XML 40 R19.htm IDEA: XBRL DOCUMENT v3.22.2
Financial Derivative Instruments (Tables)
 6 Months Ended
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Volume of Fuel Hedging The following table provides information about the Company’s volume of fuel hedging on an economic basis:
Maximum fuel hedged as of
June 30, 2022Derivative underlying commodity type as of
Period (by year)(gallons in millions) (a)June 30, 2022
Remainder of 2022610 WTI crude oil, Brent crude oil, and Heating oil
2023769 WTI crude oil and Brent crude oil
2024358 WTI crude oil
(a) Due to the types of derivatives utilized by the Company and different price levels of those contracts, these volumes represent the maximum economic hedge in place and may vary significantly as market prices and the Company's flight schedule fluctuate.
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 derivativesLiability derivatives
 Balance SheetFair value atFair value atFair value atFair value at
(in millions)location6/30/202212/31/20216/30/202212/31/2021
Derivatives designated as hedges (a)     
Fuel derivative contracts (gross)Prepaid expenses and other current assets$797 $409 $— $— 
Fuel derivative contracts (gross)Other assets372 287 — — 
Interest rate derivative contractsOther assets11 — — — 
Interest rate derivative contractsOther noncurrent liabilities— — — 4 
Total derivatives designated as hedges$1,180 $696 $— $4 
Derivatives not designated as hedges (a)     
Fuel derivative contracts (gross)Prepaid expenses and other current assets$125 $— $167 $— 
Total derivatives $1,305 $696 $167 $4 
(a) 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 4.
Offsetting Assets
In addition, the Company had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet:

 Balance SheetJune 30,December 31,
(in millions)location20222021
Cash collateral deposits held from counterparties for fuel contracts - currentOffset against Prepaid expenses and other current assets$297 $80 
Cash collateral deposits held from counterparties for fuel contracts - noncurrentOffset against Other assets162 95 
Receivable from third parties for fuel contractsAccounts and other receivables125 8 
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)
June 30, 2022December 31, 2021
DescriptionBalance Sheet locationGross amounts of recognized assetsGross amounts offset in the Balance SheetNet amounts of assets presented in the Balance SheetGross amounts of recognized assetsGross amounts offset in the Balance SheetNet amounts of assets presented in the Balance Sheet
Fuel derivative contractsPrepaid expenses and other current assets$922 $(464)
(b)
$458 $409 $(80)$329 
Fuel derivative contractsOther assets$372 $(162)$210 (a)$287 $(95)$192 (a)
Interest rate derivative contractsOther assets$11 $— $11 (a)$— $— $— (a)
(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 9.
(b) Includes the current portion of cash collateral deposits held from counterparties and derivative liability associated with fuel contracts.
Offsetting Liabilities
Offsetting of derivative liabilities
(in millions)
(i)(ii)(iii) = (i) + (ii)(i)(ii)(iii) = (i) + (ii)
June 30, 2022December 31, 2021
DescriptionBalance Sheet locationGross amounts of recognized liabilitiesGross amounts offset in the Balance SheetNet amounts of liabilities presented in the Balance SheetGross amounts of recognized liabilitiesGross amounts offset in the Balance SheetNet amounts of liabilities presented in the Balance Sheet
Fuel derivative contractsPrepaid expenses and other current assets$464 $(464)
(b)
$— $80 $(80)$— 
Fuel derivative contractsOther assets$162 $(162)$— (a)$95 $(95)$— (a)
Interest rate derivative contractsOther noncurrent liabilities$— $— $— $4 $— $4 
(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 9.
(b) Includes the current portion of cash collateral deposits held from counterparties and derivative liability associated with fuel contracts.
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
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 six months ended June 30, 2022 and 2021:

Location and amount recognized in income on cash flow and fair value hedging relationships
Three months ended June 30, 2022Three months ended June 30, 2021
(in millions)Fuel and oilOther operating expensesFuel and oilOther operating expenses
Total$(306)$2 $12 $1 
(Gain) loss on cash flow hedging relationships:
Commodity contracts:
Amount of (gain) loss reclassified from AOCI into income(306)— 12 — 
Interest contracts:
Amount of loss reclassified from AOCI into income— 2 — 1 

Location and amount recognized in income on cash flow and fair value hedging relationships
Six months ended June 30, 2022Six months ended June 30, 2021
(in millions)Fuel and oilOther (gains)/losses, netOther operating expensesFuel and oilOther (gains)/losses, netOther operating expenses
Total$(508)$— $3 $28 $6 $2 
(Gain) loss on cash flow hedging relationships
Commodity contracts:
Amount of (gain) loss reclassified from AOCI into income(508)— — 28 6 — 
Interest contracts:
Amount of loss reclassified from AOCI into income— — 3 — — 2 


Derivatives designated and qualified in cash flow hedging relationships
 (Gain) loss recognized in AOCI on derivatives, net of tax
 Three months ended
 June 30,
(in millions)20222021
Fuel derivative contracts$(140)$(192)
Interest rate derivatives(7)6 
Total$(147)$(186)
Derivatives designated and qualified in cash flow hedging relationships
 (Gain) loss recognized in AOCI on derivatives, net of tax
 Six months ended
 June 30,
(in millions)20222021
Fuel derivative contracts$(792)$(275)
Interest rate derivatives(12)(4)
Total$(804)$(279)
Derivative Instruments, Gain (Loss)
Derivatives not designated as hedges
 (Gain) loss recognized in income on derivatives 
  
 Three months endedLocation of gain recognized in income on derivatives
 June 30,
(in millions)20222021
Fuel derivative contracts$(20)$(12)Other (gains) losses, net


Derivatives not designated as hedges
 (Gain) loss recognized in income on derivatives 
  
 Six months endedLocation of (gain) loss recognized in income on derivatives
 June 30,
(in millions)20222021
Fuel derivative contracts$15 $(16)Other (gains) losses, net
Premiums Paid for Fuel Derivative Contracts The following tables present the impact of premiums paid for fuel derivative contracts and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income during the period the contract settles:
 Premium expense recognized in income on derivatives  
  
 Three months endedLocation of premium expense recognized in income on derivatives
 June 30,
(in millions)20222021
Fuel derivative contracts designated as hedges$26 $14 Fuel and oil
Fuel derivative contracts not designated as hedges— 10 Other (gains) losses, net
 Premium expense recognized in income on derivatives 
  
 Six months endedLocation of premium expense recognized in income on derivatives
 June 30,
(in millions)20222021
Fuel derivative contracts designated as hedges$53 $29 Fuel and oil
Fuel derivative contracts not designated as hedges— 21 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 June 30, 2022, at which such postings are triggered:
 Counterparty (CP) 
(in millions)ABCDEFGOther (a)Total
Fair value of fuel derivatives$289 $148 $264 $95 $131 $85 $92 $23 $1,127 
Cash collateral held from CP356 7 37 — 40 19 — — 459 
Option to substitute LC for cashN/AN/A
 (b)
 (b)

 (b)
N/A
 (b)
  
If credit rating is investment
grade, fair value of fuel
derivative level at which:		     
Cash is provided to CP
>(100)
>(50)
>(75)
>(125)

>(40)
>(65)
>(100)
  
Cash is received from CP
>0(c)
>150(c)
>250(c)
>125(c)
>100(c)
>70(c)
>100(c)
  
If credit rating is non-investment
grade, fair value of fuel derivative level at which:		     
Cash is received from CP
 (d)
 (d)
 (d)
 (d)
 (d)
 (d)
 (d)
  
(a) Individual counterparties with fair value of fuel derivatives < $12 million.
(b) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement.
(c) Thresholds may vary based on changes in credit ratings within investment grade.
(d) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.