10. Financial and derivative instruments
2014
2013
Classifi-
Fair Value Hierarchy
Carrying Amount
Fair
Carrying Amount
Fair
(millions)
cation
Value
Value
Financial and derivative assets Cash
FVTPL
n/a n/a
$
–
$
–
$
5
$
5
Trade and other receivables
LAR
148
148
148
148
Debt retirement funds Fair value of derivative instrument assets
FVTPL
Level 2
78
78
93
93
FVTPL
Level 2
28
28
21
21
Financial and derivative liabilities Short-term debt OL
n/a n/a n/a
380 122
380 122
299 117
299 117
Trade and other payables
OL OL OL
Dividends payable Long-term debt
10
10
3
3
Level 2
762
869
958
1,145
Fair value of derivative instrument liabilities
FVTPL
Level 2
39
39
107
107
Classification details:
FVTPL – fair value through profit or loss LAR – loans and receivables OL – other liabilities
The fair value hierarchy is not applicable where the carrying amount approximates fair value due to the short-term nature of the financial instrument. 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, 2014 natural gas derivative instruments had the following fair values, notional values and maturities: (millions) 2015 2016 2017 2018 2019 Total Physical natural gas contracts Fair value $ (44) $ (18) $ (2) $ – $ – $ (64) Notional value (137) (74) (23) (20) – (254)
Natural gas price swaps Fair value
(11) (11)
(8) (8)
(3) (3)
– –
– –
(22) (22)
Notional value
Total Fair value
$ (55)
$ (26)
$ (5)
$
–
$
–
$ (86)
Notional value
$ (148)
$ (82)
$ (26)
$ (20)
$
0
$ (276)
Fair value – increase (decrease) in net income Notional value – estimated undiscounted net cash inflow (outflow)
53
2014 Annual Report SaskEnergy
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