QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
+Added: We are exposed to market risk resulting from changes in currency exchange rates and interest rates.
+Added: These risks, along with other business risks, impact our cost of capital.
+Added: It is our policy to manage our debt structure and foreign exchange exposure in order to manage capital costs, control financial risks and maintain financial flexibility over the long term.
+Added: In managing market risks, we may employ derivatives according to documented policies and procedures, including interest rate swaps, interest rate locks, foreign currency exchange contracts and combined interest rate foreign currency contracts (cross-currency swaps).
+Added: We do not use derivatives for trading or speculative purposes.
+Added: We do not foresee significant changes in the strategies we use to manage market risk in the near future.
+Added: All of our financial instruments, including derivatives, are subject to counterparty credit risk considered as part of the overall fair value measurement.
Interest Rates.
10 unchanged sentences
Impact of 100 basis point increase in market rates on fair value (657)
−Removed: As most recently announced on November 30, 2020, LIBOR is expected to be phased out starting on January 1, 2022 for the one-week and two-month USD LIBOR settings and starting on July 1, 2023 for the remaining USD LIBOR settings.
+Added: LIBOR is being phased out starting on January 1, 2022 for the one-week and two-month USD LIBOR settings and starting on July 1, 2023 for the remaining USD LIBOR settings.
Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR may adversely impact our interest rates and related interest expense.
−Removed: As of December 31, 2020, the Company had $9.5 billion in variable rate indebtedness.
See Part II, Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations—Other Liquidity Matters, of this report for more information on interest expense.
+Added: Risks and uncertainties related to the LIBOR phase out are further described in Part I, Item 1A.
+Added: Risk Factors— " The proposed phase out of the London interbank offer rate could have a material adverse effect on us."
A change in market interest rates would also impact interest income earned on our cash, cash equivalents and short-term investments.
5 unchanged sentences
The Company's current strategy is to not enter into transactions to hedge fuel price volatility, although the Company regularly reviews its policy based on market conditions and other factors.
−Removed: The Company's 2021 forecasted fuel consumption is presently approximately 2.1 billion gallons, and based on this forecast, a one-dollar change in the price of a barrel of crude oil would change the Company's annual fuel expense by approximately $49 million.
+Added: A one-dollar change in the price of a barrel of aircraft fuel would change the Company's annual fuel expense by approximately $102 million, assuming flying levels similar to 2019.
Foreign Currency.
2 unchanged sentences
Some of the Company's more significant foreign currency exposures include the Canadian dollar, Chinese renminbi, European euro, British pound and Japanese yen.
−Removed: The Company's current strategy is to not enter into transactions to hedge its foreign currency sales, although the Company regularly reviews its policy based on market conditions and other factors.
+Added: The Company's current strategy is to not enter into transactions to hedge its foreign currency exposure, although the Company regularly reviews its policy based on market conditions and other factors.
The result of a uniform 1% strengthening in the value of the U.S.
2 unchanged sentences
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.