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Fair Value Measurements (Tables)

12 Months Ended

Dec. 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 December 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		December 31, 2018				(Level 1)				(Level 2)				(Level 3)
Assets		(in millions)
Cash equivalents
Cash equivalents (a)		$	1,392			$	1,392			$	—			$	—
Commercial paper		454				—				454				—
Certificates of deposit		8				—				8				—
Short-term investments:
Treasury bills		1,582				1,582				—				—
Certificates of deposit		228				—				228				—
Time deposits		25				—				25				—
Fuel derivatives:
Option contracts (b)		138				—				—				138
Other available-for-sale securities		127				127				—				—
Total assets		$	3,954			$	3,101			$	715			$	138
Liabilities
Interest rate derivatives (see Note 10)		(14		)		—				(14		)		—

(a) Cash equivalents are primarily composed of money market investments.

(b) In the Consolidated Balance Sheet amounts are presented as an asset. See Note 10.

						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 10)		(22		)		—				(22		)		—
Total liabilities		$	(57	)		$	—			$	(22	)		$	(35	)

(a) Cash equivalents are primarily composed of money market investments.

(b) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10.

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 2018 and 2017:

Fair value measurements using significant unobservable inputs (Level 3)
	Fuel
(in millions)	derivatives
Balance at December 31, 2017	$	248
Total losses (realized or unrealized) included in other comprehensive income	(1		)
Purchases	66			(a)
Sales	(4		)	(a)
Settlements	(171		)
Balance at December 31, 2018	$	138

(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.

Fair value measurements using significant unobservable inputs (Level 3)
	Fuel
(in millions)	derivatives
Balance at December 31, 2016	$	(258	)
Total losses (realized or unrealized)
Included in earnings	(125		)
Included in other comprehensive income	(50		)
Purchases	142			(a)
Sales	—			(a)
Settlements	539
Balance at December 31, 2017	$	248
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 December 31, 2016	$	(42	)

(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.

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 December 31, 2018:

Quantitative information about Level 3 fair value measurements
	Valuation technique	Unobservable input	Period (by year)	Range
Fuel derivatives	Option model	Implied volatility	2019	29-49%
			2020	22-31%
			2021	19-24%
			2022	20-21%

Fair value, by Balance Sheet Grouping

(in millions)	Carrying value				Estimated fair value				Fair value level hierarchy
2.75% Notes due November 2019	$	300			$	299			Level 2
Term Loan Agreement payable through May 2019 - 6.315%	23				23				Level 3
Term Loan Agreement payable through July 2019 - 4.84%	10				10				Level 3
2.65% Notes due 2020	492				486				Level 2
Term Loan Agreement payable through 2020 - 5.223%	187				187				Level 3
737 Aircraft Notes payable through 2020	67				67				Level 3
2.75% Notes due 2022	300				293				Level 2
Pass Through Certificates due 2022 - 6.24%	250				263				Level 2
Term Loan Agreement payable through 2026 - 3.88%	197				197				Level 3
3.00% Notes due 2026	300				279				Level 2
3.45% Notes due 2027	300				286				Level 2
7.375% Debentures due 2027	125				146				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.

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Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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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

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