Southwest Airlines 2015 Annual Report Download - page 117
Download and view the complete annual report
Please find page 117 of the 2015 Southwest 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.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107 -
108 -
109 -
110 -
111 -
112 -
113 -
114 -
115 -
116 -
117 -
118 -
119 -
120 -
121 -
122 -
123 -
124 -
125 -
126 -
127 -
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
 |
 |
The following tables present the impact of derivative instruments and their location within the
Consolidated Statement of Income for the year ended December 31, 2015 and 2014:
Derivatives in cash flow hedging relationships
(Gain) loss recognized in
AOCI on derivatives
(effective portion)
(Gain) loss reclassified
from AOCI into income
(effective portion)(a)
(Gain) loss recognized in
income on
derivatives
(ineffective
portion)(b)
Year ended
December 31,
Year ended
December 31,
Year ended
December 31,
(in millions) 2015 2014 2015 2014 2015 2014
Fuel derivative contracts $ 546 * $ 749 * $ 238 * $ 22 * $ (9) $ 7
Interest rate derivatives 4 * 6 * 13 * 14 * (4) (4)
Total $ 550 $ 755 $ 251 $ 36 $ (13) $ 3
*Net of tax
(a) Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and
Interest expense, respectively.
(b) Amounts are included in Other (gains) losses, net.
Derivatives not in cash flow hedging relationships
(Gain) loss
recognized in income on
derivatives
Year ended
December 31, Location of (gain) loss
recognized in income
on derivatives(in millions) 2015 2014
Fuel derivative contracts $ 444 $ 244 Other (gains) losses, net
The Company also recorded expense associated with premiums paid for fuel derivative contracts that
settled/expired during 2015, 2014, and 2013 of $124 million, $62 million, and $60 million,
respectively. These amounts are excluded from the Company’s measurement of effectiveness for
related hedges and are included as a component of Other (gains) losses, net, in the Consolidated
Statement of Income.
The fair values of the derivative instruments, depending on the type of instrument, were determined by
the use of present value methods or option value models with assumptions about commodity prices
based on those observed in underlying markets or provided by third parties. Included in the Company’s
cumulative net unrealized losses from fuel hedges as of December 31, 2015, recorded in AOCI, were
approximately $620 million in unrealized losses, net of taxes, which are expected to be realized in
earnings during the twelve months subsequent to December 31, 2015.
109