XML 65 R25.htm IDEA: XBRL DOCUMENT
v3.19.3

Fair Value Measurements (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2019
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 September 30, 2019, and December 31, 2018:
|  |  |  | Fair value measurements at reporting date using:
|  |  |  | Quoted prices in active markets for identical assets |  | Significant other observable inputs |  | Significant unobservable inputs
Description |  | September 30, 2019 |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  | (in millions)
Cash equivalents |  |  |  |  |  |  |  |
Cash equivalents (a) |  | $ | 2,078 |  |  | $ | 2,078 |  |  | $ | — |  |  | $ | — |
Commercial paper |  | 405 |  |  | — |  |  | 405 |  |  | — |
Certificates of deposit |  | 5 |  |  | — |  |  | 5 |  |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Treasury bills |  | 1,195 |  |  | 1,195 |  |  | — |  |  | — |
Certificates of deposit |  | 274 |  |  | — |  |  | 274 |  |  | — |
Time deposits |  | 59 |  |  | — |  |  | 59 |  |  | — |
Interest rate derivatives (see Note 3) |  | 1 |  |  | — |  |  | 1 |  |  | — |
Fuel derivatives: |  |  |  |  |  |  |  |
Option contracts (b) |  | 114 |  |  | — |  |  | — |  |  | 114 |
Other available-for-sale securities |  | 178 |  |  | 178 |  |  | — |  |  | — |
Total assets |  | $ | 4,309 |  |  | $ | 3,451 |  |  | $ | 744 |  |  | $ | 114 |
Liabilities |  |  |  |  |  |  |  |
Interest rate derivatives (see Note 3) |  | $ | (24 | ) |  | $ | — |  |  | $ | (24 | ) |  | $ | — |
(a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as an 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, 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 3) |  | $ | (14 | ) |  | $ | — |  |  | $ | (14 | ) |  | $ | — |
(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 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 the three and nine months ended September 30, 2019:
Fair value measurements using significant unobservable inputs (Level 3)
(in millions) | Fuel derivatives |
Balance at June 30, 2019 | $ | 187 |  |
Total losses (realized or unrealized) included in other comprehensive income | (123 | ) |
Purchases | 50 |  | (a)
Balance at September 30, 2019 | $ | 114 |  |
(a) The purchase of fuel derivatives is recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives was purchased as a single instrument or separate instruments.
Fair value measurements using significant unobservable inputs (Level 3)
(in millions) | Fuel derivatives |
Balance at December 31, 2018 | $ | 138 |  |
Total losses (realized or unrealized) included in other comprehensive income | (101 | ) |
Purchases | 126 |  | (a)
Sales | (2 | ) | (a)
Settlements | (47 | ) |
Balance at September 30, 2019 | $ | 114 |  |
(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 was 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 September 30, 2019:
Quantitative information about Level 3 fair value measurements
|  | Valuation technique |  | Unobservable input |  | Period (by year) |  | Range
Fuel derivatives |  | Option model |  | Implied volatility |  | Fourth quarter 2019 |  | 22-38%
|  |  |  |  |  | 2020 |  | 24-42%
|  |  |  |  |  | 2021 |  | 20-29%
|  |  |  |  |  | 2022 |  | 19-21%
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 September 30, 2019, 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 three 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
2.75% Notes due November 2019 | $ | 300 |  |  | $ | 300 |  |  | Level 2
2.65% Notes due 2020 | 501 |  |  | 504 |  |  | Level 2
Term Loan Agreement payable through 2020 - 5.223% | 147 |  |  | 147 |  |  | Level 3
737 Aircraft Notes payable through 2020 | 21 |  |  | 21 |  |  | Level 3
2.75% Notes due 2022 | 300 |  |  | 304 |  |  | Level 2
Pass Through Certificates due 2022 - 6.24% | 197 |  |  | 208 |  |  | Level 2
Term Loan Agreement payable through 2026 - 3.71% | 188 |  |  | 188 |  |  | Level 3
3.00% Notes due 2026 | 300 |  |  | 307 |  |  | Level 2
3.45% Notes due 2027 | 300 |  |  | 315 |  |  | Level 2
7.375% Debentures due 2027 | 123 |  |  | 152 |  |  | Level 2

X
- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=117815213&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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=118260190&loc=d3e13467-108611 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + 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 financial instrument classified as a derivative asset (liability) after deduction of derivative liability (asset) using recurring unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19279-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration