Southwest Airlines 2015 Annual Report Download - page 126
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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 2015 and 2014:
(in millions)
Fuel
derivatives
Interest
rate
derivatives
Defined
benefit plan
items Other
Deferred
tax
impact
Accumulated other
comprehensive
income (loss)
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)
Changes in fair value (867) (5) (19) (2) 329 (564)
Reclassification to earnings 378 20 — — (147) 251
Balance at December 31, 2015 $ (1,666) $ (30) $ 22 $ 6 $ 617 $ (1,051)
The following table illustrates the significant amounts reclassified out of each component of AOCI for
the year ended December 31, 2015:
Year ended December 31, 2015
(in millions)
AOCI components
Amounts reclassified
from AOCI
Affected line item in the
Consolidated Statement of
Comprehensive Income
Unrealized loss on fuel derivative
instruments $ 378 Fuel and oil expense
140 Less: Tax expense
$ 238 Net of tax
Unrealized loss on interest rate derivative
instruments $ 20 Interest expense
7 Less: Tax expense
$ 13 Net of tax
Total reclassifications for the period $ 251 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 of 1986, as amended, 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.
No Employee contributions to the ProfitSharing Plan are allowed.
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