Toronto Hydro Corporation Releases its Third Quarter Financial Results

TORONTO, Nov. 15, 2012 /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 nine months ended September 30, 2012, 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 September 30				Nine Months Ended September 30
		2012 $		2011 $		2012 $		2011 $
Net income		34.4		29.0		63.1		78.7
Net revenues		154.8		152.8		436.7		435.2
Capital Expenditures		67.3		101.6		182.6		306.8

• Net income for the nine months ended September 30, 2012 was $63.1 million compared to a net income of $78.7 million for the same period in 2011.

• Net revenues were higher at $436.7 million compared to $435.2 million for the same period in 2011.

• In connection with a workforce reduction program, the Corporation recorded restructuring costs of $27.8 million in 2012.

• Capital Expenditures were lower at $182.6 million compared to $306.8 million for the same period in 2011.

"The third quarter results are indicative of our focus on continuing to manage our operations within the IRM framework" 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 IRM framework which includes the filing of an ICM (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 OEB in respect of the 2012 and 2013 rate years.  The proposed IRM framework establishes rates through the use of a formulaic adjustment and the intent of the ICM is to address capital expenditure needs not covered by the formulaic adjustment.  Through the updated IRM/ICM Application, Toronto Hydro is requesting capital funding, over the two year period, in the amount of approximately $850.0 million.

Selected Financial Highlights

Selected Financial Highlights Nine Months ended September 30 (in millions of Canadian dollars, unaudited)
		2012 $		2011 $		Change $		Change %
Net income		63.1		78.7		(15.6)		(19.8)
Net revenues		436.7		435.2		1.5		0.0
Operating expenses		180.1		195.4		(15.3)		(7.8)
Depreciation and amortization		105.7		107.1		(1.4)		(1.3)
Net financing charges		(55.3)		(55.8)		0.5		(0.9)
Gain on disposals of property, plant and equipment ("PP&E")		-		5.0		(5.0)		-
Restructuring costs		(27.8)		-		(27.8)		-
Income tax expense (recovery)		4.7		3.3		1.4		43.5
Capital expenditures		182.6		306.8		(124.2)		(40.5)

Net income for the nine months ended September 30, 2012 was $63.1 million compared to net income of $78.7 million for the same period in 2011.  The decrease in net income was primarily due to restructuring costs recorded in 2012 in connection with a workforce reduction program ($27.8 million), and lower gain on disposals of PP&E ($5.0 million).  These unfavourable variances were partially offset by lower operating expenditures ($15.3 million) related mainly to a favourable Payment in Lieu of Property tax reassessment from the Ministry of Finance and other cost reduction initiatives.

The decrease in capital expenditures for the nine months ended September 30, 2012 amounted to $124.2 million.  This decrease was primarily related to a reduction in capital spending reflecting the uncertainty surrounding the regulated capital work program pending a final decision from the Ontario Energy Board regarding the ICM application filed by LDC for 2012.

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 716,000 customers located in the City of Toronto.

 

SOURCE: Toronto Hydro Corporation

Blair Peberdy,
Vice-President, Marketing, Communications and Public Affairs:
416-542-2515; [email protected] 

JS Couillard,
Chief Financial Officer:
416-542-3166; [email protected]