9. Financial and derivative instruments (continued) 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 March 31, 2016 natural gas derivative instruments had the following fair values, notional values and maturities in the next five fiscal years: (millions) 2017 2018 2019 2020 2021 Total PHYSICAL NATURAL GAS CONTRACTS Fair value $ (52) $ (15) $ (8) $ (1) $ – $ (76) Notional value (116) (42) (32) (2) – (192)
NATURAL GAS PRICE SWAPS Fair value
(15) (15)
(7) (7)
– –
– –
– –
(22) (22)
Notional value
TOTAL
Fair value
$ (67)
$ (22)
$ (8)
$ (1)
$
–
$ (98)
Notional value
$ (131)
$ (49)
$ (32)
$ (2)
$
–
$ (214)
Fair value – increase (decrease) in net income Notional value – estimated undiscounted net cash inflow (outflow) The fair value of the Corporation’s outstanding natural gas contracts is presented in the consolidated statement of financial position as follows: March December (millions) 31, 2016 31, 2014 Fair value of derivative instrument assets $ 11 $ 21 Fair value of derivative instrument liabilities (109) (107) $ (98) $ (86) Financial assets and liabilities are offset within the consolidated statement of financial position if the Corporation has the legal right to offset and intends to settle on a net basis. When natural gas contracts settle or become realized, the Corporation records the amount due to or from counterparties within trade payables or trade receivables, respectively. The Corporation offsets these amounts when the counterparty and timing of settlement are the same, which reflects the Corporation’s expected future cash flows from settling its natural gas contracts. The following amounts were netted within the consolidated statement of financial position: March December (millions) 31, 2016 31, 2014 TRADE AND OTHER RECEIVABLES Gross amount recognized $ 10 $ 21 Amount offset (7) (13) Net amount presented in the consolidated statement of financial position $ 3 $ 8
TRADE AND OTHER PAYABLES
Gross amount recognized
$ 37
$ 29
Amount offset
(13)
(7)
Net amount presented in the consolidated statement of financial position
$ 24
$ 22
66
Consolidated Financial Statements
Made with FlippingBook Ebook Creator