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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

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 June 30, 2020, and December 31, 2019:

												Fair value measurements at reporting date using:
												Quoted prices in active markets for identical assets						Significant other observable inputs						Significant unobservable inputs
Description						June 30, 2020						(Level 1)						(Level 2)						(Level 3)
Assets						(in millions)
Cash equivalents
Cash equivalents (a)						$	11,961					$	11,961					$	—					$	—
Commercial paper						90						—						90						—
Certificates of deposit						19						—						19						—
Time deposits						281						—						281						—
Short-term investments:
Treasury bills						1,649						1,649						—						—
Certificates of deposit						132						—						132						—
Time deposits						325						—						325						—
Interest rate derivatives (see Note 4)						2												2
Fuel derivatives:
Option contracts (b)						107						—						—						107
Other available-for-sale securities						219						219						—						—
Total assets						$	14,785					$	13,829					$	849					$	107
Liabilities
Interest rate derivatives (see Note 4)						$	(74)					$	—					$	(74)					$	—

(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 4.

												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, 2019						(Level 1)						(Level 2)						(Level 3)
Assets						(in millions)
Cash equivalents
Cash equivalents (a)						$	1,999					$	1,999					$	—					$	—
Commercial paper						535						—						535						—
Certificates of deposit						14						—						14						—
Short-term investments:
Treasury bills						1,196						1,196						—						—
Certificates of deposit						268						—						268						—
Time deposits						60						—						60						—
Interest rate derivatives (see Note 4)						2						—						2						—
Fuel derivatives:
Option contracts (b)						110						—						—						110
Other available-for-sale securities						197						197						—						—
Total assets						$	4,381					$	3,392					$	879					$	110
Liabilities
Interest rate derivatives (see Note 4)						$	(6)					$	—					$	(6)					$	—

(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 4.

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 six months ended June 30, 2020:

Fair value measurements using significant unobservable inputs (Level 3)
(in millions)			Fuel derivatives
Balance at March 31, 2020			$	85
Total gains (losses) for the period
Included in earnings			(15)			(a)
Included in other comprehensive income			26
Purchases			11			(b)
Balance at June 30, 2020			$	107
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 June 30, 2020			$	(8)		(a)
The amount of total gains for the period included in other comprehensive loss attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2020			$	19

(a) Included in Other (gains) losses, net, within the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss).

(b) 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, 2019			$	110
Total losses for the period
Included in earnings			(17)			(a)
Included in other comprehensive income			(80)
Purchases			94			(b)
Balance at June 30, 2020			$	107
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 June 30, 2020			$	(8)		(a)
The amount of total losses for the period included in other comprehensive loss attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2020			$	(72)

(a) Included in Other (gains) losses, net, within the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss).

(b) 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 Valuation Techniques

The following table presents a range and weighted average of the unobservable inputs utilized in the fair value measurements of the Company’s fuel derivatives classified as Level 3 at June 30, 2020:

Quantitative information about Level 3 fair value measurements
						Valuation technique						Unobservable input						Period (by year)						Range						Weighted Average (a)
Fuel derivatives						Option model						Implied volatility						Third quarter 2020						37-64%						54		%
																		Fourth quarter 2020						37-63%						47		%
																		2021						30-47%						35		%
																		2022						27-31%						29		%
																		Beyond 2022						25-28%						27		%

(a) Implied volatility weighted by the notional amount (barrels of fuel) that will settle in respective period.

Fair value, by Balance Sheet Grouping

The carrying amounts and estimated fair values of the Company’s short-term and long-term debt (including current maturities), as well as the applicable fair value hierarchy tier, at June 30, 2020, 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
2.65% Notes due 2020			$	502					$	503					Level 2
2.75% Notes due 2022			300						304						Level 2
Pass Through Certificates due 2022 - 6.24%			168						172						Level 2
4.75% Notes due 2023			1,250						1,289						Level 2
1.25% Convertible Notes due 2025			1,909						2,762						Level 2
5.25% Notes due 2025			1,250						1,317						Level 2
3.00% Notes due 2026			300						296						Level 2
Term Loan Agreement payable through 2026 - 1.99%			169						159						Level 3
3.45% Notes due 2027			300						294						Level 2
5.125% Notes due 2027			1,300						1,352						Level 2
7.375% Debentures due 2027			121						134						Level 2
Term Loan Agreement payable through 2028 - 1.71%			196						176						Level 3
2.625% Notes due 2030			500						455						Level 2
1.000% Payroll Support Program Loan due 2030			850						629						Level 3

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.

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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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- 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.

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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).

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