Hydro One Releases 2012 Year-End Financial Results (US GAAP)

TORONTO, Feb. 14, 2013 /CNW/ - Hydro One Inc. today released its 2012 year-end results with net income for the year of $745 million and revenues of $5,728 million.

"In 2012, Hydro One continued in its mission to deliver safe, reliable and affordable electricity to our customers and to return excellent financial value to the Province of Ontario," said Carmine Marcello, President and CEO of Hydro One. "We will continue to focus on prudently managing our costs and responsibly operating and maintaining our vital electricity transmission and delivery infrastructure to ensure we are providing the value our customers want."

The following are some of our key achievements:

  • During 2012, we made capital investments of $1,454 million to improve system reliability, to address our aging power system to improve service to our customers, and to facilitate the connection of new, clean generation.

  • We continued with the implementation of our entity-wide SAP information system platform throughout 2012 and we are preparing for the new customer information phase of the project to go live. In addition to the productivity improvements already obtained, we continue to invest in systems and technology which will allow us to maximize value for our customers, improve our customer service, make better investment decisions and realize additional productivity gains.

  • In May, our Bruce to Milton Transmission Reinforcement Project was placed in service. The new line allows our customers to receive over 3,000 MW of refurbished nuclear and new, renewable power generated in the Huron-Grey-Bruce area. This was our largest infrastructure project in more than 20 years and was delivered on time and on budget to our customers. The Bruce to Milton project is included in $1,748 million of prior and current year electricity system capital investments which were completed and placed in service during the year.

  • We were recently awarded one of the Edison Electric Institute's 2012 Emergency Assistance Awards for supporting the recovery efforts from the June 2012 Mid-Atlantic and Midwest storms and from Hurricane Sandy. On July 1, 2012, 200 of our employees, under a mutual aid agreement, travelled to Washington D.C, Baltimore and Virginia to repair damage after the storms passed through the region and knocked out power to more than three million homes and businesses. On November 1, 2012, we dispatched 225 employees to Long Island, New York to assist in power restoration efforts after Hurricane Sandy knocked out power to millions of residents. Our employees also restored power to approximately 160,000 customers in Ontario after storms caused by the remnants of Hurricane Sandy caused significant damage to our distribution system.

  • During the year, we successfully raised $1,085 million in debt financing through our Medium-Term Note Program.

  • In 2012, we were recognized once again by Corporate Knights Magazine as one of Canada's Top 50 Corporate Citizens, ranking first in Canada for corporate citizenship among utilities, for having successfully managed our specific environmental, social and governance performance.

Net income of $745 million was higher by $104 million, or 16%, than our comparable 2011 results. Higher revenues reflect the recovery of prior year investments which are now in service and which will improve the province's electricity system. Our net income was also positively impacted by lower operation, maintenance and administration expenditures resulting from cost-effectively managing the work program within our Transmission Business and by lower payments in lieu of corporate income taxes resulting from a lower combined federal and provincial statutory income tax rate compared to 2011. In addition, our 2012 net income reflects higher depreciation expense resulting from our placement of new assets in service, consistent with our increased capital work program, and increased financing charges reflecting our higher average level of debt.

Capital expenditures of $1,454 million were slightly higher by $7 million compared to the prior year. Within our Transmission Business, we experienced a reduction in our capital expenditures mainly due to the completion of several large inter-area network upgrade projects in 2011 and early in 2012 that will facilitate new generation.  We also experienced increases related to local area supply and load customer connection projects. Within our Distribution Business, the net increase in expenditures was primarily attributable to our continued investment in our Advanced Distribution System project aimed at modernizing our distribution system and protecting distributed generators and our investment in the Customer Information System phase of our entity-wide information system replacement and improvement project.

Total revenues of $5,728 million, were $257 million, or 5%, higher than 2011. Our transmission revenues were $1,482 million, $93 million higher than last year primarily due to the inclusion of new capital investments in our transmission rates effective January 1, 2012. Our distribution revenues were $4,184 million, $165 million higher than the comparative period. Distribution revenue includes the recovery of higher purchased power costs of $146 million.

Net cash from operating activities was $1,285 million in 2012. During the year, we paid $370 million in dividends to our shareholder, the Province of Ontario, and $197 million in payments in lieu of corporate income taxes to the Ontario Electricity Financial Corporation.

CONSOLIDATED FINANCIAL HIGHLIGHTS AND STATISTICS

Year ended December 31              
(Canadian dollars in millions, except as otherwise noted) 2012   2011   $ Change   % Change
Revenues 5,728   5,471   257   5
Purchased power 2,774   2,628   146   6
Operating costs 1,730   1,708   22   1
Net income 745   641   104   16
Net cash from operations 1,285   1,407   (122)   (9)
Average annual Ontario 60-minute peak demand (MW)1 21,132   21,166   (34)   -
Distribution - units distributed to our customers (TWh)1 29.2   29.2   -   -

1 System-related statistics are preliminary.

Hydro One Inc. is a holding company that operates through its subsidiaries in electricity transmission and distribution and telecom businesses. One of its subsidiaries, Hydro One Networks Inc., operates one of the largest transmission and distribution systems in North America. Hydro One Inc. is wholly owned by the Province of Ontario.

Hydro One Inc.'s 2012 Annual Consolidated Financial Statements and Management's Discussion and Analysis can be accessed through the following link:

www.hydroone.com/financials 

 

SOURCE: Hydro One Inc.

For further information:

Daffyd Roderick
Director, Corporate Communications
416-345-5828

Ali R. Suleman
Vice President and Treasurer
416-345-6126

Hydro One Investor Relations
416-345-6867


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