Form 6-K Crescent Point Energy For: Mar 31

 

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Exhibit 99.1

CONSOLIDATED BALANCE SHEETS

		As at
		March 31,			December 31,
(UNAUDITED) (Cdn$ millions)	Notes	2016			2015
ASSETS
Cash		25.1			24.7
Accounts receivable		269.0			327.0
Prepaids and deposits		9.6			5.1
Reclamation fund	4	18.2			-
Derivative asset	22	430.3			490.5
Total current assets		752.2			847.3
Long-term investments	5	32.4			30.3
Derivative asset	22	362.9			540.1
Other long-term assets	4, 6	34.5			63.5
Exploration and evaluation	7, 8	472.3			540.7
Property, plant and equipment	8, 9	14,888.8			14,953.7
Goodwill	10	251.9			251.9
Deferred income tax		384.5			388.5
Total assets		17,179.5			17,616.0
LIABILITIES
Accounts payable and accrued liabilities		499.2			679.4
Dividends payable		15.2			50.5
Current portion of long-term debt	11	155.0			72.0
Derivative liability	22	60.8			1.8
Decommissioning liability	13	18.2			32.4
Total current liabilities		748.4			836.1
Long-term debt	11	4,289.8			4,380.0
Derivative liability	22	2.5			0.3
Other long-term liabilities	12, 20	55.4			56.3
Decommissioning liability	13	1,301.2			1,223.0
Deferred income tax		968.0			995.3
Total liabilities		7,365.3			7,491.0
SHAREHOLDERS’ EQUITY
Shareholders’ capital	14	15,714.2			15,693.2
Contributed surplus		99.5			99.3
Deficit	15	(6,444.7	)		(6,239.3	)
Accumulated other comprehensive income		445.2			571.8
Total shareholders' equity		9,814.2			10,125.0
Total liabilities and shareholders' equity		17,179.5			17,616.0

See accompanying notes to the consolidated financial statements.

CRESCENT POINT ENERGY CORP.	1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		Three months ended March 31
(UNAUDITED) (Cdn$ millions, except per share amounts)	Notes	2016			2015
REVENUE AND OTHER INCOME
Oil and gas sales		507.6			613.6
Royalties		(72.1	)		(98.3	)
Oil and gas revenue		435.5			515.3
Derivative gains (losses)	17, 22	(86.5	)		213.0
Other income	18	2.1			23.7
		351.1			752.0
EXPENSES
Operating		165.7			164.2
Transportation		36.0			32.6
General and administrative		25.8			22.3
Interest on long-term debt		41.3			33.7
Foreign exchange (gain) loss	19	(242.0	)		130.7
Share-based compensation	20	18.3			20.0
Depletion, depreciation and amortization	7, 9	434.5			411.9
Accretion	12, 13	7.1			5.8
		486.7			821.2
Net income (loss) before tax		(135.6	)		(69.2	)
Tax recovery
Current		-			-
Deferred		(48.1	)		(23.2	)
Net income (loss)		(87.5	)		(46.0	)
Other comprehensive income (loss)
Items that may be subsequently reclassified to profit or loss
Foreign currency translation of foreign operations		(126.6	)		156.0
Comprehensive income (loss)		(214.1	)		110.0
Net income (loss) per share	21
Basic		(0.17	)		(0.10	)
Diluted		(0.17	)		(0.10	)

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, 2015		15,693.2			99.3			(6,239.3	)		571.8			10,125.0
Redemption of restricted shares	14	21.2			(21.6	)								(0.4	)
Share issue costs, net of tax		(0.2	)											(0.2	)
Share-based compensation	20				22.6									22.6
Forfeit of restricted shares	20				(0.8	)								(0.8	)
Net income (loss)								(87.5	)					(87.5	)
Dividends ($0.23 per share)								(117.9	)					(117.9	)
Foreign currency translation adjustment											(126.6	)		(126.6	)
March 31, 2016		15,714.2			99.5			(6,444.7	)		445.2			9,814.2
December 31, 2014		14,157.6			118.0			(4,357.1	)		242.4			10,160.9
Issued pursuant to the DRIP (1) and SDP (2)		91.5						1.9						93.4
Redemption of restricted shares		35.7			(36.1	)								(0.4	)
Share issue costs, net of tax		(0.1	)											(0.1	)
Share-based compensation					26.5									26.5
Forfeit of restricted shares					(0.6	)								(0.6	)
Net income (loss)								(46.0	)					(46.0	)
Dividends ($0.69 per share)								(317.5	)					(317.5	)
Foreign currency translation adjustment											156.0			156.0
March 31, 2015		14,284.7			107.8			(4,718.7	)		398.4			10,072.2

See accompanying notes to the consolidated financial statements.

CRESCENT POINT ENERGY CORP.	3

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Three months ended March 31
(UNAUDITED) (Cdn$ millions)	Notes	2016			2015
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net income (loss)		(87.5	)		(46.0	)
Items not affecting cash
Other income	18	(2.1	)		(23.7	)
Deferred tax recovery		(48.1	)		(23.2	)
Share-based compensation	20	18.3			20.0
Depletion, depreciation and amortization	7, 9	434.5			411.9
Accretion	12, 13	7.1			5.8
Unrealized (gains) losses on derivatives	17, 22	298.6			(46.6	)
Translation of US dollar long-term debt	19	(221.6	)		139.3
Other	24	(1.5	)		3.8
Realized gain on principal settlement of cross currency swap	19	(20.0	)		(8.6	)
Decommissioning expenditures		(4.3	)		(4.9	)
Change in non-cash working capital	24	(45.3	)		(28.9	)
		328.1			398.9
INVESTING ACTIVITIES
Development capital and other expenditures		(330.3	)		(570.6	)
Capital acquisitions, net	8	(8.6	)		(15.6	)
Reclamation fund	4	10.8			9.9
Change in non-cash working capital	24	(77.5	)		(101.5	)
		(405.6	)		(677.8	)
FINANCING ACTIVITIES
Issue of shares, net of issue costs		(0.7	)		(0.6	)
Increase in bank debt, net		212.5			614.4
Repayment of senior guaranteed notes		-			(96.8	)
Realized gain on principal settlement of cross currency swap	19	20.0			8.6
Cash dividends		(117.9	)		(224.0	)
Change in non-cash working capital	24	(35.3	)		2.6
		78.6			304.2
Impact of foreign currency on cash balances		(0.7	)		2.9
INCREASE IN CASH		0.4			28.2
CASH AT BEGINNING OF PERIOD		24.7			4.0
CASH AT END OF PERIOD		25.1			32.2

See accompanying notes to the consolidated financial statements.

Supplementary Information:

CRESCENT POINT ENERGY CORP.	4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    

March 31, 2016 (UNAUDITED)

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.

These interim consolidated financial statements were approved and authorized for issue by the Company's Board of Directors on May 11, 2016.

The policies applied in these interim consolidated financial statements are based on IFRS issued and outstanding as of May 11, 2016, 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 dollars. Crescent Point's operations are aggregated into one reportable segment based on the similar nature of products produced, production processes and economic characteristics between the Company's Canadian and U.S. operations.

In future accounting periods, the Company will adopt the following IFRS:

The following table reconciles the reclamation fund:

CRESCENT POINT ENERGY CORP.	5

($ millions)	March 31, 2016			December 31, 2015
Investments in public companies, beginning of period	22.8			21.0
Acquired through capital acquisitions	-			2.6
Dispositions	-			(1.3	)
Unrealized gain recognized in other income (loss)	2.1			0.5
Investments in public companies, end of period	24.9			22.8
Investments in private companies, beginning of period	7.5			28.9
Derecognized through capital acquisitions	-			(7.0	)
Unrealized loss recognized in other income (loss)	-			(14.4	)
Investment in private company, end of period	7.5			7.5
Long-term investments, end of period	32.4			30.3

The Company holds common shares in publicly traded oil and gas companies. The investments are classified as financial assets at fair value through profit or loss and are fair valued with the resulting gain or loss recorded in net income. At March 31, 2016, the investments are recorded at a fair value of $24.9 million which is $14.3 million more than the original cost of the investments. At December 31, 2015, the investments were recorded at a fair value of $22.8 million which was $12.2 million more than the original cost of the investments.

The Company holds common shares in a private oil and gas company. The investment is classified as financial assets at fair value through profit or loss and is fair valued with the resulting gain or loss recorded in net income. At March 31, 2016 and December 31, 2015, the investment is recorded at a fair value of $7.5 million which is $17.5 million less than the original cost of the investment.

($ millions)	March 31, 2016			December 31, 2015
Reclamation fund	20.5			49.5
Other receivables	14.0			14.0
Other long-term assets	34.5			63.5

See Note 4 - "Reclamation Fund" for additional information regarding the reclamation fund.

At March 31, 2016, the Company had investment tax credits of $14.0 million (December 31, 2015 - $14.0 million).

CRESCENT POINT ENERGY CORP.	6

($ millions)	March 31, 2016			December 31, 2015
Exploration and evaluation assets at cost	1,920.1			1,961.0
Accumulated amortization	(1,447.8	)		(1,420.3	)
Net carrying amount	472.3			540.7
Reconciliation of movements during the period
Cost, beginning of period	1,961.0			1,789.8
Accumulated amortization, beginning of period	(1,420.3	)		(1,167.3	)
Net carrying amount, beginning of period	540.7			622.5
Net carrying amount, beginning of period	540.7			622.5
Acquisitions through business combinations, net	0.5			162.3
Additions	83.3			385.8
Transfers to property, plant and equipment	(86.5	)		(470.6	)
Amortization	(50.3	)		(205.9	)
Foreign exchange	(15.4	)		46.6
Net carrying amount, end of period	472.3			540.7

Impairment test of exploration and evaluation assets

There were no indicators of impairment at March 31, 2016.

In the three months ended March 31, 2016, the Company incurred $0.3 million (March 31, 2015 - $0.9 million) of transaction costs related to business combinations that are recorded as general and administrative expenses.

Minor Property Acquisitions and Dispositions

Crescent Point completed minor property acquisitions and dispositions during the three months ended March 31, 2016 ($7.9 million was allocated to PP&E and $0.5 million was allocated to E&E assets, including $0.2 million related to net disposed decommissioning liability). These minor property acquisitions and dispositions were completed with full tax pools and no working capital items.

CRESCENT POINT ENERGY CORP.	7

($ millions)	March 31, 2016			December 31, 2015
Development and production assets	23,900.3			23,677.4
Corporate assets	100.8			101.5
Property, plant and equipment at cost	24,001.1			23,778.9
Accumulated depletion, depreciation and impairment	(9,112.3	)		(8,825.2	)
Net carrying amount	14,888.8			14,953.7
Reconciliation of movements during the period
Development and production assets
Cost, beginning of period	23,677.4			19,891.5
Accumulated depletion and impairment, beginning of period	(8,795.5	)		(5,708.0	)
Net carrying amount, beginning of period	14,881.9			14,183.5
Net carrying amount, beginning of period	14,881.9			14,183.5
Acquisitions through business combinations, net	10.0			1,513.8
Additions	316.4			1,357.3
Dispositions	(2.1	)		(0.5	)
Transfers from exploration and evaluation assets	86.5			470.6
Depletion	(381.9	)		(1,538.5	)
Impairment	-			(1,385.3	)
Foreign exchange	(90.8	)		281.0
Net carrying amount, end of period	14,820.0			14,881.9
Cost, end of period	23,900.3			23,677.4
Accumulated depletion and impairment, end of period	(9,080.3	)		(8,795.5	)
Net carrying amount, end of period	14,820.0			14,881.9
Corporate assets
Cost, beginning of period	101.5			87.7
Accumulated depreciation, beginning of period	(29.7	)		(21.1	)
Net carrying amount, beginning of period	71.8			66.6
Net carrying amount, beginning of period	71.8			66.6
Additions	(0.5	)		13.4
Depreciation	(2.3	)		(8.6	)
Foreign exchange	(0.2	)		0.4
Net carrying amount, end of period	68.8			71.8
Cost, end of period	100.8			101.5
Accumulated depreciation, end of period	(32.0	)		(29.7	)
Net carrying amount, end of period	68.8			71.8

At March 31, 2016, future development costs of $7.2 billion (December 31, 2015 - $7.2 billion) are included in costs subject to depletion.

Direct general and administrative costs capitalized by the Company during the three months ended March 31, 2016 were $12.8 million (year ended December 31, 2015 - $46.9 million), including $3.8 million of share-based compensation costs (year ended December 31, 2015 - $16.9 million).

CRESCENT POINT ENERGY CORP.	8

Impairment test of property, plant and equipment

There were no indicators of impairment at March 31, 2016.

At March 31, 2016, the Company had goodwill of $251.9 million (December 31, 2015 - $251.9 million). Goodwill has been assigned to the Canadian operating segment.

The following table reconciles long-term debt:

Bank Debt

The Company has a syndicated unsecured credit facility with sixteen banks and an operating credit facility with one Canadian chartered bank, for a total amount available under the combined facilities of $3.6 billion. The syndicated unsecured credit facility also includes an accordion feature that allows the Company to increase the facility by up to $500.0 million under certain conditions. The syndicated unsecured credit facility constitutes a revolving credit facility for a three year term which is extendible annually; the current maturity date is June 8, 2018. The operating credit facility constitutes a revolving facility for a three year term which is extendible annually; the current maturity date is June 8, 2018.

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 certain non-cash items including unrealized derivatives, unrealized foreign exchange, share-based compensation expense and accretion ("EBITDA").

The credit facilities and senior guaranteed notes have covenants which restrict the Company's ratio of senior debt to EBITDA to a maximum of 3.5:1.0, the ratio of total debt to 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 is in compliance with all debt covenants at March 31, 2016.

The Company had letters of credit in the amount of $13.8 million outstanding at March 31, 2016.

The Company manages its credit facilities through a combination of bankers' acceptance loans, US dollar LIBOR loans and interest rate swaps.

CRESCENT POINT ENERGY CORP.	9

Senior Guaranteed Notes

The Company has closed private offerings of senior guaranteed notes raising total gross proceeds of US$1.51 billion and Cdn$197.0 million. 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:

Concurrent with the issuance of US$1.48 billion senior guaranteed notes, the Company entered into CCS to manage the Company's foreign exchange risk. The CCS fix the US dollar amount of the notes for purposes of interest and principal repayments at a notional amount of $1.56 billion. Concurrent with the issuance of US$30.0 million senior guaranteed notes, the Company entered a foreign exchange swap which fixed the principal repayment at a notional amount of $32.2 million. See additional information in Note 22 - “Financial Instruments and Derivatives”.

($ millions)	March 31, 2016			December 31, 2015
Lease inducement (1)	46.2			47.2
Long-term compensation liability (2)	2.8			2.5
Other long-term liability (3)	6.4			6.6
Other long-term liabilities	55.4			56.3

CRESCENT POINT ENERGY CORP.	10

Upon retirement of its oil and gas assets, the Company anticipates substantial costs associated with decommissioning. The estimated cash flows have been discounted using an average risk free rate of approximately 2 percent and an inflation rate of 2 percent (December 31, 2015 - approximately 2.25 percent and 2 percent, respectively).

The following table reconciles the decommissioning liability:

Crescent Point has an unlimited number of common shares authorized for issuance.

($ millions)	March 31, 2016			December 31, 2015
Accumulated earnings	605.5			693.0
Accumulated gain on shares issued pursuant to DRIP (1) and SDP (2)	8.4			8.4
Accumulated tax effect on redemption of restricted shares	9.9			9.9
Accumulated dividends	(7,068.5	)		(6,950.6	)
Deficit	(6,444.7	)		(6,239.3	)

CRESCENT POINT ENERGY CORP.	11

The Company’s capital structure is comprised of shareholders’ equity, long-term debt and working capital. The balance of each of these items is as follows:

Crescent Point's objective for managing capital is to maintain a strong balance sheet and capital base to provide financial flexibility, pay dividends and to position the Company for the future development of the business. Ultimately, Crescent Point strives to maximize long-term stakeholder value by ensuring the Company has the financing capacity to fund projects that are expected to add value to stakeholders and distribute any excess cash that is not required for financing projects.

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 funds flow from operations. Net debt is calculated as long-term debt plus accounts payable and accrued liabilities and dividends payable, less cash, accounts receivable, prepaids and deposits and long-term investments, excluding the unrealized foreign exchange on translation of hedged US dollar long-term debt. 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 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 pay monthly dividends and to continue to exploit and develop its resource plays. 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 funds flow from operations ratio at March 31, 2016 was 2.3 times (December 31, 2015 - 2.2 times). The funds flow from operations only reflects funds flow from operations generated on acquired properties since the closing date of the acquisitions.

Crescent Point strives to fund its capital expenditures, decommissioning expenditures and dividends over time by managing risks associated with the oil and gas industry. To accomplish this, the Company maintains a conservative balance sheet with significant unutilized lines of credit, manages its exposure to fluctuating interest rates and foreign exchange rates on its long-term debt, and actively hedges commodity prices using a 3½ year risk management program. Unless otherwise approved by the Board of Directors, the Company can hedge benchmark prices on up to 65 percent of after royalty volumes using a portfolio of swaps, collars and put option instruments and can hedge price differentials on up to 35 percent of after royalty volumes using a combination of financial derivatives and fixed differential physical contracts.

Crescent Point is subject to certain financial covenants on its credit facility and senior guaranteed notes agreements and is in compliance with all financial covenants as at March 31, 2016. See Note 11 - "Long-term Debt" for additional information regarding the Company's financial covenant requirements.

	Three months ended March 31
($ millions)	2016			2015
Realized gains	212.1			166.4
Unrealized gains (losses)	(298.6	)		46.6
Derivative gains (losses)	(86.5	)		213.0

Other income for the three months ended March 31, 2016 consists of net unrealized gains on long-term investments of $2.1 million (March 31, 2015 - $23.7 million).

CRESCENT POINT ENERGY CORP.	12

	Three months ended March 31
($ millions)	2016			2015
Realized gain (loss)
CCS - interest payment	1.4			1.1
CCS - principal repayment	20.0			8.6
Settlement of US dollar long-term debt	(20.0	)		(8.6	)
Other	(1.2	)		(0.1	)
Unrealized gain (loss)
Translation of US dollar long-term debt	241.6			(130.7	)
Other	0.2			(1.0	)
Foreign exchange gain (loss)	242.0			(130.7	)

Restricted Share Bonus Plan

The Company has a Restricted Share Bonus Plan pursuant to which the Company may grant restricted shares to directors, officers, employees and consultants. The restricted shares vest on terms up to three years from the grant date as determined by the Board of Directors.

Deferred Share Unit Plan

The Company has a DSU plan for directors. Each DSU vests on the date of the grant, however, the settlement of the DSU occurs following a change of control or when the individual ceases to be a director of the Company. DSUs are settled in cash based on the prevailing Crescent Point share price.

The following table reconciles the number of restricted shares and DSUs for the three months ended March 31, 2016:

The following table reconciles the number of restricted shares and DSUs for the year ended December 31, 2015:

For the three months ended March 31, 2016, the Company calculated total share-based compensation, net of estimated forfeitures, of $22.1 million (March 31, 2015 - $26.1 million), of which $3.8 million was capitalized (March 31, 2015 - $6.1 million).

The following table summarizes the weighted average shares used in calculating net income per share:

CRESCENT POINT ENERGY CORP.	13

The Company's financial assets and liabilities are comprised of cash, accounts receivable, long-term investments, reclamation fund, derivative assets and liabilities, accounts payable and accrued liabilities, dividends payable and long-term debt.

Crescent Point's derivative assets and liabilities are transacted in active markets. Crescent Point's long-term investments are transacted in active and non-active markets. The Company classifies the fair value of these transactions according to the following fair value hierarchy based on the amount of observable inputs used to value the instrument:

Accordingly, Crescent Point's derivative assets and liabilities are classified as Level 2. Long-term investments are classified as Level 1, Level 2 or Level 3 depending on the valuation methods and inputs used and whether the applicable company is publicly traded or private. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy.

Crescent Point's valuation of the investment in a private company is based primarily on recent trading activity in the relevant company's common shares. The Company's finance department is responsible for performing the valuation of financial instruments, including the calculation of Level 3 fair values.

Discussions of the fair values and risks associated with financial assets and liabilities, as well as summarized information related to derivative positions are detailed below:

a) Carrying Amount and Fair Value of Financial Instruments

The fair value of cash, accounts receivable, reclamation fund, accounts payable and accrued liabilities and dividends payable 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.

The following table summarizes the carrying value of the Company's remaining financial assets and liabilities as compared to their respective fair values as of March 31, 2016: