2004 Crown Investments Corporation of Saskatchewan Annual Report

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Notes to Consolidated Financial StatementsDecember 31, 200417. Income Taxes (continued)The tax effects of temporary differences that give rise to significant portions of the future tax asset(thousands of dollars):2004 2003Future tax asset:Non-capital loss carryforwardsProperty, plant and equipment - differences in netbook value and undepreciated capital costOther$-49,153849$41,49573,1763,02950,002117,700Less: Valuation allowance-(41,499)Net future tax asset$50,002$76,201The establishment of future income tax asset is based on known facts and interpretation of circumstancesthat are influenced by a number of factors. As a result, the recorded amount of this asset could change by amaterial amount in the near future.18. Non-Recurring ItemsNon-recurring items include the following (thousands of dollars):2004 2003Gain (loss) on:Austar United Communications Limited (a)Navigata Holdings Inc. (b)Writedown of goodwill (c)Provision for Persona Inc. (d)$4,3543,669--$--(9,435)(6,362)$8,023$(15,797)a) During the year, the Corporation disposed of 9,550,574 shares of Austar United Communications Limitedfor net proceeds of $6.9 million resulting in a gain on sale of $4.4 million.b) On March 29, 2004, all of the shares of Navigata Holding, Inc. were sold for $4.5 million. The proceedsconsisted of $2.8 million of fibre optic cable facilities and a zero per cent interest bearing note receivableof $1.7 million. A non-cash gain of $3.7 million was recorded on the transaction.c) In 2003, the Corporation tested the amount allocated to goodwill for Retx, Inc. and determined that awritedown of $9.4 million was required due to a decrease in the fair value of its operations.d) In 2003, the Corporation recorded a $6.4 million writedown in its investment in Persona Inc. reflecting adecline in value considered to be other than temporary.84
Notes to Consolidated Financial StatementsDecember 31, 200419. Related Party Transaction AdjustmentIn 2003, the Corporation purchased buildings from a related party for $11.1 million. The buildings wererecorded at their carrying value at the transaction date of $7.1 million. The difference of $4.0 million hasbeen charged to retained earnings.20. Items Not Affecting Cash from Operations(thousands of dollars)2004 2003Amortization of property, plant and equipmentForeign exchangeSinking fund earningsNon-recurring itemsOther non-cash items$409,988(9,257)(13,781)(8,023)89$424,517(157,394)(8,506)15,797(43,568)$379,016$230,84621. Financial Risk ManagementBy virtue of its business operations, the Corporation is exposed to changes in the United States/Canadiandollar exchange rate, the price of natural gas, the price of electricity and interest rates. The Corporationutilizes a number of financial instruments to manage these exposures. The Corporation mitigates riskassociated with these financial instruments through Board approved policies; limits on use and amount ofexposure; internal monitoring; and compliance reporting to senior management and the Board.a) Commodity price risk managementThe Corporation is exposed to gas price risk through gas purchased for its gas-fired power plants, forcertain power purchase agreements and gas purchased for resale to its customers. As atDecember 31, 2004, the Corporation had entered into a series of natural gas contracts to manage theprice of natural gas.The fair value of the Corporation’s financial instruments that pertain to natural gas price hedges is listedbelow (millions of dollars):Natural gas price hedges owedto (by) the Corporation:- swaps- options- futuresCarryingAmount2004 2003FairValueCarryingAmount$ - $ 5.7 $ - $11.3(11.8)0.4-(3.5)-FairValue(14.0)0.74.0The fair values of the above instruments were based on the following:i) Natural gas price swaps - The relevant index price on December 31, 2004.ii) Natural gas price options - The relevant index price on December 31, 2004.iii) Natural gas futures contracts - The relevant index price on December 31, 2004.The Corporation is exposed to electricity price risk on its electricity trading activities. Electricity trading risks aremanaged through limits on the size and duration of transactions and open positions. Forward commitmentsmust be backed by physical supply.85
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2004 Financial HighlightsCrown Sect
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Table Of Contents2004 HighlightsLet
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Chair’s MessageSaskatchewan’s C
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Corporate ProfileCIC is the financi
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Corporate ProfileCIC ManagementThe
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Corporate ProfileFinancial and Publ
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Corporate ProfileCIC’s Holdings20
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Corporate ProfileSASKATCHEWAN GOVER
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Corporate ProfileSaskatchewan Telec
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Policy and ProgramsUtility Bundle C
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Policy and ProgramsCommitment to Gr
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Policy and ProgramsCommitment to Yo
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GovernanceFor the purposes of this
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Strategic Direction and Performance
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Strategic Direction and Performance
Page 37 and 38: Strategic Direction and Performance
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Page 43 and 44: MANAGEMENT’S DISCUSSION AND ANALY
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Page 68 and 69: Consolidated Statement of Financial
Page 70 and 71: Consolidated Statement of Cash Flow
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Page 99 and 100: Non-Consolidated Statement of Finan
Page 101 and 102: Non-Consolidated Statement of Cash
Page 103 and 104: Notes to Non-Consolidated Financial
Page 105 and 106: Notes to Non-Consolidated Financial
Page 107: Notes to Non-Consolidated Financial
Page 110: Pat AtkinsonMinisterPrinted in Sask
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2004 Crown Investments Corporation of Saskatchewan Annual Report

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