Segments

9 Months Ended

Sep. 30, 2019

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, 2019 was $1.1 billion and $3.0 billion, respectively, compared to $1.1 billion and $3.1 billion for the three and nine months ended September 30, 2018, 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, 2019
Operating revenue:	$	12,554	$	1,505						$	12,560
Sales to airline segment						$	(304	)	(1)
Exchanged products						(1,143		)	(2)
Sales of refined products						(52		)	(3)
Operating income	2,022		49			—				2,071
Interest expense, net	70		—			—				70
Depreciation and amortization	606		25			—				631
Total assets, end of period	61,515		1,704			—				63,219
Capital expenditures	936		10			—				946
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	1,633		12			—				1,645
Interest expense (income), net	84		(11		)	—				73
Depreciation and amortization	557		16			—				573
Total assets, end of period	57,965		1,958			—				59,923
Capital expenditures	923		39			—				962

⁽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, 2019
Operating revenue:	$	35,474	$	4,289						$	35,568
Sales to airline segment						$	(882	)	(1)
Exchanged products						(2,953		)	(2)
Sales of refined products						(360		)	(3)
Operating income	5,167		52			—				5,219
Interest expense (income), net	247		(19		)	—				228
Depreciation and amortization	1,886		74			—				1,960
Capital expenditures	3,836		28			—				3,864
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	4,072		101			—				4,173
Interest expense (income), net	267		(23		)	—				244
Depreciation and amortization	1,711		48			—				1,759
Capital expenditures	3,738		67			—				3,805

⁽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.