Southwest Airlines 2013 Annual Report Download - page 109
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All cash flows associated with purchasing and selling fuel derivatives are classified as Other operating cash
flows in the Consolidated Statement of Cash Flows. The following table presents the location of all assets and
liabilities associated with the Company’s hedging instruments within the Consolidated Balance Sheet:
Balance Sheet
location
Asset derivatives Liability derivatives
(in millions)
Fair value
at
12/31/2013
Fair value
at
12/31/2012
Fair value
at
12/31/2013
Fair value
at
12/31/2012
Derivatives designated as hedges*
Fuel derivative contracts (gross) . . . Prepaid expenses and other
current assets
$ 74$ —$ —$ —
Fuel derivative contracts (gross) . . . Other assets 209 355 1 16
Fuel derivative contracts (gross) . . . Accrued liabilities ————
Fuel derivative contracts (gross) . . . Other noncurrent liabilities ————
Interest rate derivative contracts . . . Other assets 20 31 — —
Interest rate derivative contracts . . . Accrued liabilities ————
Interest rate derivative contracts . . . Other noncurrent liabilities — — 77 126
Total derivatives designated as
hedges ..................... $ 303$ 386$ 78$ 142
Derivatives not designated as
hedges*
Fuel derivative contracts (gross) . . . Prepaid expenses and other
current assets
$ 175 $ 375 $ 182 $ 327
Fuel derivative contracts (gross) . . . Other assets 16 233 99 351
Fuel derivative contracts (gross) . . . Accrued liabilities 9 10 21 60
Fuel derivative contracts (gross) . . . Other noncurrent liabilities ————
Total derivatives not designated
as hedges ................... $ 200$ 618$ 302$ 738
Total derivatives .............. $ 503$ 1,004 $ 380 $ 880
* Represents the position of each trade before consideration of offsetting positions with each counterparty and
does not include the impact of cash collateral deposits provided to or received from counterparties. See
discussion of credit risk and collateral following in this Note.
In addition, the Company also had the following amounts associated with fuel derivative instruments and
hedging activities in its Consolidated Balance Sheet:
(in millions)
Balance Sheet
location
December 31,
2013
December 31,
2012
Cash collateral deposits provided
to counterparties for interest rate
contracts — noncurrent ...........
Offset against Other
noncurrent liabilities 32 89
Receivable from third parties for
fuel contracts — current ..........
Accounts and other
receivables 57 —
Receivable from third parties for
fuel contracts — noncurrent ....... Other assets — 54
Prepaid settlements for
fuel contracts — current ..........
Prepaid expenses and
other current assets — 15
All of the Company’s fuel derivative instruments and interest rate swaps are subject to agreements that
follow the netting guidance in the applicable accounting for derivatives and hedging. The types of derivative
instruments the Company has determined are subject to netting requirements in the accompanying Consolidated
101