16 unchanged sentences
The primary purpose of our commodity risk management activities is to hedge some of the exposure to commodity price risk and reduce fluctuations in our operating cash flow due to fluctuations in commodity prices.
−Removed: In an effort to reduce the variability of our cash flows, as of March 31, 2022, we have hedged the commodity price associated with a portion of our expected (i) natural gas, NGL, and condensate equity volumes in our Gathering and Processing operations that result from our percent-of-proceeds processing arrangements, (ii) future commodity purchases and sales in our Logistics and Transportation segment and (iii) natural gas transportation basis risk in our Logistics and Transportation segment.
+Added: In an effort to reduce the variability of our cash flows, as of June 30, 2022, we have hedged the commodity price associated with a portion of our expected (i) natural gas, NGL, and condensate equity volumes in our Gathering and Processing operations that result from our percent-of-proceeds processing arrangements, (ii) future commodity purchases and sales in our Logistics and Transportation segment and (iii) natural gas transportation basis risk in our Logistics and Transportation segment.
We hedge a higher percentage of our expected equity volumes in the current year compared to future years, for which we hedge incrementally lower percentages of expected equity volumes.
26 unchanged sentences
The fair values of our derivative instruments are also influenced by changes in market volatility for option contracts and the discount rates used to determine the present values.
−Removed: The following table shows the effect of hypothetical price movements on the estimated fair value of our derivative instruments as of March 31, 2022:
+Added: The following table shows the effect of hypothetical price movements on the estimated fair value of our derivative instruments as of June 30, 2022:
Result of 10% Price Decrease
2 unchanged sentences
The table above contains all derivative instruments outstanding as of the stated date for the purpose of hedging commodity price risk, which we are exposed to due to our equity volumes and future commodity purchases and sales, as well as basis differentials related to our gas transportation arrangements.
−Removed: During the three months ended March 31, 2022 and 2021, our operating revenues decreased by ($322.7) million and ( $134.7) million as a result of transactions accounted for as derivatives.
−Removed: The estimated fair value of our risk management position has moved from a net liability position of ($316.7) million at December 31, 2021 to a net liability position of ($737.7) million at March 31, 2022.
+Added: Our operating revenues decreased by ($176.7) million and ($110.2) million during the three months ended June 30, 2022 and 2021 and ($499.6) million and ($245.0) million during the six months ended June 30, 2022 and 2021, as a result of transactions accounted for as derivatives.
+Added: The estimated fair value of our risk management position has moved from a net liability position of ($316.7) million at December 31, 2021 to ($556.5) million at June 30, 2022.
Forward commodity prices have moved unfavorably relative to the fixed prices on our derivative contracts, creating this net liability position.
Interest Rate Risk
−Removed: We are exposed to the risk of changes in interest rates, primarily as a result of variable rate borrowings under the TRGP Revolver and the Securitization Facility.
−Removed: As of March 31, 2022, we do not have any interest rate hedges.
+Added: We are exposed to the risk of changes in interest rates, primarily as a result of variable rate borrowings under the TRGP Revolver, the Securitization Facility, and the Term Loan Facility, which we closed in July 2022 to fund a portion of the Lucid Acquisition.
+Added: As of June 30, 2022, we do not have any interest rate hedges.
However, we may enter into interest rate hedges in the future with the intent to mitigate the impact of changes in interest rates on cash flows.
−Removed: To the extent that interest rates increase, interest expense for the TRGP Revolver and the Securitization Facility will also increase.
−Removed: As of March 31, 2022, we had $1.3 billion in outstanding variable rate borrowings.
−Removed: A hypothetical change of 100 basis points in the rate of our variable interest rate debt would impact our consolidated annual interest expense by $12.7 million based on our March 31, 2022 debt balances.
+Added: To the extent that interest rates increase, interest expense for the TRGP Revolver, the Securitization Facility and the Term Loan Facility will also increase.
+Added: As of June 30, 2022, we had $950.0 million in outstanding variable rate borrowings.
+Added: A hypothetical change of 100 basis points in the rate of our variable interest rate debt would impact our consolidated annual interest expense by $9.5 million based on our June 30, 2022 debt balances.
Counterparty Credit Risk
7 unchanged sentences
These netting provisions allow us to net settle asset and liability positions with the same counterparties within the same Targa entity.
−Removed: As of March 31, 2022, all of our commodity derivative instruments with the exception of our futures contracts were in a net liability position, and as such, we had no counter-party risk exposure as of that date.
+Added: As of June 30, 2022, our maximum loss due to counterparty credit risk was immaterial.
+Added: The range of losses attributable to our individual counterparties as of June 30, 2022 would be between $2.7 million and $5.5 million, depending on the counterparty in default.
Customer Credit Risk
3 unchanged sentences
We have an active credit management process, which is focused on controlling loss exposure due to bankruptcies or other liquidity issues of counterparties.
−Removed: Our allowance for doubtful accounts was $0.1 million as of both March 31, 2022 and December 31, 2021.
−Removed: Changes in the allowance for doubtful accounts were not material for the three months ended March 31, 2022.
−Removed: During the three months ended March 31, 2022, sales of commodities and fees from midstream services provided to Petredec (Europe) Limited comprised approximately 10% of our consolidated revenues.
−Removed: No customer comprised 10% or greater of our consolidated revenues during the three months ended March 31, 2021.
+Added: Our allowance for doubtful accounts was $0.1 million as of both June 30, 2022 and December 31, 2021, respectively.
+Added: Changes in the allowance for doubtful accounts were not material for the three and six months ended June 30, 2022.
+Added: No customer comprised 10% or greater of our consolidated revenues during the three and six months ended June 30, 2022 and 2021 , respectively .
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.