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The following table presents the effect a hypothetical 10% change in the underlying commodity prices would have on the estimated fair value of our commodity derivative instruments as of the dates indicated:
−Removed: Commodity Contracts December 31,
−Removed: 2023 December 31,
+Added: Commodity Contracts Dec.
( Millions of dollars )
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INTEREST-RATE RISK
−Removed: We are exposed to interest-rate risk through borrowings under our $2.5 Billion Credit Agreement, commercial paper program, term loan agreements and long-term debt issuances.
−Removed: Future increases in commercial paper rates or bond rates could expose us to increased interest costs on future borrowings.
+Added: We are exposed to interest-rate risk through borrowings under our $3.5 Billion Credit Agreement, commercial paper program and long-term debt issuances.
+Added: Future increases in commercial paper rates or bond rates could expose us to increased interest
+Added: costs on future borrowings.
We may manage interest-rate risk through the use of fixed-rate debt, floating-rate debt, Treasury locks and interest-rate swaps.
−Removed: T able of Contents
Treasury locks are agreements to pay the difference between the benchmark Treasury rate and the rate that is designated in the terms of the agreement.
−Removed: In the second quarter of 2023, we entered into $1.1 billion of Treasury locks to hedge the variability of interest payments on a portion of our forecasted debt issuances.
−Removed: In the third quarter of 2023, we settled all of our Treasury locks related to our underwritten public offering of $5.25 billion senior unsecured notes associated with the Magellan Acquisition.
−Removed: At both December 31, 2023, and December 31, 2022, we had no outstanding Treasury lock agreements.
+Added: In the third quarter of 2024, we entered into $1.5 billion of Treasury locks to hedge the variability of interest payments on a portion of our forecasted debt issuances.
+Added: In the same quarter, we settled all of our $1.5 billion Treasury locks related to our underwritten public offering of $7.0 billion senior unsecured notes associated with the EnLink Controlling Interest Acquisition and Medallion Acquisition.
+Added: All of our Treasury locks were designated as cash flow hedges.
+Added: 31, 2024, and Dec.
+Added: 31, 2023, we had no outstanding Treasury lock agreements.
Interest-rate swaps are agreements to exchange interest payments at some future point based on specified notional amounts.
−Removed: At December 31, 2022, we had forward-starting interest-rate swaps with notional amounts totaling $0.4 billion to hedge the variability of interest payments on a portion of our forecasted debt issuances.
−Removed: In the third quarter of 2023, we settled all of our $0.4 billion forward-starting interest-rate swaps related to our underwritten public offerings of $5.25 billion senior unsecured notes associated with the Magellan Acquisition.
−Removed: At December 31, 2023, we had no outstanding forward-starting interest-rate swaps.
+Added: EnLink previously entered into $400 million interest rate swaps associated with the EnLink Revolving Credit Facility and the EnLink AR Facility.
+Added: In December 2024, EnLink terminated the $400 million interest rate swaps upon repayment of outstanding amounts under the EnLink Revolving Credit Facility and termination of the EnLink AR Facility.
+Added: 31, 2024, and Dec.
+Added: 31, 2023, we had no outstanding interest-rate swap agreements.
See Note E of the Notes to Consolidated Financial Statements in this Annual Report for more information on our hedging activities.
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Certain of our counterparties may be impacted by a relatively low commodity price environment and could experience financial problems, which could result in nonpayment and/or nonperformance, which could impact adversely our results of operations.
−Removed: Natural Gas Gathering and Processing - Our Natural Gas Gathering and Processing segment derives services revenue primarily from major and independent crude oil and natural gas producers, which include both large integrated and independent exploration and production companies.
+Added: As a result of our recent acquisitions, we now transact with the counterparties of EnLink and Medallion.
+Added: A substantial portion of EnLink and Medallion counterparties are rated investment-grade by S&P or provide a letter of credit or other collateral.
+Added: Natural Gas Gathering and Processing - Our Natural Gas Gathering and Processing segment derives fees for services primarily from major and independent crude oil and natural gas producers, which include both large integrated and independent exploration and production companies.
In this segment, our downstream commodity sales customers are primarily utilities, large industrial companies, marketing companies and our NGL affiliate.
We are not typically exposed to material credit risk with producers under fee with POP contracts as we sell the commodities and remit a portion of the sales proceeds back to the producer less our contractual fees.
−Removed: In 2023 and 2022, approximately 90% and 95%, respectively, of the downstream commodity sales in our Natural Gas Gathering and Processing segment were made to customers rated investment-grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit or other collateral.
+Added: In 2024, excluding EnLink, and 2023, approximately 85% and 90%, respectively, of the downstream commodity sales in our Natural Gas Gathering and Processing segment were made to customers rated investment-grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit or other collateral.
Natural Gas Liquids - Our Natural Gas Liquids segment’s counterparties are primarily NGL and natural gas gathering and processing companies;
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We also earn sales revenue on the downstream sales of Purity NGLs.
−Removed: In 2023 and 2022, approximately 85% of this segment’s commodity sales were made to customers rated investment-grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit or other collateral.
+Added: In 2024, excluding EnLink, and 2023, approximately 90% and 85%, respectively of this segment’s commodity sales were made to customers rated investment-grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit or other collateral.
In addition, the majority of our Natural Gas Liquids segment’s pipeline tariffs provide us the ability to require security from shippers.
Natural Gas Pipelines - Our Natural Gas Pipelines segment’s customers are primarily local natural gas distribution companies, electric-generation facilities, large industrial companies, municipalities, producers, processors and marketing companies.
−Removed: In 2023 and 2022, approximately 90% of our revenues in this segment were from customers rated investment-grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit or other collateral.
+Added: In 2024, excluding EnLink, and 2023, approximately 90% of our revenues in this segment were from customers rated investment grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit or other collateral.
In addition, the majority of our Natural Gas Pipelines segment’s pipeline tariffs provide us the ability to require security from shippers.
Refined Products and Crude - Our Refined Products and Crude segment’s customers include refiners, wholesalers, retailers, traders, railroads, airlines and regional farm cooperatives.
−Removed: In the fourth quarter of 2023, approximately 70% of our revenues in this segment were from customers rated investment grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit, liens, or other collateral.
−Removed: T able of Contents
+Added: In 2024, excluding EnLink and Medallion, and the fourth quarter of 2023, approximately 70% of our revenues in this segment were from customers rated investment-grade by S&P, approved through comparable internal counterparty analysis or were secured by letters of credit, liens, or other collateral.
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.