Toronto Hydro Corporation Releases its First Quarter Financial Results

TORONTO, May 16, 2013 /CNW/ - Toronto Hydro Corporation (the "Corporation") announced today that it has filed with Canadian securities regulators its Interim Consolidated Financial Statements and related Management's Discussion and Analysis for the three months ended March 31, 2013, prepared in accordance with United States Generally Accepted Accounting Principles ("US GAAP"), including the application of rate-regulated accounting policies, which Interim Consolidated Financial Statements and Management's Discussion and Analysis are presented in Canadian dollars.  Copies may be obtained from the Corporation or accessed through SEDAR's website www.sedar.com.

         
Selected Financial Highlights
(in millions of Canadian dollars, unaudited)
    Three Months Ended
March 31
    2013
$
  2012
$
         
Net income/(loss)     18.6   (12.8)
Net revenues    144.6   137.2
Capital Expenditures     81.7   65.4

  • Net income for the three months ended March 31, 2013 was $18.6 million compared to a net loss of $12.8 million for the same period in 2012.

  • Net revenues were higher at $144.6 million compared to $137.2 million for the same period in 2012.

  • Capital Expenditures were higher at $81.7 million compared to $65.4 million for the same period in 2012.

"We have received approval from the Ontario Energy Board relating to our 2012 and 2013 electricity distribution rates. These rates provide for incremental funding paving the way toward a sustainable level of capital construction program. The approved funding will primarily be used to replace aging equipment on our grid and to construct a new transformer station in downtown Toronto" said Anthony Haines, President and Chief Executive Officer.

Corporate Developments

On May 10, 2012, Toronto Hydro-Electric System Limited ("LDC") filed its application to set electricity distribution rates for 2012, 2013 and 2014 under the Incentive Regulation Mechanism ("IRM") framework which includes the filing of an Incremental Capital Module ("ICM") (collectively, the "IRM/ICM Application"). An update to the IRM/ICM Application was submitted by LDC on October 31, 2012 modifying the requested amounts for 2012 and 2013, respectively, and requesting that consideration for 2014 be deferred until LDC has received a decision from the Ontario Energy Board ("OEB") in respect of the 2012 and 2013 rate years.

On April 2, 2013, the OEB issued a partial decision and order for phase one of the proceeding comprising LDC's 2012 and 2013 work program proposals.  The OEB's decision determined that eligible capital funding under the ICM framework was to be calculated on an in-service basis.  This correlates to the approval of capital expenditures amounting to $203.3 million for 2012 and $484.2 million for 2013.  New rates will become effective June 1, 2013. It should be noted that in 2015, LDC will be seeking recovery for capital spent in 2012 and 2013 that has not yet been approved by the OEB in the current ICM decision due to the standard operation of the regulatory model.

On April 9, 2013, the Corporation issued $250.0 million of 2.91% senior unsecured debentures due April 10, 2023 and $200.0 million of 3.96% senior unsecured debentures due April 9, 2063.  The net proceeds of the debentures were used to repay the Corporation's $225.0 million of 6.11% senior unsecured debentures and $245.1 million of 6.11% senior unsecured debentures which matured on May 7, 2013 and May 6, 2013.

Selected Financial Highlights

                 
Selected Financial Highlights
Three Months ended March 31
(in millions of Canadian dollars, unaudited)
    2013
$
  2012
$
  Change
$
  Change
%
                 
Net income/(loss)     18.6   (12.8)   31.4   245.3
Net revenues     144.6   137.2   7.4   5.4
Operating expenses     70.1   68.2   1.9   2.8
Depreciation and amortization     34.7   35.4   (0.7)   (2.0)
Net financing charges     (18.6)   (18.7)   0.1   0.5
Restructuring costs    -   (27.8)   27.8   100.0
Income tax expense     2.6   -   (2.6)   (100.0)
Capital expenditures     81.7   65.4   16.3   24.9

Net income for the three months ended March 31, 2013 was $18.6 million compared to net loss of $12.8 million for the comparable period in 2012.  The increase in net income for the three months ended March 31, 2013 was primarily due to restructuring costs recognized in the first quarter of 2012 ($27.8 million) related to cost reduction initiatives at LDC and higher net revenues ($7.4 million).

The total capital expenditures were approximately $81.7 million for the three months ended March 31, 2013 compared to $65.4 million for the comparable period in 2012.  The increase in capital expenditures of $16.3 million was primarily related to overhead infrastructure ($6.3 million), underground infrastructure ($5.7 million), and customer connections ($4.0 million).

About Toronto Hydro Corporation

The Corporation is a holding company which wholly-owns two subsidiaries:

  • LDC — which distributes electricity and engages in Conservation and Demand Management activities; and

  • Toronto Hydro Energy Services Inc. — which provides street lighting services.

The principal business of the Corporation and its subsidiaries is the distribution of electricity by LDC.  LDC owns and operates an electricity distribution system, which delivers electricity to approximately 733,000 customers located in the City of Toronto.

SOURCE: Toronto Hydro Corporation

For further information:

Blair Peberdy,
Vice-President, Marketing, Communications and Public Affairs:
416-542-2515; bpeberdy@torontohydro.com 

JS Couillard,
Chief Financial Officer:
416-542-3166; jcouillard@torontohydro.com


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