Hotel Acquisition: In October 2012 Fortis Properties acquired the 126-room StationPark All Suite Hotel ("StationPark Hotel") in London, Ontario for approximately $13 million, inclusive of debt assumed of approximately $6 million.
Pending Acquisition of the Electrical Utility Assets from the City of Kelowna: FortisBC Electric has offered to purchase the City of Kelowna's electrical utility assets, which currently serve some 15,000 customers, for approximately $55 million. FortisBC Electric provides the City of Kelowna with electricity under a wholesale tariff and has operated and maintained the City of Kelowna's electrical utility assets under contract since 2000. Closing of the transaction, which is subject to satisfaction of certain conditions and receipt of applicable approvals, including regulatory approval, is expected by the end of the first quarter of 2013. An application was filed with the regulator in November 2012 requesting approval of the transaction.
Transition to US GAAP: Effective January 1, 2012, Fortis retroactively adopted US GAAP with the restatement of comparative reporting periods.
FINANCIAL HIGHLIGHTS
Fortis has adopted a strategy of profitable growth with earnings per common share as the primary measure of performance. The Corporation's business is segmented by franchise area and, depending on regulatory requirements, by the nature of the assets. Key financial highlights for the fourth quarters and years ended December 31, 2012 and December 31, 2011 are provided in the following table.
----------------------------------------------------------------------------Consolidated Financial Highlights (Unaudited)Periods Ended December 31 Quarter Annual($ millions, except for common share data) 2012 2011 Variance 2012 2011 Variance--------------------------------------------------------------------------------------------------------------------------------------------------------Revenue 999 1,034 (35) 3,654 3,738 (84)Energy Supply Costs 430 490 (60) 1,522 1,697 (175)Operating Expenses 247 233 14 868 850 18Depreciation and Amortization 119 107 12 470 416 54Other Income, Net 6 6 - 4 38 (34)Finance Charges 90 88 2 366 363 3Income Taxes 17 26 (9) 61 84 (23)----------------------------------------------------------------------------Net Earnings 102 96 6 371 366 5--------------------------------------------------------------------------------------------------------------------------------------------------------Net Earnings Attributable to: Non-Controlling Interests 2 2 - 9 9 - Preference Equity Shareholders 13 12 1 47 46 1 Common Equity Shareholders 87 82 5 315 311 4----------------------------------------------------------------------------Net Earnings 102 96 6 371 366 5--------------------------------------------------------------------------------------------------------------------------------------------------------Basic Earnings per Common Share ($) 0.46 0.44 0.02 1.66 1.71 (0.05)Diluted Earnings per Common Share ($) 0.45 0.43 0.02 1.65 1.70 (0.05)Weighted Average Number of Common Shares Outstanding (# millions) 191.0 188.1 2.9 190.0 181.6 8.4----------------------------------------------------------------------------Cash Flow from Operating Activities 172 230 (58) 976 915 61-------------------------------------------------------------------------------------------------------------------------------------------------------- Factors Contributing to Quarterly and Annual Revenue Variances
