Toronto Hydro Corporation Releases its Second Quarter Financial Results
TORONTO, Aug. 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 six months ended June 30, 2012, prepared in accordance with United States Generally Accepted Accounting Principles ("US GAAP"), including the application of rate-regulated accounting policies, which Interim Consolidated Financial Statements and Management's Discussion and Analysis are presented in Canadian dollars. Copies may be obtained from the Corporation or accessed through SEDAR's website www.sedar.com.
| Selected Financial Highlights (in millions of Canadian dollars, unaudited) |
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| Three months Ended June 30 |
Six months Ended June 30 |
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| 2012 $ |
2011 $ |
2012 $ |
2011 $ |
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| Net income | 41.5 | 24.3 | 28.7 | 49.7 | |||||||||||
| Net revenues | 144.6 | 139.0 | 281.9 | 282.4 | |||||||||||
| Capital Expenditures | 49.9 | 104.8 | 115.3 | 205.2 | |||||||||||
- Net income for the six months ended June 30, 2012 was $28.7 million compared to a net income of $49.7 million for the same period in 2011.
- Net revenues were lower at $281.9 million compared to $282.4 million for the same period in 2011.
- In connection with a workforce reduction program, the Corporation recorded restructuring costs of $27.8 million in 2012.
- Capital Expenditures were lower at $115.3 million compared to $205.2 million for the same period in 2011.
"Our strong performance in the second quarter is a result of the steps that we have taken to manage our operations within the Incentive Regulation Mechanism ("IRM") regulatory framework. We have filed an IRM application for our distribution rates with an Incremental Capital Module ("ICM") component with the Ontario Energy Board and we are preparing for the hearing to commence," 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 2012, 2013 and 2014 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 ICM, 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 Six months ended June 30 (in millions of Canadian dollars, unaudited) |
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| 2012 $ |
2011 $ |
Change $ |
Change % |
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| Net income | 28.7 | 49.7 | (21.0) | (42.3) | |||||||||
| Net revenues | 281.9 | 282.4 | (0.5) | (0.2) | |||||||||
| Operating expenses | 117.8 | 131.8 | (14.0) | (10.6) | |||||||||
| Depreciation and amortization | 70.6 | 68.9 | 1.7 | 2.5 | |||||||||
| Net financing charges | 36.8 | 37.0 | (0.2) | (0.5) | |||||||||
| Gain on disposals of property, plant and equipment ("PP&E") | - | 4.7 | (4.7) | (100.0) | |||||||||
| Restructuring costs | 27.8 | - | 27.8 | 100.0 | |||||||||
| Income tax expense (recovery) | 0.2 | (0.3) | 0.5 | 166.7 | |||||||||
| Capital expenditures | 115.3 | 205.2 | (89.9) | (43.8) | |||||||||
Net income for the six months ended June 30, 2012 was $28.7 million compared to net income of $49.7 million for the same period in 2011. The decrease in net income was primarily due to restructuring costs recorded in 2012 in connection with a workforce reduction program ($27.8 million), lower gain on disposals of PP&E ($4.7 million), and higher depreciation expense ($1.7 million). These unfavourable variances were partially offset by a favourable Payment in Lieu of Property tax reassessment from the Ministry of Finance and cost reduction initiatives.
The decrease in capital expenditures for the six months ended June 30, 2012 amounted to $89.9 million. This decrease was primarily related to a reduction in capital spending reflecting the uncertainty surrounding the regulated capital work program pending a final decision from the Ontario Energy Board regarding the ICM application filed by LDC for 2012.
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 712,000 customers located in the City of Toronto.
SOURCE: Toronto Hydro Corporation
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