5. 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. 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 September 30, 2020 natural gas derivative instruments had the following fair values, notional values and maturities in the next five fiscal years:
(millions)
2021
2022
2023
2024
2025
Total
Fair value
$
4
$
6
$
5
$
4
$
-
$
19
Notional value
$
(8)
$
(2)
$
6
$
6
$
2
$
4
Fair value - increase (decrease) in net income Notional value - estimated undiscounted net cash (outflow) inflow
6. Long-term debt
During the first half of the fiscal year, the Corporation issued $150 million in long-term debt in two increments. The first $100 million was issued at a premium of $10 million with an interest rate of 3.1 per cent and the second $50 million was issued at no premium or discount with an interest rate of 2.3 per cent.
7. Lease liability
Leases are recognized as right-of-use assets and corresponding liabilities at the date at which a leased asset is available for use. Payments for short-term leases and leases of low-value assets are expensed on a straight-line basis and excluded from the lease liability.
(millions)
2020
2020
Lease liabilities, beginning of period
$
13
$
8 7 3
Transitional provision
-
Net additions
2
Principal repayment of lease liability
(3)
(5)
12
13
Less: Current portion of lease liability
(6)
(6)
Lease liabilities, end of period
$
6
$
7
2020-21 Second Quarter Report
28
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