SOUTHWEST AIRLINES CO | 2013 | FY | 3

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 2013 and 2012:

(in millions)
Fuel derivatives
 
Interest rate derivatives
 
Defined benefit plan items
 
Other
 
Deferred tax impact
 
Accumulated other
comprehensive income (loss)
Balance at December 31, 2011
$
(297
)

$
(107
)

$
54


$
(14
)

$
140

 
$
(224
)
2012 changes in fair value
31


(27
)

(28
)

6


(73
)
 
(91
)
Reclassification to earnings
163


26


—


—


7

 
196

Balance at December 31, 2012
$
(103
)

$
(108
)

$
26


$
(8
)

$
74


$
(119
)
2013 changes in fair value
(82
)

22


39


16


—

 
(5
)
Reclassification to earnings
165


28


—


—


(72)

 
121

Balance at December 31, 2013
$
(20
)

$
(58
)

$
65


$
8


$
2


$
(3
)

The following table illustrates the significant amounts reclassified out of each component of AOCI for the year ended December 31, 2013:

Year ended December 31, 2013
(in millions)
 
Amounts reclassified from AOCI
 
Affected line item in the Consolidated Statement of Comprehensive Income
AOCI components
 
 
Unrealized gain on fuel derivative instruments
 
$
165

 
Fuel and oil expense
 
 
62

 
Less: Tax Expense
 
 
$
103

 
Net of tax
Unrealized gain on interest rate derivative instruments
 
$
28

 
Interest expense
 
 
10

 
Less: Tax Expense
 
 
$
18

 
Net of tax
 
 
 
 
 
Total reclassifications for the period
 
$
121

 
Net of tax

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