Fortis Earns $47 mi in the 2Q 2014
Fortis Inc. achieved second quarter net earnings attributable to common equity shareholders of $47 million, or $0.22 per common share, compared to $54 million, or $0.28 per common share, for the second quarter of 2013. For the first half of 2014, net earnings attributable to common equity shareholders were $190 million, or $0.89 per common share, compared to $205 million, or $1.06 per common share, for the first half of 2013.
Earnings for the second quarter were impacted by a number of significant items. Interest expense of $13 million after tax, or $0.06 per common share, associated with convertible debentures issued to finance a portion of the pending acquisition of UNS Energy Corporation ("UNS Energy") was recognized in the second quarter of 2014. Earnings for the second quarter of 2013 were reduced by $32 million, or $0.17 per common share, due to acquisition-related expenses and customer and community benefits offered to obtain regulatory approval of the acquisition of Central Hudson Gas & Electric Corporation ("Central Hudson"), compared to $1 million in acquisition-related expenses associated with UNS Energy in the second quarter of 2014.
Earnings for the second quarter of 2013 were favourably impacted by an income tax recovery of $25 million, or $0.13 per common share, due to the enactment of higher deductions associated with Part VI.1 tax on the Corporation's preference share dividends. This income tax recovery impacted earnings at Newfoundland Power, Maritime Electric and the Corporate and Other segment in the second quarter of 2013.
Excluding the above-noted impacts of interest expense on the convertible debentures, acquisition-related expenses and Part VI.1 tax impacts, net earnings attributable to common equity shareholders for the second quarter of 2014 were $61 million, or $0.28 per common share, compared to $61 million, or $0.32 per common share, for the same period last year.
Earnings per common share were impacted by an increase in the weighted average number of common shares outstanding, largely due to the issuance of 18.5 million common shares in June 2013 associated with the acquisition of Central Hudson.
Fortis announced in December 2013 that it agreed to acquire UNS Energy for US$60.25 per common share in cash, representing an aggregate purchase price of approximately US$4.3 billion, including the assumption of approximately US$1.8 billion of debt on closing.