Loss expected to be reclassified

  
  
  
Fair Values of Derivative Instruments   
Fair values of derivative instruments on the consolidated balance sheet (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |
| Fuel hedge contracts (not designated as hedges) |  |  |  |
| Prepaid expenses and other current assets | $ | 71  |  |  | $ | 11  |  |
| Other assets | 10  |  |  | 4  |  |
| Interest rate swaps (designated as hedges) |  |  |  |
|  |  |  |  |
|  |  |  |  |
| Other accrued liabilities | (6) |  |  | (10) |  |
| Other liabilities | (3) |  |  | (15) |  |
| Gains (losses) in accumulated other comprehensive loss (AOCL) | 17  |  |  | (21) |  |

  
The net cash received from settlements offset by cash paid for new fuel hedge positions was $38 million during 2021, compared to net cash paid of $14 million and $19 million during 2020 and 2019.  
Pretax effect of derivative instruments on earnings and AOCL (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| Fuel hedge contracts (not designated as hedges) |  |  |  |  |  |
| Gains (losses) recognized in Aircraft fuel | $ | 104  |  |  | $ | (10) |  |  | $ | (10) |  |
| Interest rate swaps (designated as hedges) |  |  |  |  |  |
| Losses recognized in Aircraft rent | —  |  |  | (3) |  |  | (3) |  |
| Gains (losses) recognized in other comprehensive income (OCI) | 17  |  |  | (21) |  |  | (13) |  |

  
The amounts shown as recognized in aircraft rent for cash flow hedges (interest rate swaps) represent the realized losses transferred out of AOCL to aircraft rent. Losses related to interest rate swaps on variable rate debt of $10 million were recognized in interest expense during 2021. The amounts shown as recognized in OCI are prior to the losses recognized in aircraft rent during the period. The Company expects to reclassify from OCI $6 million in interest expense within the next twelve months.  
67
