2 unchanged sentences
The Company is exposed to various market risks, including the effects of adverse changes in commodity prices and credit risk as described below.
−Removed: The Company continually monitors its market risk exposure, including the impact and developments related to the COVID-19 pandemic, which introduced significant volatility and uncertainties in the financial markets during 2020 and 2021.
+Added: The Company continually monitors its market risk exposure, including the impact and developments related to the armed conflict in Ukraine, increase in interest rate and inflation trend, which introduced significant volatility and uncertainties in the financial markets during 2022.
Commodity Price Risk
−Removed: Currently, essentially all of the Company’s midstream service agreements are fee-based, with no direct commodity price exposure to oil, natural gas, or NGLs, and only an immaterial portion of the agreements are based on the underlying value of a commodity.
−Removed: However, the Company is indirectly exposed to adverse changes in commodity prices through Apache and potential third-party customers’ economic decisions to develop and produce oil and natural gas from which Altus receives revenues for providing gathering, processing, and transmission services.
+Added: The results of the Company’s operations may be affected by the market prices of oil and natural gas.
+Added: A portion of the Company’s revenue is directly tied to local natural gas, NGLs and condensate prices in the Permian Basin.
Fluctuations in commodity prices also impact operating cost elements both directly and indirectly.
2 unchanged sentences
Management regularly reviews the Company’s potential exposure to commodity price risk, and may periodically enter into financial or physical arrangements intended to mitigate potential volatility.
+Added: Refer to Note 16—Derivative and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding our hedging strategies and objectives.
Interest Rate Risk
−Removed: At September 30, 2021, Altus Midstream had $657.0 million of proceeds drawn on its revolving credit facility.
+Added: The market risk inherent in our financial instruments and our financial position represents the potential loss arising from adverse changes in interest rates.
+Added: As of March 31, 2022, the Company had interest bearing debt, net of deferred financing costs, with principal amount of $2.95 billion.
The interest rate for the facility is variable, which exposes the Company to the risk of increased interest expense in the event of increases to short-term interest rates.
−Removed: If interest rates increased by 1.0 percent, the Company’s annual consolidated interest expense would have increased by approximately $1.7 million for the quarter ended September 30, 2021.
Accordingly, results of operations, cash flows, financial condition, and the ability to make cash distributions could be adversely affected by significant increases in interest rates.
−Removed: Altus currently has no interest rate derivative instruments outstanding, but the Company continues to monitor its interest rate exposure and may enter into interest rate derivative instruments in the future if it determines that it is necessary to invest in such instruments in order to mitigate its interest rate risk.
−Removed: The Company is subject to credit risk resulting from nonpayment or nonperformance by, or the insolvency or liquidation of, Apache or third-party customers.
+Added: If interest rates increase by 1.0%, the Company’s consolidated interest expense would have increased by approximately $6.5 million for the quarter ended March 31, 2022.
+Added: The Company may periodically enter into interest rate derivatives to add stability to interest expense and to manage its exposure to interest rate movements.
+Added: Refer to Note 16—Derivative and Hedging Activities in the Notes to our Condensed Consolidated Financial Statements in this Form 10-Q for additional discussion regarding our hedging strategies and objectives.
+Added: The Company is subject to credit risk resulting from nonpayment or nonperformance by, or the insolvency or liquidation of third-party customers.
Any increase in the nonpayment and nonperformance by, or the insolvency or liquidation of, the Company’s customers could adversely affect the Company’s results of operations.
+Added: Table of Con tents
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.