XML 36 R21.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Fair Value Measurements (Tables) | 3 Months Ended
--- | ---
Mar. 31, 2018
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 March 31, 2018, and December 31, 2017:
|  |  |  | Fair value measurements at reporting date using:
|  |  |  | Quoted prices in active markets for identical assets |  | Significant other observable inputs |  | Significant unobservable inputs
Description |  | March 31, 2018 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  | (in millions)
Cash equivalents |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 1,500 |  |  | $ | 1,500 |  |  | $ | — |  |  | $ | — |
Commercial paper |  | 285 |  |  | — |  |  | 285 |  |  | — |
Certificates of deposit |  | 12 |  |  | — |  |  | 12 |  |  | — |
Time deposits |  | 25 |  |  | — |  |  | 25 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Treasury bills |  | 1,144 |  |  | 1,144 |  |  | — |  |  | — |
Certificates of deposit |  | 277 |  |  | — |  |  | 277 |  |  | — |
Fuel derivatives: |  |  |  |  |  |  |  |
Option contracts (b) |  | 363 |  |  | — |  |  | — |  |  | 363 |
Other available-for-sale securities |  | 122 |  |  | 122 |  |  | — |  |  | — |
Total assets |  | $ | 3,728 |  |  | $ | 2,766 |  |  | $ | 599 |  |  | $ | 363 |
Liabilities |  |  |  |  |  |  |  |
Fuel derivatives: |  |  |  |  |  |  |  |
Option contracts (b) |  | (23 | ) |  | — |  |  | — |  |  | (23 | )
Interest rate derivatives (see Note 3) |  | (25 | ) |  | — |  |  | (25 | ) |  | — |
Total liabilities |  | $ | (48 | ) |  | $ | — |  |  | $ | (25 | ) |  | $ | (23 | )
(a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. See Note 3.
|  |  |  | 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, 2017 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  | (in millions)
Cash equivalents |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 1,133 |  |  | $ | 1,133 |  |  | $ | — |  |  | $ | — |
Commercial paper |  | 350 |  |  | — |  |  | 350 |  |  | — |
Certificates of deposit |  | 12 |  |  | — |  |  | 12 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Treasury bills |  | 1,491 |  |  | 1,491 |  |  | — |  |  | — |
Certificates of deposit |  | 287 |  |  | — |  |  | 287 |  |  | — |
Fuel derivatives: |  |  |  |  |  |  |  |
Option contracts (b) |  | 283 |  |  | — |  |  | — |  |  | 283 |
Other available-for-sale securities |  | 107 |  |  | 107 |  |  | — |  |  | — |
Total assets |  | $ | 3,663 |  |  | $ | 2,731 |  |  | $ | 649 |  |  | $ | 283 |
Liabilities |  |  |  |  |  |  |  |
Fuel derivatives: |  |  |  |  |  |  |  |
Option contracts (b) |  | (35 | ) |  | — |  |  | — |  |  | (35 | )
Interest rate derivatives (see Note 3) |  | (22 | ) |  | — |  |  | (22 | ) |  | — |
Total liabilities |  | $ | (57 | ) |  | $ | — |  |  | $ | (22 | ) |  | $ | (35 | )
(a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. See Note 3.
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | The following table presents the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2018:
Fair value measurements using significant unobservable inputs (Level 3)
(in millions) | Fuel derivatives |
Balance at December 31, 2017 | $ | 248 |  |
Total gains (realized or unrealized) included in other comprehensive income | 101 |  |
Purchases | 18 |  | (a)
Settlements | (27 | ) |
Balance at March 31, 2018 | $ | 340 |  |
(a) The purchase 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.
Fair Value Valuation Techniques | The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s fuel derivatives classified as Level 3 at March 31, 2018:
Quantitative information about Level 3 fair value measurements
|  | Valuation technique |  | Unobservable input |  | Period (by year) |  | Range
Fuel derivatives |  | Option model |  | Implied volatility |  | Second quarter 2018 |  | 14-31%
|  |  |  |  |  | Third quarter 2018 |  | 21-30%
|  |  |  |  |  | Fourth quarter 2018 |  | 22-29%
|  |  |  |  |  | 2019 |  | 21-26%
|  |  |  |  |  | 2020 |  | 20-23%
|  |  |  |  |  | 2021 |  | 19-20%
|  |  |  |  |  | 2022 |  | 19%
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 March 31, 2018, 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. Debt under six of the Company’s debt agreements is 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
French Credit Agreements due June 2018 - 2.54% | $ | 1 |  |  | $ | 1 |  |  | Level 3
2.75% Notes due 2019 | 298 |  |  | 298 |  |  | Level 2
Term Loan Agreement payable through 2019 - 6.315% | 55 |  |  | 55 |  |  | Level 3
Term Loan Agreement payable through 2019 - 4.84% | 15 |  |  | 15 |  |  | Level 3
2.65% Notes due 2020 | 486 |  |  | 483 |  |  | Level 2
Term Loan Agreement payable through 2020 - 5.223% | 225 |  |  | 225 |  |  | Level 3
737 Aircraft Notes payable through 2020 | 144 |  |  | 144 |  |  | Level 3
2.75% Notes due 2022 | 300 |  |  | 295 |  |  | Level 2
Pass Through Certificates due 2022 - 6.24% | 273 |  |  | 293 |  |  | Level 2
Term Loan Agreement payable through 2026 - 2.67% | 215 |  |  | 215 |  |  | Level 3
3.00% Notes due 2026 | 300 |  |  | 284 |  |  | Level 2
3.45% Notes due 2027 | 300 |  |  | 292 |  |  | Level 2
7.375% Debentures due 2027 | 126 |  |  | 151 |  |  | 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=66048111&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 825 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=77997519&loc=d3e13476-108611 Reference 2: 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=66048111&loc=d3e19207-110258 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=77997519&loc=d3e13467-108611 Reference 4: 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=75026489&loc=d3e13220-108610 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=75031198&loc=d3e14172-108612 Reference 6: 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=77997519&loc=d3e13433-108611 + Details
Name: | us-gaap_FairValueByBalanceSheetGroupingTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + 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=66048111&loc=d3e19190-110258 + Details
Name: | us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration