Segments

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segments

SEGMENTS

Refinery Operations

Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three and six months ended June 30, 2018 was $1.1 billion and $2.0 billion, respectively, compared to $756 million and $1.5 billion, respectively, for the three and six months ended June 30, 2017.

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 June 30, 2018
Operating revenue:	$	11,559	$	1,667						$	11,775
Sales to airline segment						$	(275	)	(1)
Exchanged products						(1,096		)	(2)
Sales of refined products						(80		)	(3)
Operating income	1,635		45			—				1,680
Interest expense (income), net	97		(8		)	—				89
Depreciation and amortization	573		17			—				590
Total assets, end of period	53,335		2,461			—				55,796
Capital expenditures	1,567		13			—				1,580
Three Months Ended June 30, 2017
Operating revenue:	$	10,680	$	1,139						$	10,747
Sales to airline segment						$	(193	)	(1)
Exchanged products						(756		)	(2)
Sales of refined products						(123		)	(3)
Operating income	1,976		6			—				1,982
Interest expense, net	103		—			—				103
Depreciation and amortization	520		11			—				531
Total assets, end of period	50,964		1,487			—				52,451
Capital expenditures	928		60			—				988

⁽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, which is New York Harbor, for jet fuel from the refinery.

⁽²⁾  Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

⁽³⁾  These sales were at or near cost; accordingly, the margin on these sales is de minimis.

(in millions)	Airline		Refinery			Intersegment Sales/Other				Consolidated
Six Months Ended June 30, 2018
Operating revenue:	$	21,314	$	3,158						$	21,743
Sales to airline segment						$	(537	)	(1)
Exchanged products						(1,972		)	(2)
Sales of refined products						(220		)	(3)
Operating income	2,431		89			—				2,520
Interest expense (income), net	203		(12		)	—				191
Depreciation and amortization	1,168		32			—				1,200
Capital expenditures	2,818		28			—				2,846
Six Months Ended June 30, 2017
Operating revenue:	$	19,720	$	2,267						$	19,848
Sales to airline segment						$	(383	)	(1)
Exchanged products						(1,489		)	(2)
Sales of refined products						(267		)	(3)
Operating income	2,931		50			—				2,981
Interest expense, net	197		—			—				197
Depreciation and amortization	1,047		21			—				1,068
Capital expenditures	1,704		86			—				1,790

⁽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, which is New York Harbor, for jet fuel from the refinery.

⁽²⁾  Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis.

⁽³⁾ 

These sales were at or near cost; accordingly, the margin on these sales is de minimis.