Delta Airlines 2013 Annual Report Download - page 77

Designated Hedge Gains (Losses)
Gains (losses) related to our designated hedge contracts, including those previously designated as accounting hedges, are as follows:
As of December 31, 2013 , we have recorded $157 million of net gains on cash flow hedge contracts in AOCI, which are scheduled to settle
and be reclassified into earnings within the next 12 months.
Credit Risk
To manage credit risk associated with our aircraft fuel price, interest rate and foreign currency hedging programs, we select counterparties
based on their credit ratings and limit our exposure to any one counterparty.
Our hedge contracts contain margin funding requirements.
The margin funding requirements may cause us to post margin to counterparties or
may cause counterparties to post margin to us as market prices in the underlying hedged items change. Due to the fair value position of our
hedge contracts, we received net margin of $65 million and $62 million as of December 31, 2013 and 2012 , respectively. Margin received is
recorded in accounts payable and margin posted is recorded in prepaid expenses and other.
Our accounts receivable are generated largely from the sale of passenger airline tickets and cargo transportation services. The majority of
these sales are processed through major credit card companies, resulting in accounts receivable that may be subject to certain holdbacks by the
credit card processors. We also have receivables from the sale of mileage credits under our SkyMiles Program to participating airlines and non-
airline businesses such as credit card companies, hotels and car rental agencies. The credit risk associated with our receivables is minimal.
Self
-Insurance Risk
We self-insure a portion of our losses from claims related to workers' compensation, environmental issues, property damage, medical
insurance for employees and general liability. Losses are accrued based on an estimate of the aggregate liability for claims incurred, using
independent actuarial reviews based on standard industry practices and our historical experience. A portion of our projected workers'
compensation liability is secured with restricted cash collateral.
NOTE 5 . JFK REDEVELOPMENT
We are optimizing our international and trans-continental flight schedule and undertaking a redevelopment project at John F. Kennedy
International Airport (“JFK”) to facilitate convenient connections for our passengers and improve coordination with our SkyTeam alliance
partners. Prior to beginning the redevelopment project, we primarily operated domestic flights out of Terminal 2 and international flights out of
Terminal 3 under leases with the Port Authority of New York and New Jersey (“Port Authority”), which operates JFK. Our redevelopment
project, which began in 2010, is on schedule. Terminal 4 is operated by JFK International Air Terminal LLC (“IAT”), a private party, under its
lease with the Port Authority. We have constructed nine new international gates in Terminal 4, which opened in 2013. We have relocated our
operations from Terminal 3 to our newly constructed facilities at Terminal 4 and have begun the demolition of Terminal 3. During 2013, we
announced plans for an additional $180 million expansion project that will add 11 more gates at Terminal 4. With the expansion project, we will
relocate our regional jet operations from Terminal 2 to Terminal 4.
69
Effective Portion Reclassified from AOCI to
Earnings
Effective Portion Recognized in Other
Comprehensive Income (Loss)
Year Ended December 31,
(in millions) 2013 2012 2011
2013 2012 2011
Fuel hedge contracts
$
—
$
15
$
233
$
—
$
(
15
)
$
(166
)
Interest rate contracts
—
(
5
)
—
28
14
(8
)
Foreign currency exchange contracts
135
(25
)
(61
)
133
212
7
Total designated
$
135
$
(15
)
$
172
$
161
$
211
$
(167
)