XML 45 R23.htm IDEA: XBRL DOCUMENT
v3.22.4

Financial instruments and risk management | 12 Months Ended
--- | ---
Dec. 31, 2022
Fair Value Disclosures [Abstract] |
Financial instruments and risk management | Financial instruments and risk management a) Fair value measurements In determining the fair value of financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing on each reporting date. Standard market conventions and techniques, such as discounted cash flow analysis are used to determine the fair value of the Company’s financial instruments. All methods of fair value measurement result in a general approximation of fair value and such value may never actually be realized. The fair values of the Company’s cash, accounts receivable, loans to affiliates and joint ventures (included in other assets), accounts payable, and accrued liabilities approximate their carrying amounts due to the nature of the instrument or the relatively short periods to maturity for the instruments. The Credit Facility has a carrying value that approximates the fair value due to the floating rate nature of the debt. The promissory notes have a carrying value that is not materially different than their fair value due to similar instruments bearing similar interest rates. Financial instruments with carrying amounts that differ from their fair values are as follows:
|  |  |  | December 31, 2022 |  | December 31, 2021
|  | Fair Value Hierarchy Level |  | Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
Convertible debentures |  | Level 1 |  | 129,750 |  |  | 131,795 |  |  | 129,750 |  |  | 135,963 |
Financing obligations |  | Level 2 |  | 32,889 |  |  | 30,783 |  |  | 47,945 |  |  | 47,010 |
Mortgage |  | Level 2 |  | 29,231 |  |  | 24,329 |  |  | 30,000 |  |  | 29,756 |
b) Swap agreement On October 5, 2022, the Company entered into a swap agreement on its common shares with a financial institution for investment purposes. As at December 31, 2022, the Company recognized an unrealized gain of $778 on this agreement based on the difference between the par value of the converted shares and the expected price of the Company's shares at contract maturity. The agreement is for 200,678 shares at a par value of $14.38, and an additional 152,100 shares at a par value of $17.84. The fair value of the shares as at December 31, 2022, was $18.08. The fair value of this swap is recorded in other assets (note 10) on the Consolidated Balance Sheets. The swap has not been designated as a hedge for accounting purposes and therefore changes in the fair value of the derivative are recognized in the Consolidated Statements of Operations and Comprehensive Income. This swap agreement is expected to mature in October 2023. During the year ended December 31, 2021, the Company recorded a net gain of $2,737 on the swap agreement related to the 5.50% convertible debentures issued in 2017 and redeemed through issuance of 4,583,655 common shares in April 2020. The gain recorded in 2021 was comprised of a realized gain of $7,071, offset by an unrealized gain from the year ended December 31, 2020, of $4,334. This swap agreement was completed on September 30, 2021, and the derivative financial instrument recorded on the Consolidated Balance Sheet was extinguished at that time. c) Risk management The Company is exposed to liquidity, market and credit risks associated with its financial instruments. The Company will from time to time use various financial instruments to reduce market risk exposures from changes in foreign currency exchange rates and interest rates. Management performs a risk assessment on a continual basis to help ensure that all significant risks related to the Company and its operations have been reviewed and assessed to reflect changes in market conditions and the Company’s operating activities. The Company is also exposed to concentration risk through its revenues which is mitigated by the customers being large investment grade organizations. The credit worthiness of new customers is subject to review by management through consideration of the type of customer and the size of the contract. The Company has further mitigated this risk through diversification of its operations. This diversification has primarily come through investments in joint ventures which are accounted for using the equity method. Revenues from these investments are not included in consolidated revenue. d) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages this risk by monitoring and reviewing actual and forecasted cash flows and the effect on bank covenants. The Company meets its liquidity needs from various sources including cash generated by operating activities, cash borrowings under the Credit Facility and financing through operating and financing leases and capital equipment financing. The Company has unused borrowing availability of $88.0 million on the Credit Facility (December 31, 2021 - $181.1 million) and an additional $46.6 million in borrowing availability under finance lease obligations (December 31, 2021 - $28.6 million). The Company believes that it has sufficient cash balances and availability under the Credit Facility to meet its foreseeable operating requirements. e) Market risk Market risk is the risk that the future revenue or operating expense related cash flows, the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices such as foreign currency exchange rates and interest rates. The level of market risk to which the Company is exposed at any point in time varies depending on market conditions, expectations of future price or market rate movements and composition of the Company’s financial assets and liabilities held, non-trading physical assets and contract portfolios. To manage the exposure related to changes in market risk, the Company has used various risk management techniques. Such instruments may be used to establish a fixed price for a commodity, an interest-bearing obligation or a cash flow denominated in a foreign currency. The sensitivities provided below are hypothetical and should not be considered to be predictive of future performance or indicative of earnings on these contracts. i) Foreign exchange risk The Company regularly transacts in foreign currencies when purchasing equipment and spare parts as well as certain general and administrative goods and services. These exposures are generally of a short-term nature and the impact of changes in exchange rates has not been significant in the past. The Company may fix its exposure in either the Canadian Dollar or the US Dollar for these short-term transactions, if material. ii) Interest rate risk The Company is exposed to interest rate risk from the possibility that changes in interest rates will affect future cash flows or the fair values of its financial instruments. Interest expense on borrowings with floating interest rates, including the Company’s Credit Facility, varies as market interest rates change. At December 31, 2022, the Company held $180.0 million of floating rate debt pertaining to its Credit Facility (December 31, 2021 – $110.0 million). As at December 31, 2022, holding all other variables constant, a 100 basis point change to interest rates on the outstanding floating rate debt will result in $1.8 million corresponding change in annual interest expense. The fair value of financial instruments with fixed interest rates fluctuate with changes in market interest rates. However, these fluctuations do not affect earnings, as the Company’s debt is carried at amortized cost and the carrying value does not change as interest rates change. The Company manages its interest rate risk exposure by using a mix of fixed and variable rate debt. f) Credit risk Credit risk is the risk that financial loss to the Company may be incurred if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company manages the credit risk associated with its cash by holding its funds with what it believes to be reputable financial institutions. The Company is also exposed to credit risk through its accounts receivable and contract assets. Credit risk for trade and other accounts receivables and contract assets are managed through established credit monitoring activities. The following customers accounted for 10% or more of total revenues:
Year ended December 31, |  | 2022 |  | 2021
Customer A |  | 31 | % |  | 38 | %
Customer B |  | 24 | % |  | 27 | %
Customer C |  | 21 | % |  | 10 | %
Customer D |  | 14 | % |  | 17 | %
The concentration risk is mitigated primarily by the customers being large investment grade organizations. The credit worthiness of new customers is subject to review by management through consideration of the type of customer and the size of the contract. Where the Company generates revenue under its subcontracting arrangement with MNALP, the final end customer is represented in the table above and in the table below. The following customers represented 10% or more of accounts receivable and contract assets:
|  | December 31, 2022 |  | December 31, 2021
Customer 1 |  | 32 | % |  | 45 | %
Customer 2 |  | 16 | % |  | 6 | %
Customer 3 |  | 15 | % |  | 15 | %
Customer 4 |  | 11 | % |  | 15 | %
The Company’s exposure to credit risk for accounts receivable and contract assets is as follows:
|  | December 31, 2022 |  | December 31, 2021
Trade accounts receivable |  | $ | 39,625 |  |  | $ | 51,774 |
Holdbacks |  | 372 |  |  | 380 |
Accrued trade receivables |  | 33,207 |  |  | 12,266 |
Contract receivables, included in accounts receivable |  | $ | 73,204 |  |  | $ | 64,420 |
Other receivables |  | 10,607 |  |  | 4,367 |
Total accounts receivable |  | $ | 83,811 |  |  | $ | 68,787 |
Contract assets |  | 15,802 |  |  | 9,759 |
Total |  | $ | 99,613 |  |  | $ | 78,546 |
Payment terms are per the negotiated customer contracts and generally range between net 15 days and net 60 days. As at December 31, 2022, and December 31, 2021, trade receivables and holdbacks are aged as follows:
|  | December 31, 2022 |  | December 31, 2021
Not past due |  | $ | 31,923 |  |  | $ | 31,531 |
Past due 1-30 days |  | 6,190 |  |  | 19,209 |
Past due 31-60 days |  | 1,174 |  |  | 1,250 |
More than 61 days |  | 710 |  |  | 164 |
Total |  | $ | 39,997 |  |  | $ | 52,154 |
As at December 31, 2022, the Company has recorded an allowance for credit losses of $nil (December 31, 2021 - $nil).

X
- Definition Financial Instruments and Risk Management [Text Block] + References No definition available. + Details
Name: | noa_FinancialInstrumentsAndRiskManagementTextBlock
Namespace Prefix: | noa_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration