Southwest Airlines 2009 Annual Report Download - page 86

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2009
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
(in millions)
Fuel
Derivatives
Auction Rate
Securities (a)
Other
Securities Total
Balance at December 31, 2008 .............................. $(864) $200 $ 8 $(656)
Total gains or (losses) (realized or unrealized)
Included in earnings .................................. 858 — — 858
Included in other comprehensive income .................. (56) (6) — (62)
Purchases and settlements (net) ............................. 202 (20) — 182
Balance at December 31, 2009 .............................. $140 $174(b) $ 8 $ 322
The amount of total gains or (losses) for the period included in
earnings attributable to the change in unrealized gains or losses
relating to assets still held at December 31, 2009 .............. $699 $— $— $699
(a) Includes those classified as short-term investments and noncurrent investments.
(b) Includes $75 million classified as trading securities.
All settlements from fuel derivative contracts that are deemed “effective,” are included in “Fuel and oil”
expense in the period the underlying fuel is consumed in operations. Any “ineffectiveness” associated with
hedges, including amounts that settled in the current period (realized), and amounts that will settle in future
periods (unrealized), is recorded in earnings immediately, as a component of “Other (gains) losses, net.” See
Note 10 for further information on hedging.
Any gains and losses (realized and unrealized) related to other investments are reported in “Other operating
expenses,” and were immaterial for the years ended December 31, 2009, and 2008.
The carrying amounts and estimated fair values of the Company’s long-term debt and fuel derivative
contracts at December 31, 2009 are contained in the below table. The estimated fair values of the Company’s
publicly held long-term debt were based on quoted market prices.
(In millions)
Carrying
value
Estimated
fair value
Credit line borrowing (Note 6) ................................................. $ 75 $ 75
10.5% Notes due 2011 ....................................................... 397 431
Term Loan Agreement due 2020 ............................................... 554 490
French Credit Agreements due 2012 ............................................ 21 21
6.5% Notes due 2012 ........................................................ 400 422
5.25% Notes due 2014 ....................................................... 373 379
5.75% Notes due 2016 ....................................................... 292 289
5.125% Notes due 2017 ...................................................... 330 316
French Credit Agreements due 2018 ............................................ 81 81
Term Loan Agreement due 2019 — 6.64% ....................................... 320 330
Term Loan Agreement due 2019 — 6.84% ....................................... 124 123
Pass Through Certificates ..................................................... 450 432
7.375% Debentures due 2027 .................................................. 110 109
Fuel derivative contracts* ..................................................... (477) (477)
* Does not include the impact of cash collateral deposits provided to counterparties.
See Note 10.
78