EPCOR Announces Quarterly Results
/EINPresswire.com/ -- EDMONTON, ALBERTA -- (Marketwired) -- 05/06/16 -- EPCOR Utilities Inc. (EPCOR) today filed its quarterly results for the period ended March 31, 2016.
"EPCOR recorded solid results in the first quarter of 2016 across all of our business segments," said Stuart Lee, EPCOR President & CEO.
"In addition, the Ostara phosphorus recovery facility, located in south east Edmonton, commenced operations in the quarter. At peak capacity the facility is expected to produce 2,000 tonnes of Crystal Green fertilizer and remove 85 percent of phosphorus and 25 percent of nitrogen from our Edmonton Gold Bar biosolid waste. This continues to build on our strong environmental record," said Mr. Lee.
Highlights of EPCOR's financial performance are as follows:
-- Net income was $78 million on revenues of $475 million for the three
months ended March 31, 2016, compared with net income of $69 million on
revenues of $473 million for the corresponding period in the previous
year. Net income was higher in part due to higher approved electricity
and water customer rates and gains on sales of surplus lands, partially
offset by lower favorable fair value adjustments related to financial
electricity purchase contracts. Approximately $9 million of the 2016
first quarter net income was the recognition of a refund from the
Alberta Electric System Operator that will be reimbursed to customers
later in 2016.
-- Net income from core operations was $75 million for the three months
ended March 31, 2016, compared with net income from core operations of
$50 million for the corresponding period in the previous year. Net
income from core operations was higher in part due to higher approved
electricity and water rates and the gains on sales of surplus lands.
-- Net cash flows from operating activities was $136 million for the three
months ended March 31, 2016, compared with $113 million for the
corresponding period in the previous year. The increase was primarily
due to higher funds from operations and higher non-cash operating
working capital.
-- Investment in capital projects was $88 million for the three months
ended March 31, 2016, compared with $70 million for the corresponding
period in the previous year. The increase of $18 million was primarily
due to increased spending in the Distribution and Transmission segment
on growth and lifecycle replacement projects and in the Water Services
segment on wastewater and lifecycle projects.
Management's discussion and analysis (MD&A) of the quarterly results are shown below. The MD&A and the unaudited condensed consolidated interim financial statements are available on EPCOR's website (www.epcor.com) and SEDAR (www.sedar.com).
EPCOR's wholly owned subsidiaries build, own and operate electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States. The Company's subsidiaries also provide electricity and water services and products to residential and commercial customers. EPCOR, headquartered in Edmonton, is an Alberta top 70 employer. EPCOR's website address is www.epcor.com.
EPCOR Utilities Inc.
Interim Management's Discussion and Analysis
March 31, 2016
This management's discussion and analysis (MD&A) dated May 6, 2016, should be read in conjunction with the condensed consolidated interim financial statements of EPCOR Utilities Inc. for the three months ended March 31, 2016, and 2015, including significant accounting policies adopted (note 3), the consolidated financial statements and MD&A for the year ended December 31, 2015, including standards and interpretations not yet applied (note 3(w)), related party transactions (note 27) and financial instruments (note 28), and the cautionary statement regarding forward-looking information at the end of this MD&A. In this MD&A, any reference to "the Company", "EPCOR", "it", "its", "we", "our" or "us", except where otherwise noted or the context otherwise indicates, means EPCOR Utilities Inc., together with its subsidiaries. In this MD&A, Capital Power refers to Capital Power Corporation and its directly and indirectly owned subsidiaries including Capital Power L.P., except where otherwise noted or the context otherwise indicates. Financial information in this MD&A is based on the condensed consolidated interim financial statements, which were prepared in accordance with International Financial Reporting Standards (IFRS), and is presented in Canadian dollars unless otherwise specified. In accordance with its terms of reference, the Audit Committee of the Company's Board of Directors reviews the contents of the MD&A and recommends its approval by the Board of Directors. This MD&A was approved and authorized for issue by the Board of Directors on May 6, 2016.
OVERVIEW
EPCOR is wholly owned by The City of Edmonton (the City). EPCOR, through wholly owned subsidiaries, builds, owns and operates electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States (U.S.) and provides Regulated Rate Option (RRO) and default supply electricity related services and also sells electricity and natural gas to Alberta residential consumers under contracts through its Encor brand. EPCOR's water business provides water purification, water distribution, wastewater treatment and related management services within the city of Edmonton and several other communities in Western Canada and the Southwestern U.S. In Western Canada the water business includes design, build, finance, operating and maintenance services for municipal and industrial customers. In Southwestern U.S. the water business includes wastewater collection services.
Net income for the three months ended March 31, 2016, was $78 million compared with net income of $69 million for the comparative period in 2015. The increase of $9 million was due in part to higher approved electricity and water customer rates, gains on sales of surplus lands, higher income related to industrial service contracts, and dividend income from our investment in Capital Power. Partially offsetting these increases was no equity share of income of Capital Power L.P. and lower favorable fair value adjustments related to financial electricity purchase contracts.
EPCOR's core operations performed well in the first quarter without any significant issues or disruptions to customers. Net income from core operations for the three months ended March 31, 2016, was $75 million compared with net income from core operations of $50 million for the comparative period in 2015, as described in the net income table on page 3 of this MD&A. The increase of $25 million was driven in part by higher approved electricity and water customer rates, gains on sales of surplus lands, and higher income related to industrial service contracts. Income from core operations is a non-IFRS financial measure as described in Net Income on page 2 of this MD&A.
CONSOLIDATED RESULTS OF OPERATIONS
Revenues
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions) ---------------------------------------------------------------------------- Revenues for the period ended March 31, 2015 $ 473 ---------------------------------------------------------------------------- Higher Water Services segment revenues 4 Higher electricity Distribution and Transmission segment revenues 13 Lower Energy Services segment revenues (11) Other (4) ---------------------------------------------------------------------------- Increase in revenues from core operations 2 ---------------------------------------------------------------------------- Revenues for the period ended March 31, 2016 $ 475 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Consolidated revenues were higher by $2 million for the three months ended March 31, 2016, compared with the corresponding period in 2015 primarily due to the net impact of the following:
-- Water Services segment revenues were higher primarily due to higher
customer rates and volumes, industrial service contracts revenues, and
foreign exchange translation gains, partially offset by lower
construction revenues from the Regina wastewater treatment plant
project.
-- Electricity Distribution and Transmission segment revenues were higher
primarily due to higher approved electricity customer rates.
-- Energy Services segment revenues were lower primarily due to lower
electricity prices and volumes.
Net Income
We use income from core operations to distinguish operating results from the Company's water and electricity businesses from results with respect to its investment in Capital Power and changes in the fair value of financial instruments. This definition has been revised from previous quarters by the addition of the fair value changes of financial instruments. The change in the fair value of financial instruments is the difference between the opening fair value of the derivative instrument for the period and the closing fair value of the derivative instrument. It is a non-IFRS financial measure, which does not have any standardized meaning prescribed by IFRS and is unlikely to be comparable to similar measures published by other entities. It is presented as it provides a useful measure of the Company's core operations and it is referred to by debt holders and other interested parties in evaluating the Company's financial performance and in assessing its creditworthiness.
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions) ---------------------------------------------------------------------------- Net income for the period ended March 31, 2015 $ 69 2015 change in the fair value of contracts-for- differences (10) 2015 change in the fair value of interest rate swaps 5 2015 equity share of income from Capital Power (net of income tax) (14) ---------------------------------------------------------------------------- 2015 income from core operations 50 Higher Water Services segment operating income 16 Higher Distribution and Transmission segment operating income 9 Higher Energy Services segment operating income excluding change in the fair value of contracts-for-differences 3 Other (3) ---------------------------------------------------------------------------- Increase in income from core operations 25 ---------------------------------------------------------------------------- 2016 income from core operations 75 ---------------------------------------------------------------------------- 2016 change in the fair value of contracts-for- differences 5 2016 change in the fair value of interest rate swaps (5) 2016 dividend income from available-for-sale investment in Capital Power 3 ---------------------------------------------------------------------------- Net income for the period ended March 31, 2016 $ 78 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Net income was higher for the three months ended March 31, 2016, compared with the corresponding period in 2015 primarily due to the following:
-- Changes in each business segment's operating results for the three
months ended March 31, 2016, compared with the corresponding period in
2015 as described under Segment Results below.
-- Lower favorable change in the fair value of contracts-for-differences.
-- EPCOR's equity share of income of Capital Power L.P. was lower due to
the Company transitioning from equity accounting to accounting for its
investment in Capital Power as an available-for-sale asset following the
sale of Capital Power shares in April 2015, when the Company's ownership
interest was reduced to below 10%.
-- EPCOR's dividend income from Capital Power was higher due to accounting
for the investment in Capital Power as an available-for-sale asset
commencing in the second quarter of 2015, as described above.
SEGMENT RESULTS
Water Services
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions, including intersegment transactions) Three months ended March 31, 2016 2015 ---------------------------------------------------------------------------- Revenues $ 151 $ 147 Expenses (104) (116) ---------------------------------------------------------------------------- Operating income $ 47 $ 31 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Water Services' operating income increased by $16 million for the three months ended March 31, 2016, compared with the corresponding period in 2015 primarily due to the gains on sales of surplus lands, higher approved customer rates, and higher income related to industrial services contracts.
Distribution and Transmission
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions, including intersegment transactions) Three months ended March 31, 2016 2015 ---------------------------------------------------------------------------- Revenues $ 156 $ 143 Expenses (117) (113) ---------------------------------------------------------------------------- Operating income $ 39 $ 30 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Distribution and Transmission's operating income increased by $9 million for the three months ended March 31, 2016, compared with the corresponding period in 2015 primarily due to higher net system access collections and transmission revenue.
Energy Services
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions, including intersegment transactions) Three months ended March 31, 2016 2015 ---------------------------------------------------------------------------- Revenues $ 217 $ 228 Expenses (199) (208) ---------------------------------------------------------------------------- Operating income 18 20 ---------------------------------------------------------------------------- Exclude change in the fair value of contracts-for-differences (5) (10) ---------------------------------------------------------------------------- Operating income excluding change in the fair value of contracts-for-differences $ 13 $ 10 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Energy Services' operating income excluding change in the fair value of contracts-for-differences increased by $3 million for the three months ended March 31, 2016, compared with the corresponding period in 2015 primarily due to higher Energy Price Setting Plan margins, partially offset by lower billing charge rates.
Capital Spending and Investment
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions) Three months ended March 31, 2016 2015 ---------------------------------------------------------------------------- Water Services $ 29 $ 27 Distribution and Transmission 57 41 Energy Services - - Corporate 2 2 ---------------------------------------------------------------------------- Total capital spending and investment $ 88 $ 70 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Total capital spending and investment was higher for the three months ended March 31, 2016, compared with the corresponding period in 2015 primarily due to increased spending in the Distribution and Transmission segment on growth and lifecycle replacement projects, and increased spending in the Water segment on wastewater and lifecycle projects. This was partially offset by decreased construction activity in the Water Services segment at the Rossdale water treatment plant.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Unaudited, $ March 31, December Increase Explanation of material
millions) 2016 31, 2015 (decrease) changes
----------------------------------------------------------------------------
Cash and cash $ 36 $ 36 $ - Refer to Consolidated
equivalents Statements of Cash Flows
section.
----------------------------------------------------------------------------
Trade and other 462 620 (158) Decrease primarily due to
receivables payment on the current
portion of the Capital
Power receivable related
to the back-to-back debt
and the Regina milestone
payment, lower electricity
billings and accruals
resulting from lower
electricity price and
volumes, partially offset
by an increase in current
portion of Regina long-
term receivable (see
below).
----------------------------------------------------------------------------
Inventories 16 15 1
----------------------------------------------------------------------------
Finance lease 1 1 -
receivables
----------------------------------------------------------------------------
Other financial 275 316 (41) Decrease due to portions
assets of the Regina long-term
receivable reclassified to
trade and other
receivables, net of
construction additions.
----------------------------------------------------------------------------
Deferred tax 79 77 2 Increase due to
assets recognition of tax loss
carry-forwards amounts.
----------------------------------------------------------------------------
Available-for- 169 167 2 Increase due to fair value
sale investment adjustments.
in Capital
Power
----------------------------------------------------------------------------
Property, plant 4,570 4,568 2 Increase primarily due to
and equipment capital expenditures
partially offset by
foreign currency valuation
adjustments, depreciation
expense and asset
retirements.
----------------------------------------------------------------------------
Intangible 274 288 (14) Decrease primarily due to
assets and unfavorable foreign
goodwill currency valuation
adjustments and
amortization of assets
with finite lives,
partially offset by
capital expenditures.
----------------------------------------------------------------------------
Trade and other 234 259 (25) Decrease primarily due to
Payables lower electricity accruals
and lower trade payables.
----------------------------------------------------------------------------
Loans and 1,913 2,117 (204) Decrease primarily due to
borrowings repayment of long-term
(including debt related to Capital
current Power, repayment of short-
portion) term debt and foreign
currency valuation
adjustments on U.S. dollar
denominated debt.
----------------------------------------------------------------------------
Deferred revenue 952 952 -
(including
current
portion)
----------------------------------------------------------------------------
Provisions 159 160 (1)
(including
current
portion)
----------------------------------------------------------------------------
Derivative 16 12 4 Increase primarily due to
liabilities higher unfavorable fair
(including value adjustments related
current to the interest rate
portion) swaps.
----------------------------------------------------------------------------
Other 37 38 (1)
liabilities
(including
current
portion)
----------------------------------------------------------------------------
Deferred tax 35 35 -
liabilities
----------------------------------------------------------------------------
Equity 2,536 2,515 21 Increase due to increase
attributable to in net income, partially
the Owner of offset by other
the Company comprehensive loss and
dividends paid.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Unaudited, $ millions)
Cash inflows (outflows)
----------------------------------------------------------------------------
Three months
ended March Increase
31, 2016 2015 (decrease) Explanation
----------------------------------------------------------------------------
Operating $ 136 $ 113 $ 23 Increase primarily
reflects higher funds
from operations and
higher non-cash operating
working capital. The
higher non-cash operating
working capital resulted
from a lower decrease in
accounts payable and
higher decrease in trade
and other receivables.
Investing 83 (80) 163 Increase primarily due to
higher payments received
on financial lease
receivables and other
assets net of advances
including the payment
received from Capital
Power related to the
back-to-back debt,
proceeds on disposal of
property, plant and
equipment, partially
offset by higher capital
expenditures and lower
distributions received
from Capital Power.
Financing (219) (30) (189) Decrease primarily due to
higher repayment of long-
term debt which includes
obligations related to
Capital Power, and short-
term loans and
borrowings.
Opening cash 36 37 (1)
and cash
equivalents
----------------------------------------------------------------------------
Closing cash $ 36 $ 40 $ (4)
and cash
equivalents
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Activities and Liquidity
The Company maintains its financial position through rate-regulated utility and contracted operations which generate stable cash flows.
The Company expects to have sufficient liquidity to finance its plans and fund its obligations for the remainder of 2016 with a combination of cash on hand, cash flow from operating activities, interest and principal payments related to long-term loans receivable from Capital Power, the issuance of commercial paper, public or private debt offerings and drawing upon existing credit facilities described below under Financing. EPCOR plans to eventually sell all or a substantial portion of its remaining interest in Capital Power subject to market conditions, to fund its requirements for capital and other circumstances that may arise in the future.
Cash flows from operating activities would be impaired by events that cause severe damage to our facilities and would require unplanned cash outlays for system restoration repairs. Under those circumstances, more reliance would be placed on our credit facilities for working capital requirements until a regulatory approved recovery mechanism was in place or insurance proceeds were received.
Capital Requirements and Contractual Obligations
During the first quarter of 2016, there were no material changes to the Company's capital requirements or purchase obligations, including payments for the next five years and thereafter as previously disclosed in the 2015 annual MD&A.
Financing
Generally, our external capital is raised at the corporate level and invested in the operating business units. Our external financing has consisted of commercial paper issuance, borrowings under committed syndicated bank credit facilities, debentures payable to the City, publicly issued medium-term notes, U.S. private-debt notes and issuance of preferred shares.
The Company has bank credit facilities, which are used principally for the purpose of backing the Company's commercial paper program and providing letters of credit, as outlined below:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Letters of
credit and
(Unaudited, $ Banking other
millions) Total commercial facility Net amounts
March 31, 2016 Expiry facilities paper issued draws available
----------------------------------------------------------------------------
Committed
Syndicated bank
credit November
facility(1) 2018 $ 200 $ - $ 41 $ 159
Syndicated bank
credit November
facility 2020 350 47 - 303
----------------------------------------------------------------------------
Total committed 550 47 41 462
----------------------------------------------------------------------------
Uncommitted
Bank line of
credit No expiry 25 - - 25
----------------------------------------------------------------------------
Total
uncommitted 25 - - 25
----------------------------------------------------------------------------
Total credit
facilities $ 575 $ 47 $ 41 $ 487
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1 Restricted to letters of credit.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Letters of
(Unaudited, $ credit and
millions) Banking other
December 31, Total commercial facility Net amounts
2015 Expiry facilities paper issued draws available
----------------------------------------------------------------------------
Committed
Syndicated bank
credit November
facility(1) 2018 $ 200 $ - $ 48 $ 152
Syndicated bank
credit November
facility 2020 350 98 - 252
----------------------------------------------------------------------------
Total committed 550 98 48 404
----------------------------------------------------------------------------
Uncommitted
Bank line of
credit No expiry 25 - - 25
----------------------------------------------------------------------------
Total
uncommitted 25 - - 25
----------------------------------------------------------------------------
Total credit
facilities $ 575 $ 98 $ 48 $ 429
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1 Restricted to letters of credit.
Letters of credit are issued to meet the credit requirements of energy market participants and conditions of certain service agreements. Letters of credit totaling $41 million (December 31, 2015 - $48 million) were issued and outstanding at March 31, 2016.
The committed syndicated bank credit facilities cannot be withdrawn by the lenders until expiry, provided that the Company operates within the related terms and covenants. The extension feature of EPCOR's committed syndicated bank credit facilities gives the Company the option each year to re-price and extend the terms of the facilities by one or more years subject to agreement with the lending syndicate. The Company regularly monitors market conditions and may elect to enter into negotiations to extend the maturity dates.
The Company has a Canadian base shelf prospectus under which it may raise up to $1 billion of debt with maturities of not less than one year. At March 31, 2016, the available amount remaining under this base shelf prospectus was $1 billion (December 31, 2015 - $1 billion). The base shelf prospectus expires in December 2017.
Commercial paper was issued and outstanding at March 31, 2016, for $47 million (December 31, 2015 - $98 million).
If the economy were to deteriorate in the longer term, particularly in Canada and the U.S., the Company's ability to extend the maturity or revise the terms of bank credit facilities, arrange long-term financing for its capital expenditure programs and acquisitions, or refinance outstanding indebtedness when it matures could be adversely impacted. We believe that these circumstances have a low probability of occurring. We continually monitor our capital programs and operating costs to minimize the risk that the Company becomes short of cash or unable to honor its debt servicing obligations. If required, the Company would look to reduce capital expenditures and operating costs and / or sell a portion of its investment in Capital Power as market conditions permit.
Financial Covenants
EPCOR is currently in compliance with all of its financial covenants in relation to its syndicated bank credit facilities, Canadian public medium-term notes and U.S. private-debt notes. Based on current financial covenant calculations, the Company has sufficient borrowing capacity to fund current and long-term requirements. Although the risk is low, breaching these covenants could potentially result in a revocation of EPCOR's credit facilities causing a significant loss of access to liquidity.
For further information on the Company's contractual obligations, refer to the 2015 annual MD&A.
RISK MANAGEMENT
This section should be read in conjunction with the Risk Management section of the 2015 annual MD&A. EPCOR faces a number of risks including strategy execution risk, regulatory risk, political and legislative risk, health and safety risk, risk related to investment in Capital Power, information technology related security risks, water scarcity risk, environment risk, operational risks, electricity price and volume risk, project risk, weather risk, financial liquidity risk, counterparty credit risk, availability of people, foreign exchange risk, conflicts of interest, and general economic conditions, business environment and other risks. The Company employs active programs to manage these risks.
As part of ongoing risk management practices, the Company reviews current and proposed transactions to consider their impact on the risk profile of the Company. There have been no material changes to the risk profile or risk management strategies of EPCOR as described in the 2015 annual MD&A that have affected the condensed consolidated interim financial statements for the three months ended March 31, 2016.
CRITICAL ACCOUNTING ESTIMATES
In preparing the condensed consolidated interim financial statements, management necessarily made judgments and estimates in determining transaction amounts and financial statement balances. The following are the items for which significant estimates were made in the condensed consolidated interim financial statements: electricity revenues and costs, unbilled consumption of electricity and water, fair values and income taxes. Although the current condition of the economy has not impacted our methods of estimating accounting values, it has impacted the inputs in those determinations and the resulting values. Interim results will fluctuate due to the seasonal demands for electricity and water, changes in electricity prices, and the timing and recognition of regulatory decisions. Consequently, interim results are not necessarily indicative of annual results.
For further information on the Company's other critical accounting estimates, refer to the 2015 annual consolidated financial statements and 2015 annual MD&A.
OUTLOOK
In 2016, we intend to continue to focus on growth in rate-regulated water and electricity infrastructure. We expect this growth to come from new infrastructure to accommodate customer growth and lifecycle replacement of existing infrastructure primarily related to the Edmonton and U.S. based operations. We also intend to expand our water and electricity commercial services activity.
Demand for water is expected to continue to increase and we anticipate increased requirements for better water management practices including watershed management and conservation. We will pursue expansion of our portfolio of commercial water contracts.
In the quarter, the Company commenced discussions with the City of Lloydminster related to the creation of a municipal utility corporation, potentially partnering with EPCOR. Negotiations have ended with the Town of Innisfil to purchase a 50% share of its electrical distribution company.
EPCOR's Water segment will be filing their 2017 - 2021 Edmonton water and wastewater performance-based rate application in the second quarter of 2016. A decision on the application is expected in the fourth quarter of 2016.
EPCOR's Distribution and Transmission segment received a $9 million refund from the Alberta Electricity System Operator for the 2013 and 2014 Deferral Account Reconciliation in the first quarter of 2016. This amount will be refunded to customers in the third quarter of 2016.
The Energy Services segment received approval of their 2016 - 2018 Energy Price Setting Plan in the first quarter of 2016. The Company is approved to implement the new plan in the third quarter of 2016. The plan will adapt more quickly to changes in wholesale market conditions thereby reducing EPCOR's risk.
QUARTERLY RESULTS
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (Unaudited, $ millions) Quarters ended Revenues Net income ---------------------------------------------------------------------------- March 31, 2016 $ 475 $ 78 December 31, 2015 523 65 September 30, 2015 511 (13) June 30, 2015 489 139 March 31, 2015 473 69 December 31, 2014 499 75 September 30, 2014 506 23 June 30, 2014 435 55 ----------------------------------------------------------------------------
Events for the past eight quarters compared to the same quarters of the prior year that have significantly impacted net income included:
-- March 31, 2016, first quarter results included higher approved
electricity and water customer rates, gains on sales of surplus lands,
higher income related to industrial services contracts, and higher
dividend income from Capital Power. This was partially offset by no
equity share of income of Capital Power, and lower favorable fair value
adjustments on financial electricity purchase contracts.
-- December 31, 2015, fourth quarter results included the impairment of the
available-for-sale investment in Capital Power, no equity share of
income of Capital Power and lower deferred income tax recovery. This was
partially offset by higher approved water and electricity customer
rates, higher billing charge rates, higher customer water consumption,
and higher favorable fair value adjustments on financial electricity
purchase contracts.
-- September 30, 2015, third quarter results included the impairment of the
available-for-sale investment in Capital Power and unfavorable fair
value adjustments related to the financial electricity purchase
contracts, partially offset by higher approved water and electricity
customer rates, higher billing charge rates, and higher Energy Price
Setting Plan margins.
-- June 30, 2015, second quarter results included gain on sale of a portion
of investment in Capital Power and gain on reclassification of
investment in Capital Power to an available-for-sale asset. It also
included higher approved water and electricity customer rates, higher
fair value adjustments on financial electricity purchase contracts,
lower income tax expense due to the re-organization of Energy Services,
and favorable fair value adjustments related to the interest rate swap.
-- March 31, 2015, first quarter results included higher approved water and
electricity customer rates, higher fair value adjustments on financial
electricity purchase contracts, higher equity share of income of Capital
Power, and lower income tax expense due to the re-organization of Energy
Services. This was partially offset by a loss on fair value adjustments
related to the interest rate swap.
-- December 31, 2014, fourth quarter results included higher approved water
and electricity customer rates, recovery of deferred income taxes due to
the recognition of loss carry forwards as a result from an increase in
forecasted taxable income in Energy Services, gain on dilution of
interest in Capital Power and higher income from our equity share of
Capital Power, partially offset by higher depreciation on capital assets
in service, lower fair value adjustments on interest rate swap and
financial electricity purchase contracts, and lower capitalized interest
due to lower capital spend during the period.
-- September 30, 2014, third quarter results included higher favorable fair
value adjustments on financial electricity purchase contracts and higher
approved water and electricity customer rates, partially offset by lower
income from our equity share of Capital Power.
-- June 30, 2014, second quarter results included higher favorable fair
value adjustments on financial electricity purchase contracts and higher
approved water and electricity customer rates, partially offset by lower
income from our equity share of Capital Power.
FORWARD - LOOKING INFORMATION
Certain information in this MD&A is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target", and "expect" or similar words suggest future outcomes.
The purpose of forward-looking information is to provide investors with management's assessment of future plans and possible outcomes and may not be appropriate for other purposes.
Material forward-looking information within this MD&A, including related material factors or assumptions and risk factors, are noted in the table below:
----------------------------------------------------------------------------
Forward-looking Material Factors or
Information Assumptions Risk Factors
----------------------------------------------------------------------------
The Company expects to EPCOR is able to generate EPCOR's operations do not
have sufficient the expected cash flow generate the expected
liquidity to finance from operations and level of cash flow and /
its plans and fund its various means of funding or circumstances arise
obligations in 2016. remain available to the limiting or restricting
Company. the Company's ability to
access funds through the
various means otherwise
available.
----------------------------------------------------------------------------
EPCOR plans to EPCOR is able to find EPCOR is unsuccessful in
eventually sell all or suitable lower-risk finding suitable
a substantial portion businesses and / or businesses and / or assets
of its remaining assets in which to invest to invest in, therefore
interest in Capital the sell-down proceeds. negating further sell
Power. Market conditions permit downs to raise funds.
the sale of Capital Power The market price of
shares at a price Capital Power shares
suitable to EPCOR. declines to an amount that
EPCOR no longer deems it
feasible to sell all or
substantially all of its
interest in Capital Power.
----------------------------------------------------------------------------
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ from expectations and are identified in the Risk Management section above.
Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, EPCOR disclaims any intention and assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.
ADDITIONAL INFORMATION
Additional information relating to EPCOR including the Company's 2015 Annual Information Form is available on SEDAR at www.sedar.com.
Contacts:
Media Relations:
EPCOR Utilities Inc.
Tim le Riche
(780) 969-8238
tleriche@epcor.com
Corporate Relations:
EPCOR Utilities Inc.
Claudio Pucci
(780) 969-8245 or toll free (877) 969-8280
cpucci@epcor.com
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
