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CONSOLIDATED FINANCIAL POSITION
The following table outlines the significant changes in the consolidated balance sheets between March 31, 2013 and December 31, 2012.
Significant Changes in the Consolidated Balance Sheets (Unaudited) between March 31, 2013 and December 31, 2012----------------------------------------------------------------------------Balance Sheet Account Increase/ (Decrease) Explanation ($ millions)----------------------------------------------------------------------------Accounts receivable 88 The increase was primarily due to: (i) the operation of equal payment plans for customers, mainly at the FortisBC Energy companies and Newfoundland Power; (ii) the receivable recognized in March 2013 upon the settlement of expropriation matters associated with Exploits Partnership; and (iii) the impact of a seasonal increase in electricity sales. The increase was partially offset by lower unbilled revenue accruals at the FortisBC Energy companies, due to lower average consumption as a result of warmer temperatures.----------------------------------------------------------------------------Inventories (55) The decrease was driven by the normal seasonal reduction of gas in storage at the FortisBC Energy companies, due to higher consumption during the winter months, partially offset by the impact of higher commodity cost of natural gas.----------------------------------------------------------------------------Regulatory assets (27) The decrease was mainly due to: (i) -current and long- proceeds of approximately $47 million term received from the Government of PEI upon its assumption of Maritime Electric's regulatory asset associated with certain deferred incremental replacement energy costs during the refurbishment of Point Lepreau; and (ii) the $23 million change in the deferral of the fair market value of the natural gas derivatives at the FortisBC Energy companies. The above decreases were partially offset by higher regulatory deferred income taxes and an increase in the deferral of various other costs, as permitted by the regulators, mainly at the FortisBC utilities and FortisAlberta.----------------------------------------------------------------------------Utility capital 156 The increase primarily related to: (i) assets $230 million invested in electricity and gas systems; (ii) the acquisition of the City of Kelowna's electrical utility assets by FortisBC Electric; and (iii) the impact of foreign exchange on the translation of US dollar-denominated utility capital assets. The above increases were partially offset by depreciation and customer contributions for the three months ended March 31, 2013.----------------------------------------------------------------------------Short-term borrowings (47) The decrease was primarily due to a reduction in borrowings at the FortisBC Energy companies due to the seasonality of operations, and the repayment of borrowings at Maritime Electric with a portion of proceeds received from the Government of PEI in March 2013, as discussed above.----------------------------------------------------------------------------Accounts payable and (80) The decrease was mainly due to: (i) other current the timing of Alberta Electric System liabilities Operator ("AESO") payments for transmission costs and lower accounts payable associated with transmission- connected projects at FortisAlberta; and (ii) the $23 million change in the fair market value of the natural gas derivatives at the FortisBC Energy companies.----------------------------------------------------------------------------Regulatory 53 The increase was mainly due to a liabilities - higher AESO charges deferral at current and long- FortisAlberta and an increase in the term rate stabilization accounts at the FortisBC Energy companies.----------------------------------------------------------------------------Long-term debt 114 The increase was primarily due to (including current higher committed credit facility portion) borrowings at FortisAlberta, the Corporation, FortisBC Electric and Newfoundland Power. The committed credit facility borrowings were largely in support of energy infrastructure investment, including the construction of the Waneta Expansion, and the acquisition of the City of Kelowna's electrical utility assets by FortisBC Electric. The increase was partially offset by regularly scheduled debt repayments at the FortisBC Energy companies and Fortis Properties.----------------------------------------------------------------------------Shareholders' equity 122 The increase was primarily due to net (before non- earnings attributable to common equity controlling shareholders for the three months interests) ended March 31, 2013, less dividends declared on common shares, and the issuance of common shares under the Corporation's dividend reinvestment, stock option and employee share purchase plans.----------------------------------------------------------------------------
