Financial Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table provides information about the Company’s volume of fuel hedging for the years 2016 through 2018 on an “economic” basis considering current market prices:



	Fuel hedged as of
	December 31, 2015	Derivative underlying commodity type as of
Period (by year)	(gallons in millions) (a)	December 31, 2015
2016	1,226	Brent crude oil, Heating oil, and Gulf Coast jet fuel
2017	1,503	WTI crude and Brent crude oil
2018	731	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 hedging instruments within the Consolidated Balance Sheet:



		Asset derivatives				Liability derivatives
	Balance Sheet	Fair value at		Fair value at		Fair value at		Fair value at
(in millions)	location	12/31/2015		12/31/2014		12/31/2015		12/31/2014
Derivatives designated as hedges*
Fuel derivative contracts (gross)	Prepaid expenses and other current assets	$	2	$	—	$	—	$	—
Fuel derivative contracts (gross)	Other assets	2		—		—		—
Fuel derivative contracts (gross)	Accrued liabilities	107		—		526		—
Fuel derivative contracts (gross)	Other noncurrent liabilities	55		—		658		643
Interest rate derivative contracts	Other assets	2		13		—		—
Interest rate derivative contracts	Other noncurrent liabilities	—		—		49		61
Total derivatives designated as hedges		$	168	$	13	$	1,233	$	704
Derivatives not designated as hedges*
Fuel derivative contracts (gross)	Prepaid expenses and other current assets	$	39	$	—	$	26	$	—
Fuel derivative contracts (gross)	Other assets	5		—		—		—
Fuel derivative contracts (gross)	Accrued liabilities	1,395		1,190		1,854		1,432
Fuel derivative contracts (gross)	Other noncurrent liabilities	330		157		352		273
Total derivatives not designated as hedges		$	1,769	$	1,347	$	2,232	$	1,705
Total derivatives		$	1,937	$	1,360	$	3,465	$	2,409

* 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 also had the following amounts associated with fuel derivative instruments and hedging activities in its Consolidated Balance Sheet:



	Balance Sheet	December 31,		December 31,
(in millions)	location	2015		2014
Cash collateral deposits provided to counterparties for fuel contracts - current	Offset against Accrued liabilities	$	235	$	68
Cash collateral deposits provided to counterparties for fuel contracts- noncurrent	Offset against Other noncurrent liabilities	600		198
Due to third parties for fuel contracts	Accrued liabilities	46		16

Offsetting Assets

The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting:



Offsetting of derivative assets
(in millions)
		(i)		(ii)			(iii) = (i) + (ii)		(i)		(ii)			(iii) = (i) + (ii)
		December 31, 2015							December 31, 2014
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	$	41	$	(26	)	$	15	$	—	$	—		$	—
Fuel derivative contracts	Other assets	$	7	$	—		$	7	$	—	$	—		$	—
Fuel derivative contracts	Accrued liabilities	$	1,737	$	(1,737	)	$	—	$	1,258	$	(1,258	)	$	—
Fuel derivative contracts	Other noncurrent liabilities	$	985	$	(985	)	$	—	$	355	$	(355	)	$	—
Interest rate derivative contracts	Other assets	$	2	$	—		$	2	$	13	$	—		$	13

(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5.

Offsetting Liabilities





		(i)		(ii)			(iii) = (i) + (ii)		(i)		(ii)			(iii) = (i) + (ii)
		December 31, 2015							December 31, 2014
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	$	26	$	(26	)	$	—	$	—	$	—		$	—
Fuel derivative contracts	Accrued liabilities	$	2,380	$	(1,737	)	$	643	$	1,432	$	(1,258	)	$	174
Fuel derivative contracts	Other noncurrent liabilities	$	1,010	$	(985	)	$	25	$	916	$	(355	)	$	561
Interest rate derivative contracts	Other noncurrent liabilities	$	49	$	—		$	49	$	61	$	—		$	61

(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the Consolidated Balance Sheet in Note 5.

Derivatives in Cash Flow Hedging Relationships

The following tables present the impact of derivative instruments and their location within the Consolidated Statement of Income for the year ended December 31, 2015 and 2014:



Derivatives in cash flow hedging relationships
	(Gain) loss recognized in AOCI on derivatives (effective portion)						(Gain) loss reclassified from AOCI into income (effective portion)(a)						(Gain) loss recognized in income on derivatives (ineffective portion)(b)
	Year ended						Year ended						Year ended
	December 31,						December 31,						December 31,
(in millions)	2015			2014			2015			2014			2015			2014
Fuel derivative contracts	$	546	*	$	749	*	$	238	*	$	22	*	$	(9	)	$	7
Interest rate derivatives	4		*	6		*	13		*	14		*	(4		)	(4		)
Total	$	550		$	755		$	251		$	36		$	(13	)	$	3

*Net of tax

(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.

(b) Amounts are included in Other (gains) losses, net.

Derivatives Not in Cash Flow Hedging Relationships



Derivatives not in cash flow hedging relationships
	(Gain) loss
	recognized in income on
	derivatives
	Year ended				Location of (gain) loss
	December 31,				recognized in income
(in millions)	2015		2014		on derivatives
Fuel derivative contracts	$	444	$	244	Other (gains) losses, net

Fair Values of Fuel Derivatives, Amounts Posted as Collateral, and Collateral Posting Threshold Amounts

The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of December 31, 2015, at which such postings are triggered:



	Counterparty (CP)
(in millions)	A			B			C			D			E			F		Other(a)		Total
Fair value of fuel derivatives	$	(562	)	$	(201	)	$	(176	)	$	(411	)	$	(159	)	$	20	$	8	$	(1,481	)
Cash collateral held (by) CP	(284		)	(159		)	(56		)	(299		)	(37		)	—		—		(835		)
Aircraft collateral pledged to CP	(250		)	—			—			—			—			—		—		(250		)
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			>150			>175(c)			>250			>75			>0
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 <$10 million.

(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

(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 requirement.