4. Capital management The Corporation’s objective when managing its capital is to maintain financial stability through the effective management of liquidity and capital structure. Ensuring financial stability is critical to providing safe, reliable service to Saskatchewan residents, businesses and industries. The Corporation finances its capital requirements through internally generated funds and injections of capital from the Province of Saskatchewan’s General Revenue Fund, typically in the form of debt. Under The SaskEnergy Act, the Corporation may borrow up to $1,700 million of debt upon approval of the Lieutenant Governor in Council (2013 – $1,700 million). Within this limit, the Corporation may borrow up to $400 million in temporary loans (2013 – $400 million), including a $35 million uncommitted line of credit with Toronto-Dominion Bank (2013 – $35 million). At the end of the year, the Corporation had $1,257 million of debt outstanding (2013 – $1,142 million), and had borrowed $299 million of temporary loans (2013 – $380 million) leaving $101 million of remaining short-term borrowing capacity (2013 – $20 million). The Corporation borrows all its capital, with the exception of occasional overnight loans from the Toronto-Dominion Bank, from the Province of Saskatchewan (the Province). The Corporation’s borrowing requirements constitute a minor portion of the Province’s total borrowings, and given the Province’s strong credit rating, the Corporation was able to acquire all its funding requirements during the year. The Corporation monitors capital on the basis of the debt ratio, with a long-term target of 57.0%. The purpose of this strategy is to ensure the Corporation’s debt is self-supporting and does not adversely affect the Province’s access to capital markets. The debt ratio was calculated as net debt divided by total capital at the end of the year as follows: (millions) 2014 2013 Long-term debt $ 958 $ 762 Short-term debt 299 380 Debt retirement funds (93) (78) Cash (5) – Total net debt 1,159 1,064
Equity advances Retained earnings
72
72
673
623
Total capital
$ 1,809
$ 1,854
58.8%
62.5%
The Corporation’s objectives, policies and processes for managing its capital were consistent with the prior year. The Corporation complied with all externally imposed requirements for its capital throughout the year.
5. Trade and other receivables (millions)
2014
2013
Unbilled revenue Trade receivables Other receivables
$ 86
$ 71
49 14
60 21
149
152
Allowance for doubtful accounts
(1)
(4)
$ 148
$ 148
Included in other receivables is $2 million for insurance receivable on a cavern wellhead fire that occurred in the latter part of 2014. Total damages from this incident are estimated at $11 million. The Corporation is insured for the loss of natural gas, emergency response, and surface facilities and equipment. During 2014, the Corporation received $3 million of insurance proceeds and an additional $2 million in commitments from insurers. The Corporation expects to claim for the remaining $6 million of costs incurred on this incident in 2015 following a detailed assessment of the incident.
51
2014 Annual Report SaskEnergy
Made with FlippingBook Ebook Creator