Segments

9 Months Ended

Sep. 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 nine months ended September 30, 2018 was $1.1 billion and $3.1 billion, respectively, compared to $910 million and $2.4 billion, respectively, for the three and nine months ended September 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 September 30, 2018
Operating revenue:	$	11,845	$	1,609						$	11,953
Sales to airline segment						$	(328	)	(1)
Exchanged products						(1,110		)	(2)
Sales of refined products						(63		)	(3)
Operating income	1,630		12			—				1,642
Interest expense (income), net	94		(10		)	—				84
Depreciation and amortization	564		16			—				580
Total assets, end of period	53,103		1,900			—				55,003
Capital expenditures	928		39			—				967
Three Months Ended September 30, 2017
Operating revenue:	$	10,932	$	1,357						$	11,061
Sales to airline segment						$	(239	)	(1)
Exchanged products						(910		)	(2)
Sales of refined products						(79		)	(3)
Operating income	1,786		37			—				1,823
Interest expense, net	100		—			—				100
Depreciation and amortization	560		11			—				571
Total assets, end of period	50,639		1,936			—				52,575
Capital expenditures	901		40			—				941

⁽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
Nine Months Ended September 30, 2018
Operating revenue:	$	33,159	$	4,767						$	33,696
Sales to airline segment						$	(866	)	(1)
Exchanged products						(3,081		)	(2)
Sales of refined products						(283		)	(3)
Operating income	4,060		101			—				4,161
Interest expense (income), net	297		(23		)	—				274
Depreciation and amortization	1,732		48			—				1,780
Capital expenditures	3,746		67			—				3,813
Nine Months Ended September 30, 2017
Operating revenue:	$	30,653	$	3,624						$	30,910
Sales to airline segment						$	(622	)	(1)
Exchanged products						(2,399		)	(2)
Sales of refined products						(346		)	(3)
Operating income	4,718		87			—				4,805
Interest expense, net	297		—			—				297
Depreciation and amortization	1,607		32			—				1,639
Capital expenditures	2,605		126			—				2,731

⁽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.