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SEGMENTS | 9 Months Ended
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Sep. 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 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 nine months ended September 30, 2023 was $519 million and $1.8 billion, respectively, compared to $834 million and $2.6 billion for the three and nine months ended September 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) | Airline | Refinery |  | Intersegment Sales/Other |  | Consolidated
Three Months Ended September 30, 2023 |  |  |  |  |  |
Operating revenue: | $ | 14,553 |  | $ | 1,886 |  |  |  |  | $ | 15,488 |
Sales to airline segment |  |  |  | $ | (385) |  | (1) |
Exchanged products |  |  |  | (519) |  | (2) |
Sales of refined products |  |  |  | (47) |  |  |
Depreciation and amortization | 594 |  | 23 |  |  | (23) |  | (3) | 594 |
Operating income | 1,865 |  | 119 |  | (3) | — |  |  | 1,984 |
Interest expense, net | 196 |  | 6 |  |  | (6) |  |  | 196 |
Total assets, end of period | 69,851 |  | 3,397 |  |  | (1) |  |  | 73,247 |
Net fair value obligations, end of period | — |  | (9) |  |  | — |  |  | (9) |
Capital expenditures | 1,201 |  | 68 |  |  | — |  |  | 1,269 |
Three Months Ended September 30, 2022 |  |  |  |  |  |
Operating revenue: | $ | 12,841 |  | $ | 2,599 |  |  |  |  | $ | 13,975 |
Sales to airline segment |  |  |  | $ | (504) |  | (1) |
Exchanged products |  |  |  | (834) |  | (2) |
Sales of refined products |  |  |  | (127) |  |  |
Depreciation and amortization | 538 |  | 23 |  |  | (23) |  | (3) | 538 |
Operating income | 1,264 |  | 192 |  | (3) | — |  |  | 1,456 |
Interest expense, net | 248 |  | 3 |  |  | (3) |  |  | 248 |
Total assets, end of period | 69,680 |  | 2,977 |  |  | (61) |  |  | 72,596 |
Net fair value obligations, end of period | — |  | (291) |  |  | — |  |  | (291) |
Capital expenditures | 1,393 |  | 49 |  |  | — |  |  | 1,442 |
(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) | Airline | Refinery |  | Intersegment Sales/Other |  | Consolidated
Nine Months Ended September 30, 2023 |  |  |  |  |  |
Operating revenue: | $ | 41,008 |  | $ | 6,274 |  |  |  |  | $ | 43,825 |
Sales to airline segment |  |  |  | $ | (1,346) |  | (1) |
Exchanged products |  |  |  | (1,848) |  | (2) |
Sales of refined products |  |  |  | (263) |  |  |
Depreciation and amortization | 1,731 |  | 69 |  |  | (69) |  | (3) | 1,731 |
Operating income | 3,814 |  | 385 |  | (3) | — |  |  | 4,199 |
Interest expense, net | 627 |  | 14 |  |  | (14) |  |  | 627 |
Capital expenditures | 3,594 |  | 127 |  |  | — |  |  | 3,721 |
Nine Months Ended September 30, 2022 |  |  |  |  |  |
Operating revenue: | $ | 33,312 |  | $ | 8,265 |  |  |  |  | $ | 37,147 |
Sales to airline segment |  |  |  | $ | (1,557) |  | (1) |
Exchanged products |  |  |  | (2,623) |  | (2) |
Sales of refined products |  |  |  | (250) |  |  |
Depreciation and amortization | 1,554 |  | 70 |  |  | (70) |  | (3) | 1,554 |
Operating income | 1,676 |  | 515 |  | (3) | — |  |  | 2,191 |
Interest expense, net | 791 |  | 7 |  |  | (7) |  |  | 791 |
Capital expenditures | 4,069 |  | 97 |  |  | — |  |  | 4,166 |
(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. Our obligation as of September 30, 2023 was 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.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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