HispanicBusiness

Unfavourable

--  Lower commodity cost of natural gas charged to customers--  The expropriation of Belize Electricity and the resulting discontinuance    of the consolidation method of accounting for the utility, effective    June 20, 2011, which reduced revenue year over year--  Lower average gas consumption by residential and commercial customers,    driven by overall warmer temperatures--  Decreased non-regulated hydroelectric production, mainly due to lower    rainfall and a generating facility in Upstate New York being out of    service in 2012--  Decreased electricity sales at FortisBC Electric for the quarter

--  An increase in gas delivery rates and the base component of electricity    rates at most of the regulated utilities, consistent with rate    decisions, reflecting ongoing investment in energy infrastructure and    forecasted certain higher expenses recoverable from customers--  Net transmission revenue of approximately $2 million recognized for the    quarter and $8.5 million recognized for the year at FortisAlberta, as a    result of the 2012 distribution revenue requirements decision received    in April 2012--  The flow through in customer electricity rates of higher energy supply    costs, where applicable, at most of the regulated electric utilities,    which increased revenue--  Increased electricity sales at Newfoundland Power and Maritime Electric--  A $4 million increase in franchise fee revenue at FortisAlberta for the    year--  Growth in the number of customers, driven by FortisAlberta--  Higher pole-attachment revenue at FortisBC Electric, and differences in    the amount of PBR incentives refunded to FortisBC Electric's customers    period over period--  Higher Hospitality revenue at Fortis Properties for the year, driven by    revenue from the Hilton Suites Winnipeg Airport hotel ("Hilton Suites    Hotel"), which was acquired in October 2011, and higher Hospitality    revenue for the quarter, due to revenue from the StationPark Hotel,    which was acquired in October 2012                Factors Contributing to Quarterly and Annual                        Energy Supply Costs Variances

--  Lower commodity cost of natural gas--  The expropriation of Belize Electricity and the resulting discontinuance    of the consolidation method of accounting for the utility, effective    June 20, 2011, which reduced energy supply costs year over year--  Lower average gas consumption by residential and commercial customers,    which reduced natural gas purchases--  Decreased electricity sales at FortisBC Electric for the quarter, which    reduced power purchases

--  Increased fuel prices at Caribbean Utilities and increased purchased    power costs at FortisBC Electric, Newfoundland Power and FortisOntario--  An increase in the base amount of energy supply costs expensed at    Maritime Electric in accordance with the operation of the Energy Cost    Adjustment Mechanism--  Increased electricity sales at Newfoundland Power and Maritime Electric,    which increased power purchases                Factors Contributing to Quarterly and Annual                        Operating Expenses Variances

--  General inflationary and employee-related cost increases at the    Corporation's regulated utilities, and increased franchise fee expenses    at FortisAlberta for the year--  Increased operating expenses at the FortisBC Energy companies for the    quarter, mainly due to the timing of certain expenses during 2012,    including consulting and contracting expenses--  Higher operating expenses at Fortis Properties for the year, mainly    associated with the Hilton Suites Hotel, which was acquired in October    2011, and higher operating expenses for the quarter associated with the    StationPark Hotel, which was acquired in October 2012--  A $3 million non-recurring provision recognized in the fourth quarter of    2012 associated with the Corporation's investment in CustomerWorks    Limited Partnership ("CWLP")