3 unchanged sentences
Our risk management policies and procedures are designed to help ensure that our hedging activities address our risks by monitoring our exchange-cleared and over-the-counter positions, as well as physical volumes, grades, locations, delivery schedules and storage capacity.
−Removed: The board of directors of our general partner, acting through the Audit Committee, retains a general oversight role with respect to the management of these risks while management is directly responsible for our risk management activities.
−Removed: The Audit Committee has authorized the formation of a Risk Management Committee composed of senior members of management that oversees and works with our risk management function to ensure that we are in compliance with our risk policies and procedures and that we maintain related controls around commercial activities and certain aspects of corporate risk management.
−Removed: Our Risk Management Committee also approves all new risk management strategies through a formal process.
+Added: We have a risk management function that has direct responsibility and authority for our risk policies, related controls around commercial activities and certain aspects of corporate risk management.
+Added: Our risk management function also approves all new risk management strategies through a formal process.
The following discussion addresses each category of risk.
1 unchanged sentence
We use derivative instruments to hedge price risk associated with the following commodities:
−Removed: We utilize crude oil derivatives to hedge commodity price risk inherent in our Supply and Logistics and Transportation segments.
+Added: We utilize crude oil derivatives to hedge commodity price risk inherent in our pipeline and merchant activities.
Our objectives for these derivatives include hedging anticipated purchases and sales, stored inventory and basis differentials.
1 unchanged sentence
• Natural gas
−Removed: We utilize natural gas derivatives to hedge commodity price risk inherent in our Supply and Logistics and Facilities segments.
+Added: We utilize natural gas derivatives to hedge commodity price risk inherent in our merchant activities.
Our objectives for these derivatives include hedging anticipated purchases of natural gas.
1 unchanged sentence
• NGL and other
−Removed: We utilize NGL derivatives, primarily propane and butane derivatives, to hedge commodity price risk inherent in our Supply and Logistics segment.
+Added: We utilize NGL derivatives, primarily propane and butane derivatives, to hedge commodity price risk inherent in our merchant activities.
Our objectives for these derivatives include hedging anticipated purchases and sales and stored inventory.
7 unchanged sentences
$ (15) $ (41) $ 41
+Added: 18 $ 19 $ (19)
NGL and other
9 unchanged sentences
All of PAA’s senior notes are fixed rate notes and thus are not subject to interest rate risk.
−Removed: Our variable rate debt outstanding at December 31, 2020, approximately $914 million, was subject to interest rate re-sets that generally range from one day to approximately one month.
+Added: We did not have any variable rate debt outstanding at December 31, 2021.
The average interest rate on variable rate debt that was outstanding during the year ended December 31, 2021 was 0.8%, based upon rates in effect during the year.
3 unchanged sentences
See Note 13 to our Consolidated Financial Statements for a discussion of our interest rate risk hedging activities.
−Removed: Currency Exchange Rate Risk
−Removed: We use foreign currency derivatives to hedge foreign currency exchange rate risk associated with our exposure to fluctuations in the USD-to-CAD exchange rate.
−Removed: Because a significant portion of our Canadian business is conducted in CAD we use certain financial instruments to minimize the risks of unfavorable changes in exchange rates.
−Removed: These instruments include foreign currency exchange contracts, forwards and options.
−Removed: The fair value of our foreign currency derivatives was an asset of $2 million as of December 31, 2020.
−Removed: A 10% increase in the exchange rate (USD-to-CAD) would have resulted in a decrease of $3 million to the fair value of our foreign currency derivatives.
−Removed: A 10% decrease in the exchange rate (USD-to-CAD) would have resulted in an increase of $3 million to the fair value of our foreign currency derivatives.
−Removed: See Note 13 to our Consolidated Financial Statements for a discussion of our currency exchange rate risk hedging.
Preferred Distribution Rate Reset Option
1 unchanged sentence
The valuation model utilized for this embedded derivative contains inputs including PAA’s common unit price, ten-year United States treasury rates, default probabilities and timing estimates to ultimately calculate the fair value of PAA’s Series A preferred units with and without the Preferred Distribution Rate Reset Option.
−Removed: The fair value of this embedded derivative was a liability of $14 million as of December 31, 2020.
−Removed: A 10% increase or decrease in the fair value would have an impact of $1 million.
+Added: The fair value of this embedded derivative was less than $1 million as of December 31, 2021.
+Added: A 10% increase or decrease in the fair value would have an impact of less than $1 million.
See Note 13 to our Consolidated Financial Statements for a discussion of embedded derivatives.
3 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.