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Long-Term Debt
 12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Long-Term Debt LONG-TERM DEBT

The following table summarizes our long-term debt:
 
Maturity
Interest Rate(s) Per Annum at
December 31,
(in millions)
Dates
December 31, 2017
2017
2016
Pacific Facilities(1):
 
 
 
 
 
 
 
 
Pacific Term Loan B-1(2)
October 2018
3.99%
variable(4)
$
1,048

$
1,059

Pacific Revolving Credit Facility
October 2018
undrawn
variable(4)
—

—

2015 Credit Facilities(1):
 
 
 
 
 
 
 
 
Term Loan Facility(2)
August 2022
4.07%
variable(4)
490

495

Revolving Credit Facility
August 2020
undrawn
variable(4)
—

—

Financing arrangements secured by aircraft:
 
 

 
 
 
 
 
Certificates(3)
2018
to
2027
3.63%
to
8.02%
2,380

2,777

Notes(3)
2018
to
2027
1.81%
to
6.76%
1,961

2,488

Unsecured notes(5)
2020
to
2022
2.60%
to
3.63%
2,450

—

Other financings(3)(6)
2019
to
2030
0.00%
to
8.75%
210

293

Other revolving credit facilities(1)
2018
to
2019
undrawn
variable(4)
—

—

Total secured and unsecured debt
 
 
 
 
 
 
8,539

7,112

Unamortized discount and debt issue cost, net
 
 
 
 
 
 
(99
)
(104
)
Total debt
 
 
 
 
 
 
8,440

7,008

Less: current maturities
 
 
 
 
 
 
(2,145
)
(1,009
)
Total long-term debt
 
 
 
 
 
 
$
6,295

$
5,999

 
(1) 
Guaranteed by substantially all of our domestic subsidiaries (the "Guarantors").
(2) 
Borrowings must be repaid annually in an amount equal to 1% per year of the original principal amount (paid in equal quarterly installments), with the balance due on the final maturity date.
(3) 
Due in installments.
(4) 
Interest rate equal to LIBOR (generally subject to a floor) or another index rate, in each case plus a specified margin. Additionally, certain aircraft and other financings are comprised of variable rate debt.
(5) 
Includes notes issued in March and December 2017.
(6) 
Primarily includes unsecured bonds and debt secured by certain accounts receivable and real estate.

Unsecured Debt Offerings

During the March 2017 quarter, we issued $2.0 billion in aggregate principal amount of unsecured notes, consisting of $1.0 billion of 2.875% Notes due 2020 and $1.0 billion of 3.625% Notes due 2022. During the December 2017 quarter, we issued $450 million in aggregate principal amount of 2.600% Notes due 2020 (collectively, the "Notes"). The Notes are equal in priority with all of our other unsubordinated indebtedness and senior in priority to all of our future subordinated debt.
The Notes are subject to covenants that, among other things, limit our ability to incur liens securing indebtedness for borrowed money or capital leases and engage in mergers and consolidations or transfer all or substantially all of our assets, in each case subject to certain exceptions. The Notes are also subject to customary event of default provisions, including cross-defaults to other material indebtedness.
If we experience certain changes of control and a ratings decline on any series of Notes by two of the ratings agencies to a rating below investment grade within a certain period of time following a change of control or public notice of the occurrence of a change of control, we must offer to repurchase such series.

Key Financial Covenants

We were in compliance with the covenants in our financing agreements at December 31, 2017.




Pacific Facilities. Our obligations under the Pacific Facilities are secured by a first lien on our Pacific route authorities and certain related assets. The Pacific Facilities include affirmative, negative and financial covenants that could restrict our ability to, among other things, make investments, sell or otherwise dispose of collateral if we are not in compliance with the collateral coverage ratio tests described below, pay dividends or repurchase stock.
Minimum fixed charge coverage ratio (1)
1.20:1
Minimum unrestricted liquidity
 
Unrestricted cash, permitted investments and undrawn revolving credit facilities
$2.0 billion
Minimum collateral coverage ratio (2)
1.60:1

(1) 
Defined as the ratio of (a) earnings before interest, taxes, depreciation, amortization and aircraft rent and other adjustments to net income to (b) the sum of gross cash interest expense (including the interest portion of our capitalized lease obligations) and cash aircraft rent expense, for the 12-month period ending as of the last day of each fiscal quarter.
(2) 
Defined as the ratio of (a) certain of the collateral that meet specified eligibility standards to (b) the sum of the aggregate outstanding obligations and certain other obligations.

2015 Credit Facilities. Our obligations under the 2015 Credit Facilities are secured by liens on certain of our and the Guarantors’ assets, including accounts receivable, aircraft, spare engines, non-Pacific international routes, domestic slots and certain investment property. The 2015 Credit Facilities include affirmative, negative and financial covenants that may restrict our ability to, among other things, make investments, sell or otherwise dispose of assets if not in compliance with the collateral coverage ratio tests, pay dividends or repurchase stock. These covenants require us to maintain:
Minimum unrestricted liquidity
 
Unrestricted cash, permitted investments and undrawn revolving credit facilities
$2.0 billion
Minimum collateral coverage ratio(1)
1.60:1
 
(1) 
Defined as the ratio of (a) certain of the collateral that meet specified eligibility standards to (b) the sum of the aggregate outstanding obligations under the 2015 Credit Facilities and certain other obligations.

Under the 2015 Credit Facilities, if the Minimum Collateral Coverage Ratio is not maintained, we must either provide additional collateral to secure our obligations, or we must reduce the secured obligations under the facilities by an amount necessary to maintain compliance with the collateral coverage ratio. The 2015 Credit Facilities contain events of default customary for similar financings, including cross-defaults to other material indebtedness and certain change of control events. Upon the occurrence of an event of default, the outstanding obligations under the 2015 Credit Facilities may be accelerated and become due and payable immediately.

Availability Under Revolving Credit Facilities

The table below shows availability under revolving credit facilities, all of which were undrawn, as of December 31, 2017:
(in millions)
 
Revolving Credit Facility
$
1,500

Pacific Revolving Credit Facility
415

Other revolving credit facilities
535

Total availability under revolving credit facilities
$
2,450


Future Maturities

The following table summarizes scheduled maturities of our debt for the years succeeding December 31, 2017:

(in millions)
Total Debt
 
Amortization of
Debt Discount and Debt Issuance Cost, net
 
 
2018
$
2,183

 
$
(42
)
 
 
2019
1,359

 
(30
)
 
 
2020
1,983

 
(8
)
 
 
2021
345

 
(6
)
 
 
2022
2,009

 
(7
)
 
 
Thereafter
660

 
(6
)
 
 
Total
$
8,539

 
$
(99
)
 
$
8,440


Fair Value of Debt

Market risk associated with our fixed- and variable-rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt, shown below, is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is primarily classified as Level 2 within the fair value hierarchy.
 
December 31,
(in millions)
2017
2016
Total debt at par value
$
8,539

$
7,112

Unamortized discount and debt issuance cost, net
(99
)
(104
)
Net carrying amount
$
8,440

$
7,008

Fair value
$
8,700

$
7,300