Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2016shares | |
Document and Entity Information [Abstract] | |
Document type | 10-Q |
Amendment flag | false |
Document period end date | Jun. 30, 2016 |
Document fiscal year focus | 2,016 |
Document fiscal period focus | Q2 |
Entity registrant name | DELTA AIR LINES INC /DE/ |
Entity central index key | 27,904 |
Current fiscal year end date | --12-31 |
Entity filer category | Large Accelerated Filer |
Entity common stock, shares outstanding | 748,907,678 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 1,662 | $ 1,972 |
Short-term investments | 1,289 | 1,465 |
Accounts receivable, net of an allowance for uncollectible accounts of $11 and $9 at June 30, 2016 and December 31, 2015, respectively | 2,102 | 2,020 |
Fuel inventory | 455 | 379 |
Expendable parts and supplies inventories, net of an allowance for obsolescence of $103 and $114 at June 30, 2016 and December 31, 2015, respectively | 340 | 318 |
Hedge derivatives asset | 773 | 1,987 |
Prepaid expenses and other | 1,017 | 915 |
Total current assets | 7,638 | 9,056 |
Property and Equipment, Net: | ||
Property and equipment, net of accumulated depreciation and amortization of $11,711 and $10,871 at June 30, 2016 and December 31, 2015, respectively | 23,975 | 23,039 |
Other Assets: | ||
Goodwill | 9,794 | 9,794 |
Identifiable intangibles, net of accumulated amortization of $820 and $811 at June 30, 2016 and December 31, 2015, respectively | 4,852 | 4,861 |
Deferred income taxes, net | 3,797 | 4,956 |
Other noncurrent assets | 1,578 | 1,428 |
Total other assets | 20,021 | 21,039 |
Total assets | 51,634 | 53,134 |
Current Liabilities: | ||
Current maturities of long-term debt and capital leases | 1,115 | 1,563 |
Air traffic liability | 5,955 | 4,503 |
Accounts payable | 2,956 | 2,743 |
Accrued salaries and related benefits | 2,237 | 3,195 |
Hedge derivatives liability | 895 | 2,581 |
Frequent flyer deferred revenue | 1,589 | 1,635 |
Other accrued liabilities | 1,503 | 1,306 |
Total current liabilities | 16,250 | 17,526 |
Noncurrent Liabilities: | ||
Long-term debt and capital leases | 6,689 | 6,766 |
Pension, postretirement and related benefits | 12,576 | 13,855 |
Frequent flyer deferred revenue | 2,294 | 2,246 |
Other noncurrent liabilities | 2,015 | 1,891 |
Total noncurrent liabilities | 23,574 | 24,758 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 762,988,573 and 799,850,675 shares issued at June 30, 2016 and December 31, 2015, respectively | 0 | 0 |
Additional paid-in capital | 9,361 | 10,875 |
Retained earnings | 10,000 | 7,623 |
Accumulated other comprehensive loss | (7,279) | (7,275) |
Treasury stock, at cost, 14,080,895 and 21,066,684 shares at June 30, 2016 and December 31, 2015, respectively | (272) | (373) |
Total stockholders' equity | 11,810 | 10,850 |
Total liabilities and stockholders' equity | $ 51,634 | $ 53,134 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Allowance for uncollectible accounts | $ 11 | $ 9 |
Allowance for obsolescence | 103 | 114 |
Property and equipment additions: | ||
Accumulated depreciation and amortization | 11,711 | 10,871 |
Other Assets: | ||
Accumulated amortization of identifiable intangible assets | $ 820 | $ 811 |
Stockholders' Equity: | ||
Common stock, par value per share (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued | 762,988,573 | 799,850,675 |
Treasury stock, at cost, shares | 14,080,895 | 21,066,684 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Revenue: | ||||
Mainline | $ 7,471 | $ 7,587 | $ 13,915 | $ 14,136 |
Regional carriers | 1,499 | 1,552 | 2,817 | 2,926 |
Total passenger revenue | 8,970 | 9,139 | 16,732 | 17,062 |
Cargo | 165 | 207 | 327 | 424 |
Other | 1,312 | 1,361 | 2,639 | 2,609 |
Total operating revenue | 10,447 | 10,707 | 19,698 | 20,095 |
Operating Expense: | ||||
Salaries and related costs | 2,391 | 2,195 | 4,702 | 4,287 |
Aircraft fuel and related taxes | 1,228 | 1,457 | 2,455 | 3,292 |
Regional carriers expense | 1,096 | 1,097 | 2,102 | 2,150 |
Contracted services | 484 | 457 | 960 | 898 |
Depreciation and amortization | 470 | 448 | 956 | 918 |
Aircraft maintenance materials and outside repairs | 446 | 499 | 895 | 951 |
Passenger commissions and other selling expenses | 437 | 421 | 825 | 807 |
Landing fees and other rents | 376 | 388 | 724 | 761 |
Profit sharing | 324 | 411 | 596 | 547 |
Passenger service | 221 | 227 | 410 | 417 |
Aircraft rent | 66 | 60 | 132 | 120 |
Other | 485 | 573 | 978 | 1,075 |
Total operating expense | 8,024 | 8,233 | 15,735 | 16,223 |
Operating Income | 2,423 | 2,474 | 3,963 | 3,872 |
Non-Operating Expense: | ||||
Interest expense, net | (93) | (127) | (200) | (258) |
Miscellaneous, net | 20 | 19 | 21 | (62) |
Total non-operating expense, net | (73) | (108) | (179) | (320) |
Income Before Income Taxes | 2,350 | 2,366 | 3,784 | 3,552 |
Income Tax Provision | (804) | (881) | (1,292) | (1,321) |
Net Income | $ 1,546 | $ 1,485 | $ 2,492 | $ 2,231 |
Basic earnings per share (in USD per share) | $ 2.04 | $ 1.85 | $ 3.25 | $ 2.75 |
Diluted earnings per share (in USD per share) | 2.03 | 1.83 | 3.23 | 2.72 |
Cash dividends declared per share (in USD per share) | $ 0.135 | $ 0.09 | $ 0.27 | $ 0.18 |
Comprehensive Income | $ 1,546 | $ 1,491 | $ 2,488 | $ 2,254 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Net Cash Provided by Operating Activities | ||
Net Cash Provided by Operating Activities | $ 4,226 | $ 4,381 |
Property and equipment additions: | ||
Flight equipment, including advance payments | (1,644) | (1,177) |
Ground property and equipment, including technology | (273) | (328) |
Purchase of short-term investments | (866) | (613) |
Redemption of short-term investments | 1,051 | 334 |
Other, net | 19 | 17 |
Net cash used in investing activities | (1,713) | (1,767) |
Cash Flows from Financing Activities: | ||
Payments on long-term debt and capital lease obligations | (1,149) | (634) |
Repurchase of common stock | (1,801) | (1,350) |
Cash dividends | (210) | (147) |
Fuel card obligation | 4 | (320) |
Payments on hedge derivative contracts | (205) | 0 |
Proceeds from hedge derivative contracts | 46 | 0 |
Proceeds from short-term obligations | 68 | 0 |
Proceeds from long-term obligations | 450 | 41 |
Other, net | (26) | 1 |
Net cash used in financing activities | (2,823) | (2,409) |
Net (Decrease) Increase in Cash and Cash Equivalents | (310) | 205 |
Cash and cash equivalents at beginning of period | 1,972 | 2,088 |
Cash and cash equivalents at end of period | 1,662 | 2,293 |
Non-Cash Transactions: | ||
Treasury stock contributed to our qualified defined benefit pension plans | 350 | 0 |
Flight equipment acquired under capital leases | $ 50 | $ 65 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2015 . Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items and restructuring and other items, considered necessary for a fair statement of results for the interim periods presented. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2016 are not necessarily indicative of operating results for the entire year. We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes. Recent Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under this ASU and subsequently issued amendments, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption of the standard is permitted, but not before December 15, 2016. We are currently evaluating how the adoption of the revenue recognition standard will impact our Consolidated Financial Statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." This standard will require all leases with durations greater than twelve months to be recognized on the balance sheet and is effective for interim and annual reporting periods beginning after December 15, 2018, although early adoption is permitted. Although we have not completed our assessment, we believe adoption of this standard will have a significant impact on our Consolidated Balance Sheets. However, we do not expect the adoption to change the recognition, measurement or presentation of lease expenses within the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. Information about our undiscounted future lease payments and the timing of those payments is in Note 7, "Lease Obligations," in our Form 10-K. Equity Method Investments In March 2016, the FASB issued ASU No. 2016-07, "Investments—Equity Method and Joint Ventures (Topic 323)." This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) ("AOCI") will be recognized through earnings. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. We early adopted this standard during the three months ended March 31, 2016. Although none of our available-for-sale or cost investments qualified for use of the equity method during the first half of 2016, we expect the tender offer for additional capital stock of Grupo Aeroméxico to be completed during 2016, at which point our investment will qualify for the equity method of accounting. As of June 30, 2016, the unrealized gain recorded in AOCI related to our investment in Grupo Aeroméxico was $11 million . Share-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Compensation—Stock Compensation (Topic 718)." This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. We early adopted this standard in the three months ended June 30, 2016 . The adoption of this standard results in the recognition of $95 million of previously unrecognized excess tax benefits in deferred income taxes, net and an increase to retained earnings on our Consolidated Balance Sheet as of the beginning of the current year and the recognition of $24 million of excess tax benefits to our income tax provision for the three and six months ended June 30, 2016. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Assets (Liabilities) Measured at Fair Value on a Recurring Basis (in millions) June 30, Level 1 Level 2 Cash equivalents $ 1,058 $ 1,058 $ — Short-term investments U.S. government and agency securities 191 167 24 Asset- and mortgage-backed securities 252 — 252 Corporate obligations 785 — 785 Other fixed income securities 61 — 61 Restricted cash equivalents and investments 62 62 — Long-term investments 154 128 26 Hedge derivatives, net Fuel hedge contracts (239 ) 11 (250 ) Interest rate contract 11 — 11 Foreign currency exchange contracts (79 ) — (79 ) (in millions) December 31, Level 1 Level 2 Cash equivalents $ 1,543 $ 1,543 $ — Short-term investments U.S. government and agency securities 151 74 77 Asset- and mortgage-backed securities 380 — 380 Corporate obligations 896 — 896 Other fixed income securities 38 — 38 Restricted cash equivalents and investments 49 49 — Long-term investments 155 130 25 Hedge derivatives, net Fuel hedge contracts (672 ) 65 (737 ) Interest rate contract (3 ) — (3 ) Foreign currency exchange contracts 94 — 94 Cash Equivalents and Restricted Cash Equivalents and Investments. Cash equivalents generally consist of money market funds. Restricted cash equivalents and investments generally consist of money market funds and time deposits, which relate to certain self-insurance obligations and airport commitments. The fair value of these investments is based on a market approach using prices and other relevant information generated by market transactions involving identical or comparable assets. Short-Term Investments. The fair values of short-term investments are based on a market approach using industry standard valuation techniques that incorporate observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security and other observable information. Long-Term Investments. Our long-term investments that are measured at fair value primarily consist of equity investments in Grupo Aeroméxico, the parent company of Aeroméxico, and GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL). Shares of the parent companies of Aeroméxico and GOL are traded on public exchanges and have been valued based on quoted market prices. The investments are classified in other noncurrent assets. Hedge Derivatives. A portion of our derivative contracts are negotiated over-the-counter with counterparties without going through a public exchange. Accordingly, our fair value assessments give consideration to the risk of counterparty default (as well as our own credit risk). Such contracts are classified as Level 2 within the fair value hierarchy. The remainder of our hedge contracts are comprised of futures contracts, which are traded on a public exchange. These contracts are classified within Level 1 of the fair value hierarchy. • Fuel Contracts. Our fuel hedge portfolio consists of options, swaps and futures. The hedge contracts include crude oil, diesel fuel and jet fuel, as these commodities are highly correlated with the price of jet fuel that we consume. Option contracts are valued under an income approach using option pricing models based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Volatilities used in these valuations ranged from 21% to 49% depending on the maturity dates, underlying commodities and strike prices of the option contracts. Swap contracts are valued under an income approach using a discounted cash flow model based on data either readily observable or provided by counterparties who regularly trade in public markets. Discount rates used in these valuations vary with the maturity dates of the respective contracts and are based on the London interbank offered rate ("LIBOR"). Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices. • Interest Rate Contract. Our interest rate derivative is a swap contract, which is valued based on data readily observable in public markets. • Foreign Currency Exchange Contracts. Our foreign currency derivatives consist of Japanese yen and Canadian dollar forward contracts and are valued based on data readily observable in public markets. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Short-term Investments [Abstract] | |
Investments | INVESTMENTS Short-Term Investments The estimated fair values of short-term investments, which approximate cost at June 30, 2016 , are shown below by contractual maturity. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to retire our investments without prepayment penalties. (in millions) Available-For-Sale Due in one year or less $ 231 Due after one year through three years 854 Due after three years through five years 164 Due after five years 40 Total $ 1,289 Long-Term Investments We have developed strategic relationships with certain international airlines through equity investments or other forms of cooperation and support. Strategic relationships improve our coordination with these airlines and enable our customers to seamlessly connect to more places while enjoying a consistent, high-quality travel experience. • Aeroméxico . We own 4.1% of the outstanding shares of Grupo Aeroméxico and we have a derivative contract that may be settled for the underlying shares representing an additional 8.1% of Grupo Aeroméxico outstanding shares. During 2015, we announced our intention to acquire additional shares of the capital stock of Grupo Aeroméxico through a cash tender offer, subject to regulatory approvals. If approved, the tender offer is expected to occur during the second half of 2016. As a result of this tender offer, when combined with our current holdings, we would own up to 49% of the outstanding capital stock of Grupo Aeroméxico. Based on current exchange rates, the total amount to be paid for the additional shares and the shares underlying the derivative would be approximately $700 million. • GOL. During 2015, we acquired preferred shares of GOL's parent company , increasing our ownership to 9.5% of GOL's outstanding capital stock. Additionally, GOL entered into a $300 million five -year term loan facility with third parties, which we have guaranteed. Our entire guaranty is secured by GOL's ownership interest in Smiles, GOL's publicly traded loyalty program. Because GOL remains in compliance with the terms of its loan facility, we have not recorded a liability on our Consolidated Balance Sheet as of June 30, 2016 . Challenges in the Brazilian economy and GOL’s recent financial performance have caused the fair value of our equity investment in GOL’s parent company to decline to $34 million with a $72 million loss recorded in AOCI at June 30, 2016 . As GOL’s shares have traded below our cost basis for longer than a year, we evaluated whether the investment was other-than-temporarily impaired. We determined the investment was not impaired as GOL’s management is executing measures to maximize operational and network efficiency and control costs, which we anticipate will improve GOL’s financial performance and the fair value of our investment. In addition, we currently have the intent and ability to maintain our investment in GOL to allow for the recovery of its market value as GOL is a strategic investment for Delta and operates as an extension of our global network. • China Eastern. During 2015, we acquired shares of China Eastern , which provided us with a 3.5% stake in the airline . In conjunction with this transaction, we and China Eastern entered into a new commercial agreement to expand our relationship and better connect the networks of the two airlines. As the investment agreement restricts our sale or transfer of these shares for a period of three years, we will account for the investment at cost during this period. Although China Eastern shares are actively traded on a public exchange, it is not practicable to estimate the fair value of the investment due to the restriction on our ability to sell or transfer the shares. We have, however, evaluated whether the recent decline in the value of China Eastern's shares would impair our investment. We considered the recent conditions and outlook for both China Eastern and the broader Chinese economy, as well as the nature of our investment in China Eastern. We determined that the investment was not impaired as the share price decline primarily results from declines in the broader Chinese equity markets and is not specific to China Eastern's financial performance. In addition, we have the intent and ability to maintain our investment in China Eastern to allow for the recovery of its market value as China Eastern is a strategic investment for Delta and operates as an extension of our global network. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DERIVATIVES Changes in aircraft fuel prices, interest rates and foreign currency exchange rates impact our results of operations. In an effort to manage our exposure to these risks, we enter into derivative contracts and adjust our derivative portfolio as market conditions change. Aircraft Fuel Price Risk Changes in aircraft fuel prices materially impact our results of operations. We have historically managed our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of jet fuel as jet fuel prices are subject to potential volatility. In response to this volatility, during the March 2015 quarter, we entered into transactions that effectively deferred settlement of a portion of our hedge portfolio. These deferral transactions, excluding market movements from the date of inception, provided approximately $300 million in cash receipts during the second half of 2015 and require approximately $300 million in cash payments in 2016. We early terminated certain of the March 2015 quarter deferral transactions in the second half of 2015. During the March 2016 quarter, we entered into transactions to further defer settlement of a portion of our hedge portfolio until 2017. These deferral transactions, excluding market movements from the date of inception, would provide approximately $300 million in cash receipts during the second half of 2016 and require approximately $300 million in cash payments in 2017 . Subsequently, to better participate in the low fuel price environment, we entered into derivatives designed to offset and effectively neutralize our existing airline segment hedge positions , which include the deferral transactions discussed above. As a result, we locked in the amount of the net hedge settlements for the remainder of 2016 and 2017. During the June 2016 quarter, we early settled $455 million of our airline segment's 2016 positions. During the three and six months ended June 30, 2016 , we recorded fuel hedge losses of $41 million and $315 million , respectively. During the three and six months ended June 30, 2015, we recorded a fuel hedge gain of $98 million and a fuel hedge loss of $313 million , respectively. Cash flows associated with the deferral transactions are reported as cash flows from financing activities within our Condensed Consolidated Statements of Cash Flows. During the six months ended June 30, 2016 , we reported $46 million in cash receipts and $205 million in cash payments associated with these transactions. Hedge Position as of June 30, 2016 (in millions) Volume Final Maturity Date Hedge Derivatives Asset Other Noncurrent Assets Hedge Derivatives Liability Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 367 U.S. dollars August 2022 $ 4 $ 7 $ — $ — $ 11 Foreign currency exchange contracts 63,516 Japanese yen February 2019 7 3 (47 ) (42 ) (79 ) 472 Canadian dollars Not designated as hedges Fuel hedge contracts (1) 239 gallons - crude oil, diesel and jet fuel December 2017 762 30 (848 ) (183 ) (239 ) Total derivative contracts $ 773 $ 40 $ (895 ) $ (225 ) $ (307 ) (1) As discussed above, we have early settled $455 million of our airline segment's 2016 hedge positions and entered into hedges designed to offset and effectively terminate our 2017 airline segment hedge positions. The dollar amounts shown above primarily represent the offsetting derivatives that were used to neutralize the 2016 and 2017 hedge portfolio. Hedge Position as of December 31, 2015 (in millions) Volume Final Maturity Date Hedge Derivatives Asset Other Noncurrent Assets Hedge Derivatives Liability Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 384 U.S. dollars August 2022 $ 4 $ — $ — $ (7 ) $ (3 ) Foreign currency exchange contracts 46,920 Japanese yen July 2018 76 20 (1 ) (1 ) 94 395 Canadian dollars Not designated as hedges Fuel hedge contracts 887 gallons - crude oil, diesel and jet fuel November 2017 1,907 4 (2,580 ) (3 ) (672 ) Total derivative contracts $ 1,987 $ 24 $ (2,581 ) $ (11 ) $ (581 ) Offsetting Assets and Liabilities We have master netting arrangements with our counterparties giving us the right of setoff. We have elected not to offset the fair value positions recorded on our Consolidated Balance Sheets. The following table shows the net fair value positions had we elected to offset. (in millions) Hedge Derivatives Asset Other Noncurrent Assets Hedge Derivatives Liability Other Noncurrent Liabilities Hedge Derivatives, net June 30, 2016 Net derivative contracts $ 42 $ 8 $ (164 ) $ (193 ) $ (307 ) December 31, 2015 Net derivative contracts $ 143 $ 21 $ (737 ) $ (8 ) $ (581 ) Designated Hedge Gains (Losses) Gains (losses) related to our designated hedge contracts are as follows: Effective Portion Reclassified from AOCI to Earnings Effective Portion Recognized in Other Comprehensive Income (in millions) 2016 2015 2016 2015 Three Months Ended June 30, Foreign currency exchange contracts $ 12 $ 41 $ (63 ) $ (36 ) Six Months Ended June 30, Foreign currency exchange contracts $ 36 $ 92 $ (145 ) $ (52 ) As of June 30, 2016 , we have recorded $13 million of losses on cash flow hedge contracts in AOCI, which are scheduled to settle and be reclassified into earnings within the next 12 months. Credit Risk To manage credit risk associated with our aircraft fuel price, interest rate and foreign currency hedging programs, we evaluate counterparties based on several criteria including their credit ratings and limit our exposure to any one counterparty. Our hedge contracts contain margin funding requirements. The margin funding requirements may cause us to post margin to counterparties or may cause counterparties to post margin to us as market prices in the underlying hedged items change. Due to the fair value position of our hedge contracts, we posted margin of $27 million and $119 million as of June 30, 2016 and December 31, 2015 , respectively. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT Fair Value of Debt Market risk associated with our fixed- and variable-rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt, shown below, is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is primarily classified as Level 2 within the fair value hierarchy. (in millions) June 30, December 31, Total debt at par value $ 7,609 $ 8,098 Unamortized discount and debt issue cost, net (117 ) (152 ) Net carrying amount $ 7,492 $ 7,946 Fair value $ 7,900 $ 8,400 Aircraft Financings During the March 2016 quarter, we entered into financing arrangements to borrow $450 million , which are secured by 26 aircraft. These loans bear interest at a variable rate equal to LIBOR plus a specified margin and mature between 2019 and 2021. Covenants We were in compliance with the covenants in our financing agreements at June 30, 2016 . |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The following table shows the components of net periodic cost: Pension Benefits Other Postretirement and Postemployment Benefits (in millions) 2016 2015 2016 2015 Three Months Ended June 30, Service cost $ — $ — $ 17 $ 16 Interest cost 229 221 37 35 Expected return on plan assets (226 ) (220 ) (18 ) (20 ) Amortization of prior service credit — — (7 ) (7 ) Recognized net actuarial loss 59 58 6 6 Net periodic cost $ 62 $ 59 $ 35 $ 30 Six Months Ended June 30, Service cost $ — $ — $ 34 $ 32 Interest cost 458 442 74 70 Expected return on plan assets (452 ) (440 ) (36 ) (40 ) Amortization of prior service credit — — (14 ) (14 ) Recognized net actuarial loss 118 116 12 12 Net periodic cost $ 124 $ 118 $ 70 $ 60 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Aircraft Purchase and Lease Commitments Our future aircraft purchase commitments totaled approximately $16.0 billion at June 30, 2016 : (in millions) Total Six months ending December 31, 2016 $ 1,050 2017 2,720 2018 3,270 2019 3,140 2020 2,320 Thereafter 3,480 Total $ 15,980 Our future aircraft purchase commitments included the following aircraft at June 30, 2016 : Aircraft Type Purchase Commitments B-737-900ER 60 B-787-8 18 A321-200 77 A330-300 2 A330-900neo 25 A350-900 25 CS100 75 E190-100 16 Total 298 We have obtained, but are under no obligation to use, long-term financing commitments for a substantial portion of the purchase price of a significant number of these aircraft. Our purchase commitment for the 18 B-787-8 aircraft provides for certain aircraft substitution rights, including for our current orders of B-737-900ER aircraft. During the June 2016 quarter, we reached an agreement with Bombardier to acquire 75 CS100 aircraft with deliveries beginning in 2018 and continuing through 2022. Delta has flexibility under the purchase agreement with respect to deferral, acceleration, conversion and a limited number of cancellation rights. The agreement also includes options to purchase 50 additional aircraft. Following the CS100 purchase agreement, we have separately entered into an agreement to sell for our acquisition cost the E190-100 fleet following their delivery to us. We also entered into firm commitments with Airbus for the delivery of 37 additional A321-200 aircraft. Deliveries will begin in November 2017 and continue through 2019. Legal Contingencies We are involved in various legal proceedings related to employment practices, environmental issues, antitrust matters and other matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, management believes that the resolution of these matters will not have a material effect on our Condensed Consolidated Financial Statements. Shuttle America Shuttle America and its parent, Republic Airways Holdings (collectively, Republic Airways), filed for bankruptcy in February 2016. In connection with agreements to settle litigation currently pending between Republic Airways and Delta, wind-down 50 -seat aircraft operations, return to full capacity of contracted operations for Embraer 170/175 aircraft and lease certain takeoff and landing slots at New York-LaGuardia, we have entered into a debtor-in-possession credit agreement to provide up to $75 million in liquidity to Republic Airways. We do not believe that Republic Airways' bankruptcy filing will have a material effect on our operations or financial statements. Other Contingencies General Indemnifications We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at, or in connection with, the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence or their willful misconduct. Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties' related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or other equipment. We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft and other equipment lease and financing agreements described above. While our insurance does not typically cover environmental liabilities, we have certain insurance policies in place as required by applicable environmental laws. Certain of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in laws or regulations. In certain of these financing transactions, we also bear the risk of certain changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes. We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time. Employees Under Collective Bargaining Agreements At June 30, 2016 , we had approximately 85,000 full-time equivalent employees. Approximately 18% of these employees were represented by unions. Other We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract-specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables show the components of accumulated other comprehensive loss: (in millions) Pension and Other Benefits Liabilities (2) Derivative Contracts Investments Total Balance at January 1, 2016 (net of tax effect of $1,222) $ (7,354 ) $ 140 $ (61 ) $ (7,275 ) Changes in value (net of tax effect of $42) — (69 ) 16 (53 ) Reclassifications into earnings (net of tax effect of $29) (1) 72 (23 ) — 49 Balance at June 30, 2016 (net of tax effect of $1,235) $ (7,282 ) $ 48 $ (45 ) $ (7,279 ) (in millions) Pension and Other Benefits Liabilities (2) Derivative Contracts Investments Total Balance at January 1, 2015 (net of tax effect of $1,279) $ (7,517 ) $ 222 $ (16 ) $ (7,311 ) Changes in value (net of tax effect of $15) — 25 (19 ) 6 Reclassifications into earnings (net of tax effect of $10) (1) 75 (58 ) — 17 Balance at June 30, 2015 (net of tax effect of $1,254) $ (7,442 ) $ 189 $ (35 ) $ (7,288 ) (1) Amounts reclassified from AOCI for pension and other benefits liabilities are recorded in salaries and related costs in the Condensed Consolidated Statements of Operations and Comprehensive Income. Amounts reclassified from AOCI for derivative contracts designated as foreign currency cash flow hedges are recorded in passenger revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Includes $ 1.9 billion of deferred income tax expense primarily related to pension obligations that will not be recognized in net income until the pension obligations are fully extinguished. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS Refinery Operations Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as gasoline, diesel and other refined products ("non-jet fuel products"). We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three and six months ended June 30, 2016 was $745 million and $1.3 billion , respectively, compared to $858 million and $1.6 billion during the three and six months ended June 30, 2015 , respectively. Segment Reporting Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis. (in millions) Airline Refinery Intersegment Sales/Other Consolidated Three Months Ended June 30, 2016 Operating revenue: $ 10,398 $ 1,027 $ 10,447 Sales to airline segment $ (178 ) (1) Exchanged products (745 ) (2) Sales of refined products to third parties (55 ) (3) Operating income 2,433 (10 ) — 2,423 Interest expense, net 92 1 — 93 Depreciation and amortization 461 9 — 470 Total assets, end of period 50,213 1,421 — 51,634 Capital expenditures 1,026 20 — 1,046 Three Months Ended June 30, 2015 Operating revenue: $ 10,592 $ 1,357 $ 10,707 Sales to airline segment $ (292 ) (1) Exchanged products (858 ) (2) Sales of refined products to third parties (92 ) (3) Operating income (4) 2,384 90 — 2,474 Interest expense, net 127 — — 127 Depreciation and amortization 440 8 — 448 Total assets, end of period 51,508 1,173 — 52,681 Capital expenditures 906 13 — 919 (1) Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. (2) Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. (3) Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis. (4) Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. (in millions) Airline Refinery Intersegment Sales/Other Consolidated Six Months Ended June 30, 2016 Operating revenue: $ 19,570 $ 1,792 $ 19,698 Sales to airline segment $ (322 ) (1) Exchanged products (1,271 ) (2) Sales of refined products to third parties (71 ) (3) Operating income (4) 4,001 (38 ) — 3,963 Interest expense, net 199 1 — 200 Depreciation and amortization 938 18 — 956 Capital expenditures 1,884 33 — 1,917 Six Months Ended June 30, 2015 Operating revenue: $ 19,906 $ 2,497 $ 20,095 Sales to airline segment $ (525 ) (1) Exchanged products (1,640 ) (2) Sales of refined products to third parties (143 ) (3) Operating income (4) 3,696 176 — 3,872 Interest expense, net 258 — — 258 Depreciation and amortization 903 15 — 918 Capital expenditures 1,485 20 — 1,505 (1) Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. (2) Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. (3) Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis. (4) Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING The following table shows the balances and activity for restructuring charges: (in millions) Severance and Related Costs Lease Restructuring Liability as of January 1, 2016 $ 52 $ 415 Additional costs and expenses 8 — Payments (46 ) (44 ) Liability as of June 30, 2016 $ 14 $ 371 Lease restructuring charges include remaining lease payments for permanently grounded aircraft related to domestic and Pacific fleet restructurings. We have retired 50 -seat regional aircraft and older B-757-200 aircraft as a part of our domestic fleet restructuring over the past several years. Our domestic fleet restructuring is replacing these aircraft with more efficient and customer preferred CRJ-900, B-717-200 and B-737-900ER aircraft. We are restructuring our Pacific fleet by removing less efficient B-747-400 aircraft and replacing them with smaller-gauge, widebody aircraft to better match capacity with demand. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including stock options and restricted stock awards. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, (in millions, except per share data) 2016 2015 2016 2015 Net income $ 1,546 $ 1,485 $ 2,492 $ 2,231 Basic weighted average shares outstanding 758 803 766 811 Dilutive effect of share-based awards 5 8 6 8 Diluted weighted average shares outstanding 763 811 772 819 Basic earnings per share $ 2.04 $ 1.85 $ 3.25 $ 2.75 Diluted earnings per share $ 2.03 $ 1.83 $ 3.23 $ 2.72 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2015 . Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items and restructuring and other items, considered necessary for a fair statement of results for the interim periods presented. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2016 are not necessarily indicative of operating results for the entire year. |
Recent accounting standards | Recent Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under this ASU and subsequently issued amendments, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption of the standard is permitted, but not before December 15, 2016. We are currently evaluating how the adoption of the revenue recognition standard will impact our Consolidated Financial Statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." This standard will require all leases with durations greater than twelve months to be recognized on the balance sheet and is effective for interim and annual reporting periods beginning after December 15, 2018, although early adoption is permitted. Although we have not completed our assessment, we believe adoption of this standard will have a significant impact on our Consolidated Balance Sheets. However, we do not expect the adoption to change the recognition, measurement or presentation of lease expenses within the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. Information about our undiscounted future lease payments and the timing of those payments is in Note 7, "Lease Obligations," in our Form 10-K. Equity Method Investments In March 2016, the FASB issued ASU No. 2016-07, "Investments—Equity Method and Joint Ventures (Topic 323)." This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive income/(loss) ("AOCI") will be recognized through earnings. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. We early adopted this standard during the three months ended March 31, 2016. Although none of our available-for-sale or cost investments qualified for use of the equity method during the first half of 2016, we expect the tender offer for additional capital stock of Grupo Aeroméxico to be completed during 2016, at which point our investment will qualify for the equity method of accounting. As of June 30, 2016, the unrealized gain recorded in AOCI related to our investment in Grupo Aeroméxico was $11 million . Share-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Compensation—Stock Compensation (Topic 718)." This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. We early adopted this standard in the three months ended June 30, 2016 . The adoption of this standard results in the recognition of $95 million of previously unrecognized excess tax benefits in deferred income taxes, net and an increase to retained earnings on our Consolidated Balance Sheet as of the beginning of the current year and the recognition of $24 million of excess tax benefits to our income tax provision for the three and six months ended June 30, 2016. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets (liabilities) measured at fair value on a recurring basis | Assets (Liabilities) Measured at Fair Value on a Recurring Basis (in millions) June 30, Level 1 Level 2 Cash equivalents $ 1,058 $ 1,058 $ — Short-term investments U.S. government and agency securities 191 167 24 Asset- and mortgage-backed securities 252 — 252 Corporate obligations 785 — 785 Other fixed income securities 61 — 61 Restricted cash equivalents and investments 62 62 — Long-term investments 154 128 26 Hedge derivatives, net Fuel hedge contracts (239 ) 11 (250 ) Interest rate contract 11 — 11 Foreign currency exchange contracts (79 ) — (79 ) (in millions) December 31, Level 1 Level 2 Cash equivalents $ 1,543 $ 1,543 $ — Short-term investments U.S. government and agency securities 151 74 77 Asset- and mortgage-backed securities 380 — 380 Corporate obligations 896 — 896 Other fixed income securities 38 — 38 Restricted cash equivalents and investments 49 49 — Long-term investments 155 130 25 Hedge derivatives, net Fuel hedge contracts (672 ) 65 (737 ) Interest rate contract (3 ) — (3 ) Foreign currency exchange contracts 94 — 94 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Short-term Investments [Abstract] | |
Maturities for short-term investments | The estimated fair values of short-term investments, which approximate cost at June 30, 2016 , are shown below by contractual maturity. Actual maturities may differ from contractual maturities because issuers of the securities may have the right to retire our investments without prepayment penalties. (in millions) Available-For-Sale Due in one year or less $ 231 Due after one year through three years 854 Due after three years through five years 164 Due after five years 40 Total $ 1,289 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Hedge Position | Hedge Position as of June 30, 2016 (in millions) Volume Final Maturity Date Hedge Derivatives Asset Other Noncurrent Assets Hedge Derivatives Liability Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 367 U.S. dollars August 2022 $ 4 $ 7 $ — $ — $ 11 Foreign currency exchange contracts 63,516 Japanese yen February 2019 7 3 (47 ) (42 ) (79 ) 472 Canadian dollars Not designated as hedges Fuel hedge contracts (1) 239 gallons - crude oil, diesel and jet fuel December 2017 762 30 (848 ) (183 ) (239 ) Total derivative contracts $ 773 $ 40 $ (895 ) $ (225 ) $ (307 ) (1) As discussed above, we have early settled $455 million of our airline segment's 2016 hedge positions and entered into hedges designed to offset and effectively terminate our 2017 airline segment hedge positions. The dollar amounts shown above primarily represent the offsetting derivatives that were used to neutralize the 2016 and 2017 hedge portfolio. Hedge Position as of December 31, 2015 (in millions) Volume Final Maturity Date Hedge Derivatives Asset Other Noncurrent Assets Hedge Derivatives Liability Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 384 U.S. dollars August 2022 $ 4 $ — $ — $ (7 ) $ (3 ) Foreign currency exchange contracts 46,920 Japanese yen July 2018 76 20 (1 ) (1 ) 94 395 Canadian dollars Not designated as hedges Fuel hedge contracts 887 gallons - crude oil, diesel and jet fuel November 2017 1,907 4 (2,580 ) (3 ) (672 ) Total derivative contracts $ 1,987 $ 24 $ (2,581 ) $ (11 ) $ (581 ) Offsetting Assets and Liabilities We have master netting arrangements with our counterparties giving us the right of setoff. We have elected not to offset the fair value positions recorded on our Consolidated Balance Sheets. The following table shows the net fair value positions had we elected to offset. (in millions) Hedge Derivatives Asset Other Noncurrent Assets Hedge Derivatives Liability Other Noncurrent Liabilities Hedge Derivatives, net June 30, 2016 Net derivative contracts $ 42 $ 8 $ (164 ) $ (193 ) $ (307 ) December 31, 2015 Net derivative contracts $ 143 $ 21 $ (737 ) $ (8 ) $ (581 ) |
Schedule of Designated Hedge Gains (Losses) | Designated Hedge Gains (Losses) Gains (losses) related to our designated hedge contracts are as follows: Effective Portion Reclassified from AOCI to Earnings Effective Portion Recognized in Other Comprehensive Income (in millions) 2016 2015 2016 2015 Three Months Ended June 30, Foreign currency exchange contracts $ 12 $ 41 $ (63 ) $ (36 ) Six Months Ended June 30, Foreign currency exchange contracts $ 36 $ 92 $ (145 ) $ (52 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of estimated fair value of debt instruments | The fair value of debt, shown below, is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is primarily classified as Level 2 within the fair value hierarchy. (in millions) June 30, December 31, Total debt at par value $ 7,609 $ 8,098 Unamortized discount and debt issue cost, net (117 ) (152 ) Net carrying amount $ 7,492 $ 7,946 Fair value $ 7,900 $ 8,400 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of net benefit costs | The following table shows the components of net periodic cost: Pension Benefits Other Postretirement and Postemployment Benefits (in millions) 2016 2015 2016 2015 Three Months Ended June 30, Service cost $ — $ — $ 17 $ 16 Interest cost 229 221 37 35 Expected return on plan assets (226 ) (220 ) (18 ) (20 ) Amortization of prior service credit — — (7 ) (7 ) Recognized net actuarial loss 59 58 6 6 Net periodic cost $ 62 $ 59 $ 35 $ 30 Six Months Ended June 30, Service cost $ — $ — $ 34 $ 32 Interest cost 458 442 74 70 Expected return on plan assets (452 ) (440 ) (36 ) (40 ) Amortization of prior service credit — — (14 ) (14 ) Recognized net actuarial loss 118 116 12 12 Net periodic cost $ 124 $ 118 $ 70 $ 60 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future aircraft purchase commitments | Our future aircraft purchase commitments totaled approximately $16.0 billion at June 30, 2016 : (in millions) Total Six months ending December 31, 2016 $ 1,050 2017 2,720 2018 3,270 2019 3,140 2020 2,320 Thereafter 3,480 Total $ 15,980 |
Aircraft Purchase and Lease Commitments | Our future aircraft purchase commitments included the following aircraft at June 30, 2016 : Aircraft Type Purchase Commitments B-737-900ER 60 B-787-8 18 A321-200 77 A330-300 2 A330-900neo 25 A350-900 25 CS100 75 E190-100 16 Total 298 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following tables show the components of accumulated other comprehensive loss: (in millions) Pension and Other Benefits Liabilities (2) Derivative Contracts Investments Total Balance at January 1, 2016 (net of tax effect of $1,222) $ (7,354 ) $ 140 $ (61 ) $ (7,275 ) Changes in value (net of tax effect of $42) — (69 ) 16 (53 ) Reclassifications into earnings (net of tax effect of $29) (1) 72 (23 ) — 49 Balance at June 30, 2016 (net of tax effect of $1,235) $ (7,282 ) $ 48 $ (45 ) $ (7,279 ) (in millions) Pension and Other Benefits Liabilities (2) Derivative Contracts Investments Total Balance at January 1, 2015 (net of tax effect of $1,279) $ (7,517 ) $ 222 $ (16 ) $ (7,311 ) Changes in value (net of tax effect of $15) — 25 (19 ) 6 Reclassifications into earnings (net of tax effect of $10) (1) 75 (58 ) — 17 Balance at June 30, 2015 (net of tax effect of $1,254) $ (7,442 ) $ 189 $ (35 ) $ (7,288 ) (1) Amounts reclassified from AOCI for pension and other benefits liabilities are recorded in salaries and related costs in the Condensed Consolidated Statements of Operations and Comprehensive Income. Amounts reclassified from AOCI for derivative contracts designated as foreign currency cash flow hedges are recorded in passenger revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Includes $ 1.9 billion of deferred income tax expense primarily related to pension obligations that will not be recognized in net income until the pension obligations are fully extinguished. |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis. (in millions) Airline Refinery Intersegment Sales/Other Consolidated Three Months Ended June 30, 2016 Operating revenue: $ 10,398 $ 1,027 $ 10,447 Sales to airline segment $ (178 ) (1) Exchanged products (745 ) (2) Sales of refined products to third parties (55 ) (3) Operating income 2,433 (10 ) — 2,423 Interest expense, net 92 1 — 93 Depreciation and amortization 461 9 — 470 Total assets, end of period 50,213 1,421 — 51,634 Capital expenditures 1,026 20 — 1,046 Three Months Ended June 30, 2015 Operating revenue: $ 10,592 $ 1,357 $ 10,707 Sales to airline segment $ (292 ) (1) Exchanged products (858 ) (2) Sales of refined products to third parties (92 ) (3) Operating income (4) 2,384 90 — 2,474 Interest expense, net 127 — — 127 Depreciation and amortization 440 8 — 448 Total assets, end of period 51,508 1,173 — 52,681 Capital expenditures 906 13 — 919 (1) Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. (2) Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. (3) Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis. (4) Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. (in millions) Airline Refinery Intersegment Sales/Other Consolidated Six Months Ended June 30, 2016 Operating revenue: $ 19,570 $ 1,792 $ 19,698 Sales to airline segment $ (322 ) (1) Exchanged products (1,271 ) (2) Sales of refined products to third parties (71 ) (3) Operating income (4) 4,001 (38 ) — 3,963 Interest expense, net 199 1 — 200 Depreciation and amortization 938 18 — 956 Capital expenditures 1,884 33 — 1,917 Six Months Ended June 30, 2015 Operating revenue: $ 19,906 $ 2,497 $ 20,095 Sales to airline segment $ (525 ) (1) Exchanged products (1,640 ) (2) Sales of refined products to third parties (143 ) (3) Operating income (4) 3,696 176 — 3,872 Interest expense, net 258 — — 258 Depreciation and amortization 903 15 — 918 Capital expenditures 1,485 20 — 1,505 (1) Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. (2) Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. (3) Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis. (4) Includes the impact of pricing arrangements between the airline and refinery segments with respect to the refinery's inventory price risk. |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | The following table shows the balances and activity for restructuring charges: (in millions) Severance and Related Costs Lease Restructuring Liability as of January 1, 2016 $ 52 $ 415 Additional costs and expenses 8 — Payments (46 ) (44 ) Liability as of June 30, 2016 $ 14 $ 371 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table shows the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, (in millions, except per share data) 2016 2015 2016 2015 Net income $ 1,546 $ 1,485 $ 2,492 $ 2,231 Basic weighted average shares outstanding 758 803 766 811 Dilutive effect of share-based awards 5 8 6 8 Diluted weighted average shares outstanding 763 811 772 819 Basic earnings per share $ 2.04 $ 1.85 $ 3.25 $ 2.75 Diluted earnings per share $ 2.03 $ 1.83 $ 3.23 $ 2.72 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
ASU 2016-09 | Adjustments for New Accounting Principle, Early Adoption | |||
Schedule of Equity Method Investments | |||
Excess tax benefits | $ 24 | $ 24 | |
ASU 2016-09 | Adjustments for New Accounting Principle, Early Adoption | Other assets | |||
Schedule of Equity Method Investments | |||
Unrecognized tax benefits | $ (95) | ||
ASU 2016-09 | Adjustments for New Accounting Principle, Early Adoption | Retained earnings | |||
Schedule of Equity Method Investments | |||
Unrecognized tax benefits | $ 95 | ||
Grupo Aeromexico | |||
Schedule of Equity Method Investments | |||
Unrealized gain | $ 11 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements on a Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Assets, Fair Value Disclosure | ||
Cash equivalents | $ 1,058 | $ 1,543 |
Restricted cash equivalents and investments | 62 | 49 |
Fuel hedge contracts | (239) | (672) |
Interest rate contract | 11 | (3) |
Foreign currency exchange contracts | (79) | 94 |
U.S. government and agency securities | ||
Assets, Fair Value Disclosure | ||
Investments | 191 | 151 |
Asset- and mortgage-backed securities | ||
Assets, Fair Value Disclosure | ||
Investments | 252 | 380 |
Corporate obligations | ||
Assets, Fair Value Disclosure | ||
Investments | 785 | 896 |
Other fixed income securities | ||
Assets, Fair Value Disclosure | ||
Investments | 61 | 38 |
Long-Term Investments | ||
Assets, Fair Value Disclosure | ||
Investments | 154 | 155 |
Level 1 | ||
Assets, Fair Value Disclosure | ||
Cash equivalents | 1,058 | 1,543 |
Restricted cash equivalents and investments | 62 | 49 |
Fuel hedge contracts | 11 | 65 |
Level 1 | U.S. government and agency securities | ||
Assets, Fair Value Disclosure | ||
Investments | 167 | 74 |
Level 1 | Long-Term Investments | ||
Assets, Fair Value Disclosure | ||
Investments | 128 | 130 |
Level 2 | ||
Assets, Fair Value Disclosure | ||
Fuel hedge contracts | (250) | (737) |
Interest rate contract | 11 | (3) |
Foreign currency exchange contracts | (79) | 94 |
Level 2 | U.S. government and agency securities | ||
Assets, Fair Value Disclosure | ||
Investments | 24 | 77 |
Level 2 | Asset- and mortgage-backed securities | ||
Assets, Fair Value Disclosure | ||
Investments | 252 | 380 |
Level 2 | Corporate obligations | ||
Assets, Fair Value Disclosure | ||
Investments | 785 | 896 |
Level 2 | Other fixed income securities | ||
Assets, Fair Value Disclosure | ||
Investments | 61 | 38 |
Level 2 | Long-Term Investments | ||
Assets, Fair Value Disclosure | ||
Investments | $ 26 | $ 25 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Minimum | |
Fair Value Assumptions and Methodology for Assets and Liabilities | |
Expected volatility rate (percent) | 21.00% |
Maximum | |
Fair Value Assumptions and Methodology for Assets and Liabilities | |
Expected volatility rate (percent) | 49.00% |
Investments - Schedule of matur
Investments - Schedule of maturities for short-term investments (Details) $ in Millions | Jun. 30, 2016USD ($) |
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity | |
Due in one year or less | $ 231 |
Due after one year through three years | 854 |
Due after three years through five years | 164 |
Due after five years | 40 |
Total | $ 1,289 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Grupo Aeromexico | ||
Schedule of Available-for-sale Securities | ||
Ownership percentage | 4.10% | |
Potential change in ownership percentage due to the settlement of derivatives | 8.10% | |
Potential change ownership percentage | 49.00% | |
Maximum settlement value for additional shares | $ 700,000,000 | |
GOL | ||
Schedule of Available-for-sale Securities | ||
Ownership percentage | 9.50% | |
China Eastern | ||
Schedule of Available-for-sale Securities | ||
Ownership percentage in cost method investment | 3.50% | |
Restriction of sale or transfer of shares period | 3 years | |
Preferred stock | GOL | ||
Schedule of Available-for-sale Securities | ||
Fair value of investment | 34,000,000 | |
Loss on Investments | $ 72,000,000 | |
Term loan facility | GOL | ||
Schedule of Available-for-sale Securities | ||
Guarantee borrowings on third party debt | $ 300,000,000 | |
Guarantee borrowings on third party debt, term | 5 years |
Derivatives (Narrative) (Detail
Derivatives (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2017 | |
Derivative | |||||||
Proceeds from hedge derivative contracts | $ 46 | $ 0 | |||||
Payments on hedge derivative contracts | 205 | 0 | |||||
Loss on cash flow hedge contracts in AOCI to be reclassified into earnings within 12 months | 13 | ||||||
Margin posted due to fair value position of hedge contracts | $ 27 | 27 | $ 119 | ||||
Airline | |||||||
Derivative | |||||||
Settlement of derivative contract | 455 | ||||||
Fuel Derivative | |||||||
Derivative | |||||||
Expected proceeds from derivative instruments | $ 300 | ||||||
Expected payments for derivative instruments | 300 | ||||||
Scenario, Forecast | |||||||
Derivative | |||||||
Expected proceeds from derivative instruments | $ 300 | ||||||
Expected payments for derivative instruments | $ 300 | ||||||
Fuel hedge contracts | |||||||
Derivative | |||||||
Derivative (loss) gain | $ (41) | $ 98 | $ (315) | $ (313) |
Derivatives - Hedge Position (D
Derivatives - Hedge Position (Details) ¥ in Millions, gal in Millions, CAD in Millions, $ in Millions | Jun. 30, 2016JPY (¥)gal | Jun. 30, 2016CADgal | Jun. 30, 2016USD ($)gal | Dec. 31, 2015JPY (¥)gal | Dec. 31, 2015CADgal | Dec. 31, 2015USD ($)gal |
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, hedge derivatives, net | $ (79) | $ 94 | ||||
Fuel hedge contracts, derivatives, net | (239) | (672) | ||||
Net derivative contracts, hedge derivatives, net | (307) | (581) | ||||
Hedge Derivatives Asset | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, assets | 773 | 1,987 | ||||
Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, assets | 40 | 24 | ||||
Hedge Derivatives Liability | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, liabilities | (895) | (2,581) | ||||
Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, liabilities | (225) | (11) | ||||
Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), hedge derivatives, net | 11 | (3) | ||||
Foreign currency exchange contracts, hedge derivatives, net | (79) | 94 | ||||
Not designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, derivatives, net | (239) | (672) | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Hedge Derivatives Asset | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), assets | 4 | 4 | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), assets | 7 | 0 | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Hedge Derivatives Liability | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), liabilities | 0 | 0 | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), liabilities | 0 | (7) | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Hedge Derivatives Asset | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, assets | 7 | 76 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, assets | 3 | 20 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Hedge Derivatives Liability | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, liabilities | (47) | (1) | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, liabilities | $ (42) | $ (1) | ||||
Fuel hedge contracts | Not designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Derivative, nonmonetary notional amount | gal | 239 | 239 | 239 | 887 | 887 | 887 |
Fuel hedge contracts | Not designated as hedging instrument | Hedge Derivatives Asset | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, assets | $ 762 | $ 1,907 | ||||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, assets | 30 | 4 | ||||
Fuel hedge contracts | Not designated as hedging instrument | Hedge Derivatives Liability | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, liabilities | (848) | (2,580) | ||||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, liabilities | (183) | (3) | ||||
Fair value hedging | Interest rate contract (fair value hedge) | Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Derivative, notional amount | $ 367 | $ 384 | ||||
Cash flow hedging | Foreign currency exchange contracts | Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Derivative, notional amount | ¥ 63,516 | CAD 472 | ¥ 46,920 | CAD 395 |
Derivatives Derivatives - Offse
Derivatives Derivatives - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative | ||
Net derivative contracts, hedge derivatives, net | $ (307) | $ (581) |
Hedge Derivatives Asset | ||
Derivative | ||
Net derivative contracts, assets | 42 | 143 |
Other assets | ||
Derivative | ||
Net derivative contracts, assets | 8 | 21 |
Hedge Derivatives Liability | ||
Derivative | ||
Net derivative contracts, liabilities | (164) | (737) |
Other Noncurrent Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | $ (193) | $ (8) |
Derivatives - Designated Hedge
Derivatives - Designated Hedge Gain (Loss) (Details) - Foreign currency exchange contracts - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | ||||
Effective Portion Reclassified from AOCI to Earnings | $ 12 | $ 41 | $ 36 | $ 92 |
Effective Portion Recognized in Other Comprehensive Income | $ (63) | $ (36) | $ (145) | $ (52) |
Long-Term Debt - Schedule of Fa
Long-Term Debt - Schedule of Fair Values (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Debt | ||
Total debt at par value | $ 7,609 | $ 8,098 |
Unamortized discount and debt issue cost, net | (117) | (152) |
Net carrying amount | 7,492 | 7,946 |
Fair value | $ 7,900 | $ 8,400 |
Long-Term Debt Long-Term Debt (
Long-Term Debt Long-Term Debt (Narratives) (Details) | Mar. 31, 2016USD ($)aircraft |
Debt Disclosure [Abstract] | |
Financing arrangement | $ | $ 450,000,000 |
Number of assets used as collateral | aircraft | 26 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Benefit Plan Components (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 229 | 221 | 458 | 442 |
Expected return on plan assets | (226) | (220) | (452) | (440) |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Recognized net actuarial loss | 59 | 58 | 118 | 116 |
Net periodic cost | 62 | 59 | 124 | 118 |
Other Postretirement and Postemployment Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 17 | 16 | 34 | 32 |
Interest cost | 37 | 35 | 74 | 70 |
Expected return on plan assets | (18) | (20) | (36) | (40) |
Amortization of prior service credit | (7) | (7) | (14) | (14) |
Recognized net actuarial loss | 6 | 6 | 12 | 12 |
Net periodic cost | $ 35 | $ 30 | $ 70 | $ 60 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Purchase Obligations (Details) - Future aircraft purchase commitments $ in Millions | Jun. 30, 2016USD ($) |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity | |
Six months ending December 31, 2016 | $ 1,050 |
2,017 | 2,720 |
2,018 | 3,270 |
2,019 | 3,140 |
2,020 | 2,320 |
Thereafter | 3,480 |
Total | $ 15,980 |
Commitments and Contingencies41
Commitments and Contingencies - Aircraft Purchase and Lease Commitments (Details) - Future aircraft purchase commitments | Jun. 30, 2016aircraft |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 298 |
B-737-900ER | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 60 |
B-787-8 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 18 |
A321-200 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 77 |
A321-200 | Airbus | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 37 |
A330-300 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 2 |
A330-900neo | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 25 |
A350-900 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 25 |
CS100 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 75 |
Aircraft purchase commitment with purchase options | 50 |
E190-100 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 16 |
Commitments and Contingencies42
Commitments and Contingencies - Devaluation and Other Contingencies (Details) employee in Thousands | Feb. 28, 2016USD ($)seat | Jun. 30, 2016employee |
Other Commitments | ||
Entity number of employees | employee | 85 | |
Percentage of employees represented by unions under collective bargaining agreements | 18.00% | |
Shuttle America | ||
Other Commitments | ||
Line of credit loan commitment | $ | $ 75,000,000 | |
Embraer 170/175 | ||
Other Commitments | ||
Number of seats in plane | seat | 50 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Loss - Schedule of AOCI Components (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | $ 10,850 | |||
Ending balance | 10,850 | $ 11,810 | ||
Accumulated other comprehensive income tax portion, period start | 1,222 | $ 1,279 | ||
Other comprehensive income tax affect | 42 | 15 | ||
Reclassification into earnings tax effect | 29 | 10 | ||
Accumulated other comprehensive income tax portion, period end | 1,235 | 1,254 | ||
Deferred income taxes related to pension obligation | 1,900 | 1,900 | ||
Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | (7,275) | (7,311) | ||
Changes in value (net of tax effect) | (53) | 6 | ||
Reclassifications into earnings (net of tax effect) | 49 | 17 | ||
Ending balance | (7,275) | (7,311) | (7,279) | $ (7,288) |
Pension and Other Benefits Liabilities | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | (7,354) | (7,517) | ||
Reclassifications into earnings (net of tax effect) | 72 | 75 | ||
Ending balance | (7,354) | (7,517) | (7,282) | (7,442) |
Derivative Contracts | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | 140 | 222 | ||
Changes in value (net of tax effect) | (69) | 25 | ||
Reclassifications into earnings (net of tax effect) | (23) | (58) | ||
Ending balance | 140 | 222 | 48 | 189 |
Investments | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Beginning balance | (61) | (16) | ||
Changes in value (net of tax effect) | 16 | (19) | ||
Ending balance | $ (61) | $ (16) | $ (45) | $ (35) |
Segments (Narrative) (Details)
Segments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information, Profit (Loss) | ||||
Operating revenue | $ 10,447 | $ 10,707 | $ 19,698 | $ 20,095 |
Intersegment Sales/Other | Exchanged products | ||||
Segment Reporting Information, Profit (Loss) | ||||
Operating revenue | $ (745) | $ (858) | $ 1,271 | $ (1,640) |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | $ 10,447 | $ 10,707 | $ 19,698 | $ 20,095 | |
Operating income | 2,423 | 2,474 | 3,963 | 3,872 | |
Interest expense, net | 93 | 127 | 200 | 258 | |
Depreciation and amortization | 470 | 448 | 956 | 918 | |
Assets | 51,634 | 52,681 | 51,634 | 52,681 | $ 53,134 |
Capital expenditures | 1,046 | 919 | 1,917 | 1,505 | |
Operating Segments | Airline | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | 10,398 | 10,592 | 19,570 | 19,906 | |
Operating income | 2,433 | 2,384 | 4,001 | 3,696 | |
Interest expense, net | 92 | 127 | 199 | 258 | |
Depreciation and amortization | 461 | 440 | 938 | 903 | |
Assets | 50,213 | 51,508 | 50,213 | 51,508 | |
Capital expenditures | 1,026 | 906 | 1,884 | 1,485 | |
Operating Segments | Refinery | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | 1,027 | 1,357 | 1,792 | 2,497 | |
Operating income | (10) | 90 | (38) | 176 | |
Interest expense, net | 1 | 1 | |||
Depreciation and amortization | 9 | 8 | 18 | 15 | |
Assets | 1,421 | 1,173 | 1,421 | 1,173 | |
Capital expenditures | 20 | 13 | 33 | 20 | |
Intersegment Sales/Other | Sales to airline segment | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | (178) | (292) | (322) | (525) | |
Intersegment Sales/Other | Exchanged products | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | (745) | (858) | 1,271 | (1,640) | |
Intersegment Sales/Other | Sales of refined products to third parties | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | $ (55) | $ (92) | $ (71) | $ (143) |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) | 6 Months Ended |
Jun. 30, 2016seat | |
Regional carrier | |
Restructuring Cost and Reserve | |
Number of seats in plane | 50 |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Charges (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Severance and Related Costs | |
Restructuring Reserve | |
Liability as of January 1, 2016 | $ 52 |
Additional costs and expenses | 8 |
Payments | (46) |
June 30, 2016 | 14 |
Lease Restructuring | |
Restructuring Reserve | |
Liability as of January 1, 2016 | 415 |
Additional costs and expenses | 0 |
Payments | (44) |
June 30, 2016 | $ 371 |
Earnings Per Share - Schedule
Earnings Per Share - Schedule of Computation for Earnings Per Share Types (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 1,546 | $ 1,485 | $ 2,492 | $ 2,231 |
Basic weighted average shares outstanding, shares | 758 | 803 | 766 | 811 |
Dilutive effect of share-based awards, shares | 5 | 8 | 6 | 8 |
Diluted weighted average shares outstanding, shares | 763 | 811 | 772 | 819 |
Basic earnings per share (in USD per share) | $ 2.04 | $ 1.85 | $ 3.25 | $ 2.75 |
Diluted earnings per share (in USD per share) | $ 2.03 | $ 1.83 | $ 3.23 | $ 2.72 |