5. Financial and derivative instruments (continued)
Notional values are an approximation of future undiscounted net cash flows. For physical natural gas contracts, the notional value is based on the contract price. For natural gas price swaps, the notional value is the difference between the contract price and the market price. Where contract prices are referenced to an index price that has not yet been fixed, the market price is used to estimate the contract price. As at December 31, 2016 natural gas derivative instruments had the following fair values, notional values, and maturities:
(millions)
2017
2018
2019
2020
2021
Total
Physical natural gas contracts Fair value
$
(23)
$
(13)
$
(9)
$
(2) (7)
$
1 4
$
- -
(154)
Notional value
(118)
(33)
Natural gas price swaps Fair value
(5) (5)
(5) (5)
- -
- -
- -
- -
Notional value
Total Fair value
$ $
(28)
$ $
(18)
$ $
(9)
$ $
(2) (7)
$ $
1 4
$ $
- -
(159)
Notional value
(123)
(33)
Fair value - increase (decrease) in net income Notional value - estimated undiscounted net cash inflow (outflow) The fair value of the Corporation’s outstanding natural gas contracts is presented in the condensed consolidated statement of financial position as follows:
As at December 31, 2016
As at March 31, 2016
(millions)
$
9
Fair value of derivative instrument assets Fair value of derivative instrument liabilities
$
11
(37)
(109)
$
(28)
$
(98)
6. Long-term debt
During 2016-17, the Corporation issued $138 million in long-term debt, in increments of $22 million, $16 million and $100 million with effective interest rates of 3.2%, 2.9% and 3.0%, respectively. The long-term debt issuance of $100 million in the third quarter was issued at a discount of $5 million. During the period, the Corporation also repaid $84 million in long-term debt, in increments of $22 million, $16 million, $45 million and $1 million, with effective interest rates of 4.8%, 4.9%, 4.4% and 4.4%, respectively.
7. Commitments and contingencies
a. Commitments
At period end, the Corporation forecasted to spend an additional $62 million on capital projects during the remainder of the 2016-17 fiscal year, and the Corporation had $22 million of outstanding contractual commitments for the procurement of goods and services in the future.
21
2016-17 THIRD QUARTER REPORT
Made with FlippingBook Ebook Creator