Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 30, 2014 | Jun. 28, 2013 | |
Document And Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'SOUTHWEST AIRLINES CO | ' | ' |
Entity Central Index Key | '0000092380 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 701,991,465 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $9,088,020,821 |
Consolidated_Balance_Sheet
Consolidated Balance Sheet (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $1,355 | $1,113 |
Short-term investments | 1,797 | 1,857 |
Accounts and other receivables | 419 | 332 |
Inventories of parts and supplies, at cost | 467 | 469 |
Deferred income taxes | 168 | 246 |
Prepaid expenses and other current assets | 250 | 210 |
Total current assets | 4,456 | 4,227 |
Property and equipment, at cost: | ' | ' |
Flight equipment | 16,937 | 16,367 |
Ground property and equipment | 2,666 | 2,383 |
Deposits on flight equipment purchase contracts | 764 | 416 |
Assets constructed for others | 453 | 331 |
Property and equipment, at cost | 20,820 | 19,497 |
Less allowance for depreciation and amortization | 7,431 | 6,731 |
Property and equipment, net | 13,389 | 12,766 |
Goodwill | 970 | 970 |
Other assets | 530 | 633 |
Total assets | 19,345 | 18,596 |
Current liabilities: | ' | ' |
Accounts payable | 1,247 | 1,107 |
Accrued liabilities | 1,229 | 1,102 |
Air traffic liability | 2,571 | 2,170 |
Current maturities of long-term debt | 629 | 271 |
Total current liabilities | 5,676 | 4,650 |
Long-term debt less current maturities | 2,191 | 2,883 |
Deferred income taxes | 2,934 | 2,884 |
Construction obligation | 437 | 331 |
Other noncurrent liabilities | 771 | 856 |
Stockholders' equity: | ' | ' |
Common stock, $1.00 par value: 2,000,000,000 shares authorized; 807,611,634 shares issued in 2013 and 2012 | 808 | 808 |
Capital in excess of par value | 1,231 | 1,210 |
Retained earnings | 6,431 | 5,768 |
Accumulated other comprehensive income (loss) | -3 | -119 |
Treasury stock, at cost: 107,136,946 and 77,292,145 shares in 2013 and 2012 respectively | -1,131 | -675 |
Total stockholders' equity | 7,336 | 6,992 |
Total liabilities and stockholders' equity | $19,345 | $18,596 |
Consolidated_Balance_Sheet_Par
Consolidated Balance Sheet (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' equity: | ' | ' |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 807,611,634 | 807,611,634 |
Treasury stock, at cost: shares (in shares) | 107,136,946 | 77,292,145 |
Consolidated_Statement_of_Inco
Consolidated Statement of Income (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OPERATING REVENUES: | ' | ' | ' |
Passenger | $16,721 | $16,093 | $14,754 |
Freight | 164 | 160 | 139 |
Other | 814 | 835 | 765 |
Total operating revenues | 17,699 | 17,088 | 15,658 |
OPERATING EXPENSES: | ' | ' | ' |
Salaries, wages, and benefits | 5,035 | 4,749 | 4,371 |
Fuel and oil | 5,763 | 6,120 | 5,644 |
Maintenance materials and repairs | 1,080 | 1,132 | 955 |
Aircraft rentals | 361 | 355 | 308 |
Landing fees and other rentals | 1,103 | 1,043 | 959 |
Depreciation and amortization | 867 | 844 | 715 |
Acquisition and integration | 86 | 183 | 134 |
Other operating expenses | 2,126 | 2,039 | 1,879 |
Total operating expenses | 16,421 | 16,465 | 14,965 |
OPERATING INCOME | 1,278 | 623 | 693 |
OTHER EXPENSES (INCOME): | ' | ' | ' |
Interest expense | 131 | 147 | 194 |
Capitalized interest | -24 | -21 | -12 |
Interest income | -6 | -7 | -10 |
Other (gains) losses, net | -32 | -181 | 198 |
Total other expenses (income) | 69 | -62 | 370 |
INCOME BEFORE INCOME TAXES | 1,209 | 685 | 323 |
PROVISION FOR INCOME TAXES | 455 | 264 | 145 |
NET INCOME | $754 | $421 | $178 |
NET INCOME PER SHARE, BASIC (in dollars per share) | $1.06 | $0.56 | $0.23 |
NET INCOME PER SHARE, DILUTED (in dollars per share) | $1.05 | $0.56 | $0.23 |
Cash dividends declared per common share (in dollars per share) | $0.13 | $0.03 | $0.02 |
Consolidated_Statement_of_Comp
Consolidated Statement of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $754 | $421 | $178 |
Unrealized gain (loss) on defined benefit plan items, net of deferred taxes of $15, ($11), and $0 | 24 | -17 | 0 |
Other, net of deferred taxes of $7, $3, and $1 | 9 | 3 | 3 |
OTHER COMPREHENSIVE INCOME | 116 | 105 | 38 |
COMPREHENSIVE INCOME | 870 | 526 | 216 |
Fuel derivatives | ' | ' | ' |
Unrealized gain (loss) on derivatives, net of tax | 52 | 120 | 67 |
Interest rate derivatives | ' | ' | ' |
Unrealized gain (loss) on derivatives, net of tax | $31 | ($1) | ($32) |
Consolidated_Statement_of_Comp1
Consolidated Statement of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred taxes on unrealized gain (loss), other, tax effect | $7 | $3 | $1 |
Deferred taxes on postretirement | 15 | -11 | 0 |
Fuel derivatives | ' | ' | ' |
Deferred taxes on unrealized gain (loss) on derivatives, tax effect | 31 | 74 | 42 |
Interest rate derivatives | ' | ' | ' |
Deferred taxes on unrealized gain (loss) on derivatives, tax effect | $19 | $0 | ($20) |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholder's Equity (USD $) | Total | Common Stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock |
In Millions, unless otherwise specified | ||||||
Balance at beginning of period at Dec. 31, 2010 | $6,237 | $808 | $1,183 | $5,399 | ($262) | ($891) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Repurchase of common stock | -225 | 0 | 0 | 0 | 0 | -225 |
Issuance of common and treasury stock pursuant to Employee stock plans | 20 | 0 | -3 | -14 | 0 | 37 |
Issuance of stock to acquire AirTran | 523 | 0 | 0 | -127 | 0 | 650 |
Issuance of stock for conversion of debt | 112 | 0 | 34 | -27 | 0 | 105 |
Net tax benefit (expense) of options exercised | -5 | 0 | -5 | 0 | 0 | 0 |
Share-based compensation | 13 | 0 | 13 | 0 | 0 | 0 |
Cash dividends | -14 | 0 | 0 | -14 | 0 | 0 |
Comprehensive income | 216 | 0 | 0 | 178 | 38 | 0 |
Balance at end of period at Dec. 31, 2011 | 6,877 | 808 | 1,222 | 5,395 | -224 | -324 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Repurchase of common stock | -400 | 0 | 0 | 0 | 0 | -400 |
Issuance of common and treasury stock pursuant to Employee stock plans | 23 | 0 | -4 | -22 | 0 | 49 |
Net tax benefit (expense) of options exercised | -24 | 0 | -24 | 0 | 0 | 0 |
Share-based compensation | 16 | 0 | 16 | 0 | 0 | 0 |
Cash dividends | -26 | 0 | 0 | -26 | 0 | 0 |
Comprehensive income | 526 | 0 | 0 | 421 | 105 | 0 |
Balance at end of period at Dec. 31, 2012 | 6,992 | 808 | 1,210 | 5,768 | -119 | -675 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Repurchase of common stock | -540 | 0 | 0 | 0 | 0 | -540 |
Issuance of common and treasury stock pursuant to Employee stock plans | 96 | 0 | 12 | 0 | 0 | 84 |
Net tax benefit (expense) of options exercised | -9 | 0 | -9 | 0 | 0 | 0 |
Share-based compensation | 18 | 0 | 18 | 0 | 0 | 0 |
Cash dividends | -91 | 0 | 0 | -91 | 0 | 0 |
Comprehensive income | 870 | 0 | 0 | 754 | 116 | 0 |
Balance at end of period at Dec. 31, 2013 | $7,336 | $808 | $1,231 | $6,431 | ($3) | ($1,131) |
Consolidated_Statement_of_Stoc1
Consolidated Statement of Stockholder's Equity (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Statement of Stockholders' Equity [Abstract] | ' | ' | ' |
Cash dividends, per share (in dollars per share) | $0.13 | $0.03 | $0.02 |
Consolidated_Statement_of_Cash
Consolidated Statement of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net income | $754 | $421 | $178 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 867 | 844 | 715 |
Unrealized (gain) loss on fuel derivative instruments | -5 | -189 | 90 |
Deferred income taxes | 50 | 251 | 123 |
Changes in certain assets and liabilities: | ' | ' | ' |
Accounts and other receivables | -17 | -33 | -26 |
Other assets | -46 | -104 | -196 |
Accounts payable and accrued liabilities | 343 | 186 | 253 |
Air traffic liability | 400 | 334 | 262 |
Cash collateral received from (provided to) derivative counterparties | 57 | 233 | -195 |
Other, net | 74 | 121 | 152 |
Net cash provided by operating activities | 2,477 | 2,064 | 1,356 |
Net cash used in investing activities | ' | ' | ' |
Payment to acquire AirTran, net of AirTran cash on hand | 0 | 0 | -35 |
Payments for purchase of property and equipment, net | -1,447 | -1,348 | -968 |
Purchases of short-term investments | -3,135 | -2,481 | -5,362 |
Proceeds from sales of short-term and other investments | 3,198 | 2,996 | 5,343 |
Net cash used in investing activities | -1,384 | -833 | -1,022 |
Net cash used in financing activities | ' | ' | ' |
Proceeds from Employee stock plans | 96 | 27 | 20 |
Proceeds from termination of interest rate derivative instrument | 0 | 38 | 76 |
Payments of long-term debt and capital lease obligations | -313 | -578 | -540 |
Payments of convertible debt | 0 | 0 | -81 |
Payments of cash dividends | -71 | -22 | -14 |
Repayment of construction obligation | -5 | 0 | 0 |
Repurchase of common stock | -540 | -400 | -225 |
Other, net | -18 | -12 | -2 |
Net cash used in financing activities | -851 | -947 | -766 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 242 | 284 | -432 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,113 | 829 | 1,261 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,355 | 1,113 | 829 |
CASH PAYMENTS FOR: | ' | ' | ' |
Interest, net of amount capitalized | 133 | 153 | 185 |
Income taxes | 346 | 100 | 13 |
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS: | ' | ' | ' |
Assets constructed for others | 105 | 129 | 116 |
Fair value of equity consideration given to acquire AirTran | 0 | 0 | 523 |
Fair value of common stock issued for conversion of debt | $0 | $0 | $78 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Basis of Presentation | |||||||||||
Southwest Airlines Co. (the “Company”) operates Southwest Airlines, a major domestic airline. The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, which include AirTran Holdings, LLC. On May 2, 2011 (the “acquisition date”), the Company acquired all of the outstanding equity of AirTran Holdings, Inc. (“AirTran Holdings”), the former parent company of AirTran Airways, Inc. (“AirTran Airways”). Throughout these Notes, the Company makes reference to AirTran, which is meant to be inclusive of the following: (i) for periods prior to the acquisition date, AirTran Holdings and its subsidiaries, including, among others, AirTran Airways; and (ii) for periods on and after the acquisition date, AirTran Holdings, LLC, the successor to AirTran Holdings, and its subsidiaries, including among others, AirTran Airways. The accompanying Consolidated Financial Statements include the results of operations and cash flows for AirTran since May 2, 2011. See Note 2. All significant inter-entity balances and transactions have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | |||||||||||
Certain prior period amounts have been reclassified to conform to the current presentation. In the Consolidated Statement of Comprehensive Income for the year ended December 31, 2012, the Company has reclassified $17 million from Other to Unrealized losses on defined benefit plan items, net of deferred tax. | |||||||||||
Cash and cash equivalents | |||||||||||
Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less when purchased are classified as cash and cash equivalents, which primarily consist of certificates of deposit, money market funds, and investment grade commercial paper issued by major corporations and financial institutions. Cash and cash equivalents are stated at cost, which approximates fair value. | |||||||||||
As of December 31, 2013, no cash collateral deposits were either held by or provided by the Company to its fuel hedge counterparties and the Company had provided cash collateral deposits totaling $32 million to its interest rate hedge counterparties. As of December 31, 2012, the Company had no cash collateral deposits held by or provided by the Company to its fuel hedge counterparties and cash collateral deposits totaling $89 million to its interest rate hedge counterparties. Cash collateral amounts provided or held associated with fuel and interest rate derivative instruments are not restricted in any way and earn interest income at an agreed upon rate that approximates the rates earned on short-term securities issued by the U.S. Government. Depending on the fair value of the Company’s fuel and interest rate derivative instruments, the amounts of collateral deposits held or provided at any point in time can fluctuate significantly. See Note 10 for further information on these collateral deposits and fuel derivative instruments. | |||||||||||
Short-term and noncurrent investments | |||||||||||
Short-term investments consist of investments with original maturities of greater than three months but less than twelve months when purchased. These are primarily short-term securities issued by the U.S. Government and certificates of deposit issued by domestic banks. All of these investments are classified as available-for-sale securities and are stated at fair value, which approximates cost. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as Proceeds from sales of short-term investments for the security relinquished, and Purchases of short-investments for the security purchased, in the accompanying Consolidated Statement of Cash Flows. Unrealized gains and losses, net of tax, if any, are recognized in Accumulated other comprehensive income (loss) (“AOCI”) in the accompanying Consolidated Balance Sheet. Realized net gains and losses on specific investments, if any, are reflected in Interest income in the accompanying Consolidated Statement of Income. Both unrealized and realized gains and/or losses associated with investments were immaterial for all years presented. | |||||||||||
Noncurrent investments consist of investments with maturities of greater than twelve months. At December 31, 2013, these primarily consisted of the Company’s auction rate security instruments that it expects will not be redeemed during 2014. See Note 11 for further information. Noncurrent investments are included as a component of Other assets in the Consolidated Balance Sheet. | |||||||||||
Accounts and other receivables | |||||||||||
Accounts and other receivables are carried at cost. They primarily consist of amounts due from credit card companies associated with sales of tickets for future travel, amounts due from business partners in the Company’s frequent flyer programs, and amounts due from counterparties associated with fuel derivative instruments that have settled. The allowance for doubtful accounts was immaterial at December 31, 2013, 2012, and 2011. In addition, the provision for doubtful accounts and write-offs for 2013, 2012, and 2011 were each immaterial. | |||||||||||
Inventories | |||||||||||
Inventories consist primarily of aircraft fuel, flight equipment expendable parts, materials, and supplies. All of these items are carried at average cost, less an allowance for obsolescence. These items are generally charged to expense when issued for use. The reserve for obsolescence was $36 million and $34 million at December 31, 2013, and 2012, respectively. In addition, the Company’s provision for obsolescence and write-offs for 2013, 2012, and 2011 were each immaterial. | |||||||||||
Property and equipment | |||||||||||
Property and equipment is stated at cost. Depreciation is provided by the straight-line method to estimated residual values over periods generally ranging from 23 to 25 years for flight equipment and 5 to 30 years for ground property and equipment once the asset is placed in service. Residual values estimated for aircraft generally range from 2 to 20 percent and for ground property and equipment generally range from 0 to 10 percent. Property under capital leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed on the basis of the Company’s incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in Depreciation and amortization expense. Leasehold improvements generally are amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Assets constructed for others primarily consists of airport improvement projects, once placed into service, in which the Company is considered the accounting owner of the facilities, and such assets are amortized to estimated residual value over the term of the Company's lease or the expected life of the asset. See Note 4. | |||||||||||
The Company evaluates its long-lived assets used in operations for impairment when events and circumstances indicate that the undiscounted cash flows to be generated by that asset are less than the carrying amounts of the asset and may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s physical condition, and operating or cash flow losses associated with the use of the long-lived asset. If an asset is deemed to be impaired, an impairment loss is recorded for the excess of the asset book value in relation to its estimated fair value. | |||||||||||
Aircraft and engine maintenance | |||||||||||
The cost of scheduled inspections and repairs and routine maintenance costs for all aircraft and engines are charged to Maintenance materials and repairs expense as incurred. The Company also has “power-by-the-hour” agreements related to certain of its aircraft engines with external service providers. Under these agreements, which the Company has determined effectively transfers the risk and creates an obligation associated with the maintenance on such engines to the counterparty, expense is recorded commensurate with each hour flown on an engine. In situations where the payments to the counterparty do not sufficiently match the level of services received during the period, expense is recorded on a straight-line basis over the term of the agreement based on our best estimate of expected future aircraft utilization. The Company modified its engine maintenance contract for its Classic fleet (737-300/500s) during fourth quarter 2011 and, although payments made under this contract are made on the basis of flight hours, the risk-transfer concept under this agreement is no longer met, and the Company now records expense on a time and materials basis when an engine repair event takes place. The impact of this change on fourth quarter 2011 was a reduction in Maintenance materials and repairs expense of $30 million, resulting in an increase in net income of $16 million, and an increase in earnings per share (basic and diluted) of $.02 per share. Modifications that significantly enhance the operating performance or extend the useful lives of aircraft or engines are capitalized and amortized over the remaining life of the asset. | |||||||||||
Goodwill and intangible assets | |||||||||||
Goodwill represents the excess of the consideration transferred over the fair value of AirTran’s assets and liabilities on the acquisition date. Goodwill is not amortized, but it is evaluated for impairment at least annually, or more frequently if events or circumstances indicate impairment may exist. A fair value-based methodology is utilized in testing the carrying value to Goodwill, utilizing assumptions including: (i) a long-term projection of revenues and expenses; (ii) estimated discounted future cash flows; (iii) observable earnings multiples of publicly-traded airlines; (iv) weighted-average cost of capital; and (v) expected tax rate. Factors used in the valuation of goodwill include, but are not limited to, management’s plans for future operations, recent operating results and discounted projected future cash flows. These factors are considered Level 3 inputs within the fair value hierarchy. As a result of the annual impairment test performed as of October 1, 2013, no impairment was determined to exist for Goodwill. In the Goodwill impairment analysis performed, the excess fair value of the enterprise over carrying value was estimated to be in excess of 50 percent. | |||||||||||
Intangible assets primarily consist of acquired leasehold rights to certain airport owned gates at Chicago’s Midway International Airport, take-off and landing slots at certain domestic slot-controlled airports, and certain intangible assets recognized from the AirTran acquisition. See Note 2 for further information on acquired identifiable intangible assets. The following table is a summary of the Company’s intangible assets as of December 31, 2013: | |||||||||||
Gross | Weighted-average | Accumulated | |||||||||
carrying | useful life | amortization | |||||||||
amount | (in years) | (in millions) | |||||||||
(in millions) | |||||||||||
Customer relationships/marketing agreements | $ | 39 | 9 | $ | 23 | ||||||
Trademarks/trade names | 36 | 6 | 25 | ||||||||
Owned domestic slots | 93 | Indefinite | n/a | ||||||||
Leased domestic slots (1) | 19 | 39 | 4 | ||||||||
Noncompete agreements | 5 | 2 | 5 | ||||||||
Gate leasehold rights | 60 | 19 | 29 | ||||||||
Total | $ | 252 | 15 | $ | 86 | ||||||
(1) Useful life of leased slots is based on the stated lease term. | |||||||||||
During fourth quarter 2013, following the Company’s acquisition of additional slots at New York’s LaGuardia Airport, the Company made the determination that all of its owned domestic slots should be assigned an indefinite life and would thus not be subject to further amortization, including those that are owned but leased to other carriers. Among other factors, this was due to the Company’s reassessment of the current size and importance of its operations at New York’s LaGuardia Airport and Washington’s Ronald Reagan National Airport versus when the Company first began service to these airports in recent years. The impact of this prospective change in accounting estimate is immaterial. Also, as part of this change, the Company evaluated its previously owned domestic slots for impairment, but none was noted. | |||||||||||
The aggregate amortization expense for 2013, 2012, and 2011 was $19 million, $25 million, and $50 million, respectively. Estimated aggregate amortization expense for the five succeeding years and thereafter is as follows: 2014 – $13 million, 2015 – $11 million, 2016 – $8 million, 2017 – $5 million, 2018 – $5 million, and thereafter – $31 million. | |||||||||||
Revenue recognition | |||||||||||
Tickets sold are initially deferred as Air traffic liability. Passenger revenue is recognized when transportation is provided. Air traffic liability primarily represents tickets sold for future travel dates and estimated refunds and exchanges of tickets sold for past travel dates. The majority of the Company’s tickets sold are nonrefundable. Refundable tickets that are sold but not flown on the travel date can be reused for another flight, up to a year from the date of sale, or refunded. A small percentage of tickets (or partial tickets) expire unused. The Company estimates the amount of tickets that expire unused and recognizes such amounts in Passenger revenue once the scheduled flight date has passed. Prior to September 13, 2013, funds associated with tickets in which a passenger did not show up for a flight without canceling were able to be reused on another flight for up to twelve months. On September 13, 2013, Southwest implemented a No Show policy that applies to nonrefundable fares that are not canceled or changed by a Customer at least ten minutes prior to a flight's scheduled departure. Based on the Company's revenue recognition policy, revenue is now recorded at the flight date for a Customer who does not change his/her itinerary and loses his/her funds. This change in Company policy did not have a significant impact on the amount of spoilage revenue recorded during 2013 or the Company's estimate of the amount of spoilage it expects to record in future periods. Amounts collected from passengers for ancillary services such as baggage and other fees are generally recognized as Other revenue when the service is provided, which is typically the flight date. | |||||||||||
The Company is also required to collect certain taxes and fees from Customers on behalf of government agencies and remit these back to the applicable governmental entity on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, and airport passenger facility charges. These items are collected from Customers at the time they purchase their tickets, but are not included in Passenger revenue. The Company records a liability upon collection from the Customer and relieves the liability when payments are remitted to the applicable governmental agency. | |||||||||||
Frequent flyer programs | |||||||||||
The Company records a liability for the estimated incremental cost of providing free travel under its frequent flyer programs for all amounts earned from flight activity that are expected to be redeemed for future travel. The estimated incremental cost includes direct passenger costs such as fuel, food, and other operational costs, but does not include any contribution to fixed overhead costs or profit. | |||||||||||
Southwest and AirTran also sell frequent flyer points and related services to companies participating in their respective frequent flyer programs. Funds received from the sale of these points are accounted for using the residual method. Under this method, the Company determined the portion of funds received that relate to free travel were currently estimated to be 100 percent of the amount received under both Southwest’s Rapid Reward program and under AirTran’s A+ Reward program as of December 31, 2013. These amounts are deferred and recognized as Passenger revenue when the ultimate free travel awards are flown. In periods in which less than 100 percent of funds received are apportioned to free travel, the remainder of the amount received per point sold (the residual), which is not associated with future travel, includes items such as access to the Company’s frequent flyer program population for marketing/solicitation purposes on a monthly or quarterly basis, use of the Company’s logo on co-branded credit cards, and other trademarks, designs, images, etc. of the Company for use in marketing materials. This residual portion is recognized in Other revenue in the period earned, which the Company has determined is the period in which it has fulfilled its obligation under the executed contract with the particular business partner, which is on a monthly or quarterly basis, upon sale, as the related marketing services are performed or provided. For all points sold to business partners that are expected to expire unused, the Company recognizes spoilage in accordance with the redemption method. Southwest and AirTran’s consolidated liability associated with the sale of frequent flyer points and/or flight credits, was approximately $1.1 billion as of December 31, 2013. This liability is included as part of Air Traffic liability in the Company’s Consolidated Balance Sheet, based on current expectations of redemption patterns over the next twelve months. | |||||||||||
In March 2011, Southwest re-launched its Rapid Rewards frequent flyer program. As part of Southwest’s transition to the current program, the Company did not convert members’ account balances under the previous program, but allowed members to continue to redeem those balances for award travel under the prior program rules for a period of time. The transition method used by the Company in moving members to the current program resulted in no material changes in the Company’s estimation of its existing frequent flyer liabilities as of the launch date. Although the current program is still relatively new and the Company does expect a reduction in the amount of spoilage associated with points earned within the program compared to its previous program; thus far, the impact of this expected reduction has not been material. | |||||||||||
Advertising | |||||||||||
Advertising costs are charged to expense as incurred. Advertising and promotions expense for the years ended December 31, 2013, 2012, and 2011 was $208 million, $223 million, and $237 million, respectively, and is included as a component of Other operating expense in the accompanying Consolidated Statement of Income. | |||||||||||
Share-based Employee compensation | |||||||||||
The Company has share-based compensation plans covering several of its Employee groups, including plans covering the Company’s Board of Directors. The Company accounts for share-based compensation based on its grant date fair value. See Note 14. | |||||||||||
Financial derivative instruments | |||||||||||
The Company accounts for financial derivative instruments at fair value and applies hedge accounting rules where appropriate. The Company utilizes various derivative instruments, including jet fuel, crude oil, unleaded gasoline, and heating oil-based derivatives, to attempt to reduce the risk of its exposure to jet fuel price increases. These instruments consist primarily of purchased call options, collar structures, call spreads, and fixed-price swap agreements, and upon proper qualification are accounted for as cash-flow hedges. The Company also has interest rate swap agreements to convert a portion of its fixed-rate debt to floating rates and, including instruments acquired from AirTran, has swap agreements that convert certain floating-rate debt to a fixed-rate. These interest rate hedges are appropriately designated as either fair value hedges or as cash flow hedges. | |||||||||||
Since the majority of the Company’s financial derivative instruments are not traded on a market exchange, the Company estimates their fair values. Depending on the type of instrument, the values are determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets. Also, since there is not a reliable forward market for jet fuel, the Company must estimate the future prices of jet fuel in order to measure the effectiveness of the hedging instruments in offsetting changes to those prices. Forward jet fuel prices are estimated through utilization of a statistical-based regression equation with data from market forward prices of like commodities. This equation is then adjusted for certain items, such as transportation costs, that are stated in the Company’s fuel purchasing contracts with its vendors. | |||||||||||
For the effective portion of settled fuel hedges, the Company records the associated gains or losses as a component of Fuel and oil expense in the Consolidated Statement of Income. For amounts representing ineffectiveness, as defined, or changes in fair value of derivative instruments for which hedge accounting is not applied, the Company records any gains or losses as a component of Other (gains) losses, net, in the Consolidated Statement of Income. Amounts that are paid or received in connection with the purchase or sale of financial derivative instruments (i.e., premium costs of option contracts) are classified as a component of Other (gains) losses, net, in the Consolidated Statement of Income in the period in which the instrument settles or expires. All cash flows associated with purchasing and selling derivatives are classified as operating cash flows in the Consolidated Statement of Cash Flows, within Changes in certain assets and liabilities. See Note 10 for further information on hedge accounting and financial derivative instruments. | |||||||||||
The Company classifies its cash collateral provided to or held from counterparties in a “net” presentation on the Consolidated Balance Sheet against the fair value of the derivative positions with those counterparties. See Note 10 for further information. | |||||||||||
Software capitalization | |||||||||||
The Company capitalizes certain internal and external costs related to the acquisition and development of internal use software during the application development stages of projects. The Company amortizes these costs using the straight-line method over the estimated useful life of the software, which typically ranges from five to fifteen years. Costs incurred during the preliminary project or the post-implementation/operation stages of the project are expensed as incurred. Capitalized computer software, included as a component of Ground property and equipment in the accompanying Consolidated Balance Sheet, net of accumulated depreciation, was $357 million and $256 million at December 31, 2013, and 2012, respectively. Computer software depreciation expense was $90 million, $59 million, and $55 million for the years ended December 31, 2013, 2012, and 2011, respectively, and is included as a component of Depreciation and amortization expense in the accompanying Consolidated Statement of Income. | |||||||||||
Income taxes | |||||||||||
The Company accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effect of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates. The Company also evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. | |||||||||||
The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income before income taxes. Penalties are recorded in Other (gains) losses, net, and interest paid or received is recorded in Interest expense or Interest income, respectively, in the Consolidated Statement of Income. Amounts recorded for penalties and interest related to uncertain tax positions were immaterial for all years presented. | |||||||||||
Concentration risk | |||||||||||
Approximately 83 percent of the Company’s full-time equivalent Employees are unionized and are covered by collective bargaining agreements. The Company manages this risk by maintaining positive relationships with its Employees and its Employees’ Representatives. Substantially all of the Company's unionized Employees, including its Pilots, Mechanics, Customer Service Agents and Customer Representatives, Ramp, Operations, Provisioning, and Freight Agents, Flight Attendants, Materials Specialists, Flight Simulator Technicians, and Facilities Maintenance Technicians are in discussions on labor agreements. These Employee groups represent approximately 82 percent of the Company’s full-time equivalent Employees as of December 31, 2013. | |||||||||||
The Company attempts to minimize its concentration risk with regards to its cash, cash equivalents, and its investment portfolio. This is accomplished by diversifying and limiting amounts among different counterparties, the type of investment, and the amount invested in any individual security or money market fund. | |||||||||||
To manage risk associated with financial derivative instruments held, the Company selects and will periodically review counterparties based on credit ratings, limits its exposure to a single counterparty, and monitors the market position of the program and its relative market position with each counterparty. The Company also has agreements with counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount or credit ratings fall below certain levels. Collateral deposits provided to or held from counterparties serve to decrease, but not totally eliminate, the credit risk associated with the Company’s hedging program. See Note 10 for further information. | |||||||||||
The Company currently operates an all-Boeing fleet, the majority of which are variations of the Boeing 737. If the Company were unable to acquire additional aircraft or associated aircraft parts from Boeing, or Boeing were unable or unwilling to make timely deliveries of aircraft or to provide adequate support for its products, the Company’s operations would be materially adversely impacted. In addition, the Company would be materially adversely impacted in the event of a mechanical or regulatory issue associated with the Boeing 737 or Boeing 717 aircraft type, whether as a result of downtime for part or all of the Company’s fleet or because of a negative perception by the flying public. The Company is also dependent on sole suppliers for aircraft engines and certain other aircraft parts and would, therefore, also be materially adversely impacted in the event of the unavailability of, or a mechanical or regulatory issue associated with, engines and other parts. | |||||||||||
The Company has historically entered into agreements with some of its co-brand, payment, and loyalty partners that contain exclusivity aspects which place certain confidential restrictions on the Company from entering into certain arrangements with other payment and loyalty partners. These arrangements generally extend for the terms of the partnerships, none of which currently extend beyond May 2017. The Company believes the financial benefits generated by the exclusivity aspects of these arrangements outweigh the risks involved with such agreements. |
AIRTRAN_ACQUISITION_AND_RELATE
AIRTRAN ACQUISITION AND RELATED MATTERS | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
AIRTRAN ACQUISITION AND RELATED MATTERS | ' | ||||
AIRTRAN ACQUISITION AND RELATED MATTERS | |||||
Expenses related to the AirTran acquisition and integration | |||||
The Company has incurred and expects to continue to incur substantial Acquisition and integration expenses in connection with the AirTran acquisition, including the necessary costs associated with integrating the operations of the two companies. While the Company has assumed that a certain level of expenses will be incurred, there are many factors that could affect the total amount or the timing of these expenses, and many of the expenses that will be incurred are, by their nature, difficult to estimate. In some periods, these expenses have exceeded the estimated financial benefits that the Company achieved from the AirTran acquisition and the remaining integration of the companies could continue to result in the Company taking significant charges against earnings. The Company incurred acquisition and integration-related costs for the years ended December 31, 2013, 2012, and 2011, of $86 million, $183 million, and $134 million, respectively, primarily consisting of costs associated with the lease and sublease of AirTran's Boeing 717-200 fleet, consulting, Employee training, seniority integration, financial advisory fees, severance, technology integration projects, and facility integration expenses. In the Consolidated Statement of Income, these costs are classified as Acquisition and integration expenses. | |||||
Pro forma impact of the acquisition | |||||
The unaudited pro forma results presented below include the effects of the AirTran acquisition as if it had been consummated as of January 1, 2011. The pro forma results include the amortization associated with estimates for the acquired intangible assets, fair value adjustments for deferred revenue, favorable/unfavorable leasehold interests, property and equipment, and long-term debt. In addition, the pro forma results do not include any anticipated synergies, or the assumption of hedge accounting for AirTran’s derivative instruments, or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2011. | |||||
Year ended | |||||
December 31, | |||||
(in millions, except per share data) | 2011 | ||||
Total operating revenues | $ | 16,601 | |||
Net income | 160 | ||||
Net income per share, basic | 0.21 | ||||
Net income per share, diluted | 0.21 | ||||
ACCOUNTING_CHANGES_AND_NEW_ACC
ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Changes and Error Corrections [Abstract] | ' |
ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS | ' |
ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS | |
During first quarter 2012 the Company changed the estimated retirement dates of several 737-300 and 737-500 aircraft based on revisions in the Company’s fleet plan. This change, which was accounted for on a prospective basis, resulted in an acceleration of depreciation expense, since the majority of these aircraft had previously been expected to retire in periods beyond 2012, but were subsequently expected to be retired during 2012. For the year ended December 31, 2012, the impact of this change was an increase in depreciation expense of approximately $12 million, excluding the impact of profitsharing and income taxes ($6 million after the impact of profitsharing and taxes, with a $.01 decrease in both basic and diluted net income per share). The impact of this change on 2013 was not material. | |
During third quarter 2012 the Company changed the estimated residual values of its entire fleet of owned 737-300 and 737-500 aircraft. This change was based on an agreement entered into during July 2012, pursuant to which the Company will lease or sublease certain aircraft to Delta Air Lines, Inc., and the resulting impact this transaction will have on how the Company manages the ultimate retirement of its owned 737-300 and 737-500 aircraft. See Note 8 for further information on the lease/sublease transaction. Based on the expected retirement dates and current and expected future market conditions related to its owned 737-300 and 737-500 aircraft, the Company reduced the residual values of these aircraft from approximately ten percent of original cost to approximately two percent of original cost. As this reduction in residual value is considered a change in estimate, it has been accounted for on a prospective basis, and thus the Company will record additional depreciation expense over the remainder of the useful lives for each aircraft. The impact of this change on the year ended December 31, 2012, was an increase in depreciation expense of approximately $34 million, excluding the impact of profitsharing and income taxes ($18 million after the impact of profitsharing and taxes, with a $.02 decrease in both basic and diluted net income per share). The impact of this change on the year ended December 31, 2013, was an increase in depreciation expense of approximately $26 million, excluding profitsharing and income taxes ($14 million after profitsharing and taxes, with a $.02 decrease in both basic and diluted net income per share). | |
On December 16, 2011, the Financial Accounting Standards Board ratified Accounting Standards Update (“ASU”) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” The new disclosure requirements mandate that entities disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position, as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013, and the Company adopted this ASU during first quarter 2013. This ASU did not have a material effect on the Company's financial position or results of operations, but did change the Company's disclosure policies for financial derivative instruments. See Note 10. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||
COMMITMENTS AND CONTINGENCIES | ' | |||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Commitments | ||||||||||||||
The Company has contractual obligations and commitments primarily with regard to future purchases of aircraft, repayment of debt, and lease arrangements. During the year ended December 31, 2013, the Company purchased 16 new 737-800 aircraft from Boeing, leased two new 737-800 aircraft from a third party, retired from service 11 of its older 737-300 and 737-500 aircraft and one of its 737-700 aircraft, and removed 22 of its 717-200 aircraft from active service. In addition, the Company also leased two 737-700 aircraft from a third party which were placed into service during third quarter 2013. As of December 31, 2013, the Company had scheduled deliveries for Boeing 737-700, 737-800, 737 MAX 7, and 737 MAX 8 aircraft as follows: | ||||||||||||||
The Boeing Company | The Boeing Company | |||||||||||||
737 NG | 737 MAX | |||||||||||||
-700 | -800 | Options | Additional -700 A/C | -7 | -8 | Options | Total | |||||||
Firm | Firm | Firm | Firm | |||||||||||
Orders | Orders | Orders | Orders | |||||||||||
2014 | — | 33 | — | 7 | -2 | — | — | — | 40 | |||||
2015 | — | 19 | — | 5 | — | — | — | 24 | ||||||
2016 | 31 | — | 12 | — | — | — | — | 43 | ||||||
2017 | 15 | — | 12 | — | — | 14 | — | 41 | ||||||
2018 | 10 | — | 12 | — | — | 13 | — | 35 | ||||||
2019 | — | — | — | — | 15 | 10 | — | 25 | ||||||
2020 | — | — | — | — | 14 | 22 | — | 36 | ||||||
2021 | — | — | — | — | 1 | 33 | 18 | 52 | ||||||
2022 | — | — | — | — | — | 30 | 19 | 49 | ||||||
2023 | — | — | — | — | — | 24 | 23 | 47 | ||||||
2024 | — | — | — | — | — | 24 | 23 | 47 | ||||||
2025 | — | — | — | — | — | — | 36 | 36 | ||||||
2026 | — | — | — | — | — | — | 36 | 36 | ||||||
2027 | — | — | — | — | — | — | 36 | 36 | ||||||
Total | 56 | -1 | 52 | 36 | 12 | 30 | 170 | -3 | 191 | 547 | ||||
(1) The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. | ||||||||||||||
(2) The Company executed an agreement in January 2014 to purchase an additional five 737-700 aircraft from a third party. | ||||||||||||||
(3) The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. | ||||||||||||||
The Company's financial commitments associated with the firm orders in the above aircraft table are as follows: $876 million in 2014, $824 million in 2015, $1.2 billion in 2016, $1.2 billion in 2017, $1.0 billion in 2018, and $6.8 billion thereafter. | ||||||||||||||
In December 2013, the Company entered into an agreement with Broward County, Florida, which owns and operates Fort Lauderdale-Hollywood International Airport, to oversee and manage the design and construction of the airport's Terminal 1 Modernization Project at a cost not to exceed $295 million. In addition to significant improvements to the existing Terminal 1, the project includes the design and construction of a new five-gate Concourse A with an international processing facility. Funding for the project will come directly from Broward County aviation sources, but will flow through the Company in its capacity as manager of the project. Although construction on the project is not expected to begin until late in 2014, the Company believes that due to its agreed upon role in overseeing and managing the project, it will be considered the owner of the project for accounting purposes. As such, in the Consolidated Balance Sheet, the Company is expected to record an increase in Assets constructed for others as the project is built (with a corresponding cash outflow in Investing activities in the Consolidated Statement of Cash Flows), and an increase to Construction obligation (with a corresponding cash inflow in Financing activities in the Consolidated Statement of Cash Flows) as reimbursements are received from Broward County. | ||||||||||||||
The Company entered into a Memorandum of Agreement (“MOA”) with the City of Houston (“City”), effective June 2012, to expand the existing Houston Hobby airport facility. As provided in the MOA, the Company and the City have entered into an Airport Use and Lease Agreement (“Lease”) to control the execution of this expansion and the financial terms thereof. Per the MOA and Lease, this project provides for a new five-gate international terminal with international passenger processing facilities, expansion of the existing security checkpoint, and upgrades to the Southwest ticketing counter area. The project is estimated to cost $156 million, and the Company has agreed to provide the funding for, as well as management over, the project. In return, the Company will receive a monthly credit for the capital cost portions of the international terminal, from the date of initial occupancy of the terminal until expiration of the Lease. Additionally, some portion of the project is expected to qualify for rental credits that would be utilized upon completion of the facility against the Company’s current lease space at the airport. At any time after the completion of the project, the City may buy out the Company’s investment in the international terminal for the then-unamortized cost of the project. Construction began during third quarter 2013 and is estimated to be completed during the second half of 2015. | ||||||||||||||
As a result of its significant involvement in the Houston Hobby project, the Company has evaluated its ongoing accounting requirements in consideration of accounting guidance provided for lessees involved in asset construction, and has determined that it qualifies as the accounting owner of the facility during the construction period. As such, during construction, the Company records expenditures as Assets constructed for others in the Consolidated Balance Sheet, along with a corresponding outflow within Payments for purchase of property and equipment, net, in the Consolidated Statement of Cash Flows. The amounts recorded for 2013 were not material. | ||||||||||||||
In March 2013, the Company executed an agreement with Los Angeles World Airports (“LAWA”), which owns and operates Los Angeles International Airport. Under the agreement, the Company will oversee and manage the design and construction of the airport's Terminal 1 Modernization Project at a cost not to exceed $400 million. The Company and LAWA are currently working on how the project will be funded, which may include, but is not limited to, the funding being provided by the Company (for which it would be reimbursed upon completion of different project phases, as defined, or from an external source). Although construction on the project is not expected to begin until the middle of 2014, the Company believes that due to its agreed upon role in overseeing and managing the project, it will be considered the owner of the project for accounting purposes. However, since the source of funding for the project has not yet been decided upon, the final accounting treatment will be determined at a later date. | ||||||||||||||
During 2008 the City of Dallas approved the Love Field Modernization Program (“LFMP”), a project to reconstruct Dallas Love Field (“Airport”) with modern, convenient air travel facilities. Pursuant to a Program Development Agreement with the City of Dallas and the Love Field Airport Modernization Corporation (or “LFAMC,” a Texas non-profit “local government corporation” established by the City of Dallas to act on the City of Dallas' behalf to facilitate the development of the LFMP), the Company is managing this project. Major construction commenced during 2010. New ticketing and checkin areas opened during fourth quarter 2012, and 11 new gates and new concessions opened in April 2013. Another new gate opened in July 2013, and full completion of the project is scheduled for second half 2014. The project consists of the complete replacement of gate facilities with a new 20-gate facility, including infrastructure, systems and equipment, aircraft parking apron, fueling system, roadways and terminal curbside, baggage handling systems, passenger loading bridges and support systems, and other supporting infrastructure. | ||||||||||||||
It is currently expected that the total construction costs associated with the LFMP project will be approximately $519 million. Although the City of Dallas has received commitments from various sources that are helping to fund portions of the LFMP project, including the Federal Aviation Administration (“FAA”), the Transportation Security Administration, and the City of Dallas' Aviation Fund, the majority of the funds used are from the issuance of bonds. During fourth quarter 2010, $310 million of such bonds were issued by the LFAMC, and the Company has guaranteed principal and interest payments on the bonds. An additional tranche of such bonds totaling $146 million was issued during second quarter 2012, and the Company has guaranteed the principal and interest payments on these bonds as well. The Company currently expects that as a result of the funding commitments from the above mentioned sources and the bonds that have been issued thus far, no further bond issuances and related guarantees from the Company will be required to complete the LFMP project. | ||||||||||||||
In conjunction with the Company's significant presence at Dallas Love Field, its rights to occupy 16 of the available gates upon completion of the facility, and other factors, the Company agreed to manage the majority of the LFMP project. Based on these facts, the Company has evaluated its ongoing accounting requirements in consideration of accounting guidance provided for lessees involved in asset construction. The Company has recorded and will continue to record an asset and corresponding obligation for the cost of the LFMP project as the construction of the facility occurs. As of December 31, 2013, the Company had recorded LFMP construction costs of $430 million (of which $350 million has been placed into service and was classified as Assets constructed for others and $80 million was in progress and is classified within Ground property and equipment) and had a liability of $437 million classified as Airport construction obligations in its Consolidated Balance Sheet. Upon completion of different phases of the LFMP project, the Company has placed the associated assets in service and has begun depreciating the assets over their estimated useful lives. The amount of depreciation recorded for the year ended December 31, 2013, associated with the LFMP assets in service was $9 million. The corresponding LFMP liabilities will be reduced primarily through the Company's airport rental payments to the City of Dallas as the construction costs of the project are passed through to the Company via recurring airport rates and charges. Such 2013 payments are reflected as Repayments of airport construction obligations in the Consolidated Statement of Cash Flows. Further, future contractual airport rental payments to the City of Dallas are included in the schedule of future minimum lease payments in Note 8. The Company records interest expense on the Construction obligation at an imputed rate based on the outstanding bonds. | ||||||||||||||
Contingencies | ||||||||||||||
The Company is from time to time subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, examinations by the IRS. The Company's management does not expect that the outcome in any of its currently ongoing legal proceedings or the outcome of any adjustments presented by the IRS, individually or collectively, will have a material adverse effect on the Company's financial condition, results of operations, or cash flow. |
SUPPLEMENTAL_FINANCIAL_INFORMA
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | ' | ||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
Derivative contracts | $ | 145 | $ | 306 | |||||
Intangible assets | 166 | 138 | |||||||
Non-current investments | 44 | 41 | |||||||
Other | 175 | 148 | |||||||
Other assets | $ | 530 | $ | 633 | |||||
(in millions) | December 31,2013 | 31-Dec-12 | |||||||
Accounts payable trade | $ | 189 | $ | 174 | |||||
Salaries payable | 156 | 148 | |||||||
Taxes payable | 146 | 128 | |||||||
Aircraft maintenance payable | 331 | 299 | |||||||
Fuel payable | 102 | 112 | |||||||
Other payable | 323 | 246 | |||||||
Accounts payable | $ | 1,247 | $ | 1,107 | |||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
Profitsharing and savings plans | $ | 244 | $ | 135 | |||||
Aircraft and other lease related obligations | 173 | 139 | |||||||
Vacation pay | 278 | 270 | |||||||
Health | 73 | 70 | |||||||
Derivative contracts | 12 | 50 | |||||||
Workers compensation | 161 | 159 | |||||||
Accrued taxes | 65 | 67 | |||||||
Other | 223 | 212 | |||||||
Accrued liabilities | $ | 1,229 | $ | 1,102 | |||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
Postretirement obligation | $ | 138 | $ | 148 | |||||
Non-current lease-related obligations | 290 | 376 | |||||||
Other deferred compensation | 163 | 141 | |||||||
Deferred gains from sale and leaseback of aircraft | 65 | 63 | |||||||
Other | 115 | 128 | |||||||
Other non-current liabilities | $ | 771 | $ | 856 | |||||
Other Operating Expenses | |||||||||
Other operating expenses consist of distribution costs, advertising expenses, personnel expenses, professional fees, and other operating costs, none of which individually exceed 10 percent of Operating expenses. |
REVOLVING_CREDIT_FACILITY
REVOLVING CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
REVOLVING CREDIT FACILITY | ' |
REVOLVING CREDIT FACILITY | |
On April 2, 2013, the Company entered into a new $1 billion unsecured revolving credit facility expiring in April 2018, and terminated its previous facility, which would have expired in April 2016. Interest on the facility is based on the Company's credit ratings at the time of borrowing. At the Company's current ratings, the interest cost would be LIBOR plus a spread of 150 basis points. The new facility also contains the same financial covenant as the previous facility, requiring a minimum coverage ratio of adjusted pre-tax income to fixed obligations, as defined. As of December 31, 2013, the Company was in compliance with this covenant and there were no amounts outstanding under the revolving credit facility. |
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
LONG-TERM DEBT | ' | ||||||||
LONG-TERM DEBT | |||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
5.25% Notes due 2014 | $ | 357 | $ | 366 | |||||
5.75% Notes due 2016 | 320 | 331 | |||||||
5.25% Convertible Senior Notes due 2016 | 115 | 117 | |||||||
5.125% Notes due 2017 | 322 | 329 | |||||||
Fixed-rate 717 Aircraft Notes payable through 2017—10.37% | 41 | 57 | |||||||
French Credit Agreements due 2018—1.05% | 46 | 56 | |||||||
Fixed-rate 737 Aircraft Notes payable through 2018—7.02% | 30 | 36 | |||||||
Term Loan Agreement due 2019—6.315% | 210 | 241 | |||||||
Term Loan Agreement due 2019—6.84% | 85 | 95 | |||||||
Term Loan Agreement due 2020—5.223% | 413 | 451 | |||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 340 | 527 | |||||||
Pass Through Certificates due 2022—6.24% | 371 | 394 | |||||||
7.375% Debentures due 2027 | 136 | 138 | |||||||
Capital leases (Note 8) | 56 | 37 | |||||||
$ | 2,842 | $ | 3,175 | ||||||
Less current maturities | 629 | 271 | |||||||
Less debt discount and issuance costs | 22 | 21 | |||||||
$ | 2,191 | $ | 2,883 | ||||||
AirTran Long-Term Debt | |||||||||
AirTran Holdings previously entered into aircraft purchase financing facilities, under which a total of 22 737-700 aircrafts were financed as of December 31, 2013. | |||||||||
As of December 31, 2013, after prepaying aircraft secured term loans for eight aircraft during 2012 and the first half of 2013, 19 Boeing 737 aircraft remain that were financed under floating-rate facilities. Each note is secured by a first mortgage on the aircraft to which it relates. The notes bear interest at a floating rate per annum equal to a margin plus the three or six-month LIBOR in effect at the commencement of each semi-annual or three-month period, as applicable. As of December 31, 2013, the weighted average interest rate is 1.68 percent. Principal and interest under the notes are payable semi-annually or every three months as applicable. As of December 31, 2013, the remaining debt outstanding may be prepaid without penalty under all aircraft loans provided under such facilities. The notes mature in years 2016 to 2020. As discussed further in Note 10, a portion of the above floating-rate debt has been effectively converted to a fixed rate via interest rate swap agreements which expire between 2016 and 2020. | |||||||||
As of December 31, 2013, three Boeing 737 aircraft were financed under a fixed-rate facility. Each note is secured by a first mortgage on the aircraft to which it relates. As of December 31, 2013, the weighted average interest rate is 7.02 percent. Payments of principal and interest under the notes are due semi-annually. The notes mature in years 2016 to 2018. | |||||||||
As of December 31, 2013, eight Boeing 717 aircraft were pledged as collateral for the obligations related to enhanced equipment trust certificates (EETCs). Principal and interest payments on the EETCs are due semi-annually through April 2017. The EETCs bear interest at a fixed rate of 10.37 percent. | |||||||||
In October 2009, AirTran Holdings completed a public offering of $115 million of convertible senior notes due in 2016. Such notes bear interest at 5.25 percent payable semi-annually, in arrears, on May 1 and November 1. As a result of the acquisition and subsequent dividends declared by the Company, the convertible senior notes are convertible into AirTran conversion units of 166.2806 per $1,000 in principal amount of such notes. Based on the terms of the merger agreement, the holders of these notes would receive shares of the Company’s common stock at a conversion rate of 53.3761 shares and $615.16 in cash per $1,000 in principal amount of such notes. This conversion rate is subject to adjustment under certain circumstances such as: granting of stock and cash dividends, a make-whole fundamental change of ownership provision, the issuance of rights or warrants, and/or a distribution of capital stock. Subsequent to the acquisition, holders of $5 million in principal amount elected to convert their notes. Remaining holders may convert their convertible senior notes into cash and shares of common stock at their option at any time. As such, the Company has classified $68 million, which is the cash portion the Company would be required to pay upon conversion, as current maturities in the Consolidated Balance Sheet. The convertible senior notes are not redeemable at the Company’s option prior to maturity. The holders of the convertible senior notes may require the Company to repurchase such notes, in whole or in part, for cash upon the occurrence of a fundamental change, as defined in the governing supplemental indenture, at a repurchase price of 100 percent of the principal amount plus any accrued and unpaid interest. | |||||||||
As a result of triggering the fundamental change of ownership provision in the convertible senior notes and as a result of the acquisition, an embedded conversion option is deemed to exist. In accordance with applicable accounting guidance, the embedded conversion option was effectively separated and accounted for as a free-standing derivative. A fair value calculation, utilizing similar market yields and the Company’s common stock price, was performed for the debt with and without the equity to measure the equity component. The value allocated to the conversion option of $35 million is classified as permanent equity. The estimated premium associated with the notes excluding the equity feature was $10 million, and is being amortized to interest expense over the remaining life of the notes. The dilutive effect of the shares that would be issued if the convertible notes were converted is considered in the Company’s net income per share calculations, unless such conversion would be considered antidilutive. See Note 9. | |||||||||
Other Company Long-Term Debt | |||||||||
On April 29, 2009, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $332 million, to be secured by mortgages on 14 of the Company’s 737-700 aircraft. The Company borrowed the full $332 million and secured the loan with the requisite 14 aircraft mortgages. The loan matures on May 6, 2019, and is being repaid via quarterly installments of principal that began August 6, 2009. The loan bears interest at the LIBO Rate (as defined in the term loan agreement) plus 3.30%, and interest is payable quarterly, which payments began on August 6, 2009. Pursuant to the terms of the term loan agreement, the Company entered into an interest rate swap agreement to convert the variable rate on the term loan to a fixed 6.315% until maturity. | |||||||||
On July 1, 2009, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $124 million, to be secured by mortgages on five of the Company’s 737-700 aircraft. The Company has borrowed the full $124 million and secured this loan with the requisite five aircraft mortgages. The loan matures on July 1, 2019, and is repayable semi-annually in installments of principal that began January 1, 2010. The loan bears interest at a fixed rate of 6.84%, and interest is payable semi-annually, which payments began on January 1, 2010. | |||||||||
On May 6, 2008, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $600 million, to be secured by first-lien mortgages on 21 of the Company’s 737-700 aircraft. On May 9, 2008, the Company borrowed the full $600 million and secured these loans with the requisite 21 aircraft mortgages. The loans mature on May 9, 2020, and are repayable quarterly in installments of principal, with the first payment made on August 9, 2008. The loans bear interest at the LIBO Rate (as defined in the term loan agreement) plus 0.95%, and interest is payable quarterly. Pursuant to the terms of the term loan agreement, the Company entered into an interest rate swap agreement to convert the variable rate on the term loan to a fixed 5.223% until maturity. | |||||||||
On October 3, 2007, grantor trusts established by the Company issued $500 million Pass Through Certificates consisting of $412 million 6.15% Series A certificates and $88 million 6.65% Series B certificates. A separate trust was established for each class of certificates. The trusts used the proceeds from the sale of certificates to acquire equipment notes in the same amounts, which were issued by the Company on a full recourse basis. Payments on the equipment notes held in each trust will be passed through to the holders of certificates of such trust. The equipment notes were issued for each of 16 Boeing 737-700 aircraft owned by the Company and are secured by a mortgage on each aircraft. Interest on the equipment notes held for the certificates is payable semi-annually, with the first payment made on February 1, 2008. Also beginning February 1, 2008, principal payments on the equipment notes held for both series of certificates are due semi-annually until the balance of the certificates mature on August 1, 2022. Prior to their issuance, the Company also entered into swap agreements to hedge the variability in interest rates on the Pass Through Certificates. The swap agreements were accounted for as cash flow hedges, and resulted in a payment by the Company of $20 million upon issuance of the Pass Through Certificates. The effective portion of the hedge is being amortized to interest expense concurrent with the amortization of the debt and is reflected in the above table as a reduction in the debt balance. The ineffectiveness of the hedge transaction was immaterial. | |||||||||
During December 2006, the Company issued $300 million senior unsecured notes due 2016. The notes bear interest at 5.75%, payable semi-annually in arrears, with the first payment made on June 15, 2007. During fourth quarter 2009, the Company entered into a fixed-to-floating interest rate swap to convert the interest on these unsecured notes to a floating rate until their maturity. See Note 10 for further information on the interest-rate swap agreement. | |||||||||
During February 2005, the Company issued $300 million senior unsecured notes due 2017. The notes bear interest at 5.125%, payable semi-annually in arrears, with the first payment made on September 1, 2005. In January 2007, the Company entered into an interest rate swap agreement to convert this fixed-rate debt to a floating rate; however, the interest rate swap was terminated in January 2011. See Note 10 for more information on the interest rate swap agreement and termination. | |||||||||
In fourth quarter 2004, the Company entered into four identical 13-year floating-rate financing arrangements, whereby it borrowed a total of $112 million from French banking partnerships. Although the interest rates on the borrowings float, the Company estimated at inception that, considering the full effect of the “net present value benefits” included in the transactions, the effective economic yield over the 13-year term of the loans will be approximately LIBOR minus 45 basis points. Principal and interest are payable semi-annually on June 30 and December 31 for each of the loans, and the Company may terminate the arrangements in any year on either of those dates, under certain conditions. The Company pledged four aircraft as collateral for the transactions. | |||||||||
In September 2004, the Company issued $350 million senior unsecured notes due 2014. The notes bear interest at 5.25%, payable semi-annually in arrears on April 1 and October 1. Concurrently, the Company entered into an interest rate swap agreement to convert this fixed-rate debt to a floating rate; however, the interest rate swap was terminated in January 2011. See Note 10 for more information on the interest rate swap agreement and termination. | |||||||||
On February 28, 1997, the Company issued $100 million of senior unsecured 7.375% debentures due March 1, 2027. Interest is payable semi-annually on March 1 and September 1. The debentures may be redeemed, at the option of the Company, in whole at any time or in part from time to time, at a redemption price equal to the greater of the principal amount of the debentures plus accrued interest at the date of redemption or the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the date of redemption at the comparable treasury rate plus 20 basis points, plus accrued interest at the date of redemption. In January 2007, the Company entered into an interest rate swap agreement to convert this fixed-rate debt to a floating rate; however, the interest rate swap was terminated in December 2012. See Note 10 for more information on the interest rate swap agreement and termination. | |||||||||
The Company is required to provide standby letters of credit to support certain obligations that arise in the ordinary course of business. Although the letters of credit are an off-balance sheet item, the majority of the obligations to which they relate are reflected as liabilities in the Consolidated Balance Sheet. Outstanding letters of credit totaled $182 million at December 31, 2013. | |||||||||
The net book value of the assets pledged as collateral for the Company’s secured borrowings, primarily aircraft and engines, was $2.2 billion at December 31, 2013. In addition, the Company has pledged a total of up to 81 of its Boeing 737-700 aircraft at a net book value of $2.1 billion, in the case that it has obligations related to its fuel derivative instruments with counterparties that exceed certain thresholds. See Note 10 for further information on these collateral arrangements. | |||||||||
As of December 31, 2013, aggregate annual principal maturities of debt and capital leases (not including amounts associated with interest rate swap agreements, interest on capital leases, and amortization of purchase accounting adjustments) for the five-year period ending December 31, 2018 and thereafter, were $546 million in 2014, $170 million in 2015, $597 million in 2016, $506 million in 2017, $251 million in 2018, and $674 million thereafter. |
LEASES
LEASES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Leases [Abstract] | ' | ||||||||||||||||
LEASES | ' | ||||||||||||||||
LEASES | |||||||||||||||||
The Company had four aircraft classified as capital leases at December 31, 2013, compared to two aircraft classified as capital leases at December 31, 2012. Amounts applicable to these aircraft that are included in property and equipment were: | |||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||
Flight equipment | $ | 69 | $ | 45 | |||||||||||||
Less: accumulated amortization | 12 | 8 | |||||||||||||||
$ | 57 | $ | 37 | ||||||||||||||
Total rental expense for operating leases, both aircraft and other, charged to operations in 2013, 2012, and 2011 was $997 million, $943 million, and $847 million, respectively. The majority of the Company’s terminal operations space, as well as 160 aircraft in the Company's active fleet, were under operating leases at December 31, 2013. For aircraft operating leases and for terminal operations leases, expense is included in Aircraft rentals and in Landing fees and other rentals, respectively, in the Consolidated Statement of Income. Future minimum lease payments under capital leases and noncancelable operating leases and rentals to be received under subleases with initial or remaining terms in excess of one year at December 31, 2013, were: | |||||||||||||||||
(in millions) | Capital | Operating | Subleases | Operating | |||||||||||||
leases | leases* | leases, net | |||||||||||||||
2014 | $ | 8 | $ | 689 | $ | (52 | ) | $ | 637 | ||||||||
2015 | 8 | 655 | (90 | ) | 565 | ||||||||||||
2016 | 8 | 544 | (106 | ) | 438 | ||||||||||||
2017 | 8 | 516 | (106 | ) | 410 | ||||||||||||
2018 | 8 | 429 | (102 | ) | 327 | ||||||||||||
Thereafter | 29 | 1,755 | (242 | ) | 1,513 | ||||||||||||
Total minimum lease payments | 69 | $ | 4,588 | $ | (698 | ) | $ | 3,890 | |||||||||
Less amount representing interest | 13 | ||||||||||||||||
Present value of minimum lease payments | 56 | ||||||||||||||||
Less current portion | 6 | ||||||||||||||||
Long-term portion | $ | 50 | |||||||||||||||
*Includes LFMP airport rental payments of $23 in 2014, $24 in 2015, $24 in 2016, $24 in 2017, $25 in 2018, and $685 thereafter. See Note 4. | |||||||||||||||||
The aircraft leases generally can be renewed for one to five years at rates based on fair market value at the end of the lease term. Most aircraft leases have purchase options at or near the end of the lease term at fair market value, generally limited to a stated percentage of the lessor’s defined cost of the aircraft. | |||||||||||||||||
During fourth quarter 2013, the Company entered into sale and leaseback transactions with a third party aircraft lessor for the sale and leaseback of two Boeing 737-800 aircraft. The transactions were closed on the date of delivery from Boeing, and resulted in the delivery payments being made by the aircraft lessor directly to Boeing, and Southwest being refunded the $12 million in progress payments it had previously made to Boeing during the period the aircraft was being constructed. These transactions resulted in deferred gains that are not material, which are being amortized over the terms of the respective leases, which are both 11 years. Both of the leases from these sale and leaseback transactions are accounted for as operating leases. Under the terms of the lease agreements, the Company will continue to operate and maintain the aircraft. Payments under the lease agreements are fixed. The lease agreements contain standard termination events, including termination upon a breach of the Company's obligations to make rental payments and upon any other material breach of the Company's obligations under the leases, and standard maintenance and return condition provisions. Upon a termination of the lease due to a breach by the Company, the Company would be liable for standard contractual damages, possibly including damages suffered by the lessor in connection with remarketing the aircraft or while the aircraft is not leased to another party. | |||||||||||||||||
On July 9, 2012, the Company signed an agreement with Delta Air Lines, Inc. and Boeing Capital Corp. to lease or sublease all 88 of AirTran's Boeing 717-200 aircraft (“B717s”) to Delta. The first converted B717 was delivered to Delta during late September 2013, and a total of 13 B717s were delivered to Delta during 2013. Over the expected term of the transition period for all B717s, the Company expects to average approximately three B717 conversions per month. A total of 78 of the B717s are on operating lease, eight are owned, and two are currently classified as capital leases. | |||||||||||||||||
The B717s add complexity to the Company's operations, as Southwest has historically operated an all-Boeing 737 fleet. From a fleet management perspective, the transition of approximately three B717s per month to Delta allows the Company to minimize the impact of this transaction on operations, as the B717 capacity lost is expected to be replaced through the capacity gained as a result of (i) the Company's modification of the retirement dates for a portion of its 737-300 and 737-500 aircraft and (ii) its receipt of new 737 deliveries from Boeing or its acquisition of used 737s. | |||||||||||||||||
The Company will lease and/or sublease all 88 of the B717s to Delta at agreed-upon lease rates. In addition, the Company will pay the majority of the costs to convert the aircraft to the Delta livery and perform certain maintenance checks prior to the delivery of each aircraft. The agreement to pay these conversion and maintenance costs is a “lease incentive” under applicable accounting guidance. The sublease terms for the 78 B717s currently on operating lease and the two B717s currently classified as capital leases coincide with the Company's remaining lease terms for these aircraft from the original lessor, which range from approximately five years to approximately 11 years. The lease terms for the eight B717s that are owned by the Company are for a period of seven years, after which Delta will have the option to purchase the aircraft at the then-prevailing market value. The Company will account for the lease and sublease transactions with Delta as operating leases, except for the two aircraft classified by the Company as capital leases. The subleases of these two aircraft will be accounted for as direct financing leases. There are no contingent payments and no significant residual value conditions associated with the transaction. | |||||||||||||||||
The accounting for this transaction is based on the guidance provided for lease transactions. For the components of this transaction finalized in third quarter 2012 and with respect to which the lease inception has been deemed to occur, the Company recorded a charge of approximately $137 million during third quarter 2012. The charge represents the remaining estimated cost, at the scheduled date of delivery of each B717 to Delta (including the conversion, maintenance, and other contractual costs to be incurred), of the Company's lease of the 78 B717s that are currently accounted for as operating leases, net of the future sublease income from Delta and the remaining unfavorable aircraft lease liability established as of the acquisition date. The charges recorded by the Company for this transaction were included as a component of Acquisition and integration costs in the Company's Consolidated Statement of Income and were included as a component of Other, net in Cash flows from operating activities in the Company's Consolidated Statement of Cash Flows, and the corresponding liability for this transaction is included as a component of Current liabilities and Other noncurrent liabilities in the Company's Consolidated Balance Sheet. See Note 2 for further information on the Company's Acquisition and integration costs. Following the initial recording of the $137 million liability in 2012, the Company paid $9 million in costs associated with the transaction, resulting in a liability balance of $128 million as of December 31, 2012. During 2013, the Company paid $12 million in costs, and recorded $6 million in accretion of the liability, resulting in a liability balance of $122 million as of December 31, 2013. The Company may also incur other costs associated with this transaction, such as potential changes associated with the extension of the time between when the Company removes an aircraft from revenue service and the time it is delivered to Delta. The Company has anticipated a reasonable period of transition time for the conversion process, but for some aircraft this period of time will be longer than anticipated due to the Company's plans to halt all B717 service on or around the end of 2014. The Company will follow "cease-use" date accounting guidance for these instances and thus may incur additional charges at the time the aircraft are removed from service. Any additional charges are not expected to be material. |
NET_INCOME_PER_SHARE
NET INCOME PER SHARE | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
NET INCOME PER SHARE | ' | |||||||||||
NET INCOME PER SHARE | ||||||||||||
The following table sets forth the computation of basic and diluted net income per share (in millions except per share amounts): | ||||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
NUMERATOR: | ||||||||||||
Net income | $ | 754 | $ | 421 | $ | 178 | ||||||
Incremental income effect of | 3 | 3 | — | |||||||||
interest on 5.25% convertible notes | ||||||||||||
Net income after assumed conversion | $ | 757 | $ | 424 | $ | 178 | ||||||
DENOMINATOR: | ||||||||||||
Weighted-average shares outstanding, basic | 710 | 750 | 774 | |||||||||
Dilutive effect of Employee stock options and | 2 | 1 | 1 | |||||||||
restricted stock units | ||||||||||||
Dilutive effect of 5.25% convertible notes | 6 | 6 | — | |||||||||
Adjusted weighted-average shares outstanding, diluted | 718 | 757 | 775 | |||||||||
NET INCOME PER SHARE: | ||||||||||||
Basic | $ | 1.06 | $ | 0.56 | $ | 0.23 | ||||||
Diluted | $ | 1.05 | $ | 0.56 | $ | 0.23 | ||||||
Potentially dilutive amounts excluded from calculations: | ||||||||||||
Stock options and restricted stock units | 9 | 35 | 48 | |||||||||
5.25% convertible notes | — | — | 6 | |||||||||
FINANCIAL_DERIVATIVE_INSTRUMEN
FINANCIAL DERIVATIVE INSTRUMENTS | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS | ' | |||||||||||||||||||||||||||
FINANCIAL DERIVATIVE INSTRUMENTS | ||||||||||||||||||||||||||||
Fuel contracts | ||||||||||||||||||||||||||||
Airline operators are inherently dependent upon energy to operate and, therefore, are impacted by changes in jet fuel prices. Furthermore, jet fuel and oil typically represent one of the largest operating expenses for airlines. The Company endeavors to acquire jet fuel at the lowest possible cost and to reduce volatility in operating expenses through its fuel hedging program. Although the Company may periodically enter into jet fuel derivatives for short-term timeframes, because jet fuel is not widely traded on an organized futures exchange, there are limited opportunities to hedge directly in jet fuel for time horizons longer than approximately 6 to 12 months into the future. However, the Company has found that financial derivative instruments in other commodities, such as West Texas Intermediate (“WTI”) crude oil, Brent crude oil, and refined products, such as heating oil and unleaded gasoline, can be useful in decreasing its exposure to jet fuel price volatility. The Company does not purchase or hold any financial derivative instruments for trading or speculative purposes. | ||||||||||||||||||||||||||||
The Company has used financial derivative instruments for both short-term and long-term time frames, and primarily uses a mixture of purchased call options, collar structures (which include both a purchased call option and a sold put option), call spreads (which include a purchased call option and a sold call option), and fixed price swap agreements in its portfolio. Although the use of collar structures and swap agreements can reduce the overall cost of hedging, these instruments carry more risk than purchased call options in that the Company could end up in a liability position when the collar structure or swap agreement settles. With the use of purchased call options and call spreads, the Company cannot be in a liability position at settlement, but may be exposed to price changes beyond a certain market price. | ||||||||||||||||||||||||||||
The Company evaluates its hedge volumes strictly from an “economic” standpoint and thus does not consider whether the hedges have qualified or will qualify for hedge accounting. The Company defines its “economic” hedge as the net volume of fuel derivative contracts held, including the impact of positions that have been offset through sold positions, regardless of whether those contracts qualify for hedge accounting. The level at which the Company is hedged for a particular period is also dependent on current market prices for that period as well as the types of derivative instruments held and the strike prices of those instruments. For example, the Company may enter into “out-of-the-money” option contracts (including catastrophic protection), which may not generate intrinsic gains at settlement if market prices do not rise above the option strike price. Therefore, even though the Company may have an “economic” hedge in place for a particular period, that hedge may not produce any hedging gains and may even produce hedging losses depending on market prices, the types of instruments held, and the strike prices of those instruments. | ||||||||||||||||||||||||||||
For 2013, the Company had fuel derivative instruments in place for 51 percent of its fuel consumption. As of December 31, 2013, the Company also had fuel derivative instruments in place to provide coverage for 43 percent of its 2014 estimated fuel consumption, depending on where market prices settle. The following table provides information about the Company’s volume of fuel hedging for the years 2014 through 2017 on an “economic” basis considering current market prices: | ||||||||||||||||||||||||||||
Fuel hedged as of | ||||||||||||||||||||||||||||
31-Dec-13 | Derivative underlying commodity type as of | |||||||||||||||||||||||||||
Period (by year) | (gallons in millions)(a) | 31-Dec-13 | ||||||||||||||||||||||||||
2014 | 764 | WTI crude, Brent crude oil, GC Jet Fuel | ||||||||||||||||||||||||||
2015 | 1,156 | WTI crude and Brent crude oil | ||||||||||||||||||||||||||
2016 | 977 | Brent crude oil | ||||||||||||||||||||||||||
2017 | 933 | WTI crude and Brent crude oil | ||||||||||||||||||||||||||
(a) The Company determines gallons hedged based on market prices and forward curves as of December 31, 2013. Due to the types of derivatives utilized by the Company, these volumes may vary significantly as market prices fluctuate. | ||||||||||||||||||||||||||||
Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges. Generally, utilizing hedge accounting, all periodic changes in fair value of the derivatives designated as hedges that are considered to be effective are recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") until the underlying jet fuel is consumed. See Note 12. The Company’s results are subject to the possibility that periodic changes will not be effective, as defined, or that the derivatives will no longer qualify for hedge accounting. Ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company’s expected future cash outlay to purchase and consume jet fuel. To the extent that the periodic changes in the fair value of the derivatives are ineffective, the ineffective portion is recorded to Other (gains) losses, net in the Consolidated Statement of Income. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last reporting period is recorded to Other (gains) losses, net, in the Consolidated Statement of Income in the period of the change; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, at which time these amounts would be reclassified to Fuel and oil expense. When the Company has sold derivative positions in order to effectively “close” or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings. Likewise, any changes in fair value of those positions that were offset by entering into the sold positions are concurrently marked to market through earnings. However, any changes in value related to hedges that were deferred as part of AOCI while designated as a hedge would remain until the originally forecasted transaction occurs. In a situation where it becomes probable that a fuel hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. The Company did not have any such situations occur during 2011, 2012, or during the year ended December 31, 2013. | ||||||||||||||||||||||||||||
In some situations, an entire commodity type used in hedging may cease to qualify for special hedge accounting treatment. As an example, during 2013, the Company's routine statistical analysis performed to determine which commodities qualify for special hedge accounting treatment on a prospective basis dictated that WTI crude oil based derivatives no longer qualify for hedge accounting. This is primarily due to the fact that the correlation between WTI crude oil prices and jet fuel prices during recent periods has not been as strong as in the past, and therefore the Company can no longer demonstrate that derivatives based on WTI crude oil prices will result in effective hedges on a prospective basis. As such, the change in fair value of all of the Company's derivatives based in WTI have been recorded to Other (gains) losses for the second half of 2013, and all future changes in the fair value of such instruments will continue to be recorded directly to earnings in future periods. The change in fair value of the Company's WTI derivative contracts during the second half of 2013 was an increase of $15 million, which resulted in a gain in the Consolidated Statement of Income. Any amounts previously recorded to AOCI will remain there until such time as the original forecasted transaction occurs in accordance with hedge accounting requirements. The Company will continue to evaluate whether it can qualify for hedge accounting for WTI derivative contracts in future periods. | ||||||||||||||||||||||||||||
Ineffectiveness is inherent in hedging jet fuel with derivative positions based in other crude oil related commodities. Due to the volatility in markets for crude oil and related products, the Company is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which could be determined on a derivative by derivative basis or in the aggregate for a specific commodity. This may result, and has resulted, in increased volatility in the Company’s financial results. Factors that have and may continue to lead to ineffectiveness and unrealized gains and losses on derivative contracts include: significant fluctuation in energy prices, the number of derivative positions the Company holds, significant weather events affecting refinery capacity and the production of refined products, and the volatility of the different types of products the Company uses in hedging. However, even though derivatives may not qualify for hedge accounting, the Company continues to hold the instruments as management believes derivative instruments continue to afford the Company the opportunity to stabilize jet fuel costs. | ||||||||||||||||||||||||||||
Accounting pronouncements pertaining to derivative instruments and hedging are complex with stringent requirements, including the documentation of a Company hedging strategy, statistical analysis to qualify a commodity for hedge accounting both on a historical and a prospective basis, and strict contemporaneous documentation that is required at the time each hedge is designated by the Company. The Company also examines the effectiveness of each individual hedge and its entire hedging program on a quarterly basis utilizing statistical analysis. This analysis involves utilizing regression and other statistical analyses that compare changes in the price of jet fuel to changes in the prices of the commodities used for hedging purposes. | ||||||||||||||||||||||||||||
All cash flows associated with purchasing and selling fuel derivatives are classified as Other operating cash flows in the Consolidated Statement of Cash Flows. The following table presents the location of all assets and liabilities associated with the Company’s hedging instruments within the Consolidated Balance Sheet: | ||||||||||||||||||||||||||||
Asset derivatives | Liability derivatives | |||||||||||||||||||||||||||
Balance Sheet | Fair value at | Fair value at | Fair value at | Fair value at | ||||||||||||||||||||||||
(in millions) | location | 12/31/13 | 12/31/12 | 12/31/13 | 12/31/12 | |||||||||||||||||||||||
Derivatives designated as hedges* | ||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | 74 | $ | — | $ | — | $ | — | |||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | 209 | 355 | 1 | 16 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Accrued liabilities | — | — | — | — | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | — | — | — | — | |||||||||||||||||||||||
Interest rate derivative contracts | Other assets | 20 | 31 | — | — | |||||||||||||||||||||||
Interest rate derivative contracts | Accrued liabilities | — | — | — | — | |||||||||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | — | — | 77 | 126 | |||||||||||||||||||||||
Total derivatives designated as hedges | $ | 303 | $ | 386 | $ | 78 | $ | 142 | ||||||||||||||||||||
Derivatives not designated as hedges* | ||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | 175 | $ | 375 | $ | 182 | $ | 327 | |||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | 16 | 233 | 99 | 351 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Accrued liabilities | 9 | 10 | 21 | 60 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | — | — | — | — | |||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 200 | $ | 618 | $ | 302 | $ | 738 | ||||||||||||||||||||
Total derivatives | $ | 503 | $ | 1,004 | $ | 380 | $ | 880 | ||||||||||||||||||||
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. | ||||||||||||||||||||||||||||
In addition, the Company also had the following amounts associated with fuel derivative instruments and hedging activities in its Consolidated Balance Sheet: | ||||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||
(in millions) | location | 2013 | 2012 | |||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for interest | Offset against Other noncurrent liabilities | 32 | 89 | |||||||||||||||||||||||||
rate contracts - noncurrent | ||||||||||||||||||||||||||||
Receivable from third parties for fuel contracts - current | Accounts and other receivables | 57 | — | |||||||||||||||||||||||||
Receivable from third parties for fuel contracts - noncurrent | Other assets | — | 54 | |||||||||||||||||||||||||
Prepaid settlements for fuel contracts - current | Prepaid expenses and other current assets | — | 15 | |||||||||||||||||||||||||
All of the Company's fuel derivative instruments and interest rate swaps are subject to agreements that follow the netting guidance in the applicable accounting for derivatives and hedging. The types of derivative instruments the Company has determined are subject to netting requirements in the accompanying Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty that settle on the same day and in the same currency via one net payment or receipt. For cash collateral held by the Company or provided to counterparties, the Company nets such amounts against the fair value of the Company's derivative portfolio by each counterparty. The Company has elected to utilize netting for both its fuel derivative instruments and interest rate swap agreements and also classifies such amounts as either current or noncurrent, based on the net fair value position with each of the Company's counterparties in the Consolidated Balance Sheet. | ||||||||||||||||||||||||||||
The Company's application of its netting policy associated with cash collateral differs depending on whether its derivative instruments are in a net asset position or a net liability position. If its fuel derivative instruments are in a net asset position with a counterparty, cash collateral amounts held are first netted against current outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of noncurrent outstanding derivative instruments. If the Company's fuel derivative instruments are in a net liability position with the counterparty, cash collateral amounts provided are first netted against noncurrent outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of current outstanding derivative instruments. At December 31, 2013, and December 31, 2012, no cash collateral deposits, letters of credit, and/or aircraft collateral were provided by or held by the Company associated with its outstanding fuel derivative instruments. | ||||||||||||||||||||||||||||
As of December 31, 2013, $31 million had been provided to one counterparty associated with interest rate derivatives based on the Company's outstanding net liability derivative position with that counterparty. In addition, in connection with interest rate swaps entered into by AirTran, $1 million had been provided to one counterparty at December 31, 2013, as a result of the outstanding net liability derivative position with that counterparty. The outstanding interest rate net derivative positions with all other counterparties at December 31, 2013, were assets to the Company. | ||||||||||||||||||||||||||||
The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting: | ||||||||||||||||||||||||||||
Offsetting of derivative assets | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||
December 31, 2013 | 31-Dec-12 | |||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | |||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | 249 | $ | (182 | ) | $ | 67 | (a) | $ | 375 | $ | (327 | ) | $ | 48 | (a) | |||||||||||
Fuel derivative contracts | Other assets | $ | 225 | $ | (100 | ) | $ | 125 | $ | 588 | $ | (367 | ) | $ | 221 | |||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 9 | $ | (9 | ) | $ | — | $ | 10 | $ | (10 | ) | $ | — | |||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Interest rate derivative contracts | Other assets | $ | 20 | $ | — | $ | 20 | $ | 31 | $ | — | $ | 31 | |||||||||||||||
(a) Amounts included in Prepaid expenses and other current assets. | ||||||||||||||||||||||||||||
Offsetting of derivative liabilities | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||
December 31, 2013 | 31-Dec-12 | |||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | |||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | 182 | $ | (182 | ) | $ | — | $ | 327 | $ | (327 | ) | $ | — | |||||||||||||
Fuel derivative contracts | Other assets | $ | 100 | $ | (100 | ) | $ | — | $ | 367 | $ | (367 | ) | $ | — | |||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 21 | $ | (9 | ) | $ | 12 | $ | 60 | $ | (10 | ) | $ | 50 | |||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | $ | 77 | $ | (32 | ) | $ | 45 | $ | 126 | $ | (89 | ) | $ | 37 | |||||||||||||
The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5. | ||||||||||||||||||||||||||||
The following tables present the impact of derivative instruments and their location within the Consolidated Statement of Income for the year ended December 31, 2013 and 2012: | ||||||||||||||||||||||||||||
Derivatives in cash flow hedging relationships | ||||||||||||||||||||||||||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | (Gain) loss reclassified from AOCI into income (effective portion)(a) | (Gain) loss recognized in income on derivatives (ineffective portion)(b) | ||||||||||||||||||||||||||
Year ended | Year ended | Year ended | ||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
Fuel derivative contracts | $ | 52 | * | $ | (19 | ) | * | $ | 103 | * | $ | 101 | * | $ | 10 | $ | 43 | |||||||||||
Interest rate derivatives | (14 | ) | * | 17 | * | 18 | * | (16 | ) | * | 1 | — | ||||||||||||||||
Total | $ | 38 | $ | (2 | ) | $ | 121 | $ | 85 | $ | 11 | $ | 43 | |||||||||||||||
*Net of tax | ||||||||||||||||||||||||||||
(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. | ||||||||||||||||||||||||||||
(b) Amounts are included in Other (gains) losses, net. | ||||||||||||||||||||||||||||
Derivatives not in cash flow hedging relationships | ||||||||||||||||||||||||||||
(Gain) loss | ||||||||||||||||||||||||||||
recognized in income on | ||||||||||||||||||||||||||||
derivatives | ||||||||||||||||||||||||||||
Year ended | Location of (gain) loss | |||||||||||||||||||||||||||
December 31, | recognized in income | |||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | on derivatives | |||||||||||||||||||||||||
Fuel derivative contracts | $ | (100 | ) | $ | (264 | ) | Other (gains) losses, net | |||||||||||||||||||||
The Company also recorded expense associated with premiums paid for fuel derivative contracts that settled/expired during 2013, 2012, and 2011 of $60 million, $36 million, and $107 million, respectively. These amounts are excluded from the Company’s measurement of effectiveness for related hedges and are included as a component of Other (gains) losses, net, in the Consolidated Statement of Income. | ||||||||||||||||||||||||||||
The fair values of the derivative instruments, depending on the type of instrument, were determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets or provided by third parties. Included in the Company’s cumulative net unrealized losses from fuel hedges as of December 31, 2013, were approximately $28 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to December 31, 2013. In addition, as of December 31, 2013, the Company had already recognized cumulative net gains due to ineffectiveness and derivatives that did not qualify for hedge accounting treatment totaling $57 million, net of taxes. These net gains were recognized in 2013 and prior periods, and are reflected in Retained earnings as of December 31, 2013, but the underlying derivative instruments will not expire/settle until 2014 or future periods. | ||||||||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||||
The Company is party to certain interest rate swap agreements that are accounted for as either fair value hedges or cash flow hedges, as defined in the applicable accounting guidance for derivative instruments and hedging. The interest rate swap agreements accounted for as fair value hedges qualify for the “shortcut” method of accounting for hedges, which dictates that the hedges are assumed to be perfectly effective, and, thus, there is no ineffectiveness to be recorded in earnings. For the Company’s interest rate swap agreements accounted for as cash flow hedges, ineffectiveness is required to be measured at each reporting period. The ineffectiveness associated with all of the Company’s, including AirTran’s, interest rate cash flow hedges for all periods presented was not material. | ||||||||||||||||||||||||||||
The Company has floating-to-fixed interest rate swap agreements associated with its $600 million floating-rate term loan agreement due 2020 and its $332 million term loan agreement due 2019 that are accounted for as cash flow hedges. These interest rate hedges have fixed the interest rate on the $600 million floating-rate term loan agreement at 5.223% until maturity, and for the $332 million term loan agreement at 6.315% until maturity. | ||||||||||||||||||||||||||||
The fair values of the interest rate swap agreements, which are adjusted regularly, have been aggregated by counterparty for classification in the Consolidated Balance Sheet. Agreements totaling an asset of $20 million are fair value hedges and are classified as a component of Other assets. The corresponding adjustment related to the net asset associated with the Company’s fair value hedges is to the carrying value of the long-term debt. Agreements totaling a net liability of $77 million are cash flow hedges and are classified as a component of Other noncurrent liabilities. The corresponding adjustment related to the net liability associated with the Company’s cash flow hedges is to AOCI. See Note 12. | ||||||||||||||||||||||||||||
AirTran has also entered into a number of interest rate swap agreements, which convert a portion of AirTran’s floating-rate debt to a fixed-rate basis for the remaining life of the debt, thus reducing the impact of interest rate changes on future interest expense and cash flows. Under these agreements, which expire between 2016 and 2020, it pays fixed rates between 4.35% and 6.435% and receives either three-month or six-month LIBOR on the notional values. The notional amount of outstanding debt related to interest rate swaps as of December 31, 2013, was $275 million. These interest rate swap arrangements were designated as cash flow hedges as of the acquisition date. The ineffectiveness associated with all of the Company’s interest rate cash flow hedges for all periods presented was not material. | ||||||||||||||||||||||||||||
In June 2012, the Company terminated the AirTran floating-to-fixed interest rate swap agreements related to its Floating-rate 737 Aircraft Notes payable through 2020. These swaps were previously designated as cash flow hedges and the gains and/or losses that had previously been deferred in AOCI, which were not material, are being released to expense/income in accordance with the original debt payment schedule. The release of amounts deferred in AOCI related to these interest rate swap agreements was not material during 2013 and is not expected to have a material effect on the Company’s future results of operations. | ||||||||||||||||||||||||||||
In December 2012, the Company terminated the fixed-to-floating interest rate swap agreement related to its $100 million 7.375% debentures due 2027. The effect of this termination is such that the interest associated with the debt prospectively reverts back to its original fixed rate. As a result of the approximate $38 million gain realized on this transaction, which will be amortized over the remaining term of the corresponding debentures, and based on projected interest rates at the date of termination, the Company does not believe its future interest expense associated with these debentures will significantly differ from the expense it would have recorded had the debentures remained at floating rates. | ||||||||||||||||||||||||||||
As a result of the fixed-to-floating interest rate swap agreement in place, the average floating rate recognized during 2013 for the Company’s $300 million 5.75% Notes due 2016 was approximately 2.54 percent, based on actual and forward rates as of December 31, 2013. | ||||||||||||||||||||||||||||
Credit risk and collateral | ||||||||||||||||||||||||||||
Credit exposure related to fuel derivative instruments is represented by the fair value of contracts that are an asset to the Company at the reporting date. At such times, these outstanding instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company has not experienced any significant credit loss as a result of counterparty nonperformance in the past. To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure with respect to each counterparty, and monitors the market position of the fuel hedging program and its relative market position with each counterparty. At December 31, 2013, the Company had agreements with all of its active counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount based on the counterparty credit rating. The Company also had agreements with counterparties in which cash deposits, letters of credit, and/or pledged aircraft are required to be posted whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds. The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of December 31, 2013, at which such postings are triggered: | ||||||||||||||||||||||||||||
Counterparty (CP) | ||||||||||||||||||||||||||||
(in millions) | A | B | C | D | E | Other(a) | Total | |||||||||||||||||||||
Fair value of fuel derivatives | $ | 27 | $ | 42 | $ | 41 | $ | 24 | $ | 26 | $ | 20 | $ | 180 | ||||||||||||||
Cash collateral held (by) CP | — | — | — | — | — | — | — | |||||||||||||||||||||
Aircraft collateral pledged to CP | — | — | — | — | — | — | — | |||||||||||||||||||||
Letters of credit (LC) | — | — | — | — | — | — | — | |||||||||||||||||||||
Option to substitute LC for aircraft | (250) to (650)(d) | (100) to (500)(d) | N/A | (250) to (650) (d) | N/A | |||||||||||||||||||||||
Option to substitute LC for cash | N/A | >(500) | (100) to (150)(e) | (50) to (250) or >(650)(d) | N/A | |||||||||||||||||||||||
If credit rating is investment | ||||||||||||||||||||||||||||
grade, fair value of fuel | ||||||||||||||||||||||||||||
derivative level at which: | ||||||||||||||||||||||||||||
Cash is provided to CP | (50) to (250) or >(650) | (50) to (100) or >(500) | >(50) | (50) to (250) or >(650) | >(50) | |||||||||||||||||||||||
Cash is received from CP | >50 | >150 | >175(c) | >200 | >30 | |||||||||||||||||||||||
Aircraft or cash can be pledged to | (250) to (650)(d) | (100) to (500) (d) | N/A | (250) to (650) (d) | N/A | |||||||||||||||||||||||
CP as collateral | ||||||||||||||||||||||||||||
If credit rating is non-investment | ||||||||||||||||||||||||||||
grade, fair value of fuel derivative | ||||||||||||||||||||||||||||
level at which: | ||||||||||||||||||||||||||||
Cash is provided to CP | (0) to (250) or >(650) | (0) to (100) or >(500) | (b) | (0) to (250) or >(650) | (b) | |||||||||||||||||||||||
Cash is received from CP | (b) | (b) | (b) | (b) | (b) | |||||||||||||||||||||||
Aircraft can be pledged to CP as | (250) to (650) | (100) to (500) | N/A | (250) to (650) | N/A | |||||||||||||||||||||||
collateral | ||||||||||||||||||||||||||||
(a) Individual counterparties with fair value of fuel derivatives <$20 million. | ||||||||||||||||||||||||||||
(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | ||||||||||||||||||||||||||||
(c) Thresholds may vary based on changes in credit ratings within investment grade. | ||||||||||||||||||||||||||||
(d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. No cash, letters of credit, or aircraft were pledged as collateral with such counterparties as of December 31, 2013. | ||||||||||||||||||||||||||||
(e) The Company has the option of providing cash or letters of credit as collateral. No cash or letters of credit were pledged as collateral with such counterparties as of December 31, 2013. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | |||||||||||||||||
As of December 31, 2013, the Company held certain items that are required to be measured at fair value on a recurring basis. These included cash equivalents, short-term investments (primarily treasury bills, commercial paper, and certificates of deposit), certain noncurrent investments, interest rate derivative contracts, fuel derivative contracts, and available-for-sale securities. The majority of the Company’s short-term investments consist of instruments classified as Level 1. However, the Company has certificates of deposit, commercial paper, and Eurodollar time deposits that are classified as Level 2, due to the fact that the fair value for these instruments is determined utilizing observable inputs in non-active markets. Noncurrent investments consist of certain auction rate securities, primarily those collateralized by student loan portfolios, which are guaranteed by the U.S. Government. Other available-for-sale securities primarily consist of investments associated with the Company’s excess benefit plan. | |||||||||||||||||
The Company’s fuel and interest rate derivative instruments consist of over-the-counter contracts, which are not traded on a public exchange. Fuel derivative instruments include swaps, as well as different types of option contracts, whereas interest rate derivatives consist solely of swap agreements. See Note 10 for further information on the Company’s derivative instruments and hedging activities. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these swap contracts as Level 2. The Company’s Treasury Department, which reports to the Chief Financial Officer, determines the value of option contracts utilizing an option pricing model based on inputs that are either readily available in public markets, can be derived from information available in publicly quoted markets, or are provided by financial institutions that trade these contracts. The option pricing model used by the Company is an industry standard model for valuing options and is the same model used by the broker/dealer community (i.e., the Company’s counterparties). The inputs to this option pricing model are the option strike price, underlying price, risk free rate of interest, time to expiration, and volatility. Because certain inputs used to determine the fair value of option contracts are unobservable (principally implied volatility), the Company has categorized these option contracts as Level 3. Volatility information is obtained from external sources, but is analyzed by the Company for reasonableness and compared to similar information received from other external sources. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. To validate the reasonableness of the Company’s option pricing model, on a monthly basis, the Company compares its option valuations to third party valuations. If any significant differences were to be noted, they would be researched in order to determine the reason. However, historically, no significant differences have been noted. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. | |||||||||||||||||
The Company’s investments associated with its excess benefit plan consist of mutual funds that are publicly traded and for which market prices are readily available. This plan is a non-qualified deferred compensation plan designed to hold Employee contributions in excess of limits established by Section 415 of the Internal Revenue Code of 1986, as amended. Payments under this plan are made based on the participant’s distribution election and plan balance. Assets related to the funded portion of the deferred compensation plan are held in a rabbi trust, and the Company remains liable to these participants for the unfunded portion of the plan. The Company records changes in the fair value of the liability and the asset in the Company’s earnings. | |||||||||||||||||
All of the Company’s auction rate security instruments, totaling $39 million (net) at December 31, 2013, are classified as available-for-sale securities and are reflected at their estimated fair value in the Consolidated Balance Sheet. The Company’s Treasury Department determines the estimated fair values of these securities utilizing a discounted cash flow analysis. The Company has performed, and routinely updates, a valuation for each of its auction rate security instruments, considering, among other items, the collateralization underlying the security investments, the expected future cash flows, including the final maturity, associated with the securities, estimates of the next time the security is expected to have a successful auction or return to full par value, forecasted reset rates based on LIBOR or the issuer’s net loan rate, and a counterparty credit spread. To validate the reasonableness of the Company’s discounted cash flow analyses, the Company compares its valuations to third party valuations on a quarterly basis. | |||||||||||||||||
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013, and December 31, 2012: | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 992 | $ | 992 | $ | — | $ | — | |||||||||
Commercial paper | 280 | — | 280 | — | |||||||||||||
Certificates of deposit | 23 | — | 23 | — | |||||||||||||
Eurodollar Time Deposits | 60 | — | 60 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,570 | 1,570 | — | — | |||||||||||||
Certificates of deposit | 227 | — | 227 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 39 | — | — | 39 | |||||||||||||
Interest rate derivatives (see Note 10) | 20 | — | 20 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 16 | — | 16 | — | |||||||||||||
Option contracts (c) | 458 | — | — | 458 | |||||||||||||
Option contracts (d) | 9 | — | — | 9 | |||||||||||||
Other available-for-sale securities | 63 | 58 | — | 5 | |||||||||||||
Total assets | $ | 3,757 | $ | 2,620 | $ | 626 | $ | 511 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (8 | ) | $ | — | $ | (8 | ) | $ | — | |||||||
Option contracts (c) | (274 | ) | — | — | (274 | ) | |||||||||||
Option contracts (d) | (21 | ) | — | — | (21 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (77 | ) | — | (77 | ) | — | |||||||||||
Deferred compensation | (158 | ) | (158 | ) | — | — | |||||||||||
Total liabilities | $ | (538 | ) | $ | (158 | ) | $ | (85 | ) | $ | (295 | ) | |||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||||||||||||||||
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2012 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 829 | $ | 829 | $ | — | $ | — | |||||||||
Commercial paper | 170 | — | 170 | — | |||||||||||||
Certificates of deposit | 34 | — | 34 | — | |||||||||||||
Eurodollar Time Deposits | 80 | — | 80 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,624 | 1,624 | — | — | |||||||||||||
Certificates of deposit | 233 | — | 233 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 36 | — | — | 36 | |||||||||||||
Interest rate derivatives (see Note 10) | 31 | — | 31 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 113 | — | 113 | — | |||||||||||||
Option contracts (c) | 850 | — | — | 850 | |||||||||||||
Option contracts (d) | 10 | — | — | 10 | |||||||||||||
Other available-for-sale securities | 49 | 44 | — | 5 | |||||||||||||
Total assets | $ | 4,059 | $ | 2,497 | $ | 661 | $ | 901 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (57 | ) | $ | — | $ | (57 | ) | $ | — | |||||||
Option contracts (c) | (637 | ) | — | — | (637 | ) | |||||||||||
Swap contracts (d) | (56 | ) | — | (56 | ) | — | |||||||||||
Option contracts (d) | (4 | ) | — | — | (4 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (126 | ) | — | (126 | ) | — | |||||||||||
Deferred Compensation | (137 | ) | (137 | ) | — | — | |||||||||||
Total liabilities | $ | (1,017 | ) | $ | (137 | ) | $ | (239 | ) | $ | (641 | ) | |||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||||||||||||||||
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
The Company had no transfers of assets or liabilities between any of the above levels during the years ended December 31, 2013 or 2012. The Company did not have any assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2013 or 2012. The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for 2013 and 2012: | |||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2012 | $ | 219 | $ | 36 | $ | 5 | $ | 260 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | 71 | — | — | 71 | |||||||||||||
Included in other comprehensive income | (107 | ) | 3 | — | (104 | ) | |||||||||||
Purchases | 357 | (a) | — | — | 357 | ||||||||||||
Sales | (417 | ) | (a) | — | — | (417 | ) | ||||||||||
Settlements | 49 | — | — | 49 | |||||||||||||
Balance at December 31, 2013 | $ | 172 | $ | 39 | (b) | $ | 5 | $ | 216 | ||||||||
The amount of total gains for the period | $ | 86 | $ | — | $ | — | $ | 86 | |||||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2013 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2011 | $ | 417 | $ | 67 | $ | 5 | $ | 489 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | (62 | ) | — | — | (62 | ) | |||||||||||
Included in other comprehensive income | 22 | — | — | 22 | |||||||||||||
Purchases | 1,003 | (a) | — | — | 1,003 | ||||||||||||
Sales | (1,081 | ) | (a) | (31 | ) | — | (1,112 | ) | |||||||||
Settlements | (80 | ) | — | — | (80 | ) | |||||||||||
Balance at December 31, 2012 | $ | 219 | $ | 36 | (b) | $ | 5 | $ | 260 | ||||||||
The amount of total gains for the period | $ | 27 | $ | — | $ | — | $ | 27 | |||||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2012 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
The significant unobservable input used in the fair value measurement of the Company’s derivative option contracts is implied volatility. Holding other inputs constant, a significant increase (decrease) in implied volatility would result in a significantly higher (lower) fair value measurement, respectively, for the Company’s derivative option contracts. The significant unobservable inputs used in the fair value measurement of the Company’s auction rate securities are time to principal recovery, an illiquidity premium, and counterparty credit spread. Holding other inputs constant, a significant increase (decrease) in such unobservable inputs would result in a significantly lower (higher) fair value measurement, respectively. | |||||||||||||||||
All settlements from fuel derivative contracts that are deemed “effective” are included in Fuel and oil expense in the period the underlying fuel is consumed in operations. Any “ineffectiveness” associated with hedges, including amounts that settled in the current period (realized), and amounts that will settle in future periods (unrealized), is recorded in earnings immediately, as a component of Other (gains) losses, net. See Note 10 for further information on hedging. Any gains and losses (realized and unrealized) related to other investments are reported in Other operating expenses, and were immaterial for 2013 and 2012. | |||||||||||||||||
The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s assets and liabilities classified as Level 3 at December 31, 2013: | |||||||||||||||||
Quantitative information about Level 3 fair value measurements | |||||||||||||||||
Valuation technique | Unobservable input | Period (by year) | Range | ||||||||||||||
Fuel derivatives | Option model | Implied volatility | 2014 | 9-25% | |||||||||||||
2015 | 13-23% | ||||||||||||||||
2016 | 13-20% | ||||||||||||||||
2017 | 13-17% | ||||||||||||||||
Auction rate securities | Discounted cash flow | Time to principal recovery | 5-8 years | ||||||||||||||
Illiquidity premium | 3-4% | ||||||||||||||||
Counterparty credit spread | 1-3% | ||||||||||||||||
The carrying amounts and estimated fair values of the Company’s long-term debt (including current maturities), as well as the applicable fair value hierarchy tier, at December 31, 2013, are presented in the table below. The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these agreements as Level 2. Six of the Company’s debt agreements are not publicly held. The Company has determined the estimated fair value of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes indicative pricing from counterparties and a discounted cash flow method to estimate the fair value of the Level 3 items. | |||||||||||||||||
(in millions) | Carrying value | Estimated fair value | Fair value level hierarchy | ||||||||||||||
5.25% Notes due 2014 | $ | 357 | $ | 362 | Level 2 | ||||||||||||
5.75% Notes due 2016 | 320 | 354 | Level 2 | ||||||||||||||
5.25% Convertible Senior Notes due 2016 | 115 | 178 | Level 2 | ||||||||||||||
5.125% Notes due 2017 | 322 | 346 | Level 2 | ||||||||||||||
Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | 41 | 39 | Level 2 | ||||||||||||||
French Credit Agreements due 2018 - 1.05% | 46 | 46 | Level 3 | ||||||||||||||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | 30 | 31 | Level 3 | ||||||||||||||
Term Loan Agreement due 2019 - 6.315% | 210 | 213 | Level 3 | ||||||||||||||
Term Loan Agreement due 2019 - 6.84% | 85 | 90 | Level 3 | ||||||||||||||
Term Loan Agreement due 2020 - 5.223% | 413 | 388 | Level 3 | ||||||||||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 340 | 335 | Level 3 | ||||||||||||||
Pass Through Certificates due 2022 - 6.24% | 371 | 418 | Level 2 | ||||||||||||||
7.375% Debentures due 2027 | 136 | 146 | Level 2 | ||||||||||||||
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Equity [Abstract] | ' | |||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ' | |||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||||||||||
Comprehensive income includes changes in the fair value of certain financial derivative instruments that qualify for hedge accounting, unrealized gains and losses on certain investments, and actuarial gains/losses arising from the Company’s postretirement benefit obligation. A rollforward of the amounts included in AOCI, net of taxes, is shown below for 2013 and 2012: | ||||||||||||||||||||||||
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Other | Deferred tax impact | Accumulated other | ||||||||||||||||||
comprehensive income (loss) | ||||||||||||||||||||||||
Balance at December 31, 2011 | $ | (297 | ) | $ | (107 | ) | $ | 54 | $ | (14 | ) | $ | 140 | $ | (224 | ) | ||||||||
2012 changes in fair value | 31 | (27 | ) | (28 | ) | 6 | (73 | ) | (91 | ) | ||||||||||||||
Reclassification to earnings | 163 | 26 | — | — | 7 | 196 | ||||||||||||||||||
Balance at December 31, 2012 | $ | (103 | ) | $ | (108 | ) | $ | 26 | $ | (8 | ) | $ | 74 | $ | (119 | ) | ||||||||
2013 changes in fair value | (82 | ) | 22 | 39 | 16 | — | (5 | ) | ||||||||||||||||
Reclassification to earnings | 165 | 28 | — | — | -72 | 121 | ||||||||||||||||||
Balance at December 31, 2013 | $ | (20 | ) | $ | (58 | ) | $ | 65 | $ | 8 | $ | 2 | $ | (3 | ) | |||||||||
The following table illustrates the significant amounts reclassified out of each component of AOCI for the year ended December 31, 2013: | ||||||||||||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||
AOCI components | ||||||||||||||||||||||||
Unrealized gain on fuel derivative instruments | $ | 165 | Fuel and oil expense | |||||||||||||||||||||
62 | Less: Tax Expense | |||||||||||||||||||||||
$ | 103 | Net of tax | ||||||||||||||||||||||
Unrealized gain on interest rate derivative instruments | $ | 28 | Interest expense | |||||||||||||||||||||
10 | Less: Tax Expense | |||||||||||||||||||||||
$ | 18 | Net of tax | ||||||||||||||||||||||
Total reclassifications for the period | $ | 121 | Net of tax | |||||||||||||||||||||
COMMON_STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
COMMON STOCK | ' |
COMMON STOCK | |
The Company has one class of capital stock, its common stock. Holders of shares of common stock are entitled to receive dividends when and if declared by the Board of Directors and are entitled to one vote per share on all matters submitted to a vote of the Shareholders. At December 31, 2013, the Company had 29 million shares of common stock reserved for issuance pursuant to Employee stock plans (of which 22 million shares had not been granted) through various share-based compensation arrangements. See Note 14. |
STOCK_PLANS
STOCK PLANS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
STOCK PLANS | ' | |||||||||||||
STOCK PLANS | ||||||||||||||
Share-based compensation | ||||||||||||||
The Company has previously awarded share-based compensation pursuant to plans covering the majority of its Employee groups, including plans adopted via collective bargaining, plans covering the Company’s Board of Directors, and options granted pursuant to a prior employment contract with the Chairman Emeritus of the Company. The Company accounts for share-based compensation utilizing fair value. | ||||||||||||||
The Consolidated Statement of Income for the years ended December 31, 2013, 2012, and 2011, reflects share-based compensation expense of $18 million, $16 million, and $13 million, respectively. The total tax benefit recognized in earnings from share-based compensation arrangements for the years ended December 31, 2013, 2012, and 2011, was not material. As of December 31, 2013, there was $22 million of total unrecognized compensation cost related to share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.1 years. | ||||||||||||||
Restricted stock units and stock grants | ||||||||||||||
Under the Company’s Amended and Restated 2007 Equity Incentive Plan (“2007 Equity Plan”), it granted restricted stock units (“RSUs”) to certain Employees during 2011, 2012, and 2013. In addition, the Company granted approximately 63 thousand shares of unrestricted stock at a weighted average grant price of $14.34 in 2013, approximately 82 thousand shares at a weighted average grant price of $8.21 in 2012, and approximately 33 thousand shares at a weighted average grant price of $12.26 in 2011 to members of its Board of Directors. The fair value of RSUs and unrestricted stock grants is based on the closing price of the Company’s common stock on the date of grant. Outstanding RSUs vest over three years, subject to the individual’s continued employment or service. The Company recognizes expense on a straight-line basis over the vesting period. A remaining balance of up to 10 million shares of the Company’s common stock may be issued pursuant to grants under the 2007 Equity Plan. Aggregated information regarding the Company’s RSUs is summarized below: | ||||||||||||||
RESTRICTED STOCK UNITS | ||||||||||||||
Units (000) | Wtd. Average | |||||||||||||
Fair Value | ||||||||||||||
Outstanding December 31, 2010 | 990 | $ | 12.28 | |||||||||||
Granted | 1,007 | 12.27 | ||||||||||||
Vested | (327 | ) | 12.28 | |||||||||||
Surrendered | (30 | ) | 12.28 | |||||||||||
Outstanding December 31, 2011 | 1,640 | 12.27 | ||||||||||||
Granted | 1,939 | 8.21 | ||||||||||||
Vested | (644 | ) | 12.27 | |||||||||||
Surrendered | (59 | ) | 10.54 | |||||||||||
Outstanding December 31, 2012 | 2,876 | 9.57 | ||||||||||||
Granted | 1,139 | 14.34 | ||||||||||||
Vested | (1,263 | ) | 10.24 | |||||||||||
Surrendered | (168 | ) | 9.11 | |||||||||||
Outstanding December 31, 2013 | 2,584 | $ | 11.38 | |||||||||||
Stock options | ||||||||||||||
The Company has previously awarded stock options under plans covering Employees subject to collective bargaining agreements (collective bargaining plans) and plans covering other Employees and members of the Board of Directors (other Employee plans). None of the collective bargaining plans were required to be approved by Shareholders. Options granted to Employees under collective bargaining plans are non-qualified, granted at or above the fair value of the Company’s common stock on the date of grant, and generally have terms ranging from six to twelve years. There were no material grants of stock options to Employees covered by collective bargaining plans during 2011, 2012, or 2013. Neither Executive Officers nor members of the Company’s Board of Directors are eligible to participate in any of the collective bargaining plans. Options granted to Employees and members of the Board of Directors through other Employee plans are both qualified as incentive stock options under the Internal Revenue Code of 1986 and non-qualified stock options, granted at no less than the fair value of the Company’s common stock on the date of grant, and have 10-year terms. All of the options included in other Employee plans have been approved by Shareholders, except one plan covering non-management, non-contract Employees, which did not require Shareholder approval and had an insignificant number of options outstanding as of December 31, 2013. Although the Company does not have a formal policy, upon option exercise, the Company will typically issue treasury stock, to the extent such shares are available. | ||||||||||||||
Vesting terms for the collective bargaining plans differ based on the grant made, and have ranged in length from immediate vesting to vesting periods in accordance with the period covered by the respective collective bargaining agreement. For other Employee plans, options vest and generally become fully exercisable over three, five, or ten years of continued employment, depending upon the grant type. For grants in any of the Company’s plans that are subject to graded vesting over a service period, the Company recognizes expense on a straight-line basis over the requisite service period for the entire award. None of the Company’s grants include performance-based or market-based vesting conditions, as defined. | ||||||||||||||
The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions including expected stock price volatility. The Company estimates expected stock price volatility via observations of both historical volatility trends as well as implied future volatility observations as determined by independent third parties. Stock options issued by the Company during 2013 and 2012 were immaterial. | ||||||||||||||
Aggregated information regarding Company issued stock options is summarized below: | ||||||||||||||
STOCK OPTION PLANS | ||||||||||||||
Options | Wtd. | Wtd. | Aggregate | |||||||||||
0 | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | (millions) | ||||||||||||
term | ||||||||||||||
Outstanding December 31, 2010 | 50,982 | $ | 14.68 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (181 | ) | 7.74 | |||||||||||
Surrendered | (3,477 | ) | 17.38 | |||||||||||
Outstanding December 31, 2011 | 47,324 | $ | 14.51 | |||||||||||
Granted | 6 | 9 | ||||||||||||
Exercised | (573 | ) | 8 | |||||||||||
Surrendered | (27,847 | ) | 14.85 | |||||||||||
Outstanding December 31, 2012 | 18,910 | $ | 14.19 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (6,633 | ) | 13.31 | |||||||||||
Surrendered | (3,116 | ) | 14.94 | |||||||||||
Outstanding December 31, 2013 | 9,161 | $ | 14.58 | 1.9 | $ | 39 | ||||||||
Vested or expected to vest at December 31, 2013 | 9,137 | $ | 14.58 | 1.9 | $ | 39 | ||||||||
Exercisable at December 31, 2013 | 8,689 | $ | 14.49 | 1.9 | $ | 38 | ||||||||
The total aggregate intrinsic value of options exercised for all plans during the years ended December 31, 2013, 2012, and 2011, was $22 million, $1 million, and $1 million, respectively. The total grant date fair value of shares vesting during the years ended December 31, 2013, 2012, and 2011, was $16 million, $13 million, and $13 million, respectively. | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||
Under the amended 1991 Employee Stock Purchase Plan (ESPP), which has been approved by Shareholders, the Company is authorized to issue up to a remaining balance of 11 million shares of the Company’s common stock to Employees of the Company. These shares may be issued at a price equal to 90 percent of the market value at the end of each monthly purchase period. Common stock purchases are paid for through periodic payroll deductions. For the years ended December 31, 2013, 2012, and 2011, participants under the plan purchased 1.5 million shares, 2.2 million shares, and 1.7 million shares at average prices of $12.03, $8.01, and $9.73, respectively. The weighted-average fair value of each purchase right under the ESPP granted for the years ended December 31, 2013, 2012, and 2011, which is equal to the ten percent discount from the market value of the Common Stock at the end of each monthly purchase period, was $1.34, $0.89, and $1.03, respectively. | ||||||||||||||
Taxes | ||||||||||||||
A portion of the Company’s granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax rate from year to year is subject to variability. |
EMPLOYEE_RETIREMENT_PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||
EMPLOYEE RETIREMENT PLANS | ' | ||||||||||||
EMPLOYEE RETIREMENT PLANS | |||||||||||||
Defined contribution plans | |||||||||||||
Southwest has defined contribution plans covering substantially all of its Employees. Contributions under all defined contribution plans are primarily based on Employee compensation and performance of the Company. The Company sponsors Employee savings plans under section 401(k) of the Internal Revenue Code, which include Company matching contributions. In addition, the Southwest Airlines Co. ProfitSharing Plan (ProfitSharing Plan) is a defined contribution plan to which the Company may contribute a percentage of its eligible pre-tax profits, as defined, on an annual basis. No Employee contributions to the ProfitSharing Plan are allowed. AirTran Employees became eligible to participate in Southwest’s ProfitSharing Plan beginning January 1, 2012. | |||||||||||||
Company contributions to all defined contribution plans expensed in 2013, 2012, and 2011, reflected as a component of Salaries, wages, and benefits, were $497 million, $370 million, and $316 million, respectively. | |||||||||||||
Postretirement benefit plans | |||||||||||||
Southwest and AirTran provide postretirement benefits to qualified retirees in the form of medical and dental coverage. Employees must meet minimum levels of service and age requirements as set forth by the Company, or as specified in collective bargaining agreements with specific workgroups. Employees meeting these requirements, as defined, may use accrued unused sick time to pay for medical and dental premiums from the age of retirement until age 65. | |||||||||||||
The following table shows the change in the accumulated postretirement benefit obligation (APBO) for the years ended December 31, 2013 and 2012: | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
APBO at beginning of period | $ | 148 | $ | 107 | |||||||||
Service cost | 30 | 20 | |||||||||||
Interest cost | 4 | 4 | |||||||||||
Benefits paid | (3 | ) | (5 | ) | |||||||||
Credit for prior service | — | 17 | |||||||||||
Actuarial (gain)/loss | (41 | ) | 5 | ||||||||||
APBO at end of period | $ | 138 | $ | 148 | |||||||||
During 2013, the Company recorded a $41 million actuarial gain as a decrease to the APBO with an offset to AOCI. This actuarial gain is reflected above and resulted from changes in certain key assumptions used to determine the Company’s year-end obligation. The assumption change that resulted in the largest portion of the actuarial gain was the expected participation rate in the Plan for future qualifying retirees, which reflects lower expectations as to utilization of benefits based on recent history. | |||||||||||||
Also, pursuant to the Merger Agreement between AirTran and Southwest, Southwest Employees that were former AirTran employees are to be given credit for their service with AirTran for purposes of determining eligibility for retiree benefits. This service credit requirement resulted in a $17 million increase to the APBO during 2012, which is being accounted for as prior service cost to be amortized over the average future service of active AirTran employees. | |||||||||||||
The assumed healthcare cost trend rates have a significant effect on the amounts reported for the consolidated postretirement plans. A one percent change in all healthcare cost trend rates used in measuring the APBO at December 31, 2013, would have the following effects: | |||||||||||||
(in millions) | 1% increase | 1% decrease | |||||||||||
Increase (decrease) in total service and interest costs | $ | 3 | $ | (3 | ) | ||||||||
Increase (decrease) in the APBO | $ | 19 | $ | (16 | ) | ||||||||
All plans are unfunded, and benefits are paid as they become due. Estimated future benefit payments expected to be paid for each of the next five years and the five years thereafter are $4 million in 2014, $5 million in 2015, $6 million in 2016, $7 million in 2017, $7 million in 2018, and $50 million for the next five years thereafter. | |||||||||||||
The funded status (the difference between the fair value of plan assets and the projected benefit obligations) of the Company’s consolidated benefit plans are recognized in the Consolidated Balance Sheet, with a corresponding adjustment to AOCI. The following table reconciles the funded status of the plans to the accrued postretirement benefit cost recognized in Other non-current liabilities on the Company’s Consolidated Balance Sheet at December 31, 2013 and 2012. | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
Funded status | $ | (138 | ) | $ | (148 | ) | |||||||
Unrecognized net actuarial gain | (80 | ) | (44 | ) | |||||||||
Unrecognized prior service cost | 15 | 18 | |||||||||||
Accumulated other comprehensive income | 65 | 26 | |||||||||||
Cost recognized on Consolidated Balance Sheet | $ | (138 | ) | $ | (148 | ) | |||||||
The consolidated periodic postretirement benefit cost for the years ended December 31, 2013, 2012, and 2011, included the following: | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Service cost | $ | 30 | $ | 20 | $ | 17 | |||||||
Interest cost | 4 | 4 | 4 | ||||||||||
Amortization of prior service cost | 3 | — | — | ||||||||||
Recognized actuarial gain | (4 | ) | (5 | ) | (6 | ) | |||||||
Net periodic postretirement benefit cost | $ | 33 | $ | 19 | $ | 15 | |||||||
Unrecognized prior service cost is expensed using a straight-line amortization of the cost over the average future service of Employees expected to receive benefits under the plans. Actuarial gains are amortized utilizing the minimum amortization method. The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2013, 2012, and 2011: | |||||||||||||
2013 (2) | 2012 (2) | 2011 | |||||||||||
Wtd-average discount rate | 5.05 | % | 2.9 | % | 4.05 | % | |||||||
Assumed healthcare cost trend rate (1) | 7.5 | % | 8 | % | 7.5 | % | |||||||
-1 | The assumed healthcare cost trend rate is assumed to remain at 7.5% for 2014, then decline gradually to 5.0% by 2024 and remain level thereafter. | ||||||||||||
-2 | Includes AirTran plans. | ||||||||||||
The selection of a discount rate is made annually and is selected by the Company based upon comparison of the expected future cash flows associated with the Company’s future payments under its consolidated postretirement obligations to a yield curve created using high quality bonds that closely match those expected future cash flows. This rate increased during 2013 due to both market conditions and a longer expected participant service period. The assumed healthcare trend rate is also reviewed at least annually and is determined based upon both historical experience with the Company’s healthcare benefits paid and expectations of how those trends may or may not change in future years. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
INCOME TAXES | ' | ||||||||||||
INCOME TAXES | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities at December 31, 2013 and 2012, are as follows: | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
DEFERRED TAX LIABILITIES: | |||||||||||||
Accelerated depreciation | $ | 4,069 | $ | 3,939 | |||||||||
Fuel derivative instruments | 36 | 33 | |||||||||||
Other | 84 | 70 | |||||||||||
Total deferred tax liabilities | 4,189 | 4,042 | |||||||||||
DEFERRED TAX ASSETS: | |||||||||||||
Fuel derivative instruments | 8 | 40 | |||||||||||
Deferred gains from sale and leaseback of aircraft | 24 | 24 | |||||||||||
Capital and operating leases | 163 | 179 | |||||||||||
Construction obligation | 168 | 127 | |||||||||||
Accrued engine maintenance | 90 | 84 | |||||||||||
Accrued employee benefits | 307 | 281 | |||||||||||
State taxes | 74 | 77 | |||||||||||
Business partner income | 457 | 339 | |||||||||||
Net operating losses and credit carryforwards | 14 | 83 | |||||||||||
Other | 118 | 170 | |||||||||||
Total deferred tax assets | 1,423 | 1,404 | |||||||||||
Net deferred tax liability | $ | 2,766 | $ | 2,638 | |||||||||
The provision for income taxes is composed of the following: | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
CURRENT: | |||||||||||||
Federal | $ | 355 | $ | (45 | ) | $ | 4 | ||||||
State | 44 | 12 | 13 | ||||||||||
Total current | 399 | (33 | ) | 17 | |||||||||
DEFERRED: | |||||||||||||
Federal | 62 | 287 | 122 | ||||||||||
State | (6 | ) | 10 | 6 | |||||||||
Total deferred | 56 | 297 | 128 | ||||||||||
$ | 455 | $ | 264 | $ | 145 | ||||||||
The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the following reasons: | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Tax at statutory U.S. tax rates | $ | 423 | $ | 240 | $ | 114 | |||||||
Nondeductible items | 10 | 10 | 13 | ||||||||||
State income taxes, net of federal benefit | 25 | 14 | 13 | ||||||||||
Other, net | (3 | ) | — | 5 | |||||||||
Total income tax provision | $ | 455 | $ | 264 | $ | 145 | |||||||
During 2013, the Company continues to maintain and did not adjust, a $5 million liability for unrecognized tax benefits, the majority of which related to AirTran’s tax positions in prior years. | |||||||||||||
As of December 31, 2013, the Company had net operating loss (“NOL”) carryforwards of approximately $34 million from its federal tax return. These NOL’s are available to offset future taxable income. At a 35 percent federal statutory tax rate, these NOL’s result in a deferred tax asset of $12 million, as of December 31, 2013, which represents the expected future tax benefit of the NOL’s, and which is netted against the Company’s Deferred income tax liability in the Consolidated Balance Sheet. These NOL’s will expire from 2017 to 2031 if not utilized. No valuation allowance was necessary. See Note 2 for further information on the acquisition of AirTran. The only periods subject to examination for the Company’s federal tax return are the 2012 and 2013 tax years. |
QUARTERLY_FINANCIAL_DATA
QUARTERLY FINANCIAL DATA | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Data [Abstract] | ' | ||||||||||||||||
QUARTERLY FINANCIAL DATA | ' | ||||||||||||||||
QUARTERLY FINANCIAL DATA | |||||||||||||||||
(unaudited) | |||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||
(in millions except per share amounts) | March 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
2013 | |||||||||||||||||
Operating revenues | $ | 4,084 | $ | 4,643 | $ | 4,545 | $ | 4,428 | |||||||||
Operating income | 70 | 433 | 390 | 386 | |||||||||||||
Income before income taxes | 94 | 363 | 419 | 334 | |||||||||||||
Net income | 59 | 224 | 259 | 212 | |||||||||||||
Net income per share, basic | 0.08 | 0.31 | 0.37 | 0.3 | |||||||||||||
Net income per share, diluted | 0.08 | 0.31 | 0.37 | 0.3 | |||||||||||||
31-Mar | 30-Jun | Sept. 30 | Dec. 31 | ||||||||||||||
2012 | |||||||||||||||||
Operating revenues | $ | 3,991 | $ | 4,616 | $ | 4,309 | $ | 4,173 | |||||||||
Operating income | 22 | 460 | 51 | 91 | |||||||||||||
Income (loss) before income taxes | 159 | 368 | 33 | 125 | |||||||||||||
Net income (loss) | 98 | 228 | 16 | 78 | |||||||||||||
Net income (loss) per share, basic | 0.13 | 0.3 | 0.02 | 0.11 | |||||||||||||
Net income (loss) per share, diluted | 0.13 | 0.3 | 0.02 | 0.11 | |||||||||||||
Recovered_Sheet1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Basis of Presentation | ' | ||||||||||
Basis of Presentation | |||||||||||
Southwest Airlines Co. (the “Company”) operates Southwest Airlines, a major domestic airline. The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries, which include AirTran Holdings, LLC. On May 2, 2011 (the “acquisition date”), the Company acquired all of the outstanding equity of AirTran Holdings, Inc. (“AirTran Holdings”), the former parent company of AirTran Airways, Inc. (“AirTran Airways”). Throughout these Notes, the Company makes reference to AirTran, which is meant to be inclusive of the following: (i) for periods prior to the acquisition date, AirTran Holdings and its subsidiaries, including, among others, AirTran Airways; and (ii) for periods on and after the acquisition date, AirTran Holdings, LLC, the successor to AirTran Holdings, and its subsidiaries, including among others, AirTran Airways. The accompanying Consolidated Financial Statements include the results of operations and cash flows for AirTran since May 2, 2011. See Note 2. All significant inter-entity balances and transactions have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. | |||||||||||
Certain prior period amounts have been reclassified to conform to the current presentation. In the Consolidated Statement of Comprehensive Income for the year ended December 31, 2012, the Company has reclassified $17 million from Other to Unrealized losses on defined benefit plan items, net of deferred tax. | |||||||||||
Cash and cash equivalents | ' | ||||||||||
Cash and cash equivalents | |||||||||||
Cash in excess of that necessary for operating requirements is invested in short-term, highly liquid, income-producing investments. Investments with original maturities of three months or less when purchased are classified as cash and cash equivalents, which primarily consist of certificates of deposit, money market funds, and investment grade commercial paper issued by major corporations and financial institutions. Cash and cash equivalents are stated at cost, which approximates fair value. | |||||||||||
As of December 31, 2013, no cash collateral deposits were either held by or provided by the Company to its fuel hedge counterparties and the Company had provided cash collateral deposits totaling $32 million to its interest rate hedge counterparties. As of December 31, 2012, the Company had no cash collateral deposits held by or provided by the Company to its fuel hedge counterparties and cash collateral deposits totaling $89 million to its interest rate hedge counterparties. Cash collateral amounts provided or held associated with fuel and interest rate derivative instruments are not restricted in any way and earn interest income at an agreed upon rate that approximates the rates earned on short-term securities issued by the U.S. Government. Depending on the fair value of the Company’s fuel and interest rate derivative instruments, the amounts of collateral deposits held or provided at any point in time can fluctuate significantly. See Note 10 for further information on these collateral deposits and fuel derivative instruments. | |||||||||||
Short-term and noncurrent investments | ' | ||||||||||
Short-term and noncurrent investments | |||||||||||
Short-term investments consist of investments with original maturities of greater than three months but less than twelve months when purchased. These are primarily short-term securities issued by the U.S. Government and certificates of deposit issued by domestic banks. All of these investments are classified as available-for-sale securities and are stated at fair value, which approximates cost. For all short-term investments, at each reset period or upon reinvestment, the Company accounts for the transaction as Proceeds from sales of short-term investments for the security relinquished, and Purchases of short-investments for the security purchased, in the accompanying Consolidated Statement of Cash Flows. Unrealized gains and losses, net of tax, if any, are recognized in Accumulated other comprehensive income (loss) (“AOCI”) in the accompanying Consolidated Balance Sheet. Realized net gains and losses on specific investments, if any, are reflected in Interest income in the accompanying Consolidated Statement of Income. Both unrealized and realized gains and/or losses associated with investments were immaterial for all years presented. | |||||||||||
Noncurrent investments consist of investments with maturities of greater than twelve months. At December 31, 2013, these primarily consisted of the Company’s auction rate security instruments that it expects will not be redeemed during 2014. See Note 11 for further information. Noncurrent investments are included as a component of Other assets in the Consolidated Balance Sheet. | |||||||||||
Accounts and other receivables | ' | ||||||||||
Accounts and other receivables | |||||||||||
Accounts and other receivables are carried at cost. They primarily consist of amounts due from credit card companies associated with sales of tickets for future travel, amounts due from business partners in the Company’s frequent flyer programs, and amounts due from counterparties associated with fuel derivative instruments that have settled. The allowance for doubtful accounts was immaterial at December 31, 2013, 2012, and 2011. In addition, the provision for doubtful accounts and write-offs for 2013, 2012, and 2011 were each immaterial. | |||||||||||
Inventories | ' | ||||||||||
Inventories | |||||||||||
Inventories consist primarily of aircraft fuel, flight equipment expendable parts, materials, and supplies. All of these items are carried at average cost, less an allowance for obsolescence. These items are generally charged to expense when issued for use. The reserve for obsolescence was $36 million and $34 million at December 31, 2013, and 2012, respectively. In addition, the Company’s provision for obsolescence and write-offs for 2013, 2012, and 2011 were each immaterial. | |||||||||||
Property and equipment | ' | ||||||||||
Property and equipment | |||||||||||
Property and equipment is stated at cost. Depreciation is provided by the straight-line method to estimated residual values over periods generally ranging from 23 to 25 years for flight equipment and 5 to 30 years for ground property and equipment once the asset is placed in service. Residual values estimated for aircraft generally range from 2 to 20 percent and for ground property and equipment generally range from 0 to 10 percent. Property under capital leases and related obligations are initially recorded at an amount equal to the present value of future minimum lease payments computed on the basis of the Company’s incremental borrowing rate or, when known, the interest rate implicit in the lease. Amortization of property under capital leases is on a straight-line basis over the lease term and is included in Depreciation and amortization expense. Leasehold improvements generally are amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Assets constructed for others primarily consists of airport improvement projects, once placed into service, in which the Company is considered the accounting owner of the facilities, and such assets are amortized to estimated residual value over the term of the Company's lease or the expected life of the asset. See Note 4. | |||||||||||
The Company evaluates its long-lived assets used in operations for impairment when events and circumstances indicate that the undiscounted cash flows to be generated by that asset are less than the carrying amounts of the asset and may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s physical condition, and operating or cash flow losses associated with the use of the long-lived asset. If an asset is deemed to be impaired, an impairment loss is recorded for the excess of the asset book value in relation to its estimated fair value. | |||||||||||
Aircraft and engine maintenance | ' | ||||||||||
Aircraft and engine maintenance | |||||||||||
The cost of scheduled inspections and repairs and routine maintenance costs for all aircraft and engines are charged to Maintenance materials and repairs expense as incurred. The Company also has “power-by-the-hour” agreements related to certain of its aircraft engines with external service providers. Under these agreements, which the Company has determined effectively transfers the risk and creates an obligation associated with the maintenance on such engines to the counterparty, expense is recorded commensurate with each hour flown on an engine. In situations where the payments to the counterparty do not sufficiently match the level of services received during the period, expense is recorded on a straight-line basis over the term of the agreement based on our best estimate of expected future aircraft utilization. The Company modified its engine maintenance contract for its Classic fleet (737-300/500s) during fourth quarter 2011 and, although payments made under this contract are made on the basis of flight hours, the risk-transfer concept under this agreement is no longer met, and the Company now records expense on a time and materials basis when an engine repair event takes place. The impact of this change on fourth quarter 2011 was a reduction in Maintenance materials and repairs expense of $30 million, resulting in an increase in net income of $16 million, and an increase in earnings per share (basic and diluted) of $.02 per share. Modifications that significantly enhance the operating performance or extend the useful lives of aircraft or engines are capitalized and amortized over the remaining life of the asset. | |||||||||||
Goodwill and intangible assets | ' | ||||||||||
Goodwill and intangible assets | |||||||||||
Goodwill represents the excess of the consideration transferred over the fair value of AirTran’s assets and liabilities on the acquisition date. Goodwill is not amortized, but it is evaluated for impairment at least annually, or more frequently if events or circumstances indicate impairment may exist. A fair value-based methodology is utilized in testing the carrying value to Goodwill, utilizing assumptions including: (i) a long-term projection of revenues and expenses; (ii) estimated discounted future cash flows; (iii) observable earnings multiples of publicly-traded airlines; (iv) weighted-average cost of capital; and (v) expected tax rate. Factors used in the valuation of goodwill include, but are not limited to, management’s plans for future operations, recent operating results and discounted projected future cash flows. These factors are considered Level 3 inputs within the fair value hierarchy. As a result of the annual impairment test performed as of October 1, 2013, no impairment was determined to exist for Goodwill. In the Goodwill impairment analysis performed, the excess fair value of the enterprise over carrying value was estimated to be in excess of 50 percent. | |||||||||||
Intangible assets primarily consist of acquired leasehold rights to certain airport owned gates at Chicago’s Midway International Airport, take-off and landing slots at certain domestic slot-controlled airports, and certain intangible assets recognized from the AirTran acquisition. See Note 2 for further information on acquired identifiable intangible assets. The following table is a summary of the Company’s intangible assets as of December 31, 2013: | |||||||||||
Gross | Weighted-average | Accumulated | |||||||||
carrying | useful life | amortization | |||||||||
amount | (in years) | (in millions) | |||||||||
(in millions) | |||||||||||
Customer relationships/marketing agreements | $ | 39 | 9 | $ | 23 | ||||||
Trademarks/trade names | 36 | 6 | 25 | ||||||||
Owned domestic slots | 93 | Indefinite | n/a | ||||||||
Leased domestic slots (1) | 19 | 39 | 4 | ||||||||
Noncompete agreements | 5 | 2 | 5 | ||||||||
Gate leasehold rights | 60 | 19 | 29 | ||||||||
Total | $ | 252 | 15 | $ | 86 | ||||||
(1) Useful life of leased slots is based on the stated lease term. | |||||||||||
During fourth quarter 2013, following the Company’s acquisition of additional slots at New York’s LaGuardia Airport, the Company made the determination that all of its owned domestic slots should be assigned an indefinite life and would thus not be subject to further amortization, including those that are owned but leased to other carriers. Among other factors, this was due to the Company’s reassessment of the current size and importance of its operations at New York’s LaGuardia Airport and Washington’s Ronald Reagan National Airport versus when the Company first began service to these airports in recent years. The impact of this prospective change in accounting estimate is immaterial. Also, as part of this change, the Company evaluated its previously owned domestic slots for impairment, but none was noted. | |||||||||||
The aggregate amortization expense for 2013, 2012, and 2011 was $19 million, $25 million, and $50 million, respectively. Estimated aggregate amortization expense for the five succeeding years and thereafter is as follows: 2014 – $13 million, 2015 – $11 million, 2016 – $8 million, 2017 – $5 million, 2018 – $5 million, and thereafter – $31 million. | |||||||||||
Revenue recognition | ' | ||||||||||
Revenue recognition | |||||||||||
Tickets sold are initially deferred as Air traffic liability. Passenger revenue is recognized when transportation is provided. Air traffic liability primarily represents tickets sold for future travel dates and estimated refunds and exchanges of tickets sold for past travel dates. The majority of the Company’s tickets sold are nonrefundable. Refundable tickets that are sold but not flown on the travel date can be reused for another flight, up to a year from the date of sale, or refunded. A small percentage of tickets (or partial tickets) expire unused. The Company estimates the amount of tickets that expire unused and recognizes such amounts in Passenger revenue once the scheduled flight date has passed. Prior to September 13, 2013, funds associated with tickets in which a passenger did not show up for a flight without canceling were able to be reused on another flight for up to twelve months. On September 13, 2013, Southwest implemented a No Show policy that applies to nonrefundable fares that are not canceled or changed by a Customer at least ten minutes prior to a flight's scheduled departure. Based on the Company's revenue recognition policy, revenue is now recorded at the flight date for a Customer who does not change his/her itinerary and loses his/her funds. This change in Company policy did not have a significant impact on the amount of spoilage revenue recorded during 2013 or the Company's estimate of the amount of spoilage it expects to record in future periods. Amounts collected from passengers for ancillary services such as baggage and other fees are generally recognized as Other revenue when the service is provided, which is typically the flight date. | |||||||||||
The Company is also required to collect certain taxes and fees from Customers on behalf of government agencies and remit these back to the applicable governmental entity on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, and airport passenger facility charges. These items are collected from Customers at the time they purchase their tickets, but are not included in Passenger revenue. The Company records a liability upon collection from the Customer and relieves the liability when payments are remitted to the applicable governmental agency. | |||||||||||
Frequent flyer program | ' | ||||||||||
Frequent flyer programs | |||||||||||
The Company records a liability for the estimated incremental cost of providing free travel under its frequent flyer programs for all amounts earned from flight activity that are expected to be redeemed for future travel. The estimated incremental cost includes direct passenger costs such as fuel, food, and other operational costs, but does not include any contribution to fixed overhead costs or profit. | |||||||||||
Southwest and AirTran also sell frequent flyer points and related services to companies participating in their respective frequent flyer programs. Funds received from the sale of these points are accounted for using the residual method. Under this method, the Company determined the portion of funds received that relate to free travel were currently estimated to be 100 percent of the amount received under both Southwest’s Rapid Reward program and under AirTran’s A+ Reward program as of December 31, 2013. These amounts are deferred and recognized as Passenger revenue when the ultimate free travel awards are flown. In periods in which less than 100 percent of funds received are apportioned to free travel, the remainder of the amount received per point sold (the residual), which is not associated with future travel, includes items such as access to the Company’s frequent flyer program population for marketing/solicitation purposes on a monthly or quarterly basis, use of the Company’s logo on co-branded credit cards, and other trademarks, designs, images, etc. of the Company for use in marketing materials. This residual portion is recognized in Other revenue in the period earned, which the Company has determined is the period in which it has fulfilled its obligation under the executed contract with the particular business partner, which is on a monthly or quarterly basis, upon sale, as the related marketing services are performed or provided. For all points sold to business partners that are expected to expire unused, the Company recognizes spoilage in accordance with the redemption method. Southwest and AirTran’s consolidated liability associated with the sale of frequent flyer points and/or flight credits, was approximately $1.1 billion as of December 31, 2013. This liability is included as part of Air Traffic liability in the Company’s Consolidated Balance Sheet, based on current expectations of redemption patterns over the next twelve months. | |||||||||||
In March 2011, Southwest re-launched its Rapid Rewards frequent flyer program. As part of Southwest’s transition to the current program, the Company did not convert members’ account balances under the previous program, but allowed members to continue to redeem those balances for award travel under the prior program rules for a period of time. The transition method used by the Company in moving members to the current program resulted in no material changes in the Company’s estimation of its existing frequent flyer liabilities as of the launch date. Although the current program is still relatively new and the Company does expect a reduction in the amount of spoilage associated with points earned within the program compared to its previous program; thus far, the impact of this expected reduction has not been material. | |||||||||||
Advertising | ' | ||||||||||
Advertising | |||||||||||
Advertising costs are charged to expense as incurred. Advertising and promotions expense for the years ended December 31, 2013, 2012, and 2011 was $208 million, $223 million, and $237 million, respectively, and is included as a component of Other operating expense in the accompanying Consolidated Statement of Income. | |||||||||||
Share-based Employee compensation | ' | ||||||||||
Share-based Employee compensation | |||||||||||
The Company has share-based compensation plans covering several of its Employee groups, including plans covering the Company’s Board of Directors. The Company accounts for share-based compensation based on its grant date fair value. See Note 14. | |||||||||||
The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of subjective assumptions including expected stock price volatility. The Company estimates expected stock price volatility via observations of both historical volatility trends as well as implied future volatility observations as determined by independent third parties. | |||||||||||
A portion of the Company’s granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax rate from year to year is subject to variability. | |||||||||||
The fair value of RSUs and unrestricted stock grants is based on the closing price of the Company’s common stock on the date of grant. Outstanding RSUs vest over three years, subject to the individual’s continued employment or service. The Company recognizes expense on a straight-line basis over the vesting period. | |||||||||||
The Company accounts for share-based compensation utilizing fair value. | |||||||||||
Fair Value of Financial Instruments | ' | ||||||||||
Financial derivative instruments | |||||||||||
The Company accounts for financial derivative instruments at fair value and applies hedge accounting rules where appropriate. The Company utilizes various derivative instruments, including jet fuel, crude oil, unleaded gasoline, and heating oil-based derivatives, to attempt to reduce the risk of its exposure to jet fuel price increases. These instruments consist primarily of purchased call options, collar structures, call spreads, and fixed-price swap agreements, and upon proper qualification are accounted for as cash-flow hedges. The Company also has interest rate swap agreements to convert a portion of its fixed-rate debt to floating rates and, including instruments acquired from AirTran, has swap agreements that convert certain floating-rate debt to a fixed-rate. These interest rate hedges are appropriately designated as either fair value hedges or as cash flow hedges. | |||||||||||
Since the majority of the Company’s financial derivative instruments are not traded on a market exchange, the Company estimates their fair values. Depending on the type of instrument, the values are determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets. Also, since there is not a reliable forward market for jet fuel, the Company must estimate the future prices of jet fuel in order to measure the effectiveness of the hedging instruments in offsetting changes to those prices. Forward jet fuel prices are estimated through utilization of a statistical-based regression equation with data from market forward prices of like commodities. This equation is then adjusted for certain items, such as transportation costs, that are stated in the Company’s fuel purchasing contracts with its vendors. | |||||||||||
For the effective portion of settled fuel hedges, the Company records the associated gains or losses as a component of Fuel and oil expense in the Consolidated Statement of Income. For amounts representing ineffectiveness, as defined, or changes in fair value of derivative instruments for which hedge accounting is not applied, the Company records any gains or losses as a component of Other (gains) losses, net, in the Consolidated Statement of Income. Amounts that are paid or received in connection with the purchase or sale of financial derivative instruments (i.e., premium costs of option contracts) are classified as a component of Other (gains) losses, net, in the Consolidated Statement of Income in the period in which the instrument settles or expires. All cash flows associated with purchasing and selling derivatives are classified as operating cash flows in the Consolidated Statement of Cash Flows, within Changes in certain assets and liabilities. See Note 10 for further information on hedge accounting and financial derivative instruments. | |||||||||||
The Company classifies its cash collateral provided to or held from counterparties in a “net” presentation on the Consolidated Balance Sheet against the fair value of the derivative positions with those counterparties. See Note 10 for further information. | |||||||||||
All settlements from fuel derivative contracts that are deemed “effective” are included in Fuel and oil expense in the period the underlying fuel is consumed in operations. Any “ineffectiveness” associated with hedges, including amounts that settled in the current period (realized), and amounts that will settle in future periods (unrealized), is recorded in earnings immediately, as a component of Other (gains) losses, net. See Note 10 for further information on hedging. Any gains and losses (realized and unrealized) related to other investments are reported in Other operating expenses, and were immaterial for 2013 and 2012. | |||||||||||
Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | |||||||||||
As of December 31, 2013, the Company held certain items that are required to be measured at fair value on a recurring basis. These included cash equivalents, short-term investments (primarily treasury bills, commercial paper, and certificates of deposit), certain noncurrent investments, interest rate derivative contracts, fuel derivative contracts, and available-for-sale securities. The majority of the Company’s short-term investments consist of instruments classified as Level 1. However, the Company has certificates of deposit, commercial paper, and Eurodollar time deposits that are classified as Level 2, due to the fact that the fair value for these instruments is determined utilizing observable inputs in non-active markets. Noncurrent investments consist of certain auction rate securities, primarily those collateralized by student loan portfolios, which are guaranteed by the U.S. Government. Other available-for-sale securities primarily consist of investments associated with the Company’s excess benefit plan. | |||||||||||
The Company’s fuel and interest rate derivative instruments consist of over-the-counter contracts, which are not traded on a public exchange. Fuel derivative instruments include swaps, as well as different types of option contracts, whereas interest rate derivatives consist solely of swap agreements. See Note 10 for further information on the Company’s derivative instruments and hedging activities. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these swap contracts as Level 2. The Company’s Treasury Department, which reports to the Chief Financial Officer, determines the value of option contracts utilizing an option pricing model based on inputs that are either readily available in public markets, can be derived from information available in publicly quoted markets, or are provided by financial institutions that trade these contracts. The option pricing model used by the Company is an industry standard model for valuing options and is the same model used by the broker/dealer community (i.e., the Company’s counterparties). The inputs to this option pricing model are the option strike price, underlying price, risk free rate of interest, time to expiration, and volatility. Because certain inputs used to determine the fair value of option contracts are unobservable (principally implied volatility), the Company has categorized these option contracts as Level 3. Volatility information is obtained from external sources, but is analyzed by the Company for reasonableness and compared to similar information received from other external sources. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. To validate the reasonableness of the Company’s option pricing model, on a monthly basis, the Company compares its option valuations to third party valuations. If any significant differences were to be noted, they would be researched in order to determine the reason. However, historically, no significant differences have been noted. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. | |||||||||||
Software capitalization | ' | ||||||||||
Software capitalization | |||||||||||
The Company capitalizes certain internal and external costs related to the acquisition and development of internal use software during the application development stages of projects. The Company amortizes these costs using the straight-line method over the estimated useful life of the software, which typically ranges from five to fifteen years. Costs incurred during the preliminary project or the post-implementation/operation stages of the project are expensed as incurred. Capitalized computer software, included as a component of Ground property and equipment in the accompanying Consolidated Balance Sheet, net of accumulated depreciation, was $357 million and $256 million at December 31, 2013, and 2012, respectively. Computer software depreciation expense was $90 million, $59 million, and $55 million for the years ended December 31, 2013, 2012, and 2011, respectively, and is included as a component of Depreciation and amortization expense in the accompanying Consolidated Statement of Income. | |||||||||||
Income taxes | ' | ||||||||||
Income taxes | |||||||||||
The Company accounts for deferred income taxes utilizing an asset and liability method, whereby deferred tax assets and liabilities are recognized based on the tax effect of temporary differences between the financial statements and the tax basis of assets and liabilities, as measured by current enacted tax rates. The Company also evaluates the need for a valuation allowance to reduce deferred tax assets to estimated recoverable amounts. | |||||||||||
The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of income before income taxes. Penalties are recorded in Other (gains) losses, net, and interest paid or received is recorded in Interest expense or Interest income, respectively, in the Consolidated Statement of Income. Amounts recorded for penalties and interest related to uncertain tax positions were immaterial for all years presented. | |||||||||||
Concentration risk | ' | ||||||||||
Concentration risk | |||||||||||
Approximately 83 percent of the Company’s full-time equivalent Employees are unionized and are covered by collective bargaining agreements. The Company manages this risk by maintaining positive relationships with its Employees and its Employees’ Representatives. Substantially all of the Company's unionized Employees, including its Pilots, Mechanics, Customer Service Agents and Customer Representatives, Ramp, Operations, Provisioning, and Freight Agents, Flight Attendants, Materials Specialists, Flight Simulator Technicians, and Facilities Maintenance Technicians are in discussions on labor agreements. These Employee groups represent approximately 82 percent of the Company’s full-time equivalent Employees as of December 31, 2013. | |||||||||||
The Company attempts to minimize its concentration risk with regards to its cash, cash equivalents, and its investment portfolio. This is accomplished by diversifying and limiting amounts among different counterparties, the type of investment, and the amount invested in any individual security or money market fund. | |||||||||||
To manage risk associated with financial derivative instruments held, the Company selects and will periodically review counterparties based on credit ratings, limits its exposure to a single counterparty, and monitors the market position of the program and its relative market position with each counterparty. The Company also has agreements with counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount or credit ratings fall below certain levels. Collateral deposits provided to or held from counterparties serve to decrease, but not totally eliminate, the credit risk associated with the Company’s hedging program. See Note 10 for further information. | |||||||||||
The Company currently operates an all-Boeing fleet, the majority of which are variations of the Boeing 737. If the Company were unable to acquire additional aircraft or associated aircraft parts from Boeing, or Boeing were unable or unwilling to make timely deliveries of aircraft or to provide adequate support for its products, the Company’s operations would be materially adversely impacted. In addition, the Company would be materially adversely impacted in the event of a mechanical or regulatory issue associated with the Boeing 737 or Boeing 717 aircraft type, whether as a result of downtime for part or all of the Company’s fleet or because of a negative perception by the flying public. The Company is also dependent on sole suppliers for aircraft engines and certain other aircraft parts and would, therefore, also be materially adversely impacted in the event of the unavailability of, or a mechanical or regulatory issue associated with, engines and other parts. | |||||||||||
The Company has historically entered into agreements with some of its co-brand, payment, and loyalty partners that contain exclusivity aspects which place certain confidential restrictions on the Company from entering into certain arrangements with other payment and loyalty partners. These arrangements generally extend for the terms of the partnerships, none of which currently extend beyond May 2017. The Company believes the financial benefits generated by the exclusivity aspects of these arrangements outweigh the risks involved with such agreements. | |||||||||||
Derivatives | ' | ||||||||||
All of the Company's fuel derivative instruments and interest rate swaps are subject to agreements that follow the netting guidance in the applicable accounting for derivatives and hedging. The types of derivative instruments the Company has determined are subject to netting requirements in the accompanying Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty that settle on the same day and in the same currency via one net payment or receipt. For cash collateral held by the Company or provided to counterparties, the Company nets such amounts against the fair value of the Company's derivative portfolio by each counterparty. The Company has elected to utilize netting for both its fuel derivative instruments and interest rate swap agreements and also classifies such amounts as either current or noncurrent, based on the net fair value position with each of the Company's counterparties in the Consolidated Balance Sheet. | |||||||||||
The Company's application of its netting policy associated with cash collateral differs depending on whether its derivative instruments are in a net asset position or a net liability position. If its fuel derivative instruments are in a net asset position with a counterparty, cash collateral amounts held are first netted against current outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of noncurrent outstanding derivative instruments. If the Company's fuel derivative instruments are in a net liability position with the counterparty, cash collateral amounts provided are first netted against noncurrent outstanding derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of current outstanding derivative instruments | |||||||||||
The Company is party to certain interest rate swap agreements that are accounted for as either fair value hedges or cash flow hedges, as defined in the applicable accounting guidance for derivative instruments and hedging. The interest rate swap agreements accounted for as fair value hedges qualify for the “shortcut” method of accounting for hedges, which dictates that the hedges are assumed to be perfectly effective, and, thus, there is no ineffectiveness to be recorded in earnings. For the Company’s interest rate swap agreements accounted for as cash flow hedges, ineffectiveness is required to be measured at each reporting period | |||||||||||
Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges. Generally, utilizing hedge accounting, all periodic changes in fair value of the derivatives designated as hedges that are considered to be effective are recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") until the underlying jet fuel is consumed. See Note 12. The Company’s results are subject to the possibility that periodic changes will not be effective, as defined, or that the derivatives will no longer qualify for hedge accounting. Ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company’s expected future cash outlay to purchase and consume jet fuel. To the extent that the periodic changes in the fair value of the derivatives are ineffective, the ineffective portion is recorded to Other (gains) losses, net in the Consolidated Statement of Income. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last reporting period is recorded to Other (gains) losses, net, in the Consolidated Statement of Income in the period of the change; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, at which time these amounts would be reclassified to Fuel and oil expense. When the Company has sold derivative positions in order to effectively “close” or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings. Likewise, any changes in fair value of those positions that were offset by entering into the sold positions are concurrently marked to market through earnings. However, any changes in value related to hedges that were deferred as part of AOCI while designated as a hedge would remain until the originally forecasted transaction occurs. In a situation where it becomes probable that a fuel hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. The Company did not have any such situations occur during 2011, 2012, or during the year ended December 31, 2013. | |||||||||||
In some situations, an entire commodity type used in hedging may cease to qualify for special hedge accounting treatment | |||||||||||
Ineffectiveness is inherent in hedging jet fuel with derivative positions based in other crude oil related commodities. Due to the volatility in markets for crude oil and related products, the Company is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which could be determined on a derivative by derivative basis or in the aggregate for a specific commodity. This may result, and has resulted, in increased volatility in the Company’s financial results. Factors that have and may continue to lead to ineffectiveness and unrealized gains and losses on derivative contracts include: significant fluctuation in energy prices, the number of derivative positions the Company holds, significant weather events affecting refinery capacity and the production of refined products, and the volatility of the different types of products the Company uses in hedging. However, even though derivatives may not qualify for hedge accounting, the Company continues to hold the instruments as management believes derivative instruments continue to afford the Company the opportunity to stabilize jet fuel costs. | |||||||||||
Accounting pronouncements pertaining to derivative instruments and hedging are complex with stringent requirements, including the documentation of a Company hedging strategy, statistical analysis to qualify a commodity for hedge accounting both on a historical and a prospective basis, and strict contemporaneous documentation that is required at the time each hedge is designated by the Company. The Company also examines the effectiveness of each individual hedge and its entire hedging program on a quarterly basis utilizing statistical analysis. This analysis involves utilizing regression and other statistical analyses that compare changes in the price of jet fuel to changes in the prices of the commodities used for hedging purposes | |||||||||||
Compensation Related Costs | ' | ||||||||||
A portion of the Company’s granted options qualify as incentive stock options for income tax purposes. As such, a tax benefit is not recorded at the time the compensation cost related to the options is recorded for book purposes due to the fact that an incentive stock option does not ordinarily result in a tax benefit unless there is a disqualifying disposition. Grants of non-qualified stock options result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised. Due to the treatment of incentive stock options for tax purposes, the Company’s effective tax rate from year to year is subject to variability. | |||||||||||
Employee Retirement Plans | ' | ||||||||||
Unrecognized prior service cost is expensed using a straight-line amortization of the cost over the average future service of Employees expected to receive benefits under the plans. Actuarial gains are amortized utilizing the minimum amortization method. The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2013, 2012, and 2011: | |||||||||||
2013 (2) | 2012 (2) | 2011 | |||||||||
Wtd-average discount rate | 5.05 | % | 2.9 | % | 4.05 | % | |||||
Assumed healthcare cost trend rate (1) | 7.5 | % | 8 | % | 7.5 | % | |||||
-1 | The assumed healthcare cost trend rate is assumed to remain at 7.5% for 2014, then decline gradually to 5.0% by 2024 and remain level thereafter. | ||||||||||
-2 | Includes AirTran plans. | ||||||||||
The selection of a discount rate is made annually and is selected by the Company based upon comparison of the expected future cash flows associated with the Company’s future payments under its consolidated postretirement obligations to a yield curve created using high quality bonds that closely match those expected future cash flows. This rate increased during 2013 due to both market conditions and a longer expected participant service period. The assumed healthcare trend rate is also reviewed at least annually and is determined based upon both historical experience with the Company’s healthcare benefits paid and expectations of how those trends may or may not change in future years. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Schedule Of Finite Lived Intangible Assets | ' | ||||||||||
The following table is a summary of the Company’s intangible assets as of December 31, 2013: | |||||||||||
Gross | Weighted-average | Accumulated | |||||||||
carrying | useful life | amortization | |||||||||
amount | (in years) | (in millions) | |||||||||
(in millions) | |||||||||||
Customer relationships/marketing agreements | $ | 39 | 9 | $ | 23 | ||||||
Trademarks/trade names | 36 | 6 | 25 | ||||||||
Owned domestic slots | 93 | Indefinite | n/a | ||||||||
Leased domestic slots (1) | 19 | 39 | 4 | ||||||||
Noncompete agreements | 5 | 2 | 5 | ||||||||
Gate leasehold rights | 60 | 19 | 29 | ||||||||
Total | $ | 252 | 15 | $ | 86 | ||||||
(1) Useful life of leased slots is based on the stated lease term. |
Recovered_Sheet2
Airtran Acquisition and Related Matters (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Pro Forma Results of Operations | ' | ||||
Year ended | |||||
December 31, | |||||
(in millions, except per share data) | 2011 | ||||
Total operating revenues | $ | 16,601 | |||
Net income | 160 | ||||
Net income per share, basic | 0.21 | ||||
Net income per share, diluted | 0.21 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||
Contractual Purchase Commitments | ' | |||||||||||||
As of December 31, 2013, the Company had scheduled deliveries for Boeing 737-700, 737-800, 737 MAX 7, and 737 MAX 8 aircraft as follows: | ||||||||||||||
The Boeing Company | The Boeing Company | |||||||||||||
737 NG | 737 MAX | |||||||||||||
-700 | -800 | Options | Additional -700 A/C | -7 | -8 | Options | Total | |||||||
Firm | Firm | Firm | Firm | |||||||||||
Orders | Orders | Orders | Orders | |||||||||||
2014 | — | 33 | — | 7 | -2 | — | — | — | 40 | |||||
2015 | — | 19 | — | 5 | — | — | — | 24 | ||||||
2016 | 31 | — | 12 | — | — | — | — | 43 | ||||||
2017 | 15 | — | 12 | — | — | 14 | — | 41 | ||||||
2018 | 10 | — | 12 | — | — | 13 | — | 35 | ||||||
2019 | — | — | — | — | 15 | 10 | — | 25 | ||||||
2020 | — | — | — | — | 14 | 22 | — | 36 | ||||||
2021 | — | — | — | — | 1 | 33 | 18 | 52 | ||||||
2022 | — | — | — | — | — | 30 | 19 | 49 | ||||||
2023 | — | — | — | — | — | 24 | 23 | 47 | ||||||
2024 | — | — | — | — | — | 24 | 23 | 47 | ||||||
2025 | — | — | — | — | — | — | 36 | 36 | ||||||
2026 | — | — | — | — | — | — | 36 | 36 | ||||||
2027 | — | — | — | — | — | — | 36 | 36 | ||||||
Total | 56 | -1 | 52 | 36 | 12 | 30 | 170 | -3 | 191 | 547 | ||||
(1) The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. | ||||||||||||||
(2) The Company executed an agreement in January 2014 to purchase an additional five 737-700 aircraft from a third party. | ||||||||||||||
(3) The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. |
Recovered_Sheet3
Supplemental Financial Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Table Text Block [Abstract] | ' | ||||||||
Other Assets | ' | ||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
Derivative contracts | $ | 145 | $ | 306 | |||||
Intangible assets | 166 | 138 | |||||||
Non-current investments | 44 | 41 | |||||||
Other | 175 | 148 | |||||||
Other assets | $ | 530 | $ | 633 | |||||
Accounts Payable | ' | ||||||||
(in millions) | December 31,2013 | 31-Dec-12 | |||||||
Accounts payable trade | $ | 189 | $ | 174 | |||||
Salaries payable | 156 | 148 | |||||||
Taxes payable | 146 | 128 | |||||||
Aircraft maintenance payable | 331 | 299 | |||||||
Fuel payable | 102 | 112 | |||||||
Other payable | 323 | 246 | |||||||
Accounts payable | $ | 1,247 | $ | 1,107 | |||||
Accrued Liabilities | ' | ||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
Profitsharing and savings plans | $ | 244 | $ | 135 | |||||
Aircraft and other lease related obligations | 173 | 139 | |||||||
Vacation pay | 278 | 270 | |||||||
Health | 73 | 70 | |||||||
Derivative contracts | 12 | 50 | |||||||
Workers compensation | 161 | 159 | |||||||
Accrued taxes | 65 | 67 | |||||||
Other | 223 | 212 | |||||||
Accrued liabilities | $ | 1,229 | $ | 1,102 | |||||
Other Noncurrent Liabilities | ' | ||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
Postretirement obligation | $ | 138 | $ | 148 | |||||
Non-current lease-related obligations | 290 | 376 | |||||||
Other deferred compensation | 163 | 141 | |||||||
Deferred gains from sale and leaseback of aircraft | 65 | 63 | |||||||
Other | 115 | 128 | |||||||
Other non-current liabilities | $ | 771 | $ | 856 | |||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Long-term Debt Instruments | ' | ||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | |||||||
5.25% Notes due 2014 | $ | 357 | $ | 366 | |||||
5.75% Notes due 2016 | 320 | 331 | |||||||
5.25% Convertible Senior Notes due 2016 | 115 | 117 | |||||||
5.125% Notes due 2017 | 322 | 329 | |||||||
Fixed-rate 717 Aircraft Notes payable through 2017—10.37% | 41 | 57 | |||||||
French Credit Agreements due 2018—1.05% | 46 | 56 | |||||||
Fixed-rate 737 Aircraft Notes payable through 2018—7.02% | 30 | 36 | |||||||
Term Loan Agreement due 2019—6.315% | 210 | 241 | |||||||
Term Loan Agreement due 2019—6.84% | 85 | 95 | |||||||
Term Loan Agreement due 2020—5.223% | 413 | 451 | |||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 340 | 527 | |||||||
Pass Through Certificates due 2022—6.24% | 371 | 394 | |||||||
7.375% Debentures due 2027 | 136 | 138 | |||||||
Capital leases (Note 8) | 56 | 37 | |||||||
$ | 2,842 | $ | 3,175 | ||||||
Less current maturities | 629 | 271 | |||||||
Less debt discount and issuance costs | 22 | 21 | |||||||
$ | 2,191 | $ | 2,883 | ||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Leases [Abstract] | ' | ||||||||||||||||
Capital Leases Aircraft Included In Property And Equipment | ' | ||||||||||||||||
Amounts applicable to these aircraft that are included in property and equipment were: | |||||||||||||||||
(in millions) | 2013 | 2012 | |||||||||||||||
Flight equipment | $ | 69 | $ | 45 | |||||||||||||
Less: accumulated amortization | 12 | 8 | |||||||||||||||
$ | 57 | $ | 37 | ||||||||||||||
Future Minimum Lease Payments Under Capital Leases And Noncancelable Operating Leases | ' | ||||||||||||||||
Future minimum lease payments under capital leases and noncancelable operating leases and rentals to be received under subleases with initial or remaining terms in excess of one year at December 31, 2013, were: | |||||||||||||||||
(in millions) | Capital | Operating | Subleases | Operating | |||||||||||||
leases | leases* | leases, net | |||||||||||||||
2014 | $ | 8 | $ | 689 | $ | (52 | ) | $ | 637 | ||||||||
2015 | 8 | 655 | (90 | ) | 565 | ||||||||||||
2016 | 8 | 544 | (106 | ) | 438 | ||||||||||||
2017 | 8 | 516 | (106 | ) | 410 | ||||||||||||
2018 | 8 | 429 | (102 | ) | 327 | ||||||||||||
Thereafter | 29 | 1,755 | (242 | ) | 1,513 | ||||||||||||
Total minimum lease payments | 69 | $ | 4,588 | $ | (698 | ) | $ | 3,890 | |||||||||
Less amount representing interest | 13 | ||||||||||||||||
Present value of minimum lease payments | 56 | ||||||||||||||||
Less current portion | 6 | ||||||||||||||||
Long-term portion | $ | 50 | |||||||||||||||
*Includes LFMP airport rental payments of $23 in 2014, $24 in 2015, $24 in 2016, $24 in 2017, $25 in 2018, and $685 thereafter. See Note 4. |
Net_Income_Per_Share_Tables
Net Income Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Schedule Of Earnings Per Share Basic And Diluted | ' | |||||||||||
The following table sets forth the computation of basic and diluted net income per share (in millions except per share amounts): | ||||||||||||
Year ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
NUMERATOR: | ||||||||||||
Net income | $ | 754 | $ | 421 | $ | 178 | ||||||
Incremental income effect of | 3 | 3 | — | |||||||||
interest on 5.25% convertible notes | ||||||||||||
Net income after assumed conversion | $ | 757 | $ | 424 | $ | 178 | ||||||
DENOMINATOR: | ||||||||||||
Weighted-average shares outstanding, basic | 710 | 750 | 774 | |||||||||
Dilutive effect of Employee stock options and | 2 | 1 | 1 | |||||||||
restricted stock units | ||||||||||||
Dilutive effect of 5.25% convertible notes | 6 | 6 | — | |||||||||
Adjusted weighted-average shares outstanding, diluted | 718 | 757 | 775 | |||||||||
NET INCOME PER SHARE: | ||||||||||||
Basic | $ | 1.06 | $ | 0.56 | $ | 0.23 | ||||||
Diluted | $ | 1.05 | $ | 0.56 | $ | 0.23 | ||||||
Potentially dilutive amounts excluded from calculations: | ||||||||||||
Stock options and restricted stock units | 9 | 35 | 48 | |||||||||
5.25% convertible notes | — | — | 6 | |||||||||
Recovered_Sheet4
Financial Derivative Instruments (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||||||||||||||||
Volume of Fuel Hedging | ' | |||||||||||||||||||||||||||
The following table provides information about the Company’s volume of fuel hedging for the years 2014 through 2017 on an “economic” basis considering current market prices: | ||||||||||||||||||||||||||||
Fuel hedged as of | ||||||||||||||||||||||||||||
31-Dec-13 | Derivative underlying commodity type as of | |||||||||||||||||||||||||||
Period (by year) | (gallons in millions)(a) | 31-Dec-13 | ||||||||||||||||||||||||||
2014 | 764 | WTI crude, Brent crude oil, GC Jet Fuel | ||||||||||||||||||||||||||
2015 | 1,156 | WTI crude and Brent crude oil | ||||||||||||||||||||||||||
2016 | 977 | Brent crude oil | ||||||||||||||||||||||||||
2017 | 933 | WTI crude and Brent crude oil | ||||||||||||||||||||||||||
(a) The Company determines gallons hedged based on market prices and forward curves as of December 31, 2013. Due to the types of derivatives utilized by the Company, these volumes may vary significantly as market prices fluctuate. | ||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | ' | |||||||||||||||||||||||||||
Asset derivatives | Liability derivatives | |||||||||||||||||||||||||||
Balance Sheet | Fair value at | Fair value at | Fair value at | Fair value at | ||||||||||||||||||||||||
(in millions) | location | 12/31/13 | 12/31/12 | 12/31/13 | 12/31/12 | |||||||||||||||||||||||
Derivatives designated as hedges* | ||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | 74 | $ | — | $ | — | $ | — | |||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | 209 | 355 | 1 | 16 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Accrued liabilities | — | — | — | — | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | — | — | — | — | |||||||||||||||||||||||
Interest rate derivative contracts | Other assets | 20 | 31 | — | — | |||||||||||||||||||||||
Interest rate derivative contracts | Accrued liabilities | — | — | — | — | |||||||||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | — | — | 77 | 126 | |||||||||||||||||||||||
Total derivatives designated as hedges | $ | 303 | $ | 386 | $ | 78 | $ | 142 | ||||||||||||||||||||
Derivatives not designated as hedges* | ||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | 175 | $ | 375 | $ | 182 | $ | 327 | |||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | 16 | 233 | 99 | 351 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Accrued liabilities | 9 | 10 | 21 | 60 | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other noncurrent liabilities | — | — | — | — | |||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 200 | $ | 618 | $ | 302 | $ | 738 | ||||||||||||||||||||
Total derivatives | $ | 503 | $ | 1,004 | $ | 380 | $ | 880 | ||||||||||||||||||||
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. | ||||||||||||||||||||||||||||
Cash Collateral Deposits Due To Or From Third Parties and Net Unrealized Losses | ' | |||||||||||||||||||||||||||
Balance Sheet | December 31, | December 31, | ||||||||||||||||||||||||||
(in millions) | location | 2013 | 2012 | |||||||||||||||||||||||||
Cash collateral deposits provided to counterparties for interest | Offset against Other noncurrent liabilities | 32 | 89 | |||||||||||||||||||||||||
rate contracts - noncurrent | ||||||||||||||||||||||||||||
Receivable from third parties for fuel contracts - current | Accounts and other receivables | 57 | — | |||||||||||||||||||||||||
Receivable from third parties for fuel contracts - noncurrent | Other assets | — | 54 | |||||||||||||||||||||||||
Prepaid settlements for fuel contracts - current | Prepaid expenses and other current assets | — | 15 | |||||||||||||||||||||||||
Offsetting Assets | ' | |||||||||||||||||||||||||||
The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting: | ||||||||||||||||||||||||||||
Offsetting of derivative assets | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||
December 31, 2013 | 31-Dec-12 | |||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | |||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | 249 | $ | (182 | ) | $ | 67 | (a) | $ | 375 | $ | (327 | ) | $ | 48 | (a) | |||||||||||
Fuel derivative contracts | Other assets | $ | 225 | $ | (100 | ) | $ | 125 | $ | 588 | $ | (367 | ) | $ | 221 | |||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 9 | $ | (9 | ) | $ | — | $ | 10 | $ | (10 | ) | $ | — | |||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Interest rate derivative contracts | Other assets | $ | 20 | $ | — | $ | 20 | $ | 31 | $ | — | $ | 31 | |||||||||||||||
(a) Amounts included in Prepaid expenses and other current assets. | ||||||||||||||||||||||||||||
Offsetting Liabilities | ' | |||||||||||||||||||||||||||
Offsetting of derivative liabilities | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
(i) | (ii) | (iii) =i) + (ii) | (i) | (ii) | (iii) =i) + (ii) | |||||||||||||||||||||||
December 31, 2013 | 31-Dec-12 | |||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | Gross amounts of recognized liabilities | Gross amounts offset in the Balance Sheet | Net amounts of liabilities presented in the Balance Sheet | |||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | 182 | $ | (182 | ) | $ | — | $ | 327 | $ | (327 | ) | $ | — | |||||||||||||
Fuel derivative contracts | Other assets | $ | 100 | $ | (100 | ) | $ | — | $ | 367 | $ | (367 | ) | $ | — | |||||||||||||
Fuel derivative contracts | Accrued liabilities | $ | 21 | $ | (9 | ) | $ | 12 | $ | 60 | $ | (10 | ) | $ | 50 | |||||||||||||
Fuel derivative contracts | Other noncurrent liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | $ | 77 | $ | (32 | ) | $ | 45 | $ | 126 | $ | (89 | ) | $ | 37 | |||||||||||||
Derivatives in Cash Flow Hedging Relationships | ' | |||||||||||||||||||||||||||
The following tables present the impact of derivative instruments and their location within the Consolidated Statement of Income for the year ended December 31, 2013 and 2012: | ||||||||||||||||||||||||||||
Derivatives in cash flow hedging relationships | ||||||||||||||||||||||||||||
(Gain) loss recognized in AOCI on derivatives (effective portion) | (Gain) loss reclassified from AOCI into income (effective portion)(a) | (Gain) loss recognized in income on derivatives (ineffective portion)(b) | ||||||||||||||||||||||||||
Year ended | Year ended | Year ended | ||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
Fuel derivative contracts | $ | 52 | * | $ | (19 | ) | * | $ | 103 | * | $ | 101 | * | $ | 10 | $ | 43 | |||||||||||
Interest rate derivatives | (14 | ) | * | 17 | * | 18 | * | (16 | ) | * | 1 | — | ||||||||||||||||
Total | $ | 38 | $ | (2 | ) | $ | 121 | $ | 85 | $ | 11 | $ | 43 | |||||||||||||||
*Net of tax | ||||||||||||||||||||||||||||
(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. | ||||||||||||||||||||||||||||
(b) Amounts are included in Other (gains) losses, net. | ||||||||||||||||||||||||||||
Derivatives Not in Cash Flow Hedging Relationships | ' | |||||||||||||||||||||||||||
Derivatives not in cash flow hedging relationships | ||||||||||||||||||||||||||||
(Gain) loss | ||||||||||||||||||||||||||||
recognized in income on | ||||||||||||||||||||||||||||
derivatives | ||||||||||||||||||||||||||||
Year ended | Location of (gain) loss | |||||||||||||||||||||||||||
December 31, | recognized in income | |||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | on derivatives | |||||||||||||||||||||||||
Fuel derivative contracts | $ | (100 | ) | $ | (264 | ) | Other (gains) losses, net | |||||||||||||||||||||
Fair Values of Fuel Derivatives, Amounts Posted as Collateral, and Collateral Posting Threshold Amounts | ' | |||||||||||||||||||||||||||
The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of December 31, 2013, at which such postings are triggered: | ||||||||||||||||||||||||||||
Counterparty (CP) | ||||||||||||||||||||||||||||
(in millions) | A | B | C | D | E | Other(a) | Total | |||||||||||||||||||||
Fair value of fuel derivatives | $ | 27 | $ | 42 | $ | 41 | $ | 24 | $ | 26 | $ | 20 | $ | 180 | ||||||||||||||
Cash collateral held (by) CP | — | — | — | — | — | — | — | |||||||||||||||||||||
Aircraft collateral pledged to CP | — | — | — | — | — | — | — | |||||||||||||||||||||
Letters of credit (LC) | — | — | — | — | — | — | — | |||||||||||||||||||||
Option to substitute LC for aircraft | (250) to (650)(d) | (100) to (500)(d) | N/A | (250) to (650) (d) | N/A | |||||||||||||||||||||||
Option to substitute LC for cash | N/A | >(500) | (100) to (150)(e) | (50) to (250) or >(650)(d) | N/A | |||||||||||||||||||||||
If credit rating is investment | ||||||||||||||||||||||||||||
grade, fair value of fuel | ||||||||||||||||||||||||||||
derivative level at which: | ||||||||||||||||||||||||||||
Cash is provided to CP | (50) to (250) or >(650) | (50) to (100) or >(500) | >(50) | (50) to (250) or >(650) | >(50) | |||||||||||||||||||||||
Cash is received from CP | >50 | >150 | >175(c) | >200 | >30 | |||||||||||||||||||||||
Aircraft or cash can be pledged to | (250) to (650)(d) | (100) to (500) (d) | N/A | (250) to (650) (d) | N/A | |||||||||||||||||||||||
CP as collateral | ||||||||||||||||||||||||||||
If credit rating is non-investment | ||||||||||||||||||||||||||||
grade, fair value of fuel derivative | ||||||||||||||||||||||||||||
level at which: | ||||||||||||||||||||||||||||
Cash is provided to CP | (0) to (250) or >(650) | (0) to (100) or >(500) | (b) | (0) to (250) or >(650) | (b) | |||||||||||||||||||||||
Cash is received from CP | (b) | (b) | (b) | (b) | (b) | |||||||||||||||||||||||
Aircraft can be pledged to CP as | (250) to (650) | (100) to (500) | N/A | (250) to (650) | N/A | |||||||||||||||||||||||
collateral | ||||||||||||||||||||||||||||
(a) Individual counterparties with fair value of fuel derivatives <$20 million. | ||||||||||||||||||||||||||||
(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | ||||||||||||||||||||||||||||
(c) Thresholds may vary based on changes in credit ratings within investment grade. | ||||||||||||||||||||||||||||
(d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. No cash, letters of credit, or aircraft were pledged as collateral with such counterparties as of December 31, 2013. | ||||||||||||||||||||||||||||
(e) The Company has the option of providing cash or letters of credit as collateral. No cash or letters of credit were pledged as collateral with such counterparties as of December 31, 2013. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013, and December 31, 2012: | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 992 | $ | 992 | $ | — | $ | — | |||||||||
Commercial paper | 280 | — | 280 | — | |||||||||||||
Certificates of deposit | 23 | — | 23 | — | |||||||||||||
Eurodollar Time Deposits | 60 | — | 60 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,570 | 1,570 | — | — | |||||||||||||
Certificates of deposit | 227 | — | 227 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 39 | — | — | 39 | |||||||||||||
Interest rate derivatives (see Note 10) | 20 | — | 20 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 16 | — | 16 | — | |||||||||||||
Option contracts (c) | 458 | — | — | 458 | |||||||||||||
Option contracts (d) | 9 | — | — | 9 | |||||||||||||
Other available-for-sale securities | 63 | 58 | — | 5 | |||||||||||||
Total assets | $ | 3,757 | $ | 2,620 | $ | 626 | $ | 511 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (8 | ) | $ | — | $ | (8 | ) | $ | — | |||||||
Option contracts (c) | (274 | ) | — | — | (274 | ) | |||||||||||
Option contracts (d) | (21 | ) | — | — | (21 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (77 | ) | — | (77 | ) | — | |||||||||||
Deferred compensation | (158 | ) | (158 | ) | — | — | |||||||||||
Total liabilities | $ | (538 | ) | $ | (158 | ) | $ | (85 | ) | $ | (295 | ) | |||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||||||||||||||||
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
Fair value measurements at reporting date using: | |||||||||||||||||
Quoted prices in | Significant | Significant | |||||||||||||||
active markets | other observable | unobservable | |||||||||||||||
for identical assets | inputs | inputs | |||||||||||||||
Description | December 31, 2012 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets | (in millions) | ||||||||||||||||
Cash equivalents | |||||||||||||||||
Cash equivalents (a) | $ | 829 | $ | 829 | $ | — | $ | — | |||||||||
Commercial paper | 170 | — | 170 | — | |||||||||||||
Certificates of deposit | 34 | — | 34 | — | |||||||||||||
Eurodollar Time Deposits | 80 | — | 80 | — | |||||||||||||
Short-term investments: | |||||||||||||||||
Treasury bills | 1,624 | 1,624 | — | — | |||||||||||||
Certificates of deposit | 233 | — | 233 | — | |||||||||||||
Noncurrent investments (b) | |||||||||||||||||
Auction rate securities | 36 | — | — | 36 | |||||||||||||
Interest rate derivatives (see Note 10) | 31 | — | 31 | — | |||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | 113 | — | 113 | — | |||||||||||||
Option contracts (c) | 850 | — | — | 850 | |||||||||||||
Option contracts (d) | 10 | — | — | 10 | |||||||||||||
Other available-for-sale securities | 49 | 44 | — | 5 | |||||||||||||
Total assets | $ | 4,059 | $ | 2,497 | $ | 661 | $ | 901 | |||||||||
Liabilities | |||||||||||||||||
Fuel derivatives: | |||||||||||||||||
Swap contracts (c) | $ | (57 | ) | $ | — | $ | (57 | ) | $ | — | |||||||
Option contracts (c) | (637 | ) | — | — | (637 | ) | |||||||||||
Swap contracts (d) | (56 | ) | — | (56 | ) | — | |||||||||||
Option contracts (d) | (4 | ) | — | — | (4 | ) | |||||||||||
Interest rate derivatives (see Note 10) | (126 | ) | — | (126 | ) | — | |||||||||||
Deferred Compensation | (137 | ) | (137 | ) | — | — | |||||||||||
Total liabilities | $ | (1,017 | ) | $ | (137 | ) | $ | (239 | ) | $ | (641 | ) | |||||
(a) Cash equivalents are primarily composed of money market investments. | |||||||||||||||||
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||||||||||||||||
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. | |||||||||||||||||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | ' | ||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2012 | $ | 219 | $ | 36 | $ | 5 | $ | 260 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | 71 | — | — | 71 | |||||||||||||
Included in other comprehensive income | (107 | ) | 3 | — | (104 | ) | |||||||||||
Purchases | 357 | (a) | — | — | 357 | ||||||||||||
Sales | (417 | ) | (a) | — | — | (417 | ) | ||||||||||
Settlements | 49 | — | — | 49 | |||||||||||||
Balance at December 31, 2013 | $ | 172 | $ | 39 | (b) | $ | 5 | $ | 216 | ||||||||
The amount of total gains for the period | $ | 86 | $ | — | $ | — | $ | 86 | |||||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2013 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
Fair value measurements using significant | |||||||||||||||||
unobservable inputs (Level 3) | |||||||||||||||||
Fuel | Auction rate | Other | |||||||||||||||
(in millions) | derivatives | securities | securities | Total | |||||||||||||
Balance at December 31, 2011 | $ | 417 | $ | 67 | $ | 5 | $ | 489 | |||||||||
Total gains or (losses) (realized or unrealized) | |||||||||||||||||
Included in earnings | (62 | ) | — | — | (62 | ) | |||||||||||
Included in other comprehensive income | 22 | — | — | 22 | |||||||||||||
Purchases | 1,003 | (a) | — | — | 1,003 | ||||||||||||
Sales | (1,081 | ) | (a) | (31 | ) | — | (1,112 | ) | |||||||||
Settlements | (80 | ) | — | — | (80 | ) | |||||||||||
Balance at December 31, 2012 | $ | 219 | $ | 36 | (b) | $ | 5 | $ | 260 | ||||||||
The amount of total gains for the period | $ | 27 | $ | — | $ | — | $ | 27 | |||||||||
included in earnings attributable to the | |||||||||||||||||
change in unrealized gains or losses relating | |||||||||||||||||
to assets still held at December 31, 2012 | |||||||||||||||||
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and | |||||||||||||||||
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||||||||||||||||
(b) Included in Other assets in the Consolidated Balance Sheet. | |||||||||||||||||
Fair Value Valuation Techniques | ' | ||||||||||||||||
The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s assets and liabilities classified as Level 3 at December 31, 2013: | |||||||||||||||||
Quantitative information about Level 3 fair value measurements | |||||||||||||||||
Valuation technique | Unobservable input | Period (by year) | Range | ||||||||||||||
Fuel derivatives | Option model | Implied volatility | 2014 | 9-25% | |||||||||||||
2015 | 13-23% | ||||||||||||||||
2016 | 13-20% | ||||||||||||||||
2017 | 13-17% | ||||||||||||||||
Auction rate securities | Discounted cash flow | Time to principal recovery | 5-8 years | ||||||||||||||
Illiquidity premium | 3-4% | ||||||||||||||||
Counterparty credit spread | 1-3% | ||||||||||||||||
Fair value, by Balance Sheet Grouping | ' | ||||||||||||||||
(in millions) | Carrying value | Estimated fair value | Fair value level hierarchy | ||||||||||||||
5.25% Notes due 2014 | $ | 357 | $ | 362 | Level 2 | ||||||||||||
5.75% Notes due 2016 | 320 | 354 | Level 2 | ||||||||||||||
5.25% Convertible Senior Notes due 2016 | 115 | 178 | Level 2 | ||||||||||||||
5.125% Notes due 2017 | 322 | 346 | Level 2 | ||||||||||||||
Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | 41 | 39 | Level 2 | ||||||||||||||
French Credit Agreements due 2018 - 1.05% | 46 | 46 | Level 3 | ||||||||||||||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | 30 | 31 | Level 3 | ||||||||||||||
Term Loan Agreement due 2019 - 6.315% | 210 | 213 | Level 3 | ||||||||||||||
Term Loan Agreement due 2019 - 6.84% | 85 | 90 | Level 3 | ||||||||||||||
Term Loan Agreement due 2020 - 5.223% | 413 | 388 | Level 3 | ||||||||||||||
Floating-rate 737 Aircraft Notes payable through 2020 | 340 | 335 | Level 3 | ||||||||||||||
Pass Through Certificates due 2022 - 6.24% | 371 | 418 | Level 2 | ||||||||||||||
7.375% Debentures due 2027 | 136 | 146 | Level 2 | ||||||||||||||
Recovered_Sheet5
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Equity [Abstract] | ' | |||||||||||||||||||||||
Rollforward of the Amounts Included in AOCI, Net of Taxes | ' | |||||||||||||||||||||||
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Other | Deferred tax impact | Accumulated other | ||||||||||||||||||
comprehensive income (loss) | ||||||||||||||||||||||||
Balance at December 31, 2011 | $ | (297 | ) | $ | (107 | ) | $ | 54 | $ | (14 | ) | $ | 140 | $ | (224 | ) | ||||||||
2012 changes in fair value | 31 | (27 | ) | (28 | ) | 6 | (73 | ) | (91 | ) | ||||||||||||||
Reclassification to earnings | 163 | 26 | — | — | 7 | 196 | ||||||||||||||||||
Balance at December 31, 2012 | $ | (103 | ) | $ | (108 | ) | $ | 26 | $ | (8 | ) | $ | 74 | $ | (119 | ) | ||||||||
2013 changes in fair value | (82 | ) | 22 | 39 | 16 | — | (5 | ) | ||||||||||||||||
Reclassification to earnings | 165 | 28 | — | — | -72 | 121 | ||||||||||||||||||
Balance at December 31, 2013 | $ | (20 | ) | $ | (58 | ) | $ | 65 | $ | 8 | $ | 2 | $ | (3 | ) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | ' | |||||||||||||||||||||||
The following table illustrates the significant amounts reclassified out of each component of AOCI for the year ended December 31, 2013: | ||||||||||||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||
AOCI components | ||||||||||||||||||||||||
Unrealized gain on fuel derivative instruments | $ | 165 | Fuel and oil expense | |||||||||||||||||||||
62 | Less: Tax Expense | |||||||||||||||||||||||
$ | 103 | Net of tax | ||||||||||||||||||||||
Unrealized gain on interest rate derivative instruments | $ | 28 | Interest expense | |||||||||||||||||||||
10 | Less: Tax Expense | |||||||||||||||||||||||
$ | 18 | Net of tax | ||||||||||||||||||||||
Total reclassifications for the period | $ | 121 | Net of tax | |||||||||||||||||||||
Stock_Plans_Tables
Stock Plans (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | ' | |||||||||||||
Aggregated information regarding the Company’s RSUs is summarized below: | ||||||||||||||
RESTRICTED STOCK UNITS | ||||||||||||||
Units (000) | Wtd. Average | |||||||||||||
Fair Value | ||||||||||||||
Outstanding December 31, 2010 | 990 | $ | 12.28 | |||||||||||
Granted | 1,007 | 12.27 | ||||||||||||
Vested | (327 | ) | 12.28 | |||||||||||
Surrendered | (30 | ) | 12.28 | |||||||||||
Outstanding December 31, 2011 | 1,640 | 12.27 | ||||||||||||
Granted | 1,939 | 8.21 | ||||||||||||
Vested | (644 | ) | 12.27 | |||||||||||
Surrendered | (59 | ) | 10.54 | |||||||||||
Outstanding December 31, 2012 | 2,876 | 9.57 | ||||||||||||
Granted | 1,139 | 14.34 | ||||||||||||
Vested | (1,263 | ) | 10.24 | |||||||||||
Surrendered | (168 | ) | 9.11 | |||||||||||
Outstanding December 31, 2013 | 2,584 | $ | 11.38 | |||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | ' | |||||||||||||
Aggregated information regarding Company issued stock options is summarized below: | ||||||||||||||
STOCK OPTION PLANS | ||||||||||||||
Options | Wtd. | Wtd. | Aggregate | |||||||||||
0 | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | (millions) | ||||||||||||
term | ||||||||||||||
Outstanding December 31, 2010 | 50,982 | $ | 14.68 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (181 | ) | 7.74 | |||||||||||
Surrendered | (3,477 | ) | 17.38 | |||||||||||
Outstanding December 31, 2011 | 47,324 | $ | 14.51 | |||||||||||
Granted | 6 | 9 | ||||||||||||
Exercised | (573 | ) | 8 | |||||||||||
Surrendered | (27,847 | ) | 14.85 | |||||||||||
Outstanding December 31, 2012 | 18,910 | $ | 14.19 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | (6,633 | ) | 13.31 | |||||||||||
Surrendered | (3,116 | ) | 14.94 | |||||||||||
Outstanding December 31, 2013 | 9,161 | $ | 14.58 | 1.9 | $ | 39 | ||||||||
Vested or expected to vest at December 31, 2013 | 9,137 | $ | 14.58 | 1.9 | $ | 39 | ||||||||
Exercisable at December 31, 2013 | 8,689 | $ | 14.49 | 1.9 | $ | 38 | ||||||||
Employee_Retirement_Plans_Tabl
Employee Retirement Plans (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | ||||||||||||
Schedule of Changes in Accumulated Postemployment Benefit Obligations | ' | ||||||||||||
The following table shows the change in the accumulated postretirement benefit obligation (APBO) for the years ended December 31, 2013 and 2012: | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
APBO at beginning of period | $ | 148 | $ | 107 | |||||||||
Service cost | 30 | 20 | |||||||||||
Interest cost | 4 | 4 | |||||||||||
Benefits paid | (3 | ) | (5 | ) | |||||||||
Credit for prior service | — | 17 | |||||||||||
Actuarial (gain)/loss | (41 | ) | 5 | ||||||||||
APBO at end of period | $ | 138 | $ | 148 | |||||||||
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | ' | ||||||||||||
A one percent change in all healthcare cost trend rates used in measuring the APBO at December 31, 2013, would have the following effects: | |||||||||||||
(in millions) | 1% increase | 1% decrease | |||||||||||
Increase (decrease) in total service and interest costs | $ | 3 | $ | (3 | ) | ||||||||
Increase (decrease) in the APBO | $ | 19 | $ | (16 | ) | ||||||||
Schedule of Amounts Recognized in Balance Sheet | ' | ||||||||||||
Other non-current liabilities on the Company’s Consolidated Balance Sheet at December 31, 2013 and 2012. | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
Funded status | $ | (138 | ) | $ | (148 | ) | |||||||
Unrecognized net actuarial gain | (80 | ) | (44 | ) | |||||||||
Unrecognized prior service cost | 15 | 18 | |||||||||||
Accumulated other comprehensive income | 65 | 26 | |||||||||||
Cost recognized on Consolidated Balance Sheet | $ | (138 | ) | $ | (148 | ) | |||||||
Schedule of Net Benefit Costs | ' | ||||||||||||
The consolidated periodic postretirement benefit cost for the years ended December 31, 2013, 2012, and 2011, included the following: | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Service cost | $ | 30 | $ | 20 | $ | 17 | |||||||
Interest cost | 4 | 4 | 4 | ||||||||||
Amortization of prior service cost | 3 | — | — | ||||||||||
Recognized actuarial gain | (4 | ) | (5 | ) | (6 | ) | |||||||
Net periodic postretirement benefit cost | $ | 33 | $ | 19 | $ | 15 | |||||||
Schedule of Assumptions Used | ' | ||||||||||||
The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2013, 2012, and 2011: | |||||||||||||
2013 (2) | 2012 (2) | 2011 | |||||||||||
Wtd-average discount rate | 5.05 | % | 2.9 | % | 4.05 | % | |||||||
Assumed healthcare cost trend rate (1) | 7.5 | % | 8 | % | 7.5 | % | |||||||
-1 | The assumed healthcare cost trend rate is assumed to remain at 7.5% for 2014, then decline gradually to 5.0% by 2024 and remain level thereafter. | ||||||||||||
-2 | Includes AirTran plans. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Components of Deferred Tax Assets and Liabilities | ' | ||||||||||||
The components of deferred tax assets and liabilities at December 31, 2013 and 2012, are as follows: | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
DEFERRED TAX LIABILITIES: | |||||||||||||
Accelerated depreciation | $ | 4,069 | $ | 3,939 | |||||||||
Fuel derivative instruments | 36 | 33 | |||||||||||
Other | 84 | 70 | |||||||||||
Total deferred tax liabilities | 4,189 | 4,042 | |||||||||||
DEFERRED TAX ASSETS: | |||||||||||||
Fuel derivative instruments | 8 | 40 | |||||||||||
Deferred gains from sale and leaseback of aircraft | 24 | 24 | |||||||||||
Capital and operating leases | 163 | 179 | |||||||||||
Construction obligation | 168 | 127 | |||||||||||
Accrued engine maintenance | 90 | 84 | |||||||||||
Accrued employee benefits | 307 | 281 | |||||||||||
State taxes | 74 | 77 | |||||||||||
Business partner income | 457 | 339 | |||||||||||
Net operating losses and credit carryforwards | 14 | 83 | |||||||||||
Other | 118 | 170 | |||||||||||
Total deferred tax assets | 1,423 | 1,404 | |||||||||||
Net deferred tax liability | $ | 2,766 | $ | 2,638 | |||||||||
Components of the Income Tax Provision | ' | ||||||||||||
The provision for income taxes is composed of the following: | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
CURRENT: | |||||||||||||
Federal | $ | 355 | $ | (45 | ) | $ | 4 | ||||||
State | 44 | 12 | 13 | ||||||||||
Total current | 399 | (33 | ) | 17 | |||||||||
DEFERRED: | |||||||||||||
Federal | 62 | 287 | 122 | ||||||||||
State | (6 | ) | 10 | 6 | |||||||||
Total deferred | 56 | 297 | 128 | ||||||||||
$ | 455 | $ | 264 | $ | 145 | ||||||||
Income Tax Provision Reconciliation To Federal Income Tax Statutory Rate | ' | ||||||||||||
The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the following reasons: | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
Tax at statutory U.S. tax rates | $ | 423 | $ | 240 | $ | 114 | |||||||
Nondeductible items | 10 | 10 | 13 | ||||||||||
State income taxes, net of federal benefit | 25 | 14 | 13 | ||||||||||
Other, net | (3 | ) | — | 5 | |||||||||
Total income tax provision | $ | 455 | $ | 264 | $ | 145 | |||||||
Quarterly_Financial_Data_Table
Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Data [Abstract] | ' | ||||||||||||||||
Schedule of Quarterly Financial Information | ' | ||||||||||||||||
THREE MONTHS ENDED | |||||||||||||||||
(in millions except per share amounts) | March 31 | June 30 | Sept. 30 | Dec. 31 | |||||||||||||
2013 | |||||||||||||||||
Operating revenues | $ | 4,084 | $ | 4,643 | $ | 4,545 | $ | 4,428 | |||||||||
Operating income | 70 | 433 | 390 | 386 | |||||||||||||
Income before income taxes | 94 | 363 | 419 | 334 | |||||||||||||
Net income | 59 | 224 | 259 | 212 | |||||||||||||
Net income per share, basic | 0.08 | 0.31 | 0.37 | 0.3 | |||||||||||||
Net income per share, diluted | 0.08 | 0.31 | 0.37 | 0.3 | |||||||||||||
31-Mar | 30-Jun | Sept. 30 | Dec. 31 | ||||||||||||||
2012 | |||||||||||||||||
Operating revenues | $ | 3,991 | $ | 4,616 | $ | 4,309 | $ | 4,173 | |||||||||
Operating income | 22 | 460 | 51 | 91 | |||||||||||||
Income (loss) before income taxes | 159 | 368 | 33 | 125 | |||||||||||||
Net income (loss) | 98 | 228 | 16 | 78 | |||||||||||||
Net income (loss) per share, basic | 0.13 | 0.3 | 0.02 | 0.11 | |||||||||||||
Net income (loss) per share, diluted | 0.13 | 0.3 | 0.02 | 0.11 | |||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | ||
Customer relationships/marketing agreements | Trademarks/trade names | Owned domestic slots | Leased domestic slots (1) | Noncompete agreements | Gate leasehold rights | Flight equipment | Flight equipment | Flight equipment | Ground property and equipment | Ground property and equipment | Ground property and equipment | Software | Software | Change In Maintenance Contract Accounting | Fuel derivatives | Fuel derivatives | Other Noncurrent Liabilities | Other Noncurrent Liabilities | Unionized Employees concentration risk | |||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Interest rate derivatives | Interest rate derivatives | |||||||||||||||||
Accounting Policies [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Prior period reclassification adjustment | ' | $17,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Total collateral already posted aggregate fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | |
Cash collateral deposits provided to counterparty - noncurrent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,000,000 | 89,000,000 | ' | |
Inventory reserve for obsolescence | 36,000,000 | 34,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
The percentage of the amount received per flight segment sold that relate to free travel-SWA (in hundredths) | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
The percentage of the amount received per flight segment sold that relate to free travel-AirTran (in hundredths) | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Frequent flyer points and flight credits liability | 1,100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Capitalized computer software, net | 357,000,000 | 256,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Computer software depreciation expense | 90,000,000 | 59,000,000 | 55,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Advertising costs | 208,000,000 | 223,000,000 | 237,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
The percentage of Company's employees that are unionized and covered by collective bargaining agreements (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 83.00% | |
The percentage of employees subject to amendable agreements in the current year (in hundredths) | 82.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Change in Accounting Estimate [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Change in accounting estimate financial effect on maintenance, materials and repairs expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | ' | ' | ' | |
Change in accounting estimate, financial effect on net income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,000,000 | ' | ' | ' | ' | ' | |
Change in accounting estimate, financial effect on net income per share (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.02 | ' | ' | ' | ' | ' | |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Property Plant And Equipment Useful Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '23 years 0 months 0 days | '25 years 0 months 0 days | ' | '5 years 0 months 0 days | '30 years 0 months 0 days | '5 years 0 months 0 days | '15 years 0 months 0 days | ' | ' | ' | ' | ' | ' | |
Minimum percentage of cost estimated residual value (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Maximum percentage of cost estimated as residual value (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
The percentage excess of fair value over carrying value for Goodwill and the Company's finite-lived intangible assets | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Gross carrying amount of finite-lived intangible assets | ' | ' | ' | 39,000,000 | 36,000,000 | ' | 19,000,000 | [1] | 5,000,000 | 60,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross carrying amount of indefinite-lived intangible assets | ' | ' | ' | ' | ' | 93,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Gross carrying amount (in millions) | 252,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Weighted-average useful life (in years) | '15 years 0 months 0 days | ' | ' | '9 years 0 months 0 days | '6 years 0 months 0 days | ' | '39 years 0 months 0 days | [1] | '2 years 0 months 0 days | '19 years 0 months 0 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated amortization (in millions) | 86,000,000 | ' | ' | 23,000,000 | 25,000,000 | ' | 4,000,000 | [1] | 5,000,000 | 29,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of intangible assets | 19,000,000 | 25,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
2014 | 13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
2015 | 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
2016 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
2017 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
2018 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Thereafter | $31,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | Useful life of leased slots is based on the stated lease term. |
Airtran_Acquisition_and_Relate1
Airtran Acquisition and Related Matters (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Business Combinations [Abstract] | ' | ' | ' |
Acquisition and integration | $86 | $183 | $134 |
Business Acquisition, Pro Forma Information [Abstract] | ' | ' | ' |
Total operating revenues | ' | ' | 16,601 |
Net income | ' | ' | $160 |
Net income per share, basic (in dollars per share) | ' | ' | $0.21 |
Net income per share, diluted (in dollars per share) | ' | ' | $0.21 |
Recovered_Sheet6
Accounting Changes and New Accounting Pronouncements (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Change In Estimated Useful Life | ' | ' | ' |
Change in Accounting Estimate [Line Items] | ' | ' | ' |
Change in accounting estimate, financial effect on depreciation expense | ' | ' | $12 |
Change in accounting estimate, financial effect on net income | ' | ' | 6 |
Change in accounting estimate, financial effect on net income per share (in dollars per share) | ' | ' | ($0.01) |
Change In Estimated Residual Values | ' | ' | ' |
Change in Accounting Estimate [Line Items] | ' | ' | ' |
Change in accounting estimate, financial effect on depreciation expense | ' | 26 | 34 |
Change in accounting estimate, financial effect on net income | ' | $14 | $18 |
Change in accounting estimate, financial effect on net income per share (in dollars per share) | ' | ($0.02) | ($0.02) |
Residual values, percent of original cost, prior to change | 10.00% | ' | ' |
Residual values, percent of original cost, subsequent to change | 2.00% | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |||
aircraft | Aircraft | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | Subsequent Event [Member] | LAX | FLL | DAL | DAL | DAL | DAL | HOU | B-737-800 | Classic Fleet | B-737-700 | B-737-700 | B-717-200 | |||||
aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | aircraft | 2014 | gate | gate | aircraft | aircraft | aircraft | aircraft | aircraft | ||||||||||||
aircraft | |||||||||||||||||||||||||||||||||
Airport Project [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of Aircrafts Purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16 | ' | ' | ' | ' | ||
Number of aircrafts retired from service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | ' | 1 | ' | ||
Number of aircrafts removed from active service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22 | ||
Number of aircrafts leased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | 2 | ' | ' | ||
Expected total airport modernization project cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400,000,000 | $295,000,000 | ' | ' | ' | $519,000,000 | $156,000,000 | ' | ' | ' | ' | ' | ||
Municipal bonds issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 146,000,000 | 310,000,000 | ' | ' | ' | ' | ' | ' | ' | ||
Number of gates with rights to occupy after completion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16 | ' | ' | 16 | ' | ' | ' | ' | ' | ' | ||
Assets constructed for others | 453,000,000 | 331,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 430,000,000 | ' | ' | 430,000,000 | ' | ' | ' | ' | ' | ' | ||
Assets constructed for others placed into service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 350,000,000 | ' | ' | 350,000,000 | ' | ' | ' | ' | ' | ' | ||
Assets constructed for others in progress | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 80,000,000 | ' | ' | 80,000,000 | ' | ' | ' | ' | ' | ' | ||
Airport construction obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 437,000,000 | ' | ' | 437,000,000 | ' | ' | ' | ' | ' | ' | ||
Depreciation and amortization | 867,000,000 | 844,000,000 | 715,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Firm - 737NG 700 (in units) | 56 | [1] | ' | ' | ' | 0 | 0 | 31 | 15 | 10 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Firm - 737NG 800 (in units) | 52 | ' | ' | ' | 33 | 19 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Options - 737NG (in units) | 36 | ' | ' | ' | 0 | 0 | 12 | 12 | 12 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Additional - 700 A/C (in units) | 12 | ' | ' | ' | 7 | [2] | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Firm - 737MAX (in units) | 30 | ' | ' | ' | 0 | 0 | 0 | 0 | 0 | 15 | 14 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Firm - 738MAX (in units) | 170 | [3] | ' | ' | ' | 0 | 0 | 0 | 14 | 13 | 10 | 22 | 33 | 30 | 24 | 24 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Options - 737MAX (in units) | 191 | ' | ' | ' | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 18 | 19 | 23 | 23 | 36 | 36 | 36 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total | 547 | ' | ' | ' | 40 | 24 | 43 | 41 | 35 | 25 | 36 | 52 | 49 | 47 | 47 | 36 | 36 | 36 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Committed expenditures, 2014 | ' | ' | ' | 876,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Committed expenditures, 2015 | ' | ' | ' | 824,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Committed expenditures, 2016 | ' | ' | ' | 1,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Committed expenditures, 2017 | ' | ' | ' | 1,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Committed expenditures, 2018 | ' | ' | ' | 1,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Committed expenditures, 2019 and beyond | ' | ' | ' | $6,800,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
[1] | The Company has flexibility to substitute 737-800s in lieu of 737-700 firm orders. | ||||||||||||||||||||||||||||||||
[2] | The Company executed an agreement in January 2014 to purchase an additional five 737-700 aircraft from a third party. | ||||||||||||||||||||||||||||||||
[3] | The Company has flexibility to substitute MAX 7 in lieu of MAX 8 firm orders beginning in 2019. |
Supplemental_Financial_Informa1
Supplemental Financial Information - Other Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Other Assets [Abstract] | ' | ' |
Derivative contracts | $145 | $306 |
Intangible assets | 166 | 138 |
Non-current investments | 44 | 41 |
Other | 175 | 148 |
Other assets | $530 | $633 |
Supplemental_Financial_Informa2
Supplemental Financial Information - Accounts Payable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accounts Payable [Abstract] | ' | ' |
Accounts payable trade | $189 | $174 |
Salaries payable | 156 | 148 |
Taxes payable | 146 | 128 |
Aircraft maintenance payable | 331 | 299 |
Fuel payable | 102 | 112 |
Other payable | 323 | 246 |
Accounts payable | $1,247 | $1,107 |
Supplemental_Financial_Informa3
Supplemental Financial Information - Accrued Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Supplemental Financial Data [Line Items] | ' | ' |
Retirement plans | $244 | $135 |
Aircraft rentals | 173 | 139 |
Vacation pay | 278 | 270 |
Health | 73 | 70 |
Workers compensation | 161 | 159 |
Accrued taxes | 65 | 67 |
Other | 223 | 212 |
Accrued liabilities | 1,229 | 1,102 |
Fuel derivatives | Accrued Liabilities | ' | ' |
Supplemental Financial Data [Line Items] | ' | ' |
Derivative Contracts | $12 | $50 |
Supplemental_Financial_Informa4
Supplemental Financial Information - Other Non-Current Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Other Liabilities, Noncurrent [Abstract] | ' | ' |
Postretirement obligation | $138 | $148 |
Non-current lease-related obligations | 290 | 376 |
Other deferred compensation | 163 | 141 |
Deferred gains from sale and leaseback of aircraft | 65 | 63 |
Other | 115 | 128 |
Other non-current liabilities | $771 | $856 |
Revolving_Credit_Facility_Deta
Revolving Credit Facility (Details) (USD $) | Dec. 31, 2013 | Apr. 02, 2013 | Dec. 31, 2013 |
Line of Credit | |||
LIBOR | |||
Line of Credit Facility [Line Items] | ' | ' | ' |
Maximum borrowing capacity | ' | $1,000,000,000 | ' |
Spread on variable rate | ' | ' | 1.50% |
Amount outstanding | $0 | ' | ' |
Schedule_of_Longterm_Debt_Deta
Schedule of Long-term Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2004 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2006 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2005 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 29, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 01, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | 6-May-08 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 1997 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | Capital Lease Obligations | Capital Lease Obligations | 5.25% Notes due 2014 | 5.25% Notes due 2014 | 5.25% Notes due 2014 | 5.75% Notes due 2016 | 5.75% Notes due 2016 | 5.75% Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.125% Notes due 2017 | 5.125% Notes due 2017 | 5.125% Notes due 2017 | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | French Credit Agreements due 2018 - 1.05% | French Credit Agreements due 2018 - 1.05% | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2020 - 5.223% | Floating-rate 737 Aircraft Notes payable through 2020 | Floating-rate 737 Aircraft Notes payable through 2020 | Pass Through Certificates due 2022 - 6.24% | Pass Through Certificates due 2022 - 6.24% | 7.375% Debentures due 2027 | 7.375% Debentures due 2027 | 7.375% Debentures due 2027 | ||
Unsecured Debt | Unsecured Debt | Unsecured Debt | Unsecured Debt | AirTran Airways | Convertible Debt | Convertible Debt | Convertible Debt | Convertible Debt | Convertible Debt | Unsecured Debt | Unsecured Debt | Enhanced Equipment Trust Certificate | Enhanced Equipment Trust Certificate | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Enhanced Equipment Trust Certificate | Enhanced Equipment Trust Certificate | Unsecured Debt | Unsecured Debt | ||||||||||||
AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | ||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | $2,842 | $3,175 | $56 | $37 | ' | $357 | $366 | ' | $320 | $331 | ' | ' | ' | ' | $115 | $117 | ' | $322 | $329 | $41 | $57 | $46 | $56 | $30 | $36 | ' | $210 | $241 | ' | $85 | $95 | ' | $413 | $451 | $340 | $527 | $371 | $394 | ' | $136 | $138 |
Less current maturities | 629 | 271 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less debt discount and issuance costs | 22 | 21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt less current maturities | $2,191 | $2,883 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate stated in the debt agreement (in hundredths) | ' | ' | ' | ' | 5.25% | 5.25% | ' | 5.75% | 5.75% | ' | 5.25% | 5.25% | 5.25% | 5.25% | 5.25% | ' | 5.13% | 5.13% | ' | 10.37% | ' | 1.05% | ' | 7.02% | ' | 6.32% | 6.32% | ' | 6.84% | 6.84% | ' | 5.22% | 5.22% | ' | ' | ' | 6.24% | ' | 7.38% | 7.38% | 7.38% |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2009 | Oct. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jul. 01, 2009 | Jul. 01, 2009 | Apr. 29, 2009 | Apr. 29, 2009 | Apr. 29, 2009 | 6-May-08 | 6-May-08 | Oct. 03, 2007 | Oct. 03, 2007 | Oct. 03, 2007 | Oct. 03, 2007 | Dec. 31, 2006 | Feb. 28, 2005 | Dec. 31, 2004 | Dec. 31, 2004 | Sep. 30, 2004 | Feb. 28, 1997 | Feb. 28, 1997 |
aircraft | AirTran Airways | AirTran Airways | AirTran Airways | Floating-rate 737 Aircraft Notes payable through 2020 | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2020 - 5.223% | Pass Through Certificates due 2022 - 6.24% | Pass Through Certificates due 2022 - 6.24% | Pass Through Certificates Series A | Pass Through Certificates Series B | 5.75% Notes due 2016 | 5.125% Notes due 2017 | French Credit Agreements due 2018 - 1.05% | French Credit Agreements due 2018 - 1.05% | 5.25% Notes due 2014 | 7.375% Debentures due 2027 | 7.375% Debentures due 2027 | |
Mortgages | Interest rate derivatives | Maximum | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | Southwest Airlines | Mortgages | Maximum | Mortgages | LIBOR | Maximum | Mortgages | LIBOR | Mortgages | Interest rate derivatives | Agreements | LIBOR | Treasury Rate | |||||||||
Interest rate derivatives | Loans | Mortgages | Mortgages | Cash Flow Hedging | Mortgages | |||||||||||||||||||||||||
Mortgages | ||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of mortgages on secured aircraft | ' | 22 | ' | ' | 19 | 3 | 8 | ' | ' | ' | ' | ' | 5 | ' | 14 | ' | ' | 21 | ' | 16 | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' |
Number of loans prepaid during period | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average interest rate | ' | ' | ' | ' | 1.68% | 7.02% | 10.37% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount of debt | ' | ' | ' | ' | ' | ' | ' | ' | $115,000,000 | ' | ' | ' | ' | $124,000,000 | ' | ' | $332,000,000 | $600,000,000 | ' | $500,000,000 | ' | $412,000,000 | $88,000,000 | $300,000,000 | $300,000,000 | $112,000,000 | ' | $350,000,000 | $100,000,000 | ' |
Interest rate stated in the debt agreement (in hundredths) | ' | ' | ' | 6.44% | ' | ' | ' | ' | 5.25% | ' | ' | ' | 6.84% | ' | 6.32% | ' | ' | 5.22% | ' | ' | ' | 6.15% | 6.65% | 5.75% | 5.13% | ' | ' | 5.25% | 7.38% | ' |
Conversion ratio | ' | ' | ' | ' | ' | ' | ' | 53.3761 | 166.2806 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | ' | ' | ' | $615.16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extinguishment of debt amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash set aside for conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 68,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase price percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion option, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Spread on variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.30% | ' | ' | 0.95% | ' | ' | ' | ' | ' | ' | ' | -0.45% | ' | ' | 0.20% |
Notional amount | ' | ' | 275,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of identical floating rate financing agreements entered into concurrently with French banking partnerships | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' |
Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '13 years 0 months 0 days | ' | ' | ' | ' |
Letters of Credit Outstanding Amount | 182,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net book value of assets pledged as collateral for the Company's secured borrowings, primarily aircraft and engines | 2,200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum additional number of assets pledged as collateral in case obligations related to fuel derivatives exceed certain thresholds | 81 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net book value of additional assets pledged as collateral in case obligations related to fuel derivatives exceed certain thresholds | 2,100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, by Maturity [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 546,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 170,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 597,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 506,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 251,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | $674,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leases_Details
Leases (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 09, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |||
aircraft | aircraft | CapitalLeases | Minimum | Maximum | B-717-200 | B-717-200 | B-717-200 | B-717-200 | B-717-200 | B-717-200 | B-717-200 | Love Field Airport | ||||
CapitalLeases | CapitalLeases | aircraft | aircraft | aircraft | Minimum | Maximum | ||||||||||
Capital Leases, Balance Sheet, Assets by Major Class, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Flight equipment | $69,000,000 | $69,000,000 | $45,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Less: accumulated amortization | 12,000,000 | 12,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total | 57,000,000 | 57,000,000 | 37,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Capital leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2014 | 8,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2015 | 8,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2016 | 8,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2017 | 8,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2018 | 8,000,000 | 8,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Thereafter | 29,000,000 | 29,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total minimum lease payments | 69,000,000 | 69,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Less amount representing interest | 13,000,000 | 13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Present value of minimum lease payments | 56,000,000 | 56,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Less current portion | 6,000,000 | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Long-term portion | 50,000,000 | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Operating leases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2014 | 689,000,000 | [1] | 689,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000,000 |
2015 | 655,000,000 | [1] | 655,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 |
2016 | 544,000,000 | [1] | 544,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 |
2017 | 516,000,000 | [1] | 516,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,000,000 |
2018 | 429,000,000 | [1] | 429,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 |
Thereafter | 1,755,000,000 | [1] | 1,755,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 685,000,000 |
Total minimum lease payments | 4,588,000,000 | [1] | 4,588,000,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subleases | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2014 | -52,000,000 | -52,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2015 | -90,000,000 | -90,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2016 | -106,000,000 | -106,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2017 | -106,000,000 | -106,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2018 | -102,000,000 | -102,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Thereafter | -242,000,000 | -242,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total minimum lease payments | -698,000,000 | -698,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Operating leases, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2014 | 637,000,000 | 637,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2015 | 565,000,000 | 565,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2016 | 438,000,000 | 438,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2017 | 410,000,000 | 410,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
2018 | 327,000,000 | 327,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Thereafter | 1,513,000,000 | 1,513,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Total minimum lease payments | 3,890,000,000 | 3,890,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Capital Leased Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of capital leased assets | 4 | 4 | 2 | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ||
Rental expense for operating leases | ' | 997,000,000 | 943,000,000 | 847,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of operating leased assets | 160 | 160 | ' | ' | ' | ' | ' | ' | ' | ' | 78 | ' | ' | ' | ||
Renewal term | ' | ' | ' | ' | '1 year | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of aircraft sold in sale and leaseback transaction | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Proceeds from sale leaseback transactions | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Leaseback Period | '11 years 0 months 0 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of aircrafts subleased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88 | ' | ' | ' | ||
Number of aircraft delivered to sublessee | ' | ' | ' | ' | ' | ' | 13 | ' | 13 | ' | ' | ' | ' | ' | ||
Number of aircraft expected to be converted to sublease per month | ' | ' | ' | ' | ' | ' | 3 | ' | 3 | ' | ' | ' | ' | ' | ||
Number of owned assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ||
Sublease terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '11 years | ' | ||
Lease terms for owned aircraft | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ||
Contingent rental payment due | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ||
Residual value of leased properties | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ||
Estimated Loss On Sublease | ' | ' | ' | ' | ' | ' | ' | 137,000,000 | ' | ' | ' | ' | ' | ' | ||
Sublease transaction costs | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | 9,000,000 | ' | ' | ' | ' | ||
Sublease Obligations | ' | ' | ' | ' | ' | ' | 122,000,000 | ' | 122,000,000 | 128,000,000 | ' | ' | ' | ' | ||
Interest expense related to accretion | ' | ' | ' | ' | ' | ' | ' | ' | $6,000,000 | ' | ' | ' | ' | ' | ||
[1] | Includes LFMP airport rental payments of $23 in 2014, $24 in 2015, $24 in 2016, $24 in 2017, $25 in 2018, and $685 thereafter. See Note 4. |
Net_Income_Per_Share_Details
Net Income Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
NUMERATOR: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $212 | $259 | $224 | $59 | $78 | $16 | $228 | $98 | $754 | $421 | $178 |
Incremental income effect of interest on 5.25% convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | 3 | 3 | 0 |
Net income after assumed conversion | ' | ' | ' | ' | ' | ' | ' | ' | $757 | $424 | $178 |
DENOMINATOR: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average shares outstanding, basic | ' | ' | ' | ' | ' | ' | ' | ' | 710 | 750 | 774 |
Dilutive effect of Employee stock options and restricted stock units | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 1 | 1 |
Dilutive effect of 5.25% convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | 6 | 6 | 0 |
Adjusted weighted-average shares outstanding, diluted | ' | ' | ' | ' | ' | ' | ' | ' | 718 | 757 | 775 |
NET INCOME PER SHARE: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic (in dollars per share) | $0.30 | $0.37 | $0.31 | $0.08 | $0.11 | $0.02 | $0.30 | $0.13 | $1.06 | $0.56 | $0.23 |
Diluted (in dollars per share) | $0.30 | $0.37 | $0.31 | $0.08 | $0.11 | $0.02 | $0.30 | $0.13 | $1.05 | $0.56 | $0.23 |
Stock Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potentially dilutive amounts excluded from calculations: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potentially dilutive amounts excluded from calculations: | ' | ' | ' | ' | ' | ' | ' | ' | 9 | 35 | 48 |
5.25% convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potentially dilutive amounts excluded from calculations: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potentially dilutive amounts excluded from calculations: | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | 6 |
Net_Income_Per_Share_Parenthet
Net Income Per Share Parenthetical (Details) (Convertible Debt, 5.25% Convertible Senior Notes due 2016) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Convertible Debt | 5.25% Convertible Senior Notes due 2016 | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Interest rate stated in the debt agreement (in hundredths) | 5.25% | 5.25% | 5.25% |
Financial_Derivative_Instrumen1
Financial Derivative Instruments Narrative (Details) (USD $) | 12 Months Ended | 6 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 6-May-08 | Apr. 29, 2009 | Apr. 29, 2009 | Feb. 28, 1997 | Dec. 31, 2006 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | 7.375% Debentures due 2027 | 5.75% Notes due 2016 | Notes Payable to Banks | Notes Payable to Banks | Unsecured Debt | Unsecured Debt | Unsecured Debt | Fuel derivatives | Fuel derivatives | Interest rate derivatives | Interest rate derivatives | Interest rate derivatives | Interest rate derivatives | 2014 | ||||
Maximum | Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2019 - 6.315% | 7.375% Debentures due 2027 | 7.375% Debentures due 2027 | 5.75% Notes due 2016 | Southwest Airlines | AirTran Airways | AirTran Airways | AirTran Airways | |||||||||||
Minimum | Maximum | |||||||||||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percent of fuel consumption hedged | 51.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43.00% |
Gain (Loss) On Derivative Due To Loss Of Hedge Accounting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $15,000,000 | ' | ' | ' | ' | ' | ' |
Total collateral already posted aggregate fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' |
Cash collateral deposits provided to counterparty - noncurrent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31,000,000 | 1,000,000 | ' | ' | ' |
Premiums paid for fuel derivative contracts | 60,000,000 | 36,000,000 | 107,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current Unrealized Net Gains in OCI | 28,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cumulative ineffectiveness recognized for unsettled hedges | 57,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount of debt | ' | ' | ' | 600,000,000 | ' | 332,000,000 | 100,000,000 | 300,000,000 | 600,000,000 | 332,000,000 | ' | 100,000,000 | 300,000,000 | ' | ' | ' | ' | ' | ' | ' |
Interest rate stated in the debt agreement (in hundredths) | ' | ' | ' | 5.22% | 6.32% | ' | 7.38% | 5.75% | 5.22% | 6.32% | 7.38% | 7.38% | 5.75% | ' | ' | ' | ' | 4.35% | 6.44% | ' |
Notional amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 275,000,000 | ' | ' | ' |
Proceeds from termination of interest rate derivative instrument | 0 | 38,000,000 | 76,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average Floating Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.54% | ' | ' | ' | ' | ' | ' | ' |
Maximum sum of derivatives of counterparty to be included in other (less than $20 million) | $20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash collateral provided as a percentage of derivative contract value (in hundredths) | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial_Derivative_Instrumen2
Financial Derivative Instruments - Fuel Hedging (Details) | Dec. 31, 2013 | |
gal | ||
2014 | ' | |
Volume of Fuel Hedging [Line Items] | ' | |
Fuel Hedged (in gallons) | 764,000,000 | [1] |
2015 | ' | |
Volume of Fuel Hedging [Line Items] | ' | |
Fuel Hedged (in gallons) | 1,156,000,000 | [1] |
2016 | ' | |
Volume of Fuel Hedging [Line Items] | ' | |
Fuel Hedged (in gallons) | 977,000,000 | [1] |
2017 | ' | |
Volume of Fuel Hedging [Line Items] | ' | |
Fuel Hedged (in gallons) | 933,000,000 | [1] |
[1] | The Company determines gallons hedged based on market prices and forward curves as of DecemberB 31, 2013.B Due to the types of derivatives utilized by the Company, these volumes may vary significantly as market prices fluctuate. |
Financial_Derivative_Instrumen3
Financial Derivative Instruments - Fair Values by Balance Sheet Location (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | $503 | [1] | $1,004 | [1] |
Derivative Liability, Fair Value, Gross Liability | 380 | [1] | 880 | [1] |
Designated as Hedging Instrument | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 303 | [1] | 386 | [1] |
Derivative Liability, Fair Value, Gross Liability | 78 | [1] | 142 | [1] |
Not Designated as Hedging Instrument | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 200 | [1] | 618 | [1] |
Derivative Liability, Fair Value, Gross Liability | 302 | [1] | 738 | [1] |
Fuel derivatives | Prepaid expenses and other current assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Prepaid settlement for fuel contracts - current | 0 | 15 | ||
Fuel derivatives | Other Assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Receivable from third parties for settled fuel contracts - noncurrent | 0 | 54 | ||
Fuel derivatives | Accounts And Other Receivables | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Receivable from third parties for settled fuel contracts - current | 57 | 0 | ||
Fuel derivatives | Designated as Hedging Instrument | Prepaid expenses and other current assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 74 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Fuel derivatives | Designated as Hedging Instrument | Other Assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 209 | [1] | 355 | [1] |
Derivative Liability, Fair Value, Gross Liability | 1 | [1] | 16 | [1] |
Fuel derivatives | Designated as Hedging Instrument | Accrued Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Fuel derivatives | Designated as Hedging Instrument | Other Noncurrent Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Prepaid expenses and other current assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 175 | [1] | 375 | [1] |
Derivative Liability, Fair Value, Gross Liability | 182 | [1] | 327 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Other Assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 16 | [1] | 233 | [1] |
Derivative Liability, Fair Value, Gross Liability | 99 | [1] | 351 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Accrued Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 9 | [1] | 10 | [1] |
Derivative Liability, Fair Value, Gross Liability | 21 | [1] | 60 | [1] |
Fuel derivatives | Not Designated as Hedging Instrument | Other Noncurrent Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Interest rate derivatives | Other Noncurrent Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Cash collateral deposits provided to counterparty - noncurrent | 32 | 89 | ||
Interest rate derivatives | Designated as Hedging Instrument | Other Assets | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 20 | [1] | 31 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Interest rate derivatives | Designated as Hedging Instrument | Accrued Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 0 | [1] | 0 | [1] |
Interest rate derivatives | Designated as Hedging Instrument | Other Noncurrent Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [1] | 0 | [1] |
Derivative Liability, Fair Value, Gross Liability | 77 | [1] | 126 | [1] |
Interest rate derivatives | Designated as Hedging Instrument | Other Liabilities | ' | ' | ||
Derivatives, Fair Value [Line Items] | ' | ' | ||
Derivative Liability, Fair Value, Gross Liability | $77 | ' | ||
[1] | Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. |
Financial_Derivative_Instrumen4
Financial Derivative Instruments - Offsetting of Derivative Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Offsetting Assets [Line Items] | ' | ' | ||
Net amounts of assets presented in the Balance Sheet | $145 | $306 | ||
Fuel derivatives | Prepaid expenses and other current assets | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross amounts of recognized assets | 249 | 375 | ||
Gross amounts offset in the Balance Sheet | -182 | -327 | ||
Net amounts of assets presented in the Balance Sheet | 67 | [1] | 48 | [1] |
Fuel derivatives | Other Assets | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross amounts of recognized assets | 225 | 588 | ||
Gross amounts offset in the Balance Sheet | -100 | -367 | ||
Net amounts of assets presented in the Balance Sheet | 125 | 221 | ||
Fuel derivatives | Accrued Liabilities | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross amounts of recognized assets | 9 | 10 | ||
Gross amounts offset in the Balance Sheet | -9 | -10 | ||
Net amounts of assets presented in the Balance Sheet | 0 | 0 | ||
Fuel derivatives | Other Noncurrent Liabilities | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross amounts of recognized assets | 0 | 0 | ||
Gross amounts offset in the Balance Sheet | 0 | 0 | ||
Net amounts of assets presented in the Balance Sheet | 0 | 0 | ||
Interest rate derivatives | Other Assets | ' | ' | ||
Offsetting Assets [Line Items] | ' | ' | ||
Gross amounts of recognized assets | 20 | 31 | ||
Gross amounts offset in the Balance Sheet | 0 | 0 | ||
Net amounts of assets presented in the Balance Sheet | $20 | $31 | ||
[1] | Amounts included in Prepaid expenses and other current assets. |
Financial_Derivative_Instrumen5
Financial Derivative Instruments - Offsetting of Derivative Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fuel derivatives | Prepaid expenses and other current assets | ' | ' |
Offsetting Liabilities [Line Items] | ' | ' |
Gross amounts of recognized liabilities | $182 | $327 |
Gross amounts offset in the Balance Sheet | -182 | -327 |
Net amounts of liabilities presented in the Balance Sheet | 0 | 0 |
Fuel derivatives | Other Assets | ' | ' |
Offsetting Liabilities [Line Items] | ' | ' |
Gross amounts of recognized liabilities | 100 | 367 |
Gross amounts offset in the Balance Sheet | -100 | -367 |
Net amounts of liabilities presented in the Balance Sheet | 0 | 0 |
Fuel derivatives | Accrued Liabilities | ' | ' |
Offsetting Liabilities [Line Items] | ' | ' |
Gross amounts of recognized liabilities | 21 | 60 |
Gross amounts offset in the Balance Sheet | -9 | -10 |
Net amounts of liabilities presented in the Balance Sheet | 12 | 50 |
Fuel derivatives | Other Noncurrent Liabilities | ' | ' |
Offsetting Liabilities [Line Items] | ' | ' |
Gross amounts of recognized liabilities | 0 | 0 |
Gross amounts offset in the Balance Sheet | 0 | 0 |
Net amounts of liabilities presented in the Balance Sheet | 0 | 0 |
Interest rate derivatives | Other Noncurrent Liabilities | ' | ' |
Offsetting Liabilities [Line Items] | ' | ' |
Gross amounts of recognized liabilities | 77 | 126 |
Gross amounts offset in the Balance Sheet | -32 | -89 |
Net amounts of liabilities presented in the Balance Sheet | $45 | $37 |
Financial_Derivative_Instrumen6
Financial Derivative Instruments - (Gain) Loss by Hedging Relationship (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Cash Flow Hedging | ' | ' | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
(Gain) loss recognized in AOCI on derivatives (effective portion) | $38 | ($2) | ||
(Gain) loss reclassified from AOCI into income (effective portion)(a) | 121 | [1] | 85 | [1] |
(Gain) loss recognized in income on derivatives (ineffective portion)(b) | 11 | [2] | 43 | [2] |
Fuel derivatives | Cash Flow Hedging | ' | ' | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
(Gain) loss recognized in AOCI on derivatives (effective portion) | 52 | [3] | -19 | [3] |
(Gain) loss reclassified from AOCI into income (effective portion)(a) | 103 | [1],[3] | 101 | [1],[3] |
(Gain) loss recognized in income on derivatives (ineffective portion)(b) | 10 | [2] | 43 | [2] |
Fuel derivatives | Not Designated as Hedging Instrument | Other Nonoperating Income Expense | ' | ' | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
(Gain) loss recognized in income on derivatives | -100 | -264 | ||
Interest rate derivatives | Cash Flow Hedging | ' | ' | ||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ||
(Gain) loss recognized in AOCI on derivatives (effective portion) | -14 | [3] | 17 | [3] |
(Gain) loss reclassified from AOCI into income (effective portion)(a) | 18 | [1],[3] | -16 | [1],[3] |
(Gain) loss recognized in income on derivatives (ineffective portion)(b) | $1 | [2] | $0 | [2] |
[1] | Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively. | |||
[2] | Amounts are included in Other (gains) losses, net. | |||
[3] | Net of tax |
Financial_Derivative_Instrumen7
Financial Derivative Instruments - Fair Values of Fuel Derivatives Amounts Posted as Collateral (Details) (Fuel derivatives, USD $) | Dec. 31, 2013 | |
In Millions, unless otherwise specified | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | $180 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty A | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | 27 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty B | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | 42 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty C | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | 41 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty D | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | 24 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty E | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | 26 | |
Cash collateral held by CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty Other | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Fair value of fuel derivatives | 20 | [1] |
Cash collateral held by CP | 0 | [1] |
Aircraft collateral pledged to CP | 0 | [1] |
Letters of credit (LC) | 0 | [1] |
Minimum | Counterparty A | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for aircraft | -250 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -650 | |
Fair value of fuel derivative level at which cash is received from CP | 50 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -250 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | 0 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -650 | |
Fair value of fuel derivative level at which cash is received from CP | ' | [3] |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -250 | |
Minimum | Counterparty B | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for aircraft | -100 | [2] |
Option to substitute LC for cash Threshold 1 | -500 | |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -500 | |
Fair value of fuel derivative level at which cash is received from CP | 150 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -100 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | 0 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -500 | |
Fair value of fuel derivative level at which cash is received from CP | ' | [3] |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -100 | |
Minimum | Counterparty C | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for cash Threshold 1 | -100 | [4] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative level at which cash is received from CP | 175 | [5] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | ' | [3] |
Fair value of fuel derivative level at which cash is received from CP | ' | [3] |
Minimum | Counterparty D | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for aircraft | -250 | [2] |
Option to substitute LC for cash Threshold 1 | -50 | [2] |
Option to substitute LC for cash Threshold 2 | -650 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -650 | |
Fair value of fuel derivative level at which cash is received from CP | 200 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -250 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | 0 | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | -650 | |
Fair value of fuel derivative level at which cash is received from CP | ' | [3] |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -250 | |
Minimum | Counterparty E | ' | |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -50 | |
Fair value of fuel derivative level at which cash is received from CP | 30 | |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | ' | [3] |
Fair value of fuel derivative level at which cash is received from CP | ' | [3] |
Maximum | Counterparty A | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for aircraft | -650 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -250 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -650 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -250 | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -650 | |
Maximum | Counterparty B | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for aircraft | -500 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -100 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -500 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -100 | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | -500 | |
Maximum | Counterparty C | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for cash Threshold 1 | -150 | [4] |
Maximum | Counterparty D | ' | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ' | |
Option to substitute LC for aircraft | -650 | [2] |
Option to substitute LC for cash Threshold 1 | -250 | [2] |
If credit rating is investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -250 | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | -650 | [2] |
If credit rating is non-investment grade, fair value of fuel derivative level at which: | ' | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 1 | -250 | |
Fair value of fuel derivative levels at which aircraft collateral is pledged to CP | ($650) | |
[1] | Individual counterparties with fair value of fuel derivatives <$20 million. | |
[2] | The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. No cash, letters of credit, or aircraft were pledged as collateral with such counterparties as of DecemberB 31, 2013. | |
[3] | Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | |
[4] | The Company has the option of providing cash or letters of credit as collateral. No cash or letters of credit were pledged as collateral with such counterparties as of DecemberB 31, 2013. | |
[5] | Thresholds may vary based on changes in credit ratings within investment grade. |
Fair_Value_Measurements_Narrat
Fair Value Measurements Narrative (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Agreements | |
Fair Value Disclosures [Abstract] | ' |
Available-for-sale Securities, Fair Value Disclosure | $39 |
Debt agreements not publicly held | 6 |
Fair_Value_Measurements_Measur
Fair Value Measurements - Measured on Recurring Basis (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $0 | $0 | ||
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 | ||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 | ||
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | 0 | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | 0 | 0 | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 503 | [1] | 1,004 | [1] |
Fuel derivatives: | ' | ' | ||
Derivative Liability, Fair Value, Gross Liability | -380 | [1] | -880 | [1] |
Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Treasury bills | 1,570 | 1,624 | ||
Interest rate derivatives (see Note 10) | 20 | 31 | ||
Fuel derivatives: | ' | ' | ||
Other available for sale securities | 63 | 49 | ||
Total assets | 3,757 | 4,059 | ||
Fuel derivatives: | ' | ' | ||
Interest rate derivatives (see Note 10) | -77 | -126 | ||
Deferred Compensation | -158 | -137 | ||
Total Liabilities | -538 | -1,017 | ||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Treasury bills | 1,570 | 1,624 | ||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Fuel derivatives: | ' | ' | ||
Other available for sale securities | 58 | 44 | ||
Total assets | 2,620 | 2,497 | ||
Fuel derivatives: | ' | ' | ||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Deferred Compensation | -158 | -137 | ||
Total Liabilities | -158 | -137 | ||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Treasury bills | 0 | 0 | ||
Interest rate derivatives (see Note 10) | 20 | 31 | ||
Fuel derivatives: | ' | ' | ||
Other available for sale securities | 0 | 0 | ||
Total assets | 626 | 661 | ||
Fuel derivatives: | ' | ' | ||
Interest rate derivatives (see Note 10) | -77 | -126 | ||
Deferred Compensation | 0 | 0 | ||
Total Liabilities | -85 | -239 | ||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Treasury bills | 0 | 0 | ||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Fuel derivatives: | ' | ' | ||
Other available for sale securities | 5 | 5 | ||
Total assets | 511 | 901 | ||
Fuel derivatives: | ' | ' | ||
Interest rate derivatives (see Note 10) | 0 | 0 | ||
Deferred Compensation | 0 | 0 | ||
Total Liabilities | -295 | -641 | ||
Cash Equivalents | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 992 | [2] | 829 | [2] |
Cash Equivalents | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 992 | [2] | 829 | [2] |
Cash Equivalents | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | [2] | 0 | [2] |
Cash Equivalents | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | [2] | 0 | [2] |
Commercial paper | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 280 | 170 | ||
Commercial paper | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | 0 | ||
Commercial paper | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 280 | 170 | ||
Commercial paper | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 23 | 34 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 23 | 34 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | 0 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 60 | 80 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | 0 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 60 | 80 | ||
Eurodollar Time Deposits | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Cash equivalents | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Investments | 227 | 233 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Investments | 0 | 0 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Investments | 227 | 233 | ||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Investments | 0 | 0 | ||
Auction rate securities | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Assets | ' | ' | ||
Investments | 39 | [3] | 36 | [3] |
Auction rate securities | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Assets | ' | ' | ||
Investments | 0 | [3] | 0 | [3] |
Auction rate securities | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Assets | ' | ' | ||
Investments | 0 | [3] | 0 | [3] |
Auction rate securities | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Assets | ' | ' | ||
Investments | 39 | [3] | 36 | [3] |
Swap | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 16 | [4] | 113 | [4] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | -8 | [4] | -57 | [4] |
Derivative Liability, Fair Value, Gross Liability | ' | -56 | [5] | |
Swap | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [4] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [4] |
Derivative Liability, Fair Value, Gross Liability | ' | 0 | [5] | |
Swap | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 16 | [4] | 113 | [4] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | -8 | [4] | -57 | [4] |
Derivative Liability, Fair Value, Gross Liability | ' | -56 | [5] | |
Swap | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [4] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [4] |
Derivative Liability, Fair Value, Gross Liability | ' | 0 | [5] | |
Options Held | Fair Value, Measurements, Recurring | Period end date | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 458 | [4] | 850 | [4] |
Derivative Liability, Fair Value, Gross Asset | 9 | [5] | 10 | [5] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | -274 | [4] | -637 | [4] |
Derivative Liability, Fair Value, Gross Liability | -21 | [5] | -4 | [5] |
Options Held | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [4] |
Derivative Liability, Fair Value, Gross Asset | 0 | [5] | 0 | [5] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [4] |
Derivative Liability, Fair Value, Gross Liability | 0 | [5] | 0 | [5] |
Options Held | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [4] |
Derivative Liability, Fair Value, Gross Asset | 0 | [5] | 0 | [5] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [4] |
Derivative Liability, Fair Value, Gross Liability | 0 | [5] | 0 | [5] |
Options Held | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | ' | ' | ||
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Asset | 458 | [4] | 850 | [4] |
Derivative Liability, Fair Value, Gross Asset | 9 | [5] | 10 | [5] |
Fuel derivatives: | ' | ' | ||
Derivative Asset, Fair Value, Gross Liability | -274 | [4] | -637 | [4] |
Derivative Liability, Fair Value, Gross Liability | ($21) | [5] | ($4) | [5] |
[1] | Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note. | |||
[2] | Cash equivalents are primarily composed of money market investments. | |||
[3] | Noncurrent investments are included in Other assets in the Consolidated Balance Sheet. | |||
[4] | In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10. | |||
[5] | In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10. |
Fair_Value_Measurement_Fair_Va
Fair Value Measurement - Fair Value Assets and Liabilities Measured on Recurring Basis with Unobservable Inputs (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning Balance | ' | $489 | ||
Total gains or (losses) (realized or unrealized) | ' | ' | ||
Included in earnings | 71 | -62 | ||
Included in other comprehensive income | -104 | 22 | ||
Purchases | 357 | 1,003 | ||
Sales | -417 | -1,112 | ||
Settlements | 49 | -80 | ||
Ending Balance | 216 | 260 | ||
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2013 | 86 | 27 | ||
Fuel derivatives | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning Balance | ' | 417 | ||
Total gains or (losses) (realized or unrealized) | ' | ' | ||
Included in earnings | 71 | -62 | ||
Included in other comprehensive income | -107 | 22 | ||
Purchases | 357 | [1] | 1,003 | [1] |
Sales | -417 | [1] | -1,081 | [1] |
Settlements | 49 | -80 | ||
Ending Balance | 172 | 219 | ||
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2013 | 86 | 27 | ||
Auction rate securities | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning Balance | ' | 67 | ||
Total gains or (losses) (realized or unrealized) | ' | ' | ||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 3 | 0 | ||
Purchases | 0 | 0 | ||
Sales | 0 | -31 | ||
Settlements | 0 | 0 | ||
Ending Balance | 39 | [2] | 36 | [2] |
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2013 | 0 | 0 | ||
Other securities | ' | ' | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ||
Beginning Balance | ' | 5 | ||
Total gains or (losses) (realized or unrealized) | ' | ' | ||
Included in earnings | 0 | 0 | ||
Included in other comprehensive income | 0 | 0 | ||
Purchases | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Ending Balance | 5 | 5 | ||
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2013 | $0 | $0 | ||
[1] | The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives is purchased as a single instrument or separate instruments. | |||
[2] | Included in Other assets in the Consolidated Balance Sheet. |
Fair_Value_Measurements_Quanti
Fair Value Measurements - Quantitative Information about Level 3 Fair Value (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Discounted Cash Flow | Illiquidity Premium | Auction rate securities | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum | 3.00% |
Fair Value Measurement Range, Maximum | 4.00% |
Discounted Cash Flow | Counterparty Credit Spread | Auction rate securities | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum | 1.00% |
Fair Value Measurement Range, Maximum | 3.00% |
Discounted Cash Flow | Time To Principal Recovery | Auction rate securities | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum, Term | '5 years |
Fair Value Measurement Range, Maximum, Term | '8 years |
2014 | Option Model | Implied Volatility | Fuel derivatives | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum | 9.00% |
Fair Value Measurement Range, Maximum | 25.00% |
2015 | Option Model | Implied Volatility | Fuel derivatives | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum | 13.00% |
Fair Value Measurement Range, Maximum | 23.00% |
2016 | Option Model | Implied Volatility | Fuel derivatives | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum | 13.00% |
Fair Value Measurement Range, Maximum | 20.00% |
2017 | Option Model | Implied Volatility | Fuel derivatives | ' |
Quantitative Information About Level 3 [Line Items] | ' |
Fair Value Measurement Range, Minimum | 13.00% |
Fair Value Measurement Range, Maximum | 17.00% |
Fair_Value_Instruments_Carryin
Fair Value Instruments - Carrying and Estimated Fair Value of Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2004 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2006 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2005 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 29, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 01, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | 6-May-08 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 1997 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | 5.25% Notes due 2014 | 5.25% Notes due 2014 | 5.25% Notes due 2014 | 5.75% Notes due 2016 | 5.75% Notes due 2016 | 5.75% Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.125% Notes due 2017 | 5.125% Notes due 2017 | 5.125% Notes due 2017 | French Credit Agreements due 2018 - 1.05% | French Credit Agreements due 2018 - 1.05% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2020 - 5.223% | Term Loan Agreement due 2020 - 5.223% | Pass Through Certificates due 2022 - 6.24% | Pass Through Certificates due 2022 - 6.24% | 7.375% Debentures due 2027 | 7.375% Debentures due 2027 | 7.375% Debentures due 2027 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 2 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | Level 3 | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | AirTran Airways | ||
Unsecured Debt | Unsecured Debt | Unsecured Debt | Unsecured Debt | Convertible Debt | Convertible Debt | Convertible Debt | Unsecured Debt | Unsecured Debt | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Enhanced Equipment Trust Certificate | Enhanced Equipment Trust Certificate | Unsecured Debt | Unsecured Debt | 5.25% Notes due 2014 | 5.75% Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.125% Notes due 2017 | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | Pass Through Certificates due 2022 - 6.24% | 7.375% Debentures due 2027 | French Credit Agreements due 2018 - 1.05% | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Term Loan Agreement due 2019 - 6.315% | Term Loan Agreement due 2019 - 6.84% | Term Loan Agreement due 2020 - 5.223% | Floating-rate 737 Aircraft Notes payable through 2020 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | 5.25% Convertible Senior Notes due 2016 | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37% | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02% | Floating-rate 737 Aircraft Notes payable through 2020 | Floating-rate 737 Aircraft Notes payable through 2020 | ||||||||||
Unsecured Debt | Unsecured Debt | Convertible Debt | Unsecured Debt | Enhanced Equipment Trust Certificate | Enhanced Equipment Trust Certificate | Unsecured Debt | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Convertible Debt | Convertible Debt | Enhanced Equipment Trust Certificate | Enhanced Equipment Trust Certificate | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | Notes Payable to Banks | ||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying amount of debt | ' | ' | ' | $357 | ' | ' | $320 | ' | ' | ' | ' | ' | $322 | ' | $46 | ' | ' | $210 | ' | ' | $85 | ' | ' | $413 | ' | $371 | ' | ' | $136 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $115 | ' | $41 | ' | $30 | ' | $340 | ' |
Notes Payable, Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 362 | 354 | 178 | 346 | 39 | 418 | ' | 46 | 31 | ' | ' | ' | 335 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt and Capital Lease Obligations | 2,842 | 3,175 | ' | 357 | 366 | ' | 320 | 331 | ' | ' | ' | ' | 322 | 329 | 46 | 56 | ' | 210 | 241 | ' | 85 | 95 | ' | 413 | 451 | 371 | 394 | ' | 136 | 138 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 115 | 117 | 41 | 57 | 30 | 36 | 340 | 527 |
Loans Payable, Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $146 | ' | ' | $213 | $90 | $388 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate stated in the debt agreement (in hundredths) | ' | ' | 5.25% | 5.25% | ' | 5.75% | 5.75% | ' | 5.25% | 5.25% | 5.25% | 5.13% | 5.13% | ' | 1.05% | ' | 6.32% | 6.32% | ' | 6.84% | 6.84% | ' | 5.22% | 5.22% | ' | 6.24% | ' | 7.38% | 7.38% | 7.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.25% | 5.25% | ' | 10.37% | ' | 7.02% | ' | ' | ' |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at end of period | ($3) | ($119) |
Fuel derivatives | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at beginning of period | -103 | -297 |
Changes in fair value | -82 | 31 |
Reclassification to earnings | 165 | 163 |
Balance at end of period | -20 | -103 |
Interest rate derivatives | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at beginning of period | -108 | -107 |
Changes in fair value | 22 | -27 |
Reclassification to earnings | 28 | 26 |
Balance at end of period | -58 | -108 |
Defined benefit plan items | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at beginning of period | 26 | 54 |
Changes in fair value | 39 | -28 |
Reclassification to earnings | 0 | 0 |
Balance at end of period | 65 | 26 |
Other | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at beginning of period | -8 | -14 |
Changes in fair value | 16 | 6 |
Reclassification to earnings | 0 | 0 |
Balance at end of period | 8 | -8 |
Deferred tax | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at beginning of period | 74 | 140 |
Changes in fair value | 0 | -73 |
Reclassification to earnings | -72 | 7 |
Balance at end of period | 2 | 74 |
Accumulated other comprehensive income (loss) | ' | ' |
Accumulated Other Comprehensive Income Loss Net Of Tax [Roll Forward] | ' | ' |
Balance at beginning of period | -119 | -224 |
Changes in fair value | -5 | -91 |
Reclassification to earnings | 121 | 196 |
Balance at end of period | ($3) | ($119) |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) - Reclassification out of Accumulated Other Comprehensive Income (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' |
Fuel and oil | ($5,763) | ($6,120) | ($5,644) |
Less: Tax Expense | 455 | 264 | 145 |
Reclassification out of Accumulated Other Comprehensive Income | ' | ' | ' |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' |
Net of Tax | 121 | ' | ' |
Fuel derivatives | Reclassification out of Accumulated Other Comprehensive Income | ' | ' | ' |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' |
Fuel and oil | 165 | ' | ' |
Less: Tax Expense | 62 | ' | ' |
Net of Tax | 103 | ' | ' |
Interest rate derivatives | Reclassification out of Accumulated Other Comprehensive Income | ' | ' | ' |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' |
Interest Expense | 28 | ' | ' |
Less: Tax Expense | 10 | ' | ' |
Net of Tax | $18 | ' | ' |
Common_Stock_Details
Common Stock (Details) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Equity [Abstract] | ' |
Common stock reserved for issuance pursuant to Employee stock benefit plans (in shares) | 29 |
Common stock reserved for issuance and not granted pursuant to Employee stock benefit plans (in shares) | 22 |
Stock_Plans_Details
Stock Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Share based compensation cost | $18,000,000 | $16,000,000 | $13,000,000 |
Total unrecognized compensation cost related to share-based compensation arrangements | 22,000,000 | ' | ' |
Weighted average period of time over which unrecognized compensation cost is to be recognized (years) | '1 year 1 month 0 days | ' | ' |
The remaining number of RSU's or stock options that may be issued (in shares) | 22,000,000 | ' | ' |
Additional disclosures for all plans for the period [Abstract] | ' | ' | ' |
Aggregate intrinsic value of options exercised for all plans during the period | 22,000,000 | 1,000,000 | 1,000,000 |
Total fair value of shares vested during the period | 16,000,000 | 13,000,000 | 13,000,000 |
Employee stock purchase plan [Abstract] | ' | ' | ' |
The remaining balance of shares originally authorized for issue under the employee stock purchase plan (in shares) | 11,000,000 | ' | ' |
The percentage of market value at which shares may be issued to participating employees (in hundredths) | 90.00% | ' | ' |
The number of shares issued to participants under the plan during the period | 1,500,000 | 2,200,000 | 1,700,000 |
The weighted average fair value of each purchase right under the employee stock purchase plan (in dollars per share) | $12.03 | $8.01 | $9.73 |
The discount percentage off the market value for the employee stock purchase plan (in hundredths) | 10.00% | ' | ' |
The aggregate cost of the discount from the market value on shares issued to employees at the end of each monthly purchase period | 1.34 | 0.89 | 1.03 |
Three Year vesting | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Vesting periods for plans | '3 years 0 months 0 days | ' | ' |
Five Year vesting | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Vesting periods for plans | '5 years 0 months 0 days | ' | ' |
Ten Year vesting | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Vesting periods for plans | '10 years 0 months 0 days | ' | ' |
Board of Directors | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Non-option equity instruments granted (in shares) | 63,000 | 82,000 | 33,000 |
Weighted average price of non-option equity instruments granted | $14.34 | $8.21 | $12.26 |
RSUs | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Vesting periods for plans | ' | '3 years | ' |
The remaining number of RSU's or stock options that may be issued (in shares) | ' | 10,000,000 | ' |
Units (000) | ' | ' | ' |
Outstanding RSU's - beginning balance (in shares) | 2,876,000 | 1,640,000 | 990,000 |
Granted (in shares) | 1,139,000 | 1,939,000 | 1,007,000 |
Vested (in shares) | -1,263,000 | -644,000 | -327,000 |
Surrendered (in shares) | -168,000 | -59,000 | -30,000 |
Outstanding RSU's - ending balance (in shares) | 2,584,000 | 2,876,000 | 1,640,000 |
Wtd. Average Fair Value | ' | ' | ' |
Weighted average grant date fair value RSU's - beginning balance (in dollars per share) | $9.57 | $12.27 | $12.28 |
Weighted average grant date fair value RSU's - granted (in dollars per share) | $14.34 | $8.21 | $12.27 |
Weighted average grant date fair value RSU's - vested (in dollars per share) | $10.24 | $12.27 | $12.28 |
Weighted average grant date fair value RSU's - surrendered (in dollars per share) | $9.11 | $10.54 | $12.28 |
Weighted average grant date fair value RSU's - period end (in dollars per share) | $11.38 | $9.57 | $12.27 |
Stock Options | ' | ' | ' |
Options (000) | ' | ' | ' |
Outstanding - beginning balance (in shares) | 18,910,000 | 47,324,000 | 50,982,000 |
Granted (in shares) | 0 | 6,000 | 0 |
Exercised (in shares) | -6,633,000 | -573,000 | -181,000 |
Surrendered (in shares) | -3,116,000 | -27,847,000 | -3,477,000 |
Outstanding - ending balance (in shares) | 9,161,000 | 18,910,000 | 47,324,000 |
Wtd. average exercise price | ' | ' | ' |
Weighted average exercise price - beginning balance (in dollars per share) | $14.19 | $14.51 | $14.68 |
Weighted average exercise price - granted (in dollars per share) | $0 | $9 | $0 |
Weighted average exercise price - exercised | $13.31 | $8 | $7.74 |
Weighted average exercise price - surrendered (in dollars per share) | $14.94 | $14.85 | $17.38 |
Weighted average exercise price - ending balance (in dollars per share) | $14.58 | $14.19 | $14.51 |
Weighted average remaining contractual term - period end (in years) | '1 year 11 months 0 days | ' | ' |
Aggregate intrinsic value - outstanding - period end | 39,000,000 | ' | ' |
Stock options, vested and expected to vest [Abstract] | ' | ' | ' |
Vested or expected to vest, outstanding number (in shares) | 9,137,000 | ' | ' |
Exercisable, outstanding number (in shares) | 8,689,000 | ' | ' |
Weighted average exercise price - vested or expected to vest (in dollars per share) | $14.58 | ' | ' |
Weighted average exercise price - exercisable (in dollars per share) | $14.49 | ' | ' |
Weighted average remaining contractual term - vested or expected to vest - period end (in years) | '1 year 11 months 0 days | ' | ' |
Weighted average remaining contractual term - exercisable - period end (in years) | '1 year 11 months 0 days | ' | ' |
Aggregate intrinsic value - vested or expected to vest - period end | 39,000,000 | ' | ' |
Aggregate intrinsic value - exercisable - period end | $38,000,000 | ' | ' |
Other Employee Plans | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | '10 years | ' | ' |
Minimum | Collective Bargaining Plans | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | '6 years | ' | ' |
Maximum | Collective Bargaining Plans | ' | ' | ' |
Employee service share based compensation aggregate disclosures [Abstract] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | '12 years | ' | ' |
Employee_Retirement_Plans_Deta
Employee Retirement Plans (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Defined contribution plans [Abstract] | ' | ' | ' | |||
Company contributions to all defined contribution plans expensed | $497 | $370 | $316 | |||
Maximum age after retirement that employees may use accrued unused sick time to pay for medical and dental premiums | '65 years | ' | ' | |||
Change in benefit obligation [Roll Forward] | ' | ' | ' | |||
APBO at beginning of period | 148 | 107 | ' | |||
Service cost | 30 | 20 | 17 | |||
Interest cost | 4 | 4 | 4 | |||
Benefits paid | -3 | -5 | ' | |||
Credit for prior service | 0 | 17 | ' | |||
Actuarial gain | -41 | 5 | ' | |||
APBO at end of period | 138 | 148 | 107 | |||
Effect of a one percentage point change in assumed health care cost trend rates [Abstract] | ' | ' | ' | |||
Increase in total service and interest costs | 3 | ' | ' | |||
Increase in the APBO | 19 | ' | ' | |||
Decrease in total service and interest costs | -3 | ' | ' | |||
Decrease in the APBO | -16 | ' | ' | |||
Estimated future benefit payments time period [Abstract] | ' | ' | ' | |||
2014 | 4 | ' | ' | |||
2015 | 5 | ' | ' | |||
2016 | 6 | ' | ' | |||
2017 | 7 | ' | ' | |||
2018 | 7 | ' | ' | |||
Next five years thereafter | 50 | ' | ' | |||
Reconciliation of funded status to accrued postretirement benefit cost recognized on the balance sheet [Abstract] | ' | ' | ' | |||
Funded status | -138 | -148 | ' | |||
Unrecognized net actuarial gain | -80 | -44 | ' | |||
Unrecognized prior service cost | 15 | 18 | ' | |||
Accumulated other comprehensive income | 65 | 26 | ' | |||
Cost recognized on Consolidated Balance Sheet | -138 | -148 | ' | |||
Components of periodic postretirement benefit cost [Abstract] | ' | ' | ' | |||
Service cost | 30 | 20 | 17 | |||
Interest cost | 4 | 4 | 4 | |||
Amortization of prior service cost | 3 | 0 | 0 | |||
Recognized actuarial gain | -4 | -5 | -6 | |||
Net periodic postretirement benefit cost | $33 | $19 | $15 | |||
Actuarial assumptions used to account for postretirement benefit plans [Abstract] | ' | ' | ' | |||
Weighted-average discount rate (in hundredths) | 5.05% | [1] | 2.90% | [1] | 4.05% | |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | |||
Assumed healthcare cost trend rate | 7.50% | [1],[2] | 8.00% | [1],[2] | 7.50% | [2] |
Assumed healthcare cost trend rate decline (in hundredths) | 5.00% | ' | ' | |||
Year the health care cost trend reaches ultimate rate (year) | '2024 | ' | ' | |||
2014 | ' | ' | ' | |||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | |||
Assumed healthcare cost trend rate | 7.50% | ' | ' | |||
[1] | Includes AirTran plans. | |||||
[2] | The assumed healthcare cost trend rate is assumed to remain at 7.5% for 2014, then decline gradually to 5.0% by 2024 and remain level thereafter. |
Income_Taxes_Detail
Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
DEFERRED TAX LIABILITIES: | ' | ' | ' |
Accelerated depreciation | $4,069 | $3,939 | ' |
Fuel derivative instruments | 36 | 33 | ' |
Other | 84 | 70 | ' |
Total deferred tax liabilities | 4,189 | 4,042 | ' |
DEFERRED TAX ASSETS: | ' | ' | ' |
Fuel derivative instruments | 8 | 40 | ' |
Deferred gains from sale and leaseback of aircraft | 24 | 24 | ' |
Capital and operating leases | 163 | 179 | ' |
Deferred tax assets construction obligation | 168 | 127 | ' |
Accrued engine maintenance | 90 | 84 | ' |
Accrued employee benefits | 307 | 281 | ' |
State taxes | 74 | 77 | ' |
Business partner income | 457 | 339 | ' |
Net operating losses and credit carryforwards | 14 | 83 | ' |
Other | 118 | 170 | ' |
Total deferred tax assets | 1,423 | 1,404 | ' |
Net deferred tax liability | 2,766 | 2,638 | ' |
CURRENT: | ' | ' | ' |
Federal | 355 | -45 | 4 |
State | 44 | 12 | 13 |
Total current | 399 | -33 | 17 |
DEFERRED: | ' | ' | ' |
Federal | 62 | 287 | 122 |
State | -6 | 10 | 6 |
Total deferred | 56 | 297 | 128 |
Total | 455 | 264 | 145 |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ' | ' | ' |
Tax at statutory U.S. tax rates | 423 | 240 | 114 |
Nondeductible items | 10 | 10 | 13 |
State income taxes, net of federal benefit | 25 | 14 | 13 |
Other, net | -3 | 0 | 5 |
Unrecognized Tax Benefits | 5 | ' | ' |
Federal net operating loss carryforwards | 34 | ' | ' |
Effective income tax rate, continuing operations | 35.00% | ' | ' |
Deferred Tax Assets, Operating Loss Carryforwards | $12 | ' | ' |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Data [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $4,428 | $4,545 | $4,643 | $4,084 | $4,173 | $4,309 | $4,616 | $3,991 | $17,699 | $17,088 | $15,658 |
Operating income | 386 | 390 | 433 | 70 | 91 | 51 | 460 | 22 | 1,278 | 623 | 693 |
Income (loss) before income taxes | 334 | 419 | 363 | 94 | 125 | 33 | 368 | 159 | 1,209 | 685 | 323 |
Net income (loss) | $212 | $259 | $224 | $59 | $78 | $16 | $228 | $98 | $754 | $421 | $178 |
Basic (in dollars per share) | $0.30 | $0.37 | $0.31 | $0.08 | $0.11 | $0.02 | $0.30 | $0.13 | $1.06 | $0.56 | $0.23 |
Diluted (in dollars per share) | $0.30 | $0.37 | $0.31 | $0.08 | $0.11 | $0.02 | $0.30 | $0.13 | $1.05 | $0.56 | $0.23 |