Operating Activities
SaskEnergy Incorporated First Quarter Report Cash provided by operating activities was $167 million for the nine months ending December 31, 2019, an increase of $13 million from 2018-19. Cash flows from operations are up, primarily due to the imp ct of a higher transportation revenue. March 31, 2011
Investing Activities
Cash used in investing activities totaled $258 million for the nine months ending December 31, 2019, $54 million more than the same period in 2018-19. Capital investment levels increased in 2019-20 due to higher system growth combined with higher system integrity spending compared to 2018-19. The majority of capital investment to the end of December 2019 focused on $153 million of customer growth and system expansion projects, which were a result of Saskatchewan residential and industrial growth, as well as safety and system integrity programming of $85 million - a sign of the Corporation’s ongoing commitment to a safe, reliable system.
Financing Activities
Debt Ratio - December
Cash provided by financing activities was $84 million through the nine months ending December 31, 2019, compared to $55 million provided by financing activities in 2018-19. The Corporation used $47 million for interest payments and $43 million for dividends. The Corporation borrowed an additional $194 million in long-term debt to support its capital investment requirements and repay short-term debt. SaskEnergy’s debt ratio at the end of December 31, 2019 of 57 per cent debt and 43 per cent equity is slightly higher than the debt ratio of 56 per cent debt and 44 per cent equity at the end of 2018-19 and is slightly better than the Corporation’s long-term target range of 58 to 63 per cent debt.
61.9%
59.3% 58.4%
56.3% 57.4%
2015 2016 2017 2018 2019
CAPITAL EXPENDITURES
Capital expenditures, as reported in the consolidated financial statements, were as follows:
Three months ended
Nine months ended December 31
December 31
(millions)
2019
2018 Change
2019
2018 Change
Customer growth and system expansion
$
60 30
$
52 33
$
8
$
153
$
117
$
36
Safety and system integrity
(3) (4)
85
77 12 24
8
Information systems
2 2
6
8 5
(4)
Vehicles & equipment, buildings, furniture
16
(14) (13)
(19)
$
94
$
107
$
$
251
$
230
$
21
Capital expenditures during 2019-20 of $251 million were higher than in the prior year to meet the increasing load growth in the province and to move natural gas lines away from highly populated areas. Capital expenditures of $153 million for customer growth and system expansion are $36 million higher than the prior year. Safety and system integrity spending of $85 million are $8 million higher than the prior year primarily driven by increasing regulatory requirements. The increasing demand and lower Saskatchewan production requires additional Alberta supply to be brought onto SaskEnergy’s transmission system. TransGas is currently increasing the supply from NGTL with its Pierceland supply expansion project. It is a cost effective capacity investment that increases the Corporation’s ability to meet customer’s firm contracted Alberta supply requirements. The expansion also provides supply directly into a delivery growth area and helps leverage existing mainline transmission and compression infrastructure to other key areas of the system with potential future capacity improvements. This project incurred $12 million in costs through the nine months ending December 31, 2019.
12
2019-20 THIRD QUARTER REPORT
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