Cash flow from operating activities was $280 million for the quarter compared to $328 million for the first quarter of 2012. The decrease was largely due to changes in working capital quarter over quarter.
Fortis has consolidated credit facilities of $2.4 billion, of which $2.0 billion was unused as at March 31, 2013, including $910 million available for borrowing under its corporate credit facility.
The Corporation's debt credit ratings of A- and A(low) were affirmed by Standard & Poor's and DBRS, respectively, in February 2013.
Fortis announced in February 2012 that it had entered into an agreement to acquire CH Energy Group, for an aggregate purchase price of approximately US$1.5 billion, including the assumption of approximately US$500 million of debt on closing. Central Hudson, the main business of CH Energy Group, serves 375,000 electric and gas customers in New York State's Mid-Hudson River Valley. Approval of the acquisition by the New York State Public Service Commission ("PSC") is the last significant regulatory matter required to close the transaction. A Settlement Agreement among Fortis, CH Energy Group, PSC staff, registered interveners and other parties was filed with the PSC in January 2013. A Recommended Decision issued on May 3, 2013 by administrative law judges in connection with the acquisition asserts that without modification of the terms of the Settlement Agreement, the benefits of the acquisition are outweighed by perceived detriments remaining after mitigation. The Recommended Decision is an advisory opinion that will be considered by the PSC in determining whether to approve the acquisition. While no assurance regarding a closing of the transaction can be given until an order is issued by the PSC, a final decision by the PSC and subsequent closing of the transaction is expected in June 2013. Based on the terms of the current Settlement Agreement, the acquisition is expected to be accretive to earnings per common share of Fortis within the first full year of ownership, excluding acquisition-related expenses.
"We look forward to welcoming the employees of CH Energy Group to the Fortis Group. The addition of this well-run U.S. utility and its 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," concludes Marshall.
Interim Management Discussion and Analysis For the three months ended March 31, 2013 Dated May 7, 2013
The following Fortis Inc. ("Fortis" or the "Corporation") Management Discussion and Analysis ("MD&A") has been prepared in accordance with National Instrument 51-102 - Continuous Disclosure Obligations. The MD&A should be read in conjunction with the interim unaudited consolidated financial statements and notes thereto for the three months ended March 31, 2013 and the MD&A and audited consolidated financial statements for the year ended December 31, 2012 included in the Corporation's 2012 Annual Report. Financial information contained in the MD&A has been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and is presented in Canadian dollars unless otherwise specified.
Fortis includes forward-looking information in the Management Discussion and Analysis ("MD&A") within the meaning of applicable securities laws in Canada ("forward-looking information"). The purpose of the forward-looking information is to provide management's expectations regarding the Corporation's future growth, results of operations, performance, business prospects and opportunities, and it may not be appropriate for other purposes. All forward-looking information is given pursuant to the safe harbour provisions of applicable Canadian securities legislation.