Management’s Discussion and Analysis
Operating Activities Cash provided by operating activities increased $32 million through the nine months ended December 31, 2022 compared to the same period in 2021. Higher commodity and asset optimization margins, delivery revenues and transportation and storage revenues are contributing to the increase, a result of increasing customer demand and rate increases implemented to address rising natural gas market prices and growing costs related to safety, system integrity, and infrastructure maintenance. Investing Activities Cash used in investing activities decreased $31 million compared to 2021, primarily due to capital investment required for system expansion projects declining in 2022. Investment in 2021 included two significant projects, the 86-kilometre gas line from Rosetown to Vanscoy and the Pierceland expansion project, which were both placed into service in 2021-22. Financing Activities Cash provided by financing activities decreased $55 million in 2022 compared to 2021, primarily due to higher cash from operating activities decreasing the Corporation’s reliance on short-term debt, a positive result taking into account short- term interest rates are trending higher through 2022. The Corporation used $56 million for interest payments, $30 million for dividend payments and $13 million to pay debt retirement fund installments. In addition, the Corporation borrowed an additional $100 million of long-term debt in two increments to support its capital investment requirements. In the first quarter of the fiscal year, $50 million of long-term debt was borrowed at a discount of $11 million, with an interest rate of 2.8 per cent and maturity date of 2053. A second $50 million of long-term debt was borrowed in the second quarter, at par, with an interest rate of 4.3 per cent and maturity date of 2042.
CAPITAL ADDITIONS Capital additions, as reported in the condensed consolidated financial statements, were as follows:
Three months ended December 31,
Nine months ended December 31,
(millions)
2022
2021 Change 2022
2021 Change
Strategic Customer growth System expansion
$
16 $
$
59 $
14 24 38
$
2
26 $
33
9
14 73
(15) (13)
92
(78) (45)
25
118
Operational Risk management
20
54 19
18
2 1
52 14
2 5
9 4
Reliability of natural gas service
8 5
6
Business and technology optimization
(1)
7
(1)
33
79
31 69
2
73
6
$
58 $
$
152 $
Capital additions
$
(11)
191
$
(39)
Capital additions through the nine months ended December 31, 2022 were $39 million lower than the investment made in 2021, primarily due to decreasing expenditures in system expansion projects, which were partially offset by higher investment in customer growth projects. Investment in customer growth projects increased $33 million in 2022 as the Corporation began work on the transmission and distribution system’s sections of the Moose Jaw supply project. There are three components to this 2022 project, consisting of the construction of a 30.5-kilometre NPS 16 gas line, Belle Plaine meter station modifications to accommodate increased delivery to the Moose Jaw supply gas line and new distribution meter/regulating station facilities.
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