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Leadership's commitment to driving execution excellence in customer service, company-wide productivity initiatives and storm restoration continues to deliver strong performance in first quarter of 2018

TORONTO, May 15, 2018 /CNW/ - Hydro One Limited (Hydro One or the Company), the parent company of Ontario's largest electricity transmission and distribution utility, today announced its financial and operating results for the first quarter ended March 31, 2018.

• Earnings per share (EPS) of $0.37 and adjusted EPS of $0.35, compared to $0.28 in the prior year, reflecting the Ontario Energy Board's (OEB) decision on transmission rates, seasonal weather, and controlled operating costs
• Quarterly dividend increased 5% to $0.23 per share, payable June 29, 2018
• Management's focus on delivering industry-leading customer service has resulted in a six percentage point increase year-over-year in distribution customer satisfaction
• A number of milestones reached in the regulatory approval for the Avista Corporation (Avista) transaction with settlement agreements filed in Washington, Alaska, and Idaho, as well as a settlement in principle in Oregon, all of which remain subject to approval by the respective commissions.  In addition, the transaction also received U.S. Hart-Scott-Rodino antitrust clearance, U.S. Federal Energy Regulatory Commission approval, and U.S. Federal Communications Commission consent
• Tentative deal with the Power Workers' Union (PWU) demonstrates management's commitment to building relationships with union leadership through alignment of business goals in agreement negotiations
• New methodology and proactive approach to storm restoration efforts results in all-time Company record for speed of service restoration after nearly 500,000 customers lost power in mid-April ice storm
• Senior management further strengthened by the announcements of accomplished leaders in the Chief Financial Officer and Chief Corporate Development Officer roles

"The first quarter demonstrated Hydro One's true potential through strong execution and an unwavering determination to succeed," said Mayo Schmidt, President and Chief Executive Officer, Hydro One. "The Company's growing list of achievements is a result of our leadership team's uncompromising commitment  to customer service and storm restoration, as well as their resolve in driving excellence to deliver cost savings through productivity improvement plans that will flow back to customers and shareholders. Finally, our all-party, all-issues settlement agreements in three states and anti-trust clearance show significant progress in achieving milestones to combine with Avista."

Selected Consolidated Financial and Operating Highlights

Key Financial Highlights

In the first quarter of 2018, the Company reported net income attributable to common shareholders of $222 million (2017 - $167 million), a 32.9% increase from last year, and EPS of $0.37 (2017 - $0.28). Adjusted EPS, which exclude the impact of $12 million income related to the Avista acquisition, was $0.35 for the quarter.

Revenues, net of purchased power, for the first quarter were higher than last year by 7.3%. This increase reflects higher transmission revenues driven by the OEB's decision on the 2017-2018 transmission rates filing, and increased transmission and distribution revenues due to higher energy consumption resulting from seasonal weather.

The comparability of first quarter earnings was positively impacted by higher transmission revenues driven by the timing of OEB's decision on the 2017-2018 transmission rate filing, lower corporate support costs, which were partially offset by costs relating to Hydro One's response to the Northeastern storms; and lower financing charges primarily due to revaluation of the deal-contingent foreign exchange forward contract, partially offset by interest on the Convertible Debentures issued in August 2017.

Hydro One continues to invest in the reliability and performance of Ontario's electricity transmission and distribution systems, address aging power system infrastructure, facilitate connectivity to new generation sources, and improve service to customers. The Company made capital investments of $305 million during the first quarter, and placed $145 million worth of new assets in-service.

Selected Operating Highlights

Management's focus on delivering industry-leading customer service further contributed to the rising trend of distribution customer satisfaction, now up six percentage points to 74% over the same period last year.

On March 1, the Company successfully completed the integration of 400 contact centre employees, who were previously contracted out, to advance Hydro One's renewed customer-centric service culture. Critically, contact centre performance metrics rose during the transition. When compared with the end of 2017, first quarter results for overall customer satisfaction with calls rose by four points to 94%, customer issues resolved on the first call jumped four points to 89%, and billing accuracy reached 99.7%.

The Company was also recognized with two Achieving Communications Excellence awards from the Canadian Public Relations Society for its meaningful community engagement projects.

Hydro One and Avista have achieved numerous key milestones in the regulatory approval process for the proposed merger, including all-party, all-issues settlement agreements filed in Washington in March, and Alaska and Idaho in April. A settlement in principle with all parties in the Oregon proceeding was reached in May. The settlement agreements remain subject to approval by the respective commissions. The companies also achieved approval from the U.S. Federal Energy Regulatory Commission in January, antitrust clearance under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976 in April, and consent from the U.S. Federal Communications Commission in May. Hydro One and Avista continue to anticipate closing the transaction in the second half of 2018.

The Company continues to drive a company-wide productivity improvement initiative resulting in additional cost savings in the first quarter, with a significant portion of savings culminating from more competitive procurement practices. Adopting industry best practices and streamlined processes, the Company is sourcing materials and services at lower costs compared to previous years.

Hydro One and PWU reached a tentative settlement of a two-year collective agreement covering approximately 4,000 employees in critical front line roles. This agreement recognizes the significant contributions employees make in maintaining the supply of power across the province while delivering value to customers and shareholders. Union members will now vote on this tentative agreement with the outcome anticipated by the end of the second quarter of 2018.

The Company continued to build its reputation at home and abroad for storm relief and operational excellence. In January, the Company received an Emergency Assistance Award from the Edison Electric Institute for support efforts following Hurricane Irma in Florida last September. In March, it mobilized nearly 175 employees to help restore power following a storm in Boston and Baltimore that left approximately one million people without power. Following a severe rain, ice and wind storm that hit Ontario in mid-April, the Company restored power to nearly 500,000 customers in four days. Through a new approach to storm planning and response execution, this set a new Company record for restoration time by surpassing the previous six-day effort from the last, large scale ice storm in March 2016.

The Company further strengthened its leadership team by adding proven, experienced, highly-regarded executives.

Patrick Meneley joined Hydro One as Executive Vice President and Chief Corporate Development Officer on March 1. Meneley was most recently EVP, Wholesale Banking at TD Bank Group and Vice Chair and Head of Global Corporate and Investment Banking for TD Securities. At Hydro One, he assumes responsibility for leading strategy, innovation and mergers and acquisitions.

The Company also welcomed Paul Dobson as Chief Financial Officer March 1. Dobson was most recently CFO for Direct Energy Ltd. in Houston, Texas, where he was responsible for overall financial leadership of a $15 billion revenue business with three million customers in Canada and the U.S. Dobson took over the finance, treasury, controller, audit, technology and regulation functions.

Common Share Dividends

Following the conclusion of the first quarter, on May 14, 2018, the Company declared a quarterly cash dividend to common shareholders of $0.23 per share to be paid on June 29, 2018 to shareholders of record on June 12, 2018. This represents a dividend increase of 5% since the last increase in May 2017. This second annual consecutive increase reflects the Company's expectation of continued long-term earnings growth and demonstrates the true potential of Hydro One through strong management.

Supplemental Segment Information

This press release should be read in conjunction with the Company's first quarter 2018 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 2017 Consolidated Financial Statements and Management's Discussion and Analysis, can be accessed at www.HydroOne.com/Investors and www.sedar.com.

Quarterly Investment Community Teleconference

The Company's first quarter 2018 results teleconference with the investment community will be held on May 15, 2018 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 dial 1-855-716-2690 prior to the scheduled start time and request access to Hydro One's first quarter 2018 results call, conference ID 4548189 (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 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.

About Hydro One Limited

We are Ontario's largest electricity transmission and distribution provider with more than 1.3 million valued customers, over C$25 billion in assets and 2017 annual revenues of nearly C$6 billion. Our team of over 7,400 skilled and dedicated regular and non-regular employees proudly and safely serves suburban, rural and remote communities across Ontario through our 30,000 circuit km of high-voltage transmission and 123,000 circuit km of 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 five utility companies in Canada to achieve the Sustainable Electricity Company designation from the Canadian Electricity Association. We also provide advanced broadband telecommunications services on a wholesale basis utilizing our extensive fibre optic network. Hydro One Limited's common shares are listed on the Toronto Stock Exchange (TSX: H).

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.

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: growth; customer service; cost savings; performance; efficiencies; reliability; productivity; improvement plans; operational excellence; storm restoration; ongoing and planned investments, projects and initiatives; the OEB's transmission rates decision and its anticipated impacts; collective agreements; dividends; continued long-term earnings growth; the deal-contingent foreign exchange forward contract; and the acquisition of Avista. 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 Inc.