Fortis continues to control and consolidate the financial statements of BECOL, the Corporation's indirect wholly owned non-regulated hydroelectric generating subsidiary in Belize. As at April 30, 2013, Belize Electricity owed BECOL US$4 million for overdue energy purchases, representing approximately 20% of BECOL's annual sales to Belize Electricity. In accordance with long-standing agreements, the GOB guarantees the payment of Belize Electricity's obligations to BECOL.
Capital Resources and Liquidity Risk - Credit Ratings: The Corporation's credit ratings were affirmed in February 2013 and there were no changes in the credit ratings of the Corporation's utilities year-to-date 2013, except Maritime Electric's debt credit rating by S&P was updated from 'A- stable' to 'A stable'.
Defined Benefit Pension Plan Assets: As at March 31, 2013, the fair value of the Corporation's consolidated defined benefit pension plan assets was $900 million, up $32 million or 3.7%, from $868 million as at December 31, 2012.
Labour Relations: The collective agreement between employees in specified occupations in the areas of administration and operations support at the FortisBC Energy companies and the Canadian Office and Professional Employees Union, Local 378, expired on March 31, 2012. A new three-year collective agreement, expiring on March 31, 2015, was reached in March 2013.
The collective agreement between FortisBC Electric and the International Brotherhood of Electrical Workers ("IBEW"), Local 213, expired on January 31, 2013. IBEW, Local 213, represents employees in specified occupations in the areas of generation and transmission and distribution. The parties are currently engaged in collective bargaining.
CHANGES IN ACCOUNTING POLICIES
The new US GAAP accounting pronouncements that are applicable to, and were adopted by, Fortis, effective January 1, 2013, are described as follows:
Disclosures About Offsetting Assets and Liabilities
The Corporation adopted the amendments to Accounting Standards Codification ("ASC") Topic 210, Balance Sheet - Disclosures About Offsetting Assets and Liabilities as outlined in Accounting Standards Updates ("ASU") No. 2011-11 and 2013-01. The amendments improve the transparency of the effect or potential effect of netting arrangements on a company's financial position by expanding the level of disclosures required by entities for such arrangements. The amended disclosures are intended to assist financial statement users in understanding significant quantitative differences between balance sheets prepared under US GAAP and International Financial Reporting Standards ("IFRS"). ASU No. 2013-01 limits the scope of the new offsetting disclosure requirements previously issued in ASU No. 2011-11 to certain derivative instruments, repurchase and reverse repurchase agreements, and securities borrowing and lending arrangements that are either offset on the balance sheet or subject to an enforceable master netting or similar arrangement. The above-noted amendments were applied retrospectively and did not materially impact the Corporation's interim consolidated financial statements for the three months ended March 31, 2013.
Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income
The Corporation adopted the amendments to ASC Topic 220, Other Comprehensive Income - Reporting of Amounts Out of Accumulated Other Comprehensive Income ("AOCI") as outlined in ASU No. 2013-02. The amendments improve the reporting of reclassifications out of AOCI and require entities to report, in one place, information about reclassifications out of AOCI and to present details of the reclassifications in the disclosure for changes in AOCI balances. The effect of the reclassification of significant items to net income in their entirety during the reporting period must be reported in the respective line items in the statement where net income is presented. The effect of items not reclassified to net income in their entirety during the reporting period are to be presented in the notes to the consolidated financial statements. The amendments were applied by the Corporation prospectively and did not materially impact the Corporation's interim consolidated financial statements for the three months ended March 31, 2013.
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