5 % and 87.1 % 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.

7 unchanged sentences

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

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,

For the six months ended June 30, 2025 and 2024, prorate agreements and SWC revenue represented approximately 14.5 % and 12.9 % of the Company’s flying agreements revenue, respectively.

The following table represents the Company’s flying agreements revenue by type for the three and six months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30,

For the six months ended June 30,

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

9 unchanged sentences

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 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.

During the six months ended June 30, 2025, the Company recognized $ 21.3 million of previously deferred revenue associated with the non-lease fixed monthly payments under certain agreements and increased unbilled revenue by $ 5.7 million under certain other agreements, compared to

recognizing $ 6.0 million of previously deferred revenue and decreasing unbilled revenue by $ 0.6 million during the six months ended June 30, 2024.

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

3 unchanged sentences

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 $ 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 recognized $ 6.0 million of previously deferred lease revenue and increased unbilled lease revenue by $ 2.9 million during the six months ended June 30, 2025, whereas the Company recognized $ 1.0 million of deferred lease revenue during the six months ended June 30, 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 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 as of June 30, 2025 was $ 309.1 million, including $ 105.1 million in other current liabilities and $ 204.0 million in other long-term liabilities.

The Company’s unbilled revenue balance was $ 22.6 million as of June 30, 2025, including $ 1.1 million in other current assets and $ 21.5 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.

5 unchanged sentences

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

As of June 30, 2025, the Company had 502 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”).

2 unchanged sentences

Aircraft type

Number of Aircraft

Term / Termination Dates

United Express Agreements

Individual aircraft have scheduled

(capacity purchase agreements)

• CRJ700/CRJ550

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

removal dates under the agreement

between 2025 and 2033

United Express Prorate Agreement

3 unchanged sentences

Aircraft type

Number of Aircraft

Term / Termination Dates

Delta Connection Agreement

Individual aircraft have scheduled

(capacity purchase agreement)

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

removal dates under the agreement

between 2025 and 2034

Delta Connection Prorate Agreement

2 unchanged sentences

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 under the agreement between 2027 and 2032

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 under the agreement between 2030 and 2034

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.

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.

In addition to the contractual agreements described above, as of June 30, 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 13 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.

Five new E175 aircraft are currently scheduled for delivery in the second half of 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 delivery date for the new E175 aircraft is currently scheduled for the second half of 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.

● 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 agreements with United for 32 CRJ550 aircraft that 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.

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.

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,

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 three and six months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Operating lease fixed revenue

2 unchanged sentences

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 March 31, 2025 (in thousands):

April 2025 through December 2025

July 2025 through December 2025

Total future minimum rental income 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.

Of the Company’s $ 5.7 billion of property and equipment, net of accumulated depreciation, as of June 30, 2025, $ 217.7 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.

6 unchanged sentences

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 June 30, 2025, the Company had gross receivables of $ 159.9 million in current assets and gross receivables of $ 231.8 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 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 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 amount and term of the Company’s respective accounts receivable, notes receivable or guarantees.

During the six months ended June 30, 2025, the Company increased its credit loss reserve as a result of the Company’s assessment of higher credit risk of certain outstanding receivables.

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

3 unchanged sentences

Write-offs charged against allowance

Balance at March 31, 2025

Balance at June 30, 2025

(3) Capital Transactions

Stock-Based Compensation

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.

During the six months ended June 30, 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.

3 unchanged sentences

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

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

A dditionally, during the six months ended June 30, 2025, the Company granted 6,275 fully vested shares of common stock and 1,255 fully vested restricted stock units to the Company’s directors at a weighted average grant date fair value of $ 97.02 .

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

1 unchanged sentence

Stock-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics.

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

During the six months ended June 30, 2025 and 2024, the Company recorded pre-tax stock-based compensation expense of $ 9.9 million and $ 10.3 million, respectively.

( 4) Stock Repurchase

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 .

Under the repurchase program, the Board initially authorized up to $ 250.0 million for the repurchase of the Company’s common stock.

In May 2025, the Board approved a $ 250 million increase to the existing repurchase program.

Following such increase, at June 30, 2025, $ 266.6 million remained available under the repurchase program.

During the six months ended June 30, 2025, the Company repurchased 335,843 shares of common stock for $ 31.0 million at a weighted average price per share of $ 92.24 .

During the six months ended June 30, 2024, the Company repurchased 313,381 shares of common stock for $ 22.1 million at a weighted average price per share of $ 70.44 .

(5) Net Income Per Common Share

2 unchanged sentences

The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share.

During the three months ended March 31, 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.

During the six months

ended June 30, 2025 and 2024, 216,000 and 400,000 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 June 30, 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

Six Months Ended

Basic earnings per share weighted average shares

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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

The following represents the Company’s segment data for the three-month periods ended June 30, 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 and six months ended June 30, 2024 to conform to the current year presentation.

Three months ended June 30, 2025

SkyWest Airlines

6 unchanged sentences

Segment profit (2)

Total assets (as of March 31, 2025)

Total assets (as of June 30, 2025)

Capital expenditures (including non-cash)

Three months ended March 31, 2024

Three months ended June 30, 2024

SkyWest Airlines

6 unchanged sentences

Segment profit (2)

Total assets (as of March 31, 2024)

Total assets (as of June 30, 2024)

Capital expenditures (including non-cash)

3 unchanged sentences

aircraft rentals;

interest income and other expense, net.

interest income and other income (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.

As a result of adopting ASC 2023-07 in 2024, the Company included interest income and other income (expense), net in the recast segment profit for each segment for the three months ended June 30, 2024, consistent with the presentation for the three months ended June 30, 2025.

Six months ended June 30, 2025

SkyWest Airlines

Operating revenues

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 June 30, 2025)

Capital expenditures (including non-cash)

Six months ended June 30, 2024

SkyWest Airlines

Operating revenues

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 June 30, 2024)

Capital expenditures (including non-cash)

(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 income (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 (expense), net in the recast segment profit for each segment for the six months ended June 30, 2024, consistent with the presentation for the six months ended June 30, 2025.

(7) Leases, Commitments, Guarantees and Contingencies

2 unchanged sentences

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

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 .

As of June 30, 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 .

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

Airport facilities

2 unchanged sentences

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 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:

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 June 30, 2025, the Company’s right-of-use assets were $ 79.9 million, the Company’s current maturities of operating lease liabilities were $ 20.1 million, and the Company’s noncurrent lease liabilities were $ 59.8 million.

During the six months ended June 30, 2025, the Company paid $ 17.0 million under operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of June 30, 2025:

Weighted-average remaining lease term for operating leases

Weighted-average discount rate for operating leases

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,

The Company’s lease costs for the three and six months ended June 30, 2025 and 2024 included the following components (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Operating lease cost

2 unchanged sentences

Total lease cost

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.

As of June 30, 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 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):

Apr - Dec 2025

As of June 30, 2025, the Company had a firm purchase commitment for 74 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 13 E175 aircraft with United, one E175 aircraft with Alaska and 16 E175 aircraft with Delta.

Additionally, the Company has secured delivery positions for 44 additional E175 aircraft from 2028 through 2032.

The Company also had a purchase agreement to acquire 21 used CRJ900 airframes with anticipated closing dates in 2025.

The following table summarizes the Company’s commitments and obligations for future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of June 30, 2025, firm aircraft and spare engine commitments, interest commitments and principal maturities on long-term debt as noted for each of the next five years and thereafter (in thousands):

Jul - Dec 2025

Operating lease payments for aircraft and facility obligations

3 unchanged sentences

Total commitments and obligations

(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.

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 June 30, 2025, the Company estimated the remaining financing obligation under the agreement will be between $ 50.0 million and $ 60.0 million and anticipated closing on the remaining financings through 2026.

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

1 unchanged sentence

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 $ 13.7 million as of March 31, 2025.

The balance of the debt under the guarantee was $ 13.3 million as of June 30, 2025.

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 $ 10.3 million as of March 31, 2025.

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 June 30, 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.

9 unchanged sentences

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

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

As of June 30, 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 March 31, 2025

Fair Value Measurements as of June 30, 2025

Marketable Securities

12 unchanged sentences

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 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.

See Note 10 “Investments in Other Companies” regarding the Company’s investments in other companies for the six months ended June 30, 2025.

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

As of June 30, 2025, and December 31, 2024, the Company classified $ 678.7 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 income (expense), net.

As of June 30, 2025, and December 31, 2024, the cost of the Company’s marketable securities was $ 678.7 million and $ 574.0 million, respectively.

(9) Long-term Debt

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

March 31, 2025

Long-term debt consisted of the following as of June 30, 2025, and December 31, 2024 (in thousands):

June 30, 2025

December 31, 2024

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Total long-term debt, net of debt issue costs

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.

As of June 30, 2025, the Company had $ 2.5 billion of total long-term debt, which consisted of $ 2.3 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 (“Treasury”).

As of June 30, 2025, $ 138.6 million of the debt payable to Treasury had a fixed annual interest rate of 1 % and $ 62.0 million had a variable interest rate of the Secured Overnight Financing Rate (" SOFR ") plus 2.0 % .

The interest rate under the $ 138.6 million unsecured loans is scheduled to increase to the applicable SOFR rate plus 2.0 % upon the fifth anniversary of each disbursement.

The Company received disbursements under these unsecured loans from July 2020 through April 2021.

The average effective interest rate on the Company’s debt was approximately 4.3 % at June 30, 2025.

During the six months ended June 30, 2025, the Company took delivery of two new E175 aircraft that the Company financed through $ 47.1 million of long-term debt.

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

As of June 30, 2025 and December 31, 2024, the Company had $ 49.1 million and $ 47.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of June 30, 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 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.

As of June 30, 2025, SkyWest Airlines had no amounts outstanding under the line of credit facility.

However, at June 30, 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.

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

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 June 30, 2025 and December 31, 2024, were as follows (in thousands):

June 30, 2025

December 31, 2024

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

(“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.

(“Regional One”) and, as of June 30, 2025, has invested a total of $ 26.6 million for a 75 % ownership interest in Aero Engines, LLC.

(“Aero Engines”).

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

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

Aero Engines had no debt outstanding as of June 30, 2025.

As of June 30, 2025 and December 31, 2024, the Company’s investment balance in Aero Engines was $ 12.1 million and $ 23.9 million, respectively, and has been recorded in “Other Assets” on the Company’s consolidated balance sheet.

During the six months ended June 30, 2025, the Company received a $ 12.0 million distribution from Aero Engines, which reduced the Company’s investment balance in Aero Engines from December 31, 2024.

The Company’s portion of income generated by Aero Engines for the six months ended June 30, 2025, was $ 0.1 million, which is recorded in “Other income (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 March 31, 2025 and holds one of five seats, or 20 % , on Contour’s board of directors.

The Company has a 25 % ownership interest in Contour at June 30, 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 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.

For the six months ended June 30, 2025, the Company recorded income of $ 0.7 million, its portion of income generated by Contour, which was recorded in “Other income (expense), net” on the Company’s consolidated statements of comprehensive income.

As of June 30, 2025, the Company’s investment balance in Contour of $ 22.2 million was recorded in “Other Assets” on the Company’s consolidated balance sheet.

At June 30, 2025, the Company had $ 8.5 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 .

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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 report ed in earnings.

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 report ed in earnings.

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 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.

At June 30, 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”).

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Balance at December 31, 2024

Unrealized loss

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.

Unrealized gain

Balance at June 30, 2025

During the six months ended June 30, 2025, the Company recorded an unrealized gain of $ 2.1 million in “Other income (expense), net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments.

During the six months ended June 30, 2024, the Company recognized 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 $ 7.4 million related to the Eve Investments that were recognized in “Other income (expense), net” on the Company’s consolidated statements of comprehensive income.

As of June 30, 2025 and December 31, 2024, the fair value of the Eve Investments, which only consisted of the warrant, was $ 10.3 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 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 .

The Company’s effective tax rate for the six months ended June 30, 2025 was 22.2 %.

The Company’s effective tax rate for the six months ended June 30, 2025 varied from the federal statutory rate of 21.0 % primarily due to the provision for state income taxes and the impact of non-deductible expense, partially offset by a discrete tax benefit from additional tax deductions generated from employee equity awards that vested during the six months ended June 30, 2025.

The Company’s effective tax rate for the six months ended June 30, 2024 was 25.5 %.

The Company’s effective tax rate for the six months ended June 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 expense, partially offset by a discrete tax benefit from additional tax deductions generated from employee equity awards that vested during the six months ended June 30, 2024.

(12) Legal Matters

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

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.

As of June 30, 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