XML 64 R20.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Fair Value Measurements (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2014
Fair Value Disclosures [Abstract] |
Assets and liabilities measured at fair value on a recurring basis | The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2014, and December 31, 2013:
|  |  |  | Fair value measurements at reporting date using:
|  |  |  | Quoted prices in active markets for identical assets |  | Significant other observable inputs |  | Significant unobservable inputs
Description |  | September 30, 2014 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  | (in millions)
Cash equivalents |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 1,417 |  |  | $ | 1,417 |  |  | $ | — |  |  | $ | — |
Commercial paper |  | 220 |  |  | — |  |  | 220 |  |  | — |
Certificates of deposit |  | 21 |  |  | — |  |  | 21 |  |  | — |
Eurodollar time deposits |  | 174 |  |  | — |  |  | 174 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Treasury bills |  | 1,500 |  |  | 1,500 |  |  | — |  |  | — |
Certificates of deposit |  | 228 |  |  | — |  |  | 228 |  |  | — |
Noncurrent investments (b) |  |  |  |  |  |  |  |
Auction rate securities |  | 28 |  |  | — |  |  | — |  |  | 28 |
Interest rate derivatives |  | 14 |  |  | — |  |  | 14 |  |  | — |
Fuel derivatives: |  |  |  |  |  |  |  |
Swap contracts (c) |  | 11 |  |  | — |  |  | 11 |  |  | — |
Swap contracts (d) |  | 1 |  |  | — |  |  | 1 |  |  | — |
Option contracts (c) |  | 172 |  |  | — |  |  | — |  |  | 172 |
Option contracts (d) |  | 39 |  |  | — |  |  | — |  |  | 39 |
Other available-for-sale securities |  | 67 |  |  | 62 |  |  | — |  |  | 5 |
Total assets |  | $ | 3,892 |  |  | $ | 2,979 |  |  | $ | 669 |  |  | $ | 244 |
Liabilities |  |  |  |  |  |  |  |
Fuel derivatives: |  |  |  |  |  |  |  |
Swap contracts (c) |  | $ | (2 | ) |  | $ | — |  |  | $ | (2 | ) |  | $ | — |
Swap contracts (d) |  | (8 | ) |  | — |  |  | (8 | ) |  | — |
Option contracts (c) |  | (97 | ) |  | — |  |  | — |  |  | (97 | )
Option contracts (d) |  | (63 | ) |  | — |  |  | — |  |  | (63 | )
Interest rate derivatives |  | (61 | ) |  | — |  |  | (61 | ) |  | — |
Deferred compensation |  | (162 | ) |  | (162 | ) |  | — |  |  | — |
Total liabilities |  | $ | (393 | ) |  | $ | (162 | ) |  | $ | (71 | ) |  | $ | (160 | )
(a) Cash equivalents are primarily composed of money market investments. (b) Noncurrent investments are included in Other assets in the unaudited Condensed Consolidated Balance Sheet. (c) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. (d) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net liability.
|  |  |  | Fair value measurements at reporting date using:
|  |  |  | Quoted prices in active markets for identical assets |  | Significant other observable inputs |  | Significant unobservable inputs
Description |  | December 31, 2013 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  | (in millions)
Cash equivalents |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 992 |  |  | $ | 992 |  |  | $ | — |  |  | $ | — |
Commercial paper |  | 280 |  |  | — |  |  | 280 |  |  | — |
Certificates of deposit |  | 23 |  |  | — |  |  | 23 |  |  | — |
Eurodollar time deposits |  | 60 |  |  | — |  |  | 60 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Treasury bills |  | 1,570 |  |  | 1,570 |  |  | — |  |  | — |
Certificates of deposit |  | 227 |  |  | — |  |  | 227 |  |  | — |
Noncurrent investments (b) |  |  |  |  |  |  |  |
Auction rate securities |  | 39 |  |  | — |  |  | — |  |  | 39 |
Interest rate derivatives |  | 20 |  |  | — |  |  | 20 |  |  | — |
Fuel derivatives: |  |  |  |  |  |  |  |
Swap contracts (c) |  | 16 |  |  | — |  |  | 16 |  |  | — |
Option contracts (c) |  | 458 |  |  | — |  |  | — |  |  | 458 |
Option contracts (d) |  | 9 |  |  | — |  |  | — |  |  | 9 |
Other available-for-sale securities |  | 63 |  |  | 58 |  |  | — |  |  | 5 |
Total assets |  | $ | 3,757 |  |  | $ | 2,620 |  |  | $ | 626 |  |  | $ | 511 |
Liabilities |  |  |  |  |  |  |  |
Fuel derivatives: |  |  |  |  |  |  |  |
Swap contracts (c) |  | $ | (8 | ) |  | $ | — |  |  | $ | (8 | ) |  | $ | — |
Option contracts (c) |  | (274 | ) |  | — |  |  | — |  |  | (274 | )
Option contracts (d) |  | (21 | ) |  | — |  |  | — |  |  | (21 | )
Interest rate derivatives |  | (77 | ) |  | — |  |  | (77 | ) |  | — |
Deferred Compensation |  | (158 | ) |  | (158 | ) |  | — |  |  | — |
Total liabilities |  | $ | (538 | ) |  | $ | (158 | ) |  | $ | (85 | ) |  | $ | (295 | )
(a) Cash equivalents are primarily composed of money market investments. (b) Noncurrent investments are included in Other assets in the unaudited Condensed Consolidated Balance Sheet. (c) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. (d) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net liability
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2014:
| Fair value measurements using significant unobservable inputs (Level 3)
| Fuel |  | Auction rate |  | Other |  |
(in millions) | derivatives |  | securities |  | securities |  | Total
Balance at June 30, 2014 | $ | 406 |  |  | $ | 32 |  |  | $ | 5 |  |  | $ | 443 |
Total losses (realized or unrealized) |  |  |  |  |  |  |  |  |  |  |
Included in earnings | (82 | ) |  | — |  |  | — |  |  | (82 | )
Included in other comprehensive income | (291 | ) |  | 2 |  |  | — |  |  | (289 | )
Purchases | 77 |  | (a) | — |  |  | — |  |  | 77 |
Sales | (54 | ) | (a) | (6 | ) |  | — |  |  | (60 | )
Settlements | (5 | ) |  | — |  |  | — |  |  | (5 | )
Balance at September 30, 2014 | $ | 51 |  |  | $ | 28 |  | (b) | $ | 5 |  |  | $ | 84 |
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at September 30, 2014 | $ | (86 | ) |  | $ | — |  |  | $ | — |  |  | $ | (86 | )
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. (b) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.
| Fair value measurements using significant unobservable inputs (Level 3)
| Fuel |  | Auction rate |  | Other |  |
(in millions) | derivatives |  | securities |  | securities |  | Total
Balance at December 31, 2013 | $ | 172 |  |  | $ | 39 |  |  | $ | 5 |  |  | $ | 216 |
Total gains (losses) (realized or unrealized) |  |  |  |  |  |  |  |  |  |
Included in earnings | 23 |  |  | — |  |  | — |  |  | 23 |
Included in other comprehensive income | (147 | ) |  | 4 |  |  | — |  |  | (143 | )
Purchases | 177 |  | (a) | — |  |  | — |  |  | 177 |
Sales | (154 | ) | (a) | (15 | ) |  | — |  |  | (169 | )
Settlements | (20 | ) |  | — |  |  | — |  |  | (20 | )
Balance at September 30, 2014 | $ | 51 |  |  | $ | 28 |  | (b) | $ | 5 |  |  | $ | 84 |
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at September 30, 2014 | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. (b) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.
Fair Value Valuation Techniques | The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s assets and liabilities classified as Level 3 at September 30, 2014:
Quantitative information about Level 3 fair value measurements
| Valuation technique | Unobservable input | Period (by year) | Range
Fuel derivatives | Option model | Implied volatility | Fourth quarter 2014 | 11-23%
|  |  | 2015 | 14-24%
|  |  | 2016 | 13-21%
|  |  | 2017 | 11-16%
|  |  | 2018 | 9-15%
Auction rate securities | Discounted cash flow | Time to principal recovery |  | 8 years
|  | Illiquidity premium |  | 3%
|  | Counterparty credit spread |  | 1-2%
Fair value, by Balance Sheet Grouping | The carrying amounts and estimated fair values of the Company’s long-term debt (including current maturities), as well as the applicable fair value hierarchy tier, at September 30, 2014, are presented in the table below. The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these agreements as Level 2. Six of the Company’s debt agreements are not publicly held. The Company has determined the estimated fair value of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes indicative pricing from counterparties and a discounted cash flow method to estimate the fair value of the Level 3 items.
(in millions) | Carrying value |  | Estimated fair value |  | Fair value level hierarchy
5.25% Notes due 2014 | $ | 350 |  |  | $ | 350 |  |  | Level 2
5.75% Notes due 2016 | 314 |  |  | 342 |  |  | Level 2
5.25% Convertible Senior Notes due 2016 | 114 |  |  | 267 |  |  | Level 2
5.125% Notes due 2017 | 317 |  |  | 340 |  |  | Level 2
Fixed-rate 717 Aircraft Notes payable through 2017 - 10.38% | 7 |  |  | 8 |  |  | Level 2
French Credit Agreements due 2018 - 1.03% | 41 |  |  | 41 |  |  | Level 3
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | 25 |  |  | 26 |  |  | Level 3
Term Loan Agreement due 2019 - 6.315% | 186 |  |  | 195 |  |  | Level 3
Term Loan Agreement due 2019 - 6.84% | 73 |  |  | 79 |  |  | Level 3
Term Loan Agreement due 2020 - 5.223% | 382 |  |  | 378 |  |  | Level 3
Floating-rate 737 Aircraft Notes payable through 2020 | 309 |  |  | 302 |  |  | Level 3
Pass Through Certificates due 2022 - 6.24% | 355 |  |  | 423 |  |  | Level 2
7.375% Debentures due 2027 | 135 |  |  | 162 |  |  | Level 2

X
- Definition This element represents, for the fair value measurement of assets and liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating gains or losses included in earnings (or changes in net assets) (2) purchases, sales, issuances, and settlements (net); and (3) transfers in and out of Level 3. + References No definition available. + Details
Name: | luv_FairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock
Namespace Prefix: | luv_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the inputs and valuation techniques used to measure fair value, and a discussion of changes in valuation techniques and related inputs, if any, applied during the period to each separate class of assets, liabilities, and financial instruments classified in shareholders' equity that are measured on a recurring and/or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13467-108611 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=35750535&loc=d3e13476-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610 + Details
Name: | us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19190-110258 + Details
Name: | us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration