XML 52 R16.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Financial Derivative Instruments (Tables) | 6 Months Ended
--- | ---
Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Volume of Fuel Hedging | The following table provides information about the Company’s volume of fuel hedging for the years 2015 through 2018 on an “economic” basis considering current market prices:
|  | Fuel hedged as of |  |
|  | June 30, 2015 |  | Derivative underlying commodity type as of
Period (by year) |  | (gallons in millions) |  | June 30, 2015
Remainder of 2015 |  | 843 |  | (a) | Brent crude oil, Heating oil, and Gulf Coast jet fuel
2016 |  | 1,672 |  | (a) | Brent crude oil, Heating oil, and Gulf Coast jet fuel
2017 |  | 790 |  | (a) | WTI crude and Brent crude oil
2018 |  | — |  | (b) |
(a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic net hedge in place and may vary significantly as market prices fluctuate. (b) In response to the precipitous decline in oil and jet fuel prices during the second half of 2014, the Company took action to offset its 2018 fuel derivative portfolio and remains effectively unhedged for 2018 at current price levels. While the Company still holds derivative contracts as of June 30, 2015, that will settle during 2018, the losses associated with those contracts are locked in.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the location of all assets and liabilities associated with the Company’s derivative instruments within the unaudited Condensed Consolidated Balance Sheet:
|  |  |  | Asset derivatives |  | Liability derivatives
|  | Balance Sheet |  | Fair value at |  | Fair value at |  | Fair value at |  | Fair value at
(in millions) |  | location |  | 6/30/2015 |  | 12/31/2014 |  | 6/30/2015 |  | 12/31/2014
Derivatives designated as hedges* |  |  |  |  |  |  |  |  |  |
Fuel derivative contracts (gross) |  | Accrued liabilities |  | $ | 29 |  |  | $ | — |  |  | $ | 145 |  |  | $ | — |
Fuel derivative contracts (gross) |  | Other noncurrent liabilities |  | 38 |  |  | — |  |  | 381 |  |  | 643 |
Interest rate derivative contracts |  | Other assets |  | 1 |  |  | 13 |  |  | — |  |  | — |
Interest rate derivative contracts |  | Other noncurrent liabilities |  | — |  |  | — |  |  | 54 |  |  | 61 |
Total derivatives designated as hedges |  | $ | 68 |  |  | $ | 13 |  |  | $ | 580 |  |  | $ | 704 |
Derivatives not designated as hedges* |  |  |  |  |  |  |  |  |  |
Fuel derivative contracts (gross) |  | Accrued liabilities |  | $ | 408 |  |  | $ | 1,190 |  |  | $ | 811 |  |  | $ | 1,432 |
Fuel derivative contracts (gross) |  | Other noncurrent liabilities |  | 151 |  |  | 157 |  |  | 317 |  |  | 273 |
Total derivatives not designated as hedges |  |  |  | $ | 559 |  |  | $ | 1,347 |  |  | $ | 1,128 |  |  | $ | 1,705 |
Total derivatives |  |  |  | $ | 627 |  |  | $ | 1,360 |  |  | $ | 1,708 |  |  | $ | 2,409 |
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note.
Cash Collateral Deposits Due To Or From Third Parties and Net Unrealized Losses | In addition, the Company had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet:
|  | Balance Sheet |  | June 30, |  | December 31,
(in millions) |  | location |  | 2015 |  | 2014
Cash collateral deposits provided to counterparties for fuel contracts - current |  | Offset against Accrued liabilities |  | $ | 202 |  |  | $ | 68 |
Cash collateral deposits provided to counterparties for fuel contracts - noncurrent |  | Offset against Other noncurrent liabilities |  | 458 |  |  | 198 |
Due to third parties for fuel contracts |  | Accounts payable |  | — |  |  | 16 |
Offsetting Assets | The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting:
Offsetting of derivative assets
(in millions)
|  |  |  | (i) |  | (ii) |  | (iii) = (i) + (ii) |  | (i) |  | (ii) |  | (iii) = (i) + (ii)
|  |  |  | June 30, 2015 |  | December 31, 2014
Description |  | Balance Sheet location |  | Gross amounts of recognized assets |  | Gross amounts offset in the Balance Sheet |  | Net amounts of assets presented in the Balance Sheet (a) |  | Gross amounts of recognized assets |  | Gross amounts offset in the Balance Sheet |  | Net amounts of assets presented in the Balance Sheet (a)
Fuel derivative contracts |  | Accrued liabilities |  | $ | 639 |  |  | $ | (639 | ) |  | $ | — |  |  | $ | 1,258 |  |  | $ | (1,258 | ) |  | $ | — |
Fuel derivative contracts |  | Other noncurrent liabilities |  | $ | 647 |  |  | $ | (647 | ) |  | $ | — |  |  | $ | 355 |  |  | $ | (355 | ) |  | $ | — |
Interest rate derivative contracts |  | Other assets |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 13 |  |  | $ | — |  |  | $ | 13 |
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5.
Offsetting Liabilities |
Offsetting of derivative liabilities
(in millions)
|  |  |  | (i) |  | (ii) |  | (iii) = (i) + (ii) |  | (i) |  | (ii) |  | (iii) = (i) + (ii)
|  |  |  | June 30, 2015 |  | December 31, 2014
Description |  | Balance Sheet location |  | Gross amounts of recognized liabilities |  | Gross amounts offset in the Balance Sheet |  | Net amounts of liabilities presented in the Balance Sheet (a) |  | Gross amounts of recognized liabilities |  | Gross amounts offset in the Balance Sheet |  | Net amounts of liabilities presented in the Balance Sheet (a)
Fuel derivative contracts |  | Accrued liabilities |  | $ | 956 |  |  | $ | (639 | ) |  | $ | 317 |  |  | $ | 1,432 |  |  | $ | (1,258 | ) |  | $ | 174 |
Fuel derivative contracts |  | Other noncurrent liabilities |  | $ | 698 |  |  | $ | (647 | ) |  | $ | 51 |  |  | $ | 916 |  |  | $ | (355 | ) |  | $ | 561 |
Interest rate derivative contracts |  | Other noncurrent liabilities |  | $ | 54 |  |  | $ | — |  |  | $ | 54 |  |  | $ | 61 |  |  | $ | — |  |  | $ | 61 |
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5.
Derivatives in Cash Flow Hedging Relationships | The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2015 and 2014:
Derivatives in cash flow hedging relationships
| (Gain) loss recognized in AOCI on derivatives (effective portion) |  | (Gain) loss reclassified from AOCI into income (effective portion) (a) |  | (Gain) loss recognized in income on derivatives (ineffective portion) (b)
| Three months ended |  | Three months ended |  | Three months ended
| June 30, |  | June 30, |  | June 30,
(in millions) | 2015 |  | 2014 |  | 2015 |  | 2014 |  | 2015 |  | 2014
Fuel derivative contracts | $ | (33 | ) | * | $ | (122 | ) | * | $ | 41 |  | * | $ | (1 | ) | * | $ | (2 | ) |  | $ | (28 | )
Interest rate derivatives | (1 | ) | * | 3 |  | * | 3 |  | * | 3 |  | * | (1 | ) |  | — |
Total | $ | (34 | ) |  | $ | (119 | ) |  | $ | 44 |  |  | $ | 2 |  |  | $ | (3 | ) |  | $ | (28 | )
*Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. (b) Amounts are included in Other (gains) losses, net.
Derivatives in cash flow hedging relationships
| (Gain) loss recognized in AOCI on derivatives (effective portion) |  | (Gain) loss reclassified from AOCI into income (effective portion)(a) |  | (Gain) loss recognized in income on derivatives (ineffective portion)(b)
| Six months ended |  | Six months ended |  | Six months ended
| June 30, |  | June 30, |  | June 30,
(in millions) | 2015 |  | 2014 |  | 2015 |  | 2014 |  | 2015 |  | 2014
Fuel derivative contracts | $ | 16 |  | * | $ | (110 | ) | * | $ | 87 |  | * | $ | (1 | ) | * | $ | (15 | ) |  | $ | (41 | )
Interest rate derivatives | 3 |  | * | 5 |  | * | 6 |  | * | 7 |  | * | (2 | ) |  | (1 | )
Total | $ | 19 |  |  | $ | (105 | ) |  | $ | 93 |  |  | $ | 6 |  |  | $ | (17 | ) |  | $ | (42 | )
*Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. (b) Amounts are included in Other (gains) losses, net.
Derivatives Not in Cash Flow Hedging Relationships |
Derivatives not in cash flow hedging relationships
| (Gain) loss |  |
| recognized in income on |  |
| derivatives |  |
| Three months ended |  | Location of (gain) loss
| June 30, |  | recognized in income
(in millions) | 2015 |  | 2014 |  | on derivatives
Fuel derivative contracts | $ | 71 |  |  | $ | 16 |  |  | Other (gains) losses, net
Derivatives not in cash flow hedging relationships
| (Gain) loss |  |
| recognized in income on |  |
| derivatives |  |
| Six months ended |  | Location of (gain) loss
| June 30, |  | recognized in income
(in millions) | 2015 |  | 2014 |  | on derivatives
Fuel derivative contracts | $ | 91 |  |  | $ | (40 | ) |  | Other (gains) losses, net
Fair Values of Fuel Derivatives, Amounts Posted as Collateral, and Collateral Posting Threshold Amounts | The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of June 30, 2015, at which such postings are triggered:
| Counterparty (CP) |  |
(in millions) | A |  | B |  | C |  | D |  | E |  | F |  | Other (a) |  | Total
Fair value of fuel derivatives | $ | (536 | ) |  | $ | (112 | ) |  | $ | (104 | ) |  | $ | (178 | ) |  | $ | (32 | ) |  | $ | (45 | ) |  | $ | (21 | ) |  | $ | (1,028 | )
Cash collateral held (by) CP | (469 | ) |  | (71 | ) |  | (8 | ) |  | (112 | ) |  | — |  |  | — |  |  | — |  |  | (660 | )
Aircraft collateral pledged to CP | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Letters of credit (LC) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Option to substitute LC for aircraft | <(400)(h) |  | (100) to (500)(d) |  | N/A |  | (150) to (550)(d) |  | N/A |  | N/A |  |  |  |
Option to substitute LC for cash | N/A |  | >(500) |  | (100) to (150)(e) |  | (75) to (150) or >(550)(d) |  | N/A |  | (g) |  |  |  |
If credit rating is investment grade, fair value of fuel derivative level at which: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash is provided to CP | (50) to (200) or >(600) |  | (50) to (100) or >(500) |  | >(95) |  | (75) to (150) or >(550) |  | >(65) |  | >(50) |  |  |  |
Cash is received from CP | >50 |  | >150 |  | >175(c) |  | >200 |  | >30 |  | >50 |  |  |  |
Aircraft or cash can be pledged to CP as collateral | (200) to (600)(f) |  | (100) to (500)(d) |  | N/A |  | (150) to (550)(d) |  | N/A |  | N/A |  |  |  |
If credit rating is non-investment grade, fair value of fuel derivative level at which: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash is provided to CP | (0) to (200) or >(600) |  | (0) to (100) or >(500) |  | (b) |  | (0) to (150) or >(550) |  | (b) |  | (b) |  |  |  |
Cash is received from CP | (b) |  | (b) |  | (b) |  | (b) |  | (b) |  | (b) |  |  |  |
Aircraft or cash can be pledged to CP as collateral | (200) to (600) |  | (100) to (500) |  | N/A |  | (150) to (550) |  | N/A |  | N/A |  |  |  |
(a) Individual counterparties with fair value of fuel derivatives <$10 million. (b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. (c) Thresholds may vary based on changes in credit ratings within investment grade. (d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. (e) The Company has the option of providing cash or letters of credit as collateral. (f) The Company has the option of providing cash or pledging aircraft as collateral. (g) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. (h) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements.

X
- Definition Disclosure of cash collateral deposits provided to or from a counterparty, due to or from third parties for settled fuel contracts, and net unrealized gains/losses from fuel hedges, net of tax, for fuel derivative instruments and hedging activities. + References No definition available. + Details
Name: | luv_CashCollateralDepositsDueToOrFromThirdPartiesAndNetUnrealizedLossesTableTextBlock
Namespace Prefix: | luv_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Schedule of the location and amount of gains and losses reported in the statement of financial performance (or when applicable, the statement of financial position, for example, gains and losses initially recognized in other comprehensive income) on derivative instruments designated and qualifying as hedging instruments in cash flow hedges. + References No definition available. + Details
Name: | luv_ScheduleOfDerivativeInstrumentsInCashFlowHedgingRelationshipsGainLossInStatementOfFinancialPerformanceTableTextBlock
Namespace Prefix: | luv_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Schedule of the location and amount of gains and losses reported in the statement of financial performance (or when applicable, the statement of financial position, for example, gains and losses initially recognized in other comprehensive income) on derivative instruments not designated and qualifying as hedging instruments in cash flow hedges. + References No definition available. + Details
Name: | luv_ScheduleOfDerivativeInstrumentsNotInCashFlowHedgingRelationshipsGainLossInStatementOfFinancialPerformanceTableTextBlock
Namespace Prefix: | luv_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of the agreements the Company had with counterparties in which cash deposits/receipts and/or pledged aircraft are required to be posted whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds. Includes the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts at which such postings are triggered. + References No definition available. + Details
Name: | luv_ScheduleOfFairValuesOfFuelDerivativesAmountsPostedAsCollateralAndCollateralPostingThresholdsTableTextBlock
Namespace Prefix: | luv_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of the volume of fuel hedging for the current year (including current and prior period actuals), as well as for future periods. + References No definition available. + Details
Name: | luv_ScheduleOfVolumeOfFuelHedgingTableTextBlock
Namespace Prefix: | luv_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of derivative and other financial assets that are subject to offsetting, including master netting arrangements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=34720828&loc=SL20225862-175312 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=34720828&loc=SL20225877-175312 + Details
Name: | us-gaap_OffsettingAssetsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of derivative and other financial liabilities that are subject to offsetting, including master netting arrangements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=34720828&loc=SL20225877-175312 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=34720828&loc=SL20225862-175312 + Details
Name: | us-gaap_OffsettingLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624163-113959 + Details
Name: | us-gaap_ScheduleOfDerivativeInstrumentsInStatementOfFinancialPositionFairValueTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration