CROWN SECTOR POSTS STRONG FINANCIAL RESULTS IN 2002

Saskatchewan's Crown corporation sector had a strong year financially in 2002, more than doubling earnings from the previous year and decreasing debt by more than $100 million.

Crown Investments Corporation of Saskatchewan (CIC) and its subsidiary Crown corporations, including SaskPower, SaskTel, SaskEnergy, Saskatchewan Government Insurance (SGI CANADA), Information Services Corporation of Saskatchewan (ISC), Saskatchewan Transportation Company (STC), SaskWater, Saskatchewan Opportunities Corporation (SOCO), and Saskatchewan Government Growth Fund Management Corporation (SGGFMC) tabled their 2002 Annual Reports with the Legislative Assembly today. These Crown corporations also tabled annual financial statements for their pension plans and wholly-owned subsidiaries.

CIC and its subsidiary Crown corporations and investments had consolidated earnings of $284 million on revenues of $3.49 billion in 2002. That was more than double the earnings of $132 million in 2001. The main reasons for the increase were a gain of $111.4 million on the sale of CIC's remaining Cameco shares, and a higher profit at SaskPower.

"Consolidated debt decreased by $107 million, due mainly to lower debt at SaskEnergy, SaskPower, SaskTel and some CIC investments," CIC Minister Maynard Sonntag said. "At the end of 2002, consolidated debt stood at $3.51 billion, representing a decrease of more than $1.8 billion since 1991."

CIC paid a dividend of $300 million to the province's General Revenue Fund (GRF) for 2002. That includes $100 million that was deferred for 2000. CIC also made an equity repayment of $181 million in 2002 as a result of the sale of its remaining Cameco shares. Since 1995, CIC has paid more than $1.6 billion to the GRF in dividends and equity repayments. CIC expects to declare a $200 million dividend for 2003.

"We are proud of this substantial contribution that the Crown sector has made to the GRF over the years," Sonntag said. "The money is used for vitally important services like health care, education, and highways, that benefit all Saskatchewan people. This major contribution is possible because we own these corporations."

Other financial details for 2002, as compared with 2001 unless otherwise stated, include:

• SaskPower recovered from a challenging 2001 by posting earnings of $126.7 million. The increase of $97.6 million was due to increased hydroelectric generation – which reduced reliance on higher cost supply sources – and lower natural gas prices. The corporation spent more than $305 million in Saskatchewan in new generation, environmental mitigation, customer connections, and extending the life of existing infrastructure;

• SaskTel's earnings declined to $65.1 million from $101.5 million, due mainly to a non-cash write-down in the Austar United Communications Ltd. investment. SaskTel spent $165 million on capital projects in Saskatchewan, such as high speed internet service, CommunityNet, digital cellular network expansion and MaxTM Interactive Services;

• SaskEnergy posted earnings of $6.9 million compared with a loss of $15.4 million the previous year when it absorbed $76 million of gas costs to benefit customers. SaskEnergy's provincial residential natural gas rates were the second lowest in Canada during 2002. The corporation spent $57 million in Saskatchewan in 2002 to connect new customers and maintain a safe infrastructure;

• SGI CANADA lost $8.8 million, compared with earnings of $10.2 million the year before. This was due mainly to lower investment earnings and a net loss of $11.3 million on Coachman Insurance Co. of Ontario. The Saskatchewan Auto Fund, a stand-alone, compulsory auto insurance program administered by SGI, is not included in SGI CANADA's or CIC's consolidated financial statements. The Auto Fund posted a small surplus of $855,000 in 2002, giving it a reserve of $2.8 million. There was no general rate increase in the Auto Fund in 2002 or 2001;

• ISC lost $6.2 million, compared with a loss of $6.3 million the previous year. As in 2001, ISC again paid the GRF $11.7 million in land title and personal property registry revenues. ISC is expected to complete the conversion of land titles and Geographic Information Systems (GIS) in 2003;

• STC continued its efforts to contain costs while meeting the challenge of providing passenger and freight service to Saskatchewan people. The provincial bus company's loss before grant was $4 million, up from $3.4 million; and

• SaskWater lost $3.3 million, compared with a loss of $4.2 million the previous year. SaskWater spent $5.7 million primarily for the construction of the Cory Cogeneration and Hague pipeline projects. This expansion grows SaskWater's industrial line of business and improves the quality of drinking water for more than 1,000 additional Saskatchewan residents.

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For More Information, Contact:

Ted Boyle Crown Invesments Corporation Regina Phone: (306)787-9039