Southwest Airlines 2011 Annual Report Download - page 112
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The Company had no transfers of assets or liabilities between any of the above levels during the years
ended December 31, 2011 or 2010. The following tables present the Company’s activity for items measured at
fair value on a recurring basis using significant unobservable inputs (Level 3) for 2011 and 2010:
Fair value measurements using significant
unobservable inputs (Level 3)
(in millions)
Fuel
derivatives
Auction rate
securities
Other
securities Total
Balance at December 31, 2010 ............................... $686 $ 93 $ 5 $784
Total gains or (losses) (realized or unrealized)
Included in earnings ................................... (26) — — (26)
Included in other comprehensive income ................... 30 3 — 33
Purchases ............................................ 449 — — 449
Sales ............................................... (546) (29) — (575)
Settlements .......................................... (176) — — (176)
Balance at December 31, 2011 ............................... $417 $ 67(a) $ 5 $ 489
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, 2011 ............... $ 64 $— $— $ 64
(a) Included in Other assets in the Consolidated Balance Sheet.
Fair value measurements using significant
unobservable inputs (Level 3)
(in millions)
Fuel
derivatives
Auction rate
securities
Other
securities Total
Balance at December 31, 2009 ............................... $140 $174 $ 8 $ 322
Total gains or (losses) (realized or unrealized)
Included in earnings ................................... 132 — (3) 129
Included in other comprehensive income ................... 68 — — 68
Purchases ............................................ 527 — — 527
Sales ............................................... (172) (81) — (253)
Settlements .......................................... (9) — — (9)
Balance at December 31, 2010 ............................... $686 $ 93(a) $ 5 $ 784
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, 2010 ............... $142 $— $— $142
(a) Included in Other assets in the Consolidated Balance Sheet.
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 2011 and 2010.
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