SaskEnergy Second Quarter Report - September 30, 2021

Notes to the Condensed Consolidated Financial Statements (unaudited)

Level 3 inputs are unobservable for the particular assets and liabilities as at the reporting date. The Corporation did not classify any of its fair value measurements within Level 3.

As at September 30,

As at March 31

2021

2021

Classifi- Fair Value Carrying Fair Carrying Fair cation Hierarchy Amount Value Amount Value

(millions)

(audited)

Financial and derivative assets Trade and other receivables

99

99

AC

Level 2 Level 2

165 136

165 136

149

149

Debt retirement funds

FVOCI

Fair value of derivative instrument assets

84

84

FVTPL

Level 2

17

17

Financial and derivative liabilities Bank indebtedness

1

1

FVTPL

Level 1 Level 2 Level 2 Level 2 Level 2

-

-

287 121

287 121

Short-term debt

AC AC AC AC

264 116

264 116

Trade and other payables

2

2

Dividends payable Long-term debt

7

7

1,535 1,666

1,485

1,622

Fair value of derivative instrument liabilities

23

23

FVTPL

Level 2

8

8

Classification details:

AC - amortized cost

FVTPL - fair value through profit or loss

FVOCI - fair value through other comprehensive income

The fair value of debt retirement funds is determined by Saskatchewan’s Ministry of Finance using a market approach with information provided by investment dealers. To the extent possible, valuations reflect indicative secondary pricing for these securities. In all other circumstances, valuations are determined with reference to similar actively traded instruments. The fair value of natural gas derivative instruments is determined using a market approach. The Corporation obtains quoted market prices from sources such as the Canadian Gas Price Reporter and the Natural Gas Exchange, independent price publications and over-the-counter broker quotes. The fair value of long-term debt is determined for disclosure purposes only using an income approach. Fair values are estimated using the present value of future cash flows discounted at the market rate of interest for the equivalent Province of Saskatchewan debt instruments. 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. 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.

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