Toronto Hydro Corporation Releases its First Quarter Financial Results

TORONTO, May 17, 2012 /CNW/ - Toronto Hydro Corporation (the "Corporation") announced today that it has filed with Canadian securities regulators its Interim Consolidated Financial Statements and related management's discussion and analysis for the three months ended March 31, 2012, prepared in accordance with United States Generally Accepted Accounting Principles ("US GAAP"), including the application of rate-regulated accounting policies and are presented in Canadian dollars.  Copies may be obtained from the Corporation or accessed through SEDAR's website www.sedar.com.

 
Three months ended March 31
(in millions of Canadian dollars, unaudited)
    2012
$
  2011
$
         
Net (loss) income     (12.8)   25.5
Net revenues     137.2   143.4
Capital expenditures     65.4   100.3
         
  • Net loss for the three months ended March 31, 2012 was $12.8 million compared to a net income of $25.5 million for the same period in 2011.

  • Net revenues were lower at $137.2 million compared to $143.4 million for the same period in 2011.

  • In connection with its operating cost reduction initiatives, the Corporation recorded restructuring costs of $27.8 million in the first quarter of 2012.

  • Capital Expenditures were lower at $65.4 million compared to $100.3 million for the same period in 2011.

"In this quarter, the Corporation managed its operations within the context of the Incentive Regulation Mechanism ("IRM") regulatory framework. To this end, we have implemented operating costs reduction initiatives which include a workforce restructuring program. We have also filed an IRM electricity distribution rates application to the Ontario Energy Board that includes an Incremental Capital Module ("ICM"). The details of our application are available on the Ontario Energy Board's website, www.ontarioenergyboard.ca ," said Anthony Haines, President and Chief Executive Officer.

Corporate Developments

On May 10, 2012, Toronto Hydro-Electric System Limited ("LDC") filed its application to set electricity distribution rates for the 2012, 2013 and 2014 rate years under the IRM framework which includes the filing of an ICM.  The proposed IRM framework establishes rates through the use of a formulaic adjustment and the intent of the ICM is to address capital expenditure needs not covered by the formulaic adjustment.  Through the IRM/ICM module, Toronto Hydro is requesting capital funding, over the three year period, in the amount of approximately $1.4 billion.

Selected Financial Highlights

 
Selected Financial Highlights
Three months ended March 31
(in millions of Canadian dollars, unaudited)
    2012
$
  2011
$
  Change
$
  Change
%
                 
Net (loss) income     (12.8)   25.5   (38.3)   (150.4)
Net revenues     137.2   143.4   (6.2)   (4.3)
Operating expenses     68.2   66.2   2.0   3.0
Depreciation and amortization     35.4   33.5   1.9   5.8
Net financing charges     18.7   18.9   (0.2)   (1.3)
Gain on disposals of property, plant and equipment ("PP&E")    -   3.0   (3.0)   (100.0)
Restructuring costs    27.8   -   27.8   100.0
Income tax expense    -   2.3   (2.3)   (100.0)
Capital expenditures     65.4   100.3   (34.9)   (35.8)
                 

Net loss for the three months ended March 31, 2012 was $12.8 million compared to net income of $25.5 million for the same period in 2011.  The decrease in net income was primarily due to:

  • restructuring costs recorded in 2012 in connection with an operating cost reduction initiatives ($27.8 million);

  • lower net revenues ($6.2 million);

  • lower gain on disposals of surplus PP&E ($3.0 million);

  • higher operating expenses ($2.0 million); and

  • higher depreciation expense ($1.9 million).

The decrease in capital expenditures for the three months ended March 31, 2012 amounted to $34.9 million.  This decrease was primarily related to the uncertainty surrounding the regulated capital work program pending a final decision from the Ontario Energy Board regarding the ICM application filed by LDC.

About Toronto Hydro Corporation

The Corporation is a holding company which wholly-owns two subsidiaries:

  • LDC — which distributes electricity and engages in Conservation and Demand Management activities; and

  • Toronto Hydro Energy Services Inc. — which provides street lighting services.

The principal business of the Corporation and its subsidiaries is the distribution of electricity by LDC.  LDC owns and operates an electricity distribution system, which delivers electricity to approximately 711,000 customers located in the City of Toronto.

SOURCE Toronto Hydro Corporation



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