EX-99.1 2 cpgq32019fs.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
CONSOLIDATED BALANCE SHEETS
 
 
As at
 
 
September 30,

 
December 31,

 
(UNAUDITED) (Cdn$ millions)
Notes
2019

 
2018

 
ASSETS
 
 
 
 
 
Cash
 
122.9

 
15.3

 
Accounts receivable
 
336.7

 
322.6

 
Prepaids and deposits
 
9.8

 
4.6

 
Derivative asset
17
166.3

 
244.1

 
Assets held for sale
7
985.0

 
—

 
Total current assets
 
1,620.7

 
586.6

 
Derivative asset
17
300.8

 
351.5

 
Other long-term assets
 
22.8

 
43.2

 
Exploration and evaluation
4, 5
302.8

 
472.6

 
Property, plant and equipment
5, 6
8,953.9

 
10,430.2

 
Right-of-use asset
9
135.9

 
—

 
Goodwill
 
230.9

 
244.0

 
Deferred income tax
 
505.5

 
602.3

 
Total assets
 
12,073.3

 
12,730.4

 
LIABILITIES
 
 
 
 
 
Accounts payable and accrued liabilities
 
525.8

 
549.4

 
Current portion of long-term debt
8
205.3

 
99.8

 
Derivative liability
17
6.3

 
—

 
Other current liabilities
 
121.3

 
39.4

 
Liabilities associated with assets held for sale
7
133.9

 
—

 
Total current liabilities
 
992.6

 
688.6

 
Long-term debt
8
3,372.9

 
4,176.9

 
Other long-term liabilities
 
8.9

 
48.3

 
Lease liability
9
168.4

 
—

 
Decommissioning liability
10
1,142.4

 
1,203.8

 
Total liabilities
 
5,685.2

 
6,117.6

 
SHAREHOLDERS’ EQUITY
 
 
 
 
 
Shareholders’ capital
11
16,529.5

 
16,546.9

 
Contributed surplus
 
34.0

 
41.4

 
Deficit
12
(10,699.4
)
 
(10,567.2
)
 
Accumulated other comprehensive income
 
524.0

 
591.7

 
Total shareholders' equity
 
6,388.1

 
6,612.8

 
Total liabilities and shareholders' equity
 
12,073.3

 
12,730.4

 
Subsequent Events (Note 20)
See accompanying notes to the consolidated financial statements.



CRESCENT POINT ENERGY CORP.
1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED) (Cdn$ millions, except per share and shares outstanding amounts)
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
Notes
2019

 
2018

 
2019

 
2018

 
REVENUE AND OTHER INCOME
 
 
 
 
 
 
 
 
 
Oil and gas sales
19
769.1

 
1,076.7

 
2,606.7

 
3,095.9

 
Purchased product sales
 
8.9

 
5.6

 
24.4

 
20.8

 
Royalties
 
(118.7
)
 
(171.3
)
 
(378.7
)
 
(467.7
)
 
Oil and gas revenue
 
659.3

 
911.0

 
2,252.4

 
2,649.0

 
Derivative gains (losses)
14, 17
147.3

 
(143.6
)
 
(95.1
)
 
(536.4
)
 
Other loss
 
(188.5
)
 
(38.8
)
 
(169.4
)
 
(110.4
)
 
 
 
618.1

 
728.6

 
1,987.9

 
2,002.2

 
EXPENSES
 
 
 
 
 
 
 
 
 
Operating
 
177.3

 
217.4

 
577.4

 
642.9

 
Purchased product
 
9.3

 
5.1

 
24.5

 
20.1

 
Transportation
 
29.9

 
28.4

 
95.4

 
97.8

 
General and administrative
 
32.2

 
30.4

 
71.8

 
94.3

 
Interest on long-term debt
 
38.3

 
45.8

 
117.5

 
136.2

 
Foreign exchange (gain) loss
15
40.7

 
(66.6
)
 
(151.9
)
 
56.3

 
Share-based compensation
16
9.2

 
0.9

 
19.4

 
49.4

 
Depletion, depreciation, amortization and impairment
4, 6, 9
554.8

 
418.2

 
1,220.3

 
1,203.1

 
Accretion and financing
9, 10
7.9

 
7.7

 
25.9

 
23.4

 
 
 
899.6

 
687.3

 
2,000.3

 
2,323.5

 
Net income (loss) before tax
 
(281.5
)
 
41.3

 
(12.4
)
 
(321.3
)
 
 
 
 
 
 
 
 
 
 
 
Tax expense (recovery)
 
 
 
 
 
 
 
 
 
Current
 
—

 
—

 
0.2

 
—

 
Deferred
 
20.2

 
10.8

 
88.6

 
(94.9
)
 
Net income (loss)
 
(301.7
)
 
30.5

 
(101.2
)
 
(226.4
)
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
Items that may be subsequently reclassified to profit or loss
 
 
 
 
 
 
 
 
Foreign currency translation of foreign operations
 
25.8

 
(50.4
)
 
(67.7
)
 
86.0

 
Comprehensive income (loss)
 
(275.9
)
 
(19.9
)
 
(168.9
)
 
(140.4
)
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share
 
 
 
 
 
 
 
 
 
Basic
 
(0.55
)
 
0.06

 
(0.18
)
 
(0.41
)
 
Diluted
 
(0.55
)
 
0.06

 
(0.18
)
 
(0.41
)
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
 
 
Basic
 
547,520,668

 
549,846,778

 
548,454,848

 
548,758,944

 
Diluted
 
548,030,677

 
551,117,745

 
548,567,813

 
548,758,944

 
See accompanying notes to the consolidated financial statements.

CRESCENT POINT ENERGY CORP.
2

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(Cdn$ millions, except per share amounts)
Notes
Shareholders’ capital

 
Contributed surplus

 
Deficit

 
Accumulated other comprehensive income

 
Total
shareholders’
equity

 
December 31, 2018
 
16,546.9

 
41.4

 
(10,567.2
)
 
591.7

 
6,612.8

 
Adoption of accounting policy
3
 
 
 
 
(14.4
)
 
 
 
(14.4
)
 
Redemption of restricted shares
11
22.0

 
(22.7
)
 


 


 
(0.7
)
 
Common shares repurchased
11
(39.4
)
 
 
 
 
 
 
 
(39.4
)
 
Share-based compensation
16


 
18.9

 


 


 
18.9

 
Forfeit of restricted shares
16


 
(3.6
)
 


 


 
(3.6
)
 
Net income (loss)
 


 


 
(101.2
)
 


 
(101.2
)
 
Dividends ($0.03 per share)
 


 


 
(16.6
)
 


 
(16.6
)
 
Foreign currency translation adjustment
 


 


 


 
(67.7
)
 
(67.7
)
 
September 30, 2019
 
16,529.5

 
34.0

 
(10,699.4
)
 
524.0

 
6,388.1

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
16,489.6

 
72.9

 
(7,751.8
)
 
352.2

 
9,162.9

 
Redemption of restricted shares
 
53.1

 
(54.8
)
 


 


 
(1.7
)
 
Share-based compensation
 


 
33.9

 


 


 
33.9

 
Forfeit of restricted shares
 


 
(6.2
)
 


 


 
(6.2
)
 
Net income (loss)
 


 


 
(226.4
)
 


 
(226.4
)
 
Dividends ($0.27 per share)
 


 


 
(149.1
)
 


 
(149.1
)
 
Foreign currency translation adjustment
 


 


 


 
86.0

 
86.0

 
September 30, 2018
 
16,542.7

 
45.8

 
(8,127.3
)
 
438.2

 
8,899.4

 
See accompanying notes to the consolidated financial statements.

CRESCENT POINT ENERGY CORP.
3

CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
(UNAUDITED) (Cdn$ millions)
Notes
2019

 
2018

 
2019

 
2018

 
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
 
Net income (loss)
 
(301.7
)
 
30.5

 
(101.2
)
 
(226.4
)
 
Items not affecting cash
 
 
 
 
 
 
 
 
 
Other loss
 
189.4

 
38.8

 
196.9

 
110.4

 
Deferred tax expense (recovery)
 
20.2

 
10.8

 
88.6

 
(94.9
)
 
Share-based compensation
16
3.3

 
3.7

 
11.5

 
19.7

 
Depletion, depreciation, amortization and impairment
4, 6, 9
554.8

 
418.2

 
1,220.3

 
1,203.1

 
Accretion and financing
9, 10
7.9

 
7.7

 
25.9

 
23.4

 
Unrealized (gains) losses on derivatives
14, 17
(128.3
)
 
29.2

 
115.7

 
298.5

 
Translation of US dollar long-term debt
15
38.6

 
(68.5
)
 
(114.7
)
 
119.9

 
Other
 
—

 
(2.7
)
 
0.3

 
(4.0
)
 
Realized gain on cross currency swap maturity
15
1.9

 
5.6

 
(40.5
)
 
(50.1
)
 
Decommissioning expenditures
10
(5.7
)
 
(5.4
)
 
(15.5
)
 
(20.0
)
 
Change in non-cash working capital
18
21.8

 
6.2

 
(40.9
)
 
9.3

 
 
 
402.2

 
474.1

 
1,346.4

 
1,388.9

 
INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
Development capital and other expenditures
4, 6
(374.3
)
 
(427.4
)
 
(948.7
)
 
(1,500.3
)
 
Capital acquisitions
5
(0.1
)
 
1.8

 
(2.4
)
 
(12.9
)
 
Capital dispositions
5
199.3

 
19.6

 
262.7

 
198.3

 
Other long term assets
 
—

 
104.5

 
18.8

 
162.0

 
Deposit on assets held for sale
 
39.9

 
—

 
39.9

 
—

 
Change in non-cash working capital
18
43.5

 
(6.1
)
 
28.9

 
(57.8
)
 
 
 
(91.7
)
 
(307.6
)
 
(600.8
)
 
(1,210.7
)
 
FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
Issue of shares, net of issue costs
 
(0.1
)
 
(0.2
)
 
(0.7
)
 
(1.7
)
 
Common shares repurchased
11
(14.3
)
 
—

 
(39.4
)
 
—

 
Decrease in bank debt, net
18
(166.9
)
 
(53.3
)
 
(486.5
)
 
(276.9
)
 
Issuance of senior guaranteed notes
 
—

 
—

 
—

 
267.3

 
Repayment of senior guaranteed notes
 
—

 
—

 
(98.2
)
 
(65.0
)
 
Realized gain (loss) on cross currency swap maturity
15
(1.9
)
 
(5.6
)
 
40.5

 
50.1

 
Payments on lease liability
9, 18
(8.7
)
 
—

 
(25.8
)
 
—

 
Cash dividends
18
(5.5
)
 
(49.8
)
 
(16.6
)
 
(149.1
)
 
Change in non-cash working capital
18
—

 
(0.1
)
 
(11.0
)
 
—

 
 
 
(197.4
)
 
(109.0
)
 
(637.7
)
 
(175.3
)
 
Impact of foreign currency on cash balances
 
0.1

 
(1.0
)
 
(0.3
)
 
0.2

 
DECREASE IN CASH
 
113.2

 
56.5

 
107.6

 
3.1

 
CASH AT BEGINNING OF PERIOD
 
9.7

 
9.0

 
15.3

 
62.4

 
CASH AT END OF PERIOD
 
122.9

 
65.5

 
122.9

 
65.5

 
See accompanying notes to the consolidated financial statements.

Supplementary Information:
Cash taxes paid
(0.1
)
 
(0.1
)
 
(0.4
)
 
(0.2
)
 
Cash interest paid
(21.8
)
 
(26.2
)
 
(109.8
)
 
(120.8
)
 

CRESCENT POINT ENERGY CORP.
4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
September 30, 2019 (UNAUDITED)
1.
STRUCTURE OF THE BUSINESS
The principal undertaking of Crescent Point Energy Corp. (the “Company” or “Crescent Point”) is to carry on the business of acquiring, developing and holding interests in petroleum and natural gas properties and assets related thereto through a general partnership and wholly owned subsidiaries.
Crescent Point is the ultimate parent and is amalgamated in Alberta, Canada under the Alberta Business Corporations Act. The address of the principal place of business is 2000, 585 - 8th Ave S.W., Calgary, Alberta, Canada, T2P 1G1.
These interim consolidated financial statements were approved and authorized for issue by the Company's Board of Directors on October 30, 2019.
2.
BASIS OF PREPARATION
These interim consolidated financial statements are presented under International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). These interim consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim consolidated financial statements, including International Accounting Standard (“IAS”) 34 Interim Financial Reporting and have been prepared following the same accounting policies as the annual consolidated financial statements for the year ended December 31, 2018 except as described in Note 3 - "Changes in Accounting Policies". Certain information and disclosures included in the notes to the annual consolidated financial statements are condensed herein or are disclosed on an annual basis only. Accordingly, these interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2018.
The policies applied in these consolidated financial statements are based on IFRS issued and outstanding as of October 30, 2019, the date the Board of Directors approved the statements.
The Company’s presentation currency is Canadian dollars and all amounts reported are Canadian dollars unless noted otherwise. References to “US$” are to United States ("U.S.") dollars.
3. CHANGES IN ACCOUNTING POLICIES
On January 1, 2019, the Company adopted IFRS 16 Leases ("IFRS 16") using the modified retrospective approach. Under the modified retrospective approach comparative information has not been restated and continues to be reported under IAS 17 Leases and IFRIC 4 Determining Whether an Arrangement Contains a Lease. The Company has applied the following practical expedients permitted under the standard. Some of these expedients are on a lease-by-lease basis and others are applicable by class of underlying assets.
•
Account for leases with a remaining term of less than 12 months at January 1, 2019 as short-term leases;
•
Account for lease payments as an expense and not recognize a right-of-use ("ROU") asset if the underlying asset is of a lower dollar value; and
•
Use of the Company's previous assessment of impairment under IAS 37 Provisions, Contingent Liabilities and Contingent Assets for onerous contracts instead of re-assessing the ROU asset for impairment on January 1, 2019.
The lease liability is calculated as the present value of the remaining lease payments, discounted using the Company's borrowing rate on January 1, 2019. The Company records financing expense on the lease liability and depreciation expense on the ROU asset and the associated ROU asset is measured as follows on a lease-by-lease basis:
•
The amount equal to the lease liability on January 1, 2019 with no impact on retained earnings; or
•
The balance on January 1, 2019 as if IFRS 16 had always been applied on the commencement of the lease, using the Company's borrowing rate on January 1, 2019 and with an impact on retained earnings calculated as the difference between the lease liability and the ROU asset values.

CRESCENT POINT ENERGY CORP.
5

The following table reconciles the amounts in the consolidated balance sheet as at December 31, 2018 to the opening balance sheet on transition:
 
As at

 
 
 
Restated balance as at

 
($ millions)
December 31, 2018

 
Adjustments

 
January 1, 2019

 
ROU asset
—

 
153.3

 
153.3

 
Deferred income tax
602.3

 
5.3

 
607.6

 
Other current liabilities (1) (2)
(39.4
)
 
(26.4
)
 
(65.8
)
 
Other long-term liabilities (2)
(48.3
)
 
44.8

 
(3.5
)
 
Lease liability (1)
—

 
(191.4
)
 
(191.4
)
 
Deficit
10,567.2

 
14.4

 
10,581.6

 
(1)
The weighted average incremental borrowing rate used to determine the lease liability on transition was 4.40%.
(2)
On initial adoption, the Company elected to use the practical expedient to apply the previous assessment under IAS 37 for onerous contracts and deferred lease inducements. As a result, $11.0 million onerous contract provision and $39.8 million lease inducement were offset against the ROU asset.
The following table reconciles the commitments as at December 31, 2018 to the Company's lease liability as at January 1, 2019:
($ millions)
 
 
Operating leases (building, vehicle, and equipment leases)
348.6

 
Transportation commitments
90.0

 
Total contractual commitments as at December 31, 2018
438.6

 
 
 
 
Less:
 
 
Commitments that do not contain a lease
(90.0
)
 
Non-lease components
(122.9
)
 
Short-term leases
(0.5
)
 
 
 
 
Add:
 
 
Subleased office space recoveries
44.8

 
 
 
 
Impact of discounting
(46.2
)
 
Lease liability as at January 1, 2019
223.8

 
Updated significant accounting policy and use of estimates and judgments
The following change to the Company's accounting policy is applicable from January 1, 2019:
Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the commencement date, the lease liability will be recognized at the present value of the lease payments that are not paid at that date and discounted using the interest rate implicit in the lease or the Company's incremental borrowing rate. A corresponding ROU asset will be recognized at the amount of the lease liability, adjusted for any lease incentives received and initial direct costs incurred. Financing expense is recognized on the lease liability using the effective interest rate method and lease payments are applied against the lease liability. Depreciation on the ROU asset is recorded by class of underlying asset.
Lease payments are allocated between the lease liability and financing expense with the financing expense charged to net income over the lease term.
Leases with a term of less than twelve months or leases for underlying low value assets are recognized as an expense in net income on a straight-line basis over the lease term.
As Lessor
As a lessor, the Company will evaluate whether a lease is a finance or operating lease. Leases where the Company transfers substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized at an amount equal to the present value of the aggregate lease payments the Company will receive over the term of the lease. Conversely, leases where the risks and rewards of ownership are retained by the Company are operating leases. Operating lease payments received are recognized as income on a straight-line basis over the term of the lease.

CRESCENT POINT ENERGY CORP.
6

The Company also acts as an intermediate lessor for office space sub-leased to other companies. The head lease between the Company and the building, and the sub-lease between the Company and tenants, are accounted for separately. The lease classification of the sub-lease is based upon the head lease and not the underlying asset.
The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected. Significant estimates and judgments made by management related to the application of IFRS 16 are outlined below.
Incremental borrowing rate
Financing expense recorded using the Company's incremental borrowing rate are subject to estimates regarding the expected lease term, underlying risk inherent to the asset, foreign exchange, and economic environment changes.
Lease term
The lease term is the non-cancellable period of a lease and includes periods covered by an optional lease extension option if reasonably certain the Company will exercise the option to extend. Conversely, periods covered by an option to terminate are included if the Company does not expect to end the lease during that timeframe.
4.
EXPLORATION AND EVALUATION ASSETS
($ millions)
September 30, 2019

 
December 31, 2018

 
Exploration and evaluation assets at cost
1,889.4

 
2,325.0

 
Accumulated amortization
(1,586.6
)
 
(1,852.4
)
 
Net carrying amount
302.8

 
472.6

 
 
 
 
 
 
Reconciliation of movements during the period
 
 
 
 
Cost, beginning of period
2,325.0

 
2,305.1

 
Accumulated amortization, beginning of period
(1,852.4
)
 
(1,670.2
)
 
Net carrying amount, beginning of period
472.6

 
634.9

 
 
 
 
 
 
Net carrying amount, beginning of period
472.6

 
634.9

 
Acquisitions through business combinations, net
—

 
10.2

 
Additions
303.0

 
673.3

 
Dispositions
(11.1
)
 
(7.5
)
 
Transfers to property, plant and equipment
(258.3
)
 
(705.9
)
 
Reclassified as assets held for sale
(89.7
)
 
—

 
Amortization
(107.8
)
 
(157.2
)
 
Foreign exchange
(5.9
)
 
24.8

 
Net carrying amount, end of period
302.8

 
472.6

 
Impairment test of exploration and evaluation assets
There were no indicators of impairment at September 30, 2019.

CRESCENT POINT ENERGY CORP.
7

5.
CAPITAL ACQUISITIONS AND DISPOSITIONS
In the nine months ended September 30, 2019, the Company incurred $4.2 million (nine months ended September 30, 2018 - $4.3 million) of transaction costs related to acquisitions through business combinations and dispositions that were recorded as general and administrative expenses.
a) Major Property Disposition
Southeast Saskatchewan asset dispositions
In the period ended September 30, 2019, the Company sold certain southeast Saskatchewan conventional assets for consideration of $196.9 million. These dispositions were completed with full tax pools and no working capital items.
($ millions)
 
 
Dispositions:
 
 
 
 
 
Consideration
 
 
Cash
196.9

 
 
196.9

 
Carrying Value
 
 
Exploration and evaluation
(3.2
)
 
Property, plant and equipment
(466.4
)
 
Goodwill
(13.1
)
 
Decommissioning liability
92.0

 
 
(390.7
)
 
 
 
 
Loss on capital dispositions
(193.8
)
 
b) Minor property acquisitions and dispositions
In the period ended September 30, 2019, the Company completed minor property acquisitions and dispositions for consideration of $63.4 million. These minor property acquisitions and dispositions were completed with full tax pools and no working capital items.
($ millions)
 
 
Dispositions (net):
 
 
 
 
 
Consideration
 
 
Cash
63.4

 
 
63.4

 
Carrying Value
 
 
Exploration and evaluation
(7.9
)
 
Property, plant and equipment
(89.8
)
 
Decommissioning liability
28.8

 
 
(68.9
)
 
 
 
 
Loss on capital dispositions
(5.5
)
 

CRESCENT POINT ENERGY CORP.
8

6.
PROPERTY, PLANT AND EQUIPMENT
($ millions)
September 30, 2019

 
December 31, 2018

 
Development and production assets
22,708.4

 
26,635.3

 
Corporate assets
116.1

 
114.6

 
Property, plant and equipment at cost
22,824.5

 
26,749.9

 
Accumulated depletion, depreciation and impairment
(13,870.6
)
 
(16,319.7
)
 
Net carrying amount
8,953.9

 
10,430.2

 
 
 
 
 
 
Reconciliation of movements during the period
 
 
 
 
Development and production assets
 
 
 
 
Cost, beginning of period
26,635.3

 
25,881.1

 
Accumulated depletion and impairment, beginning of period
(16,262.2
)
 
(11,877.1
)
 
Net carrying amount, beginning of period
10,373.1

 
14,004.0

 
 
 
 
 
 
Net carrying amount, beginning of period
10,373.1

 
14,004.0

 
Acquisitions through business combinations, net
2.4

 
12.2

 
Additions
835.4

 
1,083.6

 
Dispositions, net
(558.6
)
 
(523.8
)
 
Transfers from exploration and evaluation assets
258.3

 
705.9

 
Reclassified as assets held for sale
(869.0
)
 
—

 
Depletion
(839.8
)
 
(1,412.4
)
 
Impairment
(249.9
)
 
(3,704.8
)
 
Foreign exchange
(52.0
)
 
208.4

 
Net carrying amount, end of period
8,899.9

 
10,373.1

 
 
 
 
 
 
Cost, end of period
22,708.4

 
26,635.3

 
Accumulated depletion and impairment, end of period
(13,808.5
)
 
(16,262.2
)
 
Net carrying amount, end of period
8,899.9

 
10,373.1

 
 
 
 
 
 
Corporate assets
 
 
 
 
Cost, beginning of period
114.6

 
106.4

 
Accumulated depreciation, beginning of period
(57.5
)
 
(48.0
)
 
Net carrying amount, beginning of period
57.1

 
58.4

 
 
 
 
 
 
Net carrying amount, beginning of period
57.1

 
58.4

 
Additions
1.6

 
7.7

 
Depreciation
(4.6
)
 
(9.2
)
 
Foreign exchange
(0.1
)
 
0.2

 
Net carrying amount, end of period
54.0

 
57.1

 
 
 
 
 
 
Cost, end of period
116.1

 
114.6

 
Accumulated depreciation, end of period
(62.1
)
 
(57.5
)
 
Net carrying amount, end of period
54.0

 
57.1

 
Direct general and administrative costs capitalized by the Company during the nine months ended September 30, 2019 were $31.8 million (year ended December 31, 2018 - $48.0 million), including $3.7 million of share-based compensation costs (year ended December 31, 2018 - $7.7 million).

CRESCENT POINT ENERGY CORP.
9

Impairment test of property, plant and equipment
In September 2019, the Company announced that it had entered into definitive agreements to sell its Uinta Basin assets. These assets have been classified as held for sale at September 30, 2019. Immediately prior to classifying the assets as held for sale, the Company conducted a review of the assets' recoverable amounts and recorded an impairment loss of $241.4 million on PP&E as a component of depletion, depreciation, amortization and impairment expense. The recoverable amount was determined based on the assets' fair value less costs of disposal and was based on expected consideration.
The Company had recorded $8.5 million of impairment related to assets held for sale at March 31, 2019. These assets have been disposed of as at September 30, 2019.
At September 30, 2019, there were no indicators of impairment or impairment recovery related to the Company's remaining PP&E.
7.
ASSETS HELD FOR SALE
At September 30, 2019, the Company has classified its Uinta Basin assets and certain Saskatchewan gas infrastructure assets as held for sale. These assets have been recorded at the lesser of their carrying value and recoverable amount.
($ millions)
E&E
(Note 4)

 
PP&E
(Note 6)

Other assets (1) (2)
 (Note 9, 17)

 
Decommissioning liabilities
(Note 10)

Other liabilities (3)
(Note 9)

 
Uinta Basin
89.7

 
674.0

26.3

 
(100.5
)
(25.5
)
 
Infrastructure assets
—

 
195.0

—

 
(7.9
)
—

 
Assets (liabilities) held for sale
89.7

 
869.0

26.3

 
(108.4
)
(25.5
)
 
(1)
Includes working capital of $5.0 million.
(2)
Includes crude oil derivative contracts of 9,000 bbls/d at an average swap price of US$57.19/bbl for the term October 2019 to August 2020.
(3)
Includes working capital of $22.2 million.
8.
LONG-TERM DEBT
The following table reconciles long-term debt:
($ millions)
September 30, 2019

 
December 31, 2018

 
Bank debt (1)
1,440.1

 
1,982.1

 
Senior guaranteed notes (2)
2,138.1

 
2,294.6

 
Long-term debt
3,578.2

 
4,276.7

 
Long-term debt due within one year
205.3

 
99.8

 
Long-term debt due beyond one year
3,372.9

 
4,176.9

 
(1)
The Company has London Inter-bank Offered Rate ("LIBOR") loans under its bank credit facilities. The US dollar amounts of the LIBOR loans were fixed for purposes of interest and principal repayments. At September 30, 2019, the total notional amount due upon bank debt maturity was $1.45 billion (December 31, 2018 - $1.92 billion).
(2)
The Company entered into cross currency swaps ("CCS") and a foreign exchange swap concurrent with the issuance of the US dollar senior guaranteed notes to fix the US dollar amount of the notes for the purpose of principal repayment at Canadian dollar notional amounts. At September 30, 2019, the total notional principal due on the maturity of the senior guaranteed notes was $1.82 billion (December 31, 2018 - $1.89 billion) of which $158.3 million (December 31, 2018 - $73.7 million) was due within one year.
Bank debt
On October 25, 2019, the Company renewed and extended the maturity dates of its credit facilities. The Company elected to decrease the size of the facilities to a combined $3.00 billion, including a $2.90 billion syndicated unsecured credit facility with fourteen banks and a $100.0 million unsecured operating credit facility with one Canadian chartered bank. The maturity dates of the facilities were extended to October 25, 2023. Both of these facilities constitute revolving credit facilities and are extendible annually.
The credit facilities bear interest at the applicable market rate plus a margin based on a sliding scale ratio of the Company's senior debt to earnings before interest, taxes, depletion, depreciation, amortization and impairment, adjusted for payments on lease liability and certain non-cash items including unrealized derivatives, unrealized foreign exchange, equity settled share-based compensation expense, and accretion and financing expense ("adjusted EBITDA").
The credit facilities and senior guaranteed notes have covenants which restrict the Company's ratio of senior debt to adjusted EBITDA to a maximum of 3.5:1.0, the ratio of total debt to adjusted EBITDA to a maximum of 4.0:1.0 and the ratio of senior debt to capital, adjusted for certain non-cash items as noted above, to a maximum of 0.55:1.0. The Company was in compliance with all debt covenants at September 30, 2019.
The Company had letters of credit in the amount of $8.5 million outstanding at September 30, 2019 (December 31, 2018 - $8.0 million).

CRESCENT POINT ENERGY CORP.
10

Senior guaranteed notes
The notes are unsecured and rank pari passu with the Company's bank credit facilities and carry a bullet repayment on maturity. The senior guaranteed notes have financial covenants similar to those of the combined credit facilities described above. The terms, rates, amounts due on maturity and carrying amounts of the Company's outstanding senior guaranteed notes are detailed below:
Principal
($ millions)
Coupon Rate

Principal Due on Maturity (1)
(Cdn$ millions)

Interest Payment Dates
Maturity Date
Financial statement carrying value
September 30, 2019

 
December 31, 2018

 
Cdn$7.0
4.29
%
—

November 22 and May 22
May 22, 2019
—

 
7.0

 
US$68.0
3.39
%
—

November 22 and May 22
May 22, 2019
—

 
92.8

 
US$155.0
6.03
%
158.3

September 24 and March 24
March 24, 2020
205.3

 
211.5

 
Cdn$50.0
5.53
%
50.0

October 14 and April 14
April 14, 2021
50.0

 
50.0

 
US$82.0
5.13
%
79.0

October 14 and April 14
April 14, 2021
108.6

 
111.9

 
US$52.5
3.29
%
56.3

December 20 and June 20
June 20, 2021
69.5

 
71.6

 
Cdn$25.0
4.76
%
25.0

November 22 and May 22
May 22, 2022
25.0

 
25.0

 
US$200.0
4.00
%
199.1

November 22 and May 22
May 22, 2022
264.9

 
272.9

 
US$61.5
4.12
%
80.3

October 11 and April 11
April 11, 2023
81.5

 
83.9

 
Cdn$80.0
3.58
%
80.0

October 11 and April 11
April 11, 2023
80.0

 
80.0

 
Cdn$10.0
4.11
%
10.0

December 12 and June 12
June 12, 2023
10.0

 
10.0

 
US$270.0
3.78
%
274.7

December 12 and June 12
June 12, 2023
357.6

 
368.4

 
Cdn$40.0
3.85
%
40.0

December 20 and June 20
June 20, 2024
40.0

 
40.0

 
US$257.5
3.75
%
276.4

December 20 and June 20
June 20, 2024
341.0

 
351.4

 
US$82.0
4.30
%
107.0

October 11 and April 11
April 11, 2025
108.6

 
111.9

 
Cdn$65.0
3.94
%
65.0

October 22 and April 22
April 22, 2025
65.0

 
65.0

 
US$230.0
4.08
%
291.1

October 22 and April 22
April 22, 2025
304.6

 
313.9

 
US$20.0
4.18
%
25.3

October 22 and April 22
April 22, 2027
26.5

 
27.4

 
Senior guaranteed notes
1,817.5

 
 
2,138.1

 
2,294.6

 
Senior guaranteed notes due within one year
205.3

 
99.8

 
Senior guaranteed notes due beyond one year
1,932.8

 
2,194.8

 
(1)
Includes underlying derivatives which manage the Company's foreign exchange exposure on its US dollar senior guaranteed notes. The Company considers this to be the economic amount due at maturity instead of the financial statement carrying amount.

CRESCENT POINT ENERGY CORP.
11

9.
LEASES
Right-of-use asset
The following table reconciles the ROU asset by class as at September 30, 2019:
($ millions)
Office (1)

 
Fleet Vehicles

 
Other

 
Total

 
ROU asset at cost
128.2

 
15.3

 
10.6

 
154.1

 
Accumulated depreciation
(10.5
)
 
(5.5
)
 
(2.2
)
 
(18.2
)
 
Net carrying amount
117.7

 
9.8

 
8.4

 
135.9

 
 
 
 
 
 
 
 
 
 
Reconciliation of movements during the period
 
 
 
 
 
 
 
 
Cost, beginning of period
127.7

 
15.9

 
9.7

 
153.3

 
Accumulated depreciation, beginning of period
—

 
—

 
—

 
—

 
Net carrying amount, beginning of period
127.7

 
15.9

 
9.7

 
153.3

 
 
 
 
 
 
 
 
 
 
Net carrying amount, beginning of period
127.7

 
15.9

 
9.7

 
153.3

 
Additions
—

 
1.0

 
1.8

 
2.8

 
Reclassified as assets held for sale
—

 
(1.5
)
 
(0.9
)
 
(2.4
)
 
Depreciation
(10.5
)
 
(5.5
)
 
(2.2
)
 
(18.2
)
 
Lease modification
0.6

 
—

 
—

 
0.6

 
Foreign exchange
(0.1
)
 
(0.1
)
 
—

 
(0.2
)
 
Net carrying amount, end of period
117.7

 
9.8

 
8.4

 
135.9

 
(1)
A portion of the Company's office space is subleased. During the nine months ended September 30, 2019, the Company recorded sublease income of $4.6 million as a component of other loss.
Lease liability
($ millions)
September 30, 2019

 
Lease liability, beginning of period
223.8

 
Additions
2.8

 
Reclassified as liabilities associated with assets held for sale
(3.3
)
 
Financing
6.9

 
Payments on lease liability
(25.8
)
 
Lease modification
(3.3
)
 
Foreign exchange
(0.2
)
 
Lease liability, end of period
200.9

 
Expected to be incurred within one year
32.5

 
Expected to be incurred beyond one year
168.4

 
Some leases contain variable payments that are not included within the lease liability as they are based on amounts determined by the lessor annually and not dependent on an index or rate. For the nine months ended September 30, 2019, variable lease payments were $3.9 million and relate to property tax payments on office leases.
The undiscounted cash flows relating to the lease liability are as follows:
($ millions)
September 30, 2019

 
1 year
35.0

 
2 to 3 years
52.7

 
4 to 5 years
43.4

 
More than 5 years
112.8

 
Total (1)
243.9

 
(1)
Includes both the principal and amounts representing interest.

CRESCENT POINT ENERGY CORP.
12

10.
DECOMMISSIONING LIABILITY
Upon retirement of its oil and gas assets, the Company anticipates substantial costs associated with decommissioning. The estimated cash flows have been discounted using a risk free rate of 1.50 percent and an inflation rate of 2 percent (December 31, 2018 - 2.25 percent and 2 percent, respectively).
The following table reconciles the decommissioning liability:
($ millions)
September 30, 2019

 
December 31, 2018

 
Decommissioning liability, beginning of period
1,230.7

 
1,344.2

 
Liabilities incurred
21.0

 
38.6

 
Liabilities acquired through capital acquisitions
—

 
0.4

 
Liabilities disposed through capital dispositions
(120.8
)
 
(68.3
)
 
Liabilities settled
(15.5
)
 
(25.3
)
 
Revaluation of acquired decommissioning liabilities
0.9

 
0.6

 
Change in estimated future costs
—

 
(79.9
)
 
Change in discount rate
165.8

 
(20.2
)
 
Accretion
19.0

 
30.6

 
Reclassified as liabilities associated with assets held for sale
(108.4
)
 
—

 
Foreign exchange
(3.5
)
 
10.0

 
Decommissioning liability, end of period
1,189.2

 
1,230.7

 
Expected to be incurred within one year
46.8

 
26.9

 
Expected to be incurred beyond one year
1,142.4

 
1,203.8

 
11.
SHAREHOLDERS' CAPITAL
Crescent Point has an unlimited number of common shares authorized for issuance.
 
September 30, 2019
 
 
December 31, 2018
 
 


Number of
shares

 
Amount
($ millions)

 
Number of
shares

 
Amount
($ millions)

 
Common shares, beginning of period
550,151,561

 
16,803.0

 
545,794,384

 
16,745.7

 
Issued on redemption of restricted shares
3,067,767

 
22.0

 
4,357,177

 
57.3

 
Common shares repurchased
(7,989,000
)
 
(39.4
)
 
—

 
—

 
Common shares, end of period
545,230,328

 
16,785.6

 
550,151,561

 
16,803.0

 
Cumulative share issue costs, net of tax
—

 
(256.1
)
 
—

 
(256.1
)
 
Total shareholders’ capital, end of period
545,230,328

 
16,529.5

 
550,151,561

 
16,546.9

 
Normal Course Issuer Bid ("NCIB")    
On January 23, 2019, the Company announced the approval by the Toronto Stock Exchange of its notice to implement a NCIB. The NCIB allows the Company to purchase, for cancellation, up to 38,424,678 common shares, or seven percent of the Company's public float, as at January 14, 2019. The NCIB commenced on January 25, 2019 and is due to expire on January 24, 2020.
During the nine months ended September 30, 2019, the Company purchased and cancelled 8.0 million common shares for total consideration of $39.4 million. The total cost paid, including commissions and fees, was recognized directly as a reduction in shareholders' equity. Under the NCIB, all common shares purchased are cancelled.
12.
DEFICIT
($ millions)
September 30, 2019

 
December 31, 2018

 
Accumulated earnings (deficit)
(3,096.2
)
 
(2,980.6
)
 
Accumulated gain on shares issued pursuant to DRIP (1) and SDP (2)
8.4

 
8.4

 
Accumulated tax effect on redemption of restricted shares
12.1

 
12.1

 
Accumulated dividends
(7,623.7
)
 
(7,607.1
)
 
Deficit
(10,699.4
)
 
(10,567.2
)
 
(1)
Premium Dividend TM and Dividend Reinvestment Plan.
(2)
Share Dividend Plan.

CRESCENT POINT ENERGY CORP.
13

13.
CAPITAL MANAGEMENT
The Company’s capital structure is comprised of shareholders’ equity, long-term debt and adjusted working capital. The balance of each of these items is as follows:
($ millions)
September 30, 2019

 
December 31, 2018

 
Long-term debt (1)
3,578.2

 
4,276.7

 
Adjusted working capital deficiency (2)
100.2

 
208.2

 
Unrealized foreign exchange on translation of US dollar long-term debt
(318.4
)
 
(473.6
)
 
Net debt
3,360.0

 
4,011.3

 
Shareholders’ equity
6,388.1

 
6,612.8

 
Total capitalization
9,748.1

 
10,624.1

 
(1)
Includes current portion of long-term debt.
(2)
Adjusted working capital deficiency is calculated as accounts payable and accrued liabilities, and other current and long-term liabilities, excluding current decommissioning and lease liabilities, less cash, accounts receivable, prepaids and deposits and long-term investments.
Crescent Point's objective for managing capital is to maintain a strong balance sheet and capital base to provide financial flexibility, position the Company to fund future development projects and provide returns to shareholders.
Crescent Point manages and monitors its capital structure and short-term financing requirements using a measure not defined in IFRS, the ratio of net debt to adjusted funds flow from operations. Net debt is calculated as long-term debt plus accounts payable and accrued liabilities, and other current and long-term liabilities, excluding current decommissioning and lease liabilities, less cash, accounts receivable, prepaids and deposits and long-term investments, excluding the unrealized foreign exchange on translation of US dollar long-term debt. Adjusted funds flow from operations is calculated as cash flow from operating activities before changes in non-cash working capital, transaction costs and decommissioning expenditures. Net debt to adjusted funds flow from operations is used to measure the Company's overall debt position and to measure the strength of the Company's balance sheet. Crescent Point's objective is to manage this metric to be well positioned to execute its business objectives during periods of volatile commodity prices. Crescent Point monitors this ratio and uses this as a key measure in making decisions regarding financing, capital spending and dividend levels. The Company's net debt to adjusted funds flow from operations ratio at September 30, 2019 was 1.9 times (December 31, 2018 - 2.3 times).
Crescent Point is subject to certain financial covenants on its credit facilities and senior guaranteed notes agreements and was in compliance with all financial covenants as at September 30, 2019. See Note 8 - "Long-term Debt" for additional information regarding the Company's financial covenant requirements.
14.
DERIVATIVE GAINS (LOSSES)
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
($ millions)
2019

 
2018

 
2019

 
2018

 
Realized gains (losses)
19.0

 
(114.4
)
 
20.6

 
(237.9
)
 
Unrealized gains (losses)
128.3

 
(29.2
)
 
(115.7
)
 
(298.5
)
 
Derivative gains (losses)
147.3

 
(143.6
)
 
(95.1
)
 
(536.4
)
 
15.
FOREIGN EXCHANGE GAIN (LOSS)
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
($ millions)
2019

 
2018

 
2019

 
2018

 
Realized gain (loss)
 
 
 
 
 
 
 
 
CCS - US dollar long-term debt maturities
(1.9
)
 
(1.8
)
 
40.5

 
63.2

 
US dollar long-term debt maturities
1.9

 
5.6

 
(40.5
)
 
(50.1
)
 
Other
(0.9
)
 
(0.7
)
 
(2.4
)
 
1.3

 
Unrealized gain (loss)
 
 
 
 
 
 
 
 
Translation of US dollar long-term debt
(40.5
)
 
62.9

 
155.2

 
(69.8
)
 
Other
0.7

 
0.6

 
(0.9
)
 
(0.9
)
 
Foreign exchange gain (loss)
(40.7
)
 
66.6

 
151.9

 
(56.3
)
 

CRESCENT POINT ENERGY CORP.
14

16.
SHARE-BASED COMPENSATION
The following table reconciles the number of restricted shares, Performance Share Units ("PSUs"), and Deferred Share Units ("DSUs") for the nine months ended September 30, 2019:
 
Restricted Shares

 
PSUs (1)

 
DSUs

 
Balance, beginning of period
3,241,684

 
2,246,314

 
301,614

 
Granted
4,081,111

 
2,486,039

 
127,571

 
Redeemed
(3,238,522
)
 
(1,103,872
)
 
(167,262
)
 
Forfeited
(334,623
)
 
(302,960
)
 
—

 
Balance, end of period
3,749,650

 
3,325,521

 
261,923

 
(1)
Based on underlying units before any effect of performance multipliers.
The following tables provide summary information regarding stock options outstanding as at September 30, 2019:
 
Stock Options (number of units)

 
Weighted average exercise price ($)

 
Balance, beginning of period
2,048,115

 
10.03

 
Granted
1,171,945

 
3.97

 
Exercised
—

 
—

 
Forfeited
(374,673
)
 
8.94

 
Balance, end of period
2,845,387

 
7.68

 
Number of stock options outstanding

 
Weighted average exercise price per share for options outstanding ($)

 
Vest year
 
Weighted average remaining term (years)
 
Number of stock options exercisable

 
Weighted average exercise price per share for options exercisable ($)

 
417,823

 
10.03

 
2019
 
5.29
 
417,823

 
10.03

 
591,087

 
7.62

 
2020
 
5.77
 
—

 
—

 
539,794

 
7.59

 
2021
 
5.78
 
—

 
—

 
862,491

 
8.50

 
2022
 
5.60
 
—

 
—

 
434,192

 
3.97

 
2023
 
6.50
 
—

 
—

 
The Company estimates the fair value of stock options on the date of the grant using a Black-Scholes option pricing model. The following weighted average assumptions were used to estimate the fair value of the stock options at their grant date:
 
Nine months ended September 30
 
 
 
2019

 
2018

 
Grant date share price ($)
3.97

 
10.04

 
Exercise price ($)
3.97

 
10.04

 
Expected annual dividends ($)
0.04

 
0.36

 
Expected volatility (%)
39.99
%
 
35.90
%
 
Risk-free interest rate (%)
1.65
%
 
2.00
%
 
Expected life of stock option
4.9 years

 
4.9 years

 
Fair value per stock option ($)
1.33

 
2.34

 
17.
FINANCIAL INSTRUMENTS AND DERIVATIVES
The Company's financial assets and liabilities are comprised of cash, accounts receivable, long-term investments, derivative assets and liabilities, accounts payable and accrued liabilities, and long-term debt.
a) Carrying amount and fair value of financial instruments
The fair value of cash, accounts receivable, and accounts payable and accrued liabilities approximate their carrying amount due to the short-term nature of those instruments. The fair value of the amounts drawn on bank credit facilities is equal to its carrying amount as the facilities bear interest at floating rates and credit spreads that are indicative of market rates. These financial instruments are classified as financial assets and liabilities at amortized cost and are reported at amortized cost.

CRESCENT POINT ENERGY CORP.
15

Crescent Point's derivative assets and liabilities and long-term investments are transacted in active markets, classified as financial assets and liabilities at fair value through profit or loss and fair valued at each period with the resulting gain or loss recorded in net income.
At September 30, 2019, the senior guaranteed notes had a carrying value of $2.14 billion and a fair value of $2.19 billion (December 31, 2018 - $2.29 billion and $2.27 billion, respectively).
Derivative assets and liabilities
Derivative assets and liabilities arise from the use of derivative contracts. The Company's derivative financial instruments are classified as fair value through profit or loss and are reported at fair value with changes in fair value recorded in net income.
The following table summarizes the fair value as at September 30, 2019 and the change in fair value for the nine months ended September 30, 2019:
($ millions)
Commodity contracts (1)

 
Interest contracts

 
CCS
contracts

 
Foreign exchange contracts

 
Total

 
Derivative assets, beginning of period
147.0

 
5.5

 
434.7

 
8.4

 
595.6

 
Unrealized change in fair value
(2.1
)
 
(1.7
)
 
(110.7
)
 
(1.2
)
 
(115.7
)
 
Reclassified as assets held for sale
(18.9
)
 
—

 
—

 
—

 
(18.9
)
 
Foreign exchange
(0.2
)
 
—

 
—

 
—

 
(0.2
)
 
Derivative assets, end of period
125.8


3.8


324.0


7.2


460.8

 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets, end of period
125.8

 
3.8

 
329.9

 
7.6

 
467.1

 
Derivative liabilities, end of period
—

 
—

 
(5.9
)
 
(0.4
)
 
(6.3
)
 
(1)
Includes oil and gas contracts.
b)
Risks associated with financial assets and liabilities
The Company is exposed to financial risks from its financial assets and liabilities. The financial risks include market risk relating to commodity prices, interest rates, foreign exchange rates as well as credit and liquidity risk.
Commodity price risk
The Company is exposed to commodity price risk on crude oil, NGLs and natural gas revenues as well as power on electricity consumption. To manage a portion of this risk, the Company has entered into various derivative agreements.
The following table summarizes the unrealized gains (losses) on the Company's commodity financial derivative contracts and the resulting impact on income before tax due to fluctuations in commodity prices, with all other variables held constant:
 
Impact on Income Before Tax
 
 
Impact on Income Before Tax
 
 
($ millions)
Three and nine months ended
September 30, 2019
 
 
Three and nine months ended
September 30, 2018
 
 
 
Increase 10%

 
Decrease 10%

 
Increase 10%

 
Decrease 10%

 
Commodity price
 
 
 
 
 
 
 
 
Crude oil
(109.3
)
 
94.9

 
(235.6
)
 
223.4

 
Natural gas
(0.1
)
 
0.1

 
(1.5
)
 
1.5

 

CRESCENT POINT ENERGY CORP.
16

Interest rate risk
The Company is exposed to interest rate risk on bank credit facilities. Based on the Company's floating rate debt position as at September 30, 2019, a 1% increase or decrease in the interest rate on floating rate debt would amount to an impact on income before tax of $2.9 million and $8.6 million for the three and nine months ended September 30, 2019 (three and nine months ended September 30, 2018 - $3.9 million and $11.8 million, respectively).
The following table summarizes the unrealized gains (losses) on the Company's interest derivative contracts and the resulting impact on income before tax due to the respective changes in the applicable forward interest rates, with all other variables held constant:
 
Impact on Income Before Tax
 
 
Impact on Income Before Tax
 
 
($ millions)
Three and nine months ended
September 30, 2019
 
 
Three and nine months ended
September 30, 2018
 
 
Forward interest rates
Increase 10%

 
Decrease 10%

 
Increase 10%

 
Decrease 10%

 
Interest rate swaps
0.7

 
(0.7
)
 
1.4

 
(1.4
)
 
Foreign exchange risk
The Company is exposed to foreign exchange risk in relation to its US dollar denominated long-term debt, investment in U.S. subsidiaries and in relation to its crude oil sales. Crescent Point enters into various CCS and foreign exchange swaps to hedge its foreign exchange exposure on its US dollar denominated long-term debt. To partially mitigate the foreign exchange risk relating to crude oil sales, the Company has fixed crude oil contracts to settle in Cdn$ WTI.
The following table summarizes the resulting unrealized gains (losses) impacting income before tax due to the respective changes in the period end and applicable foreign exchange rates, with all other variables held constant:
 
 
Impact on Income Before Tax
 
 
Impact on Income Before Tax
 
 
($ millions)
Exchange Rate
Three and nine months ended
September 30, 2019
 
 
Three and nine months ended
September 30, 2018
 
 
Cdn$ relative to US$
 
Increase 10%

 
Decrease 10%

 
Increase 10%

 
Decrease 10%

 
US dollar long-term debt
Period End
319.2

 
(319.2
)
 
379.1

 
(379.1
)
 
Cross currency swaps
Forward
(333.2
)
 
333.2

 
(384.9
)
 
384.9

 
Foreign exchange swaps
Forward
(50.6
)
 
50.6

 
(6.0
)
 
6.0

 
Credit risk
The Company is exposed to credit risk in relation to its physical oil and gas sales, financial counterparty and joint venture receivables. A substantial portion of the Company's accounts receivable are with customers in the oil and gas industry and are subject to normal industry credit risks. To mitigate credit risk associated with its physical sales portfolio, Crescent Point obtains financial assurances such as parental guarantees, letters of credit and third party credit insurance. Including these assurances, approximately 95% of the Company's oil and gas sales are with entities considered investment grade.
At September 30, 2019, approximately 6 percent (December 31, 2018 - 5 percent) of the Company's accounts receivable balance was outstanding for more than 90 days and the Company's average expected credit loss was 3.24 percent (December 31, 2018 - 2.95 percent) on a portion of the Company’s accounts receivable balance relating to joint venture receivables.
Liquidity risk
The Company manages its liquidity risk through managing its capital structure and continuously monitoring forecast cash flows and available credit under existing banking arrangements as well as other potential sources of capital.
At September 30, 2019, prior to the renewal of the credit facilities, the Company had available unused borrowing capacity on bank credit facilities of approximately $2.27 billion, including $8.5 million outstanding letters of credit and cash of $122.9 million.
c)
Derivative contracts
The following is a summary of the derivative contracts in place as at September 30, 2019:
Financial WTI Crude Oil Derivative Contracts – Canadian Dollar (1)
 
Swap
 
Three-way Collar
 
Term
Volume
(bbls/d)

 
Average Price
($/bbl)

 
Volume
(bbls/d)

 
Average
Sold
Call Price
($/bbl)

 
Average Bought
Put Price
($/bbl)

 
Average
Sold
Put Price
($/bbl)

 
2019 October - December
5,000

 
82.01

 
52,000

 
85.07

 
78.36

 
65.32

 
2020
4,505

 
77.99

 
35,331

 
83.39

 
77.10

 
63.08

 
(1)
The volumes and prices reported are the weighted average volumes and prices for the period.

CRESCENT POINT ENERGY CORP.
17

Financial AECO Natural Gas Derivative Contracts – Canadian Dollar (1)
Average Volume
(GJ/d)
 
Average Swap Price
($/GJ)
 
Term
 
2019 October - December
12,033
 
2.70
 
(1)
The volumes and prices reported are the weighted average volumes and prices for the period.
Financial Interest Rate Derivative Contracts – Canadian Dollar
 
Notional Principal
($ millions)
 
Fixed Rate (%)
 
Term
Contract
 
 
October 2019 - August 2020
Swap
50.0
 
1.16
 
October 2019 - August 2020
Swap
50.0
 
1.16
 
October 2019 - August 2020
Swap
100.0
 
1.15
 
October 2019 - September 2020
Swap
50.0
 
1.14
 
October 2019 - September 2020
Swap
50.0
 
1.11
 
Financial Cross Currency Derivative Contracts
 
 
 
 
 
Term
Contract
Receive Notional Principal
(US$ millions)

 
Fixed Rate (US%)

 
Pay Notional Principal
(Cdn$ millions)

 
Fixed Rate (Cdn%)

 
October 2019
Swap
1,000.0

 
4.16

 
1,329.4

 
3.69

 
October 2019 - March 2020
Swap
155.0

 
6.03

 
158.3

 
6.45

 
October 2019 - April 2021
Swap
82.0

 
5.13

 
79.0

 
5.83

 
October 2019 - June 2021
Swap
52.5

 
3.29

 
56.3

 
3.59

 
October 2019 - May 2022
Swap
170.0

 
4.00

 
166.9

 
5.03

 
October 2019 - April 2023
Swap
61.5

 
4.12

 
80.3

 
3.71

 
October 2019 - June 2023
Swap
270.0

 
3.78

 
274.7

 
4.32

 
October 2019 - June 2024
Swap
257.5

 
3.75

 
276.4

 
4.03

 
October 2019 - April 2025
Swap
82.0

 
4.30

 
107.0

 
3.98

 
October 2019 - April 2025
Swap
230.0

 
4.08

 
291.1

 
4.13

 
October 2019 - April 2027
Swap
20.0

 
4.18

 
25.3

 
4.25

 
Financial Foreign Exchange Forward Derivative Contracts
 
 
 
 
 
 
Settlement Date
Contract
 
Receive Notional Principal
($ millions)
 
 
Pay Notional Principal
($ millions)
 
 
October 2019
Swap
 
Cdn
495.9

 
US
375.0

 
October 2019
Swap
 
US
22.3

 
Cdn
29.6

 
May 2022
Swap
 
US
30.0

 
Cdn
32.2

 

CRESCENT POINT ENERGY CORP.
18

18. SUPPLEMENTAL DISCLOSURES
Cash flow statement presentation
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
($ millions)
2019

 
2018

 
2019

 
2018

 
Operating activities
 
 
 
 
 
 
 
 
Changes in non-cash working capital:
 
 
 
 
 
 
 
 
Accounts receivable
(2.9
)
 
(17.5
)
 
(54.3
)
 
(52.5
)
 
Prepaids and deposits
(1.9
)
 
0.6

 
(5.3
)
 
(2.4
)
 
Accounts payable and accrued liabilities
21.6

 
26.4

 
17.5

 
69.1

 
Other current liabilities
0.6

 
(2.0
)
 
(4.2
)
 
(5.5
)
 
Other long-term liabilities
4.4

 
(1.3
)
 
5.4

 
0.6

 
 
21.8

 
6.2

 
(40.9
)
 
9.3

 
Investing activities
 
 
 
 
 
 
 
 
Changes in non-cash working capital:
 
 
 
 
 
 
 
 
Accounts receivable
(6.3
)
 
(31.0
)
 
32.3

 
(22.1
)
 
Accounts payable and accrued liabilities
49.8

 
24.9

 
(3.4
)
 
(35.7
)
 
 
43.5

 
(6.1
)
 
28.9

 
(57.8
)
 
Financing activities
 
 
 
 
 
 
 
 
Changes in non-cash working capital:
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
—

 
(0.1
)
 
(11.0
)
 
—

 

CRESCENT POINT ENERGY CORP.
19

Supplementary Financing Cash Flow Information
The Company's reconciliation of cash flow from financing activities is outlined in the table below:
($ millions)
 
Dividends payable

 
Long-term debt (1)

 
Lease liability (2) (3)

 
December 31, 2018
 
16.5

 
4,276.7

 
223.8

 
Changes from cash flow from financing activities:
 
 
 
 
 
 
 
Decrease in bank debt, net
 
 
 
(486.5
)
 
 
 
Repayment of senior guaranteed notes
 
 
 
(98.2
)
 
 
 
Realized gain on cross currency swap maturity
 
 
 
40.5

 
 
 
Cash dividends paid
 
(27.6
)
 
 
 
 
 
Payments on lease liability
 
 
 
 
 
(25.8
)
 
Non-cash changes:
 
 
 
 
 
 
 
Cash dividends declared
 
16.6

 
 
 
 
 
Financing
 
 
 
 
 
6.9

 
Additions
 
 
 
 
 
2.8

 
Lease modification
 
 
 
 
 
(3.3
)
 
Reclassified as liabilities associated with assets held for sale
 
 
 
 
 
(3.3
)
 
Foreign exchange
 
 
 
(154.3
)
 
(0.2
)
 
September 30, 2019
 
5.5

 
3,578.2

 
200.9

 
 
 
 
 
 
 
 
 
December 31, 2017
 
16.8

 
4,111.0

 
—

 
Changes from cash flow from financing activities:
 
 
 
 
 
 
 
Decrease in bank debt, net
 
 
 
(276.9
)
 
 
 
Issuance of senior guaranteed notes
 
 
 
267.3

 
 
 
Repayment of senior guaranteed notes
 
 
 
(65.0
)
 
 
 
Realized gain on cross currency swap maturity
 
 
 
50.1

 
 
 
Cash dividends paid
 
(149.1
)
 
 
 
 
 
Non-cash changes:
 
 
 
 
 
 
 
Cash dividends declared
 
149.1

 
 
 
 
 
Foreign exchange
 
 
 
69.7

 


 
September 30, 2018
 
16.8

 
4,156.2

 
—

 
(1)
Includes current portion of long-term debt.
(2)
Includes current portion of lease liability.
(3)
Lease liability is as at January 1, 2019. See Note 3 - "Changes in Accounting Policies" for additional information.

CRESCENT POINT ENERGY CORP.
20

19.
GEOGRAPHICAL DISCLOSURES
The following table reconciles oil and gas sales by country and product type:
 
Three months ended September 30
 
 
Nine months ended September 30
 
 
($ millions) (1)
2019

 
2018

 
2019

 
2018

 
Canada
 
 
 
 
 
 
 
 
Crude oil sales
575.5

 
755.2

 
1,872.1

 
2,254.3

 
NGL sales
20.3

 
56.4

 
87.1

 
151.1

 
Natural gas sales
11.0

 
11.5

 
44.7

 
38.3

 
Total Canada
606.8

 
823.1

 
2,003.9

 
2,443.7

 
U.S.
 
 
 
 
 
 
 
 
Crude oil sales
149.5

 
233.5

 
552.1

 
599.2

 
NGL sales
6.5

 
11.9

 
26.5

 
31.3

 
Natural gas sales
6.3

 
8.2

 
24.2

 
21.7

 
Total U.S.
162.3

 
253.6

 
602.8

 
652.2

 
Total oil and gas sales
769.1

 
1,076.7

 
2,606.7

 
3,095.9

 
(1)
Oil and gas sales are reported before realized derivatives.
The following table reconciles non-current assets by country:
($ millions)
September 30, 2019

 
December 31, 2018

 
Canada
9,092.7

 
9,679.1

 
U.S.
1,359.9

 
2,464.7

 
Total
10,452.6

 
12,143.8

 
20.
SUBSEQUENT EVENTS
Uinta Basin Disposition
On October 18, 2019, Crescent Point completed the disposition of its Uinta Basin assets for total consideration of approximately $680.0 million, including closing adjustments and working capital items.
Credit Facility Renewal
On October 25, 2019, Crescent Point elected to reduce its covenant based credit facilities to $3.00 billion from $3.60 billion and extended the maturity dates to October 2023 from June 2021.

CRESCENT POINT ENERGY CORP.
21

Directors
Barbara Munroe, Chair (2) (5)
Laura Cillis (1) (2)
James Craddock (1) (3)
John Dielwart (3) (4)
Ted Goldthorpe (1) (5)
Mike Jackson (1) (2) (5)
Jennifer Koury (2) (4)
Francois Langlois (3) (4) (5)
Craig Bryksa (4)
(1) Member of the Audit Committee of the Board of Directors
(2) Member of the Human Resources and Compensation Committee of the Board of Directors
(3) Member of the Reserves Committee of the Board of Directors
(4) Member of the Environmental, Health & Safety Committee of the Board of Directors
(5) Member of the Corporate Governance and Nominating Committee
Officers
Craig Bryksa
President and Chief Executive Officer
Ken Lamont
Chief Financial Officer
Ryan Gritzfeldt
Chief Operating Officer
Brad Borggard
Senior Vice President, Corporate Planning and Capital Markets
Mark Eade
Senior Vice President, General Counsel and Corporate Secretary
Garret Holt
Senior Vice President, Corporate Development
Head Office
Suite 2000, 585 - 8th Avenue S.W.
Calgary, Alberta T2P 1G1
Tel: (403) 693-0020
Fax: (403) 693-0070
Toll Free: (888) 693-0020
Banker
The Bank of Nova Scotia
Calgary, Alberta
 
Auditor
PricewaterhouseCoopers LLP
Calgary, Alberta
Legal Counsel
Norton Rose Fulbright Canada LLP
Calgary, Alberta
Evaluation Engineers
GLJ Petroleum Consultants Ltd.
Calgary, Alberta
Sproule Associates Ltd.
Calgary, Alberta
Registrar and Transfer Agent
Investors are encouraged to contact Crescent Point's Registrar and Transfer Agent for information regarding their security holdings:
Computershare Trust Company of Canada
600, 530 - 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Tel: (403) 267-6800
Stock Exchanges
Toronto Stock Exchange - TSX
New York Stock Exchange - NYSE
Stock Symbol
CPG
Investor Contacts
Brad Borggard
Senior Vice President, Corporate Planning and Capital Markets
(403) 693-0020
Shant Madian
Vice President, Investor Relations and Corporate Communications
(403) 693-0020



CRESCENT POINT ENERGY CORP.
22