Delta Airlines 2015 Annual Report Download - page 73

TableofContents
NOTE2.FAIRVALUEMEASUREMENTS
Fairvalueisdefinedasanexitprice,representingtheamountthatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransaction
betweenmarketparticipants.Fairvalueisamarket-basedmeasurementthatisdeterminedbasedonassumptionsthatmarketparticipantswoulduseinpricingan
assetorliability.
•Level1.Observableinputssuchasquotedpricesinactivemarkets;
•Level2.Inputs,otherthanquotedpricesinactivemarkets,thatareobservableeitherdirectlyorindirectly;and
•Level3.Unobservableinputsinwhichthereislittleornomarketdata,whichrequirethereportingentitytodevelopitsownassumptions.
Assetsandliabilitiesmeasuredatfairvaluearebasedonthevaluationtechniquesidentifiedinthetablesbelow.Thevaluationtechniquesareasfollows:
(a) Marketapproach.Pricesandotherrelevantinformationgeneratedbymarkettransactionsinvolvingidenticalorcomparableassetsorliabilities;and
(b) Incomeapproach.Techniquestoconvertfutureamountstoasinglepresentamountbasedonmarketexpectations(includingpresentvaluetechniques,
option-pricingandexcessearningsmodels).
Assets (Liabilities) Measured at Fair Value on a Recurring Basis (1)

December31,2015 Valuation
Technique(inmillions) Total Level1 Level2
Cashequivalents $ 1,543 $ 1,543 $ — (a)
Short-terminvestments


U.S.governmentandagencysecurities 151 74 77 (a)
Asset-andmortgage-backedsecurities 380 — 380 (a)
Corporateobligations 896 — 896 (a)
Otherfixedincomesecurities 38 — 38 (a)
Restrictedcashequivalentsandinvestments 49 49 — (a)
Long-terminvestments 155 130 25 (a)
Hedgederivatives,net




Fuelhedgecontracts (672) 65 (737) (a)(b)
Interestratecontract (3) — (3) (a)(b)
Foreigncurrencyexchangecontracts 94 — 94 (a)

December31,2014 Valuation
Technique(inmillions) Total Level1 Level2
Cashequivalents $ 1,612 $ 1,612 $ — (a)
Short-terminvestments

U.S.governmentsecurities 59 — 59 (a)
Asset-andmortgage-backedsecurities 392 — 392 (a)
Corporateobligations 749 — 749 (a)
Otherfixedincomesecurities 17 — 17 (a)
Restrictedcashequivalentsandinvestments 37 37 — (a)
Long-terminvestments 118 90 28 (a)
Hedgederivatives,net




Fuelhedgecontracts (1,848) (167) (1,681) (a)(b)
Interestratecontract (7) — (7) (a)(b)
Foreigncurrencyexchangecontracts 73 — 73 (a)
(1) SeeNote9,“EmployeeBenefitPlans,”forfairvalueofbenefitplanassets.
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