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Financial Derivative Instruments (Tables) | 3 Months Ended
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Mar. 31, 2017
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 2017 through 2019 on an “economic” basis considering current market prices:
|  | Maximum fuel hedged as of |  |
|  | March 31, 2017 |  | Derivative underlying commodity type as of
Period (by year) |  | (gallons in millions) (a) |  | March 31, 2017
Remainder of 2017 |  | 961 |  |  | WTI crude and Brent crude oil
2018 |  | 1,647 |  |  | WTI crude and Brent crude oil
2019 |  | 649 |  |  | WTI crude and Brent crude oil
(a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices fluctuate.
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 |  | 3/31/2017 |  | 12/31/2016 |  | 3/31/2017 |  | 12/31/2016
Derivatives designated as hedges* |  |  |  |  |  |  |  |  |  |
Fuel derivative contracts (gross) |  | Prepaid expenses and other current assets |  | $ | 2 |  |  | $ | 7 |  |  | $ | — |  |  | $ | 44 |
Fuel derivative contracts (gross) |  | Other assets |  | 82 |  |  | 126 |  |  | — |  |  | — |
Fuel derivative contracts (gross) |  | Accrued liabilities |  | 20 |  |  | 4 |  |  | 402 |  |  | 412 |
Interest rate derivative contracts |  | Other noncurrent liabilities |  | — |  |  | — |  |  | 25 |  |  | 35 |
Total derivatives designated as hedges |  | $ | 104 |  |  | $ | 137 |  |  | $ | 427 |  |  | $ | 491 |
Derivatives not designated as hedges* |  |  |  |  |  |  |  |  |  |
Fuel derivative contracts (gross) |  | Prepaid expenses and other current assets |  | $ | 2 |  |  | $ | 54 |  |  | $ | — |  |  | $ | — |
Fuel derivative contracts (gross) |  | Other assets |  | 46 |  |  | 52 |  |  | 46 |  |  | 52 |
Fuel derivative contracts (gross) |  | Accrued liabilities |  | 193 |  |  | 201 |  |  | 234 |  |  | 262 |
Interest rate derivative contracts |  | Other noncurrent liabilities |  | — |  |  | — |  |  | 5 |  |  | — |
Total derivatives not designated as hedges |  |  |  | $ | 241 |  |  | $ | 307 |  |  | $ | 285 |  |  | $ | 314 |
Total derivatives |  |  |  | $ | 345 |  |  | $ | 444 |  |  | $ | 712 |  |  | $ | 805 |
* 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 |  | March 31, |  | December 31,
(in millions) |  | location |  | 2017 |  | 2016
Cash collateral deposits held from counterparties for fuel contracts - current |  | Offset against Prepaid expenses and other current assets |  | $ | 2 |  |  | $ | 4 |
Cash collateral deposits held from counterparties for fuel contracts - noncurrent |  | Offset against Other assets |  | 5 |  |  | 6 |
Cash collateral deposits provided to counterparties for fuel contracts - current |  | Offset against Accrued liabilities |  | 270 |  |  | 311 |
Due to third parties for fuel contracts |  | Accounts payable |  | 55 |  |  | 75 |
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) |
|  |  |  | March 31, 2017 |  | December 31, 2016 |
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 |  | Gross amounts of recognized assets |  | Gross amounts offset in the Balance Sheet |  | Net amounts of assets presented in the Balance Sheet |
Fuel derivative contracts |  | Prepaid expenses and other current assets |  | $ | 4 |  |  | $ | (2 | ) |  | $ | 2 |  |  | $ | 61 |  |  | $ | (48 | ) |  | $ | 13 |  |
Fuel derivative contracts |  | Other assets |  | $ | 128 |  |  | $ | (51 | ) |  | $ | 77 |  | (a) | $ | 178 |  |  | $ | (58 | ) |  | $ | 120 |  | (a)
Fuel derivative contracts |  | Accrued liabilities |  | $ | 483 |  |  | $ | (483 | ) |  | $ | — |  | (a) | $ | 516 |  |  | $ | (516 | ) |  | $ | — |  | (a)
(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) |
|  |  |  | March 31, 2017 |  | December 31, 2016 |
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 |  | Gross amounts of recognized liabilities |  | Gross amounts offset in the Balance Sheet |  | Net amounts of liabilities presented in the Balance Sheet |
Fuel derivative contracts |  | Prepaid expenses and other current assets |  | $ | 2 |  |  | $ | (2 | ) |  | $ | — |  |  | $ | 48 |  |  | $ | (48 | ) |  | $ | — |  |
Fuel derivative contracts |  | Other assets |  | $ | 51 |  |  | $ | (51 | ) |  | $ | — |  | (a) | $ | 58 |  |  | $ | (58 | ) |  | $ | — |  | (a)
Fuel derivative contracts |  | Accrued liabilities |  | $ | 636 |  |  | $ | (483 | ) |  | $ | 153 |  | (a) | $ | 674 |  |  | $ | (516 | ) |  | $ | 158 |  | (a)
Interest rate derivative contracts |  | Other noncurrent liabilities |  | $ | 30 |  |  | $ | — |  |  | $ | 30 |  | (a) | $ | 35 |  |  | $ | — |  |  | $ | 35 |  | (a)
(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 months ended March 31, 2017 and 2016:
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
| March 31, |  | March 31, |  | March 31,
(in millions) | 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016
Fuel derivative contracts | $ | 79 |  | * | $ | 36 |  | * | $ | 88 |  | * | $ | 195 |  | * | $ | 14 |  |  | $ | 4 |
Interest rate derivatives | — |  | * | 5 |  | * | 2 |  | * | 2 |  | * | — |  |  | — |
Total | $ | 79 |  |  | $ | 41 |  |  | $ | 90 |  |  | $ | 197 |  |  | $ | 14 |  |  | $ | 4 |
*Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives, which 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 recognized in income on derivatives
| March 31, |
(in millions) | 2017 |  | 2016 |
Fuel derivative contracts | $ | 51 |  |  | $ | 76 |  |  | Other (gains) losses, net
Interest rate derivatives | (1 | ) |  | — |  |  | Interest Expense
| $ | 50 |  |  | $ | 76 |  |  |
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 March 31, 2017, at which such postings are triggered:
| Counterparty (CP) |  |
(in millions) | A |  | B |  | C |  | D |  | Other (a) |  | Total
Fair value of fuel derivatives | $ | (232 | ) |  | $ | (78 | ) |  | $ | (40 | ) |  | $ | 6 |  |  | $ | 7 |  |  | $ | (337 | )
Cash collateral held from (by) CP | (223 | ) |  | (46 | ) |  | — |  |  | 6 |  |  | — |  |  | (263 | )
Aircraft collateral pledged to CP | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Letters of credit (LC) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Option to substitute LC for aircraft | (200) to (600)(b) |  | (100) to (500)(c) |  | (150) to (550)(c) |  | N/A |  |  |  |
Option to substitute LC for cash | N/A |  | >(500)(d) |  | (75) to (150) or >(550)(d) |  | (e) |  |  |  |
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) |  | (75) to (150) or >(550) |  | >(100) |  |  |  |
Cash is received from CP | >50(f) |  | >150(f) |  | >250(f) |  | >0(f) |  |  |  |
Aircraft or cash can be pledged to CP as collateral | (200) to (600)(g) |  | (100) to (500)(c) |  | (150) to (550)(c) |  | 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) |  | (0) to (150) or >(550) |  | (h) |  |  |  |
Cash is received from CP | (h) |  | (h) |  | (h) |  | (h) |  |  |  |
Aircraft or cash can be pledged to CP as collateral | (200) to (600) |  | (100) to (500) |  | (150) to (550) |  | N/A |  |  |  |
(a) Individual counterparties with fair value of fuel derivatives <$5 million. (b) 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. (c) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. (d) The Company has the option of providing cash or letters of credit as collateral. (e) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. (f) Thresholds may vary based on changes in credit ratings within investment grade. (g) The Company has the option of providing cash or pledging aircraft as collateral. (h) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

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- 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
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- 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
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- 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
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- 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
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