Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document and Entity Information [Abstract] | |
Document type | 10-Q |
Amendment flag | false |
Document period end date | Sep. 30, 2017 |
Document fiscal year focus | 2,017 |
Document fiscal period focus | Q3 |
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 | 712,973,139 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 1,478 | $ 2,762 |
Short-term investments | 960 | 487 |
Accounts receivable, net of an allowance for uncollectible accounts of $12 and $15 at September 30, 2017 and December 31, 2016, respectively | 2,399 | 2,064 |
Fuel inventory | 720 | 519 |
Expendable parts and supplies inventories, net of an allowance for obsolescence of $124 and $110 at September 30, 2017 and December 31, 2016, respectively | 416 | 372 |
Prepaid expenses and other | 1,110 | 1,247 |
Total current assets | 7,083 | 7,451 |
Property and Equipment, Net: | ||
Property and equipment, net of accumulated depreciation and amortization of $13,766 and $12,456 at September 30, 2017 and December 31, 2016, respectively | 25,900 | 24,375 |
Other Assets: | ||
Goodwill | 9,794 | 9,794 |
Identifiable intangibles, net of accumulated amortization of $841 and $828 at September 30, 2017 and December 31, 2016, respectively | 4,851 | 4,844 |
Deferred income taxes, net | 1,422 | 3,064 |
Other noncurrent assets | 2,878 | 1,733 |
Total other assets | 18,945 | 19,435 |
Total assets | 51,928 | 51,261 |
Current Liabilities: | ||
Current maturities of long-term debt and capital leases | 1,224 | 1,131 |
Air traffic liability | 5,528 | 4,626 |
Accounts payable | 3,059 | 2,572 |
Accrued salaries and related benefits | 2,683 | 2,924 |
Frequent flyer deferred revenue | 1,759 | 1,648 |
Other accrued liabilities | 2,243 | 2,338 |
Total current liabilities | 16,496 | 15,239 |
Noncurrent Liabilities: | ||
Long-term debt and capital leases | 7,584 | 6,201 |
Pension, postretirement and related benefits | 9,565 | 13,378 |
Frequent flyer deferred revenue | 2,281 | 2,278 |
Other noncurrent liabilities | 2,001 | 1,878 |
Total noncurrent liabilities | 21,431 | 23,735 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 720,433,073 and 744,886,938 shares issued at September 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Additional paid-in capital | 12,133 | 12,294 |
Retained earnings | 9,502 | 7,903 |
Accumulated other comprehensive loss | (7,476) | (7,636) |
Treasury stock, at cost, 7,459,934 and 14,149,229 shares at September 30, 2017 and December 31, 2016, respectively | (158) | (274) |
Total stockholders' equity | 14,001 | 12,287 |
Total liabilities and stockholders' equity | $ 51,928 | $ 51,261 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Allowance for uncollectible accounts | $ 12 | $ 15 |
Allowance for obsolescence | 124 | 110 |
Property and equipment additions: | ||
Accumulated depreciation and amortization | 13,766 | 12,456 |
Other Assets: | ||
Accumulated amortization of identifiable intangible assets | $ 841 | $ 828 |
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 | 720,433,073 | 744,886,938 |
Treasury stock, at cost, shares | 7,459,934 | 14,149,229 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Passenger: | ||||
Mainline | $ 7,924 | $ 7,615 | $ 22,027 | $ 21,530 |
Regional carriers | 1,475 | 1,456 | 4,291 | 4,273 |
Total passenger revenue | 9,399 | 9,071 | 26,318 | 25,803 |
Cargo | 187 | 167 | 530 | 494 |
Other | 1,474 | 1,245 | 4,151 | 3,884 |
Total operating revenue | 11,060 | 10,483 | 30,999 | 30,181 |
Operating Expense: | ||||
Salaries and related costs | 2,715 | 2,463 | 7,804 | 7,165 |
Aircraft fuel and related taxes | 1,519 | 1,422 | 4,207 | 3,877 |
Regional carriers expense | 1,156 | 1,119 | 3,347 | 3,221 |
Depreciation and amortization | 574 | 474 | 1,649 | 1,430 |
Contracted services | 561 | 520 | 1,627 | 1,480 |
Aircraft maintenance materials and outside repairs | 503 | 462 | 1,496 | 1,357 |
Passenger commissions and other selling expenses | 482 | 466 | 1,344 | 1,291 |
Landing fees and other rents | 400 | 399 | 1,144 | 1,123 |
Passenger service | 315 | 264 | 806 | 674 |
Profit sharing | 314 | 326 | 803 | 922 |
Aircraft rent | 89 | 72 | 259 | 204 |
Other | 593 | 527 | 1,593 | 1,505 |
Total operating expense | 9,221 | 8,514 | 26,079 | 24,249 |
Operating Income | 1,839 | 1,969 | 4,920 | 5,932 |
Non-Operating Expense: | ||||
Interest expense, net | (100) | (95) | (297) | (295) |
Miscellaneous, net | 66 | 26 | (12) | 47 |
Total non-operating expense, net | (34) | (69) | (309) | (248) |
Income Before Income Taxes | 1,805 | 1,900 | 4,611 | 5,684 |
Income Tax Provision | (627) | (641) | (1,606) | (1,933) |
Net Income | $ 1,178 | $ 1,259 | $ 3,005 | $ 3,751 |
Basic Earnings Per Share (in USD per share) | $ 1.64 | $ 1.70 | $ 4.15 | $ 4.95 |
Diluted Earnings Per Share (in USD per share) | 1.64 | 1.69 | 4.13 | 4.92 |
Cash Dividends Declared Per Share (in USD per share) | $ 0.31 | $ 0.20 | $ 0.71 | $ 0.47 |
Comprehensive Income | $ 1,251 | $ 1,326 | $ 3,165 | $ 3,814 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net Cash Provided by Operating Activities | ||
Net Cash Provided by Operating Activities | $ 3,230 | $ 6,080 |
Property and equipment additions: | ||
Flight equipment, including advance payments | (1,905) | (2,149) |
Ground property and equipment, including technology | (826) | (448) |
Purchase of equity investments | (795) | 0 |
Purchase of short-term investments | (868) | (1,480) |
Redemption of short-term investments | 395 | 1,436 |
Other, net | (35) | 41 |
Net cash used in investing activities | (4,034) | (2,600) |
Cash Flows from Financing Activities: | ||
Payments on long-term debt and capital lease obligations | (819) | (1,403) |
Repurchase of common stock | (1,350) | (2,301) |
Cash dividends | (516) | (360) |
Fuel card obligation | 341 | (14) |
Proceeds from long-term obligations | 2,004 | 450 |
Other, net | (140) | (186) |
Net cash used in financing activities | (480) | (3,814) |
Net Decrease in Cash and Cash Equivalents | (1,284) | (334) |
Cash and cash equivalents at beginning of period | 2,762 | 1,972 |
Cash and cash equivalents at end of period | 1,478 | 1,638 |
Non-Cash Transactions: | ||
Treasury stock contributed to our qualified defined benefit pension plans | 350 | 350 |
Flight and ground equipment acquired under capital leases | $ 249 | $ 55 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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, 2016 . Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring 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 nine months ended September 30, 2017 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 Standards Effective in Future Years 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)." The standard is effective for interim and annual reporting periods beginning after December 15, 2017. 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. We expect to use the full retrospective transition method and will adopt the standard effective January 1, 2018. While we believe the adoption will not have a significant effect on earnings, certain revenues that are currently classified in other revenue will be reclassified to passenger revenue. These include baggage fees, administrative charges and other travel-related fees, which may be deemed part of the single performance obligation of providing passenger transportation. We expect that these revenues, which are approximately $2 billion annually, will be reclassified from the current presentation in other revenue to passenger revenue after adoption. In addition, we expect that the adoption will increase the rate used to account for frequent flyer miles. We currently analyze our standalone sales of mileage credits to other airlines and customers to establish the accounting value for frequent flyer miles. Considering the guidance in the new standard, we expect to change our valuation of a mileage credit to an analysis of the award redemption value. The new valuation will consider the quantitative value a passenger receives by redeeming miles rather than paying cash for an award ticket. We expect this change to significantly increase our frequent flyer liability. The mileage deferral and redemption rates would be approximately the same; therefore, assuming stable volume, we do not expect there would be a significant change in revenue recognized from the program. We continue to evaluate this and the other impacts to the financial statements due to the adoption of the new standard. 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. We have not completed our assessment, but the adoption of this standard will have a significant impact on our Consolidated Balance Sheets. However, we do not expect the adoption to have a significant impact on 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. We will adopt this standard effective January 1, 2019. Statement of Cash Flows. In 2016, the FASB issued ASU Nos. 2016-15 and 2016-18 related to the classification of certain cash receipts and cash payments and the presentation of restricted cash within an entity's statement of cash flows, respectively. These standards are effective for interim and annual reporting periods beginning after December 15, 2017. We will adopt these standards effective January 1, 2018. We do not expect these standards to have a material impact on our Consolidated Statements of Cash Flows. Financial Instruments. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10)." This standard makes several changes, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. We will adopt this standard effective January 1, 2018. Our investments in GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL), and China Eastern are currently accounted for as available-for-sale with changes in fair value recognized in other comprehensive income. At the time of adoption, any amounts in accumulated other comprehensive income/(loss) ("AOCI") related to equity investments would be reclassified to retained earnings. As of September 30, 2017, an unrealized gain of $49 million related to these investments is recorded in AOCI. Retirement Benefits. In March 2017, the FASB issued ASU No. 2017-07, "Compensation—Retirement Benefits (Topic 715)." This standard requires an entity to report the service cost component in the same line item as other compensation costs. The other components of net (benefit) cost will be required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for interim and annual reporting periods beginning after December 15, 2017. We will adopt the standard effective January 1, 2018. The components of the net (benefit) cost are shown in Note 6, "Employee Benefit Plans." Recently Adopted Standards Equity Method Investments . In March 2016, the FASB issued ASU No. 2016-07, "Investments—Equity Method and Joint Ventures (Topic 323)." This standard eliminates a previous requirement that an investor must restate its historical financial statements when an existing cost method investment qualifies for use of the equity method as if the equity method had been used since the investment was acquired. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in AOCI will be recognized through earnings. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Assets (Liabilities) Measured at Fair Value on a Recurring Basis (in millions) September 30, Level 1 Level 2 Cash equivalents $ 169 $ 169 $ — Short-term investments U.S. government and agency securities 152 142 10 Asset- and mortgage-backed securities 188 — 188 Corporate obligations 519 — 519 Other fixed income securities 101 — 101 Restricted cash equivalents and investments 39 39 — Long-term investments 399 371 28 Hedge derivatives, net Fuel hedge contracts (139 ) (31 ) (108 ) Interest rate contract (4 ) — (4 ) Foreign currency exchange contracts (22 ) — (22 ) (in millions) December 31, Level 1 Level 2 Cash equivalents $ 2,279 $ 2,279 $ — Short-term investments U.S. government and agency securities 112 86 26 Asset- and mortgage-backed securities 68 — 68 Corporate obligations 295 — 295 Other fixed income securities 12 — 12 Restricted cash equivalents and investments 61 61 — Long-term investments 139 115 24 Hedge derivatives, net Fuel hedge contracts (324 ) (26 ) (298 ) Interest rate contract 6 — 6 Foreign currency exchange contracts 27 — 27 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 primarily support letters of credit that relate to certain projected 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 have historically been measured at fair value primarily consist of equity investments in Grupo Aeroméxico, the parent company of Aeroméxico, and the parent company of GOL. During the March 2017 quarter, we completed a tender offer for additional shares of Grupo Aeroméxico. With the completion of the tender offer, our investment is accounted for under the equity method and is no longer measured at fair value on a recurring basis. As of September 30, 2017, our long-term investments include our shares in China Eastern and the parent company of GOL. Our investments are valued based on market prices and 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 35% 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. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS Short-Term Investments The estimated fair values of short-term investments, which approximate cost at September 30, 2017 , 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. Investments with maturities beyond one year when purchased may be classified as short-term investments if they are expected to be available to support our short-term liquidity needs. (in millions) Available-For-Sale Due in one year or less $ 412 Due after one year through three years 491 Due after three years through five years 37 Due after five years 20 Total $ 960 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. Equity Method Investments • Aeroméxico . During the March 2017 quarter, we completed a $622 million tender offer for additional capital stock of Grupo Aeroméxico. Subsequently, during the September 2017 quarter, we settled for $173 million derivative contracts for additional shares of Grupo Aeroméxico, bringing our non-controlling equity investment in Grupo Aeroméxico to 49% . As a result of these increases in our ownership, we account for the investment under the equity method of accounting and recognize our portion of their results in non-operating expense in our Condensed Consolidated Statements of Operations and Comprehensive Income. • Virgin Atlantic. We have a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways. We recognize our portion of Virgin Atlantic's financial results in non-operating expense in our Condensed Consolidated Statements of Operations and Comprehensive Income. Available-for-Sale Investments • GOL. Through our investment in preferred shares of GOL's parent company, we own 9% of GOL's outstanding capital stock. Driven by an improved outlook for the Brazilian economy and the financial performance of the company, GOL's stock price has more than doubled since December 31, 2016 and exceeds the original cost of our investment. This unrealized gain of $50 million is recorded in AOCI. Additionally, GOL has 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 September 30, 2017 . • China Eastern. We have a 3% equity interest in China Eastern. Because the investment agreement with China Eastern restricts our sale or transfer of these shares through the September 2018 quarter, we had previously recorded this investment at cost. As we are now within one year of the lapse of these restrictions, we began accounting for the investment during the September 2017 quarter as available-for-sale with changes in fair value recorded in AOCI. Cost Method Investments • Air France-KLM. Subsequent to the September 2017 quarter, we acquired 10% of the outstanding shares of our joint venture partner, Air France-KLM, for $448 million . Because our investment agreement restricts the sale or transfer of these shares for five |
Derivatives and Risk Management
Derivatives and Risk Management | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | DERIVATIVES AND RISK MANAGEMENT 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 recently 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 required 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, provided 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 nine months ended September 30, 2017 , we recorded fuel hedge losses of $100 million and $3 million , respectively. During the three and nine months ended September 30, 2016 , we recorded fuel hedge losses of $11 million and $326 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. Hedge Position as of September 30, 2017 (in millions) Volume Final Maturity Date Prepaid Expenses and Other Other Noncurrent Assets Other Accrued Liabilities Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 320 U.S. dollars August 2022 $ — $ — $ — $ (4 ) $ (4 ) Foreign currency exchange contracts 29,396 Japanese yen November 2019 3 1 (17 ) (9 ) (22 ) 563 Canadian dollars May 2020 Not designated as hedges Fuel hedge contracts (1) 288 gallons - crude oil, diesel and jet fuel December 2018 210 3 (335 ) (17 ) (139 ) Total derivative contracts $ 213 $ 4 $ (352 ) $ (30 ) $ (165 ) (1) As discussed above, during 2016, we entered into fuel hedges designed to offset and effectively neutralize our 2017 airline segment hedge positions. The dollar amounts shown above primarily represent the offsetting derivatives that were used to neutralize the 2017 airline segment hedge portfolio. Hedge Position as of December 31, 2016 (in millions) Volume Final Maturity Date Prepaid Expenses and Other Other Noncurrent Assets Other Accrued Liabilities Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 349 U.S. dollars August 2022 $ 2 $ 4 $ — $ — $ 6 Foreign currency exchange contracts 54,853 Japanese yen February 2019 31 3 (4 ) (3 ) 27 335 Canadian dollars January 2019 Not designated as hedges Fuel hedge contracts (1) 197 gallons - crude oil, diesel and jet fuel January 2018 360 — (684 ) — (324 ) Total derivative contracts $ 393 $ 7 $ (688 ) $ (3 ) $ (291 ) (1) As discussed above, we early settled $455 million of our airline segment's 2016 fuel hedge positions and entered into hedges designed to offset and effectively neutralize 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 airline segment hedge portfolio. Offsetting Assets and Liabilities We have master netting arrangements with our counterparties giving us the right to offset hedge assets and liabilities. However, 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 by counterparty had we elected to offset. (in millions) Prepaid Expenses and Other Other Noncurrent Assets Other Accrued Liabilities Other Noncurrent Liabilities Hedge Derivatives, net September 30, 2017 Net derivative contracts $ 1 $ — $ (140 ) $ (26 ) $ (165 ) December 31, 2016 Net derivative contracts $ 31 $ 6 $ (326 ) $ (2 ) $ (291 ) Designated Hedge Gains (Losses) Gains (losses) related to our foreign currency exchange contracts are as follows: Effective Portion Reclassified from AOCI to Earnings Effective Portion Recognized in Other Comprehensive Income (in millions) 2017 2016 2017 2016 Three Months Ended September 30, Foreign currency exchange contracts $ — $ (2 ) $ (15 ) $ (2 ) Nine Months Ended September 30, Foreign currency exchange contracts $ 11 $ 34 $ (48 ) $ (147 ) Credit Risk |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
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 classified as Level 2 within the fair value hierarchy. (in millions) September 30, December 31, Total debt at par value $ 8,473 $ 7,112 Unamortized discount and debt issue cost, net (97 ) (104 ) Net carrying amount $ 8,376 $ 7,008 Fair value $ 8,700 $ 7,300 Unsecured Debt Offering During the March 2017 quarter, we issued $2.0 billion in aggregate principal amount of unsecured notes, consisting of $1.0 billion of 2.875% Notes due 2020 and $1.0 billion of 3.625% Notes due 2022 (collectively, the "Notes"). The Notes are equal in right of payment with all of our other unsubordinated indebtedness and senior in right of payment to all of our future subordinated debt. The Notes are subject to covenants that, among other things, limit our ability to incur liens securing indebtedness for borrowed money or capital leases and engage in mergers and consolidations or transfer all or substantially all of our assets, in each case subject to certain exceptions. The Notes are also subject to customary event of default provisions, including cross-defaults to other material indebtedness. If we experience certain changes of control and a ratings decline of either series of Notes by two of the ratings agencies to a rating below investment grade within a certain period of time following a change of control or public notice of the occurrence of a change of control, we must offer to repurchase such series. Using the net proceeds from the $2.0 billion debt issuance and existing cash, we contributed $3.2 billion to our qualified defined benefit pension plans during the six months ended June 30, 2017. We also contributed shares of our common stock from treasury with a value of $350 million during the March 2017 quarter. Covenants We were in compliance with the covenants in our financings at September 30, 2017 |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The following table shows the components of net (benefit) cost: Pension Benefits Other Postretirement and Postemployment Benefits (in millions) 2017 2016 2017 2016 Three Months Ended September 30, Service cost $ — $ — $ 22 $ 17 Interest cost 213 229 35 37 Expected return on plan assets (286 ) (226 ) (17 ) (18 ) Amortization of prior service credit — — (7 ) (7 ) Recognized net actuarial loss 66 59 8 6 Net (benefit) cost $ (7 ) $ 62 $ 41 $ 35 Nine Months Ended September 30, Service cost $ — $ — $ 66 $ 51 Interest cost 639 687 105 111 Expected return on plan assets (858 ) (678 ) (51 ) (54 ) Amortization of prior service credit — — (21 ) (21 ) Recognized net actuarial loss 198 177 24 18 Net (benefit) cost $ (21 ) $ 186 $ 123 $ 105 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Aircraft Purchase and Lease Commitments Our future aircraft purchase commitments totaled approximately $13.1 billion at September 30, 2017 : (in millions) Total Three months ending December 31, 2017 $ 920 2018 3,480 2019 3,090 2020 2,160 2021 2,090 Thereafter 1,330 Total $ 13,070 Our future aircraft purchase commitments included the following aircraft at September 30, 2017 : Aircraft Type Purchase Commitments B-737-900ER 46 A321-200 96 A330-900neo 25 A350-900 23 CS100 75 Total 265 During the June 2017 quarter, we entered into agreements with Airbus SE to place an expanded A321-200 order for 40 firm additional aircraft and to defer 10 of our 25 A350-900 aircraft deliveries set for 2019-2020 by two to three years. The Boeing Company recently filed a petition with the U.S. government alleging Bombardier has agreed to sell aircraft below cost and asking the government to impose duties on all U.S. imports of 100- to 150-seat Large Civil Aircraft from Canada. This includes the CS100 aircraft under our purchase agreement with Bombardier. Although certain preliminary determinations have been issued in favor of Boeing, the government's review of this matter is ongoing, with final decisions expected during 2018. Delta is not a party to the petition, but believes the petition is without merit. 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, we believe that the resolution of these matters will not have a material adverse effect on our Condensed Consolidated 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 law 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. Other During the September 2016 quarter, we announced plans to modernize, upgrade and connect Terminals 2 and 3 at Los Angeles International Airport (“LAX”) over the next seven years. A substantial majority of the project costs will be funded through the Regional Airports Improvement Corporation ("RAIC"), a California public benefit corporation, using a revolving credit facility provided by a group of lenders, whose aggregate commitments total $800 million . The credit facility was executed during the September 2017 quarter. We have guaranteed the obligations of the RAIC under the credit facility. Because the RAIC remains in compliance with the terms of its credit facility, we have not recorded a liability on our Consolidated Balance Sheet as of September 30, 2017. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 (net of tax effect of $1,458) $ (7,714 ) $ 97 $ (19 ) $ (7,636 ) Changes in value (net of tax effect of $4) — (23 ) 76 53 Reclassifications into earnings (net of tax effect of $63) (1) 122 (7 ) (8 ) 107 Balance at September 30, 2017 (net of tax effect of $1,391) $ (7,592 ) $ 67 $ 49 $ (7,476 ) 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 $43) — (72 ) 46 (26 ) Reclassifications into earnings (net of tax effect of $51) (1) 111 (22 ) — 89 Balance at September 30, 2016 (net of tax effect of $1,214) $ (7,243 ) $ 46 $ (15 ) $ (7,212 ) (1) Amounts reclassified from AOCI for pension and other benefits liabilities and derivative contracts designated as foreign currency cash flow hedges are recorded in salaries and related costs and in passenger revenue, respectively, in the Condensed Consolidated Statements of Operations and Comprehensive Income. The reclassification into earnings for investments relates to our investment in Grupo Aeroméxico during the March 2017 quarter with the conversion to accounting under the equity method. The reclassification of the unrealized gain was recorded to non-operating expense in our Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Includes $ 1.9 billion |
Segments
Segments | 9 Months Ended |
Sep. 30, 2017 | |
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 nine months ended September 30, 2017 was $910 million and $2.4 billion , respectively, compared to $734 million and $2.0 billion during the three and nine months ended September 30, 2016 . 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 September 30, 2017 Operating revenue: $ 10,931 $ 1,357 $ 11,060 Sales to airline segment $ (239 ) (1) Exchanged products (910 ) (2) Sales of refined products (79 ) (3) Operating income 1,802 37 — 1,839 Interest expense, net 100 — — 100 Depreciation and amortization 563 11 — 574 Total assets, end of period 49,992 1,936 — 51,928 Capital expenditures 901 40 — 941 Three Months Ended September 30, 2016 Operating revenue: $ 10,473 $ 971 $ 10,483 Sales to airline segment $ (173 ) (1) Exchanged products (734 ) (2) Sales of refined products (54 ) (3) Operating income (loss) 2,014 (45 ) — 1,969 Interest expense, net 94 1 — 95 Depreciation and amortization 464 10 — 474 Total assets, end of period 49,748 1,200 — 50,948 Capital expenditures 652 28 — 680 (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) These sales were at or near cost; accordingly, the margin on these sales is de minimis. (in millions) Airline Refinery Intersegment Sales/Other Consolidated Nine Months Ended September 30, 2017 Operating revenue: $ 30,742 $ 3,624 $ 30,999 Sales to airline segment $ (622 ) (1) Exchanged products (2,399 ) (2) Sales of refined products (346 ) (3) Operating income 4,834 87 — 4,920 Interest expense, net 297 — — 297 Depreciation and amortization 1,617 32 — 1,649 Capital expenditures 2,605 126 — 2,731 Nine Months Ended September 30, 2016 Operating revenue: $ 30,043 $ 2,763 $ 30,181 Sales to airline segment $ (495 ) (1) Exchanged products (2,005 ) (2) Sales of refined products (125 ) (3) Operating income (loss) (4) 6,015 (83 ) — 5,932 Interest expense, net 293 2 — 295 Depreciation and amortization 1,402 28 — 1,430 Capital expenditures 2,536 61 — 2,597 (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) These sales were at or near cost; accordingly, the margin on these sales is de minimis. (4) |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING The following table shows the balances and activity for lease restructuring charges: (in millions) Lease Restructuring Liability as of January 1, 2017 $ 329 Payments (63 ) Additional expenses and other (10 ) Liability as of September 30, 2017 $ 256 Lease restructuring charges include remaining lease payments for permanently grounded aircraft related to domestic and Pacific fleet restructurings. We are continuing to restructure our domestic fleet by replacing a portion of our 50 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, Nine Months Ended September 30, (in millions, except per share data) 2017 2016 2017 2016 Net income $ 1,178 $ 1,259 $ 3,005 $ 3,751 Basic weighted average shares outstanding 716 740 724 758 Dilutive effect of share-based awards 3 4 3 4 Diluted weighted average shares outstanding 719 744 727 762 Basic earnings per share $ 1.64 $ 1.70 $ 4.15 $ 4.95 Diluted earnings per share $ 1.64 $ 1.69 $ 4.13 $ 4.92 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2016 . Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring 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 nine months ended September 30, 2017 are not necessarily indicative of operating results for the entire year. |
Recent Accounting Standards | Recent Accounting Standards Standards Effective in Future Years 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)." The standard is effective for interim and annual reporting periods beginning after December 15, 2017. 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. We expect to use the full retrospective transition method and will adopt the standard effective January 1, 2018. While we believe the adoption will not have a significant effect on earnings, certain revenues that are currently classified in other revenue will be reclassified to passenger revenue. These include baggage fees, administrative charges and other travel-related fees, which may be deemed part of the single performance obligation of providing passenger transportation. We expect that these revenues, which are approximately $2 billion annually, will be reclassified from the current presentation in other revenue to passenger revenue after adoption. In addition, we expect that the adoption will increase the rate used to account for frequent flyer miles. We currently analyze our standalone sales of mileage credits to other airlines and customers to establish the accounting value for frequent flyer miles. Considering the guidance in the new standard, we expect to change our valuation of a mileage credit to an analysis of the award redemption value. The new valuation will consider the quantitative value a passenger receives by redeeming miles rather than paying cash for an award ticket. We expect this change to significantly increase our frequent flyer liability. The mileage deferral and redemption rates would be approximately the same; therefore, assuming stable volume, we do not expect there would be a significant change in revenue recognized from the program. We continue to evaluate this and the other impacts to the financial statements due to the adoption of the new standard. 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. We have not completed our assessment, but the adoption of this standard will have a significant impact on our Consolidated Balance Sheets. However, we do not expect the adoption to have a significant impact on 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. We will adopt this standard effective January 1, 2019. Statement of Cash Flows. In 2016, the FASB issued ASU Nos. 2016-15 and 2016-18 related to the classification of certain cash receipts and cash payments and the presentation of restricted cash within an entity's statement of cash flows, respectively. These standards are effective for interim and annual reporting periods beginning after December 15, 2017. We will adopt these standards effective January 1, 2018. We do not expect these standards to have a material impact on our Consolidated Statements of Cash Flows. Financial Instruments. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10)." This standard makes several changes, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. We will adopt this standard effective January 1, 2018. Our investments in GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL), and China Eastern are currently accounted for as available-for-sale with changes in fair value recognized in other comprehensive income. At the time of adoption, any amounts in accumulated other comprehensive income/(loss) ("AOCI") related to equity investments would be reclassified to retained earnings. As of September 30, 2017, an unrealized gain of $49 million related to these investments is recorded in AOCI. Retirement Benefits. In March 2017, the FASB issued ASU No. 2017-07, "Compensation—Retirement Benefits (Topic 715)." This standard requires an entity to report the service cost component in the same line item as other compensation costs. The other components of net (benefit) cost will be required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for interim and annual reporting periods beginning after December 15, 2017. We will adopt the standard effective January 1, 2018. The components of the net (benefit) cost are shown in Note 6, "Employee Benefit Plans." Recently Adopted Standards Equity Method Investments . In March 2016, the FASB issued ASU No. 2016-07, "Investments—Equity Method and Joint Ventures (Topic 323)." This standard eliminates a previous requirement that an investor must restate its historical financial statements when an existing cost method investment qualifies for use of the equity method as if the equity method had been used since the investment was acquired. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in AOCI will be recognized through earnings. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets (liabilities) measured at fair value on a recurring basis | Assets (Liabilities) Measured at Fair Value on a Recurring Basis (in millions) September 30, Level 1 Level 2 Cash equivalents $ 169 $ 169 $ — Short-term investments U.S. government and agency securities 152 142 10 Asset- and mortgage-backed securities 188 — 188 Corporate obligations 519 — 519 Other fixed income securities 101 — 101 Restricted cash equivalents and investments 39 39 — Long-term investments 399 371 28 Hedge derivatives, net Fuel hedge contracts (139 ) (31 ) (108 ) Interest rate contract (4 ) — (4 ) Foreign currency exchange contracts (22 ) — (22 ) (in millions) December 31, Level 1 Level 2 Cash equivalents $ 2,279 $ 2,279 $ — Short-term investments U.S. government and agency securities 112 86 26 Asset- and mortgage-backed securities 68 — 68 Corporate obligations 295 — 295 Other fixed income securities 12 — 12 Restricted cash equivalents and investments 61 61 — Long-term investments 139 115 24 Hedge derivatives, net Fuel hedge contracts (324 ) (26 ) (298 ) Interest rate contract 6 — 6 Foreign currency exchange contracts 27 — 27 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of maturities for short-term investments | The estimated fair values of short-term investments, which approximate cost at September 30, 2017 , 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. Investments with maturities beyond one year when purchased may be classified as short-term investments if they are expected to be available to support our short-term liquidity needs. (in millions) Available-For-Sale Due in one year or less $ 412 Due after one year through three years 491 Due after three years through five years 37 Due after five years 20 Total $ 960 |
Derivatives and Risk Manageme20
Derivatives and Risk Management (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of hedge positions | Hedge Position as of September 30, 2017 (in millions) Volume Final Maturity Date Prepaid Expenses and Other Other Noncurrent Assets Other Accrued Liabilities Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 320 U.S. dollars August 2022 $ — $ — $ — $ (4 ) $ (4 ) Foreign currency exchange contracts 29,396 Japanese yen November 2019 3 1 (17 ) (9 ) (22 ) 563 Canadian dollars May 2020 Not designated as hedges Fuel hedge contracts (1) 288 gallons - crude oil, diesel and jet fuel December 2018 210 3 (335 ) (17 ) (139 ) Total derivative contracts $ 213 $ 4 $ (352 ) $ (30 ) $ (165 ) (1) As discussed above, during 2016, we entered into fuel hedges designed to offset and effectively neutralize our 2017 airline segment hedge positions. The dollar amounts shown above primarily represent the offsetting derivatives that were used to neutralize the 2017 airline segment hedge portfolio. Hedge Position as of December 31, 2016 (in millions) Volume Final Maturity Date Prepaid Expenses and Other Other Noncurrent Assets Other Accrued Liabilities Other Noncurrent Liabilities Hedge Derivatives, net Designated as hedges Interest rate contract (fair value hedge) 349 U.S. dollars August 2022 $ 2 $ 4 $ — $ — $ 6 Foreign currency exchange contracts 54,853 Japanese yen February 2019 31 3 (4 ) (3 ) 27 335 Canadian dollars January 2019 Not designated as hedges Fuel hedge contracts (1) 197 gallons - crude oil, diesel and jet fuel January 2018 360 — (684 ) — (324 ) Total derivative contracts $ 393 $ 7 $ (688 ) $ (3 ) $ (291 ) (1) As discussed above, we early settled $455 million of our airline segment's 2016 fuel hedge positions and entered into hedges designed to offset and effectively neutralize 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 airline segment hedge portfolio. Offsetting Assets and Liabilities We have master netting arrangements with our counterparties giving us the right to offset hedge assets and liabilities. However, 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 by counterparty had we elected to offset. (in millions) Prepaid Expenses and Other Other Noncurrent Assets Other Accrued Liabilities Other Noncurrent Liabilities Hedge Derivatives, net September 30, 2017 Net derivative contracts $ 1 $ — $ (140 ) $ (26 ) $ (165 ) December 31, 2016 Net derivative contracts $ 31 $ 6 $ (326 ) $ (2 ) $ (291 ) |
Schedule of designated hedge gains (losses) | Gains (losses) related to our foreign currency exchange contracts are as follows: Effective Portion Reclassified from AOCI to Earnings Effective Portion Recognized in Other Comprehensive Income (in millions) 2017 2016 2017 2016 Three Months Ended September 30, Foreign currency exchange contracts $ — $ (2 ) $ (15 ) $ (2 ) Nine Months Ended September 30, Foreign currency exchange contracts $ 11 $ 34 $ (48 ) $ (147 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 classified as Level 2 within the fair value hierarchy. (in millions) September 30, December 31, Total debt at par value $ 8,473 $ 7,112 Unamortized discount and debt issue cost, net (97 ) (104 ) Net carrying amount $ 8,376 $ 7,008 Fair value $ 8,700 $ 7,300 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of components net (benefit) costs | The following table shows the components of net (benefit) cost: Pension Benefits Other Postretirement and Postemployment Benefits (in millions) 2017 2016 2017 2016 Three Months Ended September 30, Service cost $ — $ — $ 22 $ 17 Interest cost 213 229 35 37 Expected return on plan assets (286 ) (226 ) (17 ) (18 ) Amortization of prior service credit — — (7 ) (7 ) Recognized net actuarial loss 66 59 8 6 Net (benefit) cost $ (7 ) $ 62 $ 41 $ 35 Nine Months Ended September 30, Service cost $ — $ — $ 66 $ 51 Interest cost 639 687 105 111 Expected return on plan assets (858 ) (678 ) (51 ) (54 ) Amortization of prior service credit — — (21 ) (21 ) Recognized net actuarial loss 198 177 24 18 Net (benefit) cost $ (21 ) $ 186 $ 123 $ 105 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future aircraft purchase commitments | Our future aircraft purchase commitments totaled approximately $13.1 billion at September 30, 2017 : (in millions) Total Three months ending December 31, 2017 $ 920 2018 3,480 2019 3,090 2020 2,160 2021 2,090 Thereafter 1,330 Total $ 13,070 Our future aircraft purchase commitments included the following aircraft at September 30, 2017 : Aircraft Type Purchase Commitments B-737-900ER 46 A321-200 96 A330-900neo 25 A350-900 23 CS100 75 Total 265 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of components of 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, 2017 (net of tax effect of $1,458) $ (7,714 ) $ 97 $ (19 ) $ (7,636 ) Changes in value (net of tax effect of $4) — (23 ) 76 53 Reclassifications into earnings (net of tax effect of $63) (1) 122 (7 ) (8 ) 107 Balance at September 30, 2017 (net of tax effect of $1,391) $ (7,592 ) $ 67 $ 49 $ (7,476 ) 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 $43) — (72 ) 46 (26 ) Reclassifications into earnings (net of tax effect of $51) (1) 111 (22 ) — 89 Balance at September 30, 2016 (net of tax effect of $1,214) $ (7,243 ) $ 46 $ (15 ) $ (7,212 ) (1) Amounts reclassified from AOCI for pension and other benefits liabilities and derivative contracts designated as foreign currency cash flow hedges are recorded in salaries and related costs and in passenger revenue, respectively, in the Condensed Consolidated Statements of Operations and Comprehensive Income. The reclassification into earnings for investments relates to our investment in Grupo Aeroméxico during the March 2017 quarter with the conversion to accounting under the equity method. The reclassification of the unrealized gain was recorded to non-operating expense in our Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Includes $ 1.9 billion |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, 2017 Operating revenue: $ 10,931 $ 1,357 $ 11,060 Sales to airline segment $ (239 ) (1) Exchanged products (910 ) (2) Sales of refined products (79 ) (3) Operating income 1,802 37 — 1,839 Interest expense, net 100 — — 100 Depreciation and amortization 563 11 — 574 Total assets, end of period 49,992 1,936 — 51,928 Capital expenditures 901 40 — 941 Three Months Ended September 30, 2016 Operating revenue: $ 10,473 $ 971 $ 10,483 Sales to airline segment $ (173 ) (1) Exchanged products (734 ) (2) Sales of refined products (54 ) (3) Operating income (loss) 2,014 (45 ) — 1,969 Interest expense, net 94 1 — 95 Depreciation and amortization 464 10 — 474 Total assets, end of period 49,748 1,200 — 50,948 Capital expenditures 652 28 — 680 (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) These sales were at or near cost; accordingly, the margin on these sales is de minimis. (in millions) Airline Refinery Intersegment Sales/Other Consolidated Nine Months Ended September 30, 2017 Operating revenue: $ 30,742 $ 3,624 $ 30,999 Sales to airline segment $ (622 ) (1) Exchanged products (2,399 ) (2) Sales of refined products (346 ) (3) Operating income 4,834 87 — 4,920 Interest expense, net 297 — — 297 Depreciation and amortization 1,617 32 — 1,649 Capital expenditures 2,605 126 — 2,731 Nine Months Ended September 30, 2016 Operating revenue: $ 30,043 $ 2,763 $ 30,181 Sales to airline segment $ (495 ) (1) Exchanged products (2,005 ) (2) Sales of refined products (125 ) (3) Operating income (loss) (4) 6,015 (83 ) — 5,932 Interest expense, net 293 2 — 295 Depreciation and amortization 1,402 28 — 1,430 Capital expenditures 2,536 61 — 2,597 (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) These sales were at or near cost; accordingly, the margin on these sales is de minimis. (4) |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve and activity | The following table shows the balances and activity for lease restructuring charges: (in millions) Lease Restructuring Liability as of January 1, 2017 $ 329 Payments (63 ) Additional expenses and other (10 ) Liability as of September 30, 2017 $ 256 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, Nine Months Ended September 30, (in millions, except per share data) 2017 2016 2017 2016 Net income $ 1,178 $ 1,259 $ 3,005 $ 3,751 Basic weighted average shares outstanding 716 740 724 758 Dilutive effect of share-based awards 3 4 3 4 Diluted weighted average shares outstanding 719 744 727 762 Basic earnings per share $ 1.64 $ 1.70 $ 4.15 $ 4.95 Diluted earnings per share $ 1.64 $ 1.69 $ 4.13 $ 4.92 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Sep. 30, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Available-for-sale equity securities, accumulated gross unrealized gain | $ 49 | |
ASU No. 2014-09 | Scenario, Forecast | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Expected increase in passenger revenue upon adoption of new accounting standard | $ 2,000 | |
Expected decrease in other revenue upon adoption of new accounting standard | $ 2,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Net Asset (Liability) | ||
Cash equivalents | $ 169 | $ 2,279 |
Restricted cash equivalents and investments | 39 | 61 |
Fuel hedge contracts | (139) | (324) |
Interest rate contract | (4) | 6 |
Foreign currency exchange contracts | (22) | 27 |
U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 152 | 112 |
Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 188 | 68 |
Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Investments | 519 | 295 |
Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 101 | 12 |
Long-term investments | ||
Fair Value, Net Asset (Liability) | ||
Investments | 399 | 139 |
Level 1 | ||
Fair Value, Net Asset (Liability) | ||
Cash equivalents | 169 | 2,279 |
Restricted cash equivalents and investments | 39 | 61 |
Fuel hedge contracts | (31) | (26) |
Interest rate contract | 0 | 0 |
Foreign currency exchange contracts | 0 | 0 |
Level 1 | U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 142 | 86 |
Level 1 | Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 0 | 0 |
Level 1 | Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Investments | 0 | 0 |
Level 1 | Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 0 | 0 |
Level 1 | Long-term investments | ||
Fair Value, Net Asset (Liability) | ||
Investments | 371 | 115 |
Level 2 | ||
Fair Value, Net Asset (Liability) | ||
Cash equivalents | 0 | 0 |
Restricted cash equivalents and investments | 0 | 0 |
Fuel hedge contracts | (108) | (298) |
Interest rate contract | (4) | 6 |
Foreign currency exchange contracts | (22) | 27 |
Level 2 | U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 10 | 26 |
Level 2 | Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 188 | 68 |
Level 2 | Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Investments | 519 | 295 |
Level 2 | Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 101 | 12 |
Level 2 | Long-term investments | ||
Fair Value, Net Asset (Liability) | ||
Investments | $ 28 | $ 24 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Fuel hedge contracts | 9 Months Ended |
Sep. 30, 2017 | |
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) | 35.00% |
Investments - Schedule of matur
Investments - Schedule of maturities for short-term investments (Details) $ in Millions | Sep. 30, 2017USD ($) |
Available-for-sale Securities, Debt Maturities, Fair Value, Fiscal Year Maturity | |
Due in one year or less | $ 412 |
Due after one year through three years | 491 |
Due after three years through five years | 37 |
Due after five years | 20 |
Total | $ 960 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | Oct. 11, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Schedule of Equity Method Investments [Line Items] | |||||
Purchase of equity investment | $ 795,000,000 | $ 0 | |||
Available-for-sale equity securities, accumulated gross unrealized gain | $ 49,000,000 | $ 49,000,000 | |||
Grupo Aeromexico | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Purchase of equity investment | $ 173,000,000 | $ 622,000,000 | |||
Equity method investment, ownership percentage | 49.00% | 49.00% | |||
Virgin Atlantic | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership percentage | 49.00% | 49.00% | |||
GOL | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity interests, ownership percentage | 9.00% | 9.00% | |||
Available-for-sale equity securities, accumulated gross unrealized gain | $ 50,000,000 | $ 50,000,000 | |||
GOL | Term loan facility | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Guarantee borrowings on third party debt | $ 300,000,000 | ||||
Guarantee borrowings on third party debt, term (in years) | 5 years | ||||
China Eastern | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity interests, ownership percentage | 3.00% | 3.00% | |||
Air France-KLM | Joint Venture | Subsequent Event | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity interests, ownership percentage | 10.00% | ||||
Purchase of cost method investment | $ 448,000,000 | ||||
Restriction period on sale or transfer of shares (in years) | 5 years |
Derivatives and Risk Manageme33
Derivatives and Risk Management - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fuel Derivative | |||||||||
Derivative | |||||||||
Expected proceeds from derivative instruments | $ 300 | $ 300 | |||||||
Expected payments for derivative instruments | $ 300 | ||||||||
Scenario, Forecast | Fuel Derivative | |||||||||
Derivative | |||||||||
Expected payments for derivative instruments | $ 300 | ||||||||
Fuel hedge contracts | |||||||||
Derivative | |||||||||
Derivative losses | $ 100 | $ 11 | $ 3 | $ 326 | |||||
Fuel hedge contracts | Airline | |||||||||
Derivative | |||||||||
Settlement of derivative contract | $ 455 |
Derivatives and Risk Manageme34
Derivatives and Risk Management - Hedge Position (Details) ¥ in Millions, gal in Millions, CAD in Millions, $ in Millions | Sep. 30, 2017JPY (¥)gal | Sep. 30, 2017CADgal | Sep. 30, 2017USD ($)gal | Dec. 31, 2016JPY (¥)gal | Dec. 31, 2016CADgal | Dec. 31, 2016USD ($)gal |
Derivatives, Fair Value | ||||||
Total derivative contracts, net | $ (165) | $ (291) | ||||
Prepaid Expenses and Other | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, assets | 213 | 393 | ||||
Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, assets | 4 | 7 | ||||
Other Accrued Liabilities | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, liabilities | (352) | (688) | ||||
Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Total derivative contracts, liabilities | (30) | (3) | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), hedge derivatives, net | (4) | 6 | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Prepaid Expenses and Other | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), assets | 0 | 2 | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Interest rate contract (fair value hedge), assets | 0 | 4 | ||||
Interest rate contract (fair value hedge) | Designated as hedging instrument | Other Accrued Liabilities | ||||||
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 | (4) | 0 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, hedge derivatives, net | (22) | 27 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Prepaid Expenses and Other | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, assets | 3 | 31 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, assets | 1 | 3 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Accrued Liabilities | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, liabilities | (17) | (4) | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Foreign currency exchange contracts, liabilities | $ (9) | $ (3) | ||||
Fuel hedge contracts | Not designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Derivative, nonmonetary notional amount | gal | 288 | 288 | 288 | 197 | 197 | 197 |
Fuel hedge contracts, derivatives, net | $ (139) | $ (324) | ||||
Fuel hedge contracts | Not designated as hedging instrument | Prepaid Expenses and Other | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, assets | 210 | 360 | ||||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Assets | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, assets | 3 | 0 | ||||
Fuel hedge contracts | Not designated as hedging instrument | Other Accrued Liabilities | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, liabilities | (335) | (684) | ||||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Liabilities | ||||||
Derivatives, Fair Value | ||||||
Fuel hedge contracts, liabilities | (17) | 0 | ||||
Fair value hedging | Interest rate contract (fair value hedge) | Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Derivative, notional amount | $ 320 | $ 349 | ||||
Cash flow hedging | Foreign currency exchange contracts | Designated as hedging instrument | ||||||
Derivatives, Fair Value | ||||||
Derivative, notional amount | ¥ 29,396 | CAD 563 | ¥ 54,853 | CAD 335 |
Derivatives and Risk Manageme35
Derivatives and Risk Management - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative | ||
Total derivative contracts, net | $ (165) | $ (291) |
Prepaid Expenses and Other | ||
Derivative | ||
Net derivative contracts, assets | 1 | 31 |
Other Noncurrent Assets | ||
Derivative | ||
Net derivative contracts, assets | 0 | 6 |
Other Accrued Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | (140) | (326) |
Other Noncurrent Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | $ (26) | $ (2) |
Derivatives and Risk Manageme36
Derivatives and Risk Management - Designated Hedge Gains (Losses) (Details) - Foreign currency exchange contracts - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | ||||
Effective Portion Reclassified from AOCI to Earnings | $ 0 | $ (2) | $ 11 | $ 34 |
Effective Portion Recognized in Other Comprehensive Income | $ (15) | $ (2) | $ (48) | $ (147) |
Long-Term Debt - Schedule of Fa
Long-Term Debt - Schedule of Fair Value of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt | ||
Total debt at par value | $ 8,473 | $ 7,112 |
Unamortized discount and debt issue cost, net | (97) | (104) |
Net carrying amount | 8,376 | 7,008 |
Fair value | $ 8,700 | $ 7,300 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2017 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | ||
Contributions to company's qualified defined benefit pension plans | $ 3,200,000,000 | |
Value of common stock from treasury contributed to qualified defined benefit pension plans | $ 350,000,000 | |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | 2,000,000,000 | |
Unsecured Debt | 2.875% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 1,000,000,000 | |
Debt instrument, stated interest rate (percent) | 2.875% | |
Unsecured Debt | 3.625% Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 1,000,000,000 | |
Debt instrument, stated interest rate (percent) | 3.625% |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Benefit Plan Components (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 213 | 229 | 639 | 687 |
Expected return on plan assets | (286) | (226) | (858) | (678) |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Recognized net actuarial loss | 66 | 59 | 198 | 177 |
Net (benefit) cost | (7) | 62 | (21) | 186 |
Other Postretirement and Postemployment Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 22 | 17 | 66 | 51 |
Interest cost | 35 | 37 | 105 | 111 |
Expected return on plan assets | (17) | (18) | (51) | (54) |
Amortization of prior service credit | (7) | (7) | (21) | (21) |
Recognized net actuarial loss | 8 | 6 | 24 | 18 |
Net (benefit) cost | $ 41 | $ 35 | $ 123 | $ 105 |
Commitments and Contingencies -
Commitments and Contingencies - Aircraft Purchase Commitments By Period (Details) - Future aircraft purchase commitments $ in Millions | Sep. 30, 2017USD ($) |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity | |
Three months ending December 31, 2017 | $ 920 |
2,018 | 3,480 |
2,019 | 3,090 |
2,020 | 2,160 |
2,021 | 2,090 |
Thereafter | 1,330 |
Total | $ 13,070 |
Commitments and Contingencies41
Commitments and Contingencies - Aircraft Purchase Commitments By Aircraft (Details) - Future aircraft purchase commitments - aircraft | Sep. 30, 2017 | Jun. 30, 2017 |
Unrecorded Unconditional Purchase Obligation | ||
Aircraft purchase commitments, minimum quantity required | 265 | |
B-737-900ER | ||
Unrecorded Unconditional Purchase Obligation | ||
Aircraft purchase commitments, minimum quantity required | 46 | |
A321-200 | ||
Unrecorded Unconditional Purchase Obligation | ||
Aircraft purchase commitments, minimum quantity required | 96 | |
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 | 23 | 25 |
CS100 | ||
Unrecorded Unconditional Purchase Obligation | ||
Aircraft purchase commitments, minimum quantity required | 75 |
Commitments and Contingencies42
Commitments and Contingencies - Aircraft Purchase Commitments Activity (Details) - Future aircraft purchase commitments - aircraft | 3 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2017 | |
Unrecorded Unconditional Purchase Obligation | ||
Aircraft purchase commitments, minimum quantity required | 265 | |
A321-200 | ||
Unrecorded Unconditional Purchase Obligation | ||
Expanded agreement for additional aircraft | 40 | |
Aircraft purchase commitments, minimum quantity required | 96 | |
A350-900 | ||
Unrecorded Unconditional Purchase Obligation | ||
Number of aircraft with deferred delivery | 10 | |
Aircraft purchase commitments, minimum quantity required | 25 | 23 |
Maximum | A350-900 | ||
Unrecorded Unconditional Purchase Obligation | ||
Period of deferment | 3 years | |
Minimum | A350-900 | ||
Unrecorded Unconditional Purchase Obligation | ||
Period of deferment | 2 years |
Commitments and Contingencies43
Commitments and Contingencies - Legal and Other Contingencies (Details) $ in Millions | Sep. 30, 2017USD ($) |
Financial Guarantee | Revolving Credit Facility | |
Guarantor Obligations [Line Items] | |
Aggregate commitments guaranteed | $ 800 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Loss - Schedule of AOCI Components (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | $ 12,287 | |
Ending balance (net of tax effect) | 14,001 | |
AOCI beginning balance, tax effect | (1,458) | $ (1,222) |
Changes in value, tax effect | 4 | (43) |
Reclassifications into earnings, tax effect | 63 | 51 |
AOCI ending balance, tax effect | (1,391) | (1,214) |
Accumulated Other Comprehensive Income | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | (7,636) | (7,275) |
Changes in value (net of tax effect) | 53 | (26) |
Reclassifications into earnings (net of tax effect) | 107 | 89 |
Ending balance (net of tax effect) | (7,476) | (7,212) |
Pension and Other Benefits Liabilities | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | (7,714) | (7,354) |
Changes in value (net of tax effect) | 0 | 0 |
Reclassifications into earnings (net of tax effect) | 122 | 111 |
Ending balance (net of tax effect) | (7,592) | (7,243) |
Deferred income taxes related to pension obligation | 1,900 | 1,900 |
Derivative Contracts | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | 97 | 140 |
Changes in value (net of tax effect) | (23) | (72) |
Reclassifications into earnings (net of tax effect) | (7) | (22) |
Ending balance (net of tax effect) | 67 | 46 |
Investments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | (19) | (61) |
Changes in value (net of tax effect) | 76 | 46 |
Reclassifications into earnings (net of tax effect) | (8) | 0 |
Ending balance (net of tax effect) | $ 49 | $ (15) |
Segments - Narrative (Details)
Segments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information, Profit (Loss) | ||||
Operating revenue | $ 11,060 | $ 10,483 | $ 30,999 | $ 30,181 |
Intersegment Sales/Other | Exchanged products | ||||
Segment Reporting Information, Profit (Loss) | ||||
Operating revenue | $ (910) | $ (734) | $ (2,399) | $ (2,005) |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | $ 11,060 | $ 10,483 | $ 30,999 | $ 30,181 | |
Operating income (loss) | 1,839 | 1,969 | 4,920 | 5,932 | |
Interest expense, net | 100 | 95 | 297 | 295 | |
Depreciation and amortization | 574 | 474 | 1,649 | 1,430 | |
Total assets, end of period | 51,928 | 50,948 | 51,928 | 50,948 | $ 51,261 |
Capital expenditures | 941 | 680 | 2,731 | 2,597 | |
Operating Segments | Airline | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | 10,931 | 10,473 | 30,742 | 30,043 | |
Operating income (loss) | 1,802 | 2,014 | 4,834 | 6,015 | |
Interest expense, net | 100 | 94 | 297 | 293 | |
Depreciation and amortization | 563 | 464 | 1,617 | 1,402 | |
Total assets, end of period | 49,992 | 49,748 | 49,992 | 49,748 | |
Capital expenditures | 901 | 652 | 2,605 | 2,536 | |
Operating Segments | Refinery | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | 1,357 | 971 | 3,624 | 2,763 | |
Operating income (loss) | 37 | (45) | 87 | (83) | |
Interest expense, net | 0 | 1 | 0 | 2 | |
Depreciation and amortization | 11 | 10 | 32 | 28 | |
Total assets, end of period | 1,936 | 1,200 | 1,936 | 1,200 | |
Capital expenditures | 40 | 28 | 126 | 61 | |
Intersegment Sales/Other | Sales to airline segment | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | (239) | (173) | (622) | (495) | |
Intersegment Sales/Other | Exchanged products | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | (910) | (734) | (2,399) | (2,005) | |
Intersegment Sales/Other | Sales of refined products | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | $ (79) | $ (54) | $ (346) | $ (125) |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Charges (Details) - Lease Restructuring $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Reserve | |
Liability as of January 1, 2017 | $ 329 |
Payments | (63) |
Additional expenses and other | (10) |
Liability as of June 30, 2017 | $ 256 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) | 9 Months Ended |
Sep. 30, 2017seat | |
Regional carrier | |
Restructuring Cost and Reserve | |
Number of seats in plane | 50 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation for Earnings Per Share Types (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 1,178 | $ 1,259 | $ 3,005 | $ 3,751 |
Basic weighted average shares outstanding, shares | 716 | 740 | 724 | 758 |
Dilutive effect of share-based awards, shares | 3 | 4 | 3 | 4 |
Diluted weighted average shares outstanding, shares | 719 | 744 | 727 | 762 |
Basic earnings per share (in USD per share) | $ 1.64 | $ 1.70 | $ 4.15 | $ 4.95 |
Diluted earnings per share (in USD per share) | $ 1.64 | $ 1.69 | $ 4.13 | $ 4.92 |