11. Property, plant and equipment (continued)
a. Impairment losses due to market conditions The Corporation has two cash generating units that are adversely impacted by market conditions, its non-core gas storage operations and a gas processing plant. At March 31, 2017, as a result of a decline in natural gas prices, the Corporation has recorded a cumulative impairment on its storage and gathering, treatment and compression assets of $32 million. The impairments were recognized as the carrying value of the assets exceeded the recoverable amounts of $23 million for its gas storage operations and $12 million for its gas processing plant. The recoverable amounts were the value in use determined using cash flows attributed to probable production, discounted at 6.9% for gas storage operations and 6.8% (2016 – 6.0%) for its gas processing plant, and adjusted for future market prices. The impairment losses have been recognized within other losses, with $26 million recognized in the current period and $6 million recognized in prior periods. Future natural gas prices are the main source of estimation uncertainty in determining the recoverable amount of the Corporation's assets. As at March 31, 2017, a five per cent increase in future natural gas and natural gas liquid prices would have increased the recoverable amount and reduced the impairment loss by $4 million. In future periods, any increases to future natural gas prices will result in the reversal of previously incurred impairment losses, up to the carrying value of the associated assets. b. Impairment loss due to performance of assets At March 31, 2017, as a result of lower than expected economic performance, the Corporation has recorded a cumulative impairment of $6 million on its energy services assets which are categorized within the Corporation’s distribution assets. The impairment was recognized as the carrying value of the assets exceeded the recoverable amount. The recoverable amount was the value in use determined using cash flows attributed to probable production, discounted at 6.9% (2016 – 6.1%), and adjusted for future market prices. The impairment losses have been recognized within other losses, with $3 million recognized in the current period and $3 million recognized in the prior period. Due to the nature of the impairment and the uncertainty regarding the advanced technology used in the operation of these assets, the Corporation has assessed the likelihood of a reversal of the impairment losses in future periods as unlikely.
12. Trade and other payables (millions)
2017
2016
Trade payables Interest payable Other payables
$ 65
$ 64
10 30
10 35
105
109
Less: Current portion of trade and other payables
(101)
(104)
$
4
$
5
13. Long-term debt (millions)
2017
2016
Balance, beginning of period
$ 958
$ 970
Proceeds
62
149
Repayments
(50)
(100)
Balance, end of period
$ 970
$ 1,019
65
2016-17 ANNUAL REPORT SASKENERGY
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