Slide 1: Third Quarter 2015 Results Update
HYDRO ONE THIRD QUARTER 2015 RESULTS UPDATE November 13, 2015
Slide 2: Reported Results of Hydro One Inc.
REPORTED RESULTS OF HYDRO ONE INC. 3Q15 results are for Hydro One Inc., 100% owned operating subsidiary of newly formed Hydro One Limited Hydro One Limited (H:TSX) is the parent company and is the entity which issued common shares by IPO on November 5, 2015 3Q15 results reflect the period prio
Slide 3: Hydro One Highlights
HYDRO ONE HIGHLIGHTS Proven Senior Management Team and Experienced, Independent Board of Directors Consistent and Stable, Rate-Regulated Environment Significant Scale and Leadership Position in Ontario, home to 38% of Canada’s population Stable Regulated Cash Flows and Strong Balance Sheet
Slide 4: At a Glance
HYDRO ONE AT A GLANCE LARGEST $22.86 STABLE Total Assets at September 30, 2015 AND ELECTRICITY BILLION REGULATED CORE 1% TRANSMISSION BUSINESSES DISTRIBUTION AND OF ASSETS BUSINESS IN ONTARIO 42% 57% 2014 FINANCIAL PERFORMANCE Transmission $6.5 $747 $1.29 $22.86 billion Distribution Other B I LLI O
Slide 5: Our Transmission Business
OUR TRANSMISSION BUSINESS Scale: One of North America's largest electricity transmitters, owning and operating 96% of Ontario’s network Stability: Transmission produces reliable cash flow with low volatility under OEB cost of service regulation Growth: We are building our rate base with planne
Slide 6: Our Distribution Business
OUR DISTRIBUTION BUSINESS Scale: The largest electricity distributor in Ontario, with 1.3 million residential and business customers Stability: Distribution is a stable, rate- regulated business operating under the OEB’s performance based model. Growth: We are growing our rate base with planne
Slide 7: 3Q15 Operating Highlights
3Q15 OPERATING HIGHLIGHTS Completed integration of Norfolk Power, adding 19,000 local distribution customers Integrating Haldimand County Hydro with 21,000 local distribution customers Subsequent to the end of 3Q15, closed acquisition of Woodstock Hydro with 15,500 local distribution customers
Slide 8: 3Q15 Hydro One Inc. at a Glance
3Q15 HYDRO ONE INC. AT A GLANCE (in millions $CAD) 3Q15 Q3 2014 %∆ YTD 2015 YTD 2014 %∆ Revenue 1,645 1,556 5.7% 5,016 4,886 2.7% OM&A Costs 274 300 -8.7% 834 945 -11.7% Cash from operations 469 443 5.9% 1,182 777 52.1% Funds From Operations* 434 342 26.9% 1,195 971 23.1% Pre tax income 231 196 17.9
Slide 9: 3Q15 & YTD Hydro One Inc. Financial Highlights
3Q15 & YTD HYDRO ONE INC. FINANCIAL HIGHLIGHTS In millions $CAD 1,645 Q3 2015 Q3 2014 1,556 Distribution drove revenue growth Prior year operating expenditures 469 443 included higher costs associated 434 274 300 342 with CIS resolution 231 196 192 173 Pretax earnings growth on higher Revenue
Slide 10: 3Q15 Snapshot
3Q15 SNAPSHOT Regulated Revenue Regulated EBIT 25% 75% 36% 64% Transmission $1,632 million Distribution $334 million Capital Investments Updated Rate Base1 1% 42% 40% 43% 57% 57% 60% $436 million $16,914 million BALANCED MIX OF REGULATED ELECTRIC TRANSMISSION AND DISTRIBUTION ASSETS WITH SIGNIFICANT
Slide 11: Hydro One Inc. Pro Forma Net Income
HYDRO ONE INC. PRO FORMA NET INCOME C$ millions Brampton Divestiture – $21 Net impact of all transactions relating to the divestiture of Hydro One Brampton Recapitalization – $18 Interest expense on additional $800 million of 2014 Pro Forma 2014A Net Income (1) debt raised at IPO Net Income(1)(2
Slide 12: Hydro One Limited Share Dividends
HYDRO ONE LIMITED SHARE DIVIDENDS Initial annualized common share dividends of approximately $500 million 595 million common shares outstanding with quarterly dividend of 21 cents per share (84 cents annualized) Expect first post IPO dividend payment late March 2016, composed of 21 cents for 1
Slide 13: Summary
SUMMARY Significant Scale and Leadership Position in Ontario Consistent and Stable, Rate-Regulated Environment Opportunities to Drive Growth Performance Based Culture Intensified focus on Efficiency, Productivity and Continuous Improvement 13
Slide 14: Disclaimers
DISCLAIMERS DISCLAIMERS In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Any graphs, tables or other information in this presentation demonstrating the historical performance of Hydro One Inc. or any other entity contained in this presentation are intended only