XML 28 R18.htm IDEA: XBRL DOCUMENT v3.23.1
Financial Derivative Instruments (Tables)
 3 Months Ended
Mar. 31, 2023
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
March 31, 2023Derivative underlying commodity type as of
Period (by year)(gallons in millions) (a)March 31, 2023
Remainder of 2023813 West Texas Intermediate ("WTI") crude oil and Brent crude oil
20241,265 WTI crude oil and Brent crude oil
2025227 Brent 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 derivatives
 Balance SheetFair value atFair value at
(in millions)location3/31/202312/31/2022
Derivatives designated as hedges (a)   
Fuel derivative contracts (gross)Prepaid expenses and other current assets$228 $352 
Fuel derivative contracts (gross)Other assets167 160 
Interest rate derivative contractsOther assets13 14 
Total derivatives designated as hedges$408 $526 
(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.
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 SheetMarch 31,December 31,
(in millions)location20232022
Cash collateral deposits held from counterparties for fuel contracts - currentOffset against Prepaid expenses and other current assets$65 $106 
Cash collateral deposits held from counterparties for fuel contracts - noncurrentOffset against Other assets11 — 
Receivable from third parties for fuel contractsAccounts and other receivables15 34 
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)
March 31, 2023December 31, 2022
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$228 $(65)$163 $352 $(106)$246 
Fuel derivative contractsOther assets$167 $(11)$156 (a)$160 $— $160 (a)
Interest rate derivative contractsOther assets$13 $— $13 (a)$14 $— $14 (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 8.
Offsetting Liabilities
Offsetting of derivative liabilities
(in millions)
(i)(ii)(iii) = (i) + (ii)(i)(ii)(iii) = (i) + (ii)
March 31, 2023December 31, 2022
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$65 $(65)$— $106 $(106)$— 
Fuel derivative contractsOther assets$11 $(11)$— $— $— $— 
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 (Loss) for the three months ended March 31, 2023 and 2022:

Location and amount recognized in income on cash flow and fair value hedging relationships
Three months ended March 31, 2023Three months ended March 31, 2022
(in millions)Fuel and oilOther operating expensesFuel and oilOther operating expenses
Total$(28)$2 $(203)$2 
(Gain) loss on cash flow hedging relationships:
Commodity contracts:
Amount of (gain) reclassified from AOCI into income(28)— (203)— 
Interest contracts:
Amount of loss reclassified from AOCI into income— 2 — 2 

Derivatives designated and qualified in cash flow hedging relationships
 (Gain) loss recognized in AOCI on derivatives, net of tax
 Three months ended
 March 31,
(in millions)20232022
Fuel derivative contracts$125 $(654)
Interest rate derivatives2 (4)
Total$127 $(658)
Derivative Instruments, Gain (Loss)
Derivatives not designated as hedges
 (Gain) loss recognized in income on derivatives 
  
 Three months endedLocation of (gain) loss recognized in income on derivatives
 March 31,
(in millions)20232022
Fuel derivative contracts$— $34 Other (gains) losses, net
Premiums Paid for Fuel Derivative Contracts The following table presents the impact of premiums paid for fuel derivative contracts and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) during the period the contract settles:
 Premium expense recognized in income on derivatives  
  
 Three months endedLocation of premium expense recognized in income on derivatives
 March 31,
(in millions)20232022
Fuel derivative contracts designated as hedges$30 $26 Fuel and oil
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 March 31, 2023, at which such postings are triggered:

 Counterparty (CP) 
(in millions)ABCDEFGOther (a)Total
Fair value of fuel derivatives$96 $51 $78 $23 $55 $29 $48 $15 $395 
Cash collateral held from CP76 — — — — — — — 76 
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 < $16 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.