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Market risk is the risk of loss arising from adverse changes in market rates and prices.
−Removed: We do not take title to any natural gas or crude oil in connection with our services and, accordingly, have no direct exposure to fluctuating commodity prices.
−Removed: However, the demand for our compression services depends upon the continued demand for, and production of, natural gas and crude oil.
+Added: We do not take title to any natural gas or crude oil in connection with our rendered services, and accordingly, we do not bear direct exposure to fluctuating commodity prices.
+Added: However, the demand for our compression services depends on the continued demand for, and production
+Added: of, natural gas and crude oil.
Sustained low natural gas or crude oil prices over the long term could result in a decline in the production of natural gas or crude oil, which could result in reduced demand for our compression services.
We do not intend to hedge our indirect exposure to fluctuating commodity prices.
−Removed: A one percent decrease in average revenue generating horsepower during the year ended December 31, 2021 would have resulted in a decrease of approximately $5.9 million and $4.0 million in our revenue and Adjusted gross margin, respectively.
+Added: A one percent decrease in average revenue-generating horsepower during the year ended December 31, 2022 would result in an annual decrease of approximately $6.4 million and $4.3 million in our revenue and Adjusted gross margin, respectively.
Adjusted gross margin is a non-GAAP financial measure.
For a reconciliation of Adjusted gross margin to gross margin, its most directly comparable financial measure, calculated and presented in accordance with GAAP, please read Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures”.
−Removed: Please also read Part I, Item 1A “Risk Factors – Risks Related to Our Business – An
−Removed: extended reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders.”
+Added: Please also read Part I, Item 1A “Risk Factors – Risks Related to Our Business – An extended reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders.”
Interest Rate Risk
−Removed: We are exposed to market risk due to variable interest rates under our Credit Agreement.
−Removed: As of December 31, 2021, we had $516.3 million of variable-rate outstanding indebtedness at a weighted-average interest rate of 2.68%.
−Removed: A one percent increase or decrease in the effective interest rate on our variable-rate outstanding debt as of December 31, 2021 would result in an annual increase or decrease in our interest expense of approximately $5.2 million.
+Added: We are exposed to market risk due to variable interest rates under the Credit Agreement.
+Added: As of December 31, 2022, we had $646.0 million of variable-rate indebtedness outstanding at a weighted-average interest rate of 6.84%.
+Added: Based on our December 31, 2022 variable-rate indebtedness outstanding, a one percent increase or decrease in the effective interest rate would result in an annual increase or decrease in our interest expense of approximately $6.5 million.
For further information regarding our exposure to interest rate fluctuations on our debt obligations, see Note 9 to our consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data”.
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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.