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Financial Derivative Instruments (Tables) | 9 Months Ended
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Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Volume of Fuel Hedging | The following table provides information about the Company’s volume of fuel hedging on an economic basis:
|  | Maximum fuel hedged as of |  |
|  | September 30, 2019 |  | Derivative underlying commodity type as of
Period (by year) |  | (gallons in millions) (a) |  | September 30, 2019
Remainder of 2019 |  | 344 |  |  | WTI crude oil and Brent crude oil
2020 |  | 1,301 |  |  | WTI crude oil, Brent crude oil, and Heating oil
2021 |  | 1,169 |  |  | WTI crude oil and Brent crude oil
2022 |  | 552 |  |  | WTI crude oil 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.
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 |  | 9/30/2019 |  | 12/31/2018 |  | 9/30/2019 |  | 12/31/2018
Derivatives designated as hedges (a) |  |  |  |  |  |  |  |  |  |
Fuel derivative contracts (gross) |  | Prepaid expenses and other current assets |  | $ | 35 |  |  | $ | 43 |  |  | $ | — |  |  | $ | — |
Fuel derivative contracts (gross) |  | Other assets |  | 79 |  |  | 95 |  |  | — |  |  | — |
Interest rate derivative contracts |  | Other assets |  | 1 |  |  | — |  |  | — |  |  | — |
Interest rate derivative contracts |  | Accrued liabilities |  | — |  |  | — |  |  | 20 |  |  | 2 |
Interest rate derivative contracts |  | Other noncurrent liabilities |  | — |  |  | — |  |  | 4 |  |  | 12 |
Total derivatives designated as hedges |  | $ | 115 |  |  | $ | 138 |  |  | $ | 24 |  |  | $ | 14 |
(a) 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.
Schedule of Derivative Instruments Statements of Financial Performance and Financial Position, Location | The following table presents the amounts recorded on the unaudited Condensed Consolidated Balance Sheet related to fair value hedges:
Balance Sheet location of hedged item |  | Carrying amount of the hedged liabilities |  | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities (a)
|  | September 30, |  | September 30,
(in millions) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Current maturities of long-term debt |  | $ | 300 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
Long-term debt less current maturities |  | 501 |  |  | 783 |  |  | 18 |  |  | 3 |
|  | $ | 801 |  |  | $ | 783 |  |  | $ | 20 |  |  | $ | 3 |
(a) At September 30, 2019 and 2018, these amounts include the cumulative amount of fair value hedging adjustments remaining for which hedge accounting has been discontinued of $19 million and $20 million, respectively.
Cash Collateral Deposits Due To or From Third Parties | 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 |  | September 30, |  | December 31,
(in millions) |  | location |  | 2019 |  | 2018
Due to third parties for fuel contracts |  | Accounts payable |  | $ | 1 |  |  | $ | — |
Receivable from third parties for fuel contracts |  | Accounts and other receivables |  | — |  |  | 2 |
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) |
|  |  |  | September 30, 2019 |  | December 31, 2018 |
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 |  | $ | 35 |  |  | $ | — |  |  | $ | 35 |  |  | $ | 43 |  |  | $ | — |  |  | $ | 43 |  |
Fuel derivative contracts |  | Other assets |  | $ | 79 |  |  | $ | — |  |  | $ | 79 |  | (a) | $ | 95 |  |  | $ | — |  |  | $ | 95 |  | (a)
Interest rate derivative contracts |  | Other assets |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  | (a) | $ | — |  |  | $ | — |  |  | $ | — |  | (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 9.
Offsetting Liabilities |
Offsetting of derivative liabilities |
(in millions) |
|  |  |  | (i) |  | (ii) |  | (iii) = (i) + (ii) |  | (i) |  | (ii) |  | (iii) = (i) + (ii) |
|  |  |  | September 30, 2019 |  | December 31, 2018 |
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 |
Interest rate derivative contracts |  | Accrued liabilities |  | $ | 20 |  |  | $ | — |  |  | $ | 20 |  |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |
Interest rate derivative contracts |  | Other noncurrent liabilities |  | $ | 4 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 12 |  |  | $ | — |  |  | $ | 12 |  |
Schedule Of Derivative Instruments In Hedging Relationships Gain Loss In Statement Of Financial Performance | 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 nine months ended September 30, 2019 and 2018:
Location and amount recognized in income on cash flow and fair value hedging relationships
|  | Three months ended September 30, 2019 |  | Three months ended September 30, 2018
(in millions) |  | Fuel and oil |  | Interest expense |  | Fuel and oil |  | Interest expense
Total |  | $ | 19 |  |  | $ | 8 |  |  | $ | (20 | ) |  | $ | 9 |
(Gain) loss on cash flow hedging relationships: |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |
Amount of (gain) loss reclassified from AOCI into income |  | 19 |  |  | — |  |  | (20 | ) |  | — |
Interest contracts: |  |  |  |  |  |  |  |
Amount of loss reclassified from AOCI into income |  | — |  |  | 2 |  |  | — |  |  | 1 |
Impact of fair value hedging relationships: |  |  |  |  |  |  |  |
Interest contracts: |  |  |  |  |  |  |  |
Hedged items |  | — |  |  | 6 |  |  | — |  |  | 6 |
Derivatives designated as hedging instruments |  | — |  |  | — |  |  | — |  |  | 2 |
Location and amount recognized in income on cash flow and fair value hedging relationships
|  | Nine months ended September 30, 2019 |  | Nine months ended September 30, 2018
(in millions) |  | Fuel and oil |  | Interest expense |  | Fuel and oil |  | Interest expense
Total |  | $ | 28 |  |  | $ | 21 |  |  | $ | (32 | ) |  | $ | 26 |
(Gain) loss on cash flow hedging relationships: |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |
Amount of (gain) loss reclassified from AOCI into income |  | 28 |  |  | — |  |  | (32 | ) |  | — |
Interest contracts: |  |  |  |  |  |  |  |
Amount of loss reclassified from AOCI into income |  | — |  |  | 3 |  |  | — |  |  | 4 |
Impact of fair value hedging relationships: |  |  |  |  |  |  |  |
Interest contracts: |  |  |  |  |  |  |  |
Hedged items |  | — |  |  | 17 |  |  | — |  |  | 17 |
Derivatives designated as hedging instruments |  | — |  |  | 1 |  |  | — |  |  | 5 |
Derivatives in Cash Flow Hedging Relationships |
Derivatives designated and qualified in cash flow hedging relationships
| (Gain) loss recognized in AOCI on derivatives, net of tax
| Three months ended
| September 30,
(in millions) | 2019 |  | 2018
Fuel derivative contracts | $ | 95 |  |  | $ | (122 | )
Interest rate derivatives | 17 |  |  | — |
Total | $ | 112 |  |  | $ | (122 | )
Derivatives designated and qualified in cash flow hedging relationships
| (Gain) loss recognized in AOCI on derivatives, net of tax
| Nine months ended
| September 30,
(in millions) | 2019 |  | 2018
Fuel derivative contracts | $ | 83 |  |  | $ | (428 | )
Interest rate derivatives | 43 |  |  | (2 | )
Total | $ | 126 |  |  | $ | (430 | )
Derivatives Not in Cash Flow Hedging Relationships |
Derivatives not designated as hedges
| Gain recognized in income on derivatives |  |
| Nine months ended |  | Location of gain recognized in income on derivatives
| September 30, |
(in millions) | 2019 |  | 2018 |
Interest rate derivatives | $ | — |  |  | $ | (2 | ) |  | Interest expense
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 September 30, 2019, at which such postings are triggered:
| Counterparty (CP) |  |
(in millions) | A |  | B |  | C |  | D |  | E |  | F |  | Other (a) |  | Total
Fair value of fuel derivatives | $ | 25 |  |  | $ | 18 |  |  | $ | 35 |  |  | $ | 12 |  |  | $ | 9 |  |  | $ | 7 |  |  | $ | 8 |  |  | $ | 114 |
Cash collateral held from CP | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Aircraft collateral pledged to CP | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Letters of credit (LC) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Option to substitute LC for aircraft | (200) to (600)(b) |  | N/A |  | (150) to (550)(c) |  | (150) to (550)(c) |  | N/A |  | N/A |  |  |  |
Option to substitute LC for cash | N/A |  | N/A |  | (75) to (150) or >(550)(c) |  | (125) to (150) or >(550)(d) |  | (d) |  | N/A |  |  |  |
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) |  | (75) to (150) or >(550)(e) |  | (125) to (150) or >(550)(e) |  | >(40) |  | >(70)(e) |  |  |  |
Cash is received from CP | >50(e) |  | >150(e) |  | >250(e) |  | >125(e) |  | >100(e) |  | >70(e) |  |  |  |
Aircraft or cash can be pledged to CP as collateral | (200) to (600)(f) |  | N/A |  | (150) to (550)(c) |  | (150) to (550)(c) |  | 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) |  | (g) |  | (0) to (150) or >(550) |  | (0) to (150) or >(550) |  | (g) |  | (g) |  |  |  |
Cash is received from CP | (g) |  | (g) |  | (g) |  | (g) |  | (g) |  | (g) |  |  |  |
Aircraft or cash can be pledged to CP as collateral | (200) to (600) |  | N/A |  | (150) to (550) |  | (150) to (550) |  | N/A |  | N/A |  |  |  |
(a) Individual counterparties with fair value of fuel derivatives < $7 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 to substitute letters of credit for 100 percent of cash collateral requirement. (e) Thresholds may vary based on changes in credit ratings within investment grade. (f) The Company has the option of providing cash or pledging aircraft as collateral. (g) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

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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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