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Operational transformation of Hydro One set to accelerate with recent additions to leadership team

TORONTO, Nov. 11, 2016 /CNW/ - Hydro One Limited, Ontario's largest electricity transmission and distribution company, today announced its financial and operating results for the third quarter ended September 30, 2016.

• Adjusted basic earnings per share of $0.39 up 23.9% compared to $0.32 last year.
• Capital investments of $424 million in the reliability and performance of Ontario's electricity system.
• New senior executives leading Customer Service, Operations, Legal, and Strategy functions.
• Agreement reached to acquire Ontario based Orillia Power Distribution.
• Acquisition of Great Lakes Power Transmission completed.
• $0.21 per share quarterly dividend declared payable December 30, 2016.

"The quarterly results announced today demonstrate continued execution of our plan to build momentum as we focus across the business on enhancing our operations and customer service, revitalizing Ontario's electric grid and accelerating our growth," said Mayo Schmidt, President and Chief Executive Officer, Hydro One. "The new senior leaders responsible for Hydro One's Operations, Customer Service, Legal, and Strategy functions are on board and working to drive a further acceleration of our transformation."

Consolidated Financial Highlights and Statistics

Common Share Dividends

Following the conclusion of the third quarter, on November 10, 2016, the Company declared a quarterly cash dividend to common shareholders of $0.21 per share to be paid on December 30, 2016 to shareholders of record on December 14, 2016.

Key Operating and Financial Highlights

Revenues, net of power costs, for the third quarter were higher than last year by 6.0% primarily reflecting changes to the Ontario Energy Board approved distribution rates, and higher peak transmission demand due to warmer weather in 2016, partially offset by the divestiture of Hydro One Brampton in August 2015. Revenue comparisons were also affected by non-recurring impacts of $36 million, being a 2015 revenue adjustment related to Provincial Conservation Demand Management target differences and an Ontario Energy Board order received in 2016 that required a cumulative increase in revenues related to joint-use of company assets.

In addition to the items impacting revenue noted above, year-to-date earnings were positively affected by lower bad debt expense, lower costs relating to support services, lower costs associated with transformer equipment refurbishments and stations maintenance, and lower expenses due to the divestiture of Hydro One Brampton.

Hydro One continues to invest to improve the reliability and performance of Ontario's electricity transmission and distribution systems, address aging power system infrastructure, facilitate new generation, and improve service to customers. The Company made capital investments of $424 million during the third quarter and $1,220 million in 2016 to-date, and has placed over $900 million of new assets in-service for year-to-date.

During the third quarter, new senior executives joined the Company's leadership team as follows:

• Ferio Pugliese was appointed to the position of Executive Vice President, Customer Care and Corporate Affairs. Ferio is a well recognized leader in customer service, and brings a wealth of expertise in building and leading a strong corporate culture focused on serving its customers and communities, as demonstrated by his significant contributions at WestJet Airlines over the past decade.
• Greg Kiraly was appointed to the position of Chief Operating Officer. Greg is a highly regarded power and utilities executive with an extensive background in energy transmission and distribution, in both electricity and gas, having served in various executive leadership roles across three of the largest investor-owned utilities in the United States: Pacific Gas and Electric, Commonwealth Edison, and Public Service Electric & Gas Company.
• Jamie Scarlett was appointed to the position of Executive Vice President and Chief Legal Officer. Jamie is a highly experienced legal advisor who brings a proven track record and a deep knowledge of corporate finance, securities law and international business development to Hydro One most recently from Torys LLP.
• Paul Barry was appointed to the position of Executive Vice President, Strategy and Corporate Development. Paul has significant international strategy, business development and financial expertise in the electric power, natural gas, and water utility sectors, including prior executive roles at Public Infrastructure Partners LLC, Duke Energy Corporation, Pepco Holdings, and General Electric Company.

In August 2016, the Company reached an agreement to acquire Orillia Power Distribution Corporation (Orillia Power), an electricity distribution company located in Simcoe County, Ontario, from the City of Orillia for approximately $41 million, including the assumption of outstanding indebtedness and regulatory liabilities, subject to closing adjustments. The acquisition is subject to regulatory approval by the Ontario Energy Board.

On October 31, 2016, following receipt in October of regulatory approval of the transaction by the Ontario Energy Board, Hydro One completed the acquisition of Great Lakes Power Transmission LP (Great Lakes Power), an Ontario regulated electricity transmission business operating along the eastern shore of Lake Superior, north and east of Sault Ste. Marie, Ontario. The total purchase price for Great Lakes Power was approximately $376 million, including the assumption of outstanding indebtedness, subject to final adjustments.

Supplemental Segment Information

This press release should be read in conjunction with the Company's third quarter 2016 Consolidated Financial Statements and Management's Discussion and Analysis (MD&A). These statements and MD&A together with additional information about Hydro One, including the full year 2015 Consolidated Financial Statements and Management's Discussion and Analysis, can be accessed at www.sedar.com and www.HydroOne.com/Investors.

Quarterly Investment Community Teleconference

The Company's third quarter 2016 results teleconference with the investment community will be held on November 11, 2016 at 8:30 a.m. Eastern Time, a webcast of which will be available at www.HydroOne.com/Investors. Members of the financial community wishing to ask questions during the call should dial 1-855-716-2690 prior to the scheduled start time and request access to Hydro One's third quarter 2016 results call, conference ID 89787278 (international callers may dial 1-440-996-5689). Media and other interested parties are welcome to participate on a listen-only basis. A webcast of the teleconference will be available following the call.

About Hydro One Ltd.

We are Ontario's largest electricity transmission and distribution provider with more than 1.3 million valued customers, $24.8 billion in assets and revenues of over $6.5 billion. Our team of 5,500 skilled and dedicated employees proudly and safely serves suburban, rural and remote communities across Ontario through our 29,000 circuit km high-voltage transmission and 123,000 circuit km primary distribution networks. Hydro One is committed to the communities we serve, and has been rated as the top utility in Canada for its corporate citizenship, sustainability, and diversity initiatives. We are one of only four utility companies in Canada to achieve the Sustainable Energy Company designation from the Canadian Electrical Association. We also provide advanced broadband telecommunications services on a wholesale basis utilizing our extensive fibre optic network. Hydro One's common shares are listed on the Toronto Stock Exchange (TSX: H). For more information about everything Hydro One, please visit www.HydroOne.com.

Forward-Looking Statements and Information

This press release may contain "forward-looking information" within the meaning of applicable securities laws. Such information includes, but is not limited to: statements related to strategy, growth, operational transformation, service, performance, reliability, operations, ongoing and planned investments, dividends, and the Company's acquisitions. Words such as "expect," "anticipate," "intend," "attempt," "may," "plan," "will", "can", "believe," "seek," "estimate," and variations of such words and similar expressions are intended to identify such forward-looking information. These statements are not guarantees of future performance or actions and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking information. Some of the factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by such forward-looking information, including some of the assumptions used in making such statements, are discussed more fully in Hydro One's filings with the securities regulatory authorities in Canada, which are available on SEDAR at www.sedar.com. Hydro One does not intend, and it disclaims any obligation, to update any forward-looking information, except as required by law.

SOURCE Hydro One Limited