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SEGMENTS
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
SEGMENTS SEGMENTS
Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and from jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three and six months ended June 30, 2023 was $618 million and $1.3 billion, respectively, compared to $1.0 billion and $1.8 billion for the three and six months ended June 30, 2022, respectively.

Segment Reporting

Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.

Financial information by segment
(in millions)AirlineRefineryIntersegment Sales/OtherConsolidated
Three Months Ended June 30, 2023
Operating revenue:$14,613 $2,037 $15,578 
Sales to airline segment$(365)
(1)
Exchanged products(618)
(2)
Sales of refined products(89)
Depreciation and amortization573 23 (23)
(3)
573 
Operating income2,447 44 
(3)
— 2,491 
Interest expense, net203 3 (3)203 
Total assets, end of period70,265 3,309 (77)73,497 
Capital expenditures1,422 30 — 1,452 
Three Months Ended June 30, 2022
Operating revenue:$12,310 $3,353 $13,824 
Sales to airline segment$(761)
(1)
Exchanged products(982)
(2)
Sales of refined products(96)
Depreciation and amortization510 23 (23)
(3)
510 
Operating income1,250 269 
(3)
— 1,519 
Interest expense, net269 2 (2)269 
Total assets, end of period71,766 3,065 (26)74,805 
Net fair value obligations, end of period— (556)— (556)
Capital expenditures928 30 — 958 
(1)Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.
(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.
(3)Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.
Financial information by segment
(in millions)AirlineRefineryIntersegment Sales/OtherConsolidated
Six Months Ended June 30, 2023
Operating revenue:$26,455 $4,388 $28,337 
Sales to airline segment$(961)
(1)
Exchanged products(1,330)
(2)
Sales of refined products(215)
Depreciation and amortization1,137 46 (46)
(3)
1,137 
Operating income1,949 266 
(3)
— 2,215 
Interest expense, net430 8 (8)430 
Capital expenditures2,393 59 — 2,452 
Six Months Ended June 30, 2022
Operating revenue:$20,473 $5,666 $23,173 
Sales to airline segment$(1,053)
(1)
Exchanged products(1,791)
(2)
Sales of refined products(122)
Depreciation and amortization1,016 47 (47)
(3)
1,016 
Operating income412 323 
(3)
— 735 
Interest expense, net543 4 (4)543 
Capital expenditures2,676 48 — 2,724 
(1)Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price for jet fuel from the refinery by reference to the market index for the primary delivery location, which is New York Harbor.
(2)Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.
(3)Refinery segment operating results, including depreciation and amortization, are included within aircraft fuel and related taxes in our income statement.

Fair Value Obligations

The net fair value obligations presented in the table above are related to renewable fuel compliance costs and presented net of any related assets or fixed price purchase agreements. Their value is based on quoted market prices and other observable information and are therefore classified as Level 2 in the fair value hierarchy. As of June 30, 2023 we had no net fair value obligation outstanding. Our obligation is calculated using the U.S. Environmental Protection Agency's ("EPA") Renewable Fuel Standard ("RFS") volume requirements, which were finalized in 2022 for the 2021 and 2022 obligations, and proposed in 2022 for 2023 obligations. In the March 2023 quarter, we settled a portion of our 2021 Renewable Identification Numbers ("RINs") obligation with the EPA. We expect to settle the remaining 2021 and our entire 2022 RINs obligation by the 2022 compliance deadline in the December 2023 quarter.