Emera : Reports 2015 Earnings

HALIFAX, Nova Scotia--(BUSINESS WIRE)-- Emera (TSX:EMA) today reported results for the fourth quarter and the year ended December 31, 2015.

Reported Earnings(including after-tax mark-to-market impacts) for the year

• Reported net income in 2015 was $397.2 million (versus $406.7 million in 2014).
• Reported earnings per share in 2015 were $2.72 (versus $2.84 in 2014).

Adjusted Earnings (excluding after-tax mark-to-market impacts) for the year

• Adjusted net income in 2015 was $330.0 million (versus $319.2 million in 2014).
  • Adjusted net income, also excluding $52.8 million in after-tax costs ($0.36 per common share) related to the pending acquisition of TECO Energy Inc., was $382.8 million in 2015 (versus $319.2 million in 2014).
• Adjusted earnings per share in 2015 were $2.26 (versus $2.23 in 2014).
  • Adjusted earnings per share, also excluding the impact of acquisition costs were $2.63 in 2015 (versus $2.23 in 2014).
• Included in adjusted net income are:
  • dilution gains on Emera's investment in Algonquin Power and Utilities Corp (APUC) of $9.4 million after-tax ($0.06 per common share) in 2015, and $15.5 million after-tax ($0.10 per common share) in 2014; and,
  • an $11.5 million after-tax gain ($0.08 per common share) on the sale of Northeast Wind Partnership II, LLC (NWP) in 2015.

2015 Highlights

• In 2015, Emera announced two increases totaling 22.6% in its annualized common share dividend rate, bringing the annual dividend to $1.90.
• On September 4, 2015, Emera announced a definitive agreement to acquire TECO Energy for an aggregate purchase price of approximately US$10.4 billion, including the assumption of approximately US$3.9 billion of debt.
  • The acquisition is expected to be accretive to earnings per common share by approximately 5% in the first full year following its completion (2017) , growing to more than 10% by the third full year (2019).
  • The acquisition provides additional support to Emera's 8% dividend growth target through 2019 and positions Emera to extend the dividend growth target beyond 2019.

'2015 was another strong year for Emera, with the advancement of important strategic initiatives and strong financial results achieved. We built on our strong dividend growth history with a 22.6% increase in our annual dividend, and raised our dividend growth target to 8% per year through 2019,' said Chris Huskilson, President and CEO of Emera Inc. 'The TECO Energy acquisition is expected to generate significant earnings and cash accretion, and provide the company with a new strategic growth platform. The combined growth plan for Emera and TECO drives a very positive outlook for Emera through to the end of the decade.'

Consolidated Financial Highlights (in millions of $CAD, except per share amounts)

See 'Non-GAAP Measures' noted below.
*Adjusted EBITDA, Adjusted net income and Adjusted earnings per common share exclude the effect of mark-to-market adjustments.
Effect of foreign currency translation compared quarter-over-quarter and year-over-year.

Items Affecting Earnings:
2015

Acquisition-Related Costs
Emera incurred acquisition and financing costs of $30.3 million after-tax ($0.21 per common share) in Q4 2015, and $52.8 million after-tax ($0.36 per common share) for the year ended December 31, 2015, related to the pending acquisition of TECO Energy.

Gain on Dilution of APUC Equity Investment
In December 2015, APUC closed a 14.355 million common share offering at a price per share greater than Emera's book value per share. Emera did not participate in this financing. This financing was completed at a price per share greater than Emera's book value per share; as a result, Emera recorded a gain of $9.4 million in after-tax earnings ($0.06 per common share).

BLPC Restructuring Costs
In Q2 2015, BLPC recorded severance costs relating to corporate restructuring. The after-tax effect on Emera's Consolidated Net Income was $5.4 million ($0.04 per common share).

Sale of NWP Equity Investment
In Q1 2015, Emera completed the sale of its 49 per cent interest in NWP for $282.3 million. This sale resulted in an after-tax gain of $11.5 million ($0.08 per common share).

2014

Gain on Dilution of APUC Equity Investment
In Q3 and Q4 2014, APUC closed two common share offerings (16.86 million shares and 10.05 million shares). In Q3 2015, an over-allotment option of 2.52 million common shares was exercised. Emera did not participate in these financings. These financings were all completed at a price per share greater than Emera's book value per share; as a result, Emera recorded gains of $15.5 million in after-tax earnings ($0.10 per common share).

Consolidated Highlights

Operating revenues,adjusted to exclude mark-to-market impacts, increased 2.0% in 2015 to $2,830.3 million compared to 2014. The increase was primarily due to the effect of a strengthening USD, increased revenues at Nova Scotia Power Inc. (NSPI) due to the collection of prior years' fuel costs and increased revenues at the New England Gas Generating Facilities (NEGG). The increase was partially offset by decreased revenues at Emera Caribbean due to lower fuel revenues and a decrease in revenues at Emera Energy Services. In Q4 2015, operating revenues adjusted to exclude mark-to-market impacts increased 9.6% to $716.1 million compared to Q4 2014.

Adjusted net income increased 3.4% to $330.0 million in 2015 (2014: $319.2 million), primarily due to increased electric margin at NEGG, the strengthening USD and improved results at Emera Caribbean. The increase was partially offset by acquisition related costs on the pending TECO Energy acquisition. In Q4 2015, adjusted net income increased $8.6 million to $87.1 million, compared to $78.5 million for the same period last year. The quarter-over-quarter increase was primarily due to improved trading and marketing margin at Emera Energy Services, increased electricity margin at NEGG, a stronger USD and improved results at NSPI. The increase in the quarter was partially offset by acquisition related costs on the pending TECO Energy acquisition.

After-tax mark-to-market adjustments positively affected net income by $67.2 million or $0.46 per common share in 2015. The year-over-year decrease in after-tax mark-to-market gains is primarily due to the reversal of 2013 mark-to-market losses in 2014 in Emera Energy. In Q4 2015, mark-to-market adjustments positively affected net income by $105.0 million or $0.72 per common share. The increased mark-to-market gains in the quarter are primarily due to the $100.5 million effect of foreign currency translation on USD-denominated currency and foreign currency forward contracts related to the pending TECO Energy acquisition, partially offset by changes in gas and power contract positions and amortization of transportation assets in Emera Energy.

Cash from operations before changes in working capital increased by $62.0 million in 2015 primarily due to higher margins at NEGG, the effect of the strengthening USD, and increased fuel electric revenues at NSPI. These increases were partially offset by lower trading and marketing margin at Emera Energy Services, payment of acquisition costs related to the pending TECO Energy acquisition and the deferral of demand side management program costs at NSPI.

Cash flow from operations decreased $88.3 million to $674.2 million for the year ended December 31, 2015 compared to the same period last year. The decrease was primarily due to lower trading and marketing margin and payment of acquisition costs. The decrease was partially offset by higher margins at NEGG.

Segmented Results

Emera reports its results in six operating segments: Nova Scotia Power Inc., Emera Maine, Emera Caribbean, Pipelines, Emera Energy, and Corporate & Other.

Quarterly Segmented Results (in millions of $CAD, except per share amounts)

*Adjusted net incomeexcludes after-tax mark-to-market gain in Pipelines, Emera Energy and Corporate & Other of $105.0 million in Q4 2015 (Q4 2014, after-tax mark-to-market gain of $72.7 million).2015 Adjusted net income excludes after-tax mark-to-market gain of $67.2 million (2014, after-tax mark-to-market gain of $87.5 million)

Nova Scotia Power Inc.'s net income was $129.9 million in 2015; an increase of 4.0% from 2014. This increase is primarily due to increased electricity sales due to weather. NSPI's net income for Q4 2015 was $40.1 million (Q4 2014: $30.1 million). The increased net income in the quarter was primarily due to timing of regulatory deferrals and reduced OM&G expense.

Emera Maine's net income increased 6.4% to $45.1 million in 2015. The higher net income year-over-year was primarily due to the impact of a stronger USD. Emera Maine contributed $5.2 million to consolidated net income in Q4 2015 (Q4 2014, $11.7 million). The decrease in net income in the quarter was primarily due to the timing of transmission revenue adjustments negatively impacting Q4 2015 and positively impacting Q4 2014 and increased OM&G expenses.

Emera Caribbean's net income increased 41.1% to $40.5 million in 2015 (2014: $28.7 million) and was $13.3 million in Q4 2015 (Q4 2014, $6.1 million). The higher net income in the quarter and year-over-year was primarily due to the impact of a stronger USD, decreased OM&G and increased electric margin primarily due to weather.

Pipelines' net income, adjusted to exclude mark-to-market changes, increased 21.1% to $39.6 million in 2015 (2014: $32.7 million), and was $10.1 million in Q4 2015 (Q4 2014: $8.5 million). The increased net income in the quarter and year-over-year was primarily due to higher equity earnings from Maritimes & Northeast Pipeline, the impact of a stronger USD and decreased interest expense.

Emera Energy's net income, adjusted to exclude mark-to-market impacts, increased 32.5% to $130.1 million in 2015. The increase in adjusted net income reflects increased margin at the NEGG, a strengthening USD, the gain on the sale of NWP and increased income from equity investments primarily due to increased sales at Bear Swamp. Emera Energy's adjusted net income was $35.4 million in Q4 2015 (Q4 2014: $21.3 million). The increase in the quarter is primarily due to increased trading and marketing margin, increased margin at the NEGG and a strengthening USD.

Corporate and Other's contribution to consolidated net income, adjusted to exclude mark-to-market changes, was a loss of $55.2 million in 2015 (2014: $7.7 million loss), and a loss of $17.0 million in Q4 2015 (Q4 2014: $0.8 million gain). The increase in the quarter and year-over-year losses were primarily due to acquisition costs related to the pending TECO Energy acquisition, partially offset by increased income tax recovery and increased income from equity investments.

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 within the meaning of applicable securities laws. By its nature, forward-looking information requires Emera to make assumptions and is subject to inherent risks and uncertainties. These statements reflect Emera management's current beliefs and are based on information currently available to Emera management. There is a risk that predictions, forecasts, conclusions and projections that constitute forward-looking information will not prove to be accurate, that Emera's assumptions may not be correct and that actual results may differ materially from such forward-looking information. Additional detailed information about these assumptions, risks and uncertainties is included in Emera's securities regulatory filings, including under the heading 'Business Risks and Risk Management' in Emera's annual Management's Discussion and Analysis, and under the heading 'Principal Risks and Uncertainties' in the notes to Emera's annual and interim financial statements, which can be found on SEDAR at www.sedar.com.

Teleconference Call

The company will be hosting a teleconference Tuesday, February 16, 2016 at 11:00am Atlantic time (10:00am Toronto/Montreal/New York; 9:00am Winnipeg; 8:00am Calgary; 7:00am Vancouver) to discuss the Q4 2015 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 30669537 (available until midnight, March 4, 2016).

The teleconference will also be web cast live at emera.com and available for playback for one year.

Annual General Meeting

Emera's Annual General Meeting is scheduled to be held May 17, 2016 at the Design Exchange, 234 Bay St, Toronto, Ontario.

About Emera

Emera Inc. is geographically diverse energy and services company headquartered in Halifax, Nova Scotia with approximately $12 billion in assets and 2015 revenues of $2.79 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's common and preferred shares are listed on the Toronto Stock Exchange and trade respectively under the symbol EMA, EMA.PR.A, EMA.PR.B, EMA.PR.C, EMA.PR.E, and EMA.PR.F and instalment receipts are listed and trade under the symbol EMA.IR. Depositary receipts representing common shares of Emera are listed on the Barbados Stock Exchange under the symbol EMABDR. Additional Information can be accessed at www.emera.com or at www.sedar.com.

Assuming a USD/CDN exchange rate consistent with that at the time of announcement; for additional assumptions, see 'Forward Looking Information' noted below.See 'Non-GAAP Measures' noted below.

View source version on businesswire.com :http://www.businesswire.com/news/home/20160212005874/en/

Emera
Scott LaFleur, 902-428-6375
Manager, Investor Relations

Source: Emera

Emera Inc. issued this content on 12 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 12 February 2016 22:08:13 UTC

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