Delta Airlines 2015 Annual Report Download - page 74
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Please find page 74 of the 2015 Delta Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.TableofContents
CashEquivalentsandRestrictedCashEquivalentsandInvestments.Cashequivalentsgenerallyconsistofmoneymarketfunds.Restrictedcashequivalentsand
investmentsgenerallyconsistofmoneymarketfundsandtimedeposits,whichprimarilysupportlettersofcreditthatrelatetocertainprojectedself-insurance
obligationsandairportcommitments.Thefairvalueoftheseinvestmentsisbasedonamarketapproachusingpricesandotherrelevantinformationgeneratedby
markettransactionsinvolvingidenticalorcomparableassets.
Short-TermInvestments.Thefairvaluesofshort-terminvestmentsarebasedonamarketapproachusingindustrystandardvaluationtechniquesthatincorporate
observableinputssuchasquotedmarketprices,interestrates,benchmarkcurves,creditratingsofthesecurityandotherobservableinformation.
Long-TermInvestments.Ourlong-terminvestmentsthataremeasuredatfairvalueprimarilyconsistofequityinvestmentsinGrupoAeroméxico,theparent
companyofAeroméxico,andGOLLinhasAéreasInteligentes,theparentcompanyofVRGLinhasAéreas(operatingasGOL).Sharesoftheparentcompaniesof
AeroméxicoandGOLaretradedonpublicexchangesandwehavevaluedourinvestmentsbasedonquotedmarketprices.Theinvestmentsareclassifiedinother
noncurrentassets.
HedgeDerivatives.Aportionofourderivativecontractsarenegotiatedover-the-counterwithcounterpartieswithoutgoingthroughapublicexchange.
Accordingly,ourfairvalueassessmentsgiveconsiderationtotheriskofcounterpartydefault(aswellasourowncreditrisk).SuchcontractsareclassifiedasLevel
2withinthefairvaluehierarchy.Theremainderofourhedgecontractsarecomprisedoffuturescontracts,whicharetradedonapublicexchange.Thesecontracts
areclassifiedwithin
Level1ofthefairvaluehierarchy.
•FuelContracts.Ourfuelhedgeportfolioconsistsofoptions,swapsandfutures.Thehedgecontractsincludecrudeoil,dieselfuelandjetfuel,asthese
commoditiesarehighlycorrelatedwiththepriceofjetfuelthatweconsume.Optioncontractsarevaluedunderanincomeapproachusingoptionpricing
modelsbasedondataeitherreadilyobservableinpublicmarkets,derivedfrompublicmarketsorprovidedbycounterpartieswhoregularlytradeinpublic
markets.Volatilitiesusedinthesevaluationsrangedfrom31%to53%dependingonthematuritydates,underlyingcommoditiesandstrikepricesofthe
optioncontracts.Swapcontractsarevaluedunderanincomeapproachusingadiscountedcashflowmodelbasedondataeitherreadilyobservableor
providedbycounterpartieswhoregularlytradeinpublicmarkets.Discountratesusedinthesevaluationsvarywiththematuritydatesoftherespective
contractsandarebasedontheLondoninterbankofferedrate("LIBOR").Futurescontractsandoptionsonfuturescontractsaretradedonapublicexchange
andvaluedbasedonquotedmarketprices.
•InterestRateContract.Ourinterestratederivativeisaswapcontract,whichisvaluedbasedondatareadilyobservableinpublicmarkets.
•ForeignCurrencyExchangeContracts.OurforeigncurrencyderivativesconsistofJapaneseyenandCanadiandollarforwardcontractsandarevalued
basedondatareadilyobservableinpublicmarkets.
NOTE3.INVESTMENTS
Short-Term Investments
Theestimatedfairvaluesofshort-terminvestments,whichapproximatecostatDecember31,2015,areshownbelowbycontractualmaturity.Actual
maturitiesmaydifferfromcontractualmaturitiesbecauseissuersofthesecuritiesmayhavetherighttoretireourinvestmentswithoutprepaymentpenalties.
(inmillions)
Available-
For-Sale
Dueinoneyearorless $ 344
Dueafteroneyearthroughthreeyears 905
Dueafterthreeyearsthroughfiveyears 116
Dueafterfiveyears 100
Total $ 1,465
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