HALIFAX, Nova Scotia--(BUSINESS WIRE)--
Emera (TSX: EMA) today reported results for the fourth quarter
and the year ended December 31, 2014.
Financial Highlights:
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Operating revenues increased 33.3% to $2.97 billion in 2014 compared
to 2013.
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Adjusted net income(1) (before after-tax mark-to-market
impacts), increased 23.1% to $319.2 million in 2014 (2013, $259.4
million). Reported net income, including mark-to-market adjustments
was $406.7 million in 2014 (2013, $217.5 million).
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Adjusted earnings per share increased 13.8% to $2.23 in 2014 (2013,
$1.96). Adjusted earnings per share in Q4 2014 were $0.54 (Q4 2013,
$0.47).
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Cash flowfrom operations increased 35.1% to $762.5 million for
2014 (2013, $564.2 million).
“Last September we established a 5-year dividend growth target of 6% per
year due to the strength of Emera’s financial position and the
confidence we have in our growth plan,” said Chris Huskilson, Emera’s
President and CEO. “The full year results announced today, the positive
outlook for our gas generation facilities in New England, and the recent
sale of our interest in the Northeast Wind Joint Venture, led the board
to approve a further increase of $0.05 per year, bringing our annualized
dividend rate to $1.60. This increase will take effect for the regularly
scheduled payment in May 2015, and together with the $0.10 increase
announced last September, represents a total 10.3% increase over the
$1.45 dividend rate established in late 2013. In keeping with normal
practice, we will address the dividend rate again this September”.
Consolidated Financial Highlights (in millions
of $CAD, except per share amounts)
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| Three months ended
December 31 |
| Year Ended
December 31 | |
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| 2014 |
| 2013 |
| 2014 |
| 2013 | |
| Operating revenues |
| $792.6 |
| $594.4 |
| $2,971.9 |
| $2,230.2 | |
| Adjusted EBITDA(1)*
|
| $228.0 |
| $215.2 |
| $946.5 |
| $829.5 | |
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| Net income attributable to common shareholders |
| $151.2 |
| $21.0 |
| $406.7 |
| $217.5 | |
| After-tax mark-to-market gain (loss) |
| $72.7 |
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($42.0)
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87.5
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($41.9)
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| Adjusted net income attributable to common shareholders(1)*
|
| $78.5 |
| $63.0 |
| $319.2 |
| $259.4 | |
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| Earnings per common share - basic |
| $1.05 |
| $0.16 |
| $2.84 |
| $1.64 | |
| Adjusted earnings per common share – basic(1)*
|
| $0.54 |
| $0.47 |
| $2.23 |
| $1.96 | |
| Dividends per common share declared |
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| $0.3625 |
| $1.4750 |
| $1.4125 | |
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| Operating cash flow |
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| $762.5 |
| $564.2 | |
| Total Assets (as at December 31st) |
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| $9,844.4 |
| $8,876.8 | |
Common Stock issued and outstanding (millions of
shares
as at December 31st) |
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143.78
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132.89
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*Adjusted EBITDA(1), Adjusted net
income(1) and Adjusted earnings per common share(1)
excludes the effect of mark-to-market adjustments.
Operating revenues increased 33.3% in 2014 to $2,971.9 million in
2014 compared to 2013. The increase was primarily due to the 2013
acquisition of New England Gas Generating Facilities and mark-to-market
gains within Emera Energy. In Q4 2014, operating revenues increased
33.3% to $792.6 million compared to Q4 2013.
Adjusted net income(1) increased 23.1% to $319.2
million in 2014 (2013, $259.4 million). The increase was primarily due
to strong results from the marketing and trading operation in the first
quarter of 2014 and the Q4 2013 acquisition of New England Gas plants.
In Q4 2014, adjusted net income increased $15.5 million to $78.5 million
compared to Q4 2013. Q4 2014 results include a $6.4 million after-tax
gain on dilution of Emera’s investment in Algonquin (TSX:AQN). Q4 2013
results included $5.6 million of preferred stock dividends, which in
2014, was recorded in Q3; and an investment impairment write down for
Emera’s investment in Atlantic Hydrogen Inc. (AHI).
Cash Flow from Operations increased 35.1% to $762.5 million in
2014 compared to $564.2 million in 2013. The increase year-over-year was
primarily due to higher trading and marketing margin and the 2013
acquisition of New England Gas Generating Facilities.
Significant Items Affecting Earnings:
After-Tax Derivative Mark-to-Market Gains
After-tax mark-to-market gains (losses) increased $114.7 million to
$72.7 million in Q4 2014 (Q4 2013, $(42.0) million); and increased
$129.4 million to $87.5 million for the year ended December 31, 2014
compared to $(41.9) million in 2013. The mark-to-market gains are a
result of the reversal of 2013 mark-to-market losses and favourable
changes in gas and power contract positions in Emera Energy.
2014
Gain on Dilution of Algonquin Power & Utilities Corp. (Algonquin)
Equity Investment
In Q3 2014, Algonquin closed a 16.86 million common share offering. In
addition, an over-allotment option of 2.52 million common shares was
exercised. As a result, Emera’s interest in Algonquin decreased to 22.0
percent from 24.1 percent and a gain of $10.8 million (after-tax
earnings of $9.1 million or $0.06 per common share) was recorded in
“Income from equity investments”. The gain was a result of Algonquin’s
share issuance price being higher than Emera’s pre-issuance average book
value.
On December 11, 2014, Algonquin closed a 10.05 million common share
offering. As a result, Emera’s interest in Algonquin decreased from 22.0
per cent to 21.0 per cent and a gain of $7.5 million (after-tax earnings
of $6.4 million or $0.04 per common share) was recorded in “Income from
equity investments”. The gain was a result of Algonquin’s share issuance
price being higher than Emera’s pre-issuance average book value.
2013
Algonquin Gains on Subscription Receipts
Emera recognized $18.1 million (or $0.14 per share) of after-tax gains
in 2013 from the conversion of Algonquin subscription receipts to
Algonquin common shares.
Algonquin Discontinued Operations
In Q3 2013, Emera recorded a loss from discontinued operations in
Algonquin primarily due to a write down of its Energy From Waste
facility. Emera recognized a loss of $8.3 million before tax (after-tax
loss of $7.0 million or $0.05 per common share).
AHI Investment Impairment
In Q4 2013, an after-tax investment impairment charge of $7.6 million
(or $0.06 per common share) was recorded to write down the Company’s
investment in AHI. The Company determined an impairment charge was
appropriate as AHI’s path to commercialization was less certain.
Northeast Wind Partners Supplier Settlement
In Q1 2013, Emera received total proceeds of $11.5 million (after-tax
earnings of $6.8 million or $0.05 per share) related to all of its
entitlements under various guarantee, warranty and performance
obligations from one of its Northeast Wind’s turbine suppliers. This
settlement provides contribution toward ongoing maintenance and repair
costs of these turbines.
Segmented Results
Emera now reports its results in six operating segments: Nova Scotia
Power, Emera Maine, Emera Caribbean, Pipelines, Emera Energy, and
Corporate and Other.
Quarterly Segmented Results (in millions of
$CAD, except per share amounts)
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| Adjusted Net Income(1) | |
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| Q4 2014 |
| Q4 2013 |
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| 2014 |
| 2013 | |
| Nova Scotia Power Inc. |
| $30.1 |
| $29.9 |
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| $124.9 |
| $126.0 | |
| Emera Maine |
| $11.7 |
| $11.4 |
|
| $42.4 |
| $38.4 | |
| Emera Caribbean |
| $6.1 |
| $9.6 |
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| $28.7 |
| $33.4 | |
| Pipelines |
| $8.5 |
| $8.1 |
|
| $32.7 |
| $30.3 | |
| Emera Energy* |
| $21.3 |
| $19.1 |
|
| $98.2 |
| $45.1 | |
| Corporate and Other |
| $0.8 |
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($15.1)
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($7.7)
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($13.8)
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| TOTAL |
| $78.5 |
| $63.0 |
|
| $319.2 |
| $259.4 | |
| Adjusted EPS (basic)(1) |
| $0.54 |
| $0.47 |
|
| $2.23 |
| $1.96 | |
*Q4 2014 Adjusted net income(1)excludes after-tax
mark-to-market gain in Emera Energy of $72.7 million (Q4 2013, after-tax
mark-to-market loss of $42.0 million). 2014 Adjusted net income(1)
excludes after-tax mark-to-market gain of $87.5 million
(2013, after-tax mark-to-market loss of $41.9 million).
Nova Scotia Power Inc.’s net income was $124.9 million in 2014, a
decrease of $1.1 million from the $126.0 million in 2013. The lower net
income year-over-year was primarily due to the financial impact from the
2012/2013 fuel adjustment mechanism (FAM) audit disallowance. NSPI’s net
income for Q4 2014 was $30.1 million compared to $29.9 million for the
same period last year. The increased net income in the quarter was
primarily due to higher tax deductions related to higher pension
contributions and the timing of regulatory deferrals.
Emera Maine contributed $42.4 million to consolidated net income
in 2014 (2013, $38.4 million), and $11.7 million to consolidated net
income in Q4 2014 (Q4 2013, $11.4 million). The higher net income
year-over-year and quarter-over-quarter was primarily due to increased
electric revenues resulting from rate changes, decreased income tax
expense and the impact of the stronger US dollar (USD). A provision
totaling $5.9 million after-tax ($5.0 million USD after-tax) for the
Federal Energy Regulatory Commission (FERC) return on equity complaints
has been accrued as of December 31, 2014, of which $3.0 million
after-tax ($2.5 million USD after-tax) was accrued in the quarter.
Emera Caribbean’s net income was $28.7 million in 2014 (2013,
$33.4 million) and contributed $6.1 million in Q4 2014 (Q4 2013, $9.6
million). The lower net income year-over-year was primarily due to a
$2.3 million gain recorded in 2013 due to the acquisition of a
controlling interest in Domlec, as well as the impact from $1.6 million
of investment income for Emera Caribbean Incorporated’s (ECI)
self-insurance fund (SIF) asset in 2014 compared to $4.5 million in
2013. The 2013 ECI SIF investment income of $4.5 million included a
positive adjustment of $2.6 million relating to the performance from
previous years. The lower net income in Q4 2014 was primarily due to
differences in investment income from the SIF. The impact of a stronger
USD increased earnings by $0.4 million quarter-over-quarter and $1.6
million year-over-year.
Pipelines contributed $32.7 million to consolidated net income in
2014 (2013, $30.3 million), and $8.5 million to consolidated net income
in Q4 2014 (Q4 2013, $8.1 million). The increased net income in the
quarter and year-over-year was primarily due to higher equity earnings
from Maritimes & Northeast Pipeline.
Emera Energy’s net income, adjusted to exclude mark-to-market
impacts, increased to $98.2 million in 2014 from $45.1 million in 2013.
The increase in adjusted net income(1) was primarily due to
increased trading and marketing margin in the first quarter of 2014; and
the acquisition of 1,050 MWs of gas-fired generating facilities in New
England in Q4 2013. Emera Energy’s adjusted net income was $21.3 million
in Q4 2014 (Q4 2013, $19.1 million).The increase in net income reflects
the earnings of the New England generating facilities for the full
quarter in 2014.
Corporate and Other’s segment recorded a net loss of $7.7 million
in 2014 (2013, $13.8 million loss), and a net income of $0.8 million in
Q4 2014 (Q4 2013, $15.1 million loss). The improved results
year-over-year were primarily due to gains on the dilution of Emera’s
investment in Algonquin and the losses recorded in 2013 on Algonquin’s
discontinued operations and the AHI investment impairment. The
improvement was partially offset by the gains recorded in 2013 for the
conversion of Algonquin subscription receipts. The improved results in
the quarter are primarily due to the increased income from equity
investments and the decrease in preferred stock dividends as a result of
the timing of dividend declarations; the fourth quarter dividends of
$7.7 million were declared in Q3 2014, whereas the same dividends last
year of $5.6 million were declared in Q4 2013.
(1) Non-GAAP Measures
Emera uses financial measures that do not have standardized meaning
under USGAAP and may not be comparable to similar measures presented by
other entities. Emera calculates the non-GAAP measures by adjusting
certain GAAP and non-GAAP measures for specific items the Company
believes are significant, but not reflective of underlying operations in
the period. Refer to the Non-GAAP Financial Measures section of our
Management's Discussion and Analysis ("MD&A") for further discussion of
these items.
Forward Looking Information
This news release contains forward looking information. Actual future
results may differ materially. Additional information related to Emera,
including the company’s Annual Information Form, can be found on SEDAR
at www.sedar.com.
Teleconference Call
The company will be hosting a teleconference Monday, February 9, 2015 at
10:30am Atlantic time (9:30amToronto/Montreal/New York; 8:30amWinnipeg; 7:30amCalgary; 6:30amVancouver) to discuss the Q4 2014
financial results.
Analysts and other interested parties in North America wanting to
participate in the call should dial 1 (888) 241-0394 at least 10 minutes
prior to the start of the call. International participants wanting to
participate should dial (647) 427-3413. No pass code is required. The
teleconference will be recorded. If you are unable to join the
teleconference live, you can dial for playback, toll-free at
1-855-859-2056. The Conference ID is 66983759 (available until midnight,
February 27, 2015).
The teleconference will also be web cast live at emera.com
and available for playback for one year.
About Emera
Emera Inc. is geographically diverse energy and services company
headquartered in Halifax, Nova Scotia with $9.84 billion in assets and
2014 revenues of $2.97 billion. The company invests in electricity
generation, transmission and distribution, as well as gas transmission
and utility energy services. Emera's strategy is focused on the
transformation of the electricity industry to cleaner generation and the
delivery of that clean energy to market. Emera has investments
throughout northeastern North America, and in four Caribbean countries.
Emera continues to target having 75-85% of its adjusted earnings come
from rate-regulated businesses. Emera common and preferred shares are
listed on the Toronto Stock Exchange and trade respectively under the
symbol EMA, EMA.PR.A, EMA.PR.C, EMA.PR.E, and EMA.PR.F. Additional
Information can be accessed at www.emera.com
or at www.sedar.com.
Emera Inc.
Scott LaFleur, 902-428-6375
Acting Manager,
Investor Relations
Source: Emera Inc.