Description
A mode of transport is a solution that makes use of a particular type of vehicle, infrastructure and operation. The transport of a person or of cargo may involve one mode or several of the modes, with the latter case being called intermodal or multimodal transport. Each mode has its own advantages and disadvantages, and will be chosen for a trip on the basis of cost, capability, route and speed.
Port Mann/Highway 1 Improvement Project
Transportation Investment Corporation
Statement of Financial Information
Transportation Investment Corporation
Year Ended March 31, 2011
Published in accordance with the Financial Information Act, Chapter 140, Revised Statues of British Columbia, 1996
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Financial Information Act Return
Year Ended March 31, 2011
TABLE OF CONTENTS
A. Audited Financial Statements – March 31, 2011 B. Schedule of Debts C. Schedule of Guarantee and Indemnity Agreements D. Schedule of Remuneration and Expenses E. Schedule of Severance Agreements F. Schedule of Suppliers of Goods and Services G. Statement of Financial Information Approval
Transportation Investment Corporation
Statement of Shareholder's Equity As at March 31 ($ 000s) SHARE CAPITAL & CONTRIBUTED SURPLUS Beginning and end of the year (note 14) 2011 2010
$
150,000
$
150,000
DEFICIT Beginning of the year Net loss from operations End of the year
(12,223) (7,246) (19,469)
(7,758) (4,465) (12,223)
ACCUMULATED OTHER COMPREHENSIVE LOSS Beginning of the year Other comprehensive loss for the year End of the year (note 15) TOTAL SHAREHOLDER'S EQUITY $
(26,338) (74,455) (100,793) 29,738 $
(26,338) (26,338) 111,439
The accompanying notes form an integral part of these financial statements.
Transportation Investment Corporation
Statement of Operations For the year ended March 31 ($ 000s) REVENUES Net foreign exchange gain Sundry $ 11 11 $ 213 6 219 2011 2010
EXPENSES Operations Corporate salaries Administration Depreciation Hedge ineffectiveness loss (note 15) Interest
5,108 1,071 753 136 73 116 7,257 (7,246)
2,944 894 761 58 27 4,684 (4,465)
NET LOSS FROM OPERATIONS OTHER COMPREHENSIVE LOSS Unrealized effective hedging loss (note 15) COMPREHENSIVE LOSS FOR THE YEAR $
(74,455) (81,701) $
(26,338) (30,803)
The accompanying notes form an integral part of these financial statements.
Transportation Investment Corporation
Statement of Cash Flows For the year ended March 31 ($ 000s) Cash provided by (used for) 2011 2010
OPERATIONS
Net loss from operations Items not affecting cash: Depreciation expense Hedge ineffectiveness loss Changes in non-cash operating working capital: Increase in accounts receivable Increase in HST recoverable Increase in prepaid expense Increase in accounts payable Increase in financial instrument $ (7,246) 136 73 (74) (268) (25) 417 (6,987) $ (4,465) 58 27 (13) 139 169 (4,085)
FINANCING
Proceeds from debt Settlement of derivative financial instruments Items not affecting cash: Effective hedging loss Hedge settlement amortization Accumulated other comprehensive income 680,765 (20,560) 54,887 919 (54,887) 661,124 519,410 26,338 (26,338) 519,410
INVESTING
Intangible assets Property, plant and equipment Land Items not affecting cash: Hedge settlement amortization Changes in non-cash investing working capital: Increase in accounts receivable Increase in HST recoverable Increase in prepaid expense Increase in accounts payable (74,483) (667,509) 4,990 (919) (4,971) (2,228) (1) 99,307 (645,814) 8,323 15,073 23,396 (32,399) (739,403) (5,699) 226,106 (551,395) (36,070) 51,143 15,073
Change in cash, current year Cash, beginning of year Cash, end of year Cash consists of: Restricted cash Cash in bank Petty cash
$
$
$
$
10,500 12,896 23,396
$
$
10,500 4,572 1 15,073
The accompanying notes form an integral part of these financial statements.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 1) PURPOSE The Transportation Investment Corporation (TI Corp) is a Crown corporation wholly owned by the Province of British Columbia. TI Corp was established on June 25, 2008 under the Transportation Investment Act (SBC 2002). The Corporation is currently undertaking the design and build of the Port Mann/Highway 1 Project (Project) and may also engage in or conduct business authorized by the Lieutenant Governor in Council. On March 10, 2010, the Port Mann Highway 1 Bridge Concession Agreement, which outlines the terms and conditions of the Project was signed by authorized representatives of TI Corp, the BC Transportation Financing Authority (BCTFA) and the Ministry of Transportation and Infrastructure. 2) SIGNIFICANT ACCOUNTING POLICIES a) Basis of presentation The financial statements of TI Corp are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP) on a going concern basis. b) Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates relate to property, plant and equipment, the effectiveness of hedging instruments, and accounts payable and accrued liabilities. Although management uses the best estimates available, actual balances may differ from these amounts. c) Federal and Provincial taxes TI Corp is exempt from corporate income taxes. The Corporation was exempt from the Goods and Services Tax up to June 30, 2010. Thereafter, the Corporation remits and fully recovers Harmonized Sales Tax. d) Intangible assets Intangible assets are recorded at cost and are amortized over their expected useful lives calculated on a straight line basis. The life of land rights is based on the residual term of the Concession Agreement of 78 years. e) Foreign exchange Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the rate of exchange in effect at the end of the accounting period. Changes in the Canadian dollar equivalent of these monetary assets and liabilities due to changes in the exchange rate are recognized as foreign currency gains and losses in net income from operations.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
f)
Derivative financial instruments Canadian GAAP requires that all financial instrument assets be classified as held-for-trading, available-for-sale, and held-to-maturity or as loans and receivables. In addition, derivative financial instruments that are not accounted for as hedging instruments must be classified as held-for-trading. Financial instrument liabilities can be classified as held-for-trading or as other liabilities. All financial instruments are measured at fair value on initial recognition, and subsequent measurement and recognition of changes in fair value are dependent on whether the financial instrument has been classified as held for trading, available for sale, held to maturity, loans and receivables or other financial liabilities. The Corporation has classified and measured its financial instruments as follows:
Financial Instrument
Cash and cash equivalents Accounts receivable Derivatives other than hedging instruments Effective hedged instruments Ineffective portion of hedged instruments Accounts payable and accrued liabilities Short-term debt Long-term debt
Category
Held for trading Loans and receivables Held for trading Designated hedges Held for trading Other financial liabilities Other financial liabilities Other financial liabilities
Measurement
Fair value Fair value Fair value Fair value Fair value Fair value Fair value Amortized cost using the effective interest rate method
Recognition of Gain or Loss
Income from operations Income from operations Income from operations Other comprehensive income Income from operations Income from operations Income from operations Income from operations
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
g) Property, plant and equipment Borrowing costs that are directly attributable to the acquisition, construction or production of capital assets under construction are capitalized using the actual borrowing costs net of any temporary investment income. Capitalization of borrowing costs ceases when the specific asset is available for use. Depreciation of capital asset costs less estimated residual value is calculated at straight line rates to depreciate the assets over their estimated useful lives. Depreciation commences at the end of the first quarter after management has determined the asset is available for use. Depreciation ceases on the earlier of the date the asset is classified as held-for-sale or the date the asset is derecognized. Assets under construction consist of highway infrastructure under development including bridges, road bed, overpasses, underpasses, retaining walls and drainage systems. Depreciation rates have been determined as follows:
Capital Asset
Assets under construction Office equipment Land
Initial Measurement
Cost Cost Cost
Estimated Useful Lives
Depreciated when available for use 3 years Not depreciated
h) Debt placement fees Transaction fees incurred in the arrangement or placement of debt during the capital asset construction phase are capitalized as interest during construction. Upon completion of the construction of the capital assets, these costs will be amortized over the estimated useful life of the assets. i) Pension and post retirement benefits Commencing in fiscal year 2009/10, pension benefits for employees of the Corporation are provided through the BC Public Service Pension Plan. Payments for the cost of this plan are accounted for on an accrual basis. Administration and overhead costs Administration and overhead costs which are directly attributable to bringing the property, plant and equipment to a condition necessary for them to be capable of operating in a manner intended by management form a part of the capital cost of the assets.
j)
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 3) FUTURE ACCOUNTING CHANGES International Financial Reporting Standards (IFRS) In February 2008, the Canadian Accounting Standards Board (AcSB) confirmed that the use of IFRS will be required in 2011 for publicly accountable enterprises. IFRS will replace Canada’s current Generally Accepted Accounting Principles (GAAP) for those enterprises. Pursuant to a provincial Treasury Board directive in 2010, the Corporation is directed to consult with the Office of the Comptroller General of British Columbia (OCG), who will provide guidance to the Corporation prior to the adoption of accounting policy choices and elections related to applicable accounting standards or guidelines. The TI Corp will comply with the Treasury Board directive and after consultation with OCG will adopt IFRS effective April 1, 2011. TI Corp’s future financial statements will be prepared in accordance with IFRS, with 2011 comparative figures and the April 1, 2010 opening balance sheet restated to conform with IFRS, along with reconciliations from Canadian GAAP to IFRS, as per the guidance provided in IFRS 1, “First-Time Adoption of International Financial Reporting Standards”. As part of TI Corp’s transition to IFRS, an implementation plan was prepared based on the results of a diagnostic review of the differences between IFRS and the Corporation’s current accounting policies. This analysis provided an overview of key issues due to the changeover to IFRS and the resulting impact on the Corporation, including enhanced presentation and disclosure requirements. During this phase, the Corporation also established a process to oversee the impact of the transition on financial reporting, operating processes, internal controls and information systems. As a result, an extensive analysis of IFRS for those areas of the financial statements that have identified accounting differences between Canadian GAAP and IFRS has been completed. The Corporation will continue to monitor changes to IFRS and will review the impact of such changes in its business activities, its disclosure and internal controls over financial reporting and its financial reporting systems.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
4) ACCOUNTS RECEIVABLE
($ 000’s) Trade accounts receivable Related party trade accounts receivable: Ministry of Transportation and Infrastructure $
2011 89 4,969 5,058 $
2010 13 13
$
$
Accounts receivable due from the Ministry of Transportation and Infrastructure pertains to the cost recovery for construction of a park and ride project.
5) PREPAID EXPENSE (S 000’s) Rent Software Support Insurance Membership $ 2011 11 11 3 1 26 $ 2010 -
$
$
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 6) PROPERTY, PLANT AND EQUIPMENT (PPE) Assets under construction will not be depreciated until management has determined they are available for use. Capitalization of net interest costs for the year totaled $44,623,780 (2010 - $16,559,722). PPE at Cost ($ 000’s) Balance March 31, 2009 Additions Balance March 31, 2010 Additions Balance March 31, 2011 Accumulated Depreciation ($ 000’s) Balance March 31, 2009 Depreciation expense Balance March 31, 2010 Depreciation expense Balance March 31, 2011 Net Book Value ($ 000’s) Balance March 31, 2010 Balance March 31, 2011 Office Equipment $ 480 480 56 $ 536 Office Equipment $ (96) (96) (179) $ (275) Office Equipment $ 384 $ 261 Assets Under Construction $ 202,879 738,962 941,841 668,415 $ 1,610,256 Assets Under Construction $ $ Assets Under Construction $ 941,841 $ 1,610,256 Total 202,879 739,442 942,321 668,471 $ 1,610,792 Total $ (96) (96) (179) (275) Total $ 942,225 $ 1,610,517 $
$
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
7) INTANGIBLE ASSETS TI Corp has entered into a licensing agreement with the BCTFA to use and occupy certain lands in order to permit the Corporation to comply with its obligations under the Concession Agreement for the Project. The term of the license commences on December 31, 2012 and ends on March 14, 2090. The licensing agreement requires preliminary payments to be made as the properties are acquired. Amortization of these intangible assets will commence on January 1, 2013. ($ 000’s) Land Rights – at cost Balance March 31, 2009 $ 12,409 Additions 32,398 Balance March 31, 2010 44,807 Additions 74,483 Balance March 31, 2011 $ 119,290
8) RESTRICTED CASH A restricted cash balance of $10.5 million is held as collateral for a standby letter of credit issued by the Canadian Imperial Bank of Commerce (CIBC) in favor of the Receiver General for Canada on behalf of Fisheries and Oceans Canada (the beneficiary), to ensure TI Corp’s compliance with their authorization for work or undertakings affecting fish habitat. The standby letter of credit expires on June 29, 2011 and will be automatically renewed, unless the beneficiary provides 60 days’ notice prior to the expiry date that it is no longer required. The standby letter of credit will also be automatically reduced by the amount of each drawing paid by CIBC to the beneficiary.
9) LAND Land is recorded at cost which approximates market value. TI Corp has purchased certain properties on a temporary basis to facilitate construction activities. ($ 000’s) Land Balance March 31, 2009 $ 0 Additions 5,699 Balance March 31, 2010 5,699 Additions 709 Disposals (5,699) Balance March 31, 2011 $ 709
During the fiscal year 2010/11, land purchased in the prior year for a park and ride project were sold to the Ministry of Transportation and Infrastructure for proceeds of $5,698,780.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 10) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
($000’s)
Trade payables Related party payables: Minister of Finance Ministry of Transportation and Infrastructure BC Transportation Financing Authority $
2011
405,843 14,959 6,036 3,340 430,178 $
2010
290,619 6,016 20,725 13,094 330,454
$
$
All account payables are in the normal course of operations and are measured at the exchange amount. Related party values are negotiated between the respective entities and approximate market values.
11) SHORT-TERM DEBT TI Corp funds its construction and operations with a blend of long-term and short-term debt. Short-term commercial paper debt assumed by TI Corp typically matures within 365 days. TI Corp has been authorized to acquire up to $1 billion in short-term debt. The fair values of the commercial paper debt instruments approximate their stated values.
Commercial Paper ($000’s)
Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia
Annual Interest Rate
0.14 % 0.14 % 0.13 % 1.10 % 1.08 % 1.00 % 1.07 % 1.10 % 1.12 % 1.00 % 0.90 %
Maturity Date
2011
2010
May 19, 2010 May 19, 2010 April 1, 2010 July 7, 2011 May 6, 2011 May 10, 2011 June 3, 2011 June 13, 2011 June 15, 2011 May 5, 2011 June 20, 2011
25,226 43,354 38,149 17,057 50,161 35,114 48,154 11,976 $ 269,191
$
57,989 49,991 5,000 $ 112,980
$
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 12) LONG-TERM DEBT Long-term debt consists of a series of bonds due to the Province of British Columbia. With the approval of the Minister of Finance, sinking fund payments have been temporarily suspended but will commence once tolling revenue has been received. The Minister of Finance is the fiscal agent of TI Corp. There are no debt maturities over the next 5 years. Two new long-term debt instruments were acquired during the current fiscal year. Interest to be paid on currently held long-term debt over the next 5 years amounts to $48.2 million per year. During the construction phase of operations, the majority of the interest costs will be capitalized as a part of the capital asset costs. Fair values have been determined using active market comparisons.
Debt Series ($000’s)
BCCP-148 BCCD-22 BCCD-19 BCCD-22 BCCD-W BCCD-X
Maturity Date
June 9, 2039 June 18, 2040 June 18, 2031 June 18, 2040 November 19, 2027 June 18, 2029
Coupon Effective Rate Rate
4.99% 4.95% 5.00% 4.95% 6.15% 5.70% 4.99% 4.70% 4.95% 5.27% 4.95% 5.14%
March 31, 2011 Fair Value Amortized Cost
86,061 109,405 163,159 105,029 293,142 262,999 $ 1,019,795 $ 78,188 104,219 152,745 91,191 274,881 249,909 $ 951,133 $
March 31, 2010 Fair Value Amortized Cost
82,804 105,225 157,281 101,016 $ 446,326 $ 78,188 104,392 152,889 91,110 $ 426,579 $
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 13) DERIVATIVE FINANCIAL INSTRUMENTS TI Corp entered into a number of hedging transactions during the prior year, through advanced rate setting (ARS), also known as bond forwards and forward starting swap instruments. The Corporation has elected to apply hedge accounting rules in accordance with the Canadian Institute of Chartered Accountants, (CICA) Handbook Section 3865. The sole purpose in entering into derivative contracts is to mitigate interest rate risk by offsetting expected future interest rate increases. Hedge accounting rules permit the matching of hedging instrument gains or losses to the increase or decrease in future bond coupon rates. The Corporation does not enter into derivative financial instruments for trading or speculative purposes and documentation detailing the risk management objectives and strategies for undertaking effectiveness testing of the hedges have been compiled.
($000’s) Derivative Maturity March 31, 2011 Derivative Hedged Item Amount March 31, 2010 Derivative Hedged Item Amount
Hedging Instrument
ARS-1 ARS-1 Ext ARS-2 ARS-4 ARS-5 ARS-6 ARS-7 SWAP-1 SWAP-2 SWAP-3 SWAP-4
May 19, 2010 June 20, 2011 June 18, 2010 June 20, 2011 June 18, 2010 June 20, 2011 June 20, 2011 June 18, 2013 January 16, 2013 June 18, 2011 June 18, 2011
51,500 200,000 100,000 75,000 500,000 300,000 100,000 100,000 $ 1,426,500
$
63,700 227,800 114,300 100,000 500,000 300,000 100,000 100,000 $ 1,505,800
$
216,500 51,500 100,000 200,000 100,000 100,000 75,000 500,000 300,000 100,000 100,000 $ 1,843,000
$
$ 268,000 63,700 119,100 227,800 118,400 114,300 100,000 500,000 300,000 100,000 100,000 $ 2,011,300
14) SHARE CAPITAL AND CONTRIBUTED SURPLUS
2011
Share capital Contributed surplus $ $ 100 149,999,900 150,000,000 $ $
2010
100 149,999,900 150,000,000
Authorized capital as stated in the Transportation Investment Act, is one share with a par value of $100, issued to the Minister of Transportation and Infrastructure. Contributed surplus consists of $100 million received from the Province of British Columbia and work-inprogress valued at $50 million transferred from the BCTFA in the prior year.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
15) OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE LOSS The comprehensive loss detailed in the Statement of Operations, consists of two components – net loss from operations and other comprehensive loss. Other comprehensive loss represents the fair value changes of effective portions of cash flow hedging instruments during the period which resulted in a change in shareholder’s equity. Amounts are recorded in other comprehensive loss until such time as the criteria for recognition in the statement of operations have been met.
($000’s) Hedging Instrument March 31, 2011 Other Derivative Comprehensive Liability Loss March 31, 2010 Other Derivative Comprehensive Liability Loss
Loss(Gain) on Ineffective Portion of Derivative
Loss(Gain) on Ineffective Portion of Derivative
ARS-1 ARS-1 Ext ARS-2 ARS-4 ARS-5 ARS-6 ARS-7 SWAP-1 SWAP-2 SWAP-3 SWAP-4 Unrealized hedge losses Unamortized portion of cash flow hedge reserves
$
5,047 24,554 11,710 8,573 7,649 12,613 5,712 5,317 81,175 19,618
$
(5,047) (24,608) (11,733) (8,573) (7,649) (12,613) (5,712) (5,317) (81,252) -
$
8 38 10 17 73 -
$
966 568 1,040 7,139 1,711 3,007 1,638 1,406 5,832 1,704 1,327 26,338 26,338
$
(966) (568) (1,042) (7,154) (1,715) (3,013) (1,638) (1,406) (5,832) (1,704) (1,327) (26,365) -
$
2 15 4 6 27 -
$
$
100,793
$ (81,252)
$
73
$
$ (26,365)
$
27
All hedging instruments have been designated as cash flow hedges. The current year’s loss of $72,836 on the ineffective portions of the hedging instruments is recorded under net loss from operations entitled “hedge ineffectiveness loss”. The losses on the effective portions of the hedging instruments are recorded as effective hedging losses in the Other Comprehensive Loss area of the Statement of Operations. Hedged longterm debt to be issued in the future will mature between 2019 and 2029.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
Matured Hedging Instrument ($000’s)
Loss on Maturity
Allocated to Interest Cost in the Current Year
Cash Flow Hedge Reserve Balance in Accumulated Other Comprehensive Loss March 31, 2011
Cash Flow Hedge Reserve Amortized Until
ARS-1 ARS-2 ARS-5 Cash flow hedge reserves
$
$
7,677 6,113 6,747 20,537
$
$
384 254 281 919
$
$
7,293 5,859 6,466 19,618
November 19, 2027 June 18, 2029 June 18, 2029
During the 2010/11 fiscal year, ARS-1, ARS-2, and ARS-5 matured, resulting in Accumulated Other Comprehensive Losses in the amount of $20,537,579. These amounts, collectively called “cash flow hedge reserves”, will be recognized as expenditures over the term of the debt acquired. For the 2011/12 fiscal year, the cash flow hedge reserves’ anticipated allocation to interest cost will be $1,115,559.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 16) RELATED PARTY TRANSACTIONS TI Corp is related through common ownership to all Province of British Columbia ministries, agencies, Crown corporations and all public sector organizations that are included in provincial government reporting entity (GRE). A portion of the Corporation’s suppliers are from within the GRE. Transactions with related parties are in the normal course of operations and are measured at the exchange amount, as determined through negotiations between these parties. All debt financing required during the construction phase of the Project is obtained through the Ministry of Finance.
EXPENDITURES Category ($000’s)
Related Party
2011
2010
Interest and debt management costs Administration costs PPE
Parent: Minister of Finance Minister of Finance Ministry of Transportation and Infrastructure Associates: BC Transportation Financing Authority Partnerships BC BC Hydro Key Management Personnel: Executive salaries Executive short-term benefits Executive post-employment benefits
$
45,315 131 30,877
$
16,560 27,162
Land rights Administration Utilities
78,325 17 4
31,728 8 -
374 6 15
275 1 12
Parent: Ministries of the Province of British Columbia Debt financing acquired from the Province of BC includes short-term commercial paper and bond issuances. Repayment of principal, interest and associated debt management fees are payable to the Minister of Finance. Ministry of Transportation and Infrastructure Technical services used throughout the course of construction are provided through the Ministry of Transportation and Infrastructure. Associate: BC Transportation Financing Authority (BCTFA) TI Corp obtained the right to occupy and use the right-of-way lands owned by the BCTFA until 2090.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
RECEIPTS Category ($000’s)
Related Party
2011
2010
Capital assets
Parent: Ministry of Transportation and Infrastructure
$
29,581
$
-
Parent: Ministry of Transportation and Infrastructure Receipts from the Ministry of Transportation and Infrastructure are primarily for the cost recovery of a park and ride project including the sale of land.
17) SERVICE CONCESSION AGREEMENT TI Corp, Ministry of Transportation and Infrastructure (Ministry) and the BCTFA entered into a Concession Agreement (CA), dated March 10, 2010, and a Concession Agreement Modification Agreement effective on May 19, 2010. The expiry date of the CA is March 14, 2090 and the tolling term is for the first forty years expiring on March 14, 2050. TI Corp duties: • Manage and finance the construction of the Project. • Undertake the operations, maintenance and rehabilitation of the Concession Highway. • Develop and operate a tolling system during the tolling term. • Collect and retain toll revenue. • Keep the concession open to the public. • Ownership of acquired capital assets. Province’s obligations: • Grant licenses and rights to TI Corp to permit the operation of a concession. • Take possession of the capital assets at end of term. • Permit the use of existing land and infrastructure. BCTFA duties: • Grant licenses for use and occupation of lands by TI Corp for the term of the Concession Agreement. Collection of tolls will commence upon completion of the Port Mann Bridge.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 18) CONTRACTUAL OBLIGATIONS At March 31, 2011, TI Corp had the following contractual obligations:
($ Millions)
Kiewit/Flatiron General Partnership – New construction Kiewit/Flatiron General Partnership – Decommission old bridge Mainroad Infrastructure Maintenance LP C-S Intelligent Transportation Systems BC Inc. Lands West Property Services Inc. Miscellaneous other small contracts
2011/12
$ 550
2012/13
$ 460
2013/14
$ 17
2014/15
$ -
2015/16
$ $
TOTAL
1,027
-
-
39
-
-
39
6
6
7
-
-
19
5
10
1
-
-
16
4 4 $ 569 $
2 2 480 $
1 65 $
$
$
6 7 1,114
19) CAPITAL MANAGEMENT TI Corp defines capital as cash, cash equivalents, derivative contracts, and short-term and long-term debt. Pursuant to Section 24.23(2)(c) of the Transportation Investment Act, with the approval of the Minister of Finance, TI Corp may borrow the sums of money considered necessary to carry out its mandate. TI Corp’s objective in managing its capital is to monitor its cash, debt and the use of derivative financial instruments in order to minimize its cost of capital and its exposure to credit, market, currency, interest rate and liquidity risks, and to ensure that sufficient resources are available to fund the Project and ongoing operations. To achieve this objective, management reviews its capital management approach on a continuous and ongoing basis. Cash in excess of day-to-day operational requirements is invested in interest bearing bank deposits. During the construction phase of operations, TI Corp utilizes short term debt to fund construction and ongoing operations. Pursuant to TI Corp’s long-term debt strategy and hedging plan, the majority of the short-term debt is replaced by long-term bond debt.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
20) FINANCIAL INSTRUMENT RISKS TI Corp is exposed to certain risks through its financial instruments. Credit Risk: Credit risk is the risk that TI Corp will suffer a loss due to the failure of a counterparty to discharge its obligation on derivative contracts. TI Corp has entered into a derivative product transactions agreement with the Minister of Finance under which the Minister, as fiscal agent for the Corporation, may enter into derivative products transactions with third parties. Government policy is that derivative transactions are entered into only with counterparties, comprising Canadian Schedule A banks with a rating from Standard and Poor’s and Moody’s Investors Service Inc. of at least AA-/Aa3 or A+/A1. The Province also establishes limits on individual counterparty credit exposures and monitors these on a regular basis. Cash and cash equivalents do not present a credit risk as accounts receivables are minimal and cash is held at a major banking institution. Liquidity Risk: Liquidity risk is the risk that TI Corp will encounter difficulty in meeting obligations associated with its financial liabilities. The Province has guaranteed all payments under the design-build contract for the Project. In addition, the TI Corp has been given approval to spend up to $3.3 Billion on the Project, with funding provided through the Minister of Finance as TI Corp’s fiscal agent. The Corporation monitors its spending and debt through budgets, forecasts and effective management of its contracts. Market Risk: Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk includes currency risk, interest rate risk and other price risk. a) Currency Risk: Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. As at March 31, 2011, TI Corp has no foreign currency debt. When this has occurred in the past, the risk has been managed by entering into foreign currency derivative contracts. b) Interest Rate Risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. TI Corp is exposed to interest rate risk as a result of its requirement to assume short-term and long-term debt over the period of its infrastructure development. As short-term debt must be renewed on a frequent basis, interest rate increases will lead to higher interest costs. For the 2011/12 fiscal year, an increase of 1% to the short-term interest rate would result in an estimated additional short-term interest cost of $3.5 million. TI Corp has instituted a hedging strategy to mitigate the risk of higher long-term interest rates.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
c) Other Price Risk: Other price risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices other than those arising from currency or interest rate risks. Due to the nature of TI Corp’s financial instruments and as the fair values of the financial instruments approximate carrying values, TI Corp’s financial instruments are not subject to other price risk. Fair Value Disclosure: Fair value is the amount of consideration that would be agreed upon in an arm’s length transaction between knowledgeable, willing parties who are under no compulsion to act. As fair values are dependent on a range of inputs used in making the measurements, a fair value hierarchy has been developed to disclose the basis of measurements used. TI Corp has used the following fair value hierarchy to classify financial instruments recorded at fair value on the Corporation’s Statement of Financial Position: Level 1 – quoted prices (unadjusted in active markets for identical assets and liabilities); Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). Financial Instrument Cash and cash equivalents Accounts receivable and prepaids Effective hedged instruments Ineffective portion of hedged instruments Accounts payable and accrued liabilities Short-term debt Amount ($000’s) $12,896 7,580 (81,252) 73 (430,178) (269,191) Measurement Level 1 3 2 2 3 1
The valuation of cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximated their fair values at year-end because of the short-term maturities of these instruments. The carrying value for hedging instruments is established by reference to published market rates for underlying derivative values. As permitted by the CICA Handbook, the effectiveness assessment method utilizes linear regression tests performed using a hypothetical derivative approach for both prospective and retrospective effectiveness assessments.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
21) EMPLOYEE BENEFIT PLAN In the prior year, both the TI Corp and its employees commenced contributions to the Public Service Pension Plan (the Plan), a jointly trusted pension plan. The Public Service Pension Board of Trustees, representing plan members and employers, has oversight responsibilities for the management of the Plan, including investment of the assets and administration of benefits. The Plan is a multi-employer contributory pension plan and basic pension benefits are defined. Every three years, an actuarial valuation is performed to assess the financial position of the Plan and the adequacy of plan funding. The latest valuation, as at March 31, 2008, indicated a surplus of $487 million for basic pension benefits. The actuary does not attribute portions of any unfunded liability or to individual employers. In the current year, the employees of the TI Corp contributed $108,452 (2010 - $30,780) and the Corporation paid $121,682 (2010 - $34,637) in employer contributions to the Plan. 22) SUBSEQUENT EVENTS On May 2, 2011, the Board of Directors approved the awarding of a contract to EllisDon Corporation in the amount of $19.8 million plus HST for the construction of the Transportation Management Centre, a multipurpose building to house tolling, district and regional transportation operations. During the period April 4 to April 7, 2011, TI Corp acquired additional short term debt in the amount of $393 million. The proceeds were used to settle outstanding account payables. 23) MEASUREMENT UNCERTAINTY A degree of measurement uncertainty exists over the estimation of the cost of the assets under construction. Payments on the Design-Build contract with Kiewit/Flatiron General Partnership are based on an estimate of work performed using a percentage of completion estimate at the date of billing. An error of one percent could result in an over or under estimation of cost of approximately $24 million. Every attempt is made by management to record a realistic estimation of costs incurred. 24) CONTINGENT LIABILITIES A provision of the design build contract with Kiewit/Flatiron General Partnership requires the payment of an early completion bonus if the tolling operations commence prior to December 1, 2012. At March 31, 2011, it is not possible to determine if a payment will be required. From time to time, in the ordinary course of business, TI Corp can become a defendant or party to pending or threatened legal actions and proceedings. It is not possible to determine the ultimate outcome of such matters; however, based on all currently available information, management believes that liabilities, if any arising from any pending litigation will not have a material adverse effect on the financial position or results of operations of the Corporation.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
25) COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform to the presentation adopted in the current year.
Transportation Investment Corporation
Schedule of Debts As at March 31, 2011
Short-Term Debt Commercial Paper Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Total Short-Term Debt
Principal and Accrued Interest $25,226,094 $43,354,112 $38,148,916 $17,057,090 $50,161,376 $35,113,766 $48,153,991 $11,976,132 $269,191,477 Maturity Date May 5, 2011 May 6, 2011 May 10, 2011 Jun 3, 2011 Jun 13, 2011 Jun 15, 2011 Jun 20, 2011 Jul 7, 2011
Interest Rate 1.00% 1.08% 1.00% 1.07% 1.10% 1.12% 0.90% 1.10%
Long-Term Debt Debt Series BCCD-148 BCCD-22 BCCD-19 BCCD-22 BCCD-W BCCD-X Total Long-Term Debt
Amortized Cost $78,188,000 $104,219,154 $152,744,714 $91,191,135 $274,880,841 $249,909,284 $951,133,128 Maturity Date Jun 9, 2039 Jun 18, 2040 Jun 18, 2031 Jun 18, 2040 Nov 19, 2027 Jun 18, 2029
Coupon Rate 4.99% 4.95% 5.00% 4.95% 6.15% 5.70%
Sinking Fund $0 $0 $0 $0 $0 $0
Transportation Investment Corporation
Schedule of Guarantee and Indemnity Agreements For the year ended March 31, 2011
Transportation Investment Corporation has given indemnities under the:
1) Design Build Agreement dated March 13, 2009 between Transportation Investment Corporation and Kiewit/Flatiron General Partnership with respect to the construction of the Port Mann/Highway 1 Project. 2) Application for standby Letter of Credit/Guarantee dated June 29, 2009 between Transportation Investment Corporation and the Canadian Imperial Bank of Commerce with respect to security required in favour of the Department of Fisheries and Oceans for enviromental obligations related to the Port Mann/Highway 1 Project.
3) Tolling agreement dated March 24, 2010 between Transportation Investment Corporation and CS Systemes D'Information S.A. (CSSI) with respect to the design, supply, installation, implementation, testing, commissioning, and maintenance of the toll system. CSSI had assigned the agreement to their subsidiary C-S Intelligent Systems (BC) Inc. on December 21, 2010.
4) Highway maintenance agreement dated March 10, 2010 between Transportation Investment Corporation and Mainroad Infrastructure Maintenance Limited Partnership.
Transportation Investment Corporation
Schedule of Remuneration and Expenses For the year ended March 31, 2011
1. Elected Officials, employees appointed by Cabinet and members of the Board of Directors Name Peter Milburn Larry Blain John Dyble Position Chair Member, Board Member, Board Board of Directors Total, Part (A) 2. Others Employees (excluding those listed in Part 1 above) Name Employees exceeding $75,000 Garry Dawson Kenneth Tan Colleen Pennington Gerry Fleming John Sitch Max Logan Jodi Rogers Dina Mannah Ricky Pang Position Remuneration1 Expenses Remuneration NIL $7,250 NIL $7,250 Expenses NIL NIL NIL $0
VP, Technical Services Chief Financial Officer Director, Tolling Operations Project Director Director, Finance Director, Communications Manager, Community Relations Manager, Office & Human Resources Manager, Finance & Accounting
$157,009 $150,080 $113,943 $111,412 $107,589 $86,230 $85,192 $82,411 $76,735 $647,204 $1,617,805
$2,785 $6,064 $4,489 $3,118 $13,523 $986 $4,359 $1,796 $220 $61,106 $98,446
Consolidated total of other employees not exceeding $75,000 Other Employees Total, Part (B) 3. Reconciliation Total Remuneration - Board of Directors, Part (A) Total Remuneration - Other Employees, Part (B) Subtotal Reconciling Items - Less: Remunerations that were capitalized and were not shown in Statement of Operations
$7,250 $1,617,805 $1,625,055 ($858,816) $766,239
Corporate Salaries Total per Statement of Operations Less: Items Not Considered Remuneration Contractors Employer's CPP Contribution Employer's EI Contribution Vacation Pay Accrual WCB Expense Employer's Pension Contribution Recruiting Cost Benefits - Long Term Disability Benefits - Extended Health & Dental Adjusted Corporate Salaries Total
$1,070,764 ($9,073) ($23,561) ($11,849) ($76,944) ($34,306) ($64,200) ($52,728) ($14,806) ($17,058) $766,239 Variance $0
Note: 1 Remuneration includes base salary plus other taxable benefits.
Transportation Investment Corporation
Schedule of Severance Agreements For the year ended March 31, 2011
There were no severance agreements made between Transportation Investment Corporation and its non-unionized employees during fiscal year 2010/11.
Transportation Investment Corporation
Schedule of Suppliers of Goods and Services For the year ended March 31, 2011
1.
Suppliers' Amounts Over $25,000 BC Public Service Agency BC Transportation Financing Authority BearCat Consulting Ltd. Benefits Financial Management Office Camrosa Consulting Ltd. CIBC City of Coquitlam Connect Highways Development Group Limited Partnership Connections Call Centre Ltd. C-S Intelligent Transportation Systems B.C. Inc. CS Systemes D'Information D.F. Technologies Debt Management Branch Expert Recruiters Ex-Servicemen Security Services Ltd. Farris, Vaughan, Wills & Murphy LLP Fasken Martineau DuMoulin LLP GreyBurg Consulting Ltd. Hatch Ltd. Hewlett-Packard (Canada) Co. HNTB Corporation Jacobs Canada Inc. Karyo Edelman Communications Inc. Kiewit/Flatiron General Partnership Kim J. Lang Lands West Property Services Inc Lucent Strategies Mainroad Infrastructure Maintenance LP Meyers Norris Penny LLP Mickelson Consulting, Inc. Ministry of Transportation and Infrastructure Movex Nucleus Networks Inc. Office of the Auditor General PricewaterhouseCoopers LLP Public Service Pension Plan Receiver General Simmons Property Services Inc. Spot Solutions Ltd. Synovate Ltd. TA Management Ltd. WorkSafeBC Suppliers' Amounts Over $25,000 - Total
$37,187 $88,078,909 $34,160 $33,929 $347,653 $42,741 $683,097 $2,000,000 $78,480 $3,496,248 $450,000 $109,100 $191,712 $65,961 $43,303 $146,363 $61,094 $45,629 $449,915 $30,235 $2,030,429 $39,200 $217,856 $506,119,525 $280,562 $1,621,894 $435,967 $5,303,284 $33,203 $60,837 $45,566,295 $30,907 $369,539 $60,000 $336,426 $219,462 $1,252,755 $466,253 $33,843 $40,656 $180,603 $99,133 $661,224,345
Transportation Investment Corporation
Schedule of Suppliers of Goods and Services For the year ended March 31, 2011
2.
Suppliers' Amounts Under $25,000 Suppliers' Amounts Under $25,000 - Consolidated Total
$524,530
Note: 1 A reconciliation of amounts reported in the Financial Information Act Return and the audited financial statements has not been prepared. Transportation Investment Corporation prepares its financial statements on an accrual basis while the amounts reported in the Financial Information Act Return are based on cash payments in the year. This will result in timing differences between amounts recorded as expenses in the financial statements and amounts paid to a supplier in the year.
doc_432097004.pdf
A mode of transport is a solution that makes use of a particular type of vehicle, infrastructure and operation. The transport of a person or of cargo may involve one mode or several of the modes, with the latter case being called intermodal or multimodal transport. Each mode has its own advantages and disadvantages, and will be chosen for a trip on the basis of cost, capability, route and speed.
Port Mann/Highway 1 Improvement Project
Transportation Investment Corporation
Statement of Financial Information
Transportation Investment Corporation
Year Ended March 31, 2011
Published in accordance with the Financial Information Act, Chapter 140, Revised Statues of British Columbia, 1996
Suite 1420 ? 1111 W Georgia, Vancouver BC V6E 4M3 | T: (778) 783?1200 | F: (778) 783?1201 | Info Line: 1?866?999?7641 (PMH1)
Financial Information Act Return
Year Ended March 31, 2011
TABLE OF CONTENTS
A. Audited Financial Statements – March 31, 2011 B. Schedule of Debts C. Schedule of Guarantee and Indemnity Agreements D. Schedule of Remuneration and Expenses E. Schedule of Severance Agreements F. Schedule of Suppliers of Goods and Services G. Statement of Financial Information Approval
Transportation Investment Corporation
Statement of Shareholder's Equity As at March 31 ($ 000s) SHARE CAPITAL & CONTRIBUTED SURPLUS Beginning and end of the year (note 14) 2011 2010
$
150,000
$
150,000
DEFICIT Beginning of the year Net loss from operations End of the year
(12,223) (7,246) (19,469)
(7,758) (4,465) (12,223)
ACCUMULATED OTHER COMPREHENSIVE LOSS Beginning of the year Other comprehensive loss for the year End of the year (note 15) TOTAL SHAREHOLDER'S EQUITY $
(26,338) (74,455) (100,793) 29,738 $
(26,338) (26,338) 111,439
The accompanying notes form an integral part of these financial statements.
Transportation Investment Corporation
Statement of Operations For the year ended March 31 ($ 000s) REVENUES Net foreign exchange gain Sundry $ 11 11 $ 213 6 219 2011 2010
EXPENSES Operations Corporate salaries Administration Depreciation Hedge ineffectiveness loss (note 15) Interest
5,108 1,071 753 136 73 116 7,257 (7,246)
2,944 894 761 58 27 4,684 (4,465)
NET LOSS FROM OPERATIONS OTHER COMPREHENSIVE LOSS Unrealized effective hedging loss (note 15) COMPREHENSIVE LOSS FOR THE YEAR $
(74,455) (81,701) $
(26,338) (30,803)
The accompanying notes form an integral part of these financial statements.
Transportation Investment Corporation
Statement of Cash Flows For the year ended March 31 ($ 000s) Cash provided by (used for) 2011 2010
OPERATIONS
Net loss from operations Items not affecting cash: Depreciation expense Hedge ineffectiveness loss Changes in non-cash operating working capital: Increase in accounts receivable Increase in HST recoverable Increase in prepaid expense Increase in accounts payable Increase in financial instrument $ (7,246) 136 73 (74) (268) (25) 417 (6,987) $ (4,465) 58 27 (13) 139 169 (4,085)
FINANCING
Proceeds from debt Settlement of derivative financial instruments Items not affecting cash: Effective hedging loss Hedge settlement amortization Accumulated other comprehensive income 680,765 (20,560) 54,887 919 (54,887) 661,124 519,410 26,338 (26,338) 519,410
INVESTING
Intangible assets Property, plant and equipment Land Items not affecting cash: Hedge settlement amortization Changes in non-cash investing working capital: Increase in accounts receivable Increase in HST recoverable Increase in prepaid expense Increase in accounts payable (74,483) (667,509) 4,990 (919) (4,971) (2,228) (1) 99,307 (645,814) 8,323 15,073 23,396 (32,399) (739,403) (5,699) 226,106 (551,395) (36,070) 51,143 15,073
Change in cash, current year Cash, beginning of year Cash, end of year Cash consists of: Restricted cash Cash in bank Petty cash
$
$
$
$
10,500 12,896 23,396
$
$
10,500 4,572 1 15,073
The accompanying notes form an integral part of these financial statements.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 1) PURPOSE The Transportation Investment Corporation (TI Corp) is a Crown corporation wholly owned by the Province of British Columbia. TI Corp was established on June 25, 2008 under the Transportation Investment Act (SBC 2002). The Corporation is currently undertaking the design and build of the Port Mann/Highway 1 Project (Project) and may also engage in or conduct business authorized by the Lieutenant Governor in Council. On March 10, 2010, the Port Mann Highway 1 Bridge Concession Agreement, which outlines the terms and conditions of the Project was signed by authorized representatives of TI Corp, the BC Transportation Financing Authority (BCTFA) and the Ministry of Transportation and Infrastructure. 2) SIGNIFICANT ACCOUNTING POLICIES a) Basis of presentation The financial statements of TI Corp are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP) on a going concern basis. b) Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates relate to property, plant and equipment, the effectiveness of hedging instruments, and accounts payable and accrued liabilities. Although management uses the best estimates available, actual balances may differ from these amounts. c) Federal and Provincial taxes TI Corp is exempt from corporate income taxes. The Corporation was exempt from the Goods and Services Tax up to June 30, 2010. Thereafter, the Corporation remits and fully recovers Harmonized Sales Tax. d) Intangible assets Intangible assets are recorded at cost and are amortized over their expected useful lives calculated on a straight line basis. The life of land rights is based on the residual term of the Concession Agreement of 78 years. e) Foreign exchange Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the rate of exchange in effect at the end of the accounting period. Changes in the Canadian dollar equivalent of these monetary assets and liabilities due to changes in the exchange rate are recognized as foreign currency gains and losses in net income from operations.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
f)
Derivative financial instruments Canadian GAAP requires that all financial instrument assets be classified as held-for-trading, available-for-sale, and held-to-maturity or as loans and receivables. In addition, derivative financial instruments that are not accounted for as hedging instruments must be classified as held-for-trading. Financial instrument liabilities can be classified as held-for-trading or as other liabilities. All financial instruments are measured at fair value on initial recognition, and subsequent measurement and recognition of changes in fair value are dependent on whether the financial instrument has been classified as held for trading, available for sale, held to maturity, loans and receivables or other financial liabilities. The Corporation has classified and measured its financial instruments as follows:
Financial Instrument
Cash and cash equivalents Accounts receivable Derivatives other than hedging instruments Effective hedged instruments Ineffective portion of hedged instruments Accounts payable and accrued liabilities Short-term debt Long-term debt
Category
Held for trading Loans and receivables Held for trading Designated hedges Held for trading Other financial liabilities Other financial liabilities Other financial liabilities
Measurement
Fair value Fair value Fair value Fair value Fair value Fair value Fair value Amortized cost using the effective interest rate method
Recognition of Gain or Loss
Income from operations Income from operations Income from operations Other comprehensive income Income from operations Income from operations Income from operations Income from operations
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
g) Property, plant and equipment Borrowing costs that are directly attributable to the acquisition, construction or production of capital assets under construction are capitalized using the actual borrowing costs net of any temporary investment income. Capitalization of borrowing costs ceases when the specific asset is available for use. Depreciation of capital asset costs less estimated residual value is calculated at straight line rates to depreciate the assets over their estimated useful lives. Depreciation commences at the end of the first quarter after management has determined the asset is available for use. Depreciation ceases on the earlier of the date the asset is classified as held-for-sale or the date the asset is derecognized. Assets under construction consist of highway infrastructure under development including bridges, road bed, overpasses, underpasses, retaining walls and drainage systems. Depreciation rates have been determined as follows:
Capital Asset
Assets under construction Office equipment Land
Initial Measurement
Cost Cost Cost
Estimated Useful Lives
Depreciated when available for use 3 years Not depreciated
h) Debt placement fees Transaction fees incurred in the arrangement or placement of debt during the capital asset construction phase are capitalized as interest during construction. Upon completion of the construction of the capital assets, these costs will be amortized over the estimated useful life of the assets. i) Pension and post retirement benefits Commencing in fiscal year 2009/10, pension benefits for employees of the Corporation are provided through the BC Public Service Pension Plan. Payments for the cost of this plan are accounted for on an accrual basis. Administration and overhead costs Administration and overhead costs which are directly attributable to bringing the property, plant and equipment to a condition necessary for them to be capable of operating in a manner intended by management form a part of the capital cost of the assets.
j)
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 3) FUTURE ACCOUNTING CHANGES International Financial Reporting Standards (IFRS) In February 2008, the Canadian Accounting Standards Board (AcSB) confirmed that the use of IFRS will be required in 2011 for publicly accountable enterprises. IFRS will replace Canada’s current Generally Accepted Accounting Principles (GAAP) for those enterprises. Pursuant to a provincial Treasury Board directive in 2010, the Corporation is directed to consult with the Office of the Comptroller General of British Columbia (OCG), who will provide guidance to the Corporation prior to the adoption of accounting policy choices and elections related to applicable accounting standards or guidelines. The TI Corp will comply with the Treasury Board directive and after consultation with OCG will adopt IFRS effective April 1, 2011. TI Corp’s future financial statements will be prepared in accordance with IFRS, with 2011 comparative figures and the April 1, 2010 opening balance sheet restated to conform with IFRS, along with reconciliations from Canadian GAAP to IFRS, as per the guidance provided in IFRS 1, “First-Time Adoption of International Financial Reporting Standards”. As part of TI Corp’s transition to IFRS, an implementation plan was prepared based on the results of a diagnostic review of the differences between IFRS and the Corporation’s current accounting policies. This analysis provided an overview of key issues due to the changeover to IFRS and the resulting impact on the Corporation, including enhanced presentation and disclosure requirements. During this phase, the Corporation also established a process to oversee the impact of the transition on financial reporting, operating processes, internal controls and information systems. As a result, an extensive analysis of IFRS for those areas of the financial statements that have identified accounting differences between Canadian GAAP and IFRS has been completed. The Corporation will continue to monitor changes to IFRS and will review the impact of such changes in its business activities, its disclosure and internal controls over financial reporting and its financial reporting systems.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
4) ACCOUNTS RECEIVABLE
($ 000’s) Trade accounts receivable Related party trade accounts receivable: Ministry of Transportation and Infrastructure $
2011 89 4,969 5,058 $
2010 13 13
$
$
Accounts receivable due from the Ministry of Transportation and Infrastructure pertains to the cost recovery for construction of a park and ride project.
5) PREPAID EXPENSE (S 000’s) Rent Software Support Insurance Membership $ 2011 11 11 3 1 26 $ 2010 -
$
$
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 6) PROPERTY, PLANT AND EQUIPMENT (PPE) Assets under construction will not be depreciated until management has determined they are available for use. Capitalization of net interest costs for the year totaled $44,623,780 (2010 - $16,559,722). PPE at Cost ($ 000’s) Balance March 31, 2009 Additions Balance March 31, 2010 Additions Balance March 31, 2011 Accumulated Depreciation ($ 000’s) Balance March 31, 2009 Depreciation expense Balance March 31, 2010 Depreciation expense Balance March 31, 2011 Net Book Value ($ 000’s) Balance March 31, 2010 Balance March 31, 2011 Office Equipment $ 480 480 56 $ 536 Office Equipment $ (96) (96) (179) $ (275) Office Equipment $ 384 $ 261 Assets Under Construction $ 202,879 738,962 941,841 668,415 $ 1,610,256 Assets Under Construction $ $ Assets Under Construction $ 941,841 $ 1,610,256 Total 202,879 739,442 942,321 668,471 $ 1,610,792 Total $ (96) (96) (179) (275) Total $ 942,225 $ 1,610,517 $
$
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
7) INTANGIBLE ASSETS TI Corp has entered into a licensing agreement with the BCTFA to use and occupy certain lands in order to permit the Corporation to comply with its obligations under the Concession Agreement for the Project. The term of the license commences on December 31, 2012 and ends on March 14, 2090. The licensing agreement requires preliminary payments to be made as the properties are acquired. Amortization of these intangible assets will commence on January 1, 2013. ($ 000’s) Land Rights – at cost Balance March 31, 2009 $ 12,409 Additions 32,398 Balance March 31, 2010 44,807 Additions 74,483 Balance March 31, 2011 $ 119,290
8) RESTRICTED CASH A restricted cash balance of $10.5 million is held as collateral for a standby letter of credit issued by the Canadian Imperial Bank of Commerce (CIBC) in favor of the Receiver General for Canada on behalf of Fisheries and Oceans Canada (the beneficiary), to ensure TI Corp’s compliance with their authorization for work or undertakings affecting fish habitat. The standby letter of credit expires on June 29, 2011 and will be automatically renewed, unless the beneficiary provides 60 days’ notice prior to the expiry date that it is no longer required. The standby letter of credit will also be automatically reduced by the amount of each drawing paid by CIBC to the beneficiary.
9) LAND Land is recorded at cost which approximates market value. TI Corp has purchased certain properties on a temporary basis to facilitate construction activities. ($ 000’s) Land Balance March 31, 2009 $ 0 Additions 5,699 Balance March 31, 2010 5,699 Additions 709 Disposals (5,699) Balance March 31, 2011 $ 709
During the fiscal year 2010/11, land purchased in the prior year for a park and ride project were sold to the Ministry of Transportation and Infrastructure for proceeds of $5,698,780.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 10) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
($000’s)
Trade payables Related party payables: Minister of Finance Ministry of Transportation and Infrastructure BC Transportation Financing Authority $
2011
405,843 14,959 6,036 3,340 430,178 $
2010
290,619 6,016 20,725 13,094 330,454
$
$
All account payables are in the normal course of operations and are measured at the exchange amount. Related party values are negotiated between the respective entities and approximate market values.
11) SHORT-TERM DEBT TI Corp funds its construction and operations with a blend of long-term and short-term debt. Short-term commercial paper debt assumed by TI Corp typically matures within 365 days. TI Corp has been authorized to acquire up to $1 billion in short-term debt. The fair values of the commercial paper debt instruments approximate their stated values.
Commercial Paper ($000’s)
Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia
Annual Interest Rate
0.14 % 0.14 % 0.13 % 1.10 % 1.08 % 1.00 % 1.07 % 1.10 % 1.12 % 1.00 % 0.90 %
Maturity Date
2011
2010
May 19, 2010 May 19, 2010 April 1, 2010 July 7, 2011 May 6, 2011 May 10, 2011 June 3, 2011 June 13, 2011 June 15, 2011 May 5, 2011 June 20, 2011
25,226 43,354 38,149 17,057 50,161 35,114 48,154 11,976 $ 269,191
$
57,989 49,991 5,000 $ 112,980
$
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 12) LONG-TERM DEBT Long-term debt consists of a series of bonds due to the Province of British Columbia. With the approval of the Minister of Finance, sinking fund payments have been temporarily suspended but will commence once tolling revenue has been received. The Minister of Finance is the fiscal agent of TI Corp. There are no debt maturities over the next 5 years. Two new long-term debt instruments were acquired during the current fiscal year. Interest to be paid on currently held long-term debt over the next 5 years amounts to $48.2 million per year. During the construction phase of operations, the majority of the interest costs will be capitalized as a part of the capital asset costs. Fair values have been determined using active market comparisons.
Debt Series ($000’s)
BCCP-148 BCCD-22 BCCD-19 BCCD-22 BCCD-W BCCD-X
Maturity Date
June 9, 2039 June 18, 2040 June 18, 2031 June 18, 2040 November 19, 2027 June 18, 2029
Coupon Effective Rate Rate
4.99% 4.95% 5.00% 4.95% 6.15% 5.70% 4.99% 4.70% 4.95% 5.27% 4.95% 5.14%
March 31, 2011 Fair Value Amortized Cost
86,061 109,405 163,159 105,029 293,142 262,999 $ 1,019,795 $ 78,188 104,219 152,745 91,191 274,881 249,909 $ 951,133 $
March 31, 2010 Fair Value Amortized Cost
82,804 105,225 157,281 101,016 $ 446,326 $ 78,188 104,392 152,889 91,110 $ 426,579 $
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 13) DERIVATIVE FINANCIAL INSTRUMENTS TI Corp entered into a number of hedging transactions during the prior year, through advanced rate setting (ARS), also known as bond forwards and forward starting swap instruments. The Corporation has elected to apply hedge accounting rules in accordance with the Canadian Institute of Chartered Accountants, (CICA) Handbook Section 3865. The sole purpose in entering into derivative contracts is to mitigate interest rate risk by offsetting expected future interest rate increases. Hedge accounting rules permit the matching of hedging instrument gains or losses to the increase or decrease in future bond coupon rates. The Corporation does not enter into derivative financial instruments for trading or speculative purposes and documentation detailing the risk management objectives and strategies for undertaking effectiveness testing of the hedges have been compiled.
($000’s) Derivative Maturity March 31, 2011 Derivative Hedged Item Amount March 31, 2010 Derivative Hedged Item Amount
Hedging Instrument
ARS-1 ARS-1 Ext ARS-2 ARS-4 ARS-5 ARS-6 ARS-7 SWAP-1 SWAP-2 SWAP-3 SWAP-4
May 19, 2010 June 20, 2011 June 18, 2010 June 20, 2011 June 18, 2010 June 20, 2011 June 20, 2011 June 18, 2013 January 16, 2013 June 18, 2011 June 18, 2011
51,500 200,000 100,000 75,000 500,000 300,000 100,000 100,000 $ 1,426,500
$
63,700 227,800 114,300 100,000 500,000 300,000 100,000 100,000 $ 1,505,800
$
216,500 51,500 100,000 200,000 100,000 100,000 75,000 500,000 300,000 100,000 100,000 $ 1,843,000
$
$ 268,000 63,700 119,100 227,800 118,400 114,300 100,000 500,000 300,000 100,000 100,000 $ 2,011,300
14) SHARE CAPITAL AND CONTRIBUTED SURPLUS
2011
Share capital Contributed surplus $ $ 100 149,999,900 150,000,000 $ $
2010
100 149,999,900 150,000,000
Authorized capital as stated in the Transportation Investment Act, is one share with a par value of $100, issued to the Minister of Transportation and Infrastructure. Contributed surplus consists of $100 million received from the Province of British Columbia and work-inprogress valued at $50 million transferred from the BCTFA in the prior year.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
15) OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE LOSS The comprehensive loss detailed in the Statement of Operations, consists of two components – net loss from operations and other comprehensive loss. Other comprehensive loss represents the fair value changes of effective portions of cash flow hedging instruments during the period which resulted in a change in shareholder’s equity. Amounts are recorded in other comprehensive loss until such time as the criteria for recognition in the statement of operations have been met.
($000’s) Hedging Instrument March 31, 2011 Other Derivative Comprehensive Liability Loss March 31, 2010 Other Derivative Comprehensive Liability Loss
Loss(Gain) on Ineffective Portion of Derivative
Loss(Gain) on Ineffective Portion of Derivative
ARS-1 ARS-1 Ext ARS-2 ARS-4 ARS-5 ARS-6 ARS-7 SWAP-1 SWAP-2 SWAP-3 SWAP-4 Unrealized hedge losses Unamortized portion of cash flow hedge reserves
$
5,047 24,554 11,710 8,573 7,649 12,613 5,712 5,317 81,175 19,618
$
(5,047) (24,608) (11,733) (8,573) (7,649) (12,613) (5,712) (5,317) (81,252) -
$
8 38 10 17 73 -
$
966 568 1,040 7,139 1,711 3,007 1,638 1,406 5,832 1,704 1,327 26,338 26,338
$
(966) (568) (1,042) (7,154) (1,715) (3,013) (1,638) (1,406) (5,832) (1,704) (1,327) (26,365) -
$
2 15 4 6 27 -
$
$
100,793
$ (81,252)
$
73
$
$ (26,365)
$
27
All hedging instruments have been designated as cash flow hedges. The current year’s loss of $72,836 on the ineffective portions of the hedging instruments is recorded under net loss from operations entitled “hedge ineffectiveness loss”. The losses on the effective portions of the hedging instruments are recorded as effective hedging losses in the Other Comprehensive Loss area of the Statement of Operations. Hedged longterm debt to be issued in the future will mature between 2019 and 2029.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
Matured Hedging Instrument ($000’s)
Loss on Maturity
Allocated to Interest Cost in the Current Year
Cash Flow Hedge Reserve Balance in Accumulated Other Comprehensive Loss March 31, 2011
Cash Flow Hedge Reserve Amortized Until
ARS-1 ARS-2 ARS-5 Cash flow hedge reserves
$
$
7,677 6,113 6,747 20,537
$
$
384 254 281 919
$
$
7,293 5,859 6,466 19,618
November 19, 2027 June 18, 2029 June 18, 2029
During the 2010/11 fiscal year, ARS-1, ARS-2, and ARS-5 matured, resulting in Accumulated Other Comprehensive Losses in the amount of $20,537,579. These amounts, collectively called “cash flow hedge reserves”, will be recognized as expenditures over the term of the debt acquired. For the 2011/12 fiscal year, the cash flow hedge reserves’ anticipated allocation to interest cost will be $1,115,559.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 16) RELATED PARTY TRANSACTIONS TI Corp is related through common ownership to all Province of British Columbia ministries, agencies, Crown corporations and all public sector organizations that are included in provincial government reporting entity (GRE). A portion of the Corporation’s suppliers are from within the GRE. Transactions with related parties are in the normal course of operations and are measured at the exchange amount, as determined through negotiations between these parties. All debt financing required during the construction phase of the Project is obtained through the Ministry of Finance.
EXPENDITURES Category ($000’s)
Related Party
2011
2010
Interest and debt management costs Administration costs PPE
Parent: Minister of Finance Minister of Finance Ministry of Transportation and Infrastructure Associates: BC Transportation Financing Authority Partnerships BC BC Hydro Key Management Personnel: Executive salaries Executive short-term benefits Executive post-employment benefits
$
45,315 131 30,877
$
16,560 27,162
Land rights Administration Utilities
78,325 17 4
31,728 8 -
374 6 15
275 1 12
Parent: Ministries of the Province of British Columbia Debt financing acquired from the Province of BC includes short-term commercial paper and bond issuances. Repayment of principal, interest and associated debt management fees are payable to the Minister of Finance. Ministry of Transportation and Infrastructure Technical services used throughout the course of construction are provided through the Ministry of Transportation and Infrastructure. Associate: BC Transportation Financing Authority (BCTFA) TI Corp obtained the right to occupy and use the right-of-way lands owned by the BCTFA until 2090.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
RECEIPTS Category ($000’s)
Related Party
2011
2010
Capital assets
Parent: Ministry of Transportation and Infrastructure
$
29,581
$
-
Parent: Ministry of Transportation and Infrastructure Receipts from the Ministry of Transportation and Infrastructure are primarily for the cost recovery of a park and ride project including the sale of land.
17) SERVICE CONCESSION AGREEMENT TI Corp, Ministry of Transportation and Infrastructure (Ministry) and the BCTFA entered into a Concession Agreement (CA), dated March 10, 2010, and a Concession Agreement Modification Agreement effective on May 19, 2010. The expiry date of the CA is March 14, 2090 and the tolling term is for the first forty years expiring on March 14, 2050. TI Corp duties: • Manage and finance the construction of the Project. • Undertake the operations, maintenance and rehabilitation of the Concession Highway. • Develop and operate a tolling system during the tolling term. • Collect and retain toll revenue. • Keep the concession open to the public. • Ownership of acquired capital assets. Province’s obligations: • Grant licenses and rights to TI Corp to permit the operation of a concession. • Take possession of the capital assets at end of term. • Permit the use of existing land and infrastructure. BCTFA duties: • Grant licenses for use and occupation of lands by TI Corp for the term of the Concession Agreement. Collection of tolls will commence upon completion of the Port Mann Bridge.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011 18) CONTRACTUAL OBLIGATIONS At March 31, 2011, TI Corp had the following contractual obligations:
($ Millions)
Kiewit/Flatiron General Partnership – New construction Kiewit/Flatiron General Partnership – Decommission old bridge Mainroad Infrastructure Maintenance LP C-S Intelligent Transportation Systems BC Inc. Lands West Property Services Inc. Miscellaneous other small contracts
2011/12
$ 550
2012/13
$ 460
2013/14
$ 17
2014/15
$ -
2015/16
$ $
TOTAL
1,027
-
-
39
-
-
39
6
6
7
-
-
19
5
10
1
-
-
16
4 4 $ 569 $
2 2 480 $
1 65 $
$
$
6 7 1,114
19) CAPITAL MANAGEMENT TI Corp defines capital as cash, cash equivalents, derivative contracts, and short-term and long-term debt. Pursuant to Section 24.23(2)(c) of the Transportation Investment Act, with the approval of the Minister of Finance, TI Corp may borrow the sums of money considered necessary to carry out its mandate. TI Corp’s objective in managing its capital is to monitor its cash, debt and the use of derivative financial instruments in order to minimize its cost of capital and its exposure to credit, market, currency, interest rate and liquidity risks, and to ensure that sufficient resources are available to fund the Project and ongoing operations. To achieve this objective, management reviews its capital management approach on a continuous and ongoing basis. Cash in excess of day-to-day operational requirements is invested in interest bearing bank deposits. During the construction phase of operations, TI Corp utilizes short term debt to fund construction and ongoing operations. Pursuant to TI Corp’s long-term debt strategy and hedging plan, the majority of the short-term debt is replaced by long-term bond debt.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
20) FINANCIAL INSTRUMENT RISKS TI Corp is exposed to certain risks through its financial instruments. Credit Risk: Credit risk is the risk that TI Corp will suffer a loss due to the failure of a counterparty to discharge its obligation on derivative contracts. TI Corp has entered into a derivative product transactions agreement with the Minister of Finance under which the Minister, as fiscal agent for the Corporation, may enter into derivative products transactions with third parties. Government policy is that derivative transactions are entered into only with counterparties, comprising Canadian Schedule A banks with a rating from Standard and Poor’s and Moody’s Investors Service Inc. of at least AA-/Aa3 or A+/A1. The Province also establishes limits on individual counterparty credit exposures and monitors these on a regular basis. Cash and cash equivalents do not present a credit risk as accounts receivables are minimal and cash is held at a major banking institution. Liquidity Risk: Liquidity risk is the risk that TI Corp will encounter difficulty in meeting obligations associated with its financial liabilities. The Province has guaranteed all payments under the design-build contract for the Project. In addition, the TI Corp has been given approval to spend up to $3.3 Billion on the Project, with funding provided through the Minister of Finance as TI Corp’s fiscal agent. The Corporation monitors its spending and debt through budgets, forecasts and effective management of its contracts. Market Risk: Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk includes currency risk, interest rate risk and other price risk. a) Currency Risk: Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. As at March 31, 2011, TI Corp has no foreign currency debt. When this has occurred in the past, the risk has been managed by entering into foreign currency derivative contracts. b) Interest Rate Risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. TI Corp is exposed to interest rate risk as a result of its requirement to assume short-term and long-term debt over the period of its infrastructure development. As short-term debt must be renewed on a frequent basis, interest rate increases will lead to higher interest costs. For the 2011/12 fiscal year, an increase of 1% to the short-term interest rate would result in an estimated additional short-term interest cost of $3.5 million. TI Corp has instituted a hedging strategy to mitigate the risk of higher long-term interest rates.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
c) Other Price Risk: Other price risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices other than those arising from currency or interest rate risks. Due to the nature of TI Corp’s financial instruments and as the fair values of the financial instruments approximate carrying values, TI Corp’s financial instruments are not subject to other price risk. Fair Value Disclosure: Fair value is the amount of consideration that would be agreed upon in an arm’s length transaction between knowledgeable, willing parties who are under no compulsion to act. As fair values are dependent on a range of inputs used in making the measurements, a fair value hierarchy has been developed to disclose the basis of measurements used. TI Corp has used the following fair value hierarchy to classify financial instruments recorded at fair value on the Corporation’s Statement of Financial Position: Level 1 – quoted prices (unadjusted in active markets for identical assets and liabilities); Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). Financial Instrument Cash and cash equivalents Accounts receivable and prepaids Effective hedged instruments Ineffective portion of hedged instruments Accounts payable and accrued liabilities Short-term debt Amount ($000’s) $12,896 7,580 (81,252) 73 (430,178) (269,191) Measurement Level 1 3 2 2 3 1
The valuation of cash and cash equivalents, accounts receivable, accounts payable, and short-term debt approximated their fair values at year-end because of the short-term maturities of these instruments. The carrying value for hedging instruments is established by reference to published market rates for underlying derivative values. As permitted by the CICA Handbook, the effectiveness assessment method utilizes linear regression tests performed using a hypothetical derivative approach for both prospective and retrospective effectiveness assessments.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
21) EMPLOYEE BENEFIT PLAN In the prior year, both the TI Corp and its employees commenced contributions to the Public Service Pension Plan (the Plan), a jointly trusted pension plan. The Public Service Pension Board of Trustees, representing plan members and employers, has oversight responsibilities for the management of the Plan, including investment of the assets and administration of benefits. The Plan is a multi-employer contributory pension plan and basic pension benefits are defined. Every three years, an actuarial valuation is performed to assess the financial position of the Plan and the adequacy of plan funding. The latest valuation, as at March 31, 2008, indicated a surplus of $487 million for basic pension benefits. The actuary does not attribute portions of any unfunded liability or to individual employers. In the current year, the employees of the TI Corp contributed $108,452 (2010 - $30,780) and the Corporation paid $121,682 (2010 - $34,637) in employer contributions to the Plan. 22) SUBSEQUENT EVENTS On May 2, 2011, the Board of Directors approved the awarding of a contract to EllisDon Corporation in the amount of $19.8 million plus HST for the construction of the Transportation Management Centre, a multipurpose building to house tolling, district and regional transportation operations. During the period April 4 to April 7, 2011, TI Corp acquired additional short term debt in the amount of $393 million. The proceeds were used to settle outstanding account payables. 23) MEASUREMENT UNCERTAINTY A degree of measurement uncertainty exists over the estimation of the cost of the assets under construction. Payments on the Design-Build contract with Kiewit/Flatiron General Partnership are based on an estimate of work performed using a percentage of completion estimate at the date of billing. An error of one percent could result in an over or under estimation of cost of approximately $24 million. Every attempt is made by management to record a realistic estimation of costs incurred. 24) CONTINGENT LIABILITIES A provision of the design build contract with Kiewit/Flatiron General Partnership requires the payment of an early completion bonus if the tolling operations commence prior to December 1, 2012. At March 31, 2011, it is not possible to determine if a payment will be required. From time to time, in the ordinary course of business, TI Corp can become a defendant or party to pending or threatened legal actions and proceedings. It is not possible to determine the ultimate outcome of such matters; however, based on all currently available information, management believes that liabilities, if any arising from any pending litigation will not have a material adverse effect on the financial position or results of operations of the Corporation.
Transportation Investment Corporation
Notes to the Financial Statements March 31, 2011
25) COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform to the presentation adopted in the current year.
Transportation Investment Corporation
Schedule of Debts As at March 31, 2011
Short-Term Debt Commercial Paper Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Province of British Columbia Total Short-Term Debt
Principal and Accrued Interest $25,226,094 $43,354,112 $38,148,916 $17,057,090 $50,161,376 $35,113,766 $48,153,991 $11,976,132 $269,191,477 Maturity Date May 5, 2011 May 6, 2011 May 10, 2011 Jun 3, 2011 Jun 13, 2011 Jun 15, 2011 Jun 20, 2011 Jul 7, 2011
Interest Rate 1.00% 1.08% 1.00% 1.07% 1.10% 1.12% 0.90% 1.10%
Long-Term Debt Debt Series BCCD-148 BCCD-22 BCCD-19 BCCD-22 BCCD-W BCCD-X Total Long-Term Debt
Amortized Cost $78,188,000 $104,219,154 $152,744,714 $91,191,135 $274,880,841 $249,909,284 $951,133,128 Maturity Date Jun 9, 2039 Jun 18, 2040 Jun 18, 2031 Jun 18, 2040 Nov 19, 2027 Jun 18, 2029
Coupon Rate 4.99% 4.95% 5.00% 4.95% 6.15% 5.70%
Sinking Fund $0 $0 $0 $0 $0 $0
Transportation Investment Corporation
Schedule of Guarantee and Indemnity Agreements For the year ended March 31, 2011
Transportation Investment Corporation has given indemnities under the:
1) Design Build Agreement dated March 13, 2009 between Transportation Investment Corporation and Kiewit/Flatiron General Partnership with respect to the construction of the Port Mann/Highway 1 Project. 2) Application for standby Letter of Credit/Guarantee dated June 29, 2009 between Transportation Investment Corporation and the Canadian Imperial Bank of Commerce with respect to security required in favour of the Department of Fisheries and Oceans for enviromental obligations related to the Port Mann/Highway 1 Project.
3) Tolling agreement dated March 24, 2010 between Transportation Investment Corporation and CS Systemes D'Information S.A. (CSSI) with respect to the design, supply, installation, implementation, testing, commissioning, and maintenance of the toll system. CSSI had assigned the agreement to their subsidiary C-S Intelligent Systems (BC) Inc. on December 21, 2010.
4) Highway maintenance agreement dated March 10, 2010 between Transportation Investment Corporation and Mainroad Infrastructure Maintenance Limited Partnership.
Transportation Investment Corporation
Schedule of Remuneration and Expenses For the year ended March 31, 2011
1. Elected Officials, employees appointed by Cabinet and members of the Board of Directors Name Peter Milburn Larry Blain John Dyble Position Chair Member, Board Member, Board Board of Directors Total, Part (A) 2. Others Employees (excluding those listed in Part 1 above) Name Employees exceeding $75,000 Garry Dawson Kenneth Tan Colleen Pennington Gerry Fleming John Sitch Max Logan Jodi Rogers Dina Mannah Ricky Pang Position Remuneration1 Expenses Remuneration NIL $7,250 NIL $7,250 Expenses NIL NIL NIL $0
VP, Technical Services Chief Financial Officer Director, Tolling Operations Project Director Director, Finance Director, Communications Manager, Community Relations Manager, Office & Human Resources Manager, Finance & Accounting
$157,009 $150,080 $113,943 $111,412 $107,589 $86,230 $85,192 $82,411 $76,735 $647,204 $1,617,805
$2,785 $6,064 $4,489 $3,118 $13,523 $986 $4,359 $1,796 $220 $61,106 $98,446
Consolidated total of other employees not exceeding $75,000 Other Employees Total, Part (B) 3. Reconciliation Total Remuneration - Board of Directors, Part (A) Total Remuneration - Other Employees, Part (B) Subtotal Reconciling Items - Less: Remunerations that were capitalized and were not shown in Statement of Operations
$7,250 $1,617,805 $1,625,055 ($858,816) $766,239
Corporate Salaries Total per Statement of Operations Less: Items Not Considered Remuneration Contractors Employer's CPP Contribution Employer's EI Contribution Vacation Pay Accrual WCB Expense Employer's Pension Contribution Recruiting Cost Benefits - Long Term Disability Benefits - Extended Health & Dental Adjusted Corporate Salaries Total
$1,070,764 ($9,073) ($23,561) ($11,849) ($76,944) ($34,306) ($64,200) ($52,728) ($14,806) ($17,058) $766,239 Variance $0
Note: 1 Remuneration includes base salary plus other taxable benefits.
Transportation Investment Corporation
Schedule of Severance Agreements For the year ended March 31, 2011
There were no severance agreements made between Transportation Investment Corporation and its non-unionized employees during fiscal year 2010/11.
Transportation Investment Corporation
Schedule of Suppliers of Goods and Services For the year ended March 31, 2011
1.
Suppliers' Amounts Over $25,000 BC Public Service Agency BC Transportation Financing Authority BearCat Consulting Ltd. Benefits Financial Management Office Camrosa Consulting Ltd. CIBC City of Coquitlam Connect Highways Development Group Limited Partnership Connections Call Centre Ltd. C-S Intelligent Transportation Systems B.C. Inc. CS Systemes D'Information D.F. Technologies Debt Management Branch Expert Recruiters Ex-Servicemen Security Services Ltd. Farris, Vaughan, Wills & Murphy LLP Fasken Martineau DuMoulin LLP GreyBurg Consulting Ltd. Hatch Ltd. Hewlett-Packard (Canada) Co. HNTB Corporation Jacobs Canada Inc. Karyo Edelman Communications Inc. Kiewit/Flatiron General Partnership Kim J. Lang Lands West Property Services Inc Lucent Strategies Mainroad Infrastructure Maintenance LP Meyers Norris Penny LLP Mickelson Consulting, Inc. Ministry of Transportation and Infrastructure Movex Nucleus Networks Inc. Office of the Auditor General PricewaterhouseCoopers LLP Public Service Pension Plan Receiver General Simmons Property Services Inc. Spot Solutions Ltd. Synovate Ltd. TA Management Ltd. WorkSafeBC Suppliers' Amounts Over $25,000 - Total
$37,187 $88,078,909 $34,160 $33,929 $347,653 $42,741 $683,097 $2,000,000 $78,480 $3,496,248 $450,000 $109,100 $191,712 $65,961 $43,303 $146,363 $61,094 $45,629 $449,915 $30,235 $2,030,429 $39,200 $217,856 $506,119,525 $280,562 $1,621,894 $435,967 $5,303,284 $33,203 $60,837 $45,566,295 $30,907 $369,539 $60,000 $336,426 $219,462 $1,252,755 $466,253 $33,843 $40,656 $180,603 $99,133 $661,224,345
Transportation Investment Corporation
Schedule of Suppliers of Goods and Services For the year ended March 31, 2011
2.
Suppliers' Amounts Under $25,000 Suppliers' Amounts Under $25,000 - Consolidated Total
$524,530
Note: 1 A reconciliation of amounts reported in the Financial Information Act Return and the audited financial statements has not been prepared. Transportation Investment Corporation prepares its financial statements on an accrual basis while the amounts reported in the Financial Information Act Return are based on cash payments in the year. This will result in timing differences between amounts recorded as expenses in the financial statements and amounts paid to a supplier in the year.
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