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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2013
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013, and December 31, 2012:

 
 
 
 
Fair value measurements at reporting date using:
 
 
 
 
Quoted prices in
active markets
for identical assets
 
Significant
other observable
inputs
 
Significant
unobservable
inputs
Description
 
December 31, 2013
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
(in millions)
Cash equivalents
 
 
 
 
 
 
 
 
Cash equivalents (a)
 
$
992

 
$
992

 
$
—

 
$
—

Commercial paper
 
280

 
—

 
280

 
—

Certificates of deposit
 
23

 
—

 
23

 
—

Eurodollar Time Deposits
 
60

 
—

 
60

 
—

Short-term investments:
 
 
 
 
 
 
 
 
Treasury bills
 
1,570

 
1,570

 
—

 
—

Certificates of deposit
 
227

 
—

 
227

 
—

Noncurrent investments (b)
 
 
 
 
 
 
 
 
Auction rate securities
 
39

 
—

 
—

 
39

Interest rate derivatives (see Note 10)
 
20

 
—

 
20

 
—

Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (c)
 
16

 
—

 
16

 
—

Option contracts (c)
 
458

 
—

 
—

 
458

Option contracts (d)
 
9

 
—

 
—

 
9

Other available-for-sale securities
 
63

 
58

 
—

 
5

Total assets
 
$
3,757

 
$
2,620

 
$
626

 
$
511

Liabilities
 
 
 
 
 
 
 
 
Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (c)
 
$
(8
)
 
$
—

 
$
(8
)
 
$
—

Option contracts (c)
 
(274
)
 
—

 
—

 
(274
)
Option contracts (d)
 
(21
)
 
—

 
—

 
(21
)
Interest rate derivatives (see Note 10)
 
(77
)
 
—

 
(77
)
 
—

Deferred compensation
 
(158
)
 
(158
)
 
—

 
—

Total liabilities
 
$
(538
)
 
$
(158
)
 
$
(85
)
 
$
(295
)

(a) Cash equivalents are primarily composed of money market investments.
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet.
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10.
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10.

 
 
 
 
Fair value measurements at reporting date using:
 
 
 
 
Quoted prices in
active markets
for identical assets
 
Significant
other observable
inputs
 
Significant
unobservable
inputs
Description
 
December 31, 2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
(in millions)
Cash equivalents
 
 
 
 
 
 
 
 
Cash equivalents (a)
 
$
829

 
$
829

 
$
—

 
$
—

Commercial paper
 
170

 
—

 
170

 
—

Certificates of deposit
 
34

 
—

 
34

 
—

Eurodollar Time Deposits
 
80

 
—

 
80

 
—

Short-term investments:
 
 
 
 
 
 
 
 
Treasury bills
 
1,624

 
1,624

 
—

 
—

Certificates of deposit
 
233

 
—

 
233

 
—

Noncurrent investments (b)
 
 
 
 
 
 
 
 
Auction rate securities
 
36

 
—

 
—

 
36

Interest rate derivatives (see Note 10)
 
31

 
—

 
31

 
—

Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (c)
 
113

 
—

 
113

 
—

Option contracts (c)
 
850

 
—

 
—

 
850

Option contracts (d)
 
10

 
—

 
—

 
10

Other available-for-sale securities
 
49

 
44

 
—

 
5

Total assets
 
$
4,059

 
$
2,497

 
$
661

 
$
901

Liabilities
 
 
 
 
 
 
 
 
Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (c)
 
$
(57
)
 
$
—

 
$
(57
)
 
$
—

Option contracts (c)
 
(637
)
 
—

 
—

 
(637
)
Swap contracts (d)
 
(56
)
 
—

 
(56
)
 
—

Option contracts (d)
 
(4
)
 
—

 
—

 
(4
)
Interest rate derivatives (see Note 10)
 
(126
)
 
—

 
(126
)
 
—

Deferred Compensation
 
(137
)
 
(137
)
 
—

 
—

Total liabilities
 
$
(1,017
)
 
$
(137
)
 
$
(239
)
 
$
(641
)

(a) Cash equivalents are primarily composed of money market investments.
(b) Noncurrent investments are included in Other assets in the Consolidated Balance Sheet.
(c) In the Consolidated Balance Sheet amounts are presented as a net asset. See Note 10.
(d) In the Consolidated Balance Sheet amounts are presented as a net liability. See Note 10.
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation

 
Fair value measurements using significant
unobservable inputs (Level 3)
 
Fuel
 
Auction rate
 
Other
 
 
(in millions)
derivatives
 
securities
 
securities
 
Total
Balance at December 31, 2012
$
219


$
36

 
$
5


$
260

Total gains or (losses) (realized or unrealized)
 

 
 

 
 

 
 

Included in earnings
71

 
—

 
—

 
71

Included in other comprehensive income
(107
)
 
3

 
—

 
(104
)
Purchases
357

(a)
—

 
—

 
357

Sales
(417
)
(a)
—

 
—

 
(417
)
Settlements
49

 
—

 
—

 
49

Balance at December 31, 2013
$
172

 
$
39

(b)
$
5

 
$
216

The amount of total gains for the period
  included in earnings attributable to the
  change in unrealized gains or losses relating
  to assets still held at December 31, 2013
$
86

 
$
—

 
$
—

 
$
86


(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments.
(b) Included in Other assets in the Consolidated Balance Sheet.

 
Fair value measurements using significant
unobservable inputs (Level 3)
 
Fuel
 
Auction rate
 
Other
 
 
(in millions)
derivatives
 
securities
 
securities
 
Total
Balance at December 31, 2011
$
417

 
$
67

 
$
5

 
$
489

Total gains or (losses) (realized or unrealized)
 

 
 

 
 

 
 

Included in earnings
(62
)
 
—

 
—

 
(62
)
Included in other comprehensive income
22

 
—

 
—

 
22

Purchases
1,003

(a)
—

 
—

 
1,003

Sales
(1,081
)
(a)
(31
)
 
—

 
(1,112
)
Settlements
(80
)
 
—

 
—

 
(80
)
Balance at December 31, 2012
$
219


$
36

(b)
$
5


$
260

The amount of total gains for the period
  included in earnings attributable to the
  change in unrealized gains or losses relating
  to assets still held at December 31, 2012
$
27

 
$
—

 
$
—

 
$
27


(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and
whether a contract with multiple derivatives is purchased as a single instrument or separate instruments.
(b) Included in Other assets in the Consolidated Balance Sheet.
Fair Value Valuation Techniques
The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s assets and liabilities classified as Level 3 at December 31, 2013:

Quantitative information about Level 3 fair value measurements
 
Valuation technique
Unobservable input
Period (by year)
Range
Fuel derivatives
Option model
Implied volatility
2014
9-25%
 
 
 
2015
13-23%
 
 
 
2016
13-20%
 
 
 
2017
13-17%
Auction rate securities
Discounted cash flow
Time to principal recovery
 
5-8 years
 
 
Illiquidity premium
 
3-4%
 
 
Counterparty credit spread
 
1-3%
Fair value, by Balance Sheet Grouping
(in millions)
 Carrying value
 
Estimated fair value
 
Fair value level hierarchy
5.25% Notes due 2014
$
357

 
$
362

 
Level 2
5.75% Notes due 2016
320

 
354

 
Level 2
5.25% Convertible Senior Notes due 2016
115

 
178

 
Level 2
5.125% Notes due 2017
322

 
346

 
Level 2
Fixed-rate 717 Aircraft Notes payable through 2017 - 10.37%
41

 
39

 
Level 2
French Credit Agreements due 2018 - 1.05%
46

 
46

 
Level 3
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02%
30

 
31

 
Level 3
Term Loan Agreement due 2019 - 6.315%
210

 
213

 
Level 3
Term Loan Agreement due 2019 - 6.84%
85

 
90

 
Level 3
Term Loan Agreement due 2020 - 5.223%
413

 
388

 
Level 3
Floating-rate 737 Aircraft Notes payable through 2020
340

 
335

 
Level 3
Pass Through Certificates due 2022 - 6.24%
371

 
418

 
Level 2
7.375% Debentures due 2027
136

 
146

 
Level 2