Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Document type | 10-Q |
Amendment flag | false |
Document period end date | Mar. 31, 2018 |
Document fiscal year focus | 2,018 |
Document fiscal period focus | Q1 |
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 | 702,478,205 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 1,447 | $ 1,814 |
Short-term investments | 523 | 825 |
Accounts receivable, net of an allowance for uncollectible accounts of $13 and $12 at March 31, 2018 and December 31, 2017, respectively | 2,568 | 2,377 |
Fuel inventory | 723 | 916 |
Expendable parts and supplies inventories, net of an allowance for obsolescence of $119 and $113 at March 31, 2018 and December 31, 2017, respectively | 423 | 413 |
Prepaid expenses and other | 2,040 | 1,499 |
Total current assets | 7,724 | 7,844 |
Property and Equipment, Net: | ||
Property and equipment, net of accumulated depreciation and amortization of $14,585 and $14,097 at March 31, 2018 and December 31, 2017, respectively | 27,096 | 26,563 |
Other Assets: | ||
Goodwill | 9,794 | 9,794 |
Identifiable intangibles, net of accumulated amortization of $849 and $845 at March 31, 2018 and December 31, 2017, respectively | 4,843 | 4,847 |
Deferred income taxes, net | 1,175 | 1,354 |
Other noncurrent assets | 3,446 | 3,309 |
Total other assets | 19,258 | 19,304 |
Total assets | 54,078 | 53,711 |
Current Liabilities: | ||
Current maturities of long-term debt and capital leases | 2,289 | 2,242 |
Air traffic liability | 6,233 | 4,364 |
Accounts payable | 3,351 | 3,674 |
Accrued salaries and related benefits | 1,915 | 3,022 |
Frequent flyer deferred revenue | 2,758 | 2,762 |
Fuel card obligation | 1,062 | 1,067 |
Other accrued liabilities | 2,404 | 1,868 |
Total current liabilities | 20,012 | 18,999 |
Noncurrent Liabilities: | ||
Long-term debt and capital leases | 6,360 | 6,592 |
Pension, postretirement and related benefits | 9,193 | 9,810 |
Frequent flyer deferred revenue | 3,636 | 3,559 |
Other noncurrent liabilities | 2,320 | 2,221 |
Total noncurrent liabilities | 21,509 | 22,182 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 710,603,639 and 714,674,160 shares issued at March 31, 2018 and December 31, 2017, respectively | 0 | 0 |
Additional paid-in capital | 11,967 | 12,053 |
Retained earnings | 8,465 | 8,256 |
Accumulated other comprehensive loss | (7,681) | (7,621) |
Treasury stock, at cost, 8,125,434 and 7,476,181 shares at March 31, 2018 and December 31, 2017, respectively | (194) | (158) |
Total stockholders' equity | 12,557 | 12,530 |
Total liabilities and stockholders' equity | $ 54,078 | $ 53,711 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Allowance for uncollectible accounts | $ 13 | $ 12 |
Allowance for obsolescence | 119 | 113 |
Property and Equipment, Net: | ||
Accumulated depreciation and amortization | 14,585 | 14,097 |
Other Assets: | ||
Accumulated amortization of identifiable intangibles | $ 849 | $ 845 |
Stockholders' Equity: | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, shares issued | 710,603,639 | 714,674,160 |
Treasury stock, at cost, shares | 8,125,434 | 7,476,181 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Revenue: | ||
Passenger | $ 8,765 | $ 8,178 |
Cargo | 202 | 163 |
Other | 1,001 | 760 |
Total operating revenue | 9,968 | 9,101 |
Operating Expense: | ||
Salaries and related costs | 2,584 | 2,386 |
Aircraft fuel and related taxes | 1,856 | 1,482 |
Regional carriers expense, excluding fuel | 856 | 864 |
Depreciation and amortization | 610 | 537 |
Contracted services | 544 | 505 |
Ancillary businesses and refinery | 493 | 292 |
Aircraft maintenance materials and outside repairs | 435 | 432 |
Passenger commissions and other selling expenses | 427 | 404 |
Landing fees and other rents | 373 | 361 |
Passenger service | 263 | 234 |
Profit sharing | 183 | 151 |
Aircraft rent | 94 | 84 |
Other | 410 | 370 |
Total operating expense | 9,128 | 8,102 |
Operating Income | 840 | 999 |
Non-Operating Expense: | ||
Interest expense, net | (102) | (94) |
Unrealized gain/(loss) on investments, net | 18 | 0 |
Miscellaneous, net | (38) | (56) |
Total non-operating expense, net | (122) | (150) |
Income Before Income Taxes | 718 | 849 |
Income Tax Provision | (171) | (288) |
Net Income | $ 547 | $ 561 |
Basic Earnings Per Share (in USD per share) | $ 0.78 | $ 0.77 |
Diluted Earnings Per Share (in USD per share) | 0.77 | 0.77 |
Cash Dividends Declared Per Share (in USD per share) | $ 0.31 | $ 0.20 |
Comprehensive Income | $ 487 | $ 626 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Cash Provided by (Used in) Operating Activities | ||
Net Cash Provided by (Used in) Operating Activities | $ 1,343 | $ (830) |
Property and equipment additions: | ||
Flight equipment, including advance payments | (991) | (595) |
Ground property and equipment, including technology | (274) | (207) |
Purchase of equity investments | 0 | (622) |
Purchase of short-term investments | (63) | (463) |
Redemption of short-term investments | 363 | 207 |
Other, net | 38 | (28) |
Net cash used in investing activities | (927) | (1,708) |
Cash Flows from Financing Activities: | ||
Payments on long-term debt and capital lease obligations | (244) | (288) |
Repurchase of common stock | (325) | (200) |
Cash dividends | (217) | (149) |
Fuel card obligation | (5) | 334 |
Proceeds from long-term obligations | 0 | 2,004 |
Other, net | 4 | (21) |
Net cash (used in) provided by financing activities | (787) | 1,680 |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (371) | (858) |
Cash, cash equivalents and restricted cash at beginning of period | 1,853 | 2,826 |
Cash, cash equivalents and restricted cash at end of period | 1,482 | 1,968 |
Non-Cash Transactions: | ||
Treasury stock contributed to our qualified defined benefit pension plans | 0 | 350 |
Flight and ground equipment acquired under capital leases | 50 | 186 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash: | ||
Total cash, cash equivalents and restricted cash | $ 1,853 | $ 2,826 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 . 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 months ended March 31, 2018 are not necessarily indicative of operating results for the entire year. We recast prior period financial statements to conform with the adoption of the revenue recognition and retirement benefits standards, described below. In addition, we have reclassified regional carriers fuel expense from regional carriers expense to aircraft fuel and related taxes, and consolidated ancillary businesses and refinery expenses into one financial statement line item, in addition to making other classification changes to conform to the current year presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes. Recent Accounting Standards Standards Effective in Future Years Leases. In 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)." This standard will require 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 will adopt this standard effective January 1, 2019. 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 Condensed Consolidated Statements of Operations and Comprehensive Income ("income statement") or the Condensed Consolidated Statements of Cash Flows ("cash flows statement"). Information about our undiscounted future lease payments and the timing of those payments is in Note 7, "Lease Obligations," in our Form 10-K. Comprehensive Income . In February 2018, the FASB issued ASU No. 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220)." This standard provides an option to reclassify stranded tax effects within accumulated other comprehensive income/(loss) ("AOCI") to retained earnings due to the U.S. federal corporate income tax rate change in the Tax Cuts and Jobs Act of 2017. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. We have not completed our assessment, but the adoption of the standard may impact tax amounts stranded in AOCI related to our pension plans. We will adopt this standard effective January 1, 2019. Recently Adopted Standards Revenue from Contracts with Customers. In 2014, the FASB issued 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. We adopted this standard using the full retrospective transition method effective January 1, 2018 and recast prior year results as shown below. While the adoption of the new standard did not have a significant effect on earnings, approximately $2 billion of certain annual revenues that were previously classified in other revenue have been reclassified to passenger revenue. These revenues include baggage fees, administrative charges and other travel-related fees, which are deemed part of the single performance obligation of providing passenger transportation. In addition, the adoption of the new standard increases the rate used to account for frequent flyer miles. We previously analyzed 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 changed our valuation of a mileage credit to an analysis of the award redemption value. The new valuation considers the quantitative value a passenger receives by redeeming miles for a ticket rather than paying cash. This change increased our frequent flyer liability at December 31, 2017 by $2.2 billion . The mileage deferral and redemption rates are approximately the same; therefore, assuming stable volume, there would not be a significant change in revenue recognized from the program in a given period. The adoption of the new standard also reduced our air traffic liability at December 31, 2017 by $524 million . This change primarily results from estimating the tickets that will expire unused and recognizing revenue at the scheduled flight date rather than when the unused tickets expire. See Note 2 , "Revenue Recognition," for more information. 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 cash flows statement, respectively. We adopted these standards effective January 1, 2018. Financial Instruments. In 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. In February 2018, the FASB issued ASU No. 2018-03, "Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10)" to clarify certain aspects of ASU No. 2016-01. We adopted these standards effective January 1, 2018. Our investments in GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL), and China Eastern were accounted for as available-for-sale with changes in fair value recognized in other comprehensive income. At the time of adoption, we reclassified an unrealized gain of $162 million related to these investments from AOCI to retained earnings. Our investment in Air France-KLM was accounted for at cost during 2017 as our investment agreement restricts the sale or transfer of these shares for five years. Upon adopting ASU Nos. 2016-01 and 2018-03, we recognized a $148 million gain in unrealized gain/(loss) on investments related to the value of Air France-KLM's stock compared to our investment basis at December 31, 2017. Consistent with our investments in GOL and China Eastern, this investment is now accounted for at fair value with changes in fair value recognized in net income. Retirement Benefits. In 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. We adopted this standard effective January 1, 2018. The components of the net (benefit) cost are shown in Note 7 , "Employee Benefit Plans." As a result of the adoption, for the three months ended March 31, 2017, we reclassified $12 million from operating expense into non-operating expense in our income statement. Impact of Recently Adopted Standards We recast certain prior period amounts to conform with the adoption of the revenue recognition and retirement benefits standards, as shown in the tables below. Three Months Ended March 31, 2017 (in millions, except per share data) As Previously Reported Adjustments Current Presentation Income statement: Passenger revenue $ 7,688 $ 490 $ 8,178 Cargo revenue 160 3 163 Other revenue 1,300 (540 ) 760 Operating expense 8,095 7 8,102 Non-operating expense (138 ) (12 ) (150 ) Income tax provision (312 ) 24 (288 ) Net income 603 (42 ) 561 Diluted earnings per share $ 0.82 $ (0.05 ) $ 0.77 December 31, 2017 (in millions) As Previously Reported Adjustments Current Presentation Balance sheet: Deferred income taxes, net $ 935 $ 419 $ 1,354 Air traffic liability 4,888 (524 ) 4,364 Frequent flyer deferred revenue (current and noncurrent) 4,118 2,203 6,321 Other accrued and other noncurrent liabilities 3,969 120 4,089 Retained earnings 9,636 (1,380 ) 8,256 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Passenger Revenue Passenger revenue is primarily composed of passenger ticket sales, loyalty travel awards and travel-related services performed in conjunction with a passenger’s flight. Three Months Ended March 31, (in millions) 2018 2017 Ticket $ 7,653 $ 7,105 Loyalty travel awards 618 582 Travel-related services 494 491 Total passenger revenue $ 8,765 $ 8,178 Ticket Passenger tickets. We record sales of passenger tickets to be flown by us or that we sell on behalf of other airlines in air traffic liability. Passenger revenue is recognized when we provide transportation or when ticket breakage occurs. For tickets that we sell on behalf of other airlines, we reduce the air traffic liability when consideration is remitted to those airlines. We periodically evaluate the estimated air traffic liability and record any adjustments in our income statement. These adjustments relate primarily to refunds, exchanges, transactions with other airlines and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other than the original sales price. We recognized $2.1 billion in passenger revenue during each of the three months ended March 31, 2018 and 2017 that was recorded in our air traffic liability balances of $4.4 billion and $4.1 billion at December 31, 2017 and 2016, respectively. We expect the remaining balance of the December 31, 2017 liability to be recognized during 2018. Ticket breakage. We estimate the value of tickets that will expire unused and recognize revenue at the scheduled flight date. Regional carriers . Our regional carriers include both our contract carrier agreements with third-party regional carriers ("contract carriers") and Endeavor Air, Inc. ("Endeavor"), our wholly owned subsidiary. Our contract carrier agreements are primarily structured as capacity purchase agreements where we purchase all or a portion of the contract carrier's capacity and are responsible for selling the seat inventory we purchase. We record revenue related to our capacity purchase agreements in passenger revenue and the related expenses in regional carriers expense, excluding fuel. Loyalty Travel Awards Loyalty travel awards revenue is related to the redemption of mileage credits for travel. We recognize loyalty travel award revenue in passenger revenue as mileage credits are redeemed and travel is provided. See below for discussion of our frequent flyer program accounting policies. Travel-Related Services Travel-related services are primarily composed of services performed in conjunction with a passenger’s flight, including administrative fees (such as ticket change fees), baggage fees and on-board sales. We recognize revenue for these services when the related transportation service is provided. Prior to the adoption of the new standard, the majority of these fees were classified in other revenue. Frequent Flyer Program Our frequent flyer program (the "SkyMiles program") generates customer loyalty by rewarding customers with incentives to travel on Delta. This program allows customers to earn mileage credits by flying on Delta, Delta Connection and airlines that participate in the SkyMiles program. When traveling, customers earn redeemable mileage credits based on the passenger's loyalty program status and travel fare paid. Customers can also earn mileage credits through participating companies such as credit card companies, hotels and car rental agencies. To facilitate transactions with participating companies, we sell mileage credits to non-airline businesses, customers and other airlines. Mileage credits are redeemable by customers in future periods for air travel on Delta and participating airlines, membership in our Sky Club and other program awards. To reflect the mileage credits earned, the SkyMiles program includes two types of transactions that are considered revenue arrangements with multiple performance obligations: (1) mileage credit earned with travel and (2) mileage credit sold to participating companies. Passenger ticket sales earning mileage credits. Passenger ticket sales earning mileage credits under our SkyMiles program provide customers with (1) mileage credits earned and (2) air transportation. We value each performance obligation on a standalone basis. To value the mileage credits earned, we consider the quantitative value a passenger receives by redeeming miles for a ticket rather than paying cash, which is referred to as equivalent ticket value ("ETV"). We defer revenue for the mileage credits when earned and recognize loyalty travel awards in passenger revenue as the miles are redeemed and services are provided. We record the air transportation portion of the passenger ticket sales in air traffic liability and recognize passenger revenue when we provide transportation or if the ticket goes unused. Sale of mileage credits. Customers may earn mileage credits based on their spending with participating companies such as credit card companies, hotels and car rental agencies with which we have marketing agreements to sell mileage credits. Our contracts to sell mileage credits under these marketing agreements have multiple performance obligations. During the three months ended March 31, 2018 and 2017, total cash sales from marketing agreements were $841 million and $757 million , respectively, which are allocated to travel and other performance obligations, as discussed below. Our most significant contract to sell mileage credits relates to our co-brand credit card relationship with American Express. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("Cardholders") and American Express Membership Rewards program participants, and allow American Express to market using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, may check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive other benefits while traveling on Delta. Additionally, participants in the American Express Membership Rewards program may exchange their points for mileage credits under the SkyMiles program. We sell mileage credits at agreed-upon rates to American Express which are then provided to their customers under the co-brand credit card program and the Membership Rewards program. We account for marketing agreements, including American Express, consistent with the accounting method that allocates the consideration received to the individual products and services delivered. We allocate the value based on the relative selling prices of those products and services, which generally consist of award travel, baggage fee waivers, lounge access and the use of our brand. We determined our best estimate of the selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) ETV for the award travel obligation, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta and (4) brand value. We defer the amount for award travel obligation as part of frequent flyer deferred revenue and recognize loyalty travel awards in passenger revenue as the mileage credits are used for travel. Revenue allocated to services performed in conjunction with a passenger’s flight, such as baggage fee waivers, is recognized as travel-related services in passenger revenue when the related service is performed. Revenue allocated to access to Delta Sky Club lounges is recognized as miscellaneous in other revenue as access is provided. Revenue allocated to the remaining performance obligations, primarily brand value, is recorded as loyalty program in other revenue over time as miles are delivered. Mileage breakage. For mileage credits that we estimate are not likely to be redeemed ("breakage"), we recognize the associated value proportionally during the period in which the remaining mileage credits are expected to be redeemed. Management uses statistical models to estimate breakage based on historical redemption patterns. A change in assumptions as to the period over which mileage credits are expected to be redeemed, the actual redemption activity for mileage credits or the estimated fair value of mileage credits expected to be redeemed could have a material impact on our revenue in the year in which the change occurs and in future years. Current activity of frequent flyer program. Mileage credits are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of miles that were part of the frequent flyer deferred revenue balance at the beginning of the period as well as miles that were issued during the period. The table below presents the activity of the current and noncurrent frequent flyer liability, and includes miles earned through travel and miles sold, which are primarily through marketing agreements. (in millions) 2018 2017 Balance at January 1 $ 6,321 $ 5,922 Travel mileage credits redeemed (618 ) (582 ) Non-travel mileage credits redeemed (40 ) (40 ) Mileage credits earned 731 690 Balance at March 31 $ 6,394 $ 5,990 The timing of mileage redemptions can vary widely; however, the majority of new miles are redeemed within approximately two years. Passenger Revenue by Geographic Region Passenger revenue is recognized in a specific geographic region based on the origin and destination of each flight segment. Our passenger revenue by geographic region (as defined by the U.S. Department of Transportation) is summarized in the following table: Three Months Ended March 31, (in millions) 2018 2017 Domestic $ 6,301 $ 5,894 Atlantic 1,059 923 Latin America 827 793 Pacific 578 568 Total passenger revenue $ 8,765 $ 8,178 Cargo Revenue Cargo revenue is recognized when we provide the transportation. Other Revenue Three Months Ended March 31, (in millions) 2018 2017 Ancillary businesses and refinery $ 521 $ 312 Loyalty program 347 305 Miscellaneous 133 143 Total other revenue $ 1,001 $ 760 Ancillary businesses and refinery. Ancillary businesses and refinery includes aircraft maintenance and staffing services we provide to third parties, our vacation wholesale operations, our private jet operations and refinery production sales to third parties. Third-party refinery production sales are at or near cost; accordingly, the margin on these sales is de minimis. See Note 10, "Segments," for more information on revenue recognition within our refinery segment. Loyalty program. Loyalty program revenues relate to brand usage and other performance obligations embedded in mileage credits sold, including non-travel mileage credits redeemed. These revenues are included within the total cash sales from marketing agreements, discussed above. Miscellaneous. Miscellaneous revenue is primarily composed of lounge access and codeshare revenues. Accounts Receivable Accounts receivable primarily consist of amounts due from credit card companies from the sale of passenger tickets, customers of our cargo services, ancillary businesses and refinery sales, and other companies for the purchase of mileage credits under the SkyMiles program. We provide an allowance for uncollectible accounts equal to the estimated losses expected to be incurred based on historical chargebacks, write-offs, bankruptcies and other specific analyses. Bad debt expense was not material in any period presented. Passenger Taxes and Fees |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Assets (Liabilities) Measured at Fair Value on a Recurring Basis (in millions) March 31, Level 1 Level 2 Cash equivalents $ 876 $ 876 $ — Short-term investments U.S. government and agency securities 78 66 12 Asset- and mortgage-backed securities 119 — 119 Corporate obligations 247 — 247 Other fixed income securities 79 — 79 Restricted cash equivalents and investments 34 34 — Long-term investments 1,001 972 29 Hedge derivatives, net Fuel hedge contracts (3 ) (5 ) 2 Foreign currency exchange contracts (32 ) — (32 ) (in millions) December 31, Level 1 Level 2 Cash equivalents $ 1,357 $ 1,357 $ — Short-term investments U.S. government and agency securities 93 84 9 Asset- and mortgage-backed securities 173 — 173 Corporate obligations 467 — 467 Other fixed income securities 92 — 92 Restricted cash equivalents and investments 38 38 — Long-term investments 513 485 28 Hedge derivatives, net Fuel hedge contracts (66 ) (43 ) (23 ) Foreign currency exchange contracts (17 ) — (17 ) 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 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 the parent company of GOL, China Eastern and, as of January 1, 2018, Air France-KLM. 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 and refined products, as these commodities are highly correlated with the price of 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 12% to 36% 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 based on maturity dates utilizing 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. • Foreign Currency Exchange Contracts. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS Short-Term Investments The estimated fair values of short-term investments, which approximate cost at March 31, 2018 , 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) Total Due in one year or less $ 120 Due after one year through three years 374 Due after three years through five years 13 Due after five years 16 Total $ 523 Long-Term Investments We have developed strategic relationships with a number of airlines through equity investments and 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 . We have a non-controlling 49% equity stake in Grupo Aeroméxico, the parent company of Aeroméxico. • Virgin Atlantic. We have a non-controlling 49% equity stake in Virgin Atlantic Limited, the parent company of Virgin Atlantic Airways. We account for these investments under the equity method of accounting and recognize our portion of their financial results in miscellaneous, net in our income statement under non-operating expense. Fair Value Investments • Air France-KLM. We own 10% of the outstanding shares of our joint venture partner, Air France-KLM. In addition, we are working to develop a combined long-term joint venture with Air France-KLM and Virgin Atlantic. • GOL. Through our investment in preferred shares of GOL's parent company, we own 9% of GOL's outstanding capital stock. 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 March 31, 2018 . • China Eastern. We have a 3% equity interest in China Eastern. |
Derivatives and Risk Management
Derivatives and Risk Management | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | DERIVATIVES AND RISK MANAGEMENT Changes in 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. Fuel Price Risk Changes in 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 fuel as fuel prices are subject to potential volatility. In addition, we enter into derivatives with third parties to hedge financial risk related to Monroe’s refining margins. During the three months ended March 31, 2018 and 2017 we recorded fuel hedge gains of $2 million and $57 million , respectively. Foreign Currency Exchange Risk We are subject to foreign currency exchange rate risk because we have revenue and expense denominated in foreign currencies with our primary exposures being the Japanese yen, Canadian dollar and Euro. To manage exchange rate risk, we execute both our international revenue and expense transactions in the same foreign currency to the extent practicable. From time to time, we may also enter into foreign currency option and forward contracts. Our Japanese yen and Canadian dollar foreign currency exchange contracts are designated as cash flow hedges. In January 2018, we entered into a three-year U.S. dollar-Euro cross currency swap with a notional value of 375 million Euro. This swap is intended to mitigate foreign currency volatility resulting from our Euro-denominated investment in Air France-KLM. During the three months ended March 31, 2018, we recorded losses of $16 million , which are reflected in unrealized gain/loss on investments in the income statement. Hedge Position as of March 31, 2018 (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 Foreign currency exchange contracts 18,701 Japanese yen November 2019 $ 1 $ 1 $ (14 ) $ (4 ) $ (16 ) 166 Canadian dollars May 2020 Not designated as hedges Foreign currency exchange contract 375 Euros December 2020 7 — — (23 ) (16 ) Fuel hedge contracts 267 gallons - crude oil and refined products December 2019 1,001 53 (1,006 ) (51 ) (3 ) Total derivative contracts $ 1,009 $ 54 $ (1,020 ) $ (78 ) $ (35 ) Hedge Position as of December 31, 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 Foreign currency exchange contracts 23,512 Japanese yen November 2019 $ 1 $ 1 $ (13 ) $ (6 ) $ (17 ) 490 Canadian dollars May 2020 Not designated as hedges Fuel hedge contracts 249 gallons - crude oil and refined products May 2019 638 8 (694 ) (18 ) (66 ) Total derivative contracts $ 639 $ 9 $ (707 ) $ (24 ) $ (83 ) 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 March 31, 2018 Net derivative contracts $ 21 $ 1 $ (31 ) $ (26 ) $ (35 ) December 31, 2017 Net derivative contracts $ — $ 1 $ (68 ) $ (16 ) $ (83 ) 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) 2018 2017 2018 2017 Three Months Ended March 31, Foreign currency exchange contracts $ (4 ) $ 7 $ 1 $ (25 ) Credit Risk |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
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) March 31, December 31, Total debt at par value $ 8,326 $ 8,539 Unamortized discount and debt issue cost, net (92 ) (99 ) Net carrying amount $ 8,234 $ 8,440 Fair value $ 8,400 $ 8,700 Covenants We were in compliance with the covenants in our financings at March 31, 2018 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
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) 2018 2017 2018 2017 Three Months Ended March 31, Service cost $ — $ — $ 21 $ 22 Interest cost 195 213 32 35 Expected return on plan assets (329 ) (286 ) (17 ) (17 ) Amortization of prior service credit — — (7 ) (7 ) Recognized net actuarial loss 66 66 10 8 Net (benefit) cost $ (68 ) $ (7 ) $ 39 $ 41 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Aircraft Purchase and Lease Commitments Our future aircraft purchase commitments totaled approximately $17.2 billion at March 31, 2018 : (in millions) Total Nine months ending December 31, 2018 $ 2,480 2019 3,360 2020 3,270 2021 3,880 2022 2,450 Thereafter 1,740 Total $ 17,180 Our future aircraft purchase commitments included the following aircraft at March 31, 2018 : Aircraft Type Purchase Commitments A321-200 85 A321-200neo 100 A330-900neo 25 A350-900 17 B-737-900ER 36 CS100 75 Total 338 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 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2018 | |
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 (3) Derivative Contracts and Other Available-for-Sale Investments Total Balance at January 1, 2018 (net of tax effect of $1,400) $ (7,812 ) $ 85 $ 106 $ (7,621 ) Changes in value (net of tax effect of $2) — (7 ) — (7 ) Reclassifications into retained earnings (net of tax effect of $61) (1) — — (106 ) (106 ) Reclassifications into earnings (net of tax effect of $15) (2) 51 2 — 53 Balance at March 31, 2018 (net of tax effect of $1,448) $ (7,761 ) $ 80 $ — $ (7,681 ) Balance at January 1, 2017 (net of tax effect of $1,458) $ (7,714 ) $ 114 $ (36 ) $ (7,636 ) Changes in value (net of tax effect of $5) — (12 ) 48 36 Reclassifications into earnings (net of tax effect of $17) (2) 41 (4 ) (8 ) 29 Balance at March 31, 2017 (net of tax effect of $1,446) $ (7,673 ) $ 98 $ 4 $ (7,571 ) (1) The reclassification into retained earnings relates to our investments in GOL, China Eastern and other available-for-sale investments, and the related conversion to accounting for changes in fair value of these investments from AOCI to the income statement. See Note 1, "Summary of Significant Accounting Policies," for more information. (2) Amounts reclassified from AOCI for pension and other benefits liabilities and for derivative contracts designated as foreign currency cash flow hedges are recorded in miscellaneous, net and in passenger revenue, respectively, in the income statement. The reclassification into earnings for investments relates to our investment in Grupo Aeroméxico and the related conversion to accounting under the equity method. The reclassification of the unrealized gain was recorded to non-operating expense in our income statement. (3) Includes $ 700 million |
Segments
Segments | 3 Months Ended |
Mar. 31, 2018 | |
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 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 months ended March 31, 2018 and 2017 was $876 million and $733 million , 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 March 31, 2018 Operating revenue: $ 9,755 $ 1,491 $ 9,968 Sales to airline segment $ (262 ) (1) Exchanged products (876 ) (2) Sales of refined products (140 ) (3) Operating income 796 44 — 840 Interest expense (income), net 107 (5 ) — 102 Depreciation and amortization 595 15 — 610 Total assets, end of period 52,116 1,962 — 54,078 Capital expenditures 1,250 15 — 1,265 Three Months Ended March 31, 2017 Operating revenue: $ 9,040 $ 1,128 $ 9,101 Sales to airline segment $ (190 ) (1) Exchanged products (733 ) (2) Sales of refined products (144 ) (3) Operating income 955 44 — 999 Interest expense, net 94 — — 94 Depreciation and amortization 527 10 — 537 Total assets, end of period 50,753 1,320 — 52,073 Capital expenditures 776 26 — 802 (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) |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING The following table shows the balances and activity for restructuring charges: (in millions) Lease Restructuring Liability as of January 1, 2018 $ 237 Payments (19 ) Additional expenses and other — Liability as of March 31, 2018 $ 218 Restructuring charges primarily include remaining lease payments for permanently grounded aircraft related to domestic and Pacific fleet restructurings. The domestic fleet restructuring involves replacing a portion of our 50 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, (in millions, except per share data) 2018 2017 Net income $ 547 $ 561 Basic weighted average shares outstanding 704 728 Dilutive effect of share-based awards 2 3 Diluted weighted average shares outstanding 706 731 Basic earnings per share $ 0.78 $ 0.77 Diluted earnings per share $ 0.77 $ 0.77 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2017 . 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 months ended March 31, 2018 are not necessarily indicative of operating results for the entire year. We recast prior period financial statements to conform with the adoption of the revenue recognition and retirement benefits standards, described below. In addition, we have reclassified regional carriers fuel expense from regional carriers expense to aircraft fuel and related taxes, and consolidated ancillary businesses and refinery expenses into one financial statement line item, in addition to making other classification changes to conform to the current year presentation. |
Recent Accounting Standards | Recent Accounting Standards Standards Effective in Future Years Leases. In 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)." This standard will require 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 will adopt this standard effective January 1, 2019. 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 Condensed Consolidated Statements of Operations and Comprehensive Income ("income statement") or the Condensed Consolidated Statements of Cash Flows ("cash flows statement"). Information about our undiscounted future lease payments and the timing of those payments is in Note 7, "Lease Obligations," in our Form 10-K. Comprehensive Income . In February 2018, the FASB issued ASU No. 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220)." This standard provides an option to reclassify stranded tax effects within accumulated other comprehensive income/(loss) ("AOCI") to retained earnings due to the U.S. federal corporate income tax rate change in the Tax Cuts and Jobs Act of 2017. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. We have not completed our assessment, but the adoption of the standard may impact tax amounts stranded in AOCI related to our pension plans. We will adopt this standard effective January 1, 2019. Recently Adopted Standards Revenue from Contracts with Customers. In 2014, the FASB issued 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. We adopted this standard using the full retrospective transition method effective January 1, 2018 and recast prior year results as shown below. While the adoption of the new standard did not have a significant effect on earnings, approximately $2 billion of certain annual revenues that were previously classified in other revenue have been reclassified to passenger revenue. These revenues include baggage fees, administrative charges and other travel-related fees, which are deemed part of the single performance obligation of providing passenger transportation. In addition, the adoption of the new standard increases the rate used to account for frequent flyer miles. We previously analyzed 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 changed our valuation of a mileage credit to an analysis of the award redemption value. The new valuation considers the quantitative value a passenger receives by redeeming miles for a ticket rather than paying cash. This change increased our frequent flyer liability at December 31, 2017 by $2.2 billion . The mileage deferral and redemption rates are approximately the same; therefore, assuming stable volume, there would not be a significant change in revenue recognized from the program in a given period. The adoption of the new standard also reduced our air traffic liability at December 31, 2017 by $524 million . This change primarily results from estimating the tickets that will expire unused and recognizing revenue at the scheduled flight date rather than when the unused tickets expire. See Note 2 , "Revenue Recognition," for more information. 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 cash flows statement, respectively. We adopted these standards effective January 1, 2018. Financial Instruments. In 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. In February 2018, the FASB issued ASU No. 2018-03, "Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10)" to clarify certain aspects of ASU No. 2016-01. We adopted these standards effective January 1, 2018. Our investments in GOL Linhas Aéreas Inteligentes, the parent company of VRG Linhas Aéreas (operating as GOL), and China Eastern were accounted for as available-for-sale with changes in fair value recognized in other comprehensive income. At the time of adoption, we reclassified an unrealized gain of $162 million related to these investments from AOCI to retained earnings. Our investment in Air France-KLM was accounted for at cost during 2017 as our investment agreement restricts the sale or transfer of these shares for five years. Upon adopting ASU Nos. 2016-01 and 2018-03, we recognized a $148 million gain in unrealized gain/(loss) on investments related to the value of Air France-KLM's stock compared to our investment basis at December 31, 2017. Consistent with our investments in GOL and China Eastern, this investment is now accounted for at fair value with changes in fair value recognized in net income. Retirement Benefits. In 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. We adopted this standard effective January 1, 2018. The components of the net (benefit) cost are shown in Note 7 , "Employee Benefit Plans." As a result of the adoption, for the three months ended March 31, 2017, we reclassified $12 million from operating expense into non-operating expense in our income statement. Impact of Recently Adopted Standards We recast certain prior period amounts to conform with the adoption of the revenue recognition and retirement benefits standards, as shown in the tables below. Three Months Ended March 31, 2017 (in millions, except per share data) As Previously Reported Adjustments Current Presentation Income statement: Passenger revenue $ 7,688 $ 490 $ 8,178 Cargo revenue 160 3 163 Other revenue 1,300 (540 ) 760 Operating expense 8,095 7 8,102 Non-operating expense (138 ) (12 ) (150 ) Income tax provision (312 ) 24 (288 ) Net income 603 (42 ) 561 Diluted earnings per share $ 0.82 $ (0.05 ) $ 0.77 December 31, 2017 (in millions) As Previously Reported Adjustments Current Presentation Balance sheet: Deferred income taxes, net $ 935 $ 419 $ 1,354 Air traffic liability 4,888 (524 ) 4,364 Frequent flyer deferred revenue (current and noncurrent) 4,118 2,203 6,321 Other accrued and other noncurrent liabilities 3,969 120 4,089 Retained earnings 9,636 (1,380 ) 8,256 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of impact of recently adopted accounting standards | We recast certain prior period amounts to conform with the adoption of the revenue recognition and retirement benefits standards, as shown in the tables below. Three Months Ended March 31, 2017 (in millions, except per share data) As Previously Reported Adjustments Current Presentation Income statement: Passenger revenue $ 7,688 $ 490 $ 8,178 Cargo revenue 160 3 163 Other revenue 1,300 (540 ) 760 Operating expense 8,095 7 8,102 Non-operating expense (138 ) (12 ) (150 ) Income tax provision (312 ) 24 (288 ) Net income 603 (42 ) 561 Diluted earnings per share $ 0.82 $ (0.05 ) $ 0.77 December 31, 2017 (in millions) As Previously Reported Adjustments Current Presentation Balance sheet: Deferred income taxes, net $ 935 $ 419 $ 1,354 Air traffic liability 4,888 (524 ) 4,364 Frequent flyer deferred revenue (current and noncurrent) 4,118 2,203 6,321 Other accrued and other noncurrent liabilities 3,969 120 4,089 Retained earnings 9,636 (1,380 ) 8,256 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Passenger revenue is primarily composed of passenger ticket sales, loyalty travel awards and travel-related services performed in conjunction with a passenger’s flight. Three Months Ended March 31, (in millions) 2018 2017 Ticket $ 7,653 $ 7,105 Loyalty travel awards 618 582 Travel-related services 494 491 Total passenger revenue $ 8,765 $ 8,178 Three Months Ended March 31, (in millions) 2018 2017 Ancillary businesses and refinery $ 521 $ 312 Loyalty program 347 305 Miscellaneous 133 143 Total other revenue $ 1,001 $ 760 |
Schedule of activity in frequent flyer liability | The table below presents the activity of the current and noncurrent frequent flyer liability, and includes miles earned through travel and miles sold, which are primarily through marketing agreements. (in millions) 2018 2017 Balance at January 1 $ 6,321 $ 5,922 Travel mileage credits redeemed (618 ) (582 ) Non-travel mileage credits redeemed (40 ) (40 ) Mileage credits earned 731 690 Balance at March 31 $ 6,394 $ 5,990 |
Schedule of revenue by geographic region | Our passenger revenue by geographic region (as defined by the U.S. Department of Transportation) is summarized in the following table: Three Months Ended March 31, (in millions) 2018 2017 Domestic $ 6,301 $ 5,894 Atlantic 1,059 923 Latin America 827 793 Pacific 578 568 Total passenger revenue $ 8,765 $ 8,178 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) March 31, Level 1 Level 2 Cash equivalents $ 876 $ 876 $ — Short-term investments U.S. government and agency securities 78 66 12 Asset- and mortgage-backed securities 119 — 119 Corporate obligations 247 — 247 Other fixed income securities 79 — 79 Restricted cash equivalents and investments 34 34 — Long-term investments 1,001 972 29 Hedge derivatives, net Fuel hedge contracts (3 ) (5 ) 2 Foreign currency exchange contracts (32 ) — (32 ) (in millions) December 31, Level 1 Level 2 Cash equivalents $ 1,357 $ 1,357 $ — Short-term investments U.S. government and agency securities 93 84 9 Asset- and mortgage-backed securities 173 — 173 Corporate obligations 467 — 467 Other fixed income securities 92 — 92 Restricted cash equivalents and investments 38 38 — Long-term investments 513 485 28 Hedge derivatives, net Fuel hedge contracts (66 ) (43 ) (23 ) Foreign currency exchange contracts (17 ) — (17 ) |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 , 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) Total Due in one year or less $ 120 Due after one year through three years 374 Due after three years through five years 13 Due after five years 16 Total $ 523 |
Derivatives and Risk Manageme23
Derivatives and Risk Management (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of hedge positions | Hedge Position as of March 31, 2018 (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 Foreign currency exchange contracts 18,701 Japanese yen November 2019 $ 1 $ 1 $ (14 ) $ (4 ) $ (16 ) 166 Canadian dollars May 2020 Not designated as hedges Foreign currency exchange contract 375 Euros December 2020 7 — — (23 ) (16 ) Fuel hedge contracts 267 gallons - crude oil and refined products December 2019 1,001 53 (1,006 ) (51 ) (3 ) Total derivative contracts $ 1,009 $ 54 $ (1,020 ) $ (78 ) $ (35 ) Hedge Position as of December 31, 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 Foreign currency exchange contracts 23,512 Japanese yen November 2019 $ 1 $ 1 $ (13 ) $ (6 ) $ (17 ) 490 Canadian dollars May 2020 Not designated as hedges Fuel hedge contracts 249 gallons - crude oil and refined products May 2019 638 8 (694 ) (18 ) (66 ) Total derivative contracts $ 639 $ 9 $ (707 ) $ (24 ) $ (83 ) 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 March 31, 2018 Net derivative contracts $ 21 $ 1 $ (31 ) $ (26 ) $ (35 ) December 31, 2017 Net derivative contracts $ — $ 1 $ (68 ) $ (16 ) $ (83 ) |
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) 2018 2017 2018 2017 Three Months Ended March 31, Foreign currency exchange contracts $ (4 ) $ 7 $ 1 $ (25 ) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) March 31, December 31, Total debt at par value $ 8,326 $ 8,539 Unamortized discount and debt issue cost, net (92 ) (99 ) Net carrying amount $ 8,234 $ 8,440 Fair value $ 8,400 $ 8,700 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) 2018 2017 2018 2017 Three Months Ended March 31, Service cost $ — $ — $ 21 $ 22 Interest cost 195 213 32 35 Expected return on plan assets (329 ) (286 ) (17 ) (17 ) Amortization of prior service credit — — (7 ) (7 ) Recognized net actuarial loss 66 66 10 8 Net (benefit) cost $ (68 ) $ (7 ) $ 39 $ 41 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future aircraft purchase commitments | Our future aircraft purchase commitments totaled approximately $17.2 billion at March 31, 2018 : (in millions) Total Nine months ending December 31, 2018 $ 2,480 2019 3,360 2020 3,270 2021 3,880 2022 2,450 Thereafter 1,740 Total $ 17,180 Our future aircraft purchase commitments included the following aircraft at March 31, 2018 : Aircraft Type Purchase Commitments A321-200 85 A321-200neo 100 A330-900neo 25 A350-900 17 B-737-900ER 36 CS100 75 Total 338 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 (3) Derivative Contracts and Other Available-for-Sale Investments Total Balance at January 1, 2018 (net of tax effect of $1,400) $ (7,812 ) $ 85 $ 106 $ (7,621 ) Changes in value (net of tax effect of $2) — (7 ) — (7 ) Reclassifications into retained earnings (net of tax effect of $61) (1) — — (106 ) (106 ) Reclassifications into earnings (net of tax effect of $15) (2) 51 2 — 53 Balance at March 31, 2018 (net of tax effect of $1,448) $ (7,761 ) $ 80 $ — $ (7,681 ) Balance at January 1, 2017 (net of tax effect of $1,458) $ (7,714 ) $ 114 $ (36 ) $ (7,636 ) Changes in value (net of tax effect of $5) — (12 ) 48 36 Reclassifications into earnings (net of tax effect of $17) (2) 41 (4 ) (8 ) 29 Balance at March 31, 2017 (net of tax effect of $1,446) $ (7,673 ) $ 98 $ 4 $ (7,571 ) (1) The reclassification into retained earnings relates to our investments in GOL, China Eastern and other available-for-sale investments, and the related conversion to accounting for changes in fair value of these investments from AOCI to the income statement. See Note 1, "Summary of Significant Accounting Policies," for more information. (2) Amounts reclassified from AOCI for pension and other benefits liabilities and for derivative contracts designated as foreign currency cash flow hedges are recorded in miscellaneous, net and in passenger revenue, respectively, in the income statement. The reclassification into earnings for investments relates to our investment in Grupo Aeroméxico and the related conversion to accounting under the equity method. The reclassification of the unrealized gain was recorded to non-operating expense in our income statement. (3) Includes $ 700 million |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 Operating revenue: $ 9,755 $ 1,491 $ 9,968 Sales to airline segment $ (262 ) (1) Exchanged products (876 ) (2) Sales of refined products (140 ) (3) Operating income 796 44 — 840 Interest expense (income), net 107 (5 ) — 102 Depreciation and amortization 595 15 — 610 Total assets, end of period 52,116 1,962 — 54,078 Capital expenditures 1,250 15 — 1,265 Three Months Ended March 31, 2017 Operating revenue: $ 9,040 $ 1,128 $ 9,101 Sales to airline segment $ (190 ) (1) Exchanged products (733 ) (2) Sales of refined products (144 ) (3) Operating income 955 44 — 999 Interest expense, net 94 — — 94 Depreciation and amortization 527 10 — 537 Total assets, end of period 50,753 1,320 — 52,073 Capital expenditures 776 26 — 802 (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) |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve and activity | The following table shows the balances and activity for restructuring charges: (in millions) Lease Restructuring Liability as of January 1, 2018 $ 237 Payments (19 ) Additional expenses and other — Liability as of March 31, 2018 $ 218 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, (in millions, except per share data) 2018 2017 Net income $ 547 $ 561 Basic weighted average shares outstanding 704 728 Dilutive effect of share-based awards 2 3 Diluted weighted average shares outstanding 706 731 Basic earnings per share $ 0.78 $ 0.77 Diluted earnings per share $ 0.77 $ 0.77 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Passenger revenue | $ 8,765 | $ 8,178 | |||
Other revenue | 1,001 | 760 | |||
Frequent flyer deferred revenue (current and noncurrent) | 6,394 | 5,990 | $ 6,321 | $ 5,922 | |
Air traffic liability | 6,233 | 4,364 | $ 4,100 | ||
Unrealized gain/(loss) on investments, net | 18 | 0 | |||
Operating expenses | 9,128 | 8,102 | |||
Non-operating expense | 122 | 150 | |||
ASU No. 2014-09 | Adjustments | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Passenger revenue | 2,000 | ||||
Other revenue | (2,000) | ||||
Frequent flyer deferred revenue (current and noncurrent) | 2,200 | ||||
Air traffic liability | $ (524) | ||||
ASU No. 2016-01 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Effect of adoption of new accounting standard on retained earnings | $ 162 | ||||
ASU No. 2016-01 | Air France-KLM | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Unrealized gain/(loss) on investments, net | $ 148 | ||||
ASU No. 2017-07 | Adjustments | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating expenses | (12) | ||||
Non-operating expense | $ 12 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Impact of Recently Adopted Standards (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income statement: | ||||
Passenger revenue | $ 8,765 | $ 8,178 | ||
Cargo revenue | 202 | 163 | ||
Other revenue | 1,001 | 760 | ||
Operating expenses | 9,128 | 8,102 | ||
Non-operating expense | (122) | (150) | ||
Income tax provision | (171) | (288) | ||
Net income | $ 547 | $ 561 | ||
Diluted earnings per share (in USD per share) | $ 0.77 | $ 0.77 | ||
Balance sheet: | ||||
Deferred income taxes, net | $ 1,175 | $ 1,354 | ||
Air traffic liability | 6,233 | 4,364 | $ 4,100 | |
Frequent flyer deferred revenue (current and noncurrent) | 6,394 | $ 5,990 | 6,321 | $ 5,922 |
Other accrued and other noncurrent liabilities | 4,089 | |||
Retained earnings | $ 8,465 | 8,256 | ||
Recently Adopted Standards | As Previously Reported | ||||
Income statement: | ||||
Passenger revenue | 7,688 | |||
Cargo revenue | 160 | |||
Other revenue | 1,300 | |||
Operating expenses | 8,095 | |||
Non-operating expense | (138) | |||
Income tax provision | (312) | |||
Net income | $ 603 | |||
Diluted earnings per share (in USD per share) | $ 0.82 | |||
Balance sheet: | ||||
Deferred income taxes, net | 935 | |||
Air traffic liability | 4,888 | |||
Frequent flyer deferred revenue (current and noncurrent) | 4,118 | |||
Other accrued and other noncurrent liabilities | 3,969 | |||
Retained earnings | 9,636 | |||
Recently Adopted Standards | Adjustments | ||||
Income statement: | ||||
Passenger revenue | $ 490 | |||
Cargo revenue | 3 | |||
Other revenue | (540) | |||
Operating expenses | 7 | |||
Non-operating expense | (12) | |||
Income tax provision | 24 | |||
Net income | $ (42) | |||
Diluted earnings per share (in USD per share) | $ (0.05) | |||
Balance sheet: | ||||
Deferred income taxes, net | 419 | |||
Air traffic liability | (524) | |||
Frequent flyer deferred revenue (current and noncurrent) | 2,203 | |||
Other accrued and other noncurrent liabilities | 120 | |||
Retained earnings | $ (1,380) |
Revenue Recognition - Passenger
Revenue Recognition - Passenger Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | $ 8,765 | $ 8,178 |
Ticket | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | 7,653 | 7,105 |
Loyalty travel awards | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | 618 | 582 |
Travel-related services | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | $ 494 | $ 491 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred air traffic revenue | $ 2,100 | $ 2,100 | ||
Air traffic liability | 6,233 | $ 4,364 | $ 4,100 | |
Cash sales of mileage credits | $ 841 | $ 757 |
Revenue Recognition - Frequent
Revenue Recognition - Frequent Flyer Liability (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Frequent Flyer Liability Activity [Roll Forward] | ||
Frequent flyer liability, beginning of period | $ 6,321 | $ 5,922 |
Travel mileage credits redeemed | (618) | (582) |
Non-travel mileage credits redeemed | (40) | (40) |
Mileage credits earned | 731 | 690 |
Frequent flyer liability, end of period | $ 6,394 | $ 5,990 |
Revenue Recognition - Passeng36
Revenue Recognition - Passenger Revenue by Geographic Area (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | $ 8,765 | $ 8,178 |
Domestic | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | 6,301 | 5,894 |
Atlantic | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | 1,059 | 923 |
Latin America | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | 827 | 793 |
Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Passenger revenue | $ 578 | $ 568 |
Revenue Recognition - Other Rev
Revenue Recognition - Other Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Other revenue | $ 1,001 | $ 760 |
Ancillary businesses and refinery | ||
Disaggregation of Revenue [Line Items] | ||
Other revenue | 521 | 312 |
Loyalty program | ||
Disaggregation of Revenue [Line Items] | ||
Other revenue | 347 | 305 |
Miscellaneous | ||
Disaggregation of Revenue [Line Items] | ||
Other revenue | $ 133 | $ 143 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Net Asset (Liability) | ||
Cash equivalents | $ 876 | $ 1,357 |
Restricted cash equivalents and investments | 34 | 38 |
Fuel hedge contracts | (3) | (66) |
Foreign currency exchange contracts | (32) | (17) |
U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 78 | 93 |
Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 119 | 173 |
Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Investments | 247 | 467 |
Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 79 | 92 |
Long-term investments | ||
Fair Value, Net Asset (Liability) | ||
Investments | 1,001 | 513 |
Level 1 | ||
Fair Value, Net Asset (Liability) | ||
Cash equivalents | 876 | 1,357 |
Restricted cash equivalents and investments | 34 | 38 |
Fuel hedge contracts | (5) | (43) |
Foreign currency exchange contracts | 0 | 0 |
Level 1 | U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 66 | 84 |
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 | 972 | 485 |
Level 2 | ||
Fair Value, Net Asset (Liability) | ||
Cash equivalents | 0 | 0 |
Restricted cash equivalents and investments | 0 | 0 |
Fuel hedge contracts | 2 | (23) |
Foreign currency exchange contracts | (32) | (17) |
Level 2 | U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 12 | 9 |
Level 2 | Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 119 | 173 |
Level 2 | Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Investments | 247 | 467 |
Level 2 | Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Investments | 79 | 92 |
Level 2 | Long-term investments | ||
Fair Value, Net Asset (Liability) | ||
Investments | $ 29 | $ 28 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - Fuel hedge contracts | 3 Months Ended |
Mar. 31, 2018 | |
Minimum | |
Fair Value Assumptions and Methodology for Assets and Liabilities | |
Expected volatility rate (percent) | 12.00% |
Maximum | |
Fair Value Assumptions and Methodology for Assets and Liabilities | |
Expected volatility rate (percent) | 36.00% |
Investments - Schedule of matur
Investments - Schedule of maturities for short-term investments (Details) $ in Millions | Mar. 31, 2018USD ($) |
Short-Term Investments by Contractual Maturity: | |
Due in one year or less | $ 120 |
Due after one year through three years | 374 |
Due after three years through five years | 13 |
Due after five years | 16 |
Total | $ 523 |
Investments - Narrative (Detail
Investments - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Grupo Aeromexico | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 49.00% |
Virgin Atlantic Limited | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investment, ownership percentage | 49.00% |
GOL | |
Schedule of Equity Method Investments [Line Items] | |
Equity interests, ownership percentage | 9.00% |
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% |
Air France-KLM | Joint Venture | |
Schedule of Equity Method Investments [Line Items] | |
Equity interests, ownership percentage | 10.00% |
Derivatives and Risk Manageme42
Derivatives and Risk Management - Narrative (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2018EUR (€) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018EUR (€) | |
Fuel hedge contracts | ||||
Derivative | ||||
Derivative gains (losses) | $ | $ 2 | $ 57 | ||
Foreign currency exchange contracts | ||||
Derivative | ||||
Derivative gains (losses) | $ | $ (16) | |||
Foreign currency exchange contracts | Not designated as hedging instrument | ||||
Derivative | ||||
Derivative, notional amount | € | € 375 | |||
Cash flow hedging | Foreign currency exchange contracts | Not designated as hedging instrument | ||||
Derivative | ||||
Derivative, term of contract | 3 years | |||
Derivative, notional amount | € | € 375 |
Derivatives and Risk Manageme43
Derivatives and Risk Management - Hedge Position (Details) € in Millions, ¥ in Millions, gal in Millions, $ in Millions, $ in Millions | Mar. 31, 2018EUR (€)gal | Mar. 31, 2018JPY (¥)gal | Mar. 31, 2018CAD ($)gal | Mar. 31, 2018USD ($)gal | Jan. 31, 2018EUR (€) | Dec. 31, 2017JPY (¥)gal | Dec. 31, 2017CAD ($)gal | Dec. 31, 2017USD ($)gal |
Derivatives, Fair Value | ||||||||
Total derivative contracts, net | $ (35) | $ (83) | ||||||
Prepaid Expenses and Other | ||||||||
Derivatives, Fair Value | ||||||||
Total derivative contracts, assets | 1,009 | 639 | ||||||
Other Noncurrent Assets | ||||||||
Derivatives, Fair Value | ||||||||
Total derivative contracts, assets | 54 | 9 | ||||||
Other Accrued Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Total derivative contracts, liabilities | (1,020) | (707) | ||||||
Other Noncurrent Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Total derivative contracts, liabilities | (78) | (24) | ||||||
Foreign currency exchange contracts | Designated as hedging instrument | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, hedge derivatives, net | (16) | (17) | ||||||
Foreign currency exchange contracts | Designated as hedging instrument | Prepaid Expenses and Other | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, assets | 1 | 1 | ||||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Assets | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, assets | 1 | 1 | ||||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Accrued Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, liabilities | (14) | (13) | ||||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, liabilities | (4) | $ (6) | ||||||
Foreign currency exchange contracts | Not designated as hedging instrument | ||||||||
Derivatives, Fair Value | ||||||||
Derivative, notional amount | € | € 375 | |||||||
Foreign currency exchange contracts, hedge derivatives, net | (16) | |||||||
Foreign currency exchange contracts | Not designated as hedging instrument | Prepaid Expenses and Other | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, assets | 7 | |||||||
Foreign currency exchange contracts | Not designated as hedging instrument | Other Noncurrent Assets | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, assets | 0 | |||||||
Foreign currency exchange contracts | Not designated as hedging instrument | Other Accrued Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, liabilities | 0 | |||||||
Foreign currency exchange contracts | Not designated as hedging instrument | Other Noncurrent Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Foreign currency exchange contracts, liabilities | $ (23) | |||||||
Fuel hedge contracts | Not designated as hedging instrument | ||||||||
Derivatives, Fair Value | ||||||||
Derivative, nonmonetary notional amount | gal | 267 | 267 | 267 | 267 | 249 | 249 | 249 | |
Fuel hedge contracts, derivatives, net | $ (3) | $ (66) | ||||||
Fuel hedge contracts | Not designated as hedging instrument | Prepaid Expenses and Other | ||||||||
Derivatives, Fair Value | ||||||||
Fuel hedge contracts, assets | 1,001 | 638 | ||||||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Assets | ||||||||
Derivatives, Fair Value | ||||||||
Fuel hedge contracts, assets | 53 | 8 | ||||||
Fuel hedge contracts | Not designated as hedging instrument | Other Accrued Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Fuel hedge contracts, liabilities | (1,006) | (694) | ||||||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Liabilities | ||||||||
Derivatives, Fair Value | ||||||||
Fuel hedge contracts, liabilities | $ (51) | $ (18) | ||||||
Cash flow hedging | Foreign currency exchange contracts | Designated as hedging instrument | ||||||||
Derivatives, Fair Value | ||||||||
Derivative, notional amount | ¥ 18,701 | $ 166 | ¥ 23,512 | $ 490 | ||||
Cash flow hedging | Foreign currency exchange contracts | Not designated as hedging instrument | ||||||||
Derivatives, Fair Value | ||||||||
Derivative, notional amount | € | € 375 |
Derivatives and Risk Manageme44
Derivatives and Risk Management - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative | ||
Total derivative contracts, net | $ (35) | $ (83) |
Prepaid Expenses and Other | ||
Derivative | ||
Net derivative contracts, assets | 21 | 0 |
Other Noncurrent Assets | ||
Derivative | ||
Net derivative contracts, assets | 1 | 1 |
Other Accrued Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | (31) | (68) |
Other Noncurrent Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | $ (26) | $ (16) |
Derivatives and Risk Manageme45
Derivatives and Risk Management - Designated Hedge Gains (Losses) (Details) - Foreign currency exchange contracts - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | ||
Effective Portion Reclassified from AOCI to Earnings | $ (4) | $ 7 |
Effective Portion Recognized in Other Comprehensive Income | $ 1 | $ (25) |
Long-Term Debt - Schedule of Fa
Long-Term Debt - Schedule of Fair Value of Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt | ||
Total debt at par value | $ 8,326 | $ 8,539 |
Unamortized discount and debt issue cost, net | (92) | (99) |
Net carrying amount | 8,234 | 8,440 |
Fair value | $ 8,400 | $ 8,700 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Benefit Plan Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Benefits | ||
Defined Benefit Plan Disclosure | ||
Service cost | $ 0 | $ 0 |
Interest cost | 195 | 213 |
Expected return on plan assets | (329) | (286) |
Amortization of prior service credit | 0 | 0 |
Recognized net actuarial loss | 66 | 66 |
Net (benefit) cost | (68) | (7) |
Other Postretirement and Postemployment Benefits | ||
Defined Benefit Plan Disclosure | ||
Service cost | 21 | 22 |
Interest cost | 32 | 35 |
Expected return on plan assets | (17) | (17) |
Amortization of prior service credit | (7) | (7) |
Recognized net actuarial loss | 10 | 8 |
Net (benefit) cost | $ 39 | $ 41 |
Commitments and Contingencies -
Commitments and Contingencies - Aircraft Purchase Commitments By Period (Details) - Future aircraft purchase commitments $ in Millions | Mar. 31, 2018USD ($) |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity | |
Nine months ending December 31, 2018 | $ 2,480 |
2,019 | 3,360 |
2,020 | 3,270 |
2,021 | 3,880 |
2,022 | 2,450 |
Thereafter | 1,740 |
Total | $ 17,180 |
Commitments and Contingencies49
Commitments and Contingencies - Aircraft Purchase Commitments By Aircraft (Details) - Future aircraft purchase commitments | Mar. 31, 2018aircraft |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 338 |
A321-200 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 85 |
A321-200neo | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 100 |
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 | 17 |
B-737-900ER | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 36 |
CS100 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 75 |
Accumulated Other Comprehensi50
Accumulated Other Comprehensive Loss - Schedule of AOCI Components (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | $ 12,530 | |
Ending balance (net of tax effect) | 12,557 | |
AOCI beginning balance, tax effect | (1,400) | $ (1,458) |
Changes in value, tax effect | (2) | 5 |
Reclassifications into retained earnings, tax effect | (61) | |
Reclassifications into earnings, tax effect | 15 | 17 |
AOCI ending balance, tax effect | (1,448) | (1,446) |
Accumulated Other Comprehensive Income | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | (7,621) | (7,636) |
Changes in value (net of tax effect) | (7) | 36 |
Reclassifications into retained earnings (net of tax effect) | (106) | |
Reclassifications into earnings (net of tax effect) | 53 | 29 |
Ending balance (net of tax effect) | (7,681) | (7,571) |
Pension and Other Benefits Liabilities | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | (7,812) | (7,714) |
Changes in value (net of tax effect) | 0 | 0 |
Reclassifications into retained earnings (net of tax effect) | 0 | |
Reclassifications into earnings (net of tax effect) | 51 | 41 |
Ending balance (net of tax effect) | (7,761) | (7,673) |
Deferred income taxes related to pension obligation | 700 | 700 |
Derivative Contracts and Other | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | 85 | 114 |
Changes in value (net of tax effect) | (7) | (12) |
Reclassifications into retained earnings (net of tax effect) | 0 | |
Reclassifications into earnings (net of tax effect) | 2 | (4) |
Ending balance (net of tax effect) | 80 | 98 |
Available-for-Sale Investments | ||
AOCI Attributable to Parent, Net of Tax | ||
Beginning balance (net of tax effect) | 106 | (36) |
Changes in value (net of tax effect) | 0 | 48 |
Reclassifications into retained earnings (net of tax effect) | (106) | |
Reclassifications into earnings (net of tax effect) | 0 | (8) |
Ending balance (net of tax effect) | $ 0 | $ 4 |
Segments - Narrative (Details)
Segments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information, Profit (Loss) | ||
Operating revenue | $ 9,968 | $ 9,101 |
Intersegment Sales/Other | Exchanged products | ||
Segment Reporting Information, Profit (Loss) | ||
Operating revenue | $ (876) | $ (733) |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting Information, Profit (Loss) | |||
Operating revenue | $ 9,968 | $ 9,101 | |
Operating income (loss) | 840 | 999 | |
Interest expense (income), net | 102 | 94 | |
Depreciation and amortization | 610 | 537 | |
Total assets, end of period | 54,078 | 52,073 | $ 53,711 |
Capital expenditures | 1,265 | 802 | |
Operating Segments | Airline | |||
Segment Reporting Information, Profit (Loss) | |||
Operating revenue | 9,755 | 9,040 | |
Operating income (loss) | 796 | 955 | |
Interest expense (income), net | 107 | 94 | |
Depreciation and amortization | 595 | 527 | |
Total assets, end of period | 52,116 | 50,753 | |
Capital expenditures | 1,250 | 776 | |
Operating Segments | Refinery | |||
Segment Reporting Information, Profit (Loss) | |||
Operating revenue | 1,491 | 1,128 | |
Operating income (loss) | 44 | 44 | |
Interest expense (income), net | (5) | 0 | |
Depreciation and amortization | 15 | 10 | |
Total assets, end of period | 1,962 | 1,320 | |
Capital expenditures | 15 | 26 | |
Intersegment Sales/Other | Sales to airline segment | |||
Segment Reporting Information, Profit (Loss) | |||
Operating revenue | (262) | (190) | |
Intersegment Sales/Other | Exchanged products | |||
Segment Reporting Information, Profit (Loss) | |||
Operating revenue | (876) | (733) | |
Intersegment Sales/Other | Sales of refined products | |||
Segment Reporting Information, Profit (Loss) | |||
Operating revenue | $ (140) | $ (144) |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Charges (Details) - Lease Restructuring $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve | |
Liability as of January 1, 2018 | $ 237 |
Payments | (19) |
Additional expenses and other | 0 |
Liability as of March 31, 2018 | $ 218 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) | 3 Months Ended |
Mar. 31, 2018seat | |
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 | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income | $ 547 | $ 561 |
Basic weighted average shares outstanding, shares | 704 | 728 |
Dilutive effect of share-based awards, shares | 2 | 3 |
Diluted weighted average shares outstanding, shares | 706 | 731 |
Basic earnings per share (in USD per share) | $ 0.78 | $ 0.77 |
Diluted earnings per share (in USD per share) | $ 0.77 | $ 0.77 |
Uncategorized Items - dal331201
Label | Element | Value |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 35,000,000 |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 61,000,000 |