United Airlines 2013 Annual Report Download - page 98

Table of Contents
economic hedges is to mitigate the adverse financial impact of potential increases in the price of fuel. Currently, the only such economic hedges in the
Company’s hedging portfolio are three-way collars (a collar with a higher strike sold call option). The Company records changes in the fair value of three-way
collars to Nonoperating income (expense): Miscellaneous, net in the statements of consolidated operations.
If the Company terminates a derivative prior to its contractual settlement date, then the cumulative gain or loss recognized in AOCI at the termination date
remains in AOCI until the forecasted transaction occurs. In a situation where it becomes probable that a hedged forecasted transaction will not occur, any gains
and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. All cash flows associated with purchasing and
settling derivatives are classified as operating cash flows in the statements of consolidated cash flows.
The Company records each derivative instrument as a derivative asset or liability (on a gross basis) in its consolidated balance sheets  and, accordingly,
records any related collateral on a gross basis. The table below presents the fair value amounts of fuel derivative assets and liabilities and the location of
amounts recognized in the Company’s financial statements.
98