Management’s Discussion & Analysis
Each year, SaskEnergy comprehensively sets, measures and reports on specific scorecard targets within its strategic mandates. The following discussion outlines the Corporation’s 2014 performance relative to its strategic scorecard measures, which are further defined in the Glossary of Key Success Measures. Service Excellence SaskEnergy is committed to providing high standards of safe and reliable service with effective customer solutions, as evidenced by its Service Excellence mandate. Within Service Excellence, there are three categories of measures — Efficient Operations, Safety/Vigilance and Customer Satisfaction, with our success measured by industry benchmarking and customer surveys. In alignment with the Crown Sector Priority of financial stability and a continued emphasis on operational efficiency, SaskEnergy and TransGas are committed to the cost- effective delivery of natural gas services to all customers in Saskatchewan. The Corporation realized $4.6 million in efficiency savings and process improvements in 2014. These efforts are reflected within the annual scorecard measures, most prominently in SaskEnergy’s ability to successfully offer competitive delivery rates to its customers each year. Efficiency does not come at the expense of a safe and reliable system, as acknowledged by the Corporation’s $101 million in 2014 system integrity spending. Integrity- related budgets are being actively managed over the coming years while continuing to maintain strong results in the areas of gas leaks, failures, third-party contacts and other integrity measures. Continued commitment to system integrity and asset management efforts will always be a key focus area for SaskEnergy/TransGas. Perhaps the best indicator of SaskEnergy’s success in delivering safe, reliable, and affordable services is formal feedback from its customers. Recognizing that customers are vital to a successful business, both SaskEnergy and TransGas conduct annual surveys in an effort to gather feedback on customer expectations and overall satisfaction.
Introduction The Management’s Discussion and Analysis (MD&A) highlights the primary factors that affected SaskEnergy’s consolidated financial condition and performance for the year ended December 31, 2014. Using financial and operating results as its basis, the MD&A describes the Corporation’s past performance and future prospects, enabling readers to view SaskEnergy from the perspective of management. The MD&A is presented as at February 27, 2015, and should be read in conjunction with the Corporation’s audited consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS). The following discussion contains certain forward-looking statements that are subject to inherent uncertainties and risks, which are described in the Risk Management and Disclosure section of the MD&A. All forward-looking statements reflect the Corporation’s best estimates and assumptions based on information available at the time the statements were made. However, actual results and events may vary significantly from those included in, contemplated by or implied by such statements. The Corporation’s financial results are subject to fluctuations, especially given the volatility of natural gas prices. In order to compare financial performance from period to period, the Corporation uses the following measures: income before unrealized market value adjustments, realized margin on commodity sales and realized margin on gas marketing sales. Each measure removes the impact of fair value adjustments on financial and derivative instruments and the revaluation of natural gas in storage to the lower of cost and net realizable value. These unrealized market value adjustments vary considerably with the market prices of natural gas, drive significant changes in the Corporation’s consolidated net income and may obscure other business factors that are also important to understanding the Corporation’s financial results. The measures referred to above are non-IFRS measures, in that there is no standardized definition, and may not be comparable to similar measures presented by other entities. Strategic Scorecard Measures SaskEnergy’s four strategic mandates — Service Excellence, Achieving Growth, Our Team and Creating Value — were set out in the 2014 Business Plan and support the vision, mission and values of the Corporation. They play a vital role in SaskEnergy’s business planning and reporting, and help employees determine how their everyday work and effort contribute to the Strategic Plan and overall direction of the Corporation.
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2014 Annual Report SaskEnergy
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