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Factor Contributing to Finance Charges Variance
Favourable
-- Higher capitalized interest associated with the financing of the construction of the Corporation's 51% controlling ownership interest in the Waneta Expansion hydroelectric generating facility ("Waneta Expansion")Factors Contributing to Income Taxes Variance
Unfavourable
-- Higher earnings before income taxes-- Differences in the deductions for income tax purposes compared to accounting purposes quarter over quarter
Factor Contributing to Extraordinary Gain, Net of Tax Variance
Favourable
-- An approximate $25 million ($22 million after-tax) extraordinary gain recognized in the first quarter of 2013 on the settlement of expropriation matters associated with Exploits Partnership
Factors Contributing to Earnings Variance
Favourable
-- An approximate $22 million after-tax extraordinary gain recognized in the first quarter of 2013 on the settlement of expropriation matters associated with Exploits Partnership-- Increased earnings at FortisAlberta, due to lower depreciation of $3 million and net transmission revenue of approximately $2 million recognized in the first quarter of 2013 associated with the finalization of 2012 net transmission volume variances-- Increased earnings at the FortisBC Energy companies, mainly due to rate base growth and increased transportation volumes to industrial customers, partially offset by lower-than-expected customer additions and higher effective income taxes-- Lower corporate expenses due to: (i) a foreign exchange gain of approximately $2 million recognized in the first quarter of 2013, compared to a foreign exchange loss of $1.5 million recognized in the first quarter of 2012, associated with the translation of the US dollar- denominated long-term other asset representing the book value of the Corporation's expropriated investment in Belize Electricity; (ii) approximately $0.5 million of costs incurred during the first quarter of 2013, compared to $4 million of costs incurred during the first quarter of 2012, related to the pending acquisition of CH Energy Group; and (iii) lower finance charges, primarily due to higher capitalized interest associated with financing of the construction of the Corporation's 51% controlling ownership interest in the Waneta Expansion. The above items were partially offset by higher preference share dividends and a lower income tax recovery.-- Increased earnings at FortisBC Electric, due to rate base growth, timing of operating expenses, lower-than-expected finance charges and depreciation, and higher capitalized allowance for funds used during construction ("AFUDC"), partially offset by higher effective income taxes
Unfavourable
-- Decreased non-regulated hydroelectric production in Belize, due to lower rainfall-- Decreased earnings at Maritime Electric, due to higher energy supply costs, partially offset by higher electricity sales-- Decreased earnings at Fortis Properties, mainly due to lower occupancy levels at the Hospitality Division's operations in central Canada
SEGMENTED RESULTS OF OPERATIONS
----------------------------------------------------------------------------Segmented Net Earnings Attributable to Common Equity Shareholders(Unaudited) Quarter Ended March 31($ millions) 2013 2012 Variance--------------------------------------------------------------------------------------------------------------------------------------------------------Regulated Gas Utilities - Canadian FortisBC Energy Companies 85 82 3----------------------------------------------------------------------------Regulated Electric Utilities - Canadian FortisAlberta 26 21 5 FortisBC Electric 18 16 2 Newfoundland Power 7 7 - Other Canadian Electric Utilities 6 7 (1)---------------------------------------------------------------------------- 57 51 6----------------------------------------------------------------------------Regulated Electric Utilities - Caribbean 3 3 -Non-Regulated - Fortis Generation 24 5 19Non-Regulated - Fortis Properties - 1 (1)Corporate and Other (18) (21) 3----------------------------------------------------------------------------Net Earnings Attributable to Common Equity Shareholders 151 121 30--------------------------------------------------------------------------------------------------------------------------------------------------------
