Southwest Airlines 2014 Annual Report Download - page 137
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12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Comprehensive income includes changes in the fair value of certain financial derivative
instruments that qualify for hedge accounting, unrealized gains and losses on certain investments, and
actuarial gains/losses arising from the Company’s postretirement benefit obligation. A rollforward of
the amounts included in AOCI, net of taxes, is shown below for 2014 and 2013:
(in millions)
Fuel
derivatives
Interest
rate
derivatives
Defined
benefit plan
items Other
Deferred
tax
impact
Accumulated other
comprehensive
income (loss)
Balance at December 31, 2012 $ (103) $ (108) $ 26 $ (8) $ 74 $ (119)
Changes in fair value (82) 22 39 16 — (5)
Reclassification to earnings 165 28 — — (72) 121
Balance at December 31, 2013 $ (20) $ (58) $ 65 $ 8 $ 2 $ (3)
Changes in fair value (1,191) (10) (24) — 454 (771)
Reclassification to earnings 34 23 — — (21) 36
Balance at December 31, 2014 $ (1,177) $ (45) $ 41 $ 8 $ 435 $ (738)
The following table illustrates the significant amounts reclassified out of each component of
AOCI for the year ended December 31, 2014:
Year ended December 31, 2014
(in millions)
AOCI components
Amounts reclassified
from AOCI
Affected line item in the
Consolidated Statement of
Comprehensive Income
Unrealized gain on fuel derivative
instruments $ 34 Fuel and oil expense
12 Less: Tax expense
$ 22 Net of tax
Unrealized gain on interest rate derivative
instruments $ 23 Interest expense
9 Less: Tax expense
$ 14 Net of tax
Total reclassifications for the period $ 36 Net of tax
13. EMPLOYEE RETIREMENT PLANS
Defined contribution plans
Southwest has defined contribution plans covering substantially all of its Employees.
Contributions under all defined contribution plans are primarily based on Employee compensation and
performance of the Company. The Company sponsors Employee savings plans under section 401(k) of
the Internal Revenue Code, which include Company matching contributions. In addition, the
Southwest Airlines Co. ProfitSharing Plan (ProfitSharing Plan) is a defined contribution plan to which
the Company may contribute a percentage of its eligible pre-tax profits, as defined, on an annual basis.
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