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TableofContents
Foreign Currency Exchange Rate Risk
Wearesubjecttoforeigncurrencyexchangerateriskbecausewehaverevenueandexpensedenominatedinforeigncurrencieswithourprimaryexposures
beingtheJapaneseyenandCanadiandollar.Tomanageexchangeraterisk,weexecutebothourinternationalrevenueandexpensetransactionsinthesameforeign
currencytotheextentpracticable.Fromtimetotime,wemayalsoenterintoforeigncurrencyoptionandforwardcontracts.Theseforeigncurrencyexchange
contractsaredesignatedascashflowhedges.
During2014,werestructuredcertainforeigncurrencyexchangecontractsbyre-hedgingexposuresatcurrentmarketlevels,resultinginanunrealizedgainof
$150million.Thegainonthesecontractswasrecognizedduring2015inaccordancewiththeiroriginalcontractsettlementdates.
Hedge Position as of December 31, 2015
(inmillions) Volume
FinalMaturity
Date
Hedge
Derivatives
Asset
Other
Noncurrent
Assets
Hedge
Derivatives
Liability
Other
Noncurrent
Liabilities
Hedge
Derivatives,net
Designated as hedges
Interestratecontract(fair
valuehedge) 384 U.S.dollars August2022 $ 4 $ — $ — $ (7) $ (3)
Foreigncurrencyexchange
contracts
46,920 Japaneseyen July2018 76 20 (1)(1) 94
395 Canadiandollars
Not designated as hedges
Fuelhedgecontracts 887 gallons-crudeoil,diesel
andjetfuel
November
2017 1,907 4 (2,580) (3) (672)
Totalderivativecontracts
$ 1,987 $ 24 $ (2,581) $ (11) $ (581)
Hedge Position as of December 31, 2014
(inmillions) Volume
FinalMaturity
Date
Hedge
Derivatives
Asset
Other
Noncurrent
Assets
Hedge
Derivatives
Liability
Other
Noncurrent
Liabilities
Hedge
Derivatives,
net
Designated as hedges
Interestratecontract(fair
valuehedge) 416 U.S.dollars August2022 $ 5 $ — $ — $ (12) $ (7)
Foreigncurrencyexchange
contracts
77,576 Japaneseyen October2017 25 49 (1) — 73
511 Canadiandollars
Not designated as hedges
Fuelhedgecontracts 3,286 gallons-crudeoil,diesel
andjetfuel
December
2016 1,048 3 (2,771) (128) (1,848)
Totalderivativecontracts
$ 1,078 $ 52 $ (2,772) $ (140) $ (1,782)
Offsetting Assets and Liabilities
Wehavemasternettingarrangementswithallofourcounterpartiesgivingustherightofsetoff.Wehaveelectednottooffsetthefairvaluepositionsrecorded
onourConsolidatedBalanceSheets.Thefollowingtableshowsthepotentialnetfairvaluepositionshadweelectedtooffset.
(inmillions)
HedgeDerivatives
Asset
OtherNoncurrent
Assets
Hedge
Derivatives
Liability
OtherNoncurrent
Liabilities
Hedge
Derivatives,Net
December31,2015
Netderivativecontracts $ 143 $ 21 $ (737) $ (8) $ (581)
December31,2014
Netderivativecontracts $ 29 $ 49 $ (1,723) $ (137) $ (1,782)
71