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Financial Derivative Instruments (Tables)
 9 Months Ended
Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Volume of Fuel Hedging
The following table provides information about the Company’s volume of fuel hedging for the years 2015 through 2018 on an “economic” basis:

 
 
Fuel hedged as of
 
 
 
 
September 30, 2015
 
Derivative underlying commodity type as of
Period (by year)
 
(gallons in millions)
 
September 30, 2015
Fourth quarter 2015
 
—

(a)
 
2016
 
1,188

(b)
Brent crude oil, Heating oil, and Gulf Coast jet fuel
2017
 
1,294

(b)
WTI crude and Brent crude oil
2018
 
466

(b)
Brent crude oil

(a) The Company is effectively unhedged for fourth quarter 2015 at current price levels. While the Company still holds derivative contracts as of September 30, 2015, that will settle during fourth quarter 2015, the losses associated with those contracts are substantially locked in. However, if market prices were to increase or decrease significantly related to the fourth quarter 2015 positions prior to these contracts settling, the losses incurred at settlement could be slightly lower or higher than currently expected amounts during that period. 
(b) Due to the types of derivatives and commodities utilized by the Company and different price levels of those contracts, this volume represents the maximum "economic" net hedge in place. The Company's average "economic" net hedge of estimated fuel consumption covered by fuel derivative contracts is lower than this maximum volume, may vary significantly as market prices fluctuate, and begins to provide hedge coverage at price levels above current market prices.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table presents the location of all assets and liabilities associated with the Company’s derivative instruments within the unaudited Condensed Consolidated Balance Sheet:

 
 
 
 
Asset derivatives
 
Liability derivatives
 
 
Balance Sheet
 
Fair value at
 
Fair value at
 
Fair value at
 
Fair value at
(in millions)
 
location
 
9/30/2015
 
12/31/2014
 
9/30/2015
 
12/31/2014
Derivatives designated as hedges*
 
 
 
 
 
 
 
 
 
 
Fuel derivative contracts (gross)
 
Accrued liabilities
 
$
36

 
$
—

 
$
414

 
$
—

Fuel derivative contracts (gross)
 
Other noncurrent liabilities
 
54

 
—

 
596

 
643

Interest rate derivative contracts
 
Other assets
 
6

 
13

 
—

 
—

Interest rate derivative contracts
 
Other noncurrent liabilities
 
—

 
—

 
54

 
61

Total derivatives designated as hedges
 
$
96

 
$
13

 
$
1,064

 
$
704

Derivatives not designated as hedges*
 
 
 
 
 
 
 
 
 
 
Fuel derivative contracts (gross)
 
Accrued liabilities
 
$
1,358

 
$
1,190

 
$
1,536

 
$
1,432

Fuel derivative contracts (gross)
 
Other noncurrent liabilities
 
282

 
157

 
414

 
273

Total derivatives not designated as hedges
 
 
 
$
1,640

 
$
1,347

 
$
1,950

 
$
1,705

Total derivatives
 
 
 
$
1,736

 
$
1,360

 
$
3,014

 
$
2,409

* 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
In addition, the Company had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet:

 
 
Balance Sheet
 
September 30,
 
December 31,
(in millions)
 
location
 
2015
 
2014
Cash collateral deposits provided to counterparties for fuel
  contracts - current
 
Offset against Accrued liabilities
 
$
15

 
$
68

Cash collateral deposits provided to counterparties for fuel
contracts - noncurrent
 
Offset against Other noncurrent liabilities
 
463

 
198

Due to third parties for fuel contracts
 
Accounts payable
 
41

 
16
Offsetting Assets
(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5.
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)
 
 
 
 
September 30, 2015
 
December 31, 2014
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 (a)
 
Gross amounts of recognized assets
 
Gross amounts offset in the Balance Sheet
 
Net amounts of assets presented in the Balance Sheet (a)
Fuel derivative contracts
 
Accrued liabilities
 
$
1,409

 
$
(1,409
)
 
$
—

 
$
1,258

 
$
(1,258
)
 
$
—

Fuel derivative contracts
 
Other noncurrent liabilities
 
$
799

 
$
(799
)
 
$
—

 
$
355

 
$
(355
)
 
$
—

Interest rate derivative contracts
 
Other assets
 
$
6

 
$
—

 
$
6

 
$
13

 
$
—

 
$
13
Offsetting Liabilities
Offsetting of derivative liabilities
(in millions)
 
 
 
 
(i)
 
(ii)
 
(iii) = (i) + (ii)
 
(i)
 
(ii)
 
(iii) = (i) + (ii)
 
 
 
 
September 30, 2015
 
December 31, 2014
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 (a)
 
Gross amounts of recognized liabilities
 
Gross amounts offset in the Balance Sheet
 
Net amounts of liabilities presented in the Balance Sheet (a)
Fuel derivative contracts
 
Accrued liabilities
 
$
1,950

 
$
(1,409
)
 
$
541

 
$
1,432

 
$
(1,258
)
 
$
174

Fuel derivative contracts
 
Other noncurrent liabilities
 
$
1,010

 
$
(799
)
 
$
211

 
$
916

 
$
(355
)
 
$
561

Interest rate derivative contracts
 
Other noncurrent liabilities
 
$
54

 
$
—

 
$
54

 
$
61

 
$
—

 
$
61


(a) The net amounts of derivative assets and liabilities are reconciled to the individual line item amounts presented in the unaudited Condensed Consolidated Balance Sheet in Note 5.
Derivatives in Cash Flow Hedging Relationships
The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2015 and 2014:

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)
 
Three months ended
 
Three months ended
 
Three months ended
 
September 30,
 
September 30,
 
September 30,
(in millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Fuel derivative contracts
$
315

*
$
214

*
$
79

*
$
4

*
$
—

 
$
11

Interest rate derivatives
3

*
(2
)
*
3

*
4

*
—

 
(2
)
Total
$
318

 
$
212

 
$
82

 
$
8

 
$
—

 
$
9

*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 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)
 
Nine months ended
 
Nine months ended
 
Nine months ended
 
September 30,
 
September 30,
 
September 30,
(in millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Fuel derivative contracts
$
330

*
$
104

*
$
166

*
$
3

*
$
(15
)
 
$
(31
)
Interest rate derivatives
6

*
2

*
9

*
10

*
(2
)
 
(3
)
Total
$
336

 
$
106

 
$
175

 
$
13

 
$
(17
)
 
$
(34
)
*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
 
 
 
Three months ended
 
Location of (gain) loss
 
September 30,
 
recognized in income
(in millions)
2015
 
2014
 
on derivatives
Fuel derivative contracts
$
239

 
$
39

 
Other (gains) losses, net


Derivatives not in cash flow hedging relationships
 
(Gain) loss
 
 
 
recognized in income on
 
 
 
derivatives
 
 
 
Nine months ended
 
Location of (gain) loss
 
September 30,
 
recognized in income
(in millions)
2015
 
2014
 
on derivatives
Fuel derivative contracts
$
330

 
$
(1
)
 
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 September 30, 2015, at which such postings are triggered:

 
Counterparty (CP)
 
 
(in millions)
A
 
B
 
C
 
D
 
E
 
F
 
Other (a)
 
Total
Fair value of fuel derivatives
$
(514
)
 
$
(179
)
 
$
(153
)
 
$
(206
)
 
$
(108
)
 
$
(37
)
 
$
(33
)
 
$
(1,230
)
Cash collateral held (by) CP
(238
)
 
(50
)
 
(39
)
 
(146
)
 
—

 
(5
)
 
—

 
(478
)
Aircraft collateral pledged to CP
(210
)
 
(90
)
 
—

 
—

 
—

 
—

 
—

 
(300
)
Letters of credit (LC)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Option to substitute LC for aircraft
(200) to (600)(h)
 
(100) to (500)(d)
 
N/A
 
(150) to (550)(d)
 
N/A
 
N/A
 
 
 
 
Option to substitute LC for cash
N/A
 
>(500)(e)
 
(225) to (275)(e)
 
(75) to (150) or >(550)(e)
 
(g)
 
(g)
 
 
 
 
If credit rating is investment
grade, fair value of fuel
derivative level at which:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash is provided to CP
(50) to (200) or >(600)
 
(50) to (100) or >(500)
 
>(125)
 
(75) to (150) or >(550)
 
>(125)
 
>(50)
 
 
 
 
Cash is received from CP
>50
 
>150
 
>175(c)
 
>250
 
>75
 
>50
 
 
 
 
Aircraft or cash can be pledged to
  CP as collateral
(200) to (600)(f)
 
(100) to (500)(d)
 
N/A
 
(150) to (550)(d)
 
N/A
 
N/A
 
 
 
 
If credit rating is non-investment
grade, fair value of fuel derivative level at which:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash is provided to CP
(0) to (200) or >(600)
 
(0) to (100) or >(500)
 
(b)
 
(0) to (150) or >(550)
 
(b)
 
(b)
 
 
 
 
Cash is received from CP
(b)
 
(b)
 
(b)
 
(b)
 
(b)
 
(b)
 
 
 
 
Aircraft or cash can be pledged to
  CP as collateral
(200) to (600)
 
(100) to (500)
 
N/A
 
(150) to (550)
 
N/A
 
N/A
 
 
 
 
(a) Individual counterparties with fair value of fuel derivatives <$30 million.
(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.
(c) Thresholds may vary based on changes in credit ratings within investment grade.
(d) The Company has the option of providing cash, letters of credit, or pledging aircraft as collateral.
(e) The Company has the option of providing cash or letters of credit as collateral.
(f) The Company has the option of providing cash or pledging aircraft as collateral.
(g) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement.
(h) The Company has the option of providing letters of credit in addition to aircraft collateral if the appraised value of the aircraft does not meet the collateral requirements.