ST. JOHN'S, NEWFOUNDLAND -- (Marketwired) -- 05/07/13 -- Fortis Inc. ("Fortis" or the "Corporation") (TSX: FTS) achieved first quarter net earnings attributable to common equity shareholders of $151 million, or $0.79 per common share, compared to $121 million, or $0.64 per common share, for the first quarter of 2012.
Earnings for the quarter were favourably impacted by an extraordinary gain of approximately $22 million net of tax, or $0.12 per common share, related to the settlement of all matters, including release from all debt obligations, pertaining to the Government of Newfoundland and Labrador's December 2008 expropriation of non-regulated hydroelectric generating assets and water rights in central Newfoundland, then owned by Exploits River Hydro Partnership ("Exploits Partnership") in which Fortis holds an indirect 51% interest.
"In addition to the settlement of expropriation matters relating to Exploits Partnership, performance for the quarter was driven by the regulated utilities in western Canada, led by FortisAlberta," says Stan Marshall, President and Chief Executive Officer, Fortis Inc.
Canadian Regulated Electric Utilities contributed earnings of $57 million, up $6 million from the first quarter of 2012. FortisAlberta's earnings increased $5 million, due to lower depreciation of $3 million and net transmission revenue of approximately $2 million recognized in the first quarter of 2013 associated with the finalization of 2012 transmission variances. The utility's depreciation rates were reduced, effective January 1, 2012, as a result of the decision related to FortisAlberta's 2012 revenue requirements, the impact of which was not recognized until the second quarter of 2012 when the decision was received. FortisBC Electric's earnings were $2 million higher quarter over quarter, due to growth in energy infrastructure investment, timing of operating expenses, lower-than-expected finance charges and depreciation, and higher capitalized allowance for funds used during construction, partially offset by higher effective income taxes.
FortisBC Electric acquired the City of Kelowna's (the "City's") electrical utility assets for approximately $55 million in March 2013, which now allows FortisBC Electric to directly serve some 15,000 customers formerly served by the City. FortisBC Electric had provided the City with electricity under a wholesale tariff and had operated and maintained the City's electrical utility assets under contract since 2000.
Canadian Regulated Gas Utilities contributed earnings of $85 million, up $3 million from the first quarter of 2012. The increase in earnings was mainly due to growth in energy infrastructure investment and increased gas transportation volumes to industrial customers, partially offset by lower-than-expected customer additions and higher effective income taxes.
Fortis paid a dividend of 31 cents per common share on March 1, 2013, up from 30 cents for the fourth quarter of 2012. The 3.3% increase in the quarterly dividend translates into an annualized dividend of $1.24 and extends the Corporation's record of annual common share dividend increases to 40 consecutive years, the longest record of any public corporation in Canada.
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