Financial Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Financial Derivative Instruments

Schedule of realized and unrealized gains and losses on fuel derivative contracts recorded as nonoperating income (expense)

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Fuel derivative contracts	(in thousands)
Losses realized at settlement	$	(3,790	)	$	(1,589	)	$	(11,226	)	$	(4,318	)
Reversal of prior period unrealized amounts	4,278			3,050			5,472			2,324
Unrealized gains (losses) on conracts that will settle in future periods	2,048			5,047			(5,177		)	(501		)
Gains (losses) on fuel derivatives recorded as Nonoperating income (expense)	$	2,536		$	6,508		$	(10,931	)	$	(2,495	)

Summary of accounting treatment of derivative contracts

			Classification of Unrealized Gains (Losses)
Derivative Type	Accounting Designation	Classification of Gains and Losses	Effective Portion	Ineffective Portion
Interest rate contracts	Designated as cash flow hedges	Interest expense and amortization of debt discounts and issuance costs	AOCI	Nonoperating income (expense)
Foreign currency exchange contracts	Designated as cash flow hedges	Passenger revenue	AOCI	Nonoperating income (expense)
Fuel hedge contracts	Not designated as hedges	Gains (losses) on fuel derivatives	Change in fair value of hedge is recorded in nonoperating income (expense)
Foreign currency exchange contracts	Not designated as hedges	Nonoperating income (expense), Other	Change in fair value of hedge is recorded in nonoperating income (expense)
Negative arbitrage	Not designated as hedges	Nonoperating income (expense), Other	Change in fair value of derivative is recorded in nonoperating income (expense)

Schedule of fair value of the asset and liability derivatives and net derivative position recorded

Derivative position as of September 30, 2013

	Balance Sheet Location	Notional Amount	Final Maturity Date	Gross fair value of assets		Gross fair value of (liabilities)			Net derivative position
		(in thousands)				(in thousands)
Derivatives designated as hedges
Interest rate derivative	Prepaid expenses and other	$67,000 U.S. dollars	April 2023	$	82	$	—		$	82
	Long-term prepayments and other (1)			375		—			375
Foreign currency derivatives	Prepaid expenses and other	12,036,740 Japanese Yen 9,144,358 Korean Won 71,051 Australian Dollars 8,689 New Zealand Dollars	September 2014	4,372		(2,204		)	2,168
	Other liabilities and deferred credits (2)	1,713,861 Japanese Yen 13,204 Australian Dollars	February 2015	58		(197		)	(139		)
Derivatives not designated as hedges
Foreign currency derivatives	Prepaid expenses and other	6,180 Japanese Yen 58 Australian Dollars	September 2014	426		(274		)	152
Fuel derivative contracts	Prepaid expenses and other	91,350 gallons	September 2014	5,573		(589		)	4,984
	Long-term prepayments and other (3)	9,240 gallons	January 2015	1,144		(147		)	997
Negative arbitrage derivative	Other accrued liabilities	$444,540 U.S. dollars	October 2014	—		(12,250		)	(12,250		)
	Other liabilities and deferred credits (4)			—		(615		)	(615		)

(1) Represents the noncurrent portion of the $67 million interest rate derivative with final maturity in April 2023.

(2) Represents the noncurrent portion of the foreign currency derivatives with final maturities in February 2015.

(3) Represents the noncurrent portion of the fuel derivatives with final maturity in January 2015.

(4) Represents the noncurrent portion of the $445 million negative arbitrage derivative with final maturity in October 2014.

Derivative position as of December 31, 2012

	Balance Sheet Location	Notional Amount	Final Maturity Date	Gross fair value of assets		Gross fair value of (liabilities)			Net derivative position
		(in thousands)				(in thousands)
Derivatives not designated as hedges
Fuel derivative contracts	Prepaid expenses and other	126,924 gallons	June 2014	$	13,094	$	(397	)	$	12,697

Schedule of realized and unrealized gains and losses of derivatives designated as cash flow hedges

	Loss recognized in AOCI on derivatives (effective portion)				(Gain) loss reclassified from AOCI into income (effective portion)					(Gain) loss recognized in nonoperating (income) expense (ineffective portion)
	Three months ended September 30,				Three months ended September 30,					Three months ended September 30,
	2013		2012		2013			2012		2013		2012
Foreign currency derivatives	$	3,960	$	—	$	(3,005	)	$	—	$	—	$	—
Interest rate derivatives	82		—		217			—		—		—

	Gain recognized in AOCI on derivatives (effective portion)					(Gain) loss reclassified from AOCI into income (effective portion)					Gain recognized in nonoperating (income) expense (ineffective portion)
	Nine months ended September 30,					Nine months ended September 30,					Nine months ended September 30,
	2013			2012		2013			2012		2013			2012
Foreign currency derivatives	$	(10,204	)	$	—	$	(6,395	)	$	—	$	(61	)	$	—
Interest rate derivatives	(929		)	—		440			—		—			—