The Company continues to focus on facilitating
economic growth in Ontario and
announces a landmark agreement with First Nations
TORONTO,
May 5,
2022 /CNW/ - Hydro One Limited (Hydro One or the
Company) today announced its financial and operating results for
the first quarter ended March 31,
2022.
First Quarter
Highlights
- First quarter earnings per share (EPS) of $0.52 was 15.6% higher compared to EPS of
$0.45 for the same period in
2021.
- EPS for the quarter was higher year over year primarily due to
approved rates for the transmission and distribution segments as
well as higher peak demand and higher energy consumption, partially
offset by higher depreciation, amortization and asset removal costs
and higher operating, maintenance and administrative expenses.
- Hydro One commits to meaningful Reconciliation with an
industry-leading agreement to provide First Nations with the
opportunity to invest in an equity stake in the Waasigan
Transmission Line project.
- Hydro One announced grants from its Energizing Life Community
Fund for Indigenous communities, charitable organizations, and
municipalities.
- Hydro One and Jack.org announced a free mental health
discussion for educators and adults to help identify the signs of
struggle in young people and access support.
- The Company filed an evidence update on the Joint Rate
Application with the Ontario Energy Board (OEB).
- Subsequent to the quarter, the Minister of Energy directed the
OEB to amend Hydro One Networks Inc.'s transmission licence to
develop four additional transmission lines to meet the growing
electricity demand in southwestern Ontario.
- The Company's capital investments and in-service additions for
the quarter were $449 million and
$229 million, respectively, compared
to $527 million and $157 million in 2021.
- Quarterly dividend declared at $0.2796 per share, payable June 30, 2022.
"We are extremely proud to announce a momentous agreement with
First Nations communities to help us build the electricity grid of
the future in northwestern Ontario," said Mark
Poweska, President and CEO of Hydro One. "Building on our
strong track record, we are also excited to receive the opportunity
to develop four additional transmission lines to enable economic
prosperity in Ontario."
Selected
Consolidated Financial and Operating
Highlights
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Three months ended March 31,
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(millions of Canadian dollars, except as otherwise
noted)
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2022
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2021
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|
|
|
|
|
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Revenues
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|
|
|
|
2,047
|
1,811
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Purchased
power
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|
|
|
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1,014
|
894
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Revenues, net of
purchased power1
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|
|
|
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1,033
|
917
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Net income attributable
to common shareholders
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|
|
|
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310
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268
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|
|
|
|
|
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Basic EPS
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|
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$0.52
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$0.45
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Diluted EPS
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$0.52
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$0.45
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|
|
|
|
|
|
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Net cash from operating
activities
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|
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443
|
517
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Capital
investments
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449
|
527
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Assets placed
in-service
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229
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157
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Transmission: Average
monthly Ontario 60-minute peak demand (MW)
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20,677
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19,937
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Distribution: Electricity
distributed to Hydro One customers (GWh)
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8,895
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8,156
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1
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"Revenues, net of
purchased power" is a non-GAAP financial measure. Non-GAAP
financial measures do not have a standardized meaning under United
States (US)
generally accepted accounting principles (US GAAP) used to prepare
the Company's financial statements and might not be comparable to
similar measures
presented by other entities. See the section "Non-GAAP Financial
Measures".
|
Key Financial
Highlights
2022 First Quarter Highlights
The Company reported net income attributable to common
shareholders of $310 million during
the quarter, compared to $268 million
in the same period of 2021. This resulted in EPS of $0.52, compared to EPS of $0.45 in the prior year.
Revenues, net of purchased power[1] for the first quarter of
$1,033 million were $116 million higher than revenues, net of
purchased power1 for the first quarter of 2021. The
increase is mainly due to the impacts of the OEB decision in
April 2021 regarding the deferred tax
asset (DTA) amounts previously allocated to ratepayers (DTA
Implementation Decision), as well as revenues resulting from
OEB-approved 2022 rates, and higher peak demand and energy
consumption. Pursuant to the DTA Implementation Decision, Hydro One
is currently recovering deferred tax amounts allocated to rate
payers and included in customer rates for the 2017 to 2021 period
over a two-year period which began on July
1, 2021. Hydro One has also adjusted the transmission
revenue requirement and the base distribution rates effective
January 1, 2022 to remove any further
allocation of deferred tax amounts. The impacts of the DTA
Implementation Decision are offset by a higher tax expense, and
therefore net income neutral in the period.
Operation, maintenance and administration costs in the first
quarter of 2022 were higher than last year, primarily due to higher
allowance for doubtful accounts.
Depreciation, amortization and asset removal costs for the first
quarter were higher than last year primarily due to growth in
capital assets as the Company continues to place new assets
in-service, consistent with its ongoing capital investment
program.
Income tax expense for the first quarter of 2022 was higher than
the prior year primarily due to income tax expense pursuant to the
DTA Implementation Decision and higher earnings, partially offset
by higher deductible timing differences compared to the first
quarter of the prior year.
Hydro One continues to invest in the reliability and performance
of Ontario's electricity
transmission and distribution systems by addressing aging power
system infrastructure, facilitating connectivity to new load
customers and generation sources, and improving service to
customers. The Company made capital investments of $449 million during the first quarter of 2022,
and placed $229 million of new assets
in-service.
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1
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Revenues, net of
purchased power, is a non-GAAP financial measure. Non-GAAP
financial measures do not have a standardized meaning under US GAAP
used to prepare the Company's financial statements and might not be
comparable to similar measures presented by other entities. See the
section "Non-GAAP Financial Measures".
|
Selected Operating Highlights
Through the industry-leading agreement with Hydro One, First
Nations communities will have the option to invest in a 50 per cent
equity stake in the Waasigan Transmission Line project that will
support economic growth in northwestern Ontario.
The Minister of Energy directed the OEB to amend Hydro One
Networks Inc.'s transmission licence to develop four additional
transmission lines to meet the growing electricity demand in
southwestern Ontario. This is in
addition to Hydro One's previous transmission designation for the
Chatham to Lakeshore line in 2020.
These five transmission lines are expected to meet the needs of new
and growing industries and help attract future jobs to the region.
As the Windsor-Essex region continues to grow, a consolidated
approach to developing the new transmission lines provides more
transparency during engagement with Indigenous communities,
residents, municipalities, and stakeholders and are expected to
expedite development in the region.
For the second year, Hydro One announced grants from its
Energizing Life Community Fund for 24 Indigenous communities,
charitable organizations, and municipalities, that each received
$25,000 to support initiatives that
promote physical, psychological and emotional safety across
Ontario.
Common Share Dividends
Following the conclusion of the first quarter, on May 4,
2022, the Company declared a quarterly cash dividend to common
shareholders of $0.2796 per share to
be paid on June 30, 2022 to shareholders of record on
June 8, 2022.
Supplemental Segment
Information
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Three months ended March 31,
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(millions of Canadian dollars)
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2022
|
2021
|
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|
|
|
|
|
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Revenues
|
|
|
|
|
|
|
Transmission
|
|
|
|
|
519
|
448
|
Distribution
|
|
|
|
|
1,517
|
1,354
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Other
|
|
|
|
|
11
|
9
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Total revenues
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|
|
|
|
2,047
|
1,811
|
|
|
|
|
|
|
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Revenues, net of purchased
power1
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|
|
|
|
|
|
Transmission
|
|
|
|
|
519
|
448
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Distribution
|
|
|
|
|
503
|
460
|
Other
|
|
|
|
|
11
|
9
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Total revenues, net of purchased power1
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|
|
|
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1,033
|
917
|
|
|
|
|
|
|
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Operation, maintenance and administration
costs
|
|
|
|
|
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Transmission
|
|
|
|
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99
|
98
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Distribution
|
|
|
|
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171
|
167
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Other
|
|
|
|
|
18
|
17
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Total operation, maintenance and administration costs
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|
|
|
288
|
282
|
|
|
|
|
|
|
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Income (loss) before financing charges and
taxes
|
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|
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Transmission
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295
|
229
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Distribution
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222
|
193
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Other
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(9)
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(10)
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Total income before financing charges and taxes
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508
|
412
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Capital investments
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|
|
|
|
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Transmission
|
|
|
|
|
277
|
348
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Distribution
|
|
|
|
|
167
|
176
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Other
|
|
|
|
|
5
|
3
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Total capital investments
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|
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449
|
527
|
|
|
|
|
|
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Assets placed in-service
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|
|
|
|
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Transmission
|
|
|
|
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120
|
48
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Distribution
|
|
|
|
|
105
|
106
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Other
|
|
|
|
|
4
|
3
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Total assets placed in-service
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|
|
|
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229
|
157
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1
|
Revenues, net of
purchased power, is a non-GAAP financial measure. Non-GAAP
financial measures do not have a standardized meaning under US GAAP
used to
prepare the Company's financial statements and might not be
comparable to similar measures presented by other entities. See the
section "Non-GAAP Financial
Measures".
|
This press release should be read in conjunction with the
Company's first quarter 2022 unaudited consolidated financial
statements and MD&A. These financial statements and MD&A
together with additional information about Hydro One, including the
audited consolidated financial statements and MD&A for the year
ended December 31, 2021 can be
accessed at www.HydroOne.com/Investors and www.sedar.com.
Quarterly Investment Community Teleconference
The Company's first quarter 2022 results teleconference with the
investment community will be held on May 5, 2022 at
8 a.m. ET, a webcast of which will be
available at www.HydroOne.com/Investors. Members of the financial
community wishing to ask questions during the call should dial
1-866-221-1674 prior to the scheduled start time and request access
to Hydro One's first quarter 2022 results call, conference ID
6793175 (international callers may dial 1-270-215-9604). Media and
other interested parties are welcome to participate on a
listen-only basis. A webcast of the teleconference will be
available at the same link following the call. Additionally,
investors should note that from time to time Hydro One management
presents at brokerage sponsored investor conferences. Most often,
but not always, these conferences are webcast by the hosting
brokerage firm, and when they are webcast, links are made available
on Hydro One's website at www.HydroOne.com/Investors and are
posted generally at least two days before the conference.
Hydro One Limited (TSX: H)
Hydro One Limited, through its wholly-owned subsidiaries, is
Ontario's largest electricity
transmission and distribution provider with approximately
1.5 million valued customers, approximately $30.4 billion in assets as at December 31, 2021, and annual revenues in 2021 of
approximately $7.2 billion.
Our team of approximately 9,300 skilled and dedicated employees
proudly build and maintain a safe and reliable electricity system
which is essential to supporting strong and successful communities.
In 2021, Hydro One invested approximately $2.1 billion in its transmission and distribution
networks, and supported the economy through buying approximately
$1.7 billion of goods and
services.
We are committed to the communities where we live and work
through community investment, sustainability and diversity
initiatives. We are designated as a Sustainable Electricity Company
by the Canadian Electricity Association.
Hydro One Limited's common shares are listed on the TSX and
certain of Hydro One Inc.'s medium term notes are listed on the
NYSE. Additional information can be accessed at www.hydroone.com,
www.sedar.com or www.sec.gov.
For More Information
For more information about everything Hydro One, please visit
www.hydroone.com where you can find additional information
including links to securities filings, historical financial
reports, and information about the Company's governance practices,
corporate social responsibility, customer solutions, and further
information about its business.
Non-GAAP Financial Measures
Hydro One uses a number of financial measures to assess its
performance. The Company presents "revenues, net of purchased
power" to reflect revenues net of the cost of purchased power,
which is a non-GAAP financial measure. Non-GAAP financial measures
do not have a standardized meaning under GAAP used to prepare the
Company's financial statements and might not be comparable to
similar measures presented by other entities. They should not be
considered in isolation nor as a substitute for analysis of the
Company's financial information reported under US GAAP.
Revenues, Net of Purchased Power
Revenues, net of purchased power is defined as revenues less the
cost of purchased power. Revenues, net of purchased power is used
internally by management to assess the impacts of revenue on net
income and is considered useful because it excludes the cost of
power that is fully recovered through revenues and therefore net
income neutral.
The following table provides a reconciliation of GAAP (reported)
Revenues to non-GAAP (adjusted) Revenues, Net of Purchased Power on
a consolidated basis.
Quarter ended (millions of dollars)
|
|
|
|
|
Mar 31, 2022
|
Mar 31, 2021
|
Revenues
|
|
|
|
|
2,047
|
1,811
|
Less: Purchased
power
|
|
|
|
|
1,014
|
894
|
Revenues, net of purchased power
|
|
|
|
|
1,033
|
917
|
Forward-Looking Statements and Information
This press release may contain "forward-looking information"
within the meaning of applicable securities laws. Such information
includes, but is not limited to, statements related to: the
Company's continuing focus on facilitating economic growth in
Ontario; the Company's expected
recovery of deferred tax amounts; the Company's actions to
improve service to customers; the Company's plans to improve
reliability, including facilitating connectivity for new load
customers and generation sources; the continuing growth of the
Windsor-Essex region; the Company's ongoing and
planned projects and expected capital investments, including
anticipated outcomes and impacts; the impact of Hydro One's
agreement with First Nations communities, and the impact of the
Waasigan Transmission Line project; and payment of dividends. Words
such as "expect," "anticipate," "intend," "attempt," "may," "plan,"
"will", "can", "believe," "seek," "estimate," and variations of
such words and similar expressions are intended to identify such
forward-looking information. These statements are not guarantees of
future performance or actions and involve assumptions and risks and
uncertainties that are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed,
implied or forecasted in such forward-looking information. Some of
the factors that could cause actual results or outcomes to differ
materially from the results expressed, implied or forecasted by
such forward-looking information, including some of the assumptions
used in making such statements, are discussed more fully in Hydro
One's filings with the securities regulatory authorities in
Canada, which are available on
SEDAR at www.sedar.com. Hydro One does not intend, and it disclaims
any obligation, to update any forward-looking information, except
as required by law.
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SOURCE Hydro One Limited