Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 26, 2016 | |
Entity Information [Line Items] | ||
Entity Registrant Name | SOUTHWEST AIRLINES CO | |
Entity Central Index Key | 92,380 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 615,597,738 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,966 | $ 1,583 |
Short-term investments | 1,480 | 1,468 |
Accounts and other receivables | 848 | 474 |
Inventories of parts and supplies, at cost | 331 | 311 |
Prepaid expenses and other current assets | 214 | 188 |
Total current assets | 4,839 | 4,024 |
Property and equipment, at cost: | ||
Flight equipment | 19,978 | 19,462 |
Ground property and equipment | 3,600 | 3,219 |
Deposits on flight equipment purchase contracts | 1,113 | 1,089 |
Assets constructed for others | 1,150 | 915 |
Property and equipment, at cost | 25,841 | 24,685 |
Less allowance for depreciation and amortization | 9,295 | 9,084 |
Property and equipment, net | 16,546 | 15,601 |
Goodwill | 970 | 970 |
Other assets | 690 | 717 |
Total assets | 23,045 | 21,312 |
Current liabilities: | ||
Accounts payable | 1,021 | 1,188 |
Accrued liabilities | 2,146 | 2,591 |
Air traffic liability | 3,677 | 2,990 |
Current maturities of long-term debt | 972 | 637 |
Total current liabilities | 7,816 | 7,406 |
Long-term debt less current maturities | 2,323 | 2,541 |
Deferred income taxes | 3,209 | 2,490 |
Construction obligation | 989 | 757 |
Other noncurrent liabilities | 661 | 760 |
Stockholders' equity: | ||
Common stock | 808 | 808 |
Capital in excess of par value | 1,402 | 1,374 |
Retained earnings | 10,957 | 9,409 |
Accumulated other comprehensive loss | (499) | (1,051) |
Treasury stock, at cost | (4,621) | (3,182) |
Total stockholders' equity | 8,047 | 7,358 |
Total liabilities and stockholders' equity | $ 23,045 | $ 21,312 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING REVENUES: | ||||
Passenger | $ 4,669 | $ 4,716 | $ 13,971 | $ 13,746 |
Freight | 42 | 44 | 129 | 134 |
Special revenue adjustment | 0 | 172 | 0 | 172 |
Other | 428 | 386 | 1,250 | 791 |
Total operating revenues | 5,139 | 5,318 | 15,350 | 14,843 |
OPERATING EXPENSES: | ||||
Salaries, wages, and benefits | 1,909 | 1,699 | 5,089 | 4,725 |
Fuel and oil | 941 | 936 | 2,696 | 2,818 |
Maintenance materials and repairs | 258 | 259 | 801 | 729 |
Aircraft rentals | 56 | 60 | 174 | 179 |
Landing fees and other rentals | 307 | 303 | 918 | 887 |
Depreciation and amortization | 315 | 258 | 903 | 751 |
Acquisition and integration | 0 | 6 | 0 | 32 |
Other operating expenses | 658 | 572 | 1,854 | 1,632 |
Total operating expenses | 4,444 | 4,093 | 12,435 | 11,753 |
OPERATING INCOME | 695 | 1,225 | 2,915 | 3,090 |
OTHER EXPENSES (INCOME): | ||||
Interest Expense | 31 | 31 | 93 | 92 |
Capitalized interest | (12) | (9) | (34) | (23) |
Interest income | (6) | (2) | (17) | (5) |
Other (gains) losses, net | 64 | 272 | 135 | 394 |
Total other expenses (income) | 77 | 292 | 177 | 458 |
INCOME BEFORE INCOME TAXES | 618 | 933 | 2,738 | 2,632 |
PROVISION FOR INCOME TAXES | 230 | 349 | 1,016 | 987 |
NET INCOME | $ 388 | $ 584 | $ 1,722 | $ 1,645 |
NET INCOME PER SHARE, BASIC | $ 0.63 | $ 0.89 | $ 2.73 | $ 2.47 |
NET INCOME PER SHARE, DILUTED | $ 0.62 | $ 0.88 | $ 2.70 | $ 2.45 |
COMPREHENSIVE INCOME | $ 517 | $ 345 | $ 2,274 | $ 1,480 |
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING | ||||
Basic | 618 | 655 | 630 | 665 |
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | ||||
Diluted | 625 | 663 | 638 | 673 |
Cash dividends declared per common share | $ 0.100 | $ 0.075 | $ 0.275 | $ 0.210 |
Condensed Consolidated Stateme4
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income | $ 388 | $ 584 | $ 1,722 | $ 1,645 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 315 | 258 | 903 | 751 |
Loss as asset impairment | 0 | 0 | 21 | 0 |
Unrealized/realized (gain) loss on fuel derivative instruments | (67) | 87 | (101) | 172 |
Deferred income taxes | 315 | (82) | 395 | (40) |
Changes in certain assets and liabilities: | ||||
Accounts and other receivables | (320) | 4 | (355) | (86) |
Other assets | (16) | 33 | (61) | 40 |
Accounts payable and accrued liabilities | 247 | 380 | 272 | 424 |
Air traffic liability | (77) | (301) | 686 | 617 |
Cash collateral received from (provided to) derivative counterparties | 114 | 181 | 230 | (213) |
Other, net | (43) | (308) | (128) | (396) |
Net cash provided by operating activities | 856 | 836 | 3,584 | 2,914 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Capital expenditures | (464) | (230) | (1,364) | (1,231) |
Assets constructed for others | (33) | (32) | (70) | (76) |
Purchases of short-term investments | (641) | (506) | (1,670) | (1,383) |
Proceeds from sales of short-term and other investments | 549 | 509 | 1,671 | 1,732 |
Payments for (Proceeds from) Other Investing Activities | 5 | 0 | 0 | (9) |
Net cash used in investing activities | (584) | (259) | (1,433) | (967) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from Employee stock plans | 6 | 9 | 23 | 30 |
Proceeds from termination of interest rate derivative instruments | 0 | 0 | 0 | 12 |
Reimbursement for assets constructed for others | 33 | 9 | 68 | 14 |
Payments of long-term debt and capital lease obligations | (68) | (79) | (171) | (170) |
Payments of cash dividends | (62) | (49) | (222) | (180) |
Repayment of construction obligation | (2) | (3) | (6) | (8) |
Repurchase of common stock | (250) | (500) | (1,450) | (1,180) |
Other, net | (3) | 4 | (10) | (7) |
Net cash used in financing activities | (346) | (609) | (1,768) | (1,489) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (74) | (32) | 383 | 458 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 2,040 | 1,772 | 1,583 | 1,282 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,966 | 1,740 | 1,966 | 1,740 |
CASH PAYMENTS FOR: | ||||
Interest, net of amount capitalized | 27 | 33 | 77 | 86 |
Income taxes | 264 | 409 | 902 | 975 |
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS | ||||
Noncash or Part Noncash Acquisition, Debt Assumed | 20 | 0 | 20 | 0 |
Flight equipment under capital leases | 0 | 48 | 251 | 130 |
Assets constructed for others | $ 50 | $ 46 | $ 165 | $ 126 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Southwest Airlines Co. (the “Company”) operates Southwest Airlines, a major passenger airline that provides scheduled air transportation in the United States and near-international markets. The unaudited Condensed Consolidated Financial Statements include accounts of the Company and its wholly owned subsidiaries, which include AirTran Holdings, LLC, the parent company of AirTran Airways, Inc. (“AirTran Airways”). 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. Throughout this Form 10-Q, 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. AirTran's final passenger service was on December 28, 2014. The accompanying unaudited Condensed Consolidated Financial Statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. The unaudited Condensed Consolidated Financial Statements for the interim periods ended September 30, 2016 and 2015 include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. This includes all normal and recurring adjustments and elimination of significant intercompany transactions. Financial results for the Company and airlines in general can be seasonal in nature. In many years, the Company's revenues, as well as its operating income and net income, have been better in its second and third fiscal quarters than in its first and fourth fiscal quarters. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, corporate travel budgets, and other factors beyond the Company's control. These and other factors, such as the price of jet fuel in some periods, the nature of the Company's fuel hedging program, the periodic volatility of commodities used by the Company for hedging jet fuel, and the requirements related to hedge accounting, have created, and may continue to create, significant volatility in the Company's financial results. See Note 3 for further information on fuel and the Company's hedging program. Operating results for the three and nine months ended September 30, 2016 , are not necessarily indicative of the results that may be expected for future quarters or for the year ended December 31, 2016 . For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Southwest Airlines Co. Annual Report on Form 10-K for the year ended December 31, 2015 . |
NEW ACCOUNTING PRONOUNCEMENTS A
NEW ACCOUNTING PRONOUNCEMENTS AND CHANGES IN ACCOUNTING OR ESTIMATES | 9 Months Ended |
Sep. 30, 2016 | |
Change in Accounting Estimate [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS AND CHANGES IN ACCOUNTING OR ESTIMATES | NEW ACCOUNTING PRONOUNCEMENTS AND CHANGES IN ACCOUNTING OR ESTIMATES New accounting pronouncements On August 26, 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-15, Statement of Cash Flows. The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a significant impact on its financial statement presentation or results. On June 16, 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses. The new standard requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a significant impact on its financial statement presentation or results. On February 25, 2016, the FASB issued ASU No. 2016-02, Leases. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company believes the most significant impact of this ASU on its accounting will be the presentation of operating leases with durations greater than twelve months, with certain exceptions, on the balance sheet. The Company is evaluating the new guidance and plans to provide additional information about its expected financial impact at a future date. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Following the FASB's finalization of a one year deferral of this standard, the ASU is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company currently believes the most significant impact of this ASU on its accounting will be the elimination of the incremental cost method for frequent flyer accounting, which will require the Company to re-value its liability associated with flight points earned by Customers with a relative fair value approach, based on estimated selling price, resulting in a significant increase in the liability. The Company is continuing to evaluate the new guidance and plans to provide additional information about its expected financial impact at a future date. Changes in accounting or estimates During second quarter 2016, the Company early adopted ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, with an effective date as of January 1, 2016. The prospective method of adoption of this standard resulted in the recognition of $7 million of excess tax benefits to the Company's income tax provision for the nine months ended September 30, 2016 , all of which was recorded during second quarter 2016. The Company sells frequent flyer points and related services to companies participating in its frequent flyer program. Historically, funds received from the sale of points associated with these agreements were accounted for under the residual method. Under this method, the Company estimated the portion of the amounts received from the sale of frequent flyer points that related to free travel and these amounts were deferred and recognized as Passenger revenue when the ultimate free travel awards were flown. On July 1, 2015, the Company executed an amended co-branded credit card agreement ("Agreement") with Chase Bank USA, N.A. (“Chase”), through which the Company sells loyalty points and other items to Chase. This material modification triggered an accounting change under ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements, which has been recorded on a prospective basis. The impact of the accounting change is that the Company estimated the selling prices and volumes over the term of the Agreement in order to determine the allocation of proceeds to each of the deliverables (travel points to be awarded; use of the Southwest Airlines’ brand and access to Rapid Reward Member lists; advertising elements; and the Company’s resource team). The Company records passenger revenue related to air transportation and certificates for discounted companion travel when the transportation is delivered. The other elements are recognized as Other revenue when earned. The Company followed the transition approach of ASU No. 2009-13, which required that the Company adjust the existing deferred revenue balance, classified within Air traffic liability, to reflect the value, on a relative selling price basis, of any undelivered element remaining at the date of contract modification. The relative selling price of the undelivered element (air transportation) was lower than the rate at which it had been deferred under the residual method. The estimated impacts on revenue and earnings associated with the Agreement and this change in accounting principle for the nine months ended September 30, 2016 , which only include amounts through June 30, 2016 as the impact of the accounting change for third quarter 2016 was comparable to that recognized in third quarter 2015 , are as follows: (in millions, except per share amounts) Nine months ended September 30, 2016 Passenger revenue $ (120 ) Other revenue 381 Operating revenues $ 261 Net income $ 139 Net income per basic share $ 0.22 Net income per diluted share $ 0.22 During first quarter 2016, the Company made the decision to further simplify its operations and resolve uncertainty surrounding Federal Aviation Administration ("FAA") pilot training requirements for flying both its Boeing 737-300 ("Classic") and Boeing 737-8 aircraft. The Company expects to begin operating 737-8s once all Classic aircraft are retired. These decisions have resulted in the Company accelerating the retirement of its less-efficient Classic fleet to no later than third quarter 2017, versus the original scheduled retirement of this fleet that had extended out to 2021. This change in retirement dates is considered a change in estimate and has been accounted for on a prospective basis as of the dates the decisions were finalized. Therefore, the Company has recorded and will record accelerated depreciation expense over the remainder of the useful lives for each Classic aircraft and related parts. See Note 7 for further information regarding the Company's aircraft fleet. The estimated impacts on expense and earnings from this change in assumption for the three and nine months ended September 30, 2016 are as follows: (in millions, except per share amounts) Three months ended September 30, 2016 Nine months ended September 30, 2016 Depreciation and amortization expense $ 31 $ 94 Net income $ (17 ) $ (50 ) Net income per basic share $ (0.03 ) $ (0.08 ) Net income per diluted share $ (0.03 ) $ (0.08 ) The estimated impact to Depreciation and amortization expense from this change in assumption for fourth quarter 2016 is an approximate increase of $29 million . |
FINANCIAL DERIVATIVE INSTRUMENT
FINANCIAL DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL DERIVATIVE INSTRUMENTS | (500)(e) (225) to (275)(e) (75) to (150) or >(550)(e) (125) to (150) or >(550)(e) (g) If credit rating is investment grade, fair value of fuel derivative level at which: Cash is provided to CP (50) to (200) or >(600) (50) to (100) or >(500) >(125) (75) to (150) or >(550) (125) to (150) or >(550) >(100) Cash is received from CP >50(c) >150(c) >175(c) >250(c) >75(c) >0(c) Aircraft or cash can be pledged to CP as collateral (200) to (600)(f) (100) to (500)(d) N/A (150) to (550)(d) (150) to (550)(d) N/A If credit rating is non-investment grade, fair value of fuel derivative level at which: Cash is provided to CP (0) to (200) or >(600) (0) to (100) or >(500) (b) (0) to (150) or >(550) (0) to (150) or >(550) (b) Cash is received from CP (b) (b) (b) (b) (b) (b) Aircraft or cash can be pledged to CP as collateral (200) to (600) (100) to (500) N/A (150) to (550) (150) to (550) N/A (a) Individual counterparties with fair value of fuel derivatives < $2 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. (e) The Company has the option of providing cash or letters of credit as collateral. (f) The Company has the option of providing cash or pledging aircraft as collateral. (g) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. (h) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements." id="sjs-B4">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 represents 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 24 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 timeframes 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), put spreads (which include a purchased put option and a sold put 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 does not have coverage once market prices fall below the strike price of the purchased call option. 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 economically 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 at settlement and may even produce hedging losses depending on market prices, the types of instruments held, and the strike prices of those instruments. For the three months ended September 30, 2016 , the Company had fuel derivative instruments in place for up to 58 percent of its fuel consumption. As of September 30, 2016 , the Company also had fuel derivative instruments in place to provide coverage at varying price levels, but up to a maximum of approximately 72 percent of its remaining 2016 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 2016 through 2018 on an “economic” basis: Maximum fuel hedged as of September 30, 2016 Derivative underlying commodity type as of Period (by year) (gallons in millions) (a) September 30, 2016 Fourth quarter 2016 357 Brent crude oil and Gulf Coast jet fuel 2017 1,281 WTI crude and Brent crude oil 2018 744 Brent crude oil (a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and 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 4 . 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 unaudited Condensed Consolidated Statement of Comprehensive 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 unaudited Condensed Consolidated Statement of Comprehensive 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 and were de-designated as hedges 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 2015 , or during the nine months ended September 30, 2016 . All cash flows associated with purchasing and selling fuel derivatives are classified as Other operating cash flows in the unaudited Condensed Consolidated Statement of Cash Flows. The following table presents the location of all assets and liabilities associated with the Company’s derivative instruments within the unaudited Condensed Consolidated Balance Sheet: Asset derivatives Liability derivatives Balance Sheet Fair value at Fair value at Fair value at Fair value at (in millions) location 9/30/2016 12/31/2015 9/30/2016 12/31/2015 Derivatives designated as hedges* Fuel derivative contracts (gross) Prepaid expenses and other current assets $ — $ 2 $ — $ — Fuel derivative contracts (gross) Other assets 8 2 — — Fuel derivative contracts (gross) Accrued liabilities 22 107 513 526 Fuel derivative contracts (gross) Other noncurrent liabilities 84 55 137 658 Interest rate derivative contracts Other assets 13 2 — — Interest rate derivative contracts Other noncurrent liabilities — — 36 49 Total derivatives designated as hedges $ 127 $ 168 $ 686 $ 1,233 Derivatives not designated as hedges* Fuel derivative contracts (gross) Prepaid expenses and other current assets $ 13 $ 39 $ 7 $ 26 Fuel derivative contracts (gross) Other assets 3 5 — — Fuel derivative contracts (gross) Accrued liabilities 333 1,395 526 1,854 Fuel derivative contracts (gross) Other noncurrent liabilities 134 330 136 352 Total derivatives not designated as hedges $ 483 $ 1,769 $ 669 $ 2,232 Total derivatives $ 610 $ 1,937 $ 1,355 $ 3,465 * 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 had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet: Balance Sheet September 30, December 31, (in millions) location 2016 2015 Cash collateral deposits held from counterparties for fuel contracts - current Offset against Prepaid expenses and other current assets $ 6 $ — Cash collateral deposits held from counterparties for fuel contracts - noncurrent Offset against Other assets 9 — Cash collateral deposits provided to counterparties for fuel contracts - current Offset against Accrued liabilities 530 235 Cash collateral deposits provided to counterparties for fuel Offset against Other noncurrent liabilities 90 600 Due to third parties for fuel contracts Accounts payable 94 46 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 standards for derivatives and hedging. The types of derivative instruments the Company has determined are subject to netting requirements in the accompanying unaudited Condensed Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty 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 unaudited Condensed 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 asset 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 liability 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 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) September 30, 2016 December 31, 2015 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 (a) Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet (a) Fuel derivative contracts Prepaid expenses and other current assets $ 13 $ (13 ) $ — $ 41 $ (26 ) $ 15 Fuel derivative contracts Other assets $ 11 $ (9 ) $ 2 $ 7 $ — $ 7 Fuel derivative contracts Accrued liabilities $ 885 $ (885 ) $ — $ 1,737 $ (1,737 ) $ — Fuel derivative contracts Other noncurrent liabilities $ 308 $ (273 ) $ 35 $ 985 $ (985 ) $ — Interest rate derivative contracts Other assets $ 13 $ — $ 13 $ 2 $ — $ 2 Offsetting of derivative liabilities (in millions) (i) (ii) (iii) = (i) + (ii) (i) (ii) (iii) = (i) + (ii) September 30, 2016 December 31, 2015 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 (a) Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet (a) Fuel derivative contracts Prepaid expenses and other current assets $ 13 $ (13 ) $ — $ 26 $ (26 ) $ — Fuel derivative contracts Other assets $ 9 $ (9 ) $ — $ — $ — $ — Fuel derivative contracts Accrued liabilities $ 1,039 $ (885 ) $ 154 $ 2,380 $ (1,737 ) $ 643 Fuel derivative contracts Other noncurrent liabilities $ 273 $ (273 ) $ — $ 1,010 $ (985 ) $ 25 Interest rate derivative contracts Other noncurrent liabilities $ 36 $ — $ 36 $ 49 $ — $ 49 (a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5 . The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015 : 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) Three months ended Three months ended Three months ended September 30, September 30, September 30, (in millions) 2016 2015 2016 2015 2016 2015 Fuel derivative contracts $ 19 * $ 315 * $ 141 * $ 79 * $ (4 ) $ — Interest rate derivatives (2 ) * 3 * 2 * 3 * (2 ) — Total $ 17 $ 318 $ 143 $ 82 $ (6 ) $ — *Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives, which are included in Fuel and oil and Interest expense, respectively. (b) Amounts are included in Other (gains) losses, net. 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) Nine months ended Nine months ended Nine months ended September 30, September 30, September 30, (in millions) 2016 2015 2016 2015 2016 2015 Fuel derivative contracts $ (62 ) * $ 330 * $ 484 * $ 166 * $ (3 ) $ (15 ) Interest rate derivatives 4 * 6 * 7 * 9 * (3 ) (2 ) Total $ (58 ) $ 336 $ 491 $ 175 $ (6 ) $ (17 ) *Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives, which 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 Three months ended Location of (gain) loss recognized in income on derivatives September 30, (in millions) 2016 2015 Fuel derivative contracts $ 35 $ 239 Other (gains) losses, net Derivatives not in cash flow hedging relationships (Gain) loss recognized in income on derivatives Nine months ended Location of (gain) loss recognized in income on derivatives September 30, (in millions) 2016 2015 Fuel derivative contracts $ 23 $ 330 Other (gains) losses, net The Company also recorded expense associated with premiums paid for fuel derivative contracts that settled/expired during the three months ended September 30, 2016 and 2015 of $34 million and $33 million , respectively, and the nine months ended September 30, 2016 and 2015 of $117 million and $81 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 unaudited Condensed Consolidated Statement of Comprehensive 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 September 30, 2016 , recorded in AOCI, were approximately $401 million in unrealized losses , net of taxes, which are expected to be realized in earnings during the twelve months subsequent to September 30, 2016 . 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. Several of the Company's interest rate swap agreements 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 that do not qualify for the "shortcut" method of accounting, ineffectiveness is required to be measured at each reporting period. The ineffectiveness associated with all of the Company’s interest rate hedges for all periods presented was not material. 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 September 30, 2016 , 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 as collateral whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds. In certain cases, the Company has the ability to substitute among these different forms of collateral at its discretion. For example, at September 30, 2016 , the Company had chosen to provide all of its collateral in the form of cash postings, although it could have chosen to provide aircraft and/or letters of credit for a significant portion of its collateral posted. The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of September 30, 2016 , at which such postings are triggered: Counterparty (CP) (in millions) A B C D E F Other (a) Total Fair value of fuel derivatives $ (414 ) $ (118 ) $ (4 ) $ (169 ) $ (33 ) $ 15 $ 1 $ (722 ) Cash collateral held from (by) CP (399 ) (77 ) — (144 ) — 15 — (605 ) Aircraft collateral pledged to CP — — — — — — — — Letters of credit (LC) — — — — — — — — Option to substitute LC for aircraft (200) to (600)(h) (100) to (500)(d) N/A (150) to (550)(d) (150) to (550)(d) N/A Option to substitute LC for cash N/A >(500)(e) (225) to (275)(e) (75) to (150) or >(550)(e) (125) to (150) or >(550)(e) (g) If credit rating is investment grade, fair value of fuel derivative level at which: Cash is provided to CP (50) to (200) or >(600) (50) to (100) or >(500) >(125) (75) to (150) or >(550) (125) to (150) or >(550) >(100) Cash is received from CP >50(c) >150(c) >175(c) >250(c) >75(c) >0(c) Aircraft or cash can be pledged to CP as collateral (200) to (600)(f) (100) to (500)(d) N/A (150) to (550)(d) (150) to (550)(d) N/A If credit rating is non-investment grade, fair value of fuel derivative level at which: Cash is provided to CP (0) to (200) or >(600) (0) to (100) or >(500) (b) (0) to (150) or >(550) (0) to (150) or >(550) (b) Cash is received from CP (b) (b) (b) (b) (b) (b) Aircraft or cash can be pledged to CP as collateral (200) to (600) (100) to (500) N/A (150) to (550) (150) to (550) N/A (a) Individual counterparties with fair value of fuel derivatives < $2 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. (e) The Company has the option of providing cash or letters of credit as collateral. (f) The Company has the option of providing cash or pledging aircraft as collateral. (g) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. (h) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME 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. The differences between Net income and Comprehensive income for the three and nine months ended September 30, 2016 and 2015 were as follows: Three months ended September 30, (in millions) 2016 2015 NET INCOME $ 388 $ 584 Unrealized gain (loss) on fuel derivative instruments, net of deferred taxes of $72 and ($139) 122 (236 ) Unrealized gain on interest rate derivative instruments, net of deferred taxes of $2 and $- 4 — Other, net of deferred taxes of $2 and ($2) 3 (3 ) Total other comprehensive income (loss) $ 129 $ (239 ) COMPREHENSIVE INCOME $ 517 $ 345 Nine months ended September 30, (in millions) 2016 2015 NET INCOME $ 1,722 $ 1,645 Unrealized gain (loss) on fuel derivative instruments, net of deferred taxes of $321 and ($97) 546 (164 ) Unrealized gain on interest rate derivative instruments, net of deferred taxes of $1 and $2 3 3 Other, net of deferred taxes of $2 and ($1) 3 (4 ) Total other comprehensive income (loss) $ 552 $ (165 ) COMPREHENSIVE INCOME $ 2,274 $ 1,480 A rollforward of the amounts included in AOCI, net of taxes, is shown below for the three and nine months ended September 30, 2016 : (in millions) Fuel derivatives Interest rate derivatives Defined benefit plan items Other Deferred tax Accumulated other comprehensive income (loss) Balance at June 30, 2016 $ (993 ) $ (32 ) $ 22 $ 6 $ 369 $ (628 ) Changes in fair value (30 ) 3 — 5 8 (14 ) Reclassification to earnings 224 3 — — (84 ) 143 Balance at September 30, 2016 $ (799 ) $ (26 ) $ 22 $ 11 $ 293 $ (499 ) (in millions) Fuel derivatives Interest rate derivatives Defined benefit plan items Other Deferred tax Accumulated other comprehensive income (loss) Balance at December 31, 2015 $ (1,666 ) $ (30 ) $ 22 $ 6 $ 617 $ (1,051 ) Changes in fair value 98 (7 ) — 5 (35 ) 61 Reclassification to earnings 769 11 — — (289 ) 491 Balance at September 30, 2016 $ (799 ) $ (26 ) $ 22 $ 11 $ 293 $ (499 ) The following tables illustrate the significant amounts reclassified out of each component of AOCI for the three and nine months ended September 30, 2016 : Three months ended September 30, 2016 (in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income AOCI components Unrealized loss on fuel derivative instruments $ 224 Fuel and oil expense 83 Less: Tax Expense $ 141 Net of tax Unrealized loss on interest rate derivative instruments $ 3 Interest expense 1 Less: Tax Expense $ 2 Net of tax Total reclassifications for the period $ 143 Net of tax Nine months ended September 30, 2016 (in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income AOCI components Unrealized loss on fuel derivative instruments $ 769 Fuel and oil expense 285 Less: Tax Expense $ 484 Net of tax Unrealized loss on interest rate derivative instruments $ 11 Interest expense 4 Less: Tax Expense $ 7 Net of tax Total reclassifications for the period $ 491 Net of tax |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Text Block [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION (in millions) September 30, 2016 December 31, 2015 Intangible assets, net $ 430 $ 464 Non-current investments 35 40 Other 225 213 Other assets $ 690 $ 717 (in millions) September 30, 2016 December 31, 2015 Accounts payable trade $ 148 $ 178 Salaries payable 149 173 Taxes payable 165 179 Aircraft maintenance payable 25 168 Fuel payable 66 48 Other payables 468 442 Accounts payable $ 1,021 $ 1,188 (in millions) September 30, 2016 December 31, 2015 ProfitSharing and savings plans $ 517 $ 655 Aircraft and other lease related obligations 52 74 Vacation pay 339 309 Accrued union bonuses (a) 533 329 Health 90 86 Derivative contracts 154 643 Workers compensation 179 187 Property and income taxes 63 62 Other 219 246 Accrued liabilities $ 2,146 $ 2,591 (a) As part of the ongoing negotiations with various union contract groups during 2016, the Company has recorded a liability for estimated bonuses that would be paid out to union members upon ratification of labor agreements. The liability excludes certain immaterial benefit costs that are included as a component of Accounts payable. The amount accrued is subject to change based on subsequent negotiations, and any changes would be recorded on a prospective basis. (in millions) September 30, 2016 December 31, 2015 Postretirement obligation $ 215 $ 201 Non-current lease-related obligations 135 165 Other deferred compensation 195 179 Deferred gains from sale and leaseback of aircraft 33 43 Derivative contracts 1 74 Other 82 98 Other noncurrent liabilities $ 661 $ 760 For further details on fuel derivative and interest rate derivative contracts, see Note 3 . Other Operating Expenses Other operating expenses consist of distribution costs, advertising expenses, personnel expenses, professional fees, and other operating costs, none of which individually exceeded 10 percent of Operating expenses. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
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): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 NUMERATOR: Net income $ 388 $ 584 $ 1,722 $ 1,645 Incremental income effect of interest on 5.25% convertible notes 1 1 2 3 Net income after assumed conversion $ 389 $ 585 $ 1,724 $ 1,648 DENOMINATOR: Weighted-average shares outstanding, basic 618 655 630 665 Dilutive effect of Employee stock options and restricted stock units 1 2 2 2 Dilutive effect of 5.25% convertible notes 6 6 6 6 Adjusted weighted-average shares outstanding, diluted 625 663 638 673 NET INCOME PER SHARE: Basic $ 0.63 $ 0.89 $ 2.73 $ 2.47 Diluted $ 0.62 $ 0.88 $ 2.70 $ 2.45 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Fort Lauderdale-Hollywood International Airport 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. Pursuant to an addendum entered into during 2016, the cost of the project is not to exceed $333 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 sources, but will flow through the Company in its capacity as manager of the project. Major construction on the project began during third quarter 2015 and is estimated to be substantially completed by mid- 2017 . The Company has determined that due to its agreed upon role in overseeing and managing the project, it is considered the owner of the project for accounting purposes. As such, during construction the Company records expenditures as Assets constructed for others in the unaudited Condensed Consolidated Balance Sheet, along with a corresponding outflow within Assets constructed for others in the unaudited Condensed Consolidated Statement of Cash Flows, and an increase to Construction obligation (with a corresponding cash inflow from Financing activities in the unaudited Condensed Consolidated Statement of Cash Flows) as reimbursements are received from Broward County. As of September 30, 2016 , the Company had recorded construction costs related to the project of $92 million . Houston William P. Hobby Airport 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 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 provided a new five-gate international terminal with international passenger processing facilities, expansion of the security checkpoint, and upgrades to the Southwest Airlines ticket counter area. Construction was effectively completed in October 2015, at which time the Company began operating from the new facility. The project's final cost was approximately $150 million , of which $22 million was considered proprietary and thus not classified as Assets constructed for others. The Company provided the funding for, as well as management over, the project. In return, the capital cost portion of the rent the Company owes for the international facility is being waived from the initial occupancy until the expiration of the Lease. However, the City has the option at any time during the term of the Lease to reimburse the Company's investment at the then-unamortized cost of the facility. This purchase would trigger payment of the previously waived capital cost component of rents owed the City. Additionally, a small portion of the project qualified for rental credits that have been utilized against the Company’s 2016 lease payments at the airport. As a result of its significant involvement in the Houston Hobby project, the Company determined that it is the owner of the facility for accounting purposes. As such, during construction, the Company recorded expenditures as Assets constructed for others in the unaudited Condensed Consolidated Balance Sheet, along with a corresponding outflow within Assets constructed for others, in the unaudited Condensed Consolidated Statement of Cash Flows. Los Angeles International Airport In March 2013, the Company executed a lease agreement with Los Angeles World Airports (“LAWA”), which owns and operates Los Angeles International Airport. Under the lease agreement, which was amended in June 2014, the Company is overseeing and managing the design, development, financing, construction, and commissioning of the airport's Terminal 1 Modernization Project (the “Project”) at a cost not to exceed $526 million . The Project is being funded primarily using the Regional Airports Improvement Corporation ("RAIC"), which is a quasi-governmental special purpose entity that acts as a conduit borrower under a syndicated credit facility provided by a group of lenders. Loans made under the credit facility are being used to fund the development of the Project, and the outstanding loans will be repaid with the proceeds of LAWA’s payments to purchase completed Project phases. The Company has guaranteed the obligations of the RAIC under the credit facility. Construction on the Project began during 2014 and is estimated to be completed during 2018. The Company has determined that due to its agreed upon role in overseeing and managing the Project, it is considered the owner of the Project for accounting purposes. LAWA will reimburse the Company (through the RAIC credit facility) for the non-proprietary renovations, while proprietary renovations will not be reimbursed. As a result, $313 million of costs incurred as of September 30, 2016 , to fund the Project are included within Assets constructed for others and all amounts that have been or will be reimbursed will be included within Construction obligation on the accompanying unaudited Condensed Consolidated Balance Sheet. Dallas Love Field During 2008, the City of Dallas approved the Love Field Modernization Program (“LFMP”), a project to reconstruct Dallas Love Field 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 managed this project. Major construction was effectively completed by December 31, 2014. This project consisted 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. Although the City of Dallas received commitments from various sources that helped to fund portions of this LFMP project, including the FAA, the Transportation Security Administration, and the City of Dallas' Aviation Fund, the majority of the funds used were from the issuance of bonds. The Company guaranteed principal and interest payments on $456 million of such bonds issued by the LFAMC. As of September 30, 2016 , $439 million of principal remained outstanding. In conjunction with the Company's significant presence at Dallas Love Field, the Company agreed to manage the majority of the LFMP project. Based on the pertinent factors in place at the time the agreement was made, the Company utilized the accounting guidance provided for lessees involved in asset construction. As of September 30, 2016 , the Company had recorded LFMP construction costs of $538 million within Assets constructed for others and had recorded a liability of $525 million within Construction obligation in its unaudited Condensed Consolidated Balance Sheet. Upon completion of different phases of the LFMP project, the Company placed the associated assets in service and began depreciating the assets over their estimated useful lives. In addition, upon the effective completion of construction, the Company noted the project assets did not meet the qualifications for sale and leaseback accounting due to the Company's continuing involvement with the facility, as defined; therefore, for financial reporting purposes, these assets will remain on the Company's books until the bonds issued by the City of Dallas are repaid. The corresponding LFMP liabilities are being reduced primarily through the Company's airport rental payments to the City of Dallas as the construction costs of this project are passed through to the Company via recurring airport rates and charges. A portion of these payments are reflected as Repayment of construction obligation in the unaudited Condensed Consolidated Statement of Cash Flows. The imputed interest rate associated with construction obligation was nominal for the three and nine months ended September 30, 2016 and the year ended December 31, 2015 . During 2015, the City of Dallas issued additional bonds for the construction of a new parking garage at Dallas Love Field. The Company has not guaranteed the principal or interest payments on these bonds, but remains the accounting owner of this project. As of September 30, 2016 , the Company had recorded LFMP parking construction expenditures of $59 million within Assets constructed for others with a corresponding increase to Construction obligation on the accompanying unaudited Condensed Consolidated Balance Sheet. Contractual Obligations and Contingent Liabilities and Commitments The Company has contractual obligations and commitments primarily with regard to future purchases of aircraft, repayment of debt, and lease arrangements. During third quarter 2016, the Company exercised four 737-800 options for 2018. As of September 30, 2016 , the Company had firm deliveries and options for Boeing 737-700, 737-800, 737-7, and 737-8 aircraft as follows: The Boeing Company 737 -800 Firm Orders -800 Options -7 -8 -8 Options Additional -700s Total 2016 38 — — — — 23 61 (2) 2017 39 — — 14 — 14 67 2018 16 14 — 13 — 4 47 2019 — — 15 — 5 — 20 2020 — — 14 — 8 — 22 2021 — — 1 13 18 — 32 2022 — — — 15 19 — 34 2023 — — — 34 23 — 57 2024 — — — 41 23 — 64 2025 — — — 40 36 — 76 2026 — — — — 36 — 36 2027 — — — — 23 — 23 Total 93 14 30 170 (1) 191 (1) 41 539 (1) The Company has flexibility to substitute 737-7 in lieu of 737-8 aircraft beginning in 2019. (2) Includes 25 737-800s and 19 737-700s delivered as of September 30, 2016 . The 19 737-700s are classified as capital leases and have increased the Company's future capital lease obligations by $6 million remaining in 2016, $29 million in 2017, $29 million in 2018, $28 million in 2019, $27 million in 2020, and $176 million thereafter. The Company's capital commitments associated with the firm orders and additional aircraft in the above aircraft table are as follows: $281 million in fourth quarter 2016 , $1.1 billion in 2017 , $775 million in 2018 , $614 million in 2019 , $821 million in 2020 , and $6.1 billion thereafter. 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 Internal Revenue Service ("IRS"). The Company's management does not expect that the outcome of 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 , 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 and certificates of deposit), 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. 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 3 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. Included in Other available-for-sale securities are the Company’s investments associated with its deferred compensation plans, which consist of mutual funds that are publicly traded and for which market prices are readily available. These plans are non-qualified deferred compensation plans designed to hold contributions in excess of limits established by the Internal Revenue Code of 1986, as amended. The distribution timing and payment amounts under these plans are made based on the participant’s distribution election and plan balance. Assets related to the funded portions of the deferred compensation plans are held in a rabbi trust, and the Company remains liable to these participants for the unfunded portion of the plans. The Company records changes in the fair value of the assets in the Company’s earnings. The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2016 , and December 31, 2015 : Fair value measurements at reporting date using: Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Description September 30, 2016 (Level 1) (Level 2) (Level 3) Assets (in millions) Cash equivalents Cash equivalents (a) $ 1,706 $ 1,706 $ — $ — Commercial paper 250 — 250 — Certificates of deposit 10 — 10 — Short-term investments: Treasury bills 1,198 1,198 — — Certificates of deposit 282 — 282 — Interest rate derivatives (see Note 3) 13 — 13 — Fuel derivatives: Swap contracts (b) 8 — 8 — Swap contracts (c) 173 — 173 — Option contracts (b) 16 — — 16 Option contracts (c) 400 — — 400 Other available-for-sale securities 96 80 — 16 Total assets $ 4,152 $ 2,984 $ 736 $ 432 Liabilities Fuel derivatives: Swap contracts (b) $ (2 ) $ — $ (2 ) $ — Swap contracts (c) (220 ) — (220 ) — Option contracts (b) (5 ) — — (5 ) Option contracts (c) (1,092 ) — — (1,092 ) Interest rate derivatives (see Note 3) (36 ) — (36 ) — Total liabilities $ (1,355 ) $ — $ (258 ) $ (1,097 ) (a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. See Note 3. (c) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net liability. See Note 3. Fair value measurements at reporting date using: Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Description December 31, 2015 (Level 1) (Level 2) (Level 3) Assets (in millions) Cash equivalents Cash equivalents (a) $ 1,337 $ 1,337 $ — $ — Commercial paper 200 — 200 — Certificates of deposit 13 — 13 — Eurodollar time deposits 33 — 33 — Short-term investments: Treasury bills 1,248 1,248 — — Certificates of deposit 220 — 220 — Interest rate derivatives (see Note 3) 2 — 2 — Fuel derivatives: Swap contracts (b) 38 — 38 — Swap contracts (c) 931 — 931 — Option contracts (b) 10 — — 10 Option contracts (c) 956 — — 956 Other available-for-sale securities 93 66 — 27 Total assets $ 5,081 $ 2,651 $ 1,437 $ 993 Liabilities Fuel derivatives: Swap contracts (c) $ (774 ) $ — $ (774 ) $ — Option contracts (b) (26 ) — — (26 ) Option contracts (c) (2,616 ) — — (2,616 ) Interest rate derivatives (see Note 3) (49 ) — (49 ) — Total liabilities $ (3,465 ) $ — $ (823 ) $ (2,642 ) (a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Consolidated Balance Sheet amounts are presented as a net asset. See Note 3. (c) In the unaudited Consolidated Balance Sheet amounts are presented as a net liability. See Note 3. The Company had no transfers of assets or liabilities between any of the above levels during the nine months ended September 30, 2016 , or the year ended December 31, 2015 . The Company did not have any assets or liabilities measured at fair value on a nonrecurring basis as of the nine months ended September 30, 2016 , or the year ended December 31, 2015 . The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 : Fair value measurements using significant unobservable inputs (Level 3) Fuel derivatives Other securities (in millions) Total Balance at June 30, 2016 $ (907 ) $ 26 $ (881 ) Total gains (losses) (realized or unrealized) Included in earnings (46 ) — (46 ) Included in other comprehensive income (31 ) 3 (28 ) Purchases 61 (a) — 61 Sales (4 ) (a) (13 ) (17 ) Settlements 246 — 246 Balance at September 30, 2016 $ (681 ) $ 16 $ (665 ) The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016. $ (20 ) $ — $ (20 ) (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. Fair value measurements using significant unobservable inputs (Level 3) Fuel derivatives Other securities (in millions) Total Balance at December 31, 2015 $ (1,676 ) $ 27 $ (1,649 ) Total gains (realized or unrealized) Included in earnings 128 — 128 Included in other comprehensive income 104 2 106 Purchases 191 (a) — 191 Sales (61 ) (a) (13 ) (74 ) Settlements 633 — 633 Balance at September 30, 2016 $ (681 ) $ 16 $ (665 ) The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016. $ 95 $ — $ 95 (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. 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 following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s fuel derivatives classified as Level 3 at September 30, 2016 : Quantitative information about Level 3 fair value measurements Valuation technique Unobservable input Period (by year) Range Fuel derivatives Option model Implied volatility Fourth quarter 2016 20-35% 2017 27-38% 2018 21-32% 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 September 30, 2016 , are presented in the table below. The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these agreements as Level 2. Debt under seven of the Company’s debt agreements is not publicly held. The Company has determined the estimated fair value of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes indicative pricing from counterparties and a discounted cash flow method to estimate the fair value of the Level 3 items. (in millions) Carrying value Estimated fair value Fair value level hierarchy 5.25% Convertible Senior Notes due November 2016 $ 110 $ 301 Level 2 5.75% Notes due December 2016 302 304 Level 2 5.125% Notes due 2017 303 308 Level 2 French Credit Agreements due 2018 - 1.96% 19 19 Level 3 Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03% 9 10 Level 3 2.75% Notes due 2019 307 316 Level 2 Term Loan Agreement due 2019 - 6.315% 115 117 Level 3 Term Loan Agreement due 2019 - 4.84% 28 29 Level 3 2.65% Notes due 2020 507 521 Level 2 Term Loan Agreement due 2020 - 5.223% 296 291 Level 3 Floating-rate 737 Aircraft Notes payable through 2020 217 213 Level 3 Term Loan Agreements payable through 2021 - 7.94% 20 22 Level 3 Pass Through Certificates due 2022 - 6.24% 324 362 Level 2 7.375% Debentures due 2027 130 161 Level 2 |
REVOLVING CREDIT FACILITY
REVOLVING CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | . REVOLVING CREDIT FACILITY On August 3, 2016 , the Company entered into a new $1 billion unsecured revolving credit facility expiring in August 2021 , and terminated its previous facility, which would have expired in April 2018. The new revolving credit agreement has an accordion feature that would allow the Company, subject to, among other things, the procurement of incremental commitments, to increase the size of the facility to $1.5 billion . 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 112.5 basis points. The facility contains a financial covenant, requiring a minimum coverage ratio of adjusted pre-tax income to fixed obligations, as defined. As of September 30, 2016 , the Company was in compliance with this covenant and there were no amounts outstanding under the revolving credit facility. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENT On October 31, 2016, the Company entered into a term loan agreement providing for loans to the Company aggregating up to $215 million , to be secured by mortgages on seven of the Company's 737-800 aircraft. The Company has borrowed the full $215 million and secured this loan with the requisite seven aircraft mortgages. The loan matures on October 31, 2026, and is being repaid via semi-annual installments of principal that begin April 30, 2018. The loan bears interest at the LIBOR (as defined in the term loan agreement) plus 1.10 percent , which equates to an initial rate of 2.359 percent , and interest is payable semi-annually in installments that begin April 30, 2017. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Change in Accounting Estimate [Line Items] | |
Basis of Presentation | The unaudited Condensed Consolidated Financial Statements for the interim periods ended September 30, 2016 and 2015 include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. This includes all normal and recurring adjustments and elimination of significant intercompany transactions. Financial results for the Company and airlines in general can be seasonal in nature. In many years, the Company's revenues, as well as its operating income and net income, have been better in its second and third fiscal quarters than in its first and fourth fiscal quarters. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, corporate travel budgets, and other factors beyond the Company's control. These and other factors, such as the price of jet fuel in some periods, the nature of the Company's fuel hedging program, the periodic volatility of commodities used by the Company for hedging jet fuel, and the requirements related to hedge accounting, have created, and may continue to create, significant volatility in the Company's financial results. See Note 3 for further information on fuel and the Company's hedging program. Operating results for the three and nine months ended September 30, 2016 , are not necessarily indicative of the results that may be expected for future quarters or for the year ended December 31, 2016 . For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Southwest Airlines Co. Annual Report on Form 10-K for the year ended December 31, 2015 . |
Derivatives | 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. Several of the Company's interest rate swap agreements 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 that do not qualify for the "shortcut" method of accounting, ineffectiveness is required to be measured at each reporting period. The ineffectiveness associated with all of the Company’s interest rate hedges for all periods presented was not material. 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 4 . 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 unaudited Condensed Consolidated Statement of Comprehensive 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 unaudited Condensed Consolidated Statement of Comprehensive 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 and were de-designated as hedges 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 2015 , or during the nine months ended September 30, 2016 . |
Fair Value of Financial Instruments | 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 September 30, 2016 , 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 and certificates of deposit), 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. 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 3 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. |
Revenue Recognition, Multiple-deliverable Arrangements, Description | During second quarter 2016, the Company early adopted ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, with an effective date as of January 1, 2016. The prospective method of adoption of this standard resulted in the recognition of $7 million of excess tax benefits to the Company's income tax provision for the nine months ended September 30, 2016 , all of which was recorded during second quarter 2016. The Company sells frequent flyer points and related services to companies participating in its frequent flyer program. Historically, funds received from the sale of points associated with these agreements were accounted for under the residual method. Under this method, the Company estimated the portion of the amounts received from the sale of frequent flyer points that related to free travel and these amounts were deferred and recognized as Passenger revenue when the ultimate free travel awards were flown. On July 1, 2015, the Company executed an amended co-branded credit card agreement ("Agreement") with Chase Bank USA, N.A. (“Chase”), through which the Company sells loyalty points and other items to Chase. This material modification triggered an accounting change under ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements, which has been recorded on a prospective basis. The impact of the accounting change is that the Company estimated the selling prices and volumes over the term of the Agreement in order to determine the allocation of proceeds to each of the deliverables (travel points to be awarded; use of the Southwest Airlines’ brand and access to Rapid Reward Member lists; advertising elements; and the Company’s resource team). The Company records passenger revenue related to air transportation and certificates for discounted companion travel when the transportation is delivered. The other elements are recognized as Other revenue when earned. The Company followed the transition approach of ASU No. 2009-13, which required that the Company adjust the existing deferred revenue balance, classified within Air traffic liability, to reflect the value, on a relative selling price basis, of any undelivered element remaining at the date of contract modification. The relative selling price of the undelivered element (air transportation) was lower than the rate at which it had been deferred under the residual method. |
New Accounting Pronouncements | On August 26, 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-15, Statement of Cash Flows. The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a significant impact on its financial statement presentation or results. On June 16, 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses. The new standard requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the new guidance, but does not expect it to have a significant impact on its financial statement presentation or results. On February 25, 2016, the FASB issued ASU No. 2016-02, Leases. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company believes the most significant impact of this ASU on its accounting will be the presentation of operating leases with durations greater than twelve months, with certain exceptions, on the balance sheet. The Company is evaluating the new guidance and plans to provide additional information about its expected financial impact at a future date. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Following the FASB's finalization of a one year deferral of this standard, the ASU is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company currently believes the most significant impact of this ASU on its accounting will be the elimination of the incremental cost method for frequent flyer accounting, which will require the Company to re-value its liability associated with flight points earned by Customers with a relative fair value approach, based on estimated selling price, resulting in a significant increase in the liability. The Company is continuing to evaluate the new guidance and plans to provide additional information about its expected financial impact at a future date. |
New Accounting Pronouncement an
New Accounting Pronouncement and Changes in Accounting or Estimates (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Change in Accounting Estimate [Line Items] | |
Schedule of New Changes in Accounting Principles - Chase Agreement | The estimated impacts on revenue and earnings associated with the Agreement and this change in accounting principle for the nine months ended September 30, 2016 , which only include amounts through June 30, 2016 as the impact of the accounting change for third quarter 2016 was comparable to that recognized in third quarter 2015 , are as follows: (in millions, except per share amounts) Nine months ended September 30, 2016 Passenger revenue $ (120 ) Other revenue 381 Operating revenues $ 261 Net income $ 139 Net income per basic share $ 0.22 Net income per diluted share $ 0.22 |
Schedule of Change in Accounting Estimate - Depreciation | The estimated impacts on expense and earnings from this change in assumption for the three and nine months ended September 30, 2016 are as follows: (in millions, except per share amounts) Three months ended September 30, 2016 Nine months ended September 30, 2016 Depreciation and amortization expense $ 31 $ 94 Net income $ (17 ) $ (50 ) Net income per basic share $ (0.03 ) $ (0.08 ) Net income per diluted share $ (0.03 ) $ (0.08 ) |
Financial Derivative Instrume17
Financial Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 2016 through 2018 on an “economic” basis: Maximum fuel hedged as of September 30, 2016 Derivative underlying commodity type as of Period (by year) (gallons in millions) (a) September 30, 2016 Fourth quarter 2016 357 Brent crude oil and Gulf Coast jet fuel 2017 1,281 WTI crude and Brent crude oil 2018 744 Brent crude oil (a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices fluctuate. |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table presents the location of all assets and liabilities associated with the Company’s derivative instruments within the unaudited Condensed Consolidated Balance Sheet: Asset derivatives Liability derivatives Balance Sheet Fair value at Fair value at Fair value at Fair value at (in millions) location 9/30/2016 12/31/2015 9/30/2016 12/31/2015 Derivatives designated as hedges* Fuel derivative contracts (gross) Prepaid expenses and other current assets $ — $ 2 $ — $ — Fuel derivative contracts (gross) Other assets 8 2 — — Fuel derivative contracts (gross) Accrued liabilities 22 107 513 526 Fuel derivative contracts (gross) Other noncurrent liabilities 84 55 137 658 Interest rate derivative contracts Other assets 13 2 — — Interest rate derivative contracts Other noncurrent liabilities — — 36 49 Total derivatives designated as hedges $ 127 $ 168 $ 686 $ 1,233 Derivatives not designated as hedges* Fuel derivative contracts (gross) Prepaid expenses and other current assets $ 13 $ 39 $ 7 $ 26 Fuel derivative contracts (gross) Other assets 3 5 — — Fuel derivative contracts (gross) Accrued liabilities 333 1,395 526 1,854 Fuel derivative contracts (gross) Other noncurrent liabilities 134 330 136 352 Total derivatives not designated as hedges $ 483 $ 1,769 $ 669 $ 2,232 Total derivatives $ 610 $ 1,937 $ 1,355 $ 3,465 * 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 | In addition, the Company had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet: Balance Sheet September 30, December 31, (in millions) location 2016 2015 Cash collateral deposits held from counterparties for fuel contracts - current Offset against Prepaid expenses and other current assets $ 6 $ — Cash collateral deposits held from counterparties for fuel contracts - noncurrent Offset against Other assets 9 — Cash collateral deposits provided to counterparties for fuel contracts - current Offset against Accrued liabilities 530 235 Cash collateral deposits provided to counterparties for fuel Offset against Other noncurrent liabilities 90 600 Due to third parties for fuel contracts Accounts payable 94 46 |
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) September 30, 2016 December 31, 2015 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 (a) Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet (a) Fuel derivative contracts Prepaid expenses and other current assets $ 13 $ (13 ) $ — $ 41 $ (26 ) $ 15 Fuel derivative contracts Other assets $ 11 $ (9 ) $ 2 $ 7 $ — $ 7 Fuel derivative contracts Accrued liabilities $ 885 $ (885 ) $ — $ 1,737 $ (1,737 ) $ — Fuel derivative contracts Other noncurrent liabilities $ 308 $ (273 ) $ 35 $ 985 $ (985 ) $ — Interest rate derivative contracts Other assets $ 13 $ — $ 13 $ 2 $ — $ 2 |
Offsetting Liabilities | Offsetting of derivative liabilities (in millions) (i) (ii) (iii) = (i) + (ii) (i) (ii) (iii) = (i) + (ii) September 30, 2016 December 31, 2015 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 (a) Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet (a) Fuel derivative contracts Prepaid expenses and other current assets $ 13 $ (13 ) $ — $ 26 $ (26 ) $ — Fuel derivative contracts Other assets $ 9 $ (9 ) $ — $ — $ — $ — Fuel derivative contracts Accrued liabilities $ 1,039 $ (885 ) $ 154 $ 2,380 $ (1,737 ) $ 643 Fuel derivative contracts Other noncurrent liabilities $ 273 $ (273 ) $ — $ 1,010 $ (985 ) $ 25 Interest rate derivative contracts Other noncurrent liabilities $ 36 $ — $ 36 $ 49 $ — $ 49 (a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5 . |
Derivatives in Cash Flow Hedging Relationships | The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015 : 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) Three months ended Three months ended Three months ended September 30, September 30, September 30, (in millions) 2016 2015 2016 2015 2016 2015 Fuel derivative contracts $ 19 * $ 315 * $ 141 * $ 79 * $ (4 ) $ — Interest rate derivatives (2 ) * 3 * 2 * 3 * (2 ) — Total $ 17 $ 318 $ 143 $ 82 $ (6 ) $ — *Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives, which are included in Fuel and oil and Interest expense, respectively. (b) Amounts are included in Other (gains) losses, net. 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) Nine months ended Nine months ended Nine months ended September 30, September 30, September 30, (in millions) 2016 2015 2016 2015 2016 2015 Fuel derivative contracts $ (62 ) * $ 330 * $ 484 * $ 166 * $ (3 ) $ (15 ) Interest rate derivatives 4 * 6 * 7 * 9 * (3 ) (2 ) Total $ (58 ) $ 336 $ 491 $ 175 $ (6 ) $ (17 ) *Net of tax (a) Amounts related to fuel derivative contracts and interest rate derivatives, which 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 Three months ended Location of (gain) loss recognized in income on derivatives September 30, (in millions) 2016 2015 Fuel derivative contracts $ 35 $ 239 Other (gains) losses, net Derivatives not in cash flow hedging relationships (Gain) loss recognized in income on derivatives Nine months ended Location of (gain) loss recognized in income on derivatives September 30, (in millions) 2016 2015 Fuel derivative contracts $ 23 $ 330 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 September 30, 2016 , at which such postings are triggered: Counterparty (CP) (in millions) A B C D E F Other (a) Total Fair value of fuel derivatives $ (414 ) $ (118 ) $ (4 ) $ (169 ) $ (33 ) $ 15 $ 1 $ (722 ) Cash collateral held from (by) CP (399 ) (77 ) — (144 ) — 15 — (605 ) Aircraft collateral pledged to CP — — — — — — — — Letters of credit (LC) — — — — — — — — Option to substitute LC for aircraft (200) to (600)(h) (100) to (500)(d) N/A (150) to (550)(d) (150) to (550)(d) N/A Option to substitute LC for cash N/A >(500)(e) (225) to (275)(e) (75) to (150) or >(550)(e) (125) to (150) or >(550)(e) (g) If credit rating is investment grade, fair value of fuel derivative level at which: Cash is provided to CP (50) to (200) or >(600) (50) to (100) or >(500) >(125) (75) to (150) or >(550) (125) to (150) or >(550) >(100) Cash is received from CP >50(c) >150(c) >175(c) >250(c) >75(c) >0(c) Aircraft or cash can be pledged to CP as collateral (200) to (600)(f) (100) to (500)(d) N/A (150) to (550)(d) (150) to (550)(d) N/A If credit rating is non-investment grade, fair value of fuel derivative level at which: Cash is provided to CP (0) to (200) or >(600) (0) to (100) or >(500) (b) (0) to (150) or >(550) (0) to (150) or >(550) (b) Cash is received from CP (b) (b) (b) (b) (b) (b) Aircraft or cash can be pledged to CP as collateral (200) to (600) (100) to (500) N/A (150) to (550) (150) to (550) N/A (a) Individual counterparties with fair value of fuel derivatives < $2 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. (e) The Company has the option of providing cash or letters of credit as collateral. (f) The Company has the option of providing cash or pledging aircraft as collateral. (g) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. (h) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements. |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Components of Comprehensive Income | The differences between Net income and Comprehensive income for the three and nine months ended September 30, 2016 and 2015 were as follows: Three months ended September 30, (in millions) 2016 2015 NET INCOME $ 388 $ 584 Unrealized gain (loss) on fuel derivative instruments, net of deferred taxes of $72 and ($139) 122 (236 ) Unrealized gain on interest rate derivative instruments, net of deferred taxes of $2 and $- 4 — Other, net of deferred taxes of $2 and ($2) 3 (3 ) Total other comprehensive income (loss) $ 129 $ (239 ) COMPREHENSIVE INCOME $ 517 $ 345 Nine months ended September 30, (in millions) 2016 2015 NET INCOME $ 1,722 $ 1,645 Unrealized gain (loss) on fuel derivative instruments, net of deferred taxes of $321 and ($97) 546 (164 ) Unrealized gain on interest rate derivative instruments, net of deferred taxes of $1 and $2 3 3 Other, net of deferred taxes of $2 and ($1) 3 (4 ) Total other comprehensive income (loss) $ 552 $ (165 ) COMPREHENSIVE INCOME $ 2,274 $ 1,480 |
Rollforward of the Amounts Included in AOCI, Net of Taxes | A rollforward of the amounts included in AOCI, net of taxes, is shown below for the three and nine months ended September 30, 2016 : (in millions) Fuel derivatives Interest rate derivatives Defined benefit plan items Other Deferred tax Accumulated other comprehensive income (loss) Balance at June 30, 2016 $ (993 ) $ (32 ) $ 22 $ 6 $ 369 $ (628 ) Changes in fair value (30 ) 3 — 5 8 (14 ) Reclassification to earnings 224 3 — — (84 ) 143 Balance at September 30, 2016 $ (799 ) $ (26 ) $ 22 $ 11 $ 293 $ (499 ) (in millions) Fuel derivatives Interest rate derivatives Defined benefit plan items Other Deferred tax Accumulated other comprehensive income (loss) Balance at December 31, 2015 $ (1,666 ) $ (30 ) $ 22 $ 6 $ 617 $ (1,051 ) Changes in fair value 98 (7 ) — 5 (35 ) 61 Reclassification to earnings 769 11 — — (289 ) 491 Balance at September 30, 2016 $ (799 ) $ (26 ) $ 22 $ 11 $ 293 $ (499 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following tables illustrate the significant amounts reclassified out of each component of AOCI for the three and nine months ended September 30, 2016 : Three months ended September 30, 2016 (in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income AOCI components Unrealized loss on fuel derivative instruments $ 224 Fuel and oil expense 83 Less: Tax Expense $ 141 Net of tax Unrealized loss on interest rate derivative instruments $ 3 Interest expense 1 Less: Tax Expense $ 2 Net of tax Total reclassifications for the period $ 143 Net of tax Nine months ended September 30, 2016 (in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income AOCI components Unrealized loss on fuel derivative instruments $ 769 Fuel and oil expense 285 Less: Tax Expense $ 484 Net of tax Unrealized loss on interest rate derivative instruments $ 11 Interest expense 4 Less: Tax Expense $ 7 Net of tax Total reclassifications for the period $ 491 Net of tax |
Supplemental Financial Inform19
Supplemental Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Table Text Block [Abstract] | |
Other Assets | (in millions) September 30, 2016 December 31, 2015 Intangible assets, net $ 430 $ 464 Non-current investments 35 40 Other 225 213 Other assets $ 690 $ 717 |
Schedule of Accounts Payable | (in millions) September 30, 2016 December 31, 2015 Accounts payable trade $ 148 $ 178 Salaries payable 149 173 Taxes payable 165 179 Aircraft maintenance payable 25 168 Fuel payable 66 48 Other payables 468 442 Accounts payable $ 1,021 $ 1,188 |
Accrued Liabilities | (in millions) September 30, 2016 December 31, 2015 ProfitSharing and savings plans $ 517 $ 655 Aircraft and other lease related obligations 52 74 Vacation pay 339 309 Accrued union bonuses (a) 533 329 Health 90 86 Derivative contracts 154 643 Workers compensation 179 187 Property and income taxes 63 62 Other 219 246 Accrued liabilities $ 2,146 $ 2,591 (a) As part of the ongoing negotiations with various union contract groups during 2016, the Company has recorded a liability for estimated bonuses that would be paid out to union members upon ratification of labor agreements. The liability excludes certain immaterial benefit costs that are included as a component of Accounts payable. The amount accrued is subject to change based on subsequent negotiations, and any changes would be recorded on a prospective basis. |
Other Noncurrent Liabilities | (in millions) September 30, 2016 December 31, 2015 Postretirement obligation $ 215 $ 201 Non-current lease-related obligations 135 165 Other deferred compensation 195 179 Deferred gains from sale and leaseback of aircraft 33 43 Derivative contracts 1 74 Other 82 98 Other noncurrent liabilities $ 661 $ 760 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 NUMERATOR: Net income $ 388 $ 584 $ 1,722 $ 1,645 Incremental income effect of interest on 5.25% convertible notes 1 1 2 3 Net income after assumed conversion $ 389 $ 585 $ 1,724 $ 1,648 DENOMINATOR: Weighted-average shares outstanding, basic 618 655 630 665 Dilutive effect of Employee stock options and restricted stock units 1 2 2 2 Dilutive effect of 5.25% convertible notes 6 6 6 6 Adjusted weighted-average shares outstanding, diluted 625 663 638 673 NET INCOME PER SHARE: Basic $ 0.63 $ 0.89 $ 2.73 $ 2.47 Diluted $ 0.62 $ 0.88 $ 2.70 $ 2.45 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Purchase Commitments | As of September 30, 2016 , the Company had firm deliveries and options for Boeing 737-700, 737-800, 737-7, and 737-8 aircraft as follows: The Boeing Company 737 -800 Firm Orders -800 Options -7 -8 -8 Options Additional -700s Total 2016 38 — — — — 23 61 (2) 2017 39 — — 14 — 14 67 2018 16 14 — 13 — 4 47 2019 — — 15 — 5 — 20 2020 — — 14 — 8 — 22 2021 — — 1 13 18 — 32 2022 — — — 15 19 — 34 2023 — — — 34 23 — 57 2024 — — — 41 23 — 64 2025 — — — 40 36 — 76 2026 — — — — 36 — 36 2027 — — — — 23 — 23 Total 93 14 30 170 (1) 191 (1) 41 539 (1) The Company has flexibility to substitute 737-7 in lieu of 737-8 aircraft beginning in 2019. (2) Includes 25 737-800s and 19 737-700s delivered as of September 30, 2016 . The 19 737-700s are classified as capital leases and have increased the Company's future capital lease obligations by $6 million remaining in 2016, $29 million in 2017, $29 million in 2018, $28 million in 2019, $27 million in 2020, and $176 million thereafter. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 , and December 31, 2015 : Fair value measurements at reporting date using: Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Description September 30, 2016 (Level 1) (Level 2) (Level 3) Assets (in millions) Cash equivalents Cash equivalents (a) $ 1,706 $ 1,706 $ — $ — Commercial paper 250 — 250 — Certificates of deposit 10 — 10 — Short-term investments: Treasury bills 1,198 1,198 — — Certificates of deposit 282 — 282 — Interest rate derivatives (see Note 3) 13 — 13 — Fuel derivatives: Swap contracts (b) 8 — 8 — Swap contracts (c) 173 — 173 — Option contracts (b) 16 — — 16 Option contracts (c) 400 — — 400 Other available-for-sale securities 96 80 — 16 Total assets $ 4,152 $ 2,984 $ 736 $ 432 Liabilities Fuel derivatives: Swap contracts (b) $ (2 ) $ — $ (2 ) $ — Swap contracts (c) (220 ) — (220 ) — Option contracts (b) (5 ) — — (5 ) Option contracts (c) (1,092 ) — — (1,092 ) Interest rate derivatives (see Note 3) (36 ) — (36 ) — Total liabilities $ (1,355 ) $ — $ (258 ) $ (1,097 ) (a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. See Note 3. (c) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net liability. See Note 3. Fair value measurements at reporting date using: Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Description December 31, 2015 (Level 1) (Level 2) (Level 3) Assets (in millions) Cash equivalents Cash equivalents (a) $ 1,337 $ 1,337 $ — $ — Commercial paper 200 — 200 — Certificates of deposit 13 — 13 — Eurodollar time deposits 33 — 33 — Short-term investments: Treasury bills 1,248 1,248 — — Certificates of deposit 220 — 220 — Interest rate derivatives (see Note 3) 2 — 2 — Fuel derivatives: Swap contracts (b) 38 — 38 — Swap contracts (c) 931 — 931 — Option contracts (b) 10 — — 10 Option contracts (c) 956 — — 956 Other available-for-sale securities 93 66 — 27 Total assets $ 5,081 $ 2,651 $ 1,437 $ 993 Liabilities Fuel derivatives: Swap contracts (c) $ (774 ) $ — $ (774 ) $ — Option contracts (b) (26 ) — — (26 ) Option contracts (c) (2,616 ) — — (2,616 ) Interest rate derivatives (see Note 3) (49 ) — (49 ) — Total liabilities $ (3,465 ) $ — $ (823 ) $ (2,642 ) (a) Cash equivalents are primarily composed of money market investments. (b) In the unaudited Consolidated Balance Sheet amounts are presented as a net asset. See Note 3. (c) In the unaudited Consolidated Balance Sheet amounts are presented as a net liability. See Note 3. |
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 : Fair value measurements using significant unobservable inputs (Level 3) Fuel derivatives Other securities (in millions) Total Balance at June 30, 2016 $ (907 ) $ 26 $ (881 ) Total gains (losses) (realized or unrealized) Included in earnings (46 ) — (46 ) Included in other comprehensive income (31 ) 3 (28 ) Purchases 61 (a) — 61 Sales (4 ) (a) (13 ) (17 ) Settlements 246 — 246 Balance at September 30, 2016 $ (681 ) $ 16 $ (665 ) The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016. $ (20 ) $ — $ (20 ) (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. Fair value measurements using significant unobservable inputs (Level 3) Fuel derivatives Other securities (in millions) Total Balance at December 31, 2015 $ (1,676 ) $ 27 $ (1,649 ) Total gains (realized or unrealized) Included in earnings 128 — 128 Included in other comprehensive income 104 2 106 Purchases 191 (a) — 191 Sales (61 ) (a) (13 ) (74 ) Settlements 633 — 633 Balance at September 30, 2016 $ (681 ) $ 16 $ (665 ) The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016. $ 95 $ — $ 95 (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. |
Fair Value Valuation Techniques | The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s fuel derivatives classified as Level 3 at September 30, 2016 : Quantitative information about Level 3 fair value measurements Valuation technique Unobservable input Period (by year) Range Fuel derivatives Option model Implied volatility Fourth quarter 2016 20-35% 2017 27-38% 2018 21-32% |
Fair value, by Balance Sheet Grouping | 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 September 30, 2016 , are presented in the table below. The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these agreements as Level 2. Debt under seven of the Company’s debt agreements is not publicly held. The Company has determined the estimated fair value of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes indicative pricing from counterparties and a discounted cash flow method to estimate the fair value of the Level 3 items. (in millions) Carrying value Estimated fair value Fair value level hierarchy 5.25% Convertible Senior Notes due November 2016 $ 110 $ 301 Level 2 5.75% Notes due December 2016 302 304 Level 2 5.125% Notes due 2017 303 308 Level 2 French Credit Agreements due 2018 - 1.96% 19 19 Level 3 Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03% 9 10 Level 3 2.75% Notes due 2019 307 316 Level 2 Term Loan Agreement due 2019 - 6.315% 115 117 Level 3 Term Loan Agreement due 2019 - 4.84% 28 29 Level 3 2.65% Notes due 2020 507 521 Level 2 Term Loan Agreement due 2020 - 5.223% 296 291 Level 3 Floating-rate 737 Aircraft Notes payable through 2020 217 213 Level 3 Term Loan Agreements payable through 2021 - 7.94% 20 22 Level 3 Pass Through Certificates due 2022 - 6.24% 324 362 Level 2 7.375% Debentures due 2027 130 161 Level 2 |
New Accounting Pronouncement 23
New Accounting Pronouncement and Changes in Accounting or Estimates (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)$ / shares | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Operating Results | $ 261 |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 139 |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Basic Earnings Per Share | $ / shares | $ 0.22 |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Diluted Earnings Per Share | $ / shares | $ 0.22 |
Passenger Revenue | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Operating Results | $ (120) |
Other Revenue | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Operating Results | $ 381 |
Change In Accounting Estimate (
Change In Accounting Estimate (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Change in Accounting Estimate [Abstract] | ||
Change in Accounting Estimate Financial Effect on Depreciation Expense, Depreciation Estimate | $ 31 | $ 94 |
Change in Accounting Estimate, Financial Effect on Net Income, Depreciation Adjustment | $ (17) | $ (50) |
Change in Accounting Estimate Financial Effect on Net Income Per Share | $ (0.03) | $ (0.08) |
Change in Accounting Estimate Financial Effect on Net Income Per Share Diluted | $ (0.03) | $ (0.08) |
New Accounting Pronouncement 25
New Accounting Pronouncement and Changes in Accounting or Estimates Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Item Effected [Line Items] | ||
Proceeds and Excess Tax Benefit from Share-based Compensation | $ 7 | |
Change In Accounting Estimate Financial Effect On Depreciation Expense for the Remainder of 2016 | $ 29 |
Financial Derivative Instrume26
Financial Derivative Instruments Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Derivative [Line Items] | |||||
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 58.00% | 58.00% | |||
Premiums paid for fuel derivative contracts | $ 34 | $ 33 | $ 117 | $ 81 | |
Current Unrealized Net Gains (Losses) in OCI | (401) | (401) | |||
Maximum sum of derivatives of counterparty to be included in other (less than $20 million) | $ 2 | $ 2 | |||
Maximum cash collateral provided as a percentage of derivative contract value (in hundredths) | 100.00% | 100.00% | |||
Maximum letter of credit percent of collateral | 100.00% | 100.00% | |||
Cash Flow Hedging | |||||
Derivative [Line Items] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [1] | $ (143) | (82) | $ (491) | (175) |
Cash Flow Hedging | Fuel derivatives | |||||
Derivative [Line Items] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [1],[2] | (141) | (79) | (484) | (166) |
Cash Flow Hedging | Interest rate derivatives | |||||
Derivative [Line Items] | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | [1],[2] | $ (2) | $ (3) | $ (7) | $ (9) |
Remainder of Current Year | |||||
Derivative [Line Items] | |||||
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 72.00% | 72.00% | |||
[1] | Amounts related to fuel derivative contracts and interest rate derivatives, which are included in Fuel and oil and Interest expense, respectively. | ||||
[2] | Net of tax |
Financial Derivative Instrume27
Financial Derivative Instruments - Fuel Hedging (Details) gal in Millions | Sep. 30, 2016gal | [1] |
Remainder of Current Year | ||
Volume of Fuel Hedging | ||
Fuel Hedged (in gallons) | 357 | |
2,017 | ||
Volume of Fuel Hedging | ||
Fuel Hedged (in gallons) | 1,281 | |
2,018 | ||
Volume of Fuel Hedging | ||
Fuel Hedged (in gallons) | 744 | |
[1] | Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices fluctuate. |
Financial Derivative Instrume28
Financial Derivative Instruments - Fair Values by Balance Sheet Location (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | $ 610 | $ 1,937 |
Derivative Liability, Fair Value, Gross Liability | [1] | 1,355 | 3,465 |
Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 127 | 168 |
Derivative Liability, Fair Value, Gross Liability | [1] | 686 | 1,233 |
Not Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 483 | 1,769 |
Derivative Liability, Fair Value, Gross Liability | [1] | 669 | 2,232 |
Fuel derivatives | |||
Derivatives, Fair Value [Line Items] | |||
Collateral Already Posted, Aggregate Fair Value | 605 | ||
Fuel derivatives | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Total Collateral Already Received Aggregate Fair Value | 6 | 0 | |
Fuel derivatives | Accrued Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Collateral Already Posted, Aggregate Fair Value | 530 | 235 | |
Fuel derivatives | Accounts Payable | |||
Derivatives, Fair Value [Line Items] | |||
Due To Third Parties For Settled Fuel Contracts | 94 | 46 | |
Fuel derivatives | Other Assets | |||
Derivatives, Fair Value [Line Items] | |||
Total Collateral Already Received Aggregate Fair Value | 9 | 0 | |
Fuel derivatives | Other Noncurrent Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Collateral Already Posted, Aggregate Fair Value | 90 | 600 | |
Fuel derivatives | Designated as Hedging Instrument | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 0 | 2 |
Derivative Asset, Fair Value, Gross Liability | [1] | 0 | 0 |
Fuel derivatives | Designated as Hedging Instrument | Accrued Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Asset | [1] | 22 | 107 |
Derivative Liability, Fair Value, Gross Liability | [1] | 513 | 526 |
Fuel derivatives | Designated as Hedging Instrument | Other Assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 8 | 2 |
Derivative Asset, Fair Value, Gross Liability | [1] | 0 | 0 |
Fuel derivatives | Designated as Hedging Instrument | Other Noncurrent Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Asset | [1] | 84 | 55 |
Derivative Liability, Fair Value, Gross Liability | [1] | 137 | 658 |
Fuel derivatives | Not Designated as Hedging Instrument | Prepaid expenses and other current assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 13 | 39 |
Derivative Asset, Fair Value, Gross Liability | [1] | 7 | 26 |
Fuel derivatives | Not Designated as Hedging Instrument | Accrued Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Asset | [1] | 333 | 1,395 |
Derivative Liability, Fair Value, Gross Liability | [1] | 526 | 1,854 |
Fuel derivatives | Not Designated as Hedging Instrument | Other Assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 3 | 5 |
Derivative Asset, Fair Value, Gross Liability | [1] | 0 | 0 |
Fuel derivatives | Not Designated as Hedging Instrument | Other Noncurrent Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Asset | [1] | 134 | 330 |
Derivative Liability, Fair Value, Gross Liability | [1] | 136 | 352 |
Interest rate derivatives | Designated as Hedging Instrument | Other Assets | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Asset, Fair Value, Gross Asset | [1] | 13 | 2 |
Derivative Asset, Fair Value, Gross Liability | [1] | 0 | 0 |
Interest rate derivatives | Designated as Hedging Instrument | Other Noncurrent Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative Liability, Fair Value, Gross Asset | [1] | 0 | 0 |
Derivative Liability, Fair Value, Gross Liability | [1] | $ 36 | $ 49 |
[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 Instrume29
Financial Derivative Instruments - Offsetting of Derivative Assets (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Fuel derivatives | Prepaid expenses and other current assets | |||
Offsetting Assets [Line Items] | |||
Gross amounts of recognized assets | $ 13 | $ 41 | |
Gross liability amounts offset in the Balance Sheet | (13) | (26) | |
Asset derivative contracts, net | [1] | 0 | 15 |
Fuel derivatives | Other Assets | |||
Offsetting Assets [Line Items] | |||
Gross amounts of recognized assets | 11 | 7 | |
Gross liability amounts offset in the Balance Sheet | (9) | 0 | |
Asset derivative contracts, net | [1] | 2 | 7 |
Fuel derivatives | Accrued Liabilities | |||
Offsetting Assets [Line Items] | |||
Gross amounts of recognized assets | 885 | 1,737 | |
Gross liability amounts offset in the Balance Sheet | (885) | (1,737) | |
Asset derivative contracts, net | [1] | 0 | 0 |
Fuel derivatives | Other Noncurrent Liabilities | |||
Offsetting Assets [Line Items] | |||
Gross amounts of recognized assets | 308 | 985 | |
Gross liability amounts offset in the Balance Sheet | (273) | (985) | |
Asset derivative contracts, net | [1] | 35 | 0 |
Interest rate derivatives | Other Assets | |||
Offsetting Assets [Line Items] | |||
Gross amounts of recognized assets | 13 | 2 | |
Gross liability amounts offset in the Balance Sheet | 0 | 0 | |
Asset derivative contracts, net | [1] | $ 13 | $ 2 |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5. |
Financial Derivative Instrume30
Financial Derivative Instruments - Offsetting of Derivative Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Other Noncurrent Liabilities | |||
Offsetting Liabilities [Line Items] | |||
Liability derivative contracts, net | $ 1 | $ 74 | |
Fuel derivatives | Prepaid expenses and other current assets | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 13 | 26 | |
Gross asset amounts offset in the Balance Sheet | (13) | (26) | |
Liability derivative contracts, net | [1] | 0 | 0 |
Fuel derivatives | Other Assets | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 9 | 0 | |
Gross asset amounts offset in the Balance Sheet | (9) | 0 | |
Liability derivative contracts, net | [1] | 0 | 0 |
Fuel derivatives | Accrued Liabilities | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 1,039 | 2,380 | |
Gross asset amounts offset in the Balance Sheet | (885) | (1,737) | |
Liability derivative contracts, net | [1] | 154 | 643 |
Fuel derivatives | Other Noncurrent Liabilities | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 273 | 1,010 | |
Gross asset amounts offset in the Balance Sheet | (273) | (985) | |
Liability derivative contracts, net | [1] | 0 | 25 |
Interest rate derivatives | Other Noncurrent Liabilities | |||
Offsetting Liabilities [Line Items] | |||
Gross amounts of recognized liabilities | 36 | 49 | |
Gross asset amounts offset in the Balance Sheet | 0 | 0 | |
Liability derivative contracts, net | [1] | $ 36 | $ 49 |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5. |
Financial Derivative Instrume31
Financial Derivative Instruments - (Gain) Loss by Hedging Relationship (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Cash Flow Hedging | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
(Gain) Loss recognized in AOCI on derivatives (effective portion) | $ 17 | $ 318 | $ (58) | $ 336 | |
(Gain) Loss reclassified from AOCI into income (effective portion) | [1] | 143 | 82 | 491 | 175 |
(Gain) Loss recognized in income on derivatives (ineffective portion) | [2] | (6) | 0 | (6) | (17) |
Fuel derivatives | Cash Flow Hedging | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
(Gain) Loss recognized in AOCI on derivatives (effective portion) | [3] | 19 | 315 | (62) | 330 |
(Gain) Loss reclassified from AOCI into income (effective portion) | [1],[3] | 141 | 79 | 484 | 166 |
(Gain) Loss recognized in income on derivatives (ineffective portion) | [2] | (4) | 0 | (3) | (15) |
Interest rate derivatives | Cash Flow Hedging | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
(Gain) Loss recognized in AOCI on derivatives (effective portion) | [3] | (2) | 3 | 4 | 6 |
(Gain) Loss reclassified from AOCI into income (effective portion) | [1],[3] | 2 | 3 | 7 | 9 |
(Gain) Loss recognized in income on derivatives (ineffective portion) | [2] | (2) | 0 | (3) | (2) |
Other Nonoperating Income Expense | Fuel derivatives | Not Designated as Hedging Instrument | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
(Gain) loss recognized in income on derivatives | $ 35 | $ 239 | $ 23 | $ 330 | |
[1] | Amounts related to fuel derivative contracts and interest rate derivatives, which 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 Instrume32
Financial Derivative Instruments - Fair Values of Fuel Derivatives Amounts Posted as Collateral (Details) - Fuel derivatives $ in Millions | Sep. 30, 2016USD ($) | |
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | $ (722) | |
Cash collateral held from (by) CP | (605) | |
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] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | (414) | |
Cash collateral held from (by) CP | (399) | |
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] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | (118) | |
Cash collateral held from (by) CP | (77) | |
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] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | (4) | |
Cash collateral held from (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] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | (169) | |
Cash collateral held from (by) CP | (144) | |
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] | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | (33) | |
Cash collateral held from (by) CP | 0 | |
Aircraft collateral pledged to CP | 0 | |
Letters of credit (LC) | 0 | |
Counterparty F | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 15 | |
Cash collateral held from (by) CP | 15 | |
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] | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | (1) | [1] |
Cash collateral held from (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 | (200) | [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 | (600) | |
Fair value of fuel derivative level at which cash is received from CP | 50 | [3] |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (200) | [4] |
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 | (600) | |
Fair value of fuel derivative level at which cash is received from CP | [5] | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (200) | |
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) | [6] |
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (500) | [7] |
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 | [3] |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (100) | [6] |
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 | [5] | |
Fair value of fuel derivative levels at which aircraft or cash 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] | ||
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (225) | [7] |
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 | (125) | |
Fair value of fuel derivative level at which cash is received from CP | 175 | [3] |
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 | [5] | |
Fair value of fuel derivative level at which cash is received from CP | [5] | |
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 | (150) | [6] |
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (75) | [7] |
Option to substitute LC for cash Threshold 2 | (550) | [7] |
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 | (75) | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | (550) | |
Fair value of fuel derivative level at which cash is received from CP | 250 | [3] |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (150) | [6] |
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 | (550) | |
Fair value of fuel derivative level at which cash is received from CP | [5] | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (150) | |
Minimum | Counterparty E | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | (150) | [6] |
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (125) | [7] |
Option to substitute LC for cash Threshold 2 | (550) | [7] |
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 | (125) | |
Fair value of fuel derivative levels at which cash is provided to CP Threshold 2 | (550) | |
Fair value of fuel derivative level at which cash is received from CP | 75 | [3] |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (150) | [6] |
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 | (550) | |
Fair value of fuel derivative level at which cash is received from CP | [5] | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (150) | |
Minimum | Counterparty F | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | [8] | |
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 level at which cash is received from CP | 0 | [3] |
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 | [5] | |
Fair value of fuel derivative level at which cash is received from CP | [5] | |
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 | (600) | [2] |
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | ||
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 | (200) | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (600) | [4] |
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 | (200) | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (600) | |
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) | [6] |
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) | [6] |
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 or cash 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] | ||
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (275) | [7] |
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 | (550) | [6] |
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (150) | [7] |
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 | (150) | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (550) | [6] |
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 | (150) | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (550) | |
Maximum | Counterparty E | ||
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items] | ||
Option to substitute LC for aircraft | (550) | [6] |
Fair Value Of Fuel Derivative Levels In Which Letters Of Credit May Be Substituted For Cash Threshold 1 | (150) | [7] |
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 | (150) | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | (550) | [6] |
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 | (150) | |
Fair value of fuel derivative levels at which aircraft or cash collateral is pledged to CP | $ (550) | |
[1] | Individual counterparties with fair value of fuel derivatives <$2 million. | |
[2] | The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements. | |
[3] | Thresholds may vary based on changes in credit ratings within investment grade. | |
[4] | The Company has the option of providing cash or pledging aircraft as collateral. | |
[5] | Cash collateral is provided at 100 percent of fair value of fuel derivative contracts. | |
[6] | The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. | |
[7] | The Company has the option of providing cash or letters of credit as collateral. | |
[8] | The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement. |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Net income | $ 388 | $ 584 | $ 1,722 | $ 1,645 | ||
Other, net of deferred taxes | 3 | (3) | 3 | (4) | ||
Total other comprehensive income (loss) | 129 | (239) | 552 | (165) | ||
Total comprehensive income | 517 | 345 | 2,274 | 1,480 | ||
Deferred taxes on unrealized gain (loss) on other | 2 | (2) | 2 | (1) | ||
AOCI Including Portion Attributable to Noncontrolling Interest | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (499) | (499) | $ (628) | $ (1,051) | ||
Reclassification to earnings | 143 | 491 | ||||
Changes in fair value | (14) | 61 | ||||
Fuel derivatives | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (799) | (799) | (993) | (1,666) | ||
Reclassification to earnings | 224 | 769 | ||||
Changes in fair value | (30) | 98 | ||||
Interest rate derivatives | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (26) | (26) | (32) | (30) | ||
Reclassification to earnings | 3 | 11 | ||||
Changes in fair value | 3 | (7) | ||||
Defined benefit plan items | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 22 | 22 | 22 | 22 | ||
Reclassification to earnings | 0 | 0 | ||||
Changes in fair value | 0 | 0 | ||||
Deferred Tax | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 293 | 293 | 369 | 617 | ||
Reclassification to earnings | (84) | (289) | ||||
Changes in fair value | 8 | (35) | ||||
Other | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 11 | 11 | $ 6 | $ 6 | ||
Reclassification to earnings | 0 | 0 | ||||
Changes in fair value | 5 | 5 | ||||
Interest rate derivatives | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Unrealized gain (loss) on derivatives, net of tax | 4 | 0 | 3 | 3 | ||
Deferred taxes on unrealized gain (loss) on derivatives | 2 | 0 | 1 | 2 | ||
Fuel derivatives | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Unrealized gain (loss) on derivatives, net of tax | 122 | (236) | 546 | (164) | ||
Deferred taxes on unrealized gain (loss) on derivatives | $ 72 | $ (139) | $ 321 | $ (97) |
Comprehensive Income - Reclassi
Comprehensive Income - Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Fuel and oil | $ (941) | $ (936) | $ (2,696) | $ (2,818) |
Interest Expense | (31) | (31) | (93) | (92) |
Less: Tax Expense | 230 | $ 349 | 1,016 | $ 987 |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net of Tax | 143 | 491 | ||
Fuel derivatives | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Fuel and oil | 224 | 769 | ||
Less: Tax Expense | 83 | 285 | ||
Net of Tax | 141 | 484 | ||
Interest rate derivatives | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest Expense | 3 | 11 | ||
Less: Tax Expense | 1 | 4 | ||
Net of Tax | $ 2 | $ 7 |
Supplemental Financial Inform35
Supplemental Financial Information - Other Assets (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Other Assets [Abstract] | |||
Intangible assets | $ 430 | $ 464 | |
Non-current investments | 35 | 40 | |
Other | 225 | 213 | |
Other assets | 690 | 717 | |
Accrued Liabilities | Fuel derivatives | |||
Other Assets [Abstract] | |||
Asset derivative contracts, net | [1] | 0 | 0 |
Other Assets | Fuel derivatives | |||
Other Assets [Abstract] | |||
Asset derivative contracts, net | [1] | 2 | 7 |
Other Assets | Interest rate derivatives | |||
Other Assets [Abstract] | |||
Asset derivative contracts, net | [1] | $ 13 | $ 2 |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5. |
Supplemental Financial Inform36
Supplemental Financial Information - Accounts Payable (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Supplemental Financial Information - Accounts Payable [Abstract] | ||
Accounts payable trade | $ 148 | $ 178 |
Salaries payable | 149 | 173 |
Taxes payable | 165 | 179 |
Aircraft maintenance payable | 25 | 168 |
Fuel payable | 66 | 48 |
Other payables | 468 | 442 |
Accounts Payable, Current | $ 1,021 | $ 1,188 |
Supplemental Financial Inform37
Supplemental Financial Information - Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Accrued Liabilities, Current [Abstract] | |||
ProfitSharing and savings plans | $ 517 | $ 655 | |
Aircraft and other lease related obligations | 52 | 74 | |
Vacation pay | 339 | 309 | |
Accrued union bonuses | [1] | 533 | 329 |
Health | 90 | 86 | |
Workers compensation | 179 | 187 | |
Property and income taxes | 63 | 62 | |
Other | 219 | 246 | |
Accrued liabilities | 2,146 | 2,591 | |
Fuel derivatives | Accrued Liabilities | |||
Accrued Liabilities, Current [Abstract] | |||
Derivative contracts | [2] | $ 154 | $ 643 |
[1] | As part of the ongoing negotiations with various union contract groups during 2016, the Company has recorded a liability for estimated bonuses that would be paid out to union members upon ratification of labor agreements. The liability excludes certain immaterial benefit costs that are included as a component of Accounts payable. The amount accrued is subject to change based on subsequent negotiations, and any changes would be recorded on a prospective basis. | ||
[2] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5. |
Supplemental Financial Inform38
Supplemental Financial Information - Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | |
Other Liabilities, Noncurrent [Abstract] | |||
Postretirement obligation | $ 215 | $ 201 | |
Non-current lease-related obligations | 135 | 165 | |
Other deferred compensation | 195 | 179 | |
Deferred gains from sale and leaseback of aircraft | 33 | 43 | |
Other | 82 | 98 | |
Other noncurrent liabilities | 661 | 760 | |
Other Noncurrent Liabilities | |||
Other Liabilities, Noncurrent [Abstract] | |||
Derivative contracts | 1 | 74 | |
Fuel derivatives | Other Noncurrent Liabilities | |||
Other Liabilities, Noncurrent [Abstract] | |||
Derivative contracts | [1] | 0 | 25 |
Interest rate derivatives | Other Noncurrent Liabilities | |||
Other Liabilities, Noncurrent [Abstract] | |||
Derivative contracts | [1] | $ 36 | $ 49 |
[1] | The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5. |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
NUMERATOR: | ||||
Net income | $ 388 | $ 584 | $ 1,722 | $ 1,645 |
Incremental income effect of interest on 5.25% convertible notes | 1 | 1 | 2 | 3 |
Net income after assumed conversion | $ 389 | $ 585 | $ 1,724 | $ 1,648 |
DENOMINATOR: | ||||
Weighted-average shares outstanding, basic | 618 | 655 | 630 | 665 |
Dilutive effect of Employee stock options and restricted stock units | 1 | 2 | 2 | 2 |
Dilutive effect of 5.25% convertible notes | 6 | 6 | 6 | 6 |
Adjusted weighted-average shares outstanding, diluted | 625 | 663 | 638 | 673 |
NET INCOME PER SHARE: | ||||
Basic | $ 0.63 | $ 0.89 | $ 2.73 | $ 2.47 |
Diluted | $ 0.62 | $ 0.88 | $ 2.70 | $ 2.45 |
Commitments and Contingencies40
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2010 | Dec. 31, 2015 | |
Airport Project [Line Items] | |||
Assets constructed for others | $ 1,150 | $ 915 | |
Construction obligation | 989 | $ 757 | |
Fort Lauderdale-Hollywood International Airport | |||
Airport Project [Line Items] | |||
Total Expected Cost Of Airport Project | 333 | ||
Assets constructed for others | 92 | ||
HOU | |||
Airport Project [Line Items] | |||
Total Expected Cost Of Airport Project | 150 | ||
Proprietary Construction Reimbursement | 22 | ||
Los Angeles World Airport | |||
Airport Project [Line Items] | |||
Total Expected Cost Of Airport Project | 526 | ||
Assets constructed for others | 313 | ||
Construction obligation | 313 | ||
DAL | |||
Airport Project [Line Items] | |||
Assets constructed for others | 538 | ||
Municipal bonds issued | $ 456 | ||
Municipal bonds principal remaining | 439 | ||
Construction obligation | 525 | ||
DAL Garage | |||
Airport Project [Line Items] | |||
Assets constructed for others | 59 | ||
Construction obligation | $ 59 |
Long-term Purchase Commitments
Long-term Purchase Commitments (Details) $ in Millions | Sep. 30, 2016USD ($)aircraft | |
Long-term Purchase Commitment [Line Items] | ||
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $ | $ 6 | |
Capital Leases, Future Minimum Payments Due in Two Years | $ | 29 | |
Capital Leases, Future Minimum Payments Due in Three Years | $ | 29 | |
Capital Leases, Future Minimum Payments Due in Four Years | $ | 28 | |
Capital Leases, Future Minimum Payments Due in Five Years | $ | 27 | |
Capital Leases, Future Minimum Payments Due Thereafter | $ | $ 176 | |
Firm 737 NG 800 (in units) | 93 | |
Options - 737 NG (in units) | 14 | |
Firm - 737 MAX (in units) | 30 | |
Firm - 738 MAX (in units) | 170 | [1] |
Options - 738 MAX (in units) | 191 | [1] |
Additional - 700 A/C (in units) | 41 | |
Total | 539 | |
2,016 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 38 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 0 | |
Options - 738 MAX (in units) | 0 | |
Additional - 700 A/C (in units) | 23 | |
Total | 61 | [2] |
2,017 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 39 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 14 | |
Options - 738 MAX (in units) | 0 | |
Additional - 700 A/C (in units) | 14 | |
Total | 67 | |
2,018 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 16 | |
Options - 737 NG (in units) | 14 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 13 | |
Options - 738 MAX (in units) | 0 | |
Additional - 700 A/C (in units) | 4 | |
Total | 47 | |
2,019 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 15 | |
Firm - 738 MAX (in units) | 0 | |
Options - 738 MAX (in units) | 5 | |
Additional - 700 A/C (in units) | 0 | |
Total | 20 | |
2,020 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 14 | |
Firm - 738 MAX (in units) | 0 | |
Options - 738 MAX (in units) | 8 | |
Additional - 700 A/C (in units) | 0 | |
Total | 22 | |
2,021 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 1 | |
Firm - 738 MAX (in units) | 13 | |
Options - 738 MAX (in units) | 18 | |
Additional - 700 A/C (in units) | 0 | |
Total | 32 | |
2,022 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 15 | |
Options - 738 MAX (in units) | 19 | |
Additional - 700 A/C (in units) | 0 | |
Total | 34 | |
2,023 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 34 | |
Options - 738 MAX (in units) | 23 | |
Additional - 700 A/C (in units) | 0 | |
Total | 57 | |
2,024 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 41 | |
Options - 738 MAX (in units) | 23 | |
Additional - 700 A/C (in units) | 0 | |
Total | 64 | |
2,025 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 40 | |
Options - 738 MAX (in units) | 36 | |
Additional - 700 A/C (in units) | 0 | |
Total | 76 | |
2,026 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 0 | |
Options - 738 MAX (in units) | 36 | |
Additional - 700 A/C (in units) | 0 | |
Total | 36 | |
2,027 | ||
Long-term Purchase Commitment [Line Items] | ||
Firm 737 NG 800 (in units) | 0 | |
Options - 737 NG (in units) | 0 | |
Firm - 737 MAX (in units) | 0 | |
Firm - 738 MAX (in units) | 0 | |
Options - 738 MAX (in units) | 23 | |
Additional - 700 A/C (in units) | 0 | |
Total | 23 | |
Aircraft [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Committed expenditures, 2016 | $ | $ 281 | |
Committed expenditures, 2017 | $ | 1,100 | |
Committed expenditures, 2018 | $ | 775 | |
Committed expenditures, 2019 | $ | 614 | |
Committed expenditures, 2020 | $ | 821 | |
Committed expenditures, 2021 and beyond | $ | $ 6,100 | |
[1] | The Company has flexibility to substitute 737-7 in lieu of 737-8 aircraft beginning in 2019. | |
[2] | Includes 25 737-800s and 19 737-700s delivered as of September 30, 2016. The 19 737-700s are classified as capital leases and have increased the Company's future capital lease obligations by $6 million remaining in 2016, $29 million in 2017, $29 million in 2018, $28 million in 2019, $27 million in 2020, and $176 million thereafter. |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on Recurring Basis (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Sep. 30, 2016 | Dec. 31, 2015 | ||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | [1] | $ 610 | $ 1,937 | ||
Fuel derivatives: | |||||
Derivative Liability, Fair Value, Gross Liability | [1] | (1,355) | (3,465) | ||
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 | |||
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | |||||
Assets | |||||
Treasury bills | 1,198 | 1,248 | |||
Interest rate derivatives (see Note 3) | 0 | 0 | |||
Fuel derivatives: | |||||
Other available for sale securities | 80 | 66 | |||
Total assets | 2,984 | 2,651 | |||
Liabilities | |||||
Interest rate derivatives (see Note 3) | 0 | 0 | |||
Total Liabilities | 0 | 0 | |||
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||||
Assets | |||||
Treasury bills | 0 | 0 | |||
Interest rate derivatives (see Note 3) | 13 | 2 | |||
Fuel derivatives: | |||||
Other available for sale securities | 0 | 0 | |||
Total assets | 736 | 1,437 | |||
Liabilities | |||||
Interest rate derivatives (see Note 3) | (36) | (49) | |||
Total Liabilities | (258) | (823) | |||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets | |||||
Treasury bills | 0 | 0 | |||
Interest rate derivatives (see Note 3) | 0 | 0 | |||
Fuel derivatives: | |||||
Other available for sale securities | 16 | 27 | |||
Total assets | 432 | 993 | |||
Liabilities | |||||
Interest rate derivatives (see Note 3) | 0 | 0 | |||
Total Liabilities | (1,097) | (2,642) | |||
Cash Equivalents | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | |||||
Assets | |||||
Cash equivalents | 1,706 | [2] | 1,337 | [3] | |
Cash Equivalents | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||||
Assets | |||||
Cash equivalents | 0 | [2] | 0 | [3] | |
Cash Equivalents | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets | |||||
Cash equivalents | 0 | [2] | 0 | [3] | |
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 | 250 | 200 | |||
Commercial paper | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets | |||||
Cash equivalents | 0 | 0 | |||
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 | 10 | 13 | |||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets | |||||
Cash equivalents | 0 | 0 | |||
Eurodollar time deposits | Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | |||||
Assets | |||||
Cash equivalents | 0 | ||||
Eurodollar time deposits | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||||
Assets | |||||
Cash equivalents | 33 | ||||
Eurodollar time deposits | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets | |||||
Cash equivalents | 0 | ||||
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 | 282 | 220 | |||
Certificates of deposit | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Assets | |||||
Investments | 0 | 0 | |||
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 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 0 | [6] | 0 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | [4] | 0 | |||
Derivative Liability, Fair Value, Gross Liability | 0 | [6] | 0 | [7] | |
Swap | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | 8 | [4] | 38 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 173 | [6] | 931 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | [4] | (2) | |||
Derivative Liability, Fair Value, Gross Liability | (220) | [6] | (774) | [7] | |
Swap | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 0 | [6] | 0 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | [4] | 0 | |||
Derivative Liability, Fair Value, Gross Liability | 0 | [6] | 0 | [7] | |
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 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 0 | [6] | 0 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [5] | |
Derivative Liability, Fair Value, Gross Liability | 0 | [6] | 0 | [7] | |
Options Held | Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | 0 | [4] | 0 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 0 | [6] | 0 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | 0 | [4] | 0 | [5] | |
Derivative Liability, Fair Value, Gross Liability | 0 | [6] | 0 | [7] | |
Options Held | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | 16 | [4] | 10 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 400 | [6] | 956 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | (5) | [4] | (26) | [5] | |
Derivative Liability, Fair Value, Gross Liability | (1,092) | [6] | (2,616) | [7] | |
Estimate of Fair Value Measurement [Member] | Fair Value, Measurements, Recurring | |||||
Assets | |||||
Treasury bills | 1,198 | 1,248 | |||
Interest rate derivatives (see Note 3) | 13 | 2 | |||
Fuel derivatives: | |||||
Other available for sale securities | 96 | 93 | |||
Total assets | 4,152 | 5,081 | |||
Liabilities | |||||
Interest rate derivatives (see Note 3) | (36) | (49) | |||
Total Liabilities | (1,355) | (3,465) | |||
Estimate of Fair Value Measurement [Member] | Cash Equivalents | Fair Value, Measurements, Recurring | |||||
Assets | |||||
Cash equivalents | 1,706 | [2] | 1,337 | [3] | |
Estimate of Fair Value Measurement [Member] | Commercial paper | Fair Value, Measurements, Recurring | |||||
Assets | |||||
Cash equivalents | 250 | 200 | |||
Estimate of Fair Value Measurement [Member] | Certificates of deposit | Fair Value, Measurements, Recurring | |||||
Assets | |||||
Cash equivalents | 10 | 13 | |||
Estimate of Fair Value Measurement [Member] | Eurodollar time deposits | Fair Value, Measurements, Recurring | |||||
Assets | |||||
Cash equivalents | 33 | ||||
Estimate of Fair Value Measurement [Member] | Certificates of deposit | Fair Value, Measurements, Recurring | |||||
Assets | |||||
Investments | 282 | 220 | |||
Estimate of Fair Value Measurement [Member] | Swap | Fair Value, Measurements, Recurring | |||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | 8 | [4] | 38 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 173 | [6] | 931 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | [4] | (2) | |||
Derivative Liability, Fair Value, Gross Liability | (220) | [6] | (774) | [7] | |
Estimate of Fair Value Measurement [Member] | Options Held | Fair Value, Measurements, Recurring | |||||
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Asset | 16 | [4] | 10 | [5] | |
Derivative Liability, Fair Value, Gross Asset | 400 | [6] | 956 | [7] | |
Fuel derivatives: | |||||
Derivative Asset, Fair Value, Gross Liability | (5) | [4] | (26) | [5] | |
Derivative Liability, Fair Value, Gross Liability | $ (1,092) | [6] | $ (2,616) | [7] | |
[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] | Cash equivalents are primarily composed of money market investments. | ||||
[4] | In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. See Note 3. | ||||
[5] | In the unaudited Consolidated Balance Sheet amounts are presented as a net asset. See Note 3. | ||||
[6] | In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net liability. See Note 3. | ||||
[7] | In the unaudited Consolidated Balance Sheet amounts are presented as a net liability. See Note 3. |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Assets and Liabilities Measured on Recurring Basis with Unobservable Inputs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | ||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Beginning Balance | $ 881 | $ 1,649 | |
Total gains or (losses) (realized or unrealized) | |||
Included in earnings | 46 | (128) | |
Included in other comprehensive income | (28) | 106 | |
Purchases | 61 | 191 | |
Sales | (17) | (74) | |
Settlements | (246) | (633) | |
September 30, 2016 | 665 | 665 | |
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016 | (20) | 95 | |
Fuel derivatives | |||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Beginning Balance | 907 | 1,676 | |
Total gains or (losses) (realized or unrealized) | |||
Included in earnings | 46 | (128) | |
Included in other comprehensive income | (31) | 104 | |
Purchases | [1] | 61 | 191 |
Sales | [1] | (4) | (61) |
Settlements | (246) | (633) | |
September 30, 2016 | 681 | 681 | |
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016 | (20) | 95 | |
Other securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 26 | 27 | |
Total gains or (losses) (realized or unrealized) | |||
Included in earnings | 0 | 0 | |
Included in other comprehensive income | 3 | 2 | |
Purchases | 0 | 0 | |
Sales | (13) | (13) | |
Settlements | 0 | 0 | |
September 30, 2016 | 16 | 16 | |
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to option contracts still held at September 30, 2016 | $ 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. |
Fair Value Measurements - Quant
Fair Value Measurements - Quantative Information about Level 3 Fair Value (Details) - Option Model - Implied Volatility - Fuel derivatives | Sep. 30, 2016 |
Fourth Quarter 2016 | |
Quantitative Information About Level 3 | |
Fair Value Measurement Range, Minimum | 20.00% |
Fair Value Measurement Range, Maximum | 35.00% |
2,017 | |
Quantitative Information About Level 3 | |
Fair Value Measurement Range, Minimum | 27.00% |
Fair Value Measurement Range, Maximum | 38.00% |
2,018 | |
Quantitative Information About Level 3 | |
Fair Value Measurement Range, Minimum | 21.00% |
Fair Value Measurement Range, Maximum | 32.00% |
2,019 | |
Quantitative Information About Level 3 | |
Fair Value Measurement Range, Minimum | 13.00% |
Fair Value Measurement Range, Maximum | 26.00% |
Fair Value Instruments - Carryi
Fair Value Instruments - Carrying and Estimated Fair Value of Debt (Details) $ in Millions | Sep. 30, 2016USD ($) |
5.25% Convertible Senior Notes due 2016 | Convertible Debt | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 110 |
Stated interest rate | 5.25% |
5.75% Notes due 2016 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 302 |
Stated interest rate | 5.75% |
5.125% Notes due 2017 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 303 |
Stated interest rate | 5.125% |
French Credit Agreements Due 2018 - 1.96% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 19 |
Stated interest rate | 1.96% |
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 9 |
Stated interest rate | 7.03% |
2.75% Notes Due 2019 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 307 |
Stated interest rate | 2.75% |
Term Loan Agreement due 2019 - 6.315% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 115 |
Stated interest rate | 6.315% |
Term Loan Agreement due 2019 - 4.84% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 28 |
Stated interest rate | 4.84% |
2.65% Notes due 2020 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 507 |
Stated interest rate | 2.65% |
Term Loan Agreement due 2020 - 5.223% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 296 |
Stated interest rate | 5.223% |
Pass Through Certificates due 2022 - 6.24% | Enhanced Equipment Trust Certificate | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 324 |
Stated interest rate | 6.24% |
Floating-rate 737 Aircraft Notes payable through 2020 | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 217 |
Term Loan Agreement Due 2021 - 7.94% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 20 |
Stated interest rate | 7.94% |
7.375% Debentures due 2027 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Carrying amount of debt | $ 130 |
Stated interest rate | 7.375% |
Level 2 | 5.25% Convertible Senior Notes due 2016 | Convertible Debt | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | $ 301 |
Level 2 | 5.75% Notes due 2016 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 304 |
Level 2 | 5.125% Notes due 2017 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 308 |
Level 2 | 2.75% Notes Due 2019 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 316 |
Level 2 | 2.65% Notes due 2020 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 521 |
Level 2 | Pass Through Certificates due 2022 - 6.24% | Enhanced Equipment Trust Certificate | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 362 |
Level 2 | 7.375% Debentures due 2027 | Unsecured Debt | |
Debt Instrument [Line Items] | |
Loans Payable, Fair Value | 161 |
Level 3 | French Credit Agreements Due 2018 - 1.96% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 19 |
Level 3 | Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 10 |
Level 3 | Term Loan Agreement due 2019 - 6.315% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Loans Payable, Fair Value | 117 |
Level 3 | Term Loan Agreement due 2019 - 4.84% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Loans Payable, Fair Value | 29 |
Level 3 | Term Loan Agreement due 2020 - 5.223% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Loans Payable, Fair Value | 291 |
Level 3 | Floating-rate 737 Aircraft Notes payable through 2020 | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Notes Payable, Fair Value | 213 |
Level 3 | Term Loan Agreement Due 2021 - 7.94% | Notes Payable to Banks | |
Debt Instrument [Line Items] | |
Loans Payable, Fair Value | $ 22 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | 3 Months Ended |
Sep. 30, 2016USD ($) | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Initiation Date | Aug. 3, 2016 |
Line of Credit Facility, Borrowing Capacity, Description | $ 1,000,000,000 |
Line of Credit Facility, Expiration Date | Aug. 3, 2021 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000,000 |
Debt Instrument, Description of Variable Rate Basis | LIBOR |
Basis Spread on Variable Rate | 1.125% |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | Oct. 31, 2016USD ($)aircraft | Sep. 30, 2016 |
Subsequent Event [Line Items] | ||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |
Basis Spread on Variable Rate | 1.125% | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |
Stated interest rate | 2.359% | |
Secured Debt due 2026 | $ | $ 215 | |
Number of Mortgages on Secured Aircraft | aircraft | 7 | |
Basis Spread on Variable Rate | 1.10% |