Earnings for the fourth quarter were $87 million, or $0.46 per common share, up $5 million, or $0.02 per common share, from the same quarter in 2011. Improved performance at the Canadian Regulated Electric Utilities, led by FortisAlberta, was partially offset by lower non-regulated hydroelectric generation mainly in Belize, lower earnings contribution from the Canadian Regulated Gas Utilities and higher corporate expenses. The decrease in earnings at the Canadian Regulated Gas Utilities was driven by the timing of operating expenses during 2012 and lower capitalized AFUDC.
Fortis is one of the highest-rated utility holding companies in North America with its corporate debt rated A- by Standard & Poor's and A(low) by DBRS, unchanged from 2011. The credit ratings were affirmed in 2012, reflecting several factors, notably the diversity of the Corporation's utility asset mix, as well as its financing plans for the pending acquisition of CH Energy Group and the expected completion of the Waneta Expansion on time and on budget.
Fortis raised gross proceeds of approximately $601 million, upon issuance of 18.5 million Subscription Receipts at $32.50 each in June 2012, to finance a portion of the purchase price of CH Energy Group. The proceeds are being held by an escrow agent, pending satisfaction of closing conditions, including receipt of regulatory approvals, contained in the agreement to acquire CH Energy Group. Each Subscription Receipt will entitle the holder thereof to receive, on satisfaction of the closing conditions, one common share of Fortis. The Corporation issued $200 million 4.75% preference shares in November 2012, the net proceeds of which were used to repay borrowings under its committed corporate credit facility, which borrowings were primarily incurred to support the construction of the Waneta Expansion and for other general corporate purposes. FortisAlberta raised $125 million 40-year 3.98% unsecured debentures, largely in support of its capital expenditure program, in October 2012.
Fortis retroactively adopted accounting principles generally accepted in the United States ("US GAAP"), effective January 1, 2012, with the restatement of prior periods. The adoption of US GAAP did not have a material impact on the Corporation's earnings or earnings per common share for 2012 and 2011.
"We look forward to welcoming the employees of CH Energy Group to the Fortis Group. Their proven track record for providing customers with quality service will further enhance the positioning of Fortis as a leader in the North American utility industry," says Marshall.
Central Hudson was recently recognized by the Edison Electric Institute ("EEI"), an association of electric companies representing 70% of the U.S. electric power industry, for its restoration work in response to Superstorm Sandy. Several FortisOntario crews worked with Central Hudson employees to reconnect some 104,000 customers who had been impacted by the storm. Two previous EEI Emergency Recovery Awards recognized Central Hudson's recovery efforts following severe snowstorms in October 2011 and February 2010, the latter being the most severe storm in the utility's history.
"Execution of our $1.3 billion capital program for 2013 is progressing well," says Marshall. "Capital investment will support continuing growth in earnings and dividends and will be mostly funded with cash from operations and long-term debt at the regulated utility level," he adds.
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