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Oil Refinery (Notes)
 9 Months Ended
Sep. 30, 2013
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
OIL REFINERY

Fuel expense is our single largest expense. Prior to our acquisition of an oil refinery, global demand for jet fuel and related products had increased while jet fuel refining capacity had decreased in the U.S. (particularly in the Northeast), resulting in increases in the refining margin reflected in the prices we paid for jet fuel. In June 2012, we purchased an oil refinery as part of our strategy to mitigate the increasing cost of the refining margin we pay.

Refinery Operations and Strategic Agreements

The refinery's production consists of jet fuel, as well as gasoline, diesel and other refined products ("non-jet fuel products"). Under a multi-year agreement, we are exchanging a significant portion of the non-jet fuel products with Phillips 66 for jet fuel to be used in our airline operations. In addition, we are selling most of the remaining production of non-jet fuel products to BP under a long-term buy/sell agreement, effectively exchanging those non-jet fuel products for jet fuel. Substantially all of the refinery's production of non-jet fuel products is included in these agreements. The gross fair value of the products exchanged under these agreements during the three and nine months ended September 30, 2013 was $1.5 billion and $4.2 billion, respectively.
Segment Reporting

Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.
(in millions)
Airline
Refinery
 
Intersegment Sales/ Other
 
Consolidated
Three Months Ended September 30, 2013
 
 
 
 
 
 
Operating revenue:
$
10,490

$
1,892

 
 
 
$
10,490

Sales to airline segment
 
 
 
$
(320
)
(1) 
 
Exchanged products
 
 
 
(1,504
)
(2) 
 
Sales of refined products to third parties
 
 
 
(68
)
(3) 
 
Operating income(4)
1,560

3

 
 
 
1,563

Interest expense, net
176

—

 
 
 
176

Depreciation and amortization expense
413

5

 
 
 
418

Total assets, end of period
44,823

1,174

 
 
 
45,997

Capital expenditures
618

13

 
 
 
631

Nine Months Ended September 30, 2013
 
 
 
 
 
 
Operating revenue:
$
28,697

$
5,487

 
 
 
$
28,697

Sales to airline segment
 
 
 
$
(927
)
(1) 
 
Exchanged products
 
 
 
(4,172
)
(2) 
 
Sales of refined products to third parties
 
 
 
(388
)
(3) 
 
Operating income (loss)(4)
2,769

(70
)
 
 
 
2,699

Interest expense, net
526

—

 
 
 
526

Depreciation and amortization expense
1,225

13

 
 
 
1,238

Capital expenditures
1,591

25

 
 
 
1,616


(1) 
Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location for jet fuel from the refinery, which is New York Harbor.
(2) 
Represents value of products exchanged under our buy/sell agreements, as discussed above, determined on a market price basis.
(3) 
Represents sales of refined products to third parties. These sales were at or near cost; accordingly, the margin on these sales is de minimis.
(4) 
Includes allocations of $36 million of gains in the three months ended September 30, 2013 and $8 million of losses for the nine months ended September 30, 2013 from the refinery segment to the airline segment, representing a portion of the refinery's inventory price risk.