The Company continues to execute on its capital
plans in support of economic growth in Ontario and the transition to a clean energy
future.
TORONTO, Feb. 13,
2024 /CNW/ - Hydro One Limited (Hydro One or the
Company) today announced its financial and operating results for
the fourth quarter ended December 31,
2023.
Fourth Quarter Highlights
- Fourth quarter basic earnings per share (EPS) of $0.30 was comparable to EPS of $0.30 for the same period in 2022. For the full
year, basic EPS of $1.81 was 3.4%
higher than basic EPS of $1.75 in
2022.
- EPS for the quarter was unchanged year-over-year largely due to
higher average monthly peak demand and energy consumption, as well
as higher revenues resulting from Ontario Energy Board
(OEB)-approved 2023 transmission rates, offset by higher financing
charges and depreciation expense, as well as the impact of
regulatory adjustments including the recognition of Conservation
and Demand Management (CDM) revenues in the prior year and higher
earnings sharing in the current period.
- In line with incentive rate-making and for the benefit of
Ontario ratepayers, Hydro One
rebased productivity as part of the Joint Rate Application (JRAP).
For 2023, Hydro One achieved $114
million of annual productivity savings. These efficiencies
coincide with the current rate application period to date.
- Hydro One continued to expand its network of strategic
partnerships through the signing of a partnership agreement with
Five Nations Development Inc., a wholly owned subsidiary of Five
Nations Energy Inc., to work together to maximize Indigenous
participation in the energy sector.
- Hydro One was recognized as one of Canada's Best Employers for 2024 by Forbes for
the 9th consecutive year.
- Hydro One and the Canadian Council for Aboriginal Business
(CCAB) announced the ten recipients of the Hydro One Indigenous
Entrepreneurship Grant.
- During the quarter, Hydro One Inc., a subsidiary of the
Company, priced and issued $900
million aggregate principal amount of Medium-Term Notes
(MTN), under the Company's Sustainable Financing Framework
(Framework). Subsequent to the quarter end, Hydro One Inc. issued
an additional $800 million aggregate
principal amount of MTN under the Framework.
- Subsequent to quarter end, Hydro One restored power to more
than 125,000 customers during a January storm.
- Subsequent to quarter end, the Company announced that
Chris Lopez, Chief Financial and
Regulatory Officer intends to step down to pursue other
opportunities as of June 30,
2024.
- The Company's capital investments and in-service additions for
the year were $2,531 million and
$2,324 million, respectively,
compared to $2,132 million and
$2,267 million in 2022.
- Quarterly dividend declared at $0.2964 per share, payable March 28, 2024.
"Our approach to building critical transmission infrastructure
to meet the growing electricity demand in Ontario continues to be underpinned by a
genuine commitment to developing strategic partnerships with First
Nations, communities, government and industry," said
David Lebeter, President and Chief Executive Officer of Hydro
One. "This commitment remains at the heart of everything we do and
demonstrates our efforts to building mutually beneficial
relationships that benefit from our strategic investments in energy
infrastructure."
Selected Consolidated Financial and Operating
Highlights
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(millions of
Canadian dollars, except as otherwise noted)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
Revenues
|
|
1,979
|
1,862
|
|
7,844
|
7,780
|
Purchased
power
|
|
990
|
895
|
|
3,652
|
3,724
|
Revenues, net of
purchased power1
|
|
989
|
967
|
|
4,192
|
4,056
|
Net income attributable
to common shareholders
|
|
181
|
178
|
|
1,085
|
1,050
|
|
|
|
|
|
|
|
Basic EPS
|
|
$0.30
|
$0.30
|
|
$1.81
|
$1.75
|
Diluted EPS
|
|
$0.30
|
$0.30
|
|
$1.81
|
$1.75
|
|
|
|
|
|
|
|
Net cash from operating
activities
|
|
768
|
602
|
|
2,412
|
2,260
|
Capital
investments
|
|
745
|
570
|
|
2,531
|
2,132
|
Assets placed
in-service
|
|
975
|
1,090
|
|
2,324
|
2,267
|
|
|
|
|
|
|
|
Transmission: Average
monthly Ontario 60-minute peak demand (MW)
|
20,477
|
19,020
|
|
20,806
|
20,368
|
Distribution: Electricity
distributed to Hydro One customers (GWh)
|
8,040
|
7,826
|
|
30,619
|
30,803
|
1
|
"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
2023 Fourth Quarter Highlights
The Company reported net income attributable to common
shareholders of $181 million during
the quarter, compared to $178 million
in the same period of 2022. This resulted in EPS of $0.30, which is consistent with the prior
year.
Revenues of $1,979 million for the
fourth quarter were $117 million
higher than revenues for the fourth quarter of 2022. Revenues, net
of purchased power1 of $989
million for the fourth quarter were $22 million higher than revenues, net of
purchased power1 for the fourth quarter of 2022. The
increase, when adjusted for net income neutral items, is mainly
attributable to higher average monthly peak demand and energy
consumption, as well as higher revenues resulting from OEB-approved
2023 transmission rates, partially offset by regulatory
adjustments, including the recognition of CDM revenues following
receipt of the JRAP Decision in the prior year and higher earnings
sharing in the current period.
Operation, maintenance and administration (OM&A) costs in
the fourth quarter of 2023 were slightly higher than the prior year
which, once adjusted for net income neutral items, primarily
results from an increase in forecast environmental expenditures
provisioned in the current period, partially offset by lower
corporate support costs primarily attributable to higher
capitalized overheads associated with volume of capital
activity.
Financing charges in the fourth quarter of 2023 were higher than
the prior year primarily due to an increase in the weighted-average
interest rate on long-term debt.
Depreciation, amortization and asset removal costs for the
fourth quarter of 2023 were higher than the same period of the
prior year, primarily due to gains on the disposal of fixed assets
recognized in the prior year, as well as higher depreciation
resulting from the 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 fourth quarter of 2023 was lower than
the prior year which, once adjusted for net income neutral items,
was primarily due to higher deductible timing differences.
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 $745 million during the fourth quarter of 2023
and placed $975 million of new assets
in-service.
__________
|
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".
|
2023 Annual Highlights
For the twelve months ended December 31, 2023, the Company
reported net income attributable to common shareholders of
$1,085 million compared to
$1,050 million in 2022, an increase
of $35 million compared to the prior
year. This resulted in EPS for the period of $1.81 compared to EPS of $1.75 in 2022. Annual results were primarily
impacted by the same factors as noted above.
For the full year, the Company placed $2,324 million of assets into service in 2023
compared to $2,267 million in
2022.
Selected Operating Highlights
Hydro One and Five Nations Development Inc., a wholly owned
subsidiary of Five Nations Energy Inc., announced the signing of an
initial partnership agreement to work together to meet the growing
electricity demands in northeastern Ontario while increasing Indigenous
participation in the energy sector. A partnership between the two
Ontario-based utilities further
connects Hydro One and First Nation interests in the planning,
development, and building of future transmission line projects. It
is an innovative approach targeting specific areas for economic
advancement with an initial focus in northeastern Ontario.
Hydro One and the CCAB announced the ten recipients of the Hydro
One Indigenous Entrepreneurship Grant. Grant recipients include
Indigenous businesses from across Ontario, providing services such as housing,
construction, virtual reality and web development, cultural
awareness training, graphic and commercial art, and family
reunification.
Hydro One restored power to more than 125,000 customers affected
by the damaging high winds that affected parts of western,
southern, central and eastern Ontario in January
2024. The outages were largely caused by severe winds
bringing down trees and branches onto distribution lines.
During the fourth quarter, the Company's wholly-owned
subsidiary, Hydro One Inc. raised $400
million aggregate principal amount of 5.54% MTN, Series 57,
due 2025. Hydro One Inc. also issued $500
million aggregate principal amount of 4.85% MTN, Series 58,
due 2054. Subsequent to the quarter end, the Company issued
$800 million aggregate principal
amount of MTN consisting of $550
million aggregate principal amount of 4.39% MTN, Series 59,
due 2034 and $250 million aggregate
principal amount of 3.93% MTN, Series 53, due 2029. Each of the
offerings represented additional issuances of MTN pursuant to the
Framework. The Company intends to allocate an amount equal to the
net proceeds from the issuances to finance and/or refinance, in
whole or in part, new and/or existing eligible green and social
projects that meet the eligible criteria described in the
Framework.
In January 2024, Hydro One
published its inaugural Sustainable Bond Allocation Report
outlining the use of proceeds from its $1.05
billion of sustainable bonds issued in 2023 under its
Sustainable Finance Framework. The report details the full
allocation of proceeds to Eligible Projects in the "Clean Energy",
"Energy Efficiency", "Clean Transportation" and "Biodiversity
Conservation" green categories and the "Socio-economic Advancement
of Indigenous Peoples" social categories. A copy of the report is
available on Hydro One's website at
www.hydroone.com/investor-relations/sustainable-financing.
Common Share Dividends
Following the conclusion of the fourth quarter, on
February 12, 2024, the Company declared a quarterly cash
dividend to common shareholders of $0.2964 per share to be paid on March 28,
2024 to shareholders of record on March 13, 2024.
Supplemental Segment Information
|
|
Three months ended
December 31
|
|
Year ended December
31
|
(millions of
Canadian dollars)
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
Transmission
|
|
506
|
480
|
|
2,214
|
2,077
|
Distribution
|
|
1,459
|
1,371
|
|
5,582
|
5,660
|
Other
|
|
14
|
11
|
|
48
|
43
|
Total revenues
|
|
1,979
|
1,862
|
|
7,844
|
7,780
|
|
|
|
|
|
|
|
Revenues, net of
purchased power1
|
|
|
|
|
|
|
Transmission
|
|
506
|
480
|
|
2,214
|
2,077
|
Distribution
|
|
469
|
476
|
|
1,930
|
1,936
|
Other
|
|
14
|
11
|
|
48
|
43
|
Total revenues, net of purchased power1
|
|
989
|
967
|
|
4,192
|
4,056
|
|
|
|
|
|
|
|
Operation,
maintenance and administration costs
|
|
|
|
|
|
|
Transmission
|
|
141
|
143
|
|
499
|
445
|
Distribution
|
|
230
|
222
|
|
765
|
739
|
Other
|
|
26
|
23
|
|
90
|
74
|
Total operation, maintenance and administration costs
|
397
|
388
|
|
1,354
|
1,258
|
|
|
|
|
|
|
|
Income before
financing charges and taxes
|
|
|
|
|
|
|
Transmission
|
|
225
|
213
|
|
1,189
|
1,123
|
Distribution
|
|
133
|
149
|
|
705
|
749
|
Other
|
|
(15)
|
(14)
|
|
(52)
|
(40)
|
Total income before financing charges and taxes
|
|
343
|
348
|
|
1,842
|
1,832
|
|
|
|
|
|
|
|
Capital
investments
|
|
|
|
|
|
|
Transmission
|
|
438
|
310
|
|
1,493
|
1,209
|
Distribution
|
|
301
|
253
|
|
1,015
|
899
|
Other
|
|
6
|
7
|
|
23
|
24
|
Total capital investments
|
|
745
|
570
|
|
2,531
|
2,132
|
|
|
|
|
|
|
|
Assets placed
in-service
|
|
|
|
|
|
|
Transmission
|
|
637
|
761
|
|
1,296
|
1,405
|
Distribution
|
|
329
|
326
|
|
994
|
853
|
Other
|
|
9
|
3
|
|
34
|
9
|
Total assets placed in-service
|
|
975
|
1,090
|
|
2,324
|
2,267
|
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".
|
SUMMARY OF FOURTH QUARTER RESULTS OF OPERATIONS
Net Income
Net income attributable to common shareholders for the quarter
ended December 31, 2023 of $181
million is an increase of $3
million, or 1.7%, from the prior year. Significant
influences on net income included:
- higher revenues, net of purchased power,2 primarily
resulting from:
- higher average monthly peak demand and energy consumption;
and
- OEB-approved 2023 transmission rates; partially offset by
- regulatory adjustments, including the recognition of CDM
revenues in the prior year following receipt of the JRAP Decision
and higher earnings sharing in the current period;
- higher OM&A costs primarily resulting from higher work
program expenditures, partially offset by lower corporate support
costs;
- higher financing charges primarily due to higher
weighted-average interest rates and higher volume of long-term
debt;
- higher depreciation, amortization and asset removal costs
primarily due to gains on the disposal of fixed assets recognized
during in the prior year, as well as higher depreciation resulting
from the growth in capital assets as the Company continues to place
new assets in-service, consistent with its ongoing capital
investment program; and
- lower income tax expense primarily resulting from higher
deductible timing differences compared to the prior year.
While net income neutral, the results of operations in the
period are also impacted by:
- the cessation of the OEB-approved recovery of DTA Recovery
Amounts on June 30, 2023 which
resulted in a decrease to revenue, and an offsetting decrease in
income tax expense;
- the OEB-approved recovery of historical cost deferrals
recognized as regulatory assets in prior periods which resulted in
an increase in revenue that has been offset by higher OM&A and
income tax expense; and
- a regulatory adjustment associated with the Capitalized
Overhead Tax Variance booked in the prior year which resulted in
increase in revenue that has been offset by higher income tax
expense.
__________
|
2
|
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".
|
EPS
Basic EPS was $0.30 in the fourth
quarter of 2023, compared to basic EPS of $0.30 in the fourth quarter of 2022.
Revenues
The year-over-year increase of $26
million, or 5.4%, in transmission revenues during the
quarter primarily resulted from:
- higher revenues resulting from OEB-approved 2023 rates;
and
- higher average monthly peak demand; partially offset by
- regulatory adjustments, including the recognition of CDM
revenues in the prior year following receipt of the OEB's Decision
and Order approving Hydro One's JRAP Settlement Proposal and higher
earnings sharing in the current period; and
- net income neutral items, including lower revenues associated
with the cessation of the DTA Recovery period, partially offset by
the OEB-approved recovery of historical cost deferrals recognized
as regulatory assets in prior periods and regulatory adjustments
including those associated with the Capitalized Overhead Tax
Variance.
The year-over-year increase of $88
million, or 6.4%, in distribution revenues during the
quarter primarily resulted from:
- higher purchased power costs, which are fully recovered from
ratepayers and thus net income neutral;
- higher customer count and energy consumption; and
- regulatory adjustments, including the accrued recovery of costs
in accordance with the terms of the Getting Ontario Connected Act
Variance Account which was partially offset by higher earnings
sharing in the current period; partially offset by
- net income neutral items, including lower revenues associated
with the cessation of the DTA Recovery period, partially offset by
the OEB-approved recovery of historical cost deferrals recognized
as regulatory assets in prior periods and regulatory adjustments
including those associated with the Capitalized Overhead Tax
Variance.
Distribution revenues, net of purchased power,3
decreased by 1.5% during the fourth quarter of 2023 compared to the
prior year primarily due to the factors noted above, adjusted for
the recovery of purchased power costs.
__________
|
3
|
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".
|
OM&A Costs
The year-over-year decrease of $2
million, or 1.4%, in transmission OM&A costs
during the quarter was primarily due to:
- lower corporate support costs primarily attributable to higher
capitalized overheads associated with volume of capital activity;
partially offset by
- higher work program expenditures, primarily related to
vegetation management.
The year-over-year increase of $8
million, or 3.6%, in distribution OM&A costs during
the quarter was primarily due to:
- higher work program expenditures, including an increase in
forecast environmental expenditures provisioned in the period,
higher IT initiatives and higher emergency restoration costs,
partially offset by lower vegetation management expenditures;
and
- the OEB-approved recovery of historical cost deferrals
recognized as regulatory assets in prior periods, which are net
income neutral; partially offset by
- lower corporate support costs primarily attributable to higher
capitalized overheads associated with volume of capital
activity;
- lower asset write-offs; and
- costs related to storm restoration efforts in the prior year,
which were recovered from third parties and offset in revenue,
therefore net income neutral.
Depreciation, Amortization and Asset Removal Costs
The increase of $18 million, or 7.8%, in depreciation,
amortization and asset removal costs in the fourth quarter of 2023
was primarily due to gains on the disposal of fixed assets
recognized in the prior year, as well as higher depreciation
resulting from the growth in capital assets as the Company
continues to place new assets in-service, consistent with its
ongoing capital investment program.
Financing Charges
The $19 million, or 14.8%,
increase in financing charges for the quarter ended
December 31, 2023, was primarily due to a higher
weighted-average interest rate on long-term debt and higher volume
of long-term debt.
Income Tax Expense
Income tax expense for the fourth quarter of 2023 decreased by
$28 million compared to the same
period in 2022. This resulted in a realized effective tax rate of
approximately 6.6% in the fourth quarter of 2023, compared to
approximately 18.6% in the fourth quarter of the prior year.
The decrease in income tax expense and effective tax rate for
the three months ended December 31,
2023 was primarily attributable to:
- higher deductible timing differences compared to the prior
year; and
- net decrease in income tax expense associated with net income
neutral items including the cessation of the DTA recovery period on
June 30, 2023, partially offset by
regulatory adjustments associated with the Capitalized Overhead Tax
Variance booked in the prior year and the OEB-approved recovery of
cost deferrals recognized as regulatory assets in prior
periods.
Assets Placed In-Service
The decrease in transmission assets placed in-service during the
fourth quarter was primarily due to:
- the substantial completion of the end-of-life air circuit
breakers replacement at Bruce B switching station in the fourth
quarter of 2022;
- the timing of assets placed in-service for customer
connections;
- the timing of assets placed in-service for station
refurbishments and replacements; and
- lower volume of investments placed in-service for IT
initiatives; partially offset by
- the timing of investments placed in-service for major
development projects primarily due to the Barrie Area Transmission
Upgrade project which was placed in-service during the fourth
quarter of 2023; and
- higher volume of assets placed in-service for grid operating
and control facilities.
The increase in distribution assets placed in-service during the
fourth quarter was primarily due to:
- higher volume of customer connections, line refurbishments and
wood pole replacements;
- higher spend on minor fixed assets;
- assets placed in-service for Ontario's broadband initiative; and
- higher volume of joint use assets and line relocations;
partially offset by
- lower volume of storm-related asset replacements; and
- the timing of investments placed in-service for system
capability reinforcement projects.
Capital Investments
The increase in transmission capital investments during the
fourth quarter was primarily due to:
- higher volume of station refurbishments and equipment
replacements;
- investments in the new Chatham
to Lakeshore and Waasigan Transmission Lines;
- higher volume of customer connections;
- higher spend on specified equipment to support long-term
projects; and
- higher spend on minor fixed assets.
The increase in distribution capital investments during the
fourth quarter was primarily due to:
- higher volume of customer connections;
- higher spend on minor fixed assets;
- higher volume of line refurbishments and wood pole
replacements;
- the completion of the Orleans
and Orillia Operation Centres, and Orillia Distribution
Centre;
- investments in the Advanced Metering Infrastructure 2.0 system;
and
- investments in Ontario's
broadband initiative; partially offset by
- lower spend on storm-related asset replacements.
Consolidated Income Statements
|
Three months ended
December 31,
|
Year ended December
31,
|
(millions of
Canadian dollars, except per share amounts)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
Transmission
|
|
506
|
480
|
|
2,214
|
2,077
|
Distribution
|
|
1,459
|
1,371
|
|
5,582
|
5,660
|
Other
|
|
14
|
11
|
|
48
|
43
|
|
|
1,979
|
1,862
|
|
7,844
|
7,780
|
|
|
|
|
|
|
|
Costs
|
|
|
|
|
|
|
Purchased
power
|
|
990
|
895
|
|
3,652
|
3,724
|
Operation, maintenance
and administration
|
|
397
|
388
|
|
1,354
|
1,258
|
Depreciation,
amortization and asset removal costs
|
|
249
|
231
|
|
996
|
966
|
|
|
1,636
|
1,514
|
|
6,002
|
5,948
|
|
|
|
|
|
|
|
Income before
financing charges and income tax expense
|
343
|
348
|
|
1,842
|
1,832
|
Financing
charges
|
|
147
|
128
|
|
570
|
486
|
|
|
|
|
|
|
|
Income before
taxes
|
|
196
|
220
|
|
1,272
|
1,346
|
Income tax
expense
|
|
13
|
41
|
|
178
|
288
|
Net
income
|
|
183
|
179
|
|
1,094
|
1,058
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
(2)
|
9
|
|
(14)
|
23
|
Comprehensive
income
|
|
181
|
188
|
|
1,080
|
1,081
|
|
|
|
|
|
|
|
Net income
attributable to:
|
|
|
|
|
|
|
Noncontrolling interest
|
|
2
|
1
|
|
9
|
8
|
Common shareholders
|
|
181
|
178
|
|
1,085
|
1,050
|
|
|
183
|
179
|
|
1,094
|
1,058
|
|
|
|
|
|
|
|
Comprehensive income
attributable to:
|
|
|
|
|
|
|
Noncontrolling interest
|
|
2
|
1
|
|
9
|
8
|
Common shareholders
|
|
179
|
187
|
|
1,071
|
1,073
|
|
|
181
|
188
|
|
1,080
|
1,081
|
|
|
|
|
|
|
|
Basic EPS
|
|
$0.30
|
$0.30
|
|
$1.81
|
$1.75
|
Diluted EPS
|
|
$0.30
|
$0.30
|
|
$1.81
|
$1.75
|
Consolidated Balance Sheets
As at December
31 (millions of Canadian dollars)
|
|
|
2023
|
2022
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
|
79
|
530
|
Accounts receivable
|
|
|
|
830
|
767
|
Due
from related parties
|
|
|
|
313
|
282
|
Other current assets
|
|
|
|
132
|
281
|
|
|
|
|
1,354
|
1,860
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
|
26,874
|
25,077
|
Other long-term
assets:
|
|
|
|
|
|
Regulatory assets
|
|
|
|
3,260
|
2,964
|
Deferred income tax assets
|
|
|
|
119
|
114
|
Intangible assets
|
|
|
|
656
|
608
|
Goodwill
|
|
|
|
373
|
373
|
Other assets
|
|
|
|
216
|
461
|
|
|
|
|
4,624
|
4,520
|
Total
assets
|
|
|
|
32,852
|
31,457
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Short-term notes payable
|
|
|
|
279
|
1,374
|
Long-term debt payable within one year
|
|
|
|
700
|
733
|
Accounts payable and other current liabilities
|
|
|
|
1,439
|
1,274
|
Due
to related parties
|
|
|
|
302
|
271
|
|
|
|
|
2,720
|
3,652
|
|
|
|
|
|
|
Long-term
liabilities
|
|
|
|
|
|
Long-term debt
|
|
|
|
14,710
|
13,030
|
Regulatory liabilities
|
|
|
|
908
|
1,123
|
Deferred income tax liabilities
|
|
|
|
1,067
|
715
|
Other long-term liabilities
|
|
|
|
1,682
|
1,545
|
|
|
|
|
18,367
|
16,413
|
Total
liabilities
|
|
|
|
21,087
|
20,065
|
|
|
|
|
|
|
Noncontrolling interest
subject to redemption
|
|
|
|
20
|
20
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Common shares
|
|
|
|
5,706
|
5,699
|
Additional paid-in capital
|
|
|
|
30
|
34
|
Retained earnings
|
|
|
|
5,947
|
5,562
|
Accumulated other comprehensive income (loss)
|
|
|
|
(3)
|
11
|
Hydro One shareholders' equity
|
|
|
|
11,680
|
11,306
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
|
65
|
66
|
Total
equity
|
|
|
|
11,745
|
11,372
|
|
|
|
|
32,852
|
31,457
|
Consolidated Statements of Cash Flows
|
Three months ended
December 31,
|
Year ended December
31,
|
(millions of
Canadian dollars)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
183
|
179
|
|
1,094
|
1,058
|
Environmental
expenditures
|
|
13
|
(9)
|
|
(14)
|
(33)
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
215
|
194
|
|
866
|
831
|
Regulatory assets and liabilities
|
|
46
|
26
|
|
47
|
44
|
Deferred income tax expense
|
|
5
|
34
|
|
133
|
260
|
Other
|
|
14
|
10
|
|
34
|
39
|
Changes in non-cash
balances related to operations
|
292
|
168
|
|
252
|
61
|
Net cash from
operating activities
|
|
768
|
602
|
|
2,412
|
2,260
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Long-term debt
issued
|
|
900
|
750
|
|
2,375
|
750
|
Long-term debt
repaid
|
|
—
|
(2)
|
|
(731)
|
(603)
|
Short-term notes
issued
|
|
1,070
|
1,745
|
|
6,550
|
6,335
|
Short-term notes
repaid
|
|
(1,720)
|
(1,880)
|
|
(7,650)
|
(6,000)
|
Dividends
paid
|
|
(178)
|
(168)
|
|
(700)
|
(662)
|
Distributions paid to
noncontrolling interest
|
|
(2)
|
(2)
|
|
(10)
|
(10)
|
Common shares
issued
|
|
—
|
—
|
|
—
|
3
|
Costs to obtain
financing
|
|
1
|
(5)
|
|
(6)
|
(10)
|
Net cash from (used
in) financing activities
|
|
71
|
438
|
|
(172)
|
(197)
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
|
|
|
|
Property, plant and equipment
|
|
(702)
|
(514)
|
|
(2,345)
|
(1,966)
|
Intangible assets
|
|
(36)
|
(39)
|
|
(131)
|
(120)
|
Change in future use
assets
|
|
(80)
|
—
|
|
(213)
|
—
|
Capital contributions
received
|
|
—
|
(1)
|
|
2
|
12
|
Other
|
|
(1)
|
19
|
|
(4)
|
1
|
Net cash used in
investing activities
|
|
(819)
|
(535)
|
|
(2,691)
|
(2,073)
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
20
|
505
|
|
(451)
|
(10)
|
Cash and cash
equivalents, beginning of period
|
|
59
|
25
|
|
540
|
540
|
Cash and cash
equivalents, end of period
|
|
79
|
530
|
|
79
|
530
|
This press release should be read in conjunction with the
Company's 2023 Consolidated Financial Statements and MD&A.
These financial statements and MD&A together with additional
information about Hydro One, can be accessed at
www.HydroOne.com/Investors and www.sedarplus.com.
Quarterly Investment Community Teleconference
The Company's fourth quarter 2023 results teleconference with
the investment community will be held on February 13, 2024 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 go to
this link
(https://register.vevent.com/register/BIc091d61ecd3d44228bd9640764a68a7a)
prior to the scheduled start time to access Hydro One's fourth
quarter 2023 results call. 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 $32.8 billion in assets as at December 31, 2023, and annual revenues in 2023 of
approximately $7.8 billion.
Our team of approximately 9,700 skilled and dedicated employees
proudly build and maintain a safe and reliable electricity system
which is essential to supporting strong and successful communities.
In 2023, Hydro One invested approximately $2.5 billion in its transmission and distribution
networks, and supported the economy through buying approximately
$2.5 billion of goods and
services.
We are committed to the communities where we live and work
through community investment, sustainability and diversity
initiatives.
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.sedarplus.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.
|
|
|
Three months ended
December 31
|
Year ended December
31
|
(millions of
dollars)
|
|
|
2023
|
2022
|
2023
|
2022
|
Revenues
|
|
|
1,979
|
1,862
|
7,844
|
7,780
|
Less: Purchased
power
|
|
|
990
|
895
|
3,652
|
3,724
|
Revenues, net of
purchased power
|
|
|
989
|
967
|
4,192
|
4,056
|
Forward-Looking Statements and Information
This press release contains "forward-looking information" within
the meaning of applicable securities laws. Such information
includes, but is not limited to, statements related to:
expectations regarding the Company's financing activities,
including the anticipated use of an amount equal to the net
proceeds from the issuance of MTNs towards financing and/or
refinancing new and/or existing eligible projects under the
Framework; the Company's plans to improve reliability, including
facilitating connectivity for new load customers and generation
sources; the Company's ongoing and planned projects and expected
capital investments and plan, including anticipated outcomes and
impacts; expectations regarding the Company's support for clean
energy, and economic growth in the province of Ontario; statements regarding the Company's
commitment to developing strategic partnerships with First Nations,
communities, government and industry; 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. In particular, the
forward-looking information contained in this presentation is based
on a variety of factors and assumptions including, but not limited
to: the scope of the COVID-19 pandemic and duration thereof as well
as the effect and severity of corporate and other mitigation
measures on Hydro One's operations, supply chain or employees; no
unforeseen changes in the legislative and operating framework for
Ontario's electricity market or
for Hydro One specifically; favourable decisions from the OEB and
other regulatory bodies concerning outstanding and future rate and
other applications; no unexpected delays in obtaining required
approvals; no unforeseen changes in rate orders or rate setting
methodologies for Hydro One's distribution and transmission
businesses; the continued use and availability of US GAAP; no
unfavourable changes in environmental regulation; a stable
regulatory environment; no significant changes to Hydro One's
current credit ratings; no unforeseen impacts of new accounting
pronouncements; no changes to expectations regarding electricity
consumption; no unforeseen changes to economic and market
conditions; completion of operating and capital projects that have
been deferred; and no significant event occurring outside the
ordinary course of business. We caution that all forward-looking
information is inherently subject to change and uncertainty and
that actual results may differ materially from those expressed or
implied by the forward-looking information. A number of risks,
uncertainties and other factors could cause actual results and
events to differ materially from those expressed or implied in the
forward-looking information or could cause our current objectives,
strategies and intentions to change, and many of these factors are
beyond our control and current expectation or knowledge. 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.sedarplus.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