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Oil Refinery (Notes)
 3 Months Ended
Mar. 31, 2014
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 uses crude oil purchased from BP under a multi-year agreement. 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 sell non-jet fuel products to BP under a buy/sell agreement, effectively exchanging those non-jet fuel products for jet fuel. The gross fair value of the products exchanged under these agreements during the three months ended March 31, 2014 and 2013 was $1.0 billion and $1.3 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 March 31, 2014
 
 
 
 
 
 
Operating revenue:
$
8,916

$
1,463

 
 
 
$
8,916

Sales to airline segment
 
 
 
$
(249
)
(1) 
 
Exchanged products
 
 
 
(1,003
)
(2) 
 
Sales of refined products to third parties
 
 
 
(211
)
(3) 
 
Operating income (loss)
661

(41
)
 
 
 
620

Interest expense, net
165

—

 
 
 
165

Depreciation and amortization
437

5

 
 
 
442

Total assets, end of period
51,016

1,151

 
 
 
52,167

Capital expenditures
592

22

 
 
 
614

Three Months Ended March 31, 2013
 
 
 
 
 
 
Operating revenue:
$
8,500

$
1,731

 
 
 
$
8,500

Sales to airline segment
 
 
 
$
(292
)
(1) 
 
Exchanged products
 
 
 
(1,321
)
(2) 
 
Sales of refined products to third parties
 
 
 
(118
)
(3) 
 
Operating income (loss)
244

(22
)
 
 
 
222

Interest expense, net
178

—

 
 
 
178

Depreciation and amortization
401

4

 
 
 
405

Total assets, end of period
43,789

1,279

 
 
 
45,068

Capital expenditures
641

6

 
 
 
647


(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 delivered under our strategic 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.