potential negative impact of adverse changes in these prices or rates on our Consolidated Financial Statements. In an effort to manage our exposure to these risks, we enter into derivative contracts and may adjust our derivative portfolio as market conditions change. We expect adjustments to the fair value of financial instruments to result in ongoing volatility in earnings and stockholders' equity.

The following sensitivity analysis does not consider the effects of a change in demand for air travel, the economy as a whole or actions we may take to seek to mitigate our exposure to a particular risk. For these and other reasons, the actual results of changes in these prices or rates may differ materially from the following hypothetical results.

Aircraft Fuel Price Risk

Changes in aircraft fuel prices materially impact our results of operations. We actively manage our fuel price risk through a hedging program intended to reduce the financial impact from changes in the price of jet fuel. We utilize different contract and commodity types in this program and frequently test their economic effectiveness against our financial targets. We closely monitor the hedge portfolio and rebalance the portfolio based on market conditions, which may result in locking in gains or losses on hedge contracts prior to their settlement dates .

Our fuel hedge portfolio consists of options, swaps and futures. The hedge contracts include crude oil, diesel fuel and jet fuel, as these commodities are highly correlated with the price of jet fuel that we consume. Our fuel hedge contracts contain margin funding requirements. The margin funding requirements may cause us to post margin to counterparties or may cause counterparties to post margin to us as market prices in the underlying hedged items change. If fuel prices change significantly from the levels existing at the time we enter into fuel hedge contracts, we may be required to post a significant amount of margin. We may adjust our hedge portfolio from time to time in response to margin posting requirements.

For the year ended December 31, 2015 , aircraft fuel and related taxes, including our regional carriers, accounted for $7.6 billion , or 23.0% , of our total operating expense. We recognized $741 million of fuel hedge losses during the year ended December 31, 2015 , due to unfavorable MTM adjustments.

During the December 2015 quarter, we entered into hedges designed to offset and effectively terminate our existing hedge positions for the March 2016 quarter. In January 2016, we continued this process for substantially all of our positions with contract settlement dates through December 31, 2016. As a result, we have both neutralized our hedge portfolio and locked in cash payments of approximately $725 million in 2016.

The following table shows the projected cash impact to fuel cost assuming 20% and 40% increases or decreases in fuel prices for the period from February 1, 2016 to December 31, 2016. As a result of effectively terminating our hedge positions as discussed above, the impact of our hedge portfolio due to changes in fuel prices during 2016 is not significant.



Interest Rate Risk

Our exposure to