3 unchanged sentences
(i) prevailing interest rates, (ii) foreign exchange rates, (iii) credit risk and (iv) inflation.
−Removed: Our exposure to market risk relates to interest payments due on our long-term debt, Revolver, derivative instruments, income on cash and cash equivalents, accounts receivable and payable and travel supplier liabilities and related deferred revenue.
+Added: Our exposure to market risk relates to interest payments due on our long-term debt, derivative instruments, income on cash and cash equivalents, accounts receivable and payable, subscriber incentive liabilities and deferred revenue.
We manage our exposure to these risks through established policies and procedures.
2 unchanged sentences
Interest Rate Risk
−Removed: As of December 31, 2020, our exposure to interest rates relates primarily to our interest rate swaps, our senior secured credit facilities and our borrowings on our Revolver.
+Added: As of December 31, 2021, our exposure to interest rates relates primarily to our senior secured credit facilities, as all of our interest rate swaps have matured.
Offsetting some of this exposure is interest income received from our money market funds.
2 unchanged sentences
This amount was determined by applying the hypothetical interest rate change to our average money market funds invested.
−Removed: In connection with the 2017 Term Facility Amendment, we entered into forward starting interest rate swaps effective March 31, 2017 to hedge the interest payments associated with $750 million of the floating-rate 2017 Term Loan B.
−Removed: The total notional amount outstanding of $750 million became effective December 31, 2018 and extended through the full year 2019.
In September 2017, we entered into forward starting interest rate swaps to hedge the interest payments associated with $750 million of the floating-rate Term Loan B.
−Removed: The total notional outstanding of $750 million became effective December 31, 2019 and extends through the full year 2020.
+Added: The total notional outstanding of $750 million became effective December 31, 2019 and extended through the full year 2020.
In April 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $600 million, $300 million and $450 million of the floating-rate Term Loan B related to years 2019, 2020 and 2021, respectively.
In December 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $150 million of the floating-rate Term Loan B for the years 2020 and 2021.
−Removed: We have designated these swaps as cash flow hedges.
−Removed: Interest rate swaps outstanding at December 31, 2020 and matured during the years ended December 31, 2020, 2019 and 2018 are as follows:
+Added: We designated these swaps as cash flow hedges.
+Added: Interest rate swaps matured during the years ended December 31, 2021, 2020 and 2019 are as follows:
Notional Amount Interest Rate
7 unchanged sentences
2.81% December 31, 2020 December 31, 2021
−Removed: $600 million 1 month LIBOR (1)
−Removed: 2.81% December 31, 2020 December 31, 2021
(1) Subject to a 1% floor.
−Removed: Since outstanding balances under our senior secured credit facilities incur interest at rates based on LIBOR, subject to a 0% floor, increases in short-term interest rates would impact our interest expense.
+Added: Since outstanding balances under our senior secured credit facilities incur interest at rates based on LIBOR, subject to an applicable floor, increases in short-term interest rates would impact our interest expense.
If our mix of interest rate-sensitive assets and liabilities changes significantly, we may enter into additional derivative transactions to manage our net interest rate exposure.
−Removed: The fair value of these interest rate swaps was a liability of $16 million and $15 million at December 31, 2020 and 2019, respectively.
+Added: We did not have any liabilities from interest rate swaps for the year ended December 31, 2021.
+Added: The fair value of these interest rate swaps was a liability of $16 million at December 31, 2020.
+Added: As of December 31, 2021, we had outstanding approximately $2.8 billion of variable debt that is indexed to LIBOR consisting of Term Loan B for $1.8 billion, Term Loan B-1 for $401 million and Term Loan B-2 for $635 million.
+Added: In July 2017, the Financial Conduct Authority announced its intention to phase out LIBOR by the end of 2021, and subsequently extended the phase-out date to June 30, 2023.
+Added: See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Senior Secured Credit Facilities" for the estimated impacts of this change.
+Added: We intend to seek an amendment with our lenders of Term Loan B prior to June 2023 to provide for a transition to SOFR or another alternative to LIBOR in anticipation of its discontinuation, but there can be no assurance that we will be able to reach an agreement with our lenders for any such amendment or that the incremental amount of any interest pursuant to such amendment would be significantly less than current requirements.
Foreign Currency Risk
8 unchanged sentences
During times of volatile currency movements, this risk can impact our earnings.
−Removed: To reduce the impact of this earnings volatility, we hedge a portion of our foreign currency exposure in our operating expenses by entering into foreign currency forward contracts on several of our largest exposures, including the Indian Rupee, the British Pound Sterling, the Australian Dollar, the Polish Zloty, the Singaporean Dollar, and the Swedish Krona.
−Removed: Additionally,
−Removed: approximately 26% of our exposure in foreign currency operating expenses is naturally hedged by foreign currency cash receipts associated with foreign currency revenue.
+Added: To reduce the impact of this earnings volatility, we have historically hedged a portion of our foreign currency exposure in our operating expenses by entering into foreign currency forward contracts on several of our largest exposures, including the Indian Rupee, the British Pound Sterling, the Australian Dollar, the Polish Zloty, the Singaporean Dollar, and the Swedish Krona.
+Added: Additionally, approximately 35% of our exposure in foreign currency operating expenses is naturally hedged by foreign currency cash receipts associated with foreign currency revenue.
Our forward contracts represent obligations to purchase foreign currencies at a predetermined exchange rate to fund a portion of our expenses that are denominated in foreign currencies.
3 unchanged sentences
dollars in consolidation.
−Removed: These gains and losses are recognized as a component of accumulated other comprehensive income (loss) and is included in stockholders’ equity.
−Removed: We recognized net translation gains in other comprehensive income (loss) of $8 million for the year ended December 31, 2020 and net translation losses of $2 million and $4 million for the years ended December 31, 2019 and 2018, respectively.
+Added: These gains and losses are recognized as a component of accumulated other comprehensive loss and is included in stockholders’ (deficit) equity.
+Added: We recognized net translation gains in other comprehensive income (loss) of $7 million and $2 million for the years ended December 31, 2021 and 2019, respectively, and net translation losses of $8 million for the year ended December 31, 2020.
Our customers are primarily located in the United States, Canada, Europe, Latin America and Asia, and are concentrated in the travel industry.
4 unchanged sentences
We generally do not require security or collateral from our customers as a condition of sale.
−Removed: See “ Risk Factors —Our travel supplier customers may experience financial instability or consolidation, pursue cost reductions, change their distribution model or undergo other changes.”
+Added: See “ Risk Factors —Our travel supplier customers may
+Added: experience financial instability or consolidation, pursue cost reductions, change their distribution model or undergo other changes.”
We regularly monitor the financial condition of the air transportation industry.
−Removed: We believe the credit risk related to the air carriers’ difficulties is significantly mitigated by the fact that we collect a significant portion of the receivables from these carriers through the Airline Clearing House (“ACH”).
+Added: We believe the credit risk related to the air carriers’ difficulties is significantly mitigated by the fact that we collect a significant portion of the receivables from these carriers through clearing houses, such as the Airline Clearing House (“ACH”).
As of December 31, 2021, 2020 and 2019, approximately 53%, 52%, and 59%, respectively, of our air customers make payments through the ACH which accounts for approximately 82%, 63% and 89%, respectively, of our air billings.
5 unchanged sentences
There can be no assurance, however, that our operating results will not be affected by inflation in the future.
+Added: An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, caused by COVID-19 or as a result of general macroeconomic factors, could have a material adverse impact on our operations, results of operations, liquidity or cash flows.
+Added: See Item 7 , “ Management’s Discussion and Analysis of Financial Condition and Results of Operations —Factors Affecting our Results—Technology transformation and change in mix of technology spend” and “Risk Factors—Our business could be harmed by adverse global and regional economic and political conditions."
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.