Financial Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The following table provides information about the Company’s volume of fuel hedging for the years 2014 through 2017 on an “economic” basis considering current market prices:



	Fuel hedged as of
	December 31, 2013	Derivative underlying commodity type as of
Period (by year)	(gallons in millions)(a)	December 31, 2013
2014	764	WTI crude, Brent crude oil, GC Jet Fuel
2015	1,156	WTI crude and Brent crude oil
2016	977	Brent crude oil
2017	933	WTI crude and Brent crude oil

(a) The Company determines gallons hedged based on market prices and forward curves as of December 31, 2013. Due to the types of derivatives utilized by the Company, these volumes may vary significantly as market prices fluctuate.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value



		Asset derivatives				Liability derivatives
	Balance Sheet	Fair value at		Fair value at		Fair value at		Fair value at
(in millions)	location	12/31/2013		12/31/2012		12/31/2013		12/31/2012
Derivatives designated as hedges*
Fuel derivative contracts (gross)	Prepaid expenses and other current assets	$	74	$	—	$	—	$	—
Fuel derivative contracts (gross)	Other assets	209		355		1		16
Fuel derivative contracts (gross)	Accrued liabilities	—		—		—		—
Fuel derivative contracts (gross)	Other noncurrent liabilities	—		—		—		—
Interest rate derivative contracts	Other assets	20		31		—		—
Interest rate derivative contracts	Accrued liabilities	—		—		—		—
Interest rate derivative contracts	Other noncurrent liabilities	—		—		77		126
Total derivatives designated as hedges		$	303	$	386	$	78	$	142
Derivatives not designated as hedges*
Fuel derivative contracts (gross)	Prepaid expenses and other current assets	$	175	$	375	$	182	$	327
Fuel derivative contracts (gross)	Other assets	16		233		99		351
Fuel derivative contracts (gross)	Accrued liabilities	9		10		21		60
Fuel derivative contracts (gross)	Other noncurrent liabilities	—		—		—		—
Total derivatives not designated as hedges		$	200	$	618	$	302	$	738
Total derivatives		$	503	$	1,004	$	380	$	880

* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note.

Cash Collateral Deposits Due To Or From Third Parties and Net Unrealized Losses



	Balance Sheet	December 31,	December 31,
(in millions)	location	2013	2012
Cash collateral deposits provided to counterparties for interest rate contracts - noncurrent	Offset against Other noncurrent liabilities	32	89
Receivable from third parties for fuel contracts - current	Accounts and other receivables	57	—
Receivable from third parties for fuel contracts - noncurrent	Other assets	—	54
Prepaid settlements for fuel contracts - current	Prepaid expenses and other current assets	—	15

Offsetting Assets

The Company has the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting:



Offsetting of derivative assets
(in millions)
		(i)		(ii)			(iii) = (i) + (ii)			(i)		(ii)			(iii) = (i) + (ii)
		December 31, 2013								December 31, 2012
Description	Balance Sheet location	Gross amounts of recognized assets		Gross amounts offset in the Balance Sheet			Net amounts of assets presented in the Balance Sheet			Gross amounts of recognized assets		Gross amounts offset in the Balance Sheet			Net amounts of assets presented in the Balance Sheet
Fuel derivative contracts	Prepaid expenses and other current assets	$	249	$	(182	)	$	67	(a)	$	375	$	(327	)	$	48	(a)
Fuel derivative contracts	Other assets	$	225	$	(100	)	$	125		$	588	$	(367	)	$	221
Fuel derivative contracts	Accrued liabilities	$	9	$	(9	)	$	—		$	10	$	(10	)	$	—
Fuel derivative contracts	Other noncurrent liabilities	$	—	$	—		$	—		$	—	$	—		$	—
Interest rate derivative contracts	Other assets	$	20	$	—		$	20		$	31	$	—		$	31

(a) Amounts included in Prepaid expenses and other current assets.

Offsetting Liabilities



Offsetting of derivative liabilities
(in millions)
		(i)		(ii)			(iii) = (i) + (ii)		(i)		(ii)			(iii) = (i) + (ii)
		December 31, 2013							December 31, 2012
Description	Balance Sheet location	Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheet			Net amounts of liabilities presented in the Balance Sheet		Gross amounts of recognized liabilities		Gross amounts offset in the Balance Sheet			Net amounts of liabilities presented in the Balance Sheet
Fuel derivative contracts	Prepaid expenses and other current assets	$	182	$	(182	)	$	—	$	327	$	(327	)	$	—
Fuel derivative contracts	Other assets	$	100	$	(100	)	$	—	$	367	$	(367	)	$	—
Fuel derivative contracts	Accrued liabilities	$	21	$	(9	)	$	12	$	60	$	(10	)	$	50
Fuel derivative contracts	Other noncurrent liabilities	$	—	$	—		$	—	$	—	$	—		$	—
Interest rate derivative contracts	Other noncurrent liabilities	$	77	$	(32	)	$	45	$	126	$	(89	)	$	37

Derivatives in Cash Flow Hedging Relationships

The following tables present the impact of derivative instruments and their location within the Consolidated Statement of Income for the year ended December 31, 2013 and 2012:



Derivatives in cash flow hedging relationships
	(Gain) loss recognized in AOCI on derivatives (effective portion)								(Gain) loss reclassified from AOCI into income (effective portion)(a)							(Gain) loss recognized in income on derivatives (ineffective portion)(b)
	Year ended								Year ended							Year ended
	December 31,								December 31,							December 31,
(in millions)	2013				2012				2013			2012				2013		2012
Fuel derivative contracts	$	52		*	$	(19	)	*	$	103	*	$	101		*	$	10	$	43
Interest rate derivatives	(14		)	*	17			*	18		*	(16		)	*	1		—
Total	$	38			$	(2	)		$	121		$	85			$	11	$	43

*Net of tax

(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.

(b) Amounts are included in Other (gains) losses, net.

Derivatives Not in Cash Flow Hedging Relationships



Derivatives not in cash flow hedging relationships
	(Gain) loss
	recognized in income on
	derivatives
	Year ended						Location of (gain) loss
	December 31,						recognized in income
(in millions)	2013			2012			on derivatives
Fuel derivative contracts	$	(100	)	$	(264	)	Other (gains) losses, net

Fair Values of Fuel Derivatives, Amounts Posted as Collateral, and Collateral Posting Threshold Amounts

The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of December 31, 2013, at which such postings are triggered:

Counterparty (CP)

(in millions)

Other(a)

Total

Fair value of fuel derivatives

180

Cash collateral held (by) CP

—

Aircraft collateral pledged to CP

—

Letters of credit (LC)

—

Option to substitute LC for aircraft

(250) to (650)(d)

(100) to (500)(d)

N/A

(250) to (650) (d)

N/A

Option to substitute LC for cash

N/A

>(500)

(100) to (150)(e)

(50) to (250) or >(650)(d)

N/A

If credit rating is investment

grade, fair value of fuel

derivative level at which:

Cash is provided to CP

(50) to (250) or >(650)

(50) to (100) or >(500)

>(50)

(50) to (250) or >(650)

>(50)

Cash is received from CP

>50

>150

>175(c)

>200

>30

Aircraft or cash can be pledged to

CP as collateral

(250) to (650)(d)

(100) to (500) (d)

N/A

(250) to (650) (d)

N/A

If credit rating is non-investment

grade, fair value of fuel derivative

level at which:

Cash is provided to CP

(0) to (250) or >(650)

(0) to (100) or >(500)

(b)

(0) to (250) or >(650)

(b)

Cash is received from CP

(b)

Aircraft can be pledged to CP as

collateral

(250) to (650)

(100) to (500)

N/A

(250) to (650)

N/A

(a) Individual counterparties with fair value of fuel derivatives <$20 million.

(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

(d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral. No cash, letters of credit, or aircraft were pledged as collateral with such counterparties as of December 31, 2013.

(e) The Company has the option of providing cash or letters of credit as collateral. No cash or letters of credit were pledged as collateral with such counterparties as of December 31, 2013.