HispanicBusiness

                Factors Contributing to Quarterly and Annual                          Finance Charges Variances

--  Higher long-term debt levels in support of the utilities' capital    expenditure programs--  Lower capitalized debt component of AFUDC at the regulated utilities,    mainly at the FortisBC Energy companies

--  Higher capitalized interest associated with the financing of the    construction of the Corporation's 51% controlling ownership interest in    the Waneta Expansion--  The expropriation of Belize Electricity and the resulting discontinuance    of the consolidation method of accounting for the utility, effective    June 20, 2011, which decreased finance charges year over year--  Lower short-term borrowings at the regulated utilities year over year                Factors Contributing to Quarterly and Annual                           Income Taxes Variances

--  Lower statutory income tax rates and lower earnings before income taxes--  Differences in deductions for income tax purposes compared to accounting    purposes period over period             Factors Contributing to Quarterly Earnings Variance

--  Increased earnings at FortisAlberta, mainly due to rate base growth, net    transmission revenue of $2 million recognized in the fourth quarter of    2012, and the rate revenue reduction accrual during the fourth quarter    of 2011, reflecting the cumulative impact from January 1, 2011 of the    decrease in the allowed ROE for 2011--  Increased earnings at Other Canadian Regulated Electric Utilities,    mainly due to lower effective income taxes at Maritime Electric and the    accrual of cumulative return earned on FortisOntario's capital    investment in smart meters--  Increased earnings at FortisBC Electric, due to rate base growth, lower-    than-expected finance charges in 2012, higher pole-attachment revenue    and the expiry of the PBR mechanism on December 31, 2011

--  Decreased non-regulated hydroelectric production, mainly in Belize due    to lower rainfall, partially offset by an approximate $0.5 million    after-tax gain recognized in the fourth quarter of 2012 on the    involuntary disposition of generation assets in Upstate New York--  Increased corporate expenses, largely due to the $3 million non-    recurring provision recognized in the fourth quarter of 2012 and lower    effective income tax recoveries, partially offset by a foreign exchange    gain of approximately $1 million recognized in the fourth quarter of    2012, compared to an after-tax net foreign exchange loss of    approximately $1 million recognized in the fourth quarter of 2011, and    lower finance charges--  Decreased earnings at the FortisBC Energy companies, due to the timing    of certain operating and maintenance expenses during 2012, lower    capitalized AFUDC and lower-than-expected customer additions in 2012,    partially offset by rate base growth, higher gas transportation volumes    to industrial customers and lower effective income taxes              Factors Contributing to Annual Earnings Variance

--  Increased earnings at FortisAlberta, due to rate base growth, net    transmission revenue of $8.5 million recognized in 2012, and lower-than-    expected depreciation expense and finance charges in 2012, partially    offset by an approximate $1 million gain on the sale of property during    the first quarter of 2011--  Increased earnings at Newfoundland Power, mainly due to lower effective    income taxes, a higher allowed ROE and electricity sales growth,    partially offset by the impact of the support structure arrangements    with Bell Aliant Regional Communications Inc. ("Bell Aliant") during    2011, higher purchased power costs and higher depreciation expense--  Increased earnings at Other Canadian Regulated Electric Utilities,    largely for the same reasons discussed above for the quarter--  Increased earnings at FortisBC Electric, due to rate base growth, higher    pole-attachment revenue and lower-than-expected finance charges in 2012,    partially offset by the expiry of the PBR mechanism on December 31, 2011--  Increased earnings at the FortisBC Energy companies, mainly due to rate    base growth, higher gas transportation volumes to industrial customers,    lower-than-expected operating and maintenance expenses during 2012 and    lower effective income taxes, partially offset by lower-than-expected    customer additions in 2012 and lower capitalized AFUDC