2014 Q4 Form 10-K Financial Statement

#000009238016000175 Filed on February 03, 2016

View on sec.gov

Income Statement

Concept 2014 Q4 2014 Q3 2014 Q2
Revenue $4.628B $4.800B $5.011B
YoY Change 4.52% 5.61% 7.93%
Cost Of Revenue $1.498B $1.746B $1.795B
YoY Change -12.19% -4.69% -4.16%
Gross Profit $3.130B $3.054B $3.216B
YoY Change 14.99% 12.57% 16.14%
Gross Profit Margin 67.63% 63.63% 64.18%
Selling, General & Admin $1.634B $1.611B $1.642B
YoY Change 7.36% 4.47% 4.12%
% of Gross Profit 52.2% 52.75% 51.06%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $251.0M $238.0M $228.0M
YoY Change 12.05% 7.69% 7.55%
% of Gross Profit 8.02% 7.79% 7.09%
Operating Expenses $2.462B $4.186B $4.236B
YoY Change 6.26% 0.75% 0.62%
Operating Profit $621.0M $614.0M $775.0M
YoY Change 60.88% 57.44% 78.98%
Interest Expense $183.0M -$89.00M -$29.00M
YoY Change -325.93% -406.9% -58.57%
% of Operating Profit 29.47% -14.5% -3.74%
Other Income/Expense, Net -$502.0M -$89.00M -$29.00M
YoY Change -1831.03% -406.9% -58.57%
Pretax Income $302.0M $525.0M $746.0M
YoY Change -9.58% 25.3% 105.51%
Income Tax $111.0M $196.0M $281.0M
% Of Pretax Income 36.75% 37.33% 37.67%
Net Earnings $190.0M $329.0M $465.0M
YoY Change -10.38% 27.03% 107.59%
Net Earnings / Revenue 4.11% 6.85% 9.28%
Basic Earnings Per Share $0.28 $0.48 $0.67
Diluted Earnings Per Share $0.28 $0.48 $0.67
COMMON SHARES
Basic Shares Outstanding 678.7M shares 683.0M shares 690.0M shares
Diluted Shares Outstanding 691.0M shares 698.0M shares

Balance Sheet

Concept 2014 Q4 2014 Q3 2014 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $2.988B $3.560B $3.994B
YoY Change -5.2% 6.97% 17.71%
Cash & Equivalents $1.282B $1.832B $1.882B
Short-Term Investments $1.706B $1.728B $2.112B
Other Short-Term Assets $232.0M $528.0M $441.0M
YoY Change -44.5% 14.53% -11.09%
Inventory $342.0M $429.0M $435.0M
Prepaid Expenses
Receivables $365.0M $468.0M $447.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $3.927B $4.985B $5.317B
YoY Change -11.87% 4.44% 9.31%
LONG-TERM ASSETS
Property, Plant & Equipment $14.29B $13.97B $13.73B
YoY Change 6.74% 5.77% 4.28%
Goodwill $970.0M $970.0M $970.0M
YoY Change 0.0% 0.0% 0.0%
Intangibles $363.0M $366.0M $369.0M
YoY Change 118.67%
Long-Term Investments $36.00M $39.00M
YoY Change -18.18% -4.88%
Other Assets $534.0M $619.0M $877.0M
YoY Change 0.75% 48.09% 128.39%
Total Long-Term Assets $15.80B $15.55B $15.57B
YoY Change 6.09% 6.6% 7.27%
TOTAL ASSETS
Total Short-Term Assets $3.927B $4.985B $5.317B
Total Long-Term Assets $15.80B $15.55B $15.57B
Total Assets $19.72B $20.54B $20.89B
YoY Change 1.95% 6.07% 7.79%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.203B $1.185B $1.292B
YoY Change -3.53% 4.5% 4.87%
Accrued Expenses $1.565B $1.277B $1.645B
YoY Change 27.34% 8.96% 36.29%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $258.0M $607.0M $605.0M
YoY Change -58.98% 134.36% 130.04%
Total Short-Term Liabilities $5.923B $6.446B $7.027B
YoY Change 4.35% 16.23% 21.6%
LONG-TERM LIABILITIES
Long-Term Debt $2.627B $2.327B $2.395B
YoY Change 19.9% -11.05% -10.33%
Other Long-Term Liabilities $1.255B $658.0M $710.0M
YoY Change 62.78% -45.08% -41.37%
Total Long-Term Liabilities $1.255B $658.0M $710.0M
YoY Change 62.78% -82.75% -81.71%
TOTAL LIABILITIES
Total Short-Term Liabilities $5.923B $6.446B $7.027B
Total Long-Term Liabilities $1.255B $658.0M $710.0M
Total Liabilities $7.178B $7.104B $7.737B
YoY Change 11.34% -24.1% -19.92%
SHAREHOLDERS EQUITY
Retained Earnings $7.416B $7.266B $6.979B
YoY Change 15.32% 16.33% 16.03%
Common Stock $2.123B $2.088B $2.071B
YoY Change 4.12% 3.73% 3.09%
Preferred Stock
YoY Change
Treasury Stock (at cost) $2.026B $1.833B $1.645B
YoY Change 79.13% 61.93% 65.33%
Treasury Stock Shares 132.1M shares
Shareholders Equity $6.775B $7.429B $7.516B
YoY Change
Total Liabilities & Shareholders Equity $19.72B $20.54B $20.89B
YoY Change 1.95% 6.07% 7.79%

Cashflow Statement

Concept 2014 Q4 2014 Q3 2014 Q2
OPERATING ACTIVITIES
Net Income $190.0M $329.0M $465.0M
YoY Change -10.38% 27.03% 107.59%
Depreciation, Depletion And Amortization $251.0M $238.0M $228.0M
YoY Change 12.05% 7.69% 7.55%
Cash From Operating Activities $204.0M $240.0M $1.338B
YoY Change -29.41% -43.93% 71.98%
INVESTING ACTIVITIES
Capital Expenditures -$488.0M -$433.0M -$500.0M
YoY Change 7.96% -261.57% -359.07%
Acquisitions
YoY Change
Other Investing Activities $20.00M $1.000M $1.000M
YoY Change -89.9%
Cash From Investing Activities -$468.0M -$44.00M -$857.0M
YoY Change 84.25% -87.74% 185.67%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $200.0M $240.0M
YoY Change 33.33% -4.38%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -286.0M -$246.0M -$340.0M
YoY Change 2100.0% 9.33% 3.98%
NET CHANGE
Cash From Operating Activities 204.0M $240.0M $1.338B
Cash From Investing Activities -468.0M -$44.00M -$857.0M
Cash From Financing Activities -286.0M -$246.0M -$340.0M
Net Change In Cash -550.0M -$50.00M $141.0M
YoY Change -2600.0% -67.95% -6.62%
FREE CASH FLOW
Cash From Operating Activities $204.0M $240.0M $1.338B
Capital Expenditures -$488.0M -$433.0M -$500.0M
Free Cash Flow $692.0M $673.0M $1.838B
YoY Change -6.61% 320.63% 214.19%

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CY2015 us-gaap Capital Lease Obligations Incurred
CapitalLeaseObligationsIncurred
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CY2015Q4 us-gaap Capital Lease Obligations Noncurrent
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CY2015Q4 us-gaap Capital Leased Assets Gross
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16 CapitalLeases
CY2015Q4 us-gaap Capital Leased Assets Number Of Units
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CY2015Q4 us-gaap Capital Leases Balance Sheet Assets By Major Class Net
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due Current
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due In Five Years
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due In Four Years
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due In Three Years
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due In Two Years
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Due Thereafter
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Interest Included In Payments
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CY2015Q4 us-gaap Capital Leases Future Minimum Payments Present Value Of Net Minimum Payments
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CY2014Q4 us-gaap Capital Leases Lessee Balance Sheet Assets By Major Class Accumulated Deprecation
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CY2015Q4 us-gaap Capital Leases Lessee Balance Sheet Assets By Major Class Accumulated Deprecation
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29000000 USD
CY2013 us-gaap Capitalized Computer Software Amortization
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CY2014 us-gaap Capitalized Computer Software Amortization
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CY2015 us-gaap Capitalized Computer Software Amortization
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CY2014Q4 us-gaap Capitalized Computer Software Net
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CY2015Q4 us-gaap Capitalized Computer Software Net
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CY2014 us-gaap Cargo And Freight Revenue
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CY2015 us-gaap Cargo And Freight Revenue
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CY2013Q4 us-gaap Cash And Cash Equivalents At Carrying Value
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CY2014Q4 us-gaap Cash And Cash Equivalents At Carrying Value
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CY2015Q4 us-gaap Cash And Cash Equivalents At Carrying Value
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CY2014 us-gaap Cash And Cash Equivalents Period Increase Decrease
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CY2015 us-gaap Cash And Cash Equivalents Period Increase Decrease
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CY2014 us-gaap Common Stock Dividends Per Share Cash Paid
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CY2015 us-gaap Common Stock Dividends Per Share Cash Paid
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CY2013 us-gaap Common Stock Dividends Per Share Declared
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CY2014 us-gaap Common Stock Dividends Per Share Declared
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CY2015 us-gaap Common Stock Dividends Per Share Declared
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CY2015Q4 us-gaap Common Stock Par Or Stated Value Per Share
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CY2015Q4 us-gaap Common Stock Shares Authorized
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CY2015Q4 us-gaap Common Stock Shares Issued
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CY2015Q4 us-gaap Common Stock Value
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CY2014 us-gaap Comprehensive Income Net Of Tax
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CY2015 us-gaap Comprehensive Income Net Of Tax
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CY2014 us-gaap Current Federal Tax Expense Benefit
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CY2015 us-gaap Current Federal Tax Expense Benefit
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CY2013 us-gaap Current Income Tax Expense Benefit
CurrentIncomeTaxExpenseBenefit
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CY2014 us-gaap Current Income Tax Expense Benefit
CurrentIncomeTaxExpenseBenefit
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CY2015 us-gaap Current Income Tax Expense Benefit
CurrentIncomeTaxExpenseBenefit
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CY2013 us-gaap Current State And Local Tax Expense Benefit
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CY2014 us-gaap Current State And Local Tax Expense Benefit
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CY2015 us-gaap Current State And Local Tax Expense Benefit
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CY2014Q4 us-gaap Debt And Capital Lease Obligations
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CY2015Q4 us-gaap Debt And Capital Lease Obligations
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CY2014Q4 us-gaap Deferred Tax Assets Operating Loss Carryforwards State And Local
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CY2015Q4 us-gaap Deferred Tax Assets Operating Loss Carryforwards State And Local
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62000000 USD
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CY2014Q4 us-gaap Deferred Air Traffic Revenue
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CY2015Q4 us-gaap Deferred Air Traffic Revenue
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CY2014Q4 us-gaap Deferred Compensation Cash Based Arrangements Liability Current
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CY2015Q4 us-gaap Deferred Compensation Cash Based Arrangements Liability Current
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CY2013 us-gaap Deferred Federal Income Tax Expense Benefit
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CY2014 us-gaap Deferred Federal Income Tax Expense Benefit
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CY2015 us-gaap Deferred Federal Income Tax Expense Benefit
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CY2013 us-gaap Deferred Income Tax Expense Benefit
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CY2014 us-gaap Deferred Income Tax Expense Benefit
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CY2015 us-gaap Deferred Income Tax Expense Benefit
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CY2015Q4 us-gaap Deferred Income Tax Liabilities
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CY2013 us-gaap Deferred State And Local Income Tax Expense Benefit
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CY2014 us-gaap Deferred State And Local Income Tax Expense Benefit
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CY2015 us-gaap Deferred State And Local Income Tax Expense Benefit
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CY2015Q4 us-gaap Deferred Tax Assets Derivative Instruments
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CY2014Q4 us-gaap Deferred Tax Assets Frequent Flier Liability
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90000000 USD
CY2015Q4 us-gaap Deferred Tax Assets Frequent Flier Liability
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CY2014Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Employee Benefits
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CY2015Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Employee Benefits
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CY2014Q4 us-gaap Deferred Tax Liabilities
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CY2015Q4 us-gaap Deferred Tax Liabilities
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CY2014Q4 us-gaap Deferred Tax Liabilities Noncurrent
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CY2015Q4 us-gaap Deferred Tax Liabilities Noncurrent
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CY2015Q4 us-gaap Defined Benefit Plan Accumulated Other Comprehensive Income Before Tax
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CY2015Q4 us-gaap Defined Benefit Plan Accumulated Other Comprehensive Income Net Gains Losses Before Tax
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CY2014Q4 us-gaap Defined Benefit Plan Accumulated Other Comprehensive Income Net Prior Service Cost Credit Before Tax
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CY2015Q4 us-gaap Defined Benefit Plan Accumulated Other Comprehensive Income Net Prior Service Cost Credit Before Tax
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9000000 USD
CY2014 us-gaap Defined Benefit Plan Actuarial Gain Loss
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CY2015 us-gaap Defined Benefit Plan Actuarial Gain Loss
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CY2014 us-gaap Defined Benefit Plan Amortization Of Gains Losses
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CY2013 us-gaap Defined Benefit Plan Amortization Of Prior Service Cost Credit
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CY2014 us-gaap Defined Benefit Plan Amortization Of Prior Service Cost Credit
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CY2015 us-gaap Defined Benefit Plan Amortization Of Prior Service Cost Credit
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CY2015Q4 us-gaap Defined Benefit Plan Amounts Recognized In Balance Sheet
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CY2014Q4 us-gaap Defined Benefit Plan Assumptions Used Calculating Benefit Obligation Discount Rate
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CY2015Q4 us-gaap Defined Benefit Plan Assumptions Used Calculating Benefit Obligation Discount Rate
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CY2013Q4 us-gaap Defined Benefit Plan Benefit Obligation
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CY2014Q4 us-gaap Defined Benefit Plan Benefit Obligation
DefinedBenefitPlanBenefitObligation
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CY2015Q4 us-gaap Defined Benefit Plan Benefit Obligation
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CY2015 us-gaap Defined Benefit Plan Effect Of One Percentage Point Increase On Service And Interest Cost Components
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CY2015Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Five Fiscal Years Thereafter
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CY2015Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Next Twelve Months
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CY2015Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Five
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CY2015Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Four
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8000000 USD
CY2015Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Three
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7000000 USD
CY2015Q4 us-gaap Defined Benefit Plan Expected Future Benefit Payments Year Two
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6000000 USD
CY2014Q4 us-gaap Defined Benefit Plan Funded Status Of Plan
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CY2015Q4 us-gaap Defined Benefit Plan Funded Status Of Plan
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CY2014 us-gaap Defined Benefit Plan Health Care Cost Trend Rate Assumed For Next Fiscal Year
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CY2015 us-gaap Defined Benefit Plan Health Care Cost Trend Rate Assumed For Next Fiscal Year
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CY2013 us-gaap Defined Benefit Plan Interest Cost
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CY2014 us-gaap Defined Benefit Plan Interest Cost
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CY2015 us-gaap Defined Benefit Plan Interest Cost
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7000000 USD
CY2013 us-gaap Defined Benefit Plan Net Periodic Benefit Cost
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33000000 USD
CY2014 us-gaap Defined Benefit Plan Net Periodic Benefit Cost
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CY2015 us-gaap Defined Benefit Plan Net Periodic Benefit Cost
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18000000 USD
CY2013 us-gaap Defined Benefit Plan Recognized Net Gain Loss Due To Settlements1
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CY2014 us-gaap Defined Benefit Plan Recognized Net Gain Loss Due To Settlements1
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1000000 USD
CY2015 us-gaap Defined Benefit Plan Recognized Net Gain Loss Due To Settlements1
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CY2013 us-gaap Defined Benefit Plan Service Cost
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30000000 USD
CY2014 us-gaap Defined Benefit Plan Service Cost
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10000000 USD
CY2015 us-gaap Defined Benefit Plan Service Cost
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11000000 USD
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3000000 USD
CY2015 us-gaap Defined Benefit Plan Settlements Benefit Obligation
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CY2015 us-gaap Defined Benefit Plan Ultimate Health Care Cost Trend Rate
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0.0519
CY2015Q4 us-gaap Defined Benefit Plan Year That Rate Reaches Ultimate Trend Rate
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2026
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497000000 USD
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439000000 USD
CY2014 us-gaap Defined Contribution Plan Cost Recognized
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644000000 USD
CY2015 us-gaap Defined Contribution Plan Cost Recognized
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945000000 USD
CY2014Q4 us-gaap Deposits On Flight Equipment
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566000000 USD
CY2015Q4 us-gaap Deposits On Flight Equipment
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1089000000 USD
CY2013 us-gaap Depreciation And Amortization
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867000000 USD
CY2014 us-gaap Depreciation And Amortization
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938000000 USD
CY2015 us-gaap Depreciation And Amortization
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1015000000 USD
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1360000000 USD
CY2015Q4 us-gaap Derivative Fair Value Of Derivative Asset
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1937000000 USD
CY2014Q4 us-gaap Derivative Fair Value Of Derivative Liability
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2409000000 USD
CY2015Q4 us-gaap Derivative Fair Value Of Derivative Liability
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3465000000 USD
CY2015Q4 us-gaap Derivative Nonmonetary Notional Amount Percent Of Required Need Coverage
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0.15
CY2013 us-gaap Dividends Cash
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91000000 USD
CY2014 us-gaap Dividends Cash
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151000000 USD
CY2015 us-gaap Dividends Cash
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188000000 USD
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1.06
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CY2014 us-gaap Earnings Per Share Basic
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0.89
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0.83
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3.30
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1.05
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0.22
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0.67
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0.48
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0.28
CY2014 us-gaap Earnings Per Share Diluted
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1.64
CY2015Q1 us-gaap Earnings Per Share Diluted
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0.66
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0.90
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0.88
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0.82
CY2015 us-gaap Earnings Per Share Diluted
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3.27
CY2015Q4 us-gaap Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized
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34000000 USD
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P1Y10M24D
CY2015 us-gaap Employee Service Share Based Compensation Tax Benefit From Compensation Expense
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0 USD
CY2015 us-gaap Fair Value Assets And Liabilities Measured On Recurring Basis Gain Loss Included In Earnings
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647000000 USD
CY2014Q4 us-gaap Fair Value Assets Level1 To Level2 Transfers Amount
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0 USD
CY2015Q4 us-gaap Fair Value Assets Level1 To Level2 Transfers Amount
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0 USD
CY2014Q4 us-gaap Fair Value Assets Level2 To Level1 Transfers Amount
FairValueAssetsLevel2ToLevel1TransfersAmount
0 USD
CY2015Q4 us-gaap Fair Value Assets Level2 To Level1 Transfers Amount
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0 USD
CY2014Q4 us-gaap Fair Value Liabilities Level1 To Level2 Transfers Amount
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0 USD
CY2015Q4 us-gaap Fair Value Liabilities Level1 To Level2 Transfers Amount
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0 USD
CY2014Q4 us-gaap Fair Value Liabilities Level2 To Level1 Transfers Amount
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0 USD
CY2015Q4 us-gaap Fair Value Liabilities Level2 To Level1 Transfers Amount
FairValueLiabilitiesLevel2ToLevel1TransfersAmount
0 USD
CY2014 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Gain Loss Included In Earnings1
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CY2015 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Gain Loss Included In Earnings1
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CY2014 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Purchases
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403000000 USD
CY2015 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Purchases
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750000000 USD
CY2014 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Sales
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170000000 USD
CY2015 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Sales
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200000000 USD
CY2014 us-gaap Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Asset Settlements
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:16px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Concentration Risk</font></div><div style="line-height:120%;text-indent:16px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Approximately </font><font style="font-family:Times New Roman;font-size:11pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">83 percent</font><font style="font-family:inherit;font-size:11pt;"> of the Company&#8217;s full-time equivalent Employees are unionized and are covered by collective-bargaining agreements. The majority of the Company's unionized Employees, including its Pilots, Mechanics, Ramp, Operations, Provisioning and Freight Agents, Flight Attendants, Material Specialists, Flight Crew Training Instructors, Facilities Maintenance Technicians, and Source of Support Representatives are in discussions on labor agreements or have labor agreements which will become amendable within one year. These Employee groups represent approximately </font><font style="font-family:Times New Roman;font-size:11pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">69 percent</font><font style="font-family:inherit;font-size:11pt;"> of the Company&#8217;s full-time equivalent Employees as of </font><font style="font-family:Times New Roman;font-size:11pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">December&#160;31, 2015</font><font style="font-family:inherit;font-size:11pt;">. </font></div><div style="line-height:120%;text-align:justify;text-indent:41px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Company attempts to minimize its concentration risk with regards to its cash, cash equivalents, and its investment portfolio. This is accomplished by diversifying and limiting amounts among different counterparties, the type of investment, and the amount invested in any individual security or money market fund.</font></div><div style="line-height:120%;text-align:justify;text-indent:41px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">To manage risk associated with financial derivative instruments held, the Company selects and will periodically review counterparties based on credit ratings, limits its exposure to a single counterparty, and monitors the market position of the program and its relative market position with each counterparty. The Company also has agreements with counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount or credit ratings fall below certain levels. Collateral deposits provided to or held from counterparties serve to decrease, but not totally eliminate, the credit risk associated with the Company&#8217;s hedging program. See </font><font style="font-family:inherit;font-size:11pt;">Note 10</font><font style="font-family:inherit;font-size:11pt;"> for further information.</font></div><div style="line-height:120%;text-align:justify;text-indent:41px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">As of </font><font style="font-family:Times New Roman;font-size:11pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">December&#160;31, 2015</font><font style="font-family:inherit;font-size:11pt;">, the Company operated an all-Boeing fleet, all of which are variations of the Boeing 737. Following the 2011 acquisition of AirTran, the Company also operated a fleet of Boeing 717's, but these aircraft were removed from the Company's operations prior to the end of 2014. See Note </font><font style="font-family:inherit;font-size:11pt;">7</font><font style="font-family:inherit;font-size:11pt;"> for further information. If the Company were unable to acquire additional aircraft or associated aircraft parts from Boeing, or Boeing were unable or unwilling to make timely deliveries of aircraft or to provide adequate support for its products, the Company&#8217;s operations would be materially adversely impacted. In addition, the Company would be materially adversely impacted in the event of a mechanical or regulatory issue associated with the Boeing 737 aircraft type, whether as a result of downtime for part or all of the Company&#8217;s fleet, increased maintenance costs, or because of a negative perception by the flying public. The Company is also dependent on sole suppliers for aircraft engines and certain other aircraft parts and would, therefore, also be materially adversely impacted in the event of the unavailability of, or a mechanical or regulatory issue associated with, engines and other parts.</font></div><div style="line-height:120%;text-align:justify;text-indent:41px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Company has historically entered into agreements with some of its co-brand, payment, and loyalty partners that contain exclusivity aspects which place certain confidential restrictions on the Company from entering into certain arrangements with other payment and loyalty partners. These arrangements generally extend for the terms of the partnerships, none of which currently extend beyond </font><font style="font-family:inherit;font-size:10pt;"><font style="font-family:inherit;font-size:11pt;">May 2022</font></font><font style="font-family:inherit;font-size:11pt;">. The Company believes the financial benefits generated by the exclusivity aspects of these arrangements outweigh the risks involved with such agreements.</font></div></div>

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