SASKENERGY 2017-18 ANNUAL REPORT
Level 1 valuations use quoted prices (unadjusted) that are available in active markets for identical assets or liabilities as at the reporting date. Active markets are those in which transactions occur in sufficient frequency and volume to provide ongoing pricing information. The Corporation did not classify any of its fair value measurements within Level 1. Level 2 valuations are based on inputs that are either directly or indirectly observable for the asset or liability as at the reporting date. Inputs include quoted market prices, time value, volatility factors and broker quotations which can be substantially observed or corroborated in the marketplace. Level 3 inputs are unobservable for the particular assets and liabilities as at the reporting date.
2018
2017
Class- ification
Fair Value Hierarchy
Carrying Amount
Carrying Amount
(millions)
Fair Value
Fair Value
FINANCIAL AND DERIVATIVE ASSETS Cash Trade and other receivables Debt retirement funds Fair value of derivative instrument assets FINANCIAL AND DERIVATIVE LIABILITIES Bank indebtedness Short-term debt Trade and other payables Finance lease obligation Dividends payable Long-term debt Fair value of derivative instrument liabilities
$
- 141 106 61 3 254 127
$
- 141 106 61 3 254 127
FVTPL AC FVOCI FVTPL FVTPL OL OL OL OL OL FVTPL
Level 3 Level 3 Level 2 Level 2 Level 3 Level 3 Level 3 Level 3 Level 3 Level 2 Level 2
$
1 112 101 5
$
1 112 101 5
- 293 104 5 14 1,019 40
- 293 104 5 14 1,050 40
11 23 1,081 50
11 23 1,207 50
Classification details: FVTPL – fair value through profit or loss AC – amortized cost
FVOCI – fair value through other comprehensive income OL – other liabilities
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. As at March 31, 2018 natural gas derivative instruments had the following fair values, notional values and maturities in the next five fiscal years:
(millions) Fair value
2019
2020
2021
2022
2023
Total
- $ - $
10
$
13 $ (67) $
(1) $ (14) $
(2) $ (7) $
- $ 1 $
(87)
Notional value
$
Fair value – decrease in net income
Notional value – estimated undiscounted net cash outflow
62
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